Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 03, 2018 | |
Document and Entity Information Abstract | ||
Entity Registrant Name | Internap Corp | |
Entity Central Index Key | 1,056,386 | |
Trading Symbol | inap | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
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 | 21,131,147 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenues: | ||
Total revenues | $ 74,201 | $ 72,133 |
Costs of sales and services, exclusive of depreciation and amortization, shown below: | ||
Costs of customer support | 7,387 | 7,264 |
Sales, general and administrative | 19,854 | 16,564 |
Depreciation and amortization | 21,077 | 17,745 |
Exit activities, restructuring and impairments | (33) | 1,023 |
Total operating costs and expenses | 73,322 | 71,641 |
Income from operations | 879 | 492 |
Non-operating expenses: | ||
Interest expense | 15,027 | 8,137 |
(Gain) loss on foreign currency, net | (215) | 97 |
Total non-operating expenses | 14,812 | 8,234 |
Loss before income taxes, non-controlling interest and equity in earnings of equity-method investment | (13,933) | (7,742) |
Provision for income taxes | 100 | 518 |
Equity in earnings of equity-method investment, net of taxes | 0 | (30) |
Net loss | (14,033) | (8,230) |
Less net income attributable to non-controlling interest | 27 | 0 |
Net loss attributable to INAP stockholders | (14,060) | (8,230) |
Other comprehensive income: | ||
Foreign currency translation adjustment | 61 | 73 |
Unrealized gain on foreign currency contracts | 0 | 85 |
Total other comprehensive income | 61 | 158 |
Comprehensive loss | $ (13,999) | $ (8,072) |
Basic and diluted net loss per share (in dollars per share) | $ (0.70) | $ (0.50) |
Weighted average shares outstanding used in computing basic and diluted net loss per share (in shares) | 20,052 | 16,087 |
INAP US | ||
Revenues: | ||
Total revenues | $ 57,076 | $ 55,461 |
Costs of sales and services, exclusive of depreciation and amortization, shown below: | ||
Direct costs of sales and services, exclusive of depreciation and amortization | 18,435 | 23,547 |
INAP INTL | ||
Revenues: | ||
Total revenues | 17,125 | 16,672 |
Costs of sales and services, exclusive of depreciation and amortization, shown below: | ||
Direct costs of sales and services, exclusive of depreciation and amortization | $ 6,602 | $ 5,498 |
UNAUDITED CONDENSED CONSOLIDAT3
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | |||||
Cash and cash equivalents | $ 16,159 | $ 14,603 | $ 14,603 | $ 9,174 | $ 10,389 |
Accounts receivable, net of allowance for doubtful accounts of $1,700 and $1,487, respectively | 17,524 | 17,794 | 17,794 | ||
Contract assets | 7,131 | 0 | |||
Prepaid expenses and other assets | 8,690 | 15,487 | 8,673 | ||
Total current assets | 49,504 | 47,884 | 41,070 | ||
Property and equipment, net | 461,314 | 458,565 | 458,565 | ||
Intangible assets, net | 79,185 | 25,666 | 25,666 | ||
Goodwill | 118,077 | 50,209 | 50,209 | ||
Non-current contract assets | 12,056 | 0 | |||
Deposits and other assets | 11,784 | 23,229 | 11,015 | ||
Total assets | 731,920 | 605,553 | 586,525 | ||
Current liabilities: | |||||
Accounts payable | 21,699 | 20,388 | 20,388 | ||
Accrued liabilities | 14,279 | 15,908 | 15,908 | ||
Deferred revenues | 5,871 | 4,112 | 4,861 | ||
Capital lease obligations | 10,095 | 11,711 | 11,711 | ||
Revolving credit facility | 16,000 | 5,000 | 5,000 | ||
Term loan, less discount and prepaid costs of $3,539 and $2,133, respectively | 818 | 867 | 867 | ||
Exit activities and restructuring liability | 3,391 | 4,152 | 4,152 | ||
Other current liabilities | 4,197 | 1,707 | 1,707 | ||
Total current liabilities | 76,350 | 63,845 | 64,594 | ||
Capital lease obligations | 223,549 | 223,749 | 223,749 | ||
Term loan, less discount and prepaid costs of $11,286 and $7,655, respectively | 416,766 | 287,845 | 287,845 | ||
Exit activities and restructuring liability | 408 | 664 | 664 | ||
Deferred rent | 1,138 | 1,310 | 1,310 | ||
Deferred tax liability | 1,841 | 1,860 | 1,651 | ||
Other long-term liabilities | 3,046 | 3,128 | 7,744 | ||
Total liabilities | 723,098 | 582,401 | 587,557 | ||
Commitments and contingencies (note 10) | |||||
Stockholders’ deficit: | |||||
Preferred stock, $0.001 par value; 5,000 shares authorized; no shares issued or outstanding | 0 | 0 | 0 | ||
Common stock, $0.001 par value; 30,000 shares authorized; 21,131 and 20,804 shares outstanding, respectively | 21 | 21 | 21 | ||
Additional paid-in capital | 1,327,985 | 1,327,084 | 1,327,084 | ||
Treasury stock, at cost, 313 and 293 shares, respectively | (7,429) | (7,159) | (7,159) | ||
Accumulated deficit | (1,313,598) | (1,299,539) | (1,323,723) | ||
Accumulated items of other comprehensive loss | (1,263) | (1,324) | (1,324) | ||
Total INAP stockholders’ deficit | 5,716 | 19,083 | (5,101) | ||
Non-controlling interests | 3,106 | 4,069 | 4,069 | ||
Total stockholders’ deficit | 8,822 | 23,152 | (1,032) | ||
Total liabilities and stockholders’ deficit | $ 731,920 | $ 605,553 | $ 586,525 |
UNAUDITED CONDENSED CONSOLIDAT4
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 1,700 | $ 1,487 |
Term loan current, discount and prepaid costs | 3,539 | 2,133 |
Term loan deferred, discount and prepaid costs | $ 11,286 | $ 7,655 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 30,000,000 | 30,000,000 |
Common stock, shares outstanding (in shares) | 21,131,000 | 20,804,000 |
Treasury stock, shares (in shares) | 313,000 | 293,000 |
UNAUDITED CONDENSED CONSOLIDAT5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash Flows from Operating Activities: | ||
Net loss | $ (14,033) | $ (8,230) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 21,077 | 17,745 |
Loss on disposal of fixed asset | 46 | 0 |
Amortization of debt discount and issuance costs | 638 | 715 |
Stock-based compensation expense, net of capitalized amount | 858 | 598 |
Equity in earnings of equity-method investment | 2 | (30) |
Provision for doubtful accounts | 332 | 301 |
Non-cash change in capital lease obligations | (213) | 71 |
Non-cash change in exit activities and restructuring liability | 372 | 980 |
Non-cash change in deferred rent | (252) | (423) |
Deferred taxes | (30) | 254 |
Payment of debt lender fees | (300) | (2,583) |
Other, net | 0 | (96) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 864 | 2,096 |
Prepaid expenses, deposits and other assets | (467) | 123 |
Accounts payable | (636) | (2,247) |
Accrued and other liabilities | (2,904) | (180) |
Deferred revenues | (138) | (510) |
Exit activities and restructuring liability | (1,389) | (1,386) |
Asset retirement obligation | (248) | 52 |
Other liabilities | (52) | 14 |
Net cash flows provided by operating activities | 3,527 | 7,264 |
Cash Flows from Investing Activities: | ||
Purchases of property and equipment | (6,082) | (5,789) |
Proceeds from disposal of property and equipment | 437 | 0 |
Business acquisition, net of cash acquired | (132,143) | 0 |
Acquisition of minority shares | (1,130) | 0 |
Additions to acquired and developed technology | (277) | (200) |
Net cash flows used in investing activities | (139,195) | (5,989) |
Cash Flows from Financing Activities: | ||
Proceeds from credit agreements | 146,000 | 0 |
Proceeds from stock issuance | 0 | 40,282 |
Principal payments on credit agreements | (1,089) | (39,997) |
Debt issuance costs | (5,676) | 0 |
Payments on capital lease obligations | (2,027) | (2,491) |
Proceeds from exercise of stock options | 31 | 7 |
Acquisition of common stock for income tax withholdings | (270) | (149) |
Other, net | 235 | (157) |
Net cash flows provided by (used in) in financing activities | 137,204 | (2,505) |
Effect of exchange rates on cash and cash equivalents | 20 | 15 |
Net increase (decrease) in cash and cash equivalents | 1,556 | (1,215) |
Cash and cash equivalents at beginning of period | 14,603 | 10,389 |
Cash and cash equivalents at end of period | 16,159 | 9,174 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 13,000 | 7,336 |
Non-cash acquisition of property and equipment under capital leases | 0 | 290 |
Additions to property and equipment included in accounts payable | $ 2,287 | $ 1,247 |
NATURE OF OPERATIONS AND BASIS
NATURE OF OPERATIONS AND BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS AND BASIS OF PRESENTATION | NATURE OF OPERATIONS AND BASIS OF PRESENTATION Internap Corporation (“we,” “us,” “our,” “INAP,” or “the Company”) provides high-performance data center services including colocation, managed hosting, cloud and network services. INAP partners with its customers, who range from the Fortune 500 to emerging start-ups, to create secure, scalable and reliable IT infrastructure solutions that meet the customer’s unique business requirements. INAP operates in 57 primarily Tier 3 data centers in 21 metropolitan markets and has 98 POPs around the world. INAP has over 1 million gross square feet under lease, with over 500,000 square feet of data center space. We have prepared the accompanying unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. These financial statements include all of our accounts and those of our wholly-owned subsidiaries. We have eliminated all intercompany transactions and balances in the accompanying financial statements. In the opinion of management, all adjustments necessary for a fair presentation of the interim results have been reflected therein. All such adjustments were of a normal and recurring nature, with the exception of those related to the adoption of Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASC 606”). Prior year amounts have been reclassified in some cases to conform to the current year presentation. We have condensed or omitted certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP. The accompanying financial statements reflect all adjustments, which consist of normal recurring adjustments unless otherwise disclosed, necessary for a fair statement of our financial position as of March 31, 2018 and our operating results and cash flows for the interim periods presented. The balance sheet at December 31, 2017 was derived from our audited financial statements, but does not include all disclosures required by GAAP. You should read the accompanying financial statements and the related notes in conjunction with our financial statements and notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission (“SEC”). The preparation of financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. Actual results may differ materially from these estimates. The results of operations for the three months ended March 31, 2018 are not necessarily indicative of the results that may be expected for the 2018 fiscal year or any future periods. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Mar. 31, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS Adoption of New Accounting Standards On August 26, 2016, the Financial Accounting Standard Board (the "FASB") issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments ("ASU 2016-15"), a consensus of the FASB’s Emerging Issues Task Force. The new guidance is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. We adopted ASU 2016-15 in the first quarter of 2018 and it did not impact our consolidated financial statements. On November 17, 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash ("ASU 2016-18"), a consensus of the FASB’s Emerging Issues Task Force. The new standard requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Entities will also be required to reconcile such total to amounts on the balance sheet and disclose the nature of the restrictions. We adopted ASU 2016-18 in the first quarter of 2018 and it did not impact our consolidated financial statements. On January 5, 2017, the FASB issued final guidance that revises the definition of a business, ASU No. 2017-01: Clarifying the Definition of a Business (Topic 805) ("ASU 2017-01"). The definition of a business affects many areas of accounting (e.g., acquisitions, disposals, goodwill impairment, consolidation). The guidance requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities is not a business. The guidance also requires a business to include at least one substantive process and narrows the definition of outputs by more closely aligning it with how outputs are described in ASC 606. We adopted ASU 2017-01 in the first quarter of 2018 and it did not impact our consolidated financial statements. On May 10, 2017, the FASB issued guidance ASU No. 2017-09: Scope of Modification Accounting (Topic 718) ("ASU 2017-09"), to clarify when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. We adopted ASU 2017-9 in the first quarter of 2018 and it did not impact our consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09") to clarify the principles of recognizing revenue. Under this ASU, revenue is recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, ASU 2014-09 requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted ASU 2014-09 on January 1, 2018, using the modified retrospective method. Following the adoption of ASU 2014-09, the revenue recognition for our sales arrangements remained materially consistent with our historical practice. Together with the ASU No. 2014-09, we also adopted ASU No. 2016-10, Revenue from Contracts with Customers : Identifying Performance Obligations and Licensing (Topic 606) ("ASU 2016-10") , that amended the above new revenue recognition guidance on accounting for licenses of intellectual property and identifying performance obligations. In addition, we adopted Accounting Standard Update 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients ("ASU 2016-12"). The amendment clarified that, for a contract to be considered completed at transition, all (or substantially all) of the revenue must have been recognized under legacy GAAP. It also clarified how an entity should evaluate the collectability threshold and when an entity can recognize nonrefundable consideration received as revenue if an arrangement does not meet the standard’s contract criteria. Accounting Pronouncements Issued But Not Yet Effective In February 2016, the FASB issued ASU No. 2016-02, Leases ("ASU 2016-02"), which requires all leases in excess of 12 months to be recognized on the balance sheet as lease assets and lease liabilities. For operating leases, a lessee is required to recognize a right-of-use asset and lease liability, initially measured at the present value of the lease payment; recognize a single lease cost over the lease term generally on a straight-line basis; and classify all cash payments within operating activities on the cash flow statement. The guidance is effective for annual and interim periods beginning after December 15, 2018. Earlier adoption is permitted. The Company has identified a project team and commenced an initial impact assessment process for ASU 2016-02. We are continuing to work towards establishing policies, updating our processes and implementing necessary changes to data and processes to be able to comply with the new requirements. Based on the results of our assessment to date, we anticipate this standard will have an impact, which could be significant, on our consolidated financial statements. While we are continuing to assess all potential impacts of the standard, we currently believe the most significant impact relates to recognition of a right-of-use asset and lease liability. The lease liability will be initially measured at the present value of the lease payment; the asset will be based on the liability, subject to adjustment, such as for initial direct costs. Consistent with current guidance, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification. For income statement purposes, operating leases will result in a straight line expense while finance leases will result in a front-loaded expense pattern. The Company currently plans to adopt this standard using the modified retrospective transition approach with optional practical expedients. The Company is continuing to assess all potential impacts of the standard, the impact of the standard on current accounting policies, practices and system of internal controls, in order to identify material differences, if any, that would result from applying the new requirements. |
