Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 13, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity Registrant Name | MONITRONICS INTERNATIONAL, INC | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 22,500,000 | |
Entity Central Index Key | 0001265107 | |
Document Fiscal Year Focus | 2020 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 12,759 | $ 14,763 |
Restricted cash | 133 | 238 |
Trade receivables, net of allowance for doubtful accounts of $2,759 in 2020 and $3,828 in 2019 | 10,854 | 12,083 |
Inventories, net | 6,878 | 5,242 |
Prepaid and other current assets | 20,387 | 19,953 |
Total current assets | 51,011 | 52,279 |
Property and equipment, net of accumulated depreciation of $13,796 in 2020 and $3,777 in 2019 | 41,516 | 42,096 |
Subscriber accounts and deferred contract acquisition costs, net of accumulated amortization of $208,387 in 2020 and $61,771 in 2019 | 1,089,198 | 1,064,311 |
Dealer network and other intangible assets, net of accumulated amortization of $25,748 in 2020 and $7,922 in 2019 | 118,952 | 136,778 |
Goodwill | 0 | 81,943 |
Deferred income tax asset, net | 684 | 684 |
Operating lease right-of-use asset | 18,345 | 19,277 |
Other assets | 18,651 | 21,944 |
Total assets | 1,338,357 | 1,419,312 |
Current liabilities: | ||
Accounts payable | 13,369 | 16,869 |
Other accrued liabilities | 45,806 | 24,954 |
Deferred revenue | 11,065 | 12,008 |
Holdback liability | 8,583 | 8,191 |
Current portion of long-term debt | 8,225 | 8,225 |
Total current liabilities | 87,048 | 70,247 |
Non-current liabilities: | ||
Long-term debt | 979,550 | 978,219 |
Long-term holdback liability | 1,761 | 2,183 |
Operating lease liabilities | 15,648 | 16,195 |
Other liabilities | 66,989 | 6,390 |
Total liabilities | 1,150,996 | 1,073,234 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value. Authorized 5,000,000 shares; no shares issued | 0 | 0 |
Common stock, $0.01 par value. Authorized 45,000,000 shares; issued and outstanding 22,500,000 shares at both September 30, 2020 and December 31, 2019 | 225 | 225 |
Additional paid-in capital | 379,175 | 379,175 |
Accumulated deficit | (189,779) | (33,331) |
Accumulated other comprehensive (loss) income, net | (2,260) | 9 |
Total stockholders' equity | 187,361 | 346,078 |
Total liabilities and stockholders' equity | $ 1,338,357 | $ 1,419,312 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Trade receivables, allowance for doubtful accounts | $ 2,759 | $ 3,828 |
Property and equipment, accumulated depreciation | 13,796 | 3,777 |
Subscriber accounts and deferred contract acquisition costs, accumulated amortization | 208,387 | 61,771 |
Dealer network and other intangible assets, accumulated amortization | $ 25,748 | $ 7,922 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
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) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 45,000,000 | 45,000,000 |
Common stock, shares issued (in shares) | 22,500,000 | 22,500,000 |
Common stock, shares outstanding (in shares) | 22,500,000 | 22,500,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Aug. 31, 2019 | Sep. 30, 2020 | Aug. 31, 2019 | Sep. 30, 2020 | |
Income Statement [Abstract] | |||||
Net revenue | $ 36,289 | $ 84,589 | $ 130,852 | $ 342,286 | $ 374,235 |
Operating expenses: | |||||
Cost of services | 8,976 | 19,986 | 31,383 | 75,286 | 87,017 |
Selling, general and administrative, including stock-based and long-term incentive compensation | 11,390 | 20,980 | 31,572 | 80,365 | 108,566 |
Radio conversion costs | 825 | 931 | 5,612 | 931 | 14,103 |
Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets | 17,302 | 32,508 | 57,240 | 130,791 | 164,889 |
Depreciation | 925 | 1,073 | 3,459 | 7,348 | 10,019 |
Goodwill impairment | 0 | 0 | 81,943 | ||
Total operating expenses | 39,418 | 75,478 | 129,266 | 294,721 | 466,537 |
Operating income (loss) | (3,129) | 9,111 | 1,586 | 47,565 | (92,302) |
Other (income) expense: | |||||
Gain on restructuring and reorganization, net | 0 | (702,824) | 0 | (669,722) | 0 |
Interest expense | 7,474 | 27,112 | 20,033 | 105,081 | 60,582 |
Realized and unrealized loss, net on derivative financial instruments | 0 | 6,804 | 0 | ||
Refinancing expense | 0 | 5,214 | 0 | ||
Total other (income) expense | 7,474 | (675,712) | 20,033 | (552,623) | 60,582 |