REVENUES
REVENUES | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | REVENUES Upon adoption of ASC 606, the Company applied certain transition practical expedients available for modified retrospective adoption. The Company adopted the practical expedient for the portfolio approach of contracts with similar characteristics in which the company reasonably expects that the effects on the financial statements of applying this practical expedient to the portfolio would not differ materially from applying this guidance to the individual contracts (or performance obligations) within that portfolio. The Company also adopted the practical expedient to not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) contracts for which INAP recognizes revenue at the amount to which the Company has the right to invoice for services performed, and (iii) the value for variable consideration that is applied to individual performance obligations in a series. The Company elected to exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the entity from a customer (for example, sales, use, and value added taxes). Changes in Accounting Policies The most significant impact of the adoption of the new standard is the requirement for incremental costs to obtain a customer, such as commissions, which previously were expensed as incurred, to be deferred and amortized over the period of contract performance or a longer period if renewals are expected and the renewal commission is not commensurate with the initial commission. In addition, installation revenues are recognized over the initial contract life rather than over the estimated customer life, as they are not significant to the total contract and therefore do not represent a material right. Most performance obligations, with the exception of certain sales of equipment or hardware, are satisfied over time as the customer consumes the benefits as we perform. For equipment and hardware sales, the performance obligation is satisfied when control transfers to the customer. The Company exercised more judgment in deferring installation revenue as well as expense fulfillment and commission costs over the appropriate life. With the exception of the revenues noted above, revenue recognition remains materially consistent with historical practice. However, neither caused a material difference in the financial statement. Adjustments to Reported Financial Statements from the Adoption The following table presents the effect of the adoption of ASC 606 on the Company’s balance sheet as of January 1, 2018 (in thousands): December 31, 2017, as reported Adjustments January 1, 2018, as adjusted ASSETS Current assets: Cash and cash equivalents $ 14,603 $ — $ 14,603 Accounts receivable, net of allowance for doubtful accounts of $1,487 17,794 — 17,794 Prepaid expenses and other assets 8,673 6,814 15,487 Total current assets 41,070 6,814 47,884 Property and equipment, net 458,565 — 458,565 Intangible assets, net 25,666 — 25,666 Goodwill 50,209 — 50,209 Deposits and other assets 11,015 12,214 23,229 Total assets $ 586,525 $ 19,028 $ 605,553 LIABILITIES AND STOCKHOLDERS’ DEFICIT Current liabilities: Accounts payable $ 20,388 $ — $ 20,388 Accrued liabilities 15,908 — 15,908 Deferred revenues 4,861 (749 ) 4,112 Capital lease obligations 11,711 — 11,711 Revolving credit facility 5,000 — 5,000 Term loan, less discount and prepaid costs of $2,133 867 — 867 Exit activities and restructuring liability 4,152 — 4,152 Other current liabilities 1,707 — 1,707 Total current liabilities 64,594 (749 ) 63,845 Capital lease obligations 223,749 — 223,749 Term loan, less discount and prepaid costs of $7,655 287,845 — 287,845 Exit activities and restructuring liability 664 — 664 Deferred rent 1,310 — 1,310 Deferred tax liability 1,651 209 1,860 Other long-term liabilities 7,744 (4,616 ) 3,128 Total liabilities 587,557 (5,156 ) 582,401 Commitments and contingencies Stockholders’ deficit: Preferred stock, $0.001 par value; 5,000 shares authorized; no shares issued or outstanding — — — Common stock, $0.001 par value; 30,000 shares authorized; 20,804 shares outstanding 21 — 21 Additional paid-in capital 1,327,084 — 1,327,084 Treasury stock, at cost, 293 shares (7,159 ) — (7,159 ) Accumulated deficit (1,323,723 ) 24,184 (1,299,539 ) Accumulated items of other comprehensive loss (1,324 ) — (1,324 ) Total INAP stockholders’ deficit (5,101 ) 24,184 19,083 Non-controlling interests 4,069 — 4,069 Total stockholders’ deficit (1,032 ) 24,184 23,152 Total liabilities and stockholders’ deficit $ 586,525 $ 19,028 $ 605,553 Current Impact from the Adoption In accordance with the new revenue standard requirements, the disclosure of the current period impact of adoption on our unaudited condensed consolidated statement of operations and comprehensive loss and balance sheet is as follows (in thousands, except for per share amounts): For the Three Months Ended March 31, 2018 As Reported Balances without Adoption of ASC 606 Effect of Change Higher/ (Lower) Revenues: INAP US $ 57,076 $ 56,835 $ 241 INAP INTL 17,125 17,125 — Total revenues 74,201 73,960 241 Operating costs and expenses: Costs of sales and services, exclusive of depreciation and amortization, shown below: INAP US 18,435 18,435 — INAP INTL 6,602 6,602 — Costs of customer support 7,387 7,387 — Sales, general and administrative 19,854 19,948 (94 ) Depreciation and amortization 21,077 21,077 — Exit activities, restructuring and impairments (33 ) (33 ) — Total operating costs and expenses 73,322 73,416 (94 ) Income from operations 879 544 335 Non-operating expenses: Interest expense 15,027 15,027 — Gain on foreign currency, net (215 ) (215 ) — Total non-operating expenses 14,812 14,812 — Loss before income taxes and non-controlling interest (13,933 ) (14,268 ) 335 Provision for income taxes 100 100 — Net loss (14,033 ) (14,368 ) 335 Less net income attributable to non-controlling interest 27 27 — Net loss attributable to INAP stockholders (14,060 ) (14,395 ) 335 Other comprehensive income: Foreign currency translation adjustment 61 61 — Comprehensive loss $ (13,999 ) $ (14,334 ) $ 335 Basic and diluted net loss per share $ (0.70 ) $ (0.72 ) $ 0.02 Weighted average shares outstanding used in computing basic and diluted net loss per share 20,052 20,052 March 31, 2018 As Reported Balances without Adoption of ASC 606 Effect of Change Higher/ (Lower) ASSETS Current assets: Cash and cash equivalents $ 16,159 $ 16,159 $ — Accounts receivable, net of allowance for doubtful accounts of $1,700 17,524 17,524 — Contract assets 7,131 6,872 259 Prepaid expenses and other assets 8,690 8,690 — Total current assets 49,504 49,245 259 Property and equipment, net 461,314 461,314 — Intangible assets, net 79,185 79,185 — Goodwill 118,077 118,077 — Non-current contract assets 12,056 12,027 29 Deposits and other assets 11,784 11,784 — Total assets $ 731,920 $ 731,632 $ 288 LIABILITIES AND STOCKHOLDERS’ DEFICIT Current liabilities: Accounts payable $ 21,699 $ 21,699 $ — Accrued liabilities 14,279 14,279 — Deferred revenues 5,871 6,062 (191 ) Capital lease obligations 10,095 10,095 — Revolving credit facility 16,000 16,000 — Term loan, less discount and prepaid costs of $3,539 818 818 — Exit activities and restructuring liability 3,391 3,391 — Other current liabilities 4,197 4,197 — Total current liabilities 76,350 76,541 (191 ) Capital lease obligations 223,549 223,549 — Term loan, less discount and prepaid costs of $11,286 416,766 416,766 — Exit activities and restructuring liability 408 408 — Deferred rent 1,138 1,138 — Deferred tax liability 1,841 1,841 — Other long-term liabilities 3,046 2,902 144 Total liabilities 723,098 723,145 (47 ) Commitments and contingencies Stockholders’ deficit: Preferred stock, $0.001 par value; 5,000 shares authorized; no shares issued or outstanding — — — Common stock, $0.001 par value; 30,000 shares authorized; 21,131 shares outstanding 21 21 — Additional paid-in capital 1,327,985 1,327,985 — Treasury stock, at cost, 313 shares (7,429 ) (7,429 ) — Accumulated deficit (1,313,598 ) (1,313,933 ) 335 Accumulated items of other comprehensive loss (1,263 ) (1,263 ) — Total INAP stockholders’ deficit 5,716 5,381 335 Non-controlling interests 3,106 3,106 — Total stockholders’ deficit 8,822 8,487 335 Total liabilities and stockholders’ deficit $ 731,920 $ 731,632 $ 288 ASC 606 did not have a significant impact on the Company's unaudited condensed consolidated statement of cash flows. The Company accounts for revenue in accordance with ASC 606. Revenue is recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company enters into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. The Company’s contracts with customers often include performance obligations to transfer multiple products and services to a customer. Common performance obligations of the Company include delivery of services, which are discussed in more detail below. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together requires significant judgment by the Company. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in ASC 606. A contracts transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Total transaction price is estimated for impact of variable consideration, such as INAP’s service level arrangements ("SLA"), additional usage and late fees, discounts and promotions, and customer care credits. The majority of our contracts have multiple performance obligations, as the promise to transfer individual goods or services is separately identifiable from other promises in the contracts and, therefore, is distinct. For contracts with multiple performance obligations, we allocate the contracts transaction price to each performance obligation based on its relative standalone selling price. The stand-alone selling price (“SSP”) is determined based on observable price. In instances where the SSP is not directly observable, such as when the Company does not sell the product or service separately, INAP determines the SSP using information that may include market conditions and other observable inputs. The Company typically has more than one SSP for individual products and services due to the stratification of those products and services by customers and circumstances. In these instances, the Company may use information such as the size of the customer and geographic region in determining the SSP. Revenue by source, with sales and usage-based taxes excluded, is as follows (in thousands, unaudited): Three Months Ended March 31, 2018 INAP US INAP INTL Colocation $ 30,936 $ 1,517 Network services 13,820 2,971 Cloud 12,320 12,637 $ 57,076 $ 17,125 Revenue by geography is as follows (in thousands, unaudited): Three Months Ended March 31, 2018 INAP US INAP INTL United States $ 57,076 $ — Canada — 9,291 Other countries — 7,834 $ 57,076 $ 17,125 For the three months ended March 31, 2018, revenue recognized that was included in the contract liability balance at the beginning of each year was $0.5 million . Management expects that fulfillment costs and commission fees paid to sales representative as a result of obtaining service contracts and contract renewals are recoverable and therefore the Company capitalized them as contract costs in the amount of $26.3 million at March 31, 2018. Capitalized fulfillment and commission fees are amortized on a straight-line basis over the determined life, which vary based on the customer segment. For the three months ended March 31, 2018, amortization recognized was $2.9 million . There was no impairment loss in relation to the costs capitalized. Applying the practical expedient pertaining to contract costs, the Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. These costs are included in selling, general and administrative expenses. |
CHANGE IN ORGANIZATIONAL STRUCT
CHANGE IN ORGANIZATIONAL STRUCTURE | 3 Months Ended |
Mar. 31, 2018 | |
Change In Organizational Structure And Realignment Of Expenses [Abstract] | |