(Loss) income before income taxes | (10,603) | 684,823 | (18,447) | 600,188 | (152,884) |
Income tax expense | 204 | 438 | 717 | 1,775 | 1,937 |
Net (loss) income | (10,807) | 684,385 | (19,164) | 598,413 | (154,821) |
Other comprehensive loss: | |||||
Unrealized loss on derivative contracts, net | 0 | 0 | (475) | (940) | (2,269) |
Total other comprehensive loss, net of tax | 0 | 0 | (475) | (940) | (2,269) |
Comprehensive (loss) income | $ (10,807) | $ 684,385 | $ (19,639) | $ 597,473 | $ (157,090) |
Basic and diluted income per share: | |||||
Net loss (in dollars per share) | $ (0.48) | $ 0 | $ (0.85) | $ 0 | $ (6.88) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 1 Months Ended | 8 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Aug. 31, 2019 | Sep. 30, 2020 | |
Cash flows from operating activities: | |||
Net (loss) income | $ (10,807) | $ 598,413 | $ (154,821) |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||
Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets | 17,302 | 130,791 | 164,889 |
Depreciation | 925 | 7,348 | 10,019 |
Stock-based and long-term incentive compensation | 26 | 912 | 722 |
Gain on restructuring and reorganization, net | 0 | (705,559) | 0 |
Unrealized loss on derivative financial instruments, net | 0 | 4,577 | 0 |
Refinancing expense | 0 | 5,214 | 0 |
Trade bad debt expense | 912 | 7,558 | 6,567 |
Goodwill impairment | 0 | 0 | 81,943 |
Other non-cash activity, net | 117 | (462) | 2,867 |
Changes in assets and liabilities: | |||
Trade receivables | (1,183) | (6,271) | (5,338) |
Inventories | (943) | (188) | (1,636) |
Prepaid expenses and other assets | 207 | 2,948 | (4,554) |
Subscriber accounts - deferred contract acquisition costs | (162) | (2,193) | (1,904) |
Payables and other liabilities | 6,776 | 36,690 | (6,357) |
Net cash provided by operating activities | 13,170 | 79,778 | 92,397 |
Cash flows from investing activities: | |||
Capital expenditures | (1,123) | (7,100) | (10,530) |
Cost of subscriber accounts acquired | (8,012) | (83,814) | (84,253) |
Net cash used in investing activities | (9,135) | (90,914) | (94,783) |
Cash flows from financing activities: | |||
Proceeds from long-term debt | 5,000 | 253,100 | 65,000 |
Payments on long-term debt | (5,000) | (379,666) | (63,669) |
Payments of earnout liability | 0 | 0 | (1,054) |
Proceeds from equity rights offering | 0 | 161,497 | 0 |
Cash contributed by Ascent Capital | 0 | 24,139 | 0 |
Payments of restructuring and reorganization costs | 0 | (13,249) | 0 |
Payments of refinancing costs | 0 | (7,404) | 0 |
Value of shares withheld for share-based compensation | 0 | (18) | 0 |
Dividend to Ascent Capital | 0 | (5,000) | 0 |
Net cash provided by financing activities | 0 | 33,399 | 277 |
Net (decrease) increase in cash, cash equivalents and restricted cash | 4,035 | 22,263 | (2,109) |
Cash, cash equivalents and restricted cash at beginning of period | 24,640 | 15,001 | |
Cash, cash equivalents and restricted cash at end of period | $ 28,675 | $ 24,640 | $ 12,892 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Cumulative Effect, Period of Adoption, Adjusted Balance | Common Stock | Common StockCumulative Effect, Period of Adoption, Adjusted Balance | Additional Paid-in Capital | Additional Paid-in CapitalCumulative Effect, Period of Adoption, Adjusted Balance | Accumulated Deficit | Accumulated DeficitCumulative Effect, Period of Adoption, Adjustment | Accumulated DeficitCumulative Effect, Period of Adoption, Adjusted Balance | Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss)Cumulative Effect, Period of Adoption, Adjusted Balance |
Beginning Balance (in shares) at Dec. 31, 2018 | 1,000 | |||||||||||
Beginning Balance at Dec. 31, 2018 | $ (588,975) | $ 0 | $ 439,711 | $ (1,036,294) | $ 7,608 | |||||||
Increase (Decrease) in Stockholder's Equity | ||||||||||||
Net (loss) income | (31,770) | (31,770) | ||||||||||
Other comprehensive income (loss) | (468) | (468) | ||||||||||
Dividend paid to Ascent Capital | (5,000) | (5,000) | ||||||||||
Contribution from Ascent Capital | 2,250 | 2,250 | ||||||||||
Stock-based compensation | 189 | 189 | ||||||||||
Value of shares withheld for minimum tax liability | (1) | (1) | ||||||||||
Ending Balance (in shares) at Mar. 31, 2019 | 1,000 | |||||||||||
Ending Balance at Mar. 31, 2019 | (623,775) | $ 0 | 437,149 | (1,068,064) | 7,140 | |||||||
Beginning Balance (in shares) at Dec. 31, 2018 | 1,000 | |||||||||||
Beginning Balance at Dec. 31, 2018 | (588,975) | $ 0 | 439,711 | (1,036,294) | 7,608 | |||||||
Increase (Decrease) in Stockholder's Equity | ||||||||||||
Net (loss) income | 598,413 | |||||||||||
Other comprehensive income (loss) | $ (940) | |||||||||||
Ending Balance (in shares) at Aug. 31, 2019 | 0 | 22,500,000 | ||||||||||
Ending Balance at Aug. 31, 2019 | $ 379,400 | $ 225 | 379,175 | 0 | 0 | |||||||
Beginning Balance (in shares) at Dec. 31, 2018 | 1,000 | |||||||||||
Beginning Balance at Dec. 31, 2018 | $ (588,975) | $ 0 | 439,711 | (1,036,294) | 7,608 | |||||||
Ending Balance (in shares) at Dec. 31, 2019 | 22,500,000 | 22,500,000 | 22,500,000 | |||||||||
Ending Balance at Dec. 31, 2019 | $ 346,078 | $ (1,627) | $ 344,451 | $ 225 | $ 225 | 379,175 | $ 379,175 | (33,331) | $ (1,627) | $ (34,958) | 9 | $ 9 |
Increase (Decrease) in Stockholder's Equity | ||||||||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | |||||||||||
Beginning Balance (in shares) at Mar. 31, 2019 | 1,000 | |||||||||||
Beginning Balance at Mar. 31, 2019 | $ (623,775) | $ 0 | 437,149 | (1,068,064) | 7,140 | |||||||
Increase (Decrease) in Stockholder's Equity | ||||||||||||
Net (loss) income | (54,202) | (54,202) | ||||||||||
Other comprehensive income (loss) | (472) | (472) | ||||||||||
Stock-based compensation | (413) | (413) | ||||||||||
Value of shares withheld for minimum tax liability | (2) | (2) | ||||||||||
Ending Balance (in shares) at Jun. 30, 2019 | 1,000 | |||||||||||
Ending Balance at Jun. 30, 2019 | (678,864) | $ 0 | 436,734 | (1,122,266) | 6,668 | |||||||
Increase (Decrease) in Stockholder's Equity | ||||||||||||
Net (loss) income | 684,385 | 684,385 | ||||||||||
Other comprehensive income (loss) | 0 | |||||||||||
Stock-based compensation | 267 | 267 | ||||||||||
Value of shares withheld for minimum tax liability | (15) | (15) | ||||||||||
Cancellation of Predecessor equity (in shares) | (1,000) | |||||||||||
Cancellation of Predecessor equity | (5,773) | (436,986) | 437,881 | (6,668) | ||||||||
Issuance of Successor common stock (in shares) | 22,500,000 | |||||||||||
Issuance of Successor common stock | $ 379,400 | $ 225 | 379,175 | |||||||||
Ending Balance (in shares) at Aug. 31, 2019 | 0 | 22,500,000 | ||||||||||
Ending Balance at Aug. 31, 2019 | $ 379,400 | $ 225 | 379,175 | 0 | 0 | |||||||
Increase (Decrease) in Stockholder's Equity | ||||||||||||
Net (loss) income | (10,807) | (10,807) | ||||||||||
Other comprehensive income (loss) | 0 | |||||||||||
Ending Balance (in shares) at Sep. 30, 2019 | 22,500,000 | |||||||||||
Ending Balance at Sep. 30, 2019 | $ 368,593 | $ 225 | 379,175 | (10,807) | 0 | |||||||
Beginning Balance (in shares) at Dec. 31, 2019 | 22,500,000 | 22,500,000 | 22,500,000 | |||||||||
Beginning Balance at Dec. 31, 2019 | $ 346,078 | (1,627) | 344,451 | $ 225 | $ 225 | 379,175 | 379,175 | (33,331) | (1,627) | (34,958) | 9 | 9 |
Increase (Decrease) in Stockholder's Equity | ||||||||||||
Net (loss) income | (114,005) | (114,005) | ||||||||||
Other comprehensive income (loss) | (1,813) | (1,813) | ||||||||||
Ending Balance (in shares) at Mar. 31, 2020 | 22,500,000 | |||||||||||
Ending Balance at Mar. 31, 2020 | $ 228,633 | $ 225 | 379,175 | (148,963) | (1,804) | |||||||
Beginning Balance (in shares) at Dec. 31, 2019 | 22,500,000 | 22,500,000 | 22,500,000 | |||||||||
Beginning Balance at Dec. 31, 2019 | $ 346,078 | $ (1,627) | $ 344,451 | $ 225 | $ 225 | 379,175 | $ 379,175 | (33,331) | $ (1,627) | $ (34,958) | 9 | $ 9 |
Increase (Decrease) in Stockholder's Equity | ||||||||||||
Net (loss) income | (154,821) | |||||||||||
Other comprehensive income (loss) | $ (2,269) | |||||||||||
Ending Balance (in shares) at Sep. 30, 2020 | 22,500,000 | 22,500,000 | ||||||||||
Ending Balance at Sep. 30, 2020 | $ 187,361 | $ 225 | 379,175 | (189,779) | (2,260) | |||||||
Increase (Decrease) in Stockholder's Equity | ||||||||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | |||||||||||
Beginning Balance (in shares) at Mar. 31, 2020 | 22,500,000 | |||||||||||
Beginning Balance at Mar. 31, 2020 | $ 228,633 | $ 225 | 379,175 | (148,963) | (1,804) | |||||||
Increase (Decrease) in Stockholder's Equity | ||||||||||||
Net (loss) income | (21,652) | (21,652) | ||||||||||