CHANGE IN ORGANIZATIONAL STRUCTURE | CHANGE IN ORGANIZATIONAL STRUCTURE During the three months ended March 31, 2018 , we changed our organizational structure in an effort to create more effective and efficient operations and to improve customer and product focus. In that regard, we revised the information that our chief executive officer, who is also our Chief Operating Decision Maker (“CODM”), regularly reviews for purposes of allocating resources and assessing performance. As a result, we report our financial performance based on our revised segment structure, described in more detail note 11 “Operating Segments.” We have reclassified prior period amounts to conform to the current presentation. The prior year reclassifications, which did not affect total revenues, total costs of sales and services, operating loss or net loss, are summarized as follows (in thousands): Three Months Ended March 31, 2017 As Previously Reported Reclassification As Reported Revenues: INAP COLO $ 53,339 $ (53,339 ) $ — INAP CLOUD 18,794 (18,794 ) — INAP US — 55,461 55,461 INAP INTL — 16,672 16,672 Costs of sales and services, exclusive of depreciation and amortization: INAP COLO 24,806 (24,806 ) — INAP CLOUD 4,239 (4,239 ) — INAP US — 23,547 23,547 INAP INTL — 5,498 5,498 Our services, which are included within both our reportable segments, are described as follows: Colocation Colocation involves providing physical space within data centers and associated services such as power, interconnection, environmental controls, monitoring and security while allowing our customers to deploy and manage their servers, storage and other equipment in our secure data centers. We design the data center infrastructure, procure the capital equipment, deploy the infrastructure and are responsible for the operation and maintenance of the facility. Cloud Cloud services involve providing compute resources and storage services on demand via an integrated platform that includes our automated bare metal solutions. We offer our next generation cloud platforms in our high density colocation facilities and utilize the INAP performance IP for low latency connectivity. Network Network services includes our patented Performance IP™ service, content delivery network services, IP routing hardware and software platform. By intelligently routing traffic with redundant, high-speed connections over multiple, major Internet backbones, our IP connectivity provides high-performance and highly-reliable delivery of content, applications and communications to end users globally. We deliver our IP connectivity through 97 POPs around the world. |
ACQUISITION
ACQUISITION | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
ACQUISITION | ACQUISITION On February 28, 2018, the Company acquired SingleHop LLC ("SingleHop"), a provider of high-performance data center services including colocation, managed hosting, cloud and network services for $132.0 million net of working capital adjustments, liabilities assumed, and net of cash acquired. The transaction was funded with an incremental term loan and cash from the balance sheet. As part of the financing, INAP obtained an amendment to its credit agreement to allow for the incremental term loan and to provide further operational flexibility under the credit agreement covenants. The amendments to the credit agreement are described in more detail in note 8, "Debt". SingleHop is a recognized leader in the Managed Hosting and Infrastructure as a Service (IaaS) business segment, offering highly automated and on-demand IT infrastructure. This strategic combination allows INAP to immediately offer its customers advanced products and expertise. SingleHop’s enterprise and business customers will also benefit from INAP’s North America and global presence, providing a more expansive integrated footprint. The Company determined the preliminary fair value of the net assets acquired as follows (in thousands): Purchase price allocation Cash $ 2,857 Prepaid expenses and other assets 1,683 Property, plant and equipment 14,885 Other long term assets 39 Intangible assets: Weighted Average Noncompete Agreements 4,000 4 years Trade name 1,700 8 years Technology 15,100 7 years Customer relationship 34,100 10 years Goodwill 67,868 Total assets acquired 142,232 Accounts payable and accrued liabilities 5,098 Deferred revenue 1,600 Long term liabilities 534 Net assets acquired $ 135,000 The goodwill recorded in connection with this acquisition was based on operating synergies and other benefits expected to result from the combined operations and the assembled workforce acquired. The goodwill acquired is deductible for tax purposes. Acquisition-related costs recognized during the three months ended March 31, 2018 including transaction costs such as legal, accounting, valuation and other professional services, were $2.5 million and are included in "Sales, general and administrative" expenses on the accompanying unaudited condensed consolidated statements of operations and comprehensive loss. Pro-Forma Financial Information The following unaudited pro forma financial information presents the combined results of operations of INAP and SingleHop as if the acquisition had occurred on January 1, 2017. The unaudited pro forma financial information is not intended to represent or be indicative of our consolidated results of operations that would have been reported had the INAP and SingleHop acquisition been completed as of January 1, 2017, and should not be taken as indicative of our future consolidated results of operations. Three months ended March 31, 2018 ( in thousands except per share amounts) Three months ended March 31, 2017 ( in thousands except per share amounts) Revenues $ 82,172 $ 81,728 Net loss $ (15,667 ) $ (17,739 ) Basic and diluted net loss per share $ (0.78 ) $ (0.89 ) Weighted average shares outstanding used in computing basic and diluted net loss per share 20,052 19,877 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS We account for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are: • Level 1: Quoted prices in active markets for identical assets or liabilities; • Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and • Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Assets and liabilities measured at fair value on a recurring basis are summarized as follows (in thousands): Level 1 Level 2 Level 3 Total March 31, 2018 Cash and cash equivalents $ 16,159 $ — $ — $ 16,159 Asset retirement obligations (1) — — 1,729 1,729 December 31, 2017 Cash and cash equivalents 14,603 — — 14,603 Asset retirement obligations (1) — — 1,936 1,936 (1) We calculate the fair value of asset retirement obligations by discounting the estimated amount using the current Treasury bill rate adjusted for our credit risk. At March 31, 2018, the balance is included in “Other long-term liabilities,” in the accompanying unaudited consolidated balance sheets. At December 31, 2017, $0.2 million and $1.7 million were included in "Other current liabilities" and "Other long-term liabilities," respectively, in the accompanying unaudited consolidated balance sheets. The following table provides a summary of changes in our Level 3 asset retirement obligations for the three months ended March 31, 2018 (in thousands): Balance, January 1, 2018 $ 1,936 Accretion 41 Payments (248 ) Balance, March 31, 2018 $ 1,729 The fair values of our other Level 3 debt liabilities, estimated using a discounted cash flow analysis based on incremental borrowing rates for similar types of borrowing arrangements, are as follows (in thousands): March 31, 2018 December 31, 2017 Carrying Amount Fair Value Carrying Amount Fair Value Term loan $ 432,409 $ 435,934 $ 298,500 $ 301,485 Revolving credit facility 16,000 16,130 5,000 5,050 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill During the three months ended March 31, 2018 , we changed our operating segments, as discussed in note 4 “Change in Organizational Structure,” and, subsequently, our reporting units. We now have seven reporting units: US Colocation, US Cloud, US Network, INT Colocation, INT Cloud, INT Network, and Ubersmith. We allocated goodwill to our new reporting units using a relative fair value approach. In addition, we completed an assessment of any potential goodwill impairment for all reporting units immediately prior to and after the reallocation and determined that no impairment existed. During the three months ended March 31, 2018, our goodwill activity is as follows (in thousands): December 31, 2017 Re-allocations SingleHop Acquisition (note 5) March 31, 2018 Operating segments: INAP COLO $ 6,003 $ (6,003 ) $ — $ — INAP CLOUD 44,206 (44,206 ) — — INAP US — 28,304 67,868 96,172 INAP INTL — 21,905 — 21,905 Total $ 50,209 $ — $ 67,868 $ 118,077 Other Intangible Assets The components of our amortizing intangible assets, including capitalized software, are as follows (in thousands): March 31, 2018 December 31, 2017 Gross Carrying Amount AccumulatedAmortization Gross Carrying Amount AccumulatedAmortization Acquired and developed technology $ 68,269 $ (48,766 ) $ 52,825 $ (48,063 ) Customer relationships, trade names and noncompete 110,850 (51,168 ) 71,116 (50,212 ) $ 179,119 $ (99,934 ) $ 123,941 $ (98,275 ) During the three months ended March 31, 2018 and 2017, amortization expense for intangible assets was $1.7 million and $1.1 million , respectively. As of March 31, 2018, remaining amortization expenses is as follows (in thousands): Nine months remaining in 2018 $ 8,636 2019 10,941 2020 10,031 2021 9,548 2022 7,839 Thereafter 32,190 $ 79,185 |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Credit Agreement On April 6, 2017, we entered into a new Credit Agreement (the “2017 Credit Agreement”), which provides for a $300 million term loan facility ("2017 term loan") and a $25 million revolving credit facility (the "2017 revolving credit facility"). The proceeds of the term loan were used to refinance the Company’s existing credit facility and to pay costs and expenses associated with the 2017 Credit Agreement. Certain portions of refinancing transaction were considered an extinguishment of debt and certain portions were considered a modification. A total of $5.7 million was paid for debt issuance costs related to the 2017 Credit Agreement. Of the $5.7 million in costs paid, $1.9 million related to the exchange of debt and was expensed, $3.3 million related to term loan third party costs and will be amortized over the term of the loan and $0.4 million are prepaid debt issuance costs related to the revolving credit facility and will be amortized over the term of the revolving credit facility. In addition, $4.8 million of debt discount and debt issuance costs related to the previous credit facility were expensed due to the extinguishment of that credit facility. The maturity date of the term loan is April 6, 2022 and the maturity date of the 2017 revolving credit facility is October 6, 2021. As of March 31, 2018, the balance of the term loan and the revolver was $432.4 million and $16.0 million , respectively. As of March 31, 2018, the interest rate on the 2017 term loan and the revolver was 8.72% and 8.88% , respectively. Borrowings under the amended credit agreement bear interest at a rate per annum equal to an applicable margin plus, at our option, a base rate or an adjusted LIBOR rate. The applicable margin for loans under the revolving credit facility is 4.5% for loans bearing interest calculated using the base rate (“Base Rate Loans”) and 5.50% for loans bearing interest calculated using the adjusted LIBOR rate (“Adjusted LIBOR Loans”). The applicable margin for loans under the term loan is 5.00% for Base Rate Loans and 6.00% for Adjusted LIBOR Rate loans. The base rate is equal to the highest of (a) the adjusted U.S. Prime Lending Rate as published in the Wall Street Journal, (b) with respect to term loans issued on the closing date, 2.00% , (c) the federal funds effective rate from time to time, plus 0.50% , and (d) the adjusted LIBOR rate, as defined below, for a one-month interest period, plus 1.00% . The adjusted LIBOR rate is equal to the rate per annum (adjusted for statutory reserve requirements for Eurocurrency liabilities) at which Eurodollar deposits are offered in the interbank Eurodollar market for the applicable interest period (one, two, three or six months), as quoted on Reuters screen LIBOR (or any successor page or service). The financing commitments of the Lenders extending the revolving credit facility are subject to various conditions, as set forth in the credit agreement. First Amendment On June 28, 2017, the Company entered into an amendment to the 2017 Credit Agreement (“First Amendment”), by and among the Company, each of the lenders party thereto, and Jefferies Finance LLC, as Administrative Agent. The First Amendment clarified that for all purposes the Company’s liabilities pursuant to any lease that was treated as rental and lease expense, and not as a capital lease obligation or indebtedness on the closing date of the 2017 Credit Agreement, would continue to be treated as a rental and lease expense, and not as a capital lease obligations or indebtedness, for all purposes of the 2017 Credit Agreement, notwithstanding any amendment of the lease that results in the treatment of such lease as a capital lease obligation or indebtedness for financial reporting purposes. Second Amendment On February 6, 2018, the Company, the Lenders party thereto and Jefferies Finance LLC, as Administrative Agent, entered into a Second Amendment to Credit Agreement (the “Second Amendment”) that amended the 2017 Credit Agreement. The Second Amendment, among other things, amends the 2017 Credit Agreement (i) to permit the Company to incur incremental term loans under the 2017 Credit Agreement of up to $135 million to finance the Company’s acquisition of SingleHop and to pay related fees, costs and expenses and (ii) to revise the maximum total net leverage ratio and minimum consolidated interest coverage ratio covenants. The financial covenant amendments became effective upon the consummation of the SingleHop acquisition, while the other provisions of the 2018 Second Amendment became effective upon the execution and delivery of the Second Amendment. At March 31, 2018, the Company has been in compliance with the covenants. A total of $1.0 million was paid for debt issuance costs related to the Second Amendment. Of the $1.0 million in costs paid, $0.2 million related to the payment of legal and professional which were expensed, $0.8 million related to term loan lender fees and will be amortized over the term of the loan. Third Amendment On February 28, 2018, INAP entered into the Incremental and Third Amendment to the Credit Agreement among the Company, the Lenders party thereto and Jefferies Finance LLC, as Administrative Agent (the “Third Amendment”). The Third Amendment provides for a new incremental term loan facility under the 2017 Credit Agreement of $135 million (the “Incremental Term Loan”). The Incremental Term Loan has terms and conditions identical to the existing loans under the 2017 Credit Agreement, as amended. Proceeds of the Incremental Term Loan were used to complete the acquisition of SingleHop and to pay fees, costs and expenses related to the acquisition, the Third Amendment and the Incremental Term Loan. This transaction was considered a modification. A total of $5.0 million was paid for debt issuance costs related to the First Amendment. Of the $5.0 million in costs paid, $0.1 million related to the payment of legal and professional which were expensed, $4.9 million related to term loan lender fees and will be amortized over the term of the loan. |
EXIT ACTIVITIES AND RESTRUCTURI
EXIT ACTIVITIES AND RESTRUCTURING LIABILITIES | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
EXIT ACTIVITIES AND RESTRUCTURING LIABILITIES | EXIT ACTIVITIES AND RESTRUCTURING LIABILITIES During the three months ended March 31, 2018, we recorded initial exit activity charges due to ceasing use of office space. We include initial charges and plan adjustments in “Exit activities, restructuring and impairments” in the accompanying unaudited condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2018 and 2017. The following table displays the transactions and balances for exit activities and restructuring charges during the three months ended March 31, 2018 and 2017 (in thousands). Our real estate and severance obligations are substantially related to our INAP US segment. Balance December 31, 2017 Initial Charges Plan Adjustments Cash Payments Balance March 31, 2018 Activity for 2018 restructuring charge: Real estate obligations $ — $ 171 $ 9 $ (23 ) $ 157 Activity for 2017 restructuring charge: Real estate obligations 3,380 — 72 (1,020 ) 2,432 Activity for 2016 restructuring charge: Severance 46 — 34 (34 ) 46 Real estate obligations 247 — 7 (38 ) 216 Activity for 2015 restructuring charge: Real estate obligation 64 — 12 (22 ) 54 Service contracts 388 — 8 (50 ) 346 Activity for 2014 restructuring charge: Real estate obligation 691 — 59 (202 ) 548 $ 4,816 $ 171 $ 201 $ (1,389 ) $ 3,799 Balance December 31, 2016 Initial Charges Plan Adjustments Cash Payments Balance March 31, 2017 Activity for 2016 restructuring charge: Real estate obligations $ 1,911 $ — $ 566 $ (993 ) $ 1,484 Service contracts 933 — 378 (187 ) 1,124 Activity for 2015 restructuring charge: Real estate obligation 111 — (4 ) (7 ) 100 Service contracts 565 — 5 (49 ) 521 Activity for 2014 restructuring charge: Real estate obligations 1,183 — 34 (150 ) 1,067 $ 4,703 $ — $ 979 $ (1,386 ) $ 4,296 |
COMMITMENTS, CONTINGENCIES AND
COMMITMENTS, CONTINGENCIES AND LITIGATION | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS, CONTINGENCIES AND LITIGATION | COMMITMENTS, CONTINGENCIES AND LITIGATION We are subject to legal proceedings, claims and litigation arising in the ordinary course of business. Although the outcome of these matters is currently not determinable, we do not expect that the ultimate costs to resolve these matters will have a material adverse impact on our financial condition, results of operations or cash flows. |
OPERATING SEGMENTS
OPERATING SEGMENTS | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
OPERATING SEGMENTS | OPERATING SEGMENTS The Company has two reportable segments: INAP US and INAP INTL. These segments are comprised of strategic businesses that are defined by the location of the service offerings. Our INAP US segment consists of US Colocation, US Cloud, and US Network services based in the United States. Our INAP INTL segment consists of these same services based in countries other than the United States, and Ubersmith. Each segment is managed as an operation with well-established strategic directions and performance requirements. Each segment is led by a separate General Manager who reports directly to the Company’s CODM. The CODM evaluates segment performance using business unit contribution which is defined as business unit revenues less direct costs of sales and services, customer support, and sales and marketing, exclusive of depreciation and amortization. Our services, which are included within both our reportable segments, are described as follows: Colocation Colocation involves providing physical space within data centers and associated services such as power, interconnection, environmental controls, monitoring and security while allowing our customers to deploy and manage their servers, storage and other equipment in our secure data centers. We design the data center infrastructure, procure the capital equipment, deploy the infrastructure and are responsible for the operation and maintenance of the facility. Cloud Cloud services involve providing compute resources and storage services on demand via an integrated platform that includes our automated bare metal solutions. We offer our next generation cloud platforms in our high density colocation facilities and utilize the INAP performance IP for low latency connectivity. Network Network services includes our patented Performance IP™ service, content delivery network services, IP routing hardware and software platform. By intelligently routing traffic with redundant, high-speed connections over multiple, major Internet backbones, our IP connectivity provides high-performance and highly-reliable delivery of content, applications and communications to end users globally. We deliver our IP connectivity through 97 POPs around the world. The following table provides segment results with prior period amounts reclassified to conform to the current presentation (in thousands): Three Months Ended March 31, 2018 2017 Revenues: INAP US $ 57,076 $ 55,461 INAP INTL 17,125 16,672 Total revenues 74,201 72,133 Cost of sales and services, customer support and sales and marketing: INAP US 30,537 35,457 INAP INTL 11,133 9,002 Total costs of sales and services, customer support and sales and marketing 41,670 44,459 Segment profit: INAP US 26,539 20,004 INAP INTL 5,992 7,670 Total segment profit 32,531 27,674 Exit activities, restructuring and impairments (33 ) 1,023 Other operating expenses, including general and administrative and depreciation and amortization expenses 31,685 26,159 Income from operations 879 492 Non-operating expenses 14,812 8,234 Loss before income taxes and non-controlling interest $ (13,933 ) $ (7,742 ) The CODM does not manage the operating segments based on asset allocations. Therefore, assets by operating segment have not been provided. |
NET LOSS PER SHARE
NET LOSS PER SHARE | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
NET LOSS PER SHARE | NET LOSS PER SHARE We compute basic net loss per share by dividing net loss attributable to our common stockholders by the weighted average number of shares of common stock outstanding during the period. We exclude all outstanding options and unvested restricted stock as such securities are anti-dilutive for all periods presented. Basic and diluted net loss per share is calculated as follows (in thousands, except per share amounts): Three Months Ended 2018 2017 Net loss $ (14,033 ) $ (8,230 ) Less net income attributable to non-controlling stockholders 27 — Net loss attributable to common stock $ (14,060 ) $ (8,230 ) Weighted average shares outstanding, basic and diluted 20,052 16,087 Net loss per share, basic and diluted $ (0.70 ) $ (0.50 ) Anti-dilutive securities excluded from diluted net loss per share calculation for stock-based compensation plans 1,336 1,385 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On April 9, 2018, the Company entered into the Fourth Amendment to 2017 Credit Agreement, among the Company, the Lenders party thereto and Jefferies Finance LLC, as Administrative Agent (the “Fourth Amendment”). The Fourth Amendment amends the 2017 Credit Agreement to lower the interest rate margins applicable to the outstanding term loans under the 2017 Credit Agreement by 1.25% . In addition, the Fourth Amendment amends the 2017 Credit Agreement such that if the Company incurs a “Repricing Event” (as defined in the 2017 Credit Agreement), before October 9, 2018, then the Company will incur a 1.0% prepayment premium on any term loans that are subject to such Repricing Event. |
RECENT ACCOUNTING PRONOUNCEME19
RECENT ACCOUNTING PRONOUNCEMENTS (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Basis of Presentation | We have prepared the accompanying unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. These financial statements include all of our accounts and those of our wholly-owned subsidiaries. We have eliminated all intercompany transactions and balances in the accompanying financial statements. In the opinion of management, all adjustments necessary for a fair presentation of the interim results have been reflected therein. All such adjustments were of a normal and recurring nature, with the exception of those related to the adoption of Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASC 606”). Prior year amounts have been reclassified in some cases to conform to the current year presentation. We have condensed or omitted certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP. The accompanying financial statements reflect all adjustments, which consist of normal recurring adjustments unless otherwise disclosed, necessary for a fair statement of our financial position as of March 31, 2018 and our operating results and cash flows for the interim periods presented. The balance sheet at December 31, 2017 was derived from our audited financial statements, but does not include all disclosures required by GAAP. You should read the accompanying financial statements and the related notes in conjunction with our financial statements and notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission (“SEC”). |
Use of Estimates | The preparation of financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. Actual results may differ materially from these estimates. The results of operations for the three months ended March 31, 2018 are not necessarily indicative of the results that may be expected for the 2018 fiscal year or any future periods. |
Recent Accounting Pronouncements | Adoption of New Accounting Standards On August 26, 2016, the Financial Accounting Standard Board (the "FASB") issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments ("ASU 2016-15"), a consensus of the FASB’s Emerging Issues Task Force. The new guidance is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. We adopted ASU 2016-15 in the first quarter of 2018 and it did not impact our consolidated financial statements. On November 17, 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash ("ASU 2016-18"), a consensus of the FASB’s Emerging Issues Task Force. The new standard requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Entities will also be required to reconcile such total to amounts on the balance sheet and disclose the nature of the restrictions. We adopted ASU 2016-18 in the first quarter of 2018 and it did not impact our consolidated financial statements. On January 5, 2017, the FASB issued final guidance that revises the definition of a business, ASU No. 2017-01: Clarifying the Definition of a Business (Topic 805) ("ASU 2017-01"). The definition of a business affects many areas of accounting (e.g., acquisitions, disposals, goodwill impairment, consolidation). The guidance requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities is not a business. The guidance also requires a business to include at least one substantive process and narrows the definition of outputs by more closely aligning it with how outputs are described in ASC 606. We adopted ASU 2017-01 in the first quarter of 2018 and it did not impact our consolidated financial statements. On May 10, 2017, the FASB issued guidance ASU No. 2017-09: Scope of Modification Accounting (Topic 718) ("ASU 2017-09"), to clarify when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. We adopted ASU 2017-9 in the first quarter of 2018 and it did not impact our consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09") to clarify the principles of recognizing revenue. Under this ASU, revenue is recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, ASU 2014-09 requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted ASU 2014-09 on January 1, 2018, using the modified retrospective method. Following the adoption of ASU 2014-09, the revenue recognition for our sales arrangements remained materially consistent with our historical practice. Together with the ASU No. 2014-09, we also adopted ASU No. 2016-10, Revenue from Contracts with Customers : Identifying Performance Obligations and Licensing (Topic 606) ("ASU 2016-10") , that amended the above new revenue recognition guidance on accounting for licenses of intellectual property and identifying performance obligations. In addition, we adopted Accounting Standard Update 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients ("ASU 2016-12"). The amendment clarified that, for a contract to be considered completed at transition, all (or substantially all) of the revenue must have been recognized under legacy GAAP. It also clarified how an entity should evaluate the collectability threshold and when an entity can recognize nonrefundable consideration received as revenue if an arrangement does not meet the standard’s contract criteria. Accounting Pronouncements Issued But Not Yet Effective In February 2016, the FASB issued ASU No. 2016-02, Leases ("ASU 2016-02"), which requires all leases in excess of 12 months to be recognized on the balance sheet as lease assets and lease liabilities. For operating leases, a lessee is required to recognize a right-of-use asset and lease liability, initially measured at the present value of the lease payment; recognize a single lease cost over the lease term generally on a straight-line basis; and classify all cash payments within operating activities on the cash flow statement. The guidance is effective for annual and interim periods beginning after December 15, 2018. Earlier adoption is permitted. The Company has identified a project team and commenced an initial impact assessment process for ASU 2016-02. We are continuing to work towards establishing policies, updating our processes and implementing necessary changes to data and processes to be able to comply with the new requirements. Based on the results of our assessment to date, we anticipate this standard will have an impact, which could be significant, on our consolidated financial statements. While we are continuing to assess all potential impacts of the standard, we currently believe the most significant impact relates to recognition of a right-of-use asset and lease liability. The lease liability will be initially measured at the present value of the lease payment; the asset will be based on the liability, subject to adjustment, such as for initial direct costs. Consistent with current guidance, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification. For income statement purposes, operating leases will result in a straight line expense while finance leases will result in a front-loaded expense pattern. The Company currently plans to adopt this standard using the modified retrospective transition approach with optional practical expedients. The Company is continuing to assess all potential impacts of the standard, the impact of the standard on current accounting policies, practices and system of internal controls, in order to identify material differences, if any, that would result from applying the new requirements. |