Other comprehensive income (loss) | 19 | 19 | ||||||||||
Ending Balance (in shares) at Jun. 30, 2020 | 22,500,000 | |||||||||||
Ending Balance at Jun. 30, 2020 | 207,000 | $ 225 | 379,175 | (170,615) | (1,785) | |||||||
Increase (Decrease) in Stockholder's Equity | ||||||||||||
Net (loss) income | (19,164) | (19,164) | ||||||||||
Other comprehensive income (loss) | $ (475) | (475) | ||||||||||
Ending Balance (in shares) at Sep. 30, 2020 | 22,500,000 | 22,500,000 | ||||||||||
Ending Balance at Sep. 30, 2020 | $ 187,361 | $ 225 | $ 379,175 | $ (189,779) | $ (2,260) |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Monitronics International, Inc. and its subsidiaries (collectively, "Monitronics" or the "Company", doing business as Brinks Home Security TM ) provide residential customers and commercial client accounts with monitored home and business security systems, as well as interactive and home automation services, in the United States, Canada and Puerto Rico. Monitronics customers are obtained through our direct-to-consumer sales channel (the "Direct to Consumer Channel"), which offers both Do-It-Yourself and professional installation security solutions and our exclusive authorized dealer network (the "Dealer Channel"), which provides product and installation services, as well as support to customers. We also periodically acquire alarm monitoring accounts from other alarm companies in bulk on a negotiated basis. As previously disclosed, on June 30, 2019, Monitronics and certain of its domestic subsidiaries (collectively, the "Debtors"), filed voluntary petitions for relief (collectively, the "Petitions" and, the cases commenced thereby, the "Chapter 11 Cases") under chapter 11 of title 11 of the United States Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the Southern District of Texas (the "Bankruptcy Court"). The Debtors' Chapter 11 Cases were jointly administered under the caption In re Monitronics International, Inc., et al., Case No. 19-33650 . On August 7, 2019, the Bankruptcy Court entered an order, Docket No. 199 (the "Confirmation Order"), confirming and approving the Debtors' Joint Partial Prepackaged Plan of Reorganization (including all exhibits thereto and, as modified by the Confirmation Order, the "Plan") that was previously filed with the Bankruptcy Court on June 30, 2019. On August 30, 2019 (the "Effective Date"), the conditions to the effectiveness of the Plan were satisfied and the Company emerged from Chapter 11 after completing a series of transactions through which the Company and its former parent, Ascent Capital Group, Inc. ("Ascent Capital"), merged (the "Merger") in accordance with the terms of the Agreement and Plan of Merger, dated as of May 24, 2019 (the "Merger Agreement"). Monitronics was the surviving corporation and, immediately following the Merger, was redomiciled in Delaware in accordance with the terms of the Merger Agreement. Upon emergence from Chapter 11 on the Effective Date, the Company has applied Accounting Standards Codification ("ASC") 852, Reorganizations , in preparing its condensed consolidated financial statements. As a result of the application of fresh start accounting and the effects of the implementation of the Plan, a new entity for financial reporting purposes was created. The Company selected a convenience date of August 31, 2019 for purposes of applying fresh start accounting as the activity between the convenience date and the Effective Date did not result in a material difference in the financial results. References to "Successor" or "Successor Company" relate to the balance sheet and results of operations of Monitronics on and subsequent to September 1, 2019. References to "Predecessor" or "Predecessor Company" refer to the balance sheet and results of operations of Monitronics prior to September 1, 2019. With the exception of interest and amortization expense, the Company's operating results and key operating performance measures on a consolidated basis were not materially impacted by the reorganization. As such, references to the "Company" could refer to either the Predecessor or Successor periods, as defined. The unaudited interim financial information of the Company has been prepared in accordance with Article 10 of the Securities and Exchange Commission’s (the "SEC") Regulation S-X. Accordingly, it