Fair Value Measurements | We account for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are: • Level 1: Quoted prices in active markets for identical assets or liabilities; • Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and • Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
Operating Segments | The Company has two reportable segments: INAP US and INAP INTL. These segments are comprised of strategic businesses that are defined by the location of the service offerings. Our INAP US segment consists of US Colocation, US Cloud, and US Network services based in the United States. Our INAP INTL segment consists of these same services based in countries other than the United States, and Ubersmith. Each segment is managed as an operation with well-established strategic directions and performance requirements. Each segment is led by a separate General Manager who reports directly to the Company’s CODM. The CODM evaluates segment performance using business unit contribution which is defined as business unit revenues less direct costs of sales and services, customer support, and sales and marketing, exclusive of depreciation and amortization. |
Net Loss Per Share | We compute basic net loss per share by dividing net loss attributable to our common stockholders by the weighted average number of shares of common stock outstanding during the period. We exclude all outstanding options and unvested restricted stock as such securities are anti-dilutive for all periods presented. |
REVENUES (Tables)
REVENUES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of new accounting pronouncements and changes in accounting principles | In accordance with the new revenue standard requirements, the disclosure of the current period impact of adoption on our unaudited condensed consolidated statement of operations and comprehensive loss and balance sheet is as follows (in thousands, except for per share amounts): For the Three Months Ended March 31, 2018 As Reported Balances without Adoption of ASC 606 Effect of Change Higher/ (Lower) Revenues: INAP US $ 57,076 $ 56,835 $ 241 INAP INTL 17,125 17,125 — Total revenues 74,201 73,960 241 Operating costs and expenses: Costs of sales and services, exclusive of depreciation and amortization, shown below: INAP US 18,435 18,435 — INAP INTL 6,602 6,602 — Costs of customer support 7,387 7,387 — Sales, general and administrative 19,854 19,948 (94 ) Depreciation and amortization 21,077 21,077 — Exit activities, restructuring and impairments (33 ) (33 ) — Total operating costs and expenses 73,322 73,416 (94 ) Income from operations 879 544 335 Non-operating expenses: Interest expense 15,027 15,027 — Gain on foreign currency, net (215 ) (215 ) — Total non-operating expenses 14,812 14,812 — Loss before income taxes and non-controlling interest (13,933 ) (14,268 ) 335 Provision for income taxes 100 100 — Net loss (14,033 ) (14,368 ) 335 Less net income attributable to non-controlling interest 27 27 — Net loss attributable to INAP stockholders (14,060 ) (14,395 ) 335 Other comprehensive income: Foreign currency translation adjustment 61 61 — Comprehensive loss $ (13,999 ) $ (14,334 ) $ 335 Basic and diluted net loss per share $ (0.70 ) $ (0.72 ) $ 0.02 Weighted average shares outstanding used in computing basic and diluted net loss per share 20,052 20,052 March 31, 2018 As Reported Balances without Adoption of ASC 606 Effect of Change Higher/ (Lower) ASSETS Current assets: Cash and cash equivalents $ 16,159 $ 16,159 $ — Accounts receivable, net of allowance for doubtful accounts of $1,700 17,524 17,524 — Contract assets 7,131 6,872 259 Prepaid expenses and other assets 8,690 8,690 — Total current assets 49,504 49,245 259 Property and equipment, net 461,314 461,314 — Intangible assets, net 79,185 79,185 — Goodwill 118,077 118,077 — Non-current contract assets 12,056 12,027 29 Deposits and other assets 11,784 11,784 — Total assets $ 731,920 $ 731,632 $ 288 LIABILITIES AND STOCKHOLDERS’ DEFICIT Current liabilities: Accounts payable $ 21,699 $ 21,699 $ — Accrued liabilities 14,279 14,279 — Deferred revenues 5,871 6,062 (191 ) Capital lease obligations 10,095 10,095 — Revolving credit facility 16,000 16,000 — Term loan, less discount and prepaid costs of $3,539 818 818 — Exit activities and restructuring liability 3,391 3,391 — Other current liabilities 4,197 4,197 — Total current liabilities 76,350 76,541 (191 ) Capital lease obligations 223,549 223,549 — Term loan, less discount and prepaid costs of $11,286 416,766 416,766 — Exit activities and restructuring liability 408 408 — Deferred rent 1,138 1,138 — Deferred tax liability 1,841 1,841 — Other long-term liabilities 3,046 2,902 144 Total liabilities 723,098 723,145 (47 ) Commitments and contingencies Stockholders’ deficit: Preferred stock, $0.001 par value; 5,000 shares authorized; no shares issued or outstanding — — — Common stock, $0.001 par value; 30,000 shares authorized; 21,131 shares outstanding 21 21 — Additional paid-in capital 1,327,985 1,327,985 — Treasury stock, at cost, 313 shares (7,429 ) (7,429 ) — Accumulated deficit (1,313,598 ) (1,313,933 ) 335 Accumulated items of other comprehensive loss (1,263 ) (1,263 ) — Total INAP stockholders’ deficit 5,716 5,381 335 Non-controlling interests 3,106 3,106 — Total stockholders’ deficit 8,822 8,487 335 Total liabilities and stockholders’ deficit $ 731,920 $ 731,632 $ 288 The following table presents the effect of the adoption of ASC 606 on the Company’s balance sheet as of January 1, 2018 (in thousands): December 31, 2017, as reported Adjustments January 1, 2018, as adjusted ASSETS Current assets: Cash and cash equivalents $ 14,603 $ — $ 14,603 Accounts receivable, net of allowance for doubtful accounts of $1,487 17,794 — 17,794 Prepaid expenses and other assets 8,673 6,814 15,487 Total current assets 41,070 6,814 47,884 Property and equipment, net 458,565 — 458,565 Intangible assets, net 25,666 — 25,666 Goodwill 50,209 — 50,209 Deposits and other assets 11,015 12,214 23,229 Total assets $ 586,525 $ 19,028 $ 605,553 LIABILITIES AND STOCKHOLDERS’ DEFICIT Current liabilities: Accounts payable $ 20,388 $ — $ 20,388 Accrued liabilities 15,908 — 15,908 Deferred revenues 4,861 (749 ) 4,112 Capital lease obligations 11,711 — 11,711 Revolving credit facility 5,000 — 5,000 Term loan, less discount and prepaid costs of $2,133 867 — 867 Exit activities and restructuring liability 4,152 — 4,152 Other current liabilities 1,707 — 1,707 Total current liabilities 64,594 (749 ) 63,845 Capital lease obligations 223,749 — 223,749 Term loan, less discount and prepaid costs of $7,655 287,845 — 287,845 Exit activities and restructuring liability 664 — 664 Deferred rent 1,310 — 1,310 Deferred tax liability 1,651 209 1,860 Other long-term liabilities 7,744 (4,616 ) 3,128 Total liabilities 587,557 (5,156 ) 582,401 Commitments and contingencies Stockholders’ deficit: Preferred stock, $0.001 par value; 5,000 shares authorized; no shares issued or outstanding — — — Common stock, $0.001 par value; 30,000 shares authorized; 20,804 shares outstanding 21 — 21 Additional paid-in capital 1,327,084 — 1,327,084 Treasury stock, at cost, 293 shares (7,159 ) — (7,159 ) Accumulated deficit (1,323,723 ) 24,184 (1,299,539 ) Accumulated items of other comprehensive loss (1,324 ) — (1,324 ) Total INAP stockholders’ deficit (5,101 ) 24,184 19,083 Non-controlling interests 4,069 — 4,069 Total stockholders’ deficit (1,032 ) 24,184 23,152 Total liabilities and stockholders’ deficit $ 586,525 $ 19,028 $ 605,553 |
Summary of revenue by source | Revenue by source, with sales and usage-based taxes excluded, is as follows (in thousands, unaudited): Three Months Ended March 31, 2018 INAP US INAP INTL Colocation $ 30,936 $ 1,517 Network services 13,820 2,971 Cloud 12,320 12,637 $ 57,076 $ 17,125 Revenue by geography is as follows (in thousands, unaudited): Three Months Ended March 31, 2018 INAP US INAP INTL United States $ 57,076 $ — Canada — 9,291 Other countries — 7,834 $ 57,076 $ 17,125 |
Summary of receivables, contract assets and liabilities from contracts with customers |
CHANGE IN ORGANIZATIONAL STRU21
CHANGE IN ORGANIZATIONAL STRUCTURE (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Change In Organizational Structure And Realignment Of Expenses [Abstract] | |
Schedule of change in organizational structure | The prior year reclassifications, which did not affect total revenues, total costs of sales and services, operating loss or net loss, are summarized as follows (in thousands): Three Months Ended March 31, 2017 As Previously Reported Reclassification As Reported Revenues: INAP COLO $ 53,339 $ (53,339 ) $ — INAP CLOUD 18,794 (18,794 ) — INAP US — 55,461 55,461 INAP INTL — 16,672 16,672 Costs of sales and services, exclusive of depreciation and amortization: INAP COLO 24,806 (24,806 ) — INAP CLOUD 4,239 (4,239 ) — INAP US — 23,547 23,547 INAP INTL — 5,498 5,498 |
ACQUISITION (Tables)
ACQUISITION (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of fair value of acquired assets | The Company determined the preliminary fair value of the net assets acquired as follows (in thousands): Purchase price allocation Cash $ 2,857 Prepaid expenses and other assets 1,683 Property, plant and equipment 14,885 Other long term assets 39 Intangible assets: Weighted Average Noncompete Agreements 4,000 4 years Trade name 1,700 8 years Technology 15,100 7 years Customer relationship 34,100 10 years Goodwill 67,868 Total assets acquired 142,232 Accounts payable and accrued liabilities 5,098 Deferred revenue 1,600 Long term liabilities 534 Net assets acquired $ 135,000 |
Summary of unaudited pro forma financial information | The following unaudited pro forma financial information presents the combined results of operations of INAP and SingleHop as if the acquisition had occurred on January 1, 2017. The unaudited pro forma financial information is not intended to represent or be indicative of our consolidated results of operations that would have been reported had the INAP and SingleHop acquisition been completed as of January 1, 2017, and should not be taken as indicative of our future consolidated results of operations. Three months ended March 31, 2018 ( in thousands except per share amounts) Three months ended March 31, 2017 ( in thousands except per share amounts) Revenues $ 82,172 $ 81,728 Net loss $ (15,667 ) $ (17,739 ) Basic and diluted net loss per share $ (0.78 ) $ (0.89 ) Weighted average shares outstanding used in computing basic and diluted net loss per share 20,052 19,877 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets and liabilities measured at fair value on a recurring basis | Assets and liabilities measured at fair value on a recurring basis are summarized as follows (in thousands): Level 1 Level 2 Level 3 Total March 31, 2018 Cash and cash equivalents $ 16,159 $ — $ — $ 16,159 Asset retirement obligations (1) — — 1,729 1,729 December 31, 2017 Cash and cash equivalents 14,603 — — 14,603 Asset retirement obligations (1) — — 1,936 1,936 (1) We calculate the fair value of asset retirement obligations by discounting the estimated amount using the current Treasury bill rate adjusted for our credit risk. At March 31, 2018, the balance is included in “Other long-term liabilities,” in the accompanying unaudited consolidated balance sheets. At December 31, 2017, $0.2 million and $1.7 million were included in "Other current liabilities" and "Other long-term liabilities," respectively, in the accompanying unaudited consolidated balance sheets. |
Schedule of changes in asset retirement obligations | The following table provides a summary of changes in our Level 3 asset retirement obligations for the three months ended March 31, 2018 (in thousands): Balance, January 1, 2018 $ 1,936 Accretion 41 Payments (248 ) Balance, March 31, 2018 $ 1,729 |
Schedule of fair value of term loan and revolving credit facility | The fair values of our other Level 3 debt liabilities, estimated using a discounted cash flow analysis based on incremental borrowing rates for similar types of borrowing arrangements, are as follows (in thousands): March 31, 2018 December 31, 2017 Carrying Amount Fair Value Carrying Amount Fair Value Term loan $ 432,409 $ 435,934 $ 298,500 $ 301,485 Revolving credit facility 16,000 16,130 5,000 5,050 |
GOODWILL AND OTHER INTANGIBLE24
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of re-allocated goodwill | During the three months ended March 31, 2018, our goodwill activity is as follows (in thousands): December 31, 2017 Re-allocations SingleHop Acquisition (note 5) March 31, 2018 Operating segments: INAP COLO $ 6,003 $ (6,003 ) $ — $ — INAP CLOUD 44,206 (44,206 ) — — INAP US — 28,304 67,868 96,172 INAP INTL — 21,905 — 21,905 Total $ 50,209 $ — $ 67,868 $ 118,077 |
Schedule of components of amortizing intangible assets | The components of our amortizing intangible assets, including capitalized software, are as follows (in thousands): March 31, 2018 December 31, 2017 Gross Carrying Amount AccumulatedAmortization Gross Carrying Amount AccumulatedAmortization Acquired and developed technology $ 68,269 $ (48,766 ) $ 52,825 $ (48,063 ) Customer relationships, trade names and noncompete 110,850 (51,168 ) 71,116 (50,212 ) $ 179,119 $ (99,934 ) $ 123,941 $ (98,275 ) |
Schedule of remaining amortization expense for intangible assets | As of March 31, 2018, remaining amortization expenses is as follows (in thousands): Nine months remaining in 2018 $ 8,636 2019 10,941 2020 10,031 2021 9,548 2022 7,839 Thereafter 32,190 $ 79,185 |
EXIT ACTIVITIES AND RESTRUCTU25
EXIT ACTIVITIES AND RESTRUCTURING LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Schedule of transactions and balances for exit activities and restructuring charges | The following table displays the transactions and balances for exit activities and restructuring charges during the three months ended March 31, 2018 and 2017 (in thousands). Our real estate and severance obligations are substantially related to our INAP US segment. Balance December 31, 2017 Initial Charges Plan Adjustments Cash Payments Balance March 31, 2018 Activity for 2018 restructuring charge: Real estate obligations $ — $ 171 $ 9 $ (23 ) $ 157 Activity for 2017 restructuring charge: Real estate obligations 3,380 — 72 (1,020 ) 2,432 Activity for 2016 restructuring charge: Severance 46 — 34 (34 ) 46 Real estate obligations 247 — 7 (38 ) 216 Activity for 2015 restructuring charge: Real estate obligation 64 — 12 (22 ) 54 Service contracts 388 — 8 (50 ) 346 Activity for 2014 restructuring charge: Real estate obligation 691 — 59 (202 ) 548 $ 4,816 $ 171 $ 201 $ (1,389 ) $ 3,799 Balance December 31, 2016 Initial Charges Plan Adjustments Cash Payments Balance March 31, 2017 Activity for 2016 restructuring charge: Real estate obligations $ 1,911 $ — $ 566 $ (993 ) $ 1,484 Service contracts 933 — 378 (187 ) 1,124 Activity for 2015 restructuring charge: Real estate obligation 111 — (4 ) (7 ) 100 Service contracts 565 — 5 (49 ) 521 Activity for 2014 restructuring charge: Real estate obligations 1,183 — 34 (150 ) 1,067 $ 4,703 $ — $ 979 $ (1,386 ) $ 4,296 |
OPERATING SEGMENTS (Tables)
OPERATING SEGMENTS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of operating results for business segments, along with reconciliation from segment profit to loss before income taxes and equity in (earnings) of equity-method investment | The following table provides segment results with prior period amounts reclassified to conform to the current presentation (in thousands): Three Months Ended March 31, 2018 2017 Revenues: INAP US $ 57,076 $ 55,461 INAP INTL 17,125 16,672 Total revenues 74,201 72,133 Cost of sales and services, customer support and sales and marketing: INAP US 30,537 35,457 INAP INTL 11,133 9,002 Total costs of sales and services, customer support and sales and marketing 41,670 44,459 Segment profit: INAP US 26,539 20,004 INAP INTL 5,992 7,670 Total segment profit 32,531 27,674 Exit activities, restructuring and impairments (33 ) 1,023 Other operating expenses, including general and administrative and depreciation and amortization expenses 31,685 26,159 Income from operations 879 492 Non-operating expenses 14,812 8,234 Loss before income taxes and non-controlling interest $ (13,933 ) $ (7,742 ) |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted net loss per share | Basic and diluted net loss per share is calculated as follows (in thousands, except per share amounts): Three Months Ended 2018 2017 Net loss $ (14,033 ) $ (8,230 ) Less net income attributable to non-controlling stockholders 27 — Net loss attributable to common stock $ (14,060 ) $ (8,230 ) Weighted average shares outstanding, basic and diluted 20,052 16,087 Net loss per share, basic and diluted $ (0.70 ) $ (0.50 ) Anti-dilutive securities excluded from diluted net loss per share calculation for stock-based compensation plans 1,336 1,385 |
NATURE OF OPERATIONS AND BASI28
NATURE OF OPERATIONS AND BASIS OF PRESENTATION - Narrative (Details) ft² in Millions | 3 Months Ended |
Mar. 31, 2018ft²datacentermarketpoint_of_presence | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of metropolitan markets (market) | market | 21 |
Number of datacenters (datacenter) | datacenter | 57 |
Number of POPs (point of presence) | point_of_presence | 98 |
Area under lease (sqft) | 1 |
Area of data centers (sqft) | 0.5 |
REVENUES - Schedule of Adjustme
REVENUES - Schedule of Adjustments to Previously Reported Financial Statements from the Adoption (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | |||||
Cash and cash equivalents | $ 16,159 | $ 14,603 | $ 14,603 | $ 9,174 | $ 10,389 |
Accounts receivable, net of allowance for doubtful accounts of $1,700 and $1,487, respectively | 17,524 | 17,794 | 17,794 | ||
Prepaid expenses and other assets | 8,690 | 15,487 | 8,673 | ||
Total current assets | 49,504 | 47,884 | 41,070 | ||
Property and equipment, net | 461,314 | 458,565 | 458,565 | ||
Intangible assets, net | 79,185 | 25,666 | 25,666 | ||
Goodwill | 118,077 | 50,209 | 50,209 | ||
Deposits and other assets | 11,784 | 23,229 | 11,015 | ||
Total assets | 731,920 | 605,553 | 586,525 | ||
Current liabilities: | |||||
Accounts payable | 21,699 | 20,388 | 20,388 | ||
Accrued liabilities | 14,279 | 15,908 | 15,908 | ||
Deferred revenues | 5,871 | 4,112 | 4,861 | ||
Capital lease obligations | 10,095 | 11,711 | 11,711 | ||
Revolving credit facility | 16,000 | 5,000 | 5,000 | ||
Term loan, less discount and prepaid costs of $3,539 and $2,133, respectively | 818 | 867 | 867 | ||
Exit activities and restructuring liability | 3,391 | 4,152 | 4,152 | ||
Other current liabilities | 4,197 | 1,707 | 1,707 | ||
Total current liabilities | 76,350 | 63,845 | 64,594 | ||
Capital lease obligations | 223,549 | 223,749 | 223,749 | ||
Term loan, less discount and prepaid costs of $11,286 and $7,655, respectively | 416,766 | 287,845 | 287,845 | ||
Exit activities and restructuring liability | 408 | 664 | 664 | ||
Deferred rent | 1,138 | 1,310 | 1,310 | ||
Deferred tax liability | 1,841 | 1,860 | 1,651 | ||
Other long-term liabilities | 3,046 | 3,128 | 7,744 | ||
Total liabilities | 723,098 | 582,401 | 587,557 | ||
Commitments and contingencies | |||||
Stockholders’ deficit: | |||||
Preferred stock, $0.001 par value; 5,000 shares authorized; no shares issued or outstanding | 0 | 0 | 0 | ||
Common stock, $0.001 par value; 30,000 shares authorized; 21,131 and 20,804 shares outstanding, respectively | 21 | 21 | 21 | ||
Additional paid-in capital | 1,327,985 | 1,327,084 | 1,327,084 | ||
Treasury stock, at cost, 313 and 293 shares, respectively | (7,429) | (7,159) | (7,159) | ||
Accumulated deficit | (1,313,598) | (1,299,539) | (1,323,723) | ||
Accumulated items of other comprehensive loss | (1,263) | (1,324) | (1,324) | ||
Total INAP stockholders’ deficit | 5,716 | 19,083 | (5,101) | ||
Non-controlling interests | 3,106 | 4,069 | 4,069 | ||
Total stockholders’ deficit | 8,822 | 23,152 | (1,032) | ||
Total liabilities and stockholders’ deficit | 731,920 | 605,553 | 586,525 | ||
Allowance for doubtful accounts receivable | 1,700 | 1,487 | |||
Term loan current, discount and prepaid costs | 3,539 | 2,133 | |||
Term loan deferred, discount and prepaid costs | $ 11,286 | $ 7,655 | |||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |||
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 | |||
Preferred stock, shares issued (in shares) | 0 | 0 | |||
Preferred stock, shares outstanding (in shares) | 0 | 0 | |||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |||
Common stock, shares authorized (in shares) | 30,000,000 | 30,000,000 | |||
Common stock, shares outstanding (in shares) | 21,131,000 | 20,804,000 | |||
Treasury stock, shares (in shares) | 313,000 | 293,000 | |||
Balances without Adoption of ASC 606 | |||||
Current assets: | |||||
Cash and cash equivalents | $ 16,159 | $ 14,603 | |||
Accounts receivable, net of allowance for doubtful accounts of $1,700 and $1,487, respectively | 17,524 | 17,794 | |||
Prepaid expenses and other assets | 8,690 | 8,673 | |||
Total current assets | 49,245 | 41,070 | |||
Property and equipment, net | 461,314 | 458,565 | |||
Intangible assets, net | 79,185 | 25,666 | |||
Goodwill | 118,077 | 50,209 | |||
Deposits and other assets | 11,784 | 11,015 | |||
Total assets | 731,632 | 586,525 | |||
Current liabilities: | |||||
Accounts payable | 21,699 | 20,388 | |||
Accrued liabilities | 14,279 | 15,908 | |||
Deferred revenues | 6,062 | 4,861 | |||
Capital lease obligations | 10,095 | 11,711 | |||
Revolving credit facility | 16,000 | 5,000 | |||
Term loan, less discount and prepaid costs of $3,539 and $2,133, respectively | 818 | 867 | |||
Exit activities and restructuring liability | 3,391 | 4,152 | |||
Other current liabilities | 4,197 | 1,707 | |||
Total current liabilities | 76,541 | 64,594 | |||
Capital lease obligations | 223,549 | 223,749 | |||
Term loan, less discount and prepaid costs of $11,286 and $7,655, respectively | 416,766 | 287,845 | |||
Exit activities and restructuring liability | 408 | 664 | |||
Deferred rent | 1,138 | 1,310 | |||
Deferred tax liability | 1,841 | 1,651 | |||
Other long-term liabilities | 2,902 | 7,744 | |||
Total liabilities | 723,145 | 587,557 | |||
Commitments and contingencies | |||||
Stockholders’ deficit: | |||||
Preferred stock, $0.001 par value; 5,000 shares authorized; no shares issued or outstanding | 0 | 0 | |||
Common stock, $0.001 par value; 30,000 shares authorized; 21,131 and 20,804 shares outstanding, respectively | 21 | 21 | |||
Additional paid-in capital | 1,327,985 | 1,327,084 | |||
Treasury stock, at cost, 313 and 293 shares, respectively | (7,429) | (7,159) | |||
Accumulated deficit | (1,313,933) | (1,323,723) | |||
Accumulated items of other comprehensive loss | (1,263) | (1,324) | |||
Total INAP stockholders’ deficit | 5,381 | (5,101) | |||
Non-controlling interests | 3,106 | 4,069 | |||
Total stockholders’ deficit | 8,487 | (1,032) | |||
Total liabilities and stockholders’ deficit | 731,632 | $ 586,525 | |||
Effect of Change Higher/ (Lower) | Accounting Standards Update 2014-09 | |||||
Current assets: | |||||
Cash and cash equivalents | 0 | 0 | |||
Accounts receivable, net of allowance for doubtful accounts of $1,700 and $1,487, respectively | 0 | 0 | |||
Prepaid expenses and other assets | 0 | 6,814 | |||
Total current assets | 259 | 6,814 | |||
Property and equipment, net | 0 | 0 | |||
Intangible assets, net | 0 | 0 | |||
Goodwill | 0 | 0 | |||
Deposits and other assets | 0 | 12,214 | |||
Total assets | 288 | 19,028 | |||
Current liabilities: | |||||
Accounts payable | 0 | 0 | |||
Accrued liabilities | 0 | 0 | |||
Deferred revenues | (191) | (749) | |||
Capital lease obligations | 0 | 0 | |||
Revolving credit facility | 0 | 0 | |||
Term loan, less discount and prepaid costs of $3,539 and $2,133, respectively | 0 | 0 | |||
Exit activities and restructuring liability | 0 | 0 | |||
Other current liabilities | 0 | 0 | |||
Total current liabilities | (191) | (749) | |||
Capital lease obligations | 0 | 0 | |||
Term loan, less discount and prepaid costs of $11,286 and $7,655, respectively | 0 | 0 | |||
Exit activities and restructuring liability | 0 | 0 | |||
Deferred rent | 0 | 0 | |||
Deferred tax liability | 0 | 209 | |||
Other long-term liabilities | 144 | (4,616) | |||
Total liabilities | (47) | (5,156) | |||
Commitments and contingencies | |||||
Stockholders’ deficit: | |||||
Preferred stock, $0.001 par value; 5,000 shares authorized; no shares issued or outstanding | 0 | 0 | |||
Common stock, $0.001 par value; 30,000 shares authorized; 21,131 and 20,804 shares outstanding, respectively | 0 | 0 | |||
Additional paid-in capital | 0 | 0 | |||
Treasury stock, at cost, 313 and 293 shares, respectively | 0 | 0 | |||
Accumulated deficit | 335 | 24,184 | |||
Accumulated items of other comprehensive loss | 0 | 0 | |||
Total INAP stockholders’ deficit | 335 | 24,184 | |||
Non-controlling interests | 0 | 0 | |||
Total stockholders’ deficit | 335 | 24,184 | |||
Total liabilities and stockholders’ deficit | $ 288 | $ 19,028 |
REVENUES - Schedule of Current
REVENUES - Schedule of Current Impact from Adoption on Consolidated Income Statement (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenues: | ||
Total revenues | $ 74,201 | $ 72,133 |
Costs of sales and services, exclusive of depreciation and amortization, shown below: | ||
Costs of customer support | 7,387 | 7,264 |
Sales, general and administrative | 19,854 | 16,564 |
Depreciation and amortization | 21,077 | 17,745 |
Exit activities, restructuring and impairments | (33) | 1,023 |
Total operating costs and expenses | 73,322 | 71,641 |
Income from operations | 879 | 492 |
Non-operating expenses: | ||
Interest expense | 15,027 | 8,137 |
Gain on foreign currency, net | (215) | 97 |
Total non-operating expenses | 14,812 | 8,234 |
Loss before income taxes, non-controlling interest and equity in earnings of equity-method investment | (13,933) | (7,742) |
Provision for income taxes | 100 | 518 |
Net loss | (14,033) | (8,230) |
Less net income attributable to non-controlling interest | 27 | 0 |
Net loss attributable to INAP stockholders | (14,060) | (8,230) |
Other comprehensive income: | ||
Foreign currency translation adjustment | 61 | 73 |
Comprehensive loss | $ (13,999) | $ (8,072) |
Basic and diluted net loss per share (in dollars per share) | $ (0.70) | $ (0.50) |
Weighted average shares outstanding used in computing basic and diluted net loss per share (in shares) | 20,052 | 16,087 |
Balances without Adoption of ASC 606 | ||
Revenues: | ||
Total revenues | $ 73,960 | |
Costs of sales and services, exclusive of depreciation and amortization, shown below: | ||
Costs of customer support | 7,387 | |
Sales, general and administrative | 19,948 | |
Depreciation and amortization | 21,077 | |
Exit activities, restructuring and impairments | (33) | |
Total operating costs and expenses | 73,416 | |
Income from operations | 544 | |
Non-operating expenses: | ||
Interest expense | 15,027 | |
Gain on foreign currency, net | (215) | |
Total non-operating expenses | 14,812 | |
Loss before income taxes, non-controlling interest and equity in earnings of equity-method investment | (14,268) | |
Provision for income taxes | 100 | |
Net loss | (14,368) | |
Less net income attributable to non-controlling interest | 27 | |
Net loss attributable to INAP stockholders | (14,395) | |
Other comprehensive income: | ||
Foreign currency translation adjustment | 61 | |
Comprehensive loss | $ (14,334) | |
Basic and diluted net loss per share (in dollars per share) | $ (0.72) | |
Weighted average shares outstanding used in computing basic and diluted net loss per share (in shares) | 20,052 | |
Accounting Standards Update 2014-09 | Effect of Change Higher/ (Lower) | ||
Revenues: | ||
Total revenues | $ 241 | |
Costs of sales and services, exclusive of depreciation and amortization, shown below: | ||
Costs of customer support | 0 | |
Sales, general and administrative | (94) | |
Depreciation and amortization | 0 | |
Exit activities, restructuring and impairments | 0 | |
Total operating costs and expenses | (94) | |
Income from operations | 335 | |
Non-operating expenses: | ||
Interest expense | 0 | |
Gain on foreign currency, net | 0 | |
Total non-operating expenses | 0 | |
Loss before income taxes, non-controlling interest and equity in earnings of equity-method investment | 335 | |
Provision for income taxes | 0 | |
Net loss | 335 | |
Less net income attributable to non-controlling interest | 0 | |
Net loss attributable to INAP stockholders | 335 | |
Other comprehensive income: | ||
Foreign currency translation adjustment | 0 | |
Comprehensive loss | $ 335 | |
Basic and diluted net loss per share (in dollars per share) | $ 0.02 | |
Weighted average shares outstanding used in computing basic and diluted net loss per share (in shares) | ||
INAP US | ||
Revenues: | ||
Total revenues | $ 57,076 | $ 55,461 |
Costs of sales and services, exclusive of depreciation and amortization, shown below: | ||
Direct costs of sales and services, exclusive of depreciation and amortization | 18,435 | 23,547 |
INAP US | Balances without Adoption of ASC 606 | ||
Revenues: | ||
Total revenues | 56,835 | |
Costs of sales and services, exclusive of depreciation and amortization, shown below: | ||
Direct costs of sales and services, exclusive of depreciation and amortization | 18,435 | |