does not include all of the information required by generally accepted accounting principles in the United States ("GAAP") for complete financial statements. The Company’s unaudited condensed consolidated balance sheet as of September 30, 2020, and the unaudited condensed statements of operations and cash flows of the Successor Company for the three and nine months ended September 30, 2020 and of the Predecessor Company for the three and nine months ended September 30, 2019, include the results of Monitronics and all of its direct and indirect subsidiaries. The accompanying interim condensed consolidated financial statements are unaudited but, in the opinion of management, reflect all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of the results for such periods. The results of operations for any interim period are not necessarily indicative of results for the full year, particularly when considering the risks and uncertainties associated with the COVID-19 pandemic and the impacts it may have on our financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the Monitronics Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on March 30, 2020. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of revenue and expenses for each reporting period. The significant estimates made in preparation of the Company’s condensed consolidated financial statements primarily relate to valuation of subscriber accounts, deferred tax assets, goodwill and other indefinite-lived intangible assets. These estimates are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including consideration of the potential impacts of the COVID-19 pandemic, and adjusts them when facts and circumstances change. Given the severity and the duration the COVID-19 pandemic is unknown, the potential impacts of the pandemic on Management's estimates is uncertain. Furthermore, as the effects of any future events cannot be determined with any certainty, actual results could differ from the estimates upon which the carrying values were based. Supplemental Cash Flow Information Successor Company Predecessor Company Nine Months Ended September 30, Period from September 1, 2019 through September 30, Period from January 1, 2019 through August 31, 2020 2019 2019 State taxes paid, net $ 2,532 $ — $ 2,637 Interest paid 59,686 7,238 72,710 Accrued capital expenditures 713 1,471 1,405 Earnout Payments liability 84,799 — — |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments-Credit Losses (Topic 326) ("ASU 2016-13"), and related amendments, which replaces the incurred loss impairment methodology under prior GAAP with an expected credit loss model. ASU 2016-13 affects trade receivables, loans, contract assets, certain beneficial interests, off-balance sheet credit exposures not accounted for as insurance and other financial assets that are not subject to fair value through net income, as defined by the standard. Under the expected credit loss model, we are required to consider future economic trends to estimate expected credit losses over the lifetime of the asset. We adopted ASU 2016-13 In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes ("ASU 2019-12"). ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles in ASC 740, Income Taxes , and becomes effective on January 1, 2021. The adoption of the new guidance is not expected to have a material impact on our condensed consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) ("ASU 2020-04"). ASU 2020-04 provides optional guidance for a limited period of time to ease potential accounting impact associated with transitioning away from reference rates that are expected to be discontinued, such as the London Interbank Offered Rate ("LIBOR"). The amendments in this ASU apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued. The amendments in ASU 2020-04 can be adopted as of March 12, 2020 and are effective through December 31, 2022. The guidance is optional and may be elected over time as reference rate reform activities occur. During the second quarter of 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur. |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The following table provides the activity and balances of goodwill by reporting unit (amounts in thousands): Brinks Home Balance at 12/31/2019 $ 81,943 Goodwill impairment (81,943) Balance