INAP US | Accounting Standards Update 2014-09 | Effect of Change Higher/ (Lower) | ||
Revenues: | ||
Total revenues | 241 | |
Costs of sales and services, exclusive of depreciation and amortization, shown below: | ||
Direct costs of sales and services, exclusive of depreciation and amortization | 0 | |
INAP INTL | ||
Revenues: | ||
Total revenues | 17,125 | 16,672 |
Costs of sales and services, exclusive of depreciation and amortization, shown below: | ||
Direct costs of sales and services, exclusive of depreciation and amortization | 6,602 | $ 5,498 |
INAP INTL | Balances without Adoption of ASC 606 | ||
Revenues: | ||
Total revenues | 17,125 | |
Costs of sales and services, exclusive of depreciation and amortization, shown below: | ||
Direct costs of sales and services, exclusive of depreciation and amortization | 6,602 | |
INAP INTL | Accounting Standards Update 2014-09 | Effect of Change Higher/ (Lower) | ||
Revenues: | ||
Total revenues | 0 | |
Costs of sales and services, exclusive of depreciation and amortization, shown below: | ||
Direct costs of sales and services, exclusive of depreciation and amortization | $ 0 |
REVENUES - Schedule of Curren31
REVENUES - Schedule of Current Impact from Adoption on Consolidated Balance Sheet (Details) (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | |||||
Cash and cash equivalents | $ 16,159 | $ 14,603 | $ 14,603 | $ 9,174 | $ 10,389 |
Accounts receivable, net of allowance for doubtful accounts of $1,700 and $1,487, respectively | 17,524 | 17,794 | 17,794 | ||
Contract assets | 7,131 | 0 | |||
Prepaid expenses and other assets | 8,690 | 15,487 | 8,673 | ||
Total current assets | 49,504 | 47,884 | 41,070 | ||
Property and equipment, net | 461,314 | 458,565 | 458,565 | ||
Intangible assets, net | 79,185 | 25,666 | 25,666 | ||
Goodwill | 118,077 | 50,209 | 50,209 | ||
Non-current contract assets | 12,056 | 0 | |||
Deposits and other assets | 11,784 | 23,229 | 11,015 | ||
Total assets | 731,920 | 605,553 | 586,525 | ||
Current liabilities: | |||||
Accounts payable | 21,699 | 20,388 | 20,388 | ||
Accrued liabilities | 14,279 | 15,908 | 15,908 | ||
Deferred revenues | 5,871 | 4,112 | 4,861 | ||
Capital lease obligations | 10,095 | 11,711 | 11,711 | ||
Revolving credit facility | 16,000 | 5,000 | 5,000 | ||
Term loan, less discount and prepaid costs of $3,539 and $2,133, respectively | 818 | 867 | 867 | ||
Exit activities and restructuring liability | 3,391 | 4,152 | 4,152 | ||
Other current liabilities | 4,197 | 1,707 | 1,707 | ||
Total current liabilities | 76,350 | 63,845 | 64,594 | ||
Capital lease obligations | 223,549 | 223,749 | 223,749 | ||
Term loan, less discount and prepaid costs of $11,286 and $7,655, respectively | 416,766 | 287,845 | 287,845 | ||
Exit activities and restructuring liability | 408 | 664 | 664 | ||
Deferred rent | 1,138 | 1,310 | 1,310 | ||
Deferred tax liability | 1,841 | 1,860 | 1,651 | ||
Other long-term liabilities | 3,046 | 3,128 | 7,744 | ||
Total liabilities | 723,098 | 582,401 | 587,557 | ||
Commitments and contingencies | |||||
Stockholders’ deficit: | |||||
Preferred stock, $0.001 par value; 5,000 shares authorized; no shares issued or outstanding | 0 | 0 | 0 | ||
Common stock, $0.001 par value; 30,000 shares authorized; 21,131 and 20,804 shares outstanding, respectively | 21 | 21 | 21 | ||
Additional paid-in capital | 1,327,985 | 1,327,084 | 1,327,084 | ||
Treasury stock, at cost, 313 and 293 shares, respectively | (7,429) | (7,159) | (7,159) | ||
Accumulated deficit | (1,313,598) | (1,299,539) | (1,323,723) | ||
Accumulated items of other comprehensive loss | (1,263) | (1,324) | (1,324) | ||
Total INAP stockholders’ deficit | 5,716 | 19,083 | (5,101) | ||
Non-controlling interests | 3,106 | 4,069 | 4,069 | ||
Total stockholders’ deficit | 8,822 | 23,152 | (1,032) | ||
Total liabilities and stockholders’ deficit | 731,920 | 605,553 | 586,525 | ||
Allowance for doubtful accounts receivable | 1,700 | 1,487 | |||
Term loan current, discount and prepaid costs | 3,539 | 2,133 | |||
Term loan deferred, discount and prepaid costs | $ 11,286 | $ 7,655 | |||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |||
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 | |||
Preferred stock, shares issued (in shares) | 0 | 0 | |||
Preferred stock, shares outstanding (in shares) | 0 | 0 | |||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |||
Common stock, shares authorized (in shares) | 30,000,000 | 30,000,000 | |||
Common stock, shares outstanding (in shares) | 21,131,000 | 20,804,000 | |||
Treasury stock, shares (in shares) | 313,000 | 293,000 | |||
Balances without Adoption of ASC 606 | |||||
Current assets: | |||||
Cash and cash equivalents | $ 16,159 | $ 14,603 | |||
Accounts receivable, net of allowance for doubtful accounts of $1,700 and $1,487, respectively | 17,524 | 17,794 | |||
Contract assets | 6,872 | ||||
Prepaid expenses and other assets | 8,690 | 8,673 | |||
Total current assets | 49,245 | 41,070 | |||
Property and equipment, net | 461,314 | 458,565 | |||
Intangible assets, net | 79,185 | 25,666 | |||
Goodwill | 118,077 | 50,209 | |||
Non-current contract assets | 12,027 | ||||
Deposits and other assets | 11,784 | 11,015 | |||
Total assets | 731,632 | 586,525 | |||
Current liabilities: | |||||
Accounts payable | 21,699 | 20,388 | |||
Accrued liabilities | 14,279 | 15,908 | |||
Deferred revenues | 6,062 | 4,861 | |||
Capital lease obligations | 10,095 | 11,711 | |||
Revolving credit facility | 16,000 | 5,000 | |||
Term loan, less discount and prepaid costs of $3,539 and $2,133, respectively | 818 | 867 | |||
Exit activities and restructuring liability | 3,391 | 4,152 | |||
Other current liabilities | 4,197 | 1,707 | |||
Total current liabilities | 76,541 | 64,594 | |||
Capital lease obligations | 223,549 | 223,749 | |||
Term loan, less discount and prepaid costs of $11,286 and $7,655, respectively | 416,766 | 287,845 | |||
Exit activities and restructuring liability | 408 | 664 | |||
Deferred rent | 1,138 | 1,310 | |||
Deferred tax liability | 1,841 | 1,651 | |||
Other long-term liabilities | 2,902 | 7,744 | |||
Total liabilities | 723,145 | 587,557 | |||
Commitments and contingencies | |||||
Stockholders’ deficit: | |||||
Preferred stock, $0.001 par value; 5,000 shares authorized; no shares issued or outstanding | 0 | 0 | |||
Common stock, $0.001 par value; 30,000 shares authorized; 21,131 and 20,804 shares outstanding, respectively | 21 | 21 | |||
Additional paid-in capital | 1,327,985 | 1,327,084 | |||
Treasury stock, at cost, 313 and 293 shares, respectively | (7,429) | (7,159) | |||
Accumulated deficit | (1,313,933) | (1,323,723) | |||
Accumulated items of other comprehensive loss | (1,263) | (1,324) | |||
Total INAP stockholders’ deficit | 5,381 | (5,101) | |||
Non-controlling interests | 3,106 | 4,069 | |||
Total stockholders’ deficit | 8,487 | (1,032) | |||
Total liabilities and stockholders’ deficit | 731,632 | $ 586,525 | |||
Effect of Change Higher/ (Lower) | Accounting Standards Update 2014-09 | |||||
Current assets: | |||||
Cash and cash equivalents | 0 | 0 | |||
Accounts receivable, net of allowance for doubtful accounts of $1,700 and $1,487, respectively | 0 | 0 | |||
Contract assets | 259 | ||||
Prepaid expenses and other assets | 0 | 6,814 | |||
Total current assets | 259 | 6,814 | |||
Property and equipment, net | 0 | 0 | |||
Intangible assets, net | 0 | 0 | |||
Goodwill | 0 | 0 | |||
Non-current contract assets | 29 | ||||
Deposits and other assets | 0 | 12,214 | |||
Total assets | 288 | 19,028 | |||
Current liabilities: | |||||
Accounts payable | 0 | 0 | |||
Accrued liabilities | 0 | 0 | |||
Deferred revenues | (191) | (749) | |||
Capital lease obligations | 0 | 0 | |||
Revolving credit facility | 0 | 0 | |||
Term loan, less discount and prepaid costs of $3,539 and $2,133, respectively | 0 | 0 | |||
Exit activities and restructuring liability | 0 | 0 | |||
Other current liabilities | 0 | 0 | |||
Total current liabilities | (191) | (749) | |||
Capital lease obligations | 0 | 0 | |||
Term loan, less discount and prepaid costs of $11,286 and $7,655, respectively | 0 | 0 | |||
Exit activities and restructuring liability | 0 | 0 | |||
Deferred rent | 0 | 0 | |||
Deferred tax liability | 0 | 209 | |||
Other long-term liabilities | 144 | (4,616) | |||
Total liabilities | (47) | (5,156) | |||
Commitments and contingencies | |||||
Stockholders’ deficit: | |||||
Preferred stock, $0.001 par value; 5,000 shares authorized; no shares issued or outstanding | 0 | 0 | |||
Common stock, $0.001 par value; 30,000 shares authorized; 21,131 and 20,804 shares outstanding, respectively | 0 | 0 | |||
Additional paid-in capital | 0 | 0 | |||
Treasury stock, at cost, 313 and 293 shares, respectively | 0 | 0 | |||
Accumulated deficit | 335 | 24,184 | |||
Accumulated items of other comprehensive loss | 0 | 0 | |||
Total INAP stockholders’ deficit | 335 | 24,184 | |||
Non-controlling interests | 0 | 0 | |||
Total stockholders’ deficit | 335 | 24,184 | |||
Total liabilities and stockholders’ deficit | $ 288 | $ 19,028 |
REVENUES - Summary of Revenue b
REVENUES - Summary of Revenue by Source (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
INAP US | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Total revenue | $ 57,076 |
INAP INTL | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Total revenue | 17,125 |
Colocation | INAP US | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Total revenue | 30,936 |
Colocation | INAP INTL | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Total revenue | 1,517 |
Network services | INAP US | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Total revenue | 13,820 |
Network services | INAP INTL | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Total revenue | 2,971 |
Cloud | INAP US | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Total revenue | 12,320 |
Cloud | INAP INTL | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Total revenue | $ 12,637 |
REVENUES - Summary of Revenue33
REVENUES - Summary of Revenue by Geography (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
INAP US | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenue | $ 57,076 | |
INAP INTL | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenue | 17,125 | |
United States | INAP INTL | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenue | 57,076 | $ 0 |
Canada | INAP US | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenue | 0 | |
Canada | INAP INTL | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenue | 9,291 | |
Other countries | INAP US | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenue | 0 | |
Other countries | INAP INTL | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenue | $ 7,834 |
REVENUES - Narrative (Details)
REVENUES - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Revenue recognized that was included in the contract liability balance at the beginning of the year | $ 0.5 |
Fulfillment Costs and Commission Fees | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Capitalized contract cost | 26.3 |
Amortization of capitalized contract costs | $ 2.9 |
CHANGE IN ORGANIZATIONAL STRU35
CHANGE IN ORGANIZATIONAL STRUCTURE - Schedule of Change in Organizational Structure (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Change In Organizational Structure And Realignment Of Expenses [Line Items] | ||
Total revenues | $ 74,201 | $ 72,133 |
INAP COLO | ||
Change In Organizational Structure And Realignment Of Expenses [Line Items] | ||
Total revenues | 0 | |
Direct costs of sales and services, exclusive of depreciation and amortization | 0 | |
INAP CLOUD | ||
Change In Organizational Structure And Realignment Of Expenses [Line Items] | ||
Total revenues | 0 | |
Direct costs of sales and services, exclusive of depreciation and amortization | 0 | |
INAP US | ||
Change In Organizational Structure And Realignment Of Expenses [Line Items] | ||
Total revenues | 57,076 | 55,461 |
Direct costs of sales and services, exclusive of depreciation and amortization | 18,435 | 23,547 |
INAP INTL | ||
Change In Organizational Structure And Realignment Of Expenses [Line Items] | ||
Total revenues | 17,125 | 16,672 |
Direct costs of sales and services, exclusive of depreciation and amortization | 6,602 | 5,498 |
As Previously Reported | INAP COLO | ||
Change In Organizational Structure And Realignment Of Expenses [Line Items] | ||
Total revenues | 53,339 | |
Direct costs of sales and services, exclusive of depreciation and amortization | 24,806 | |
As Previously Reported | INAP CLOUD | ||
Change In Organizational Structure And Realignment Of Expenses [Line Items] | ||
Total revenues | 18,794 | |
Direct costs of sales and services, exclusive of depreciation and amortization | $ 4,239 | |
As Previously Reported | INAP US | ||
Change In Organizational Structure And Realignment Of Expenses [Line Items] | ||
Total revenues | 0 | |
Direct costs of sales and services, exclusive of depreciation and amortization | 0 | |
As Previously Reported | INAP INTL | ||
Change In Organizational Structure And Realignment Of Expenses [Line Items] | ||
Total revenues | 0 | |
Direct costs of sales and services, exclusive of depreciation and amortization | 0 | |
Reclassification | INAP COLO | ||
Change In Organizational Structure And Realignment Of Expenses [Line Items] | ||
Total revenues | (53,339) | |
Direct costs of sales and services, exclusive of depreciation and amortization | (24,806) | |
Reclassification | INAP CLOUD | ||
Change In Organizational Structure And Realignment Of Expenses [Line Items] | ||
Total revenues | (18,794) | |
Direct costs of sales and services, exclusive of depreciation and amortization | (4,239) | |
Reclassification | INAP US | ||
Change In Organizational Structure And Realignment Of Expenses [Line Items] | ||
Total revenues | 55,461 | |
Direct costs of sales and services, exclusive of depreciation and amortization | 23,547 | |
Reclassification | INAP INTL | ||
Change In Organizational Structure And Realignment Of Expenses [Line Items] | ||
Total revenues | 16,672 | |
Direct costs of sales and services, exclusive of depreciation and amortization | $ 5,498 |
CHANGE IN ORGANIZATIONAL STRU36
CHANGE IN ORGANIZATIONAL STRUCTURE - Narrative (Details) | 3 Months Ended |
Mar. 31, 2018point_of_presence | |
Segment Reporting Information [Line Items] | |
Number of POPs (point of presence) | 98 |
Network services | |
Segment Reporting Information [Line Items] | |
Number of POPs (point of presence) | 97 |
ACQUISITION - Additional Inform
ACQUISITION - Additional Information (Details) - SingleHop, LLC - USD ($) $ in Millions | Feb. 28, 2018 | Mar. 31, 2018 |
Business Acquisition [Line Items] | ||
Payment to acquire business | $ 132 | |
Acquisition related costs | $ 2.5 |
ACQUISITION - Schedule of Fair
ACQUISITION - Schedule of Fair Value of Acquired Assets (Details) - USD ($) $ in Thousands | Feb. 28, 2018 | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Intangible assets: | ||||
Goodwill | $ 118,077 | $ 50,209 | $ 50,209 | |
SingleHop, LLC | ||||
Business Acquisition [Line Items] | ||||
Cash | $ 2,857,000 | |||
Prepaid expenses and other assets | 1,683,000 | |||
Property, plant and equipment | 14,885,000 | |||
Other long term assets | 39,000 | |||
Intangible assets: | ||||
Goodwill | 67,868,000 | |||
Total assets acquired | 142,232,000 | |||
Accounts payable and accrued liabilities | 5,098,000 | |||
Deferred revenue | 1,600,000 | |||
Long term liabilities | 534,000 | |||
Net assets acquired | 135,000,000 | |||
SingleHop, LLC | Noncompete Agreements | ||||
Intangible assets: | ||||
Finite lived intangible assets | $ 4,000,000 | |||
Weighted Average | 4 years | |||
SingleHop, LLC | Trade name | ||||
Intangible assets: | ||||
Finite lived intangible assets | $ 1,700,000 | |||
Weighted Average | 8 years | |||
SingleHop, LLC | Technology | ||||
Intangible assets: | ||||
Finite lived intangible assets | $ 15,100,000 | |||
Weighted Average | 7 years | |||
SingleHop, LLC | Customer relationship | ||||
Intangible assets: | ||||
Finite lived intangible assets | $ 34,100,000 | |||
Weighted Average | 10 years |
ACQUISITION - Summary of Unaudi
ACQUISITION - Summary of Unaudited Proforma Financial Information (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Business Combinations [Abstract] | ||
Revenues | $ 82,172 | $ 81,728 |
Net loss | $ (15,667) | $ (17,739) |
Net Income per share (in dollars per share) | $ (780) | $ (890) |
Basic and diluted (in shares) | 20,052 | 19,877 |
FAIR VALUE MEASUREMENTS - Summa
FAIR VALUE MEASUREMENTS - Summary of Assets and liabilities measured at fair value on recurring basis (Details) - Recurring basis - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Total | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | $ 16,159 | $ 14,603 |
Total | Asset retirement obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Asset retirement obligations | 1,729 | 1,936 |
Total | Asset retirement obligations | Other Noncurrent Liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Asset retirement obligations | 200 | |
Total | Asset retirement obligations | Other Current Liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Asset retirement obligations | 1,700 | |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 16,159 | 14,603 |
Level 1 | Asset retirement obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Asset retirement obligations | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Level 2 | Asset retirement obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Asset retirement obligations | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Level 3 | Asset retirement obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Asset retirement obligations | $ 1,729 | $ 1,936 |
FAIR VALUE MEASUREMENTS - Sum41
FAIR VALUE MEASUREMENTS - Summary of changes in Level 3 financial asset - Asset retirement obligation (Details) - Asset retirement obligations $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance, beginning of period | $ 1,936 |
Accretion | 41 |
Payments | (248) |
Balance, end of period | $ 1,729 |
FAIR VALUE MEASUREMENTS - Sum42
FAIR VALUE MEASUREMENTS - Summary of fair value Level 3 debt - Term loan (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Term loan | $ 432,409 | $ 298,500 |
Revolving credit facility | 16,000 | 5,000 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Term loan | 435,934 | 301,485 |
Revolving credit facility | $ 16,130 | $ 5,050 |
GOODWILL AND OTHER INTANGIBLE43
GOODWILL AND OTHER INTANGIBLE ASSETS - Additional Information (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2018USD ($)reporting_unit | Mar. 31, 2017USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Number of reportable units (reporting unit) | reporting_unit | 7 | |
Amortization expense for intangible assets | $ | $ 1.7 | $ 1.1 |
GOODWILL AND OTHER INTANGIBLE44
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Re-allocations of Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Operating segments: | |
Goodwill, beginning of period | $ 50,209 |
Re-allocations | 0 |
SingleHop Acquisition | 67,868 |
Goodwill, end of period | 118,077 |
INAP COLO | |
Operating segments: | |
Goodwill, beginning of period | 6,003 |
Re-allocations | (6,003) |
SingleHop Acquisition | 0 |
Goodwill, end of period | 0 |
INAP CLOUD | |
Operating segments: | |
Goodwill, beginning of period | 44,206 |
Re-allocations | (44,206) |
SingleHop Acquisition | 0 |
Goodwill, end of period | 0 |
INAP US | |
Operating segments: | |
Goodwill, beginning of period | 0 |
Re-allocations | 28,304 |
SingleHop Acquisition | 67,868 |
Goodwill, end of period | 96,172 |
INAP INTL | |
Operating segments: | |
Goodwill, beginning of period | 0 |
Re-allocations | 21,905 |
SingleHop Acquisition | 0 |
Goodwill, end of period | $ 21,905 |
GOODWILL AND OTHER INTANGIBLE45
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Components of Amortizing Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 179,119 | $ 123,941 |
AccumulatedAmortization | (99,934) | (98,275) |
Acquired and developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 68,269 | 52,825 |
AccumulatedAmortization | (48,766) | (48,063) |
Customer relationships, trade names and noncompete | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 110,850 | 71,116 |
AccumulatedAmortization | $ (51,168) | $ (50,212) |
GOODWILL AND OTHER INTANGIBLE46
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Remaining Amortization Expense for Intangible Assets (Details) $ in Thousands | Mar. 31, 2018USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Nine months remaining in 2018 | $ 8,636 |
2,019 | 10,941 |
2,020 | 10,031 |
2,021 | 9,548 |
2,022 | 7,839 |
Thereafter | 32,190 |
Total remaining amortization expense | $ 79,185 |
DEBT - Additional Information (
DEBT - Additional Information (Details) - USD ($) | Feb. 06, 2018 | Jun. 28, 2017 | Apr. 06, 2017 | Mar. 31, 2018 | Mar. 31, 2017 |
Short-term Debt [Line Items] | |||||
Debt issuance costs | $ 5,676,000 | $ 0 | |||
Revolving credit facility | Base Rate | |||||
Short-term Debt [Line Items] | |||||
Interest rate during period for the credit agreement | 4.50% | ||||
Revolving credit facility | London Interbank Offered Rate (LIBOR) | |||||
Short-term Debt [Line Items] | |||||
Interest rate during period for the credit agreement | 5.50% | ||||
Term Loan | Base Rate | |||||
Short-term Debt [Line Items] | |||||
Interest rate during period for the credit agreement | 5.00% | ||||
Term Loan | London Interbank Offered Rate (LIBOR) | |||||
Short-term Debt [Line Items] | |||||
Interest rate during period for the credit agreement | 6.00% | ||||
2017 Credit Agreement | Line of Credit | |||||
Short-term Debt [Line Items] | |||||
Debt issuance costs | $ 5,700,000 | ||||
2017 Credit Agreement | Revolving credit facility | |||||
Short-term Debt [Line Items] | |||||
Total amount available under Credit Agreement | 25,000,000 | ||||
Debt issuance costs | 400,000 | ||||
Debt balance | $ 16,000,000 | ||||
Interest rate at period end | 8.88% | ||||
2017 Credit Agreement | Term Loan | |||||
Short-term Debt [Line Items] | |||||
Total amount available under Credit Agreement | 300,000,000 | ||||
Debt issuance costs | 3,300,000 | ||||
Debt balance | $ 432,400,000 | ||||
Interest rate at period end | 8.72% | ||||
2017 Credit Agreement | Term Loan | Line of Credit | |||||
Short-term Debt [Line Items] | |||||
Loss on extinguishment and modification of debt | 1,900,000 | ||||
2017 Credit Agreement | Incremental Term Loan | |||||
Short-term Debt [Line Items] | |||||
Total amount available under Credit Agreement | $ 135,000,000 | ||||
Credit Agreement | |||||
Short-term Debt [Line Items] | |||||
Loss on extinguishment and modification of debt | $ 4,800,000 | ||||
Credit Agreement | London Interbank Offered Rate (LIBOR) | |||||
Short-term Debt [Line Items] | |||||
Basis spread on variable rate | 1.00% | ||||
Credit Agreement | Prime Rate | |||||
Short-term Debt [Line Items] | |||||
Basis spread on variable rate | 2.00% | ||||
Credit Agreement | Federal Funds Effective Swap Rate | |||||
Short-term Debt [Line Items] | |||||
Basis spread on variable rate | 0.50% | ||||
Second Amendment to 2017 Credit Agreement | Line of Credit | |||||
Short-term Debt [Line Items] | |||||
Debt issuance costs | 1,000,000 | ||||
Legal and professional expenses | 200,000 | ||||
Second Amendment to 2017 Credit Agreement | Term Loan | Line of Credit | |||||
Short-term Debt [Line Items] | |||||
Debt issuance costs | $ 800,000 | ||||
Third Amendment To 2017 Credit Agreement | Line of Credit | |||||
Short-term Debt [Line Items] | |||||
Debt issuance costs | $ 5,000,000 | ||||
Legal and professional expenses | 100,000 | ||||
Third Amendment To 2017 Credit Agreement | Term Loan | Line of Credit | |||||
Short-term Debt [Line Items] | |||||
Debt issuance costs | $ 4,900,000 |
EXIT ACTIVITIES AND RESTRUCTU48
EXIT ACTIVITIES AND RESTRUCTURING LIABILITIES - Exit activities and restructuring charges for Real estate obligations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Restructuring Reserve [Roll Forward] | ||
Balance, beginning of period | $ 4,816 | $ 4,703 |
Initial Charges | 171 | 0 |
Plan Adjustments | 201 | 979 |
Cash Payments | (1,389) | (1,386) |
Balance, end of period | 3,799 | 4,296 |
Activity for 2018 restructuring charge: | Real estate obligations | ||
Restructuring Reserve [Roll Forward] | ||
Balance, beginning of period | 0 | |
Initial Charges | 171 | |
Plan Adjustments | 9 | |
Cash Payments | (23) | |
Balance, end of period | 157 | |
Activity for 2017 restructuring charge: | Real estate obligations | ||
Restructuring Reserve [Roll Forward] | ||
Balance, beginning of period | 3,380 | |
Initial Charges | 0 | |
Plan Adjustments | 72 | |
Cash Payments | (1,020) | |
Balance, end of period | 2,432 | |
Activity for 2016 restructuring charge: | Real estate obligations | ||
Restructuring Reserve [Roll Forward] | ||
Balance, beginning of period | 247 | 1,911 |
Initial Charges | 0 | 0 |
Plan Adjustments | 7 | 566 |
Cash Payments | (38) | (993) |
Balance, end of period | 216 | 1,484 |
Activity for 2016 restructuring charge: | Severance | ||
Restructuring Reserve [Roll Forward] | ||
Balance, beginning of period | 46 | |
Initial Charges | 0 | |
Plan Adjustments | 34 | |
Cash Payments | (34) | |
Balance, end of period | 46 | |
Activity for 2016 restructuring charge: | Service contracts | ||
Restructuring Reserve [Roll Forward] | ||
Balance, beginning of period | 933 | |
Initial Charges | 0 | |
Plan Adjustments | 378 | |
Cash Payments | (187) | |
Balance, end of period | 1,124 | |
Activity for 2015 restructuring charge: | Real estate obligations | ||
Restructuring Reserve [Roll Forward] | ||
Balance, beginning of period | 64 | 111 |
Initial Charges | 0 | 0 |
Plan Adjustments | 12 | (4) |
Cash Payments | (22) | (7) |
Balance, end of period | 54 | 100 |
Activity for 2015 restructuring charge: | Service contracts | ||
Restructuring Reserve [Roll Forward] | ||
Balance, beginning of period | 388 | 565 |
Initial Charges | 0 | 0 |
Plan Adjustments | 8 | 5 |
Cash Payments | (50) | (49) |
Balance, end of period | 346 | 521 |
Activity for 2014 restructuring charge: | Real estate obligations | ||
Restructuring Reserve [Roll Forward] | ||
Balance, beginning of period | 691 | 1,183 |
Initial Charges | 0 | 0 |
Plan Adjustments | 59 | 34 |
Cash Payments | (202) | (150) |
Balance, end of period | $ 548 | $ 1,067 |
OPERATING SEGMENTS - Additional
OPERATING SEGMENTS - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2018point_of_presencesegment | |
Segment Reporting [Abstract] | |
Number of reportable segments (segment) | segment | 2 |
Segment Reporting Information [Line Items] | |
Number of POPs (point of presence) | 98 |
Network services | |
Segment Reporting Information [Line Items] | |
Number of POPs (point of presence) | 97 |
OPERATING SEGMENTS - Summary of
OPERATING SEGMENTS - Summary of operating results for business segments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenues: | ||
Total revenues | $ 74,201 | $ 72,133 |
Direct costs of sales and services, customer support and sales and marketing, exclusive of depreciation and amortization: | ||
Total direct costs of sales and services, customer support and sales and marketing | 41,670 | 44,459 |
Business unit contribution: | ||
Total business unit contribution | 32,531 | 27,674 |
Exit activities, restructuring and impairments | (33) | 1,023 |
Other operating expenses, including depreciation and amortization | 31,685 | 26,159 |
Income from operations | 879 | 492 |
Non-operating expenses | 14,812 | 8,234 |
Loss before income taxes, non-controlling interest and equity in earnings of equity-method investment | (13,933) | (7,742) |
INAP US | ||
Revenues: | ||
Total revenues | 57,076 | 55,461 |
Direct costs of sales and services, customer support and sales and marketing, exclusive of depreciation and amortization: | ||
Total direct costs of sales and services, customer support and sales and marketing | 30,537 | 35,457 |
Business unit contribution: | ||
Total business unit contribution | 26,539 | 20,004 |
INAP INTL | ||
Revenues: | ||
Total revenues | 17,125 | 16,672 |
Direct costs of sales and services, customer support and sales and marketing, exclusive of depreciation and amortization: | ||
Total direct costs of sales and services, customer support and sales and marketing | 11,133 | 9,002 |
Business unit contribution: | ||
Total business unit contribution | $ 5,992 | $ 7,670 |
NET LOSS PER SHARE - Schedule o
NET LOSS PER SHARE - Schedule of basic and diluted net loss per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Earnings Per Share [Abstract] | ||
Net loss | $ (14,033) | $ (8,230) |
Less net income attributable to non-controlling interest | 27 | 0 |
Net loss attributable to INAP stockholders | $ (14,060) | $ (8,230) |
Weighted average shares outstanding, basic and diluted (in shares) | 20,052 | 16,087 |
Net loss per share, basic and diluted (in dollars per share) | $ (0.70) | $ (0.50) |
Anti-dilutive securities excluded from diluted net loss per share calculation for stock-based compensation plans (in shares) | 1,336 | 1,385 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Term Loan - Fourth Amendment to Credit Agreement - Subsequent Event | Apr. 09, 2018 |
Subsequent Event [Line Items] | |
Reduction of interest rate margins | 1.25% |
Prepayment premium percentage | 1.00% |