at 9/30/2020 $ — The Company accounts for its goodwill pursuant to the provisions of FASB ASC Topic 350, Intangibles - Goodwill and Other ("ASC 350"). In accordance with ASC 350, goodwill is not amortized, but rather tested for impairment annually, or earlier if an event occurs, or circumstances change, that indicate the fair value of a reporting unit may be below its carrying amount. As of March 31, 2020, the Company determined that a triggering event had occurred as a result of the recent economic disruption and uncertainty due to the COVID-19 pandemic. In response to the triggering event, the Company performed a quantitative impairment test at the Brinks Home Security entity level as we operate as a single reporting unit. The fair value of the Company's reporting unit was estimated based on a discounted cash flow model and market-based approach. Assumptions critical to our fair value estimate under the discounted cash flow model include the discount rate, projected average revenue growth and projected long-term growth rates in the determination of terminal values. The results of the quantitative assessment indicated that the carrying value was in excess of the fair value of the reporting unit, including goodwill. An impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit's fair value. Applying this methodology, we recorded a full goodwill impairment charge of $81,943,000 during the nine months ended September 30, 2020. The factors leading to the goodwill impairment were lower projected overall account acquisition in future periods due to the estimated impact of COVID-19 on our account acquisition channels and an increase in the discount rate applied in the discounted cash flow model based on current economic conditions. This resulted in reductions in future cash flows and a lower fair value as calculated under the income approach. |
Other Accrued Liabilities
Other Accrued Liabilities | 9 Months Ended |
Sep. 30, 2020 | |
Payables and Accruals [Abstract] | |
Other Accrued Liabilities | Other Accrued Liabilities Other accrued liabilities consisted of the following (amounts in thousands): September 30, December 31, Accrued payroll and related liabilities $ 8,966 $ 5,908 Interest payable 258 291 Income taxes payable 2,046 2,603 Operating lease liabilities 3,441 3,725 Contingent dealer liabilities 2,591 3,274 Earnout Payments liability 21,786 — Other 6,718 9,153 Total Other accrued liabilities $ 45,806 $ 24,954 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt Debt consisted of the following (amounts in thousands): September 30, December 31, Takeback Loan Facility, matures March 29, 2024, LIBOR plus 6.5%, subject to a LIBOR floor of 1.25%, with an effective rate of 8.0% $ 814,275 $ 820,444 Term Loan Facility, matures July 3, 2024, LIBOR plus 5.0%, subject to a LIBOR floor of 1.5%, with an effective rate of 6.7% 150,000 150,000 Revolving Credit Facility, matures July 3, 2024, LIBOR plus 5.0%, subject to a LIBOR floor of 1.5%, or base rate (with a floor of 4.5%) plus 4.0%, with an effective rate of 9.0% 23,500 16,000 $ 987,775 $ 986,444 Less: Current portion of long-term debt (8,225) (8,225) Long-term debt $ 979,550 $ 978,219 Takeback Loan Facility On the Effective Date, pursuant to the terms of the Plan, the Debtors entered into an $822,500,000 takeback term loan facility (the "Takeback Loan Facility") with the lenders party thereto, and Alter Domus (formerly known as Cortland Capital Market Services, LLC) as administrative agent. The Takeback Loan Facility requires quarterly interest payments and quarterly principal payments of $2,056,250, and matures on March 29, 2024. Interest on loans made under the Takeback Loan Facility accrues at an interest rate per year equal to the LIBOR rate (with a floor of 1.25%) plus 6.5% or base rate plus 5.5%. The Takeback Loan Facility, subject to certain exceptions, is guaranteed by each of the Company's existing and future domestic subsidiaries and is secured by substantially all the assets of the Company and such subsidiary guarantors. See note 13, Consolidating Guarantor Financial Information for further information. The Takeback Loan Facility contains customary representations, warranties, covenants and events of default and related remedies. Credit Facilities On the Effective Date, pursuant to the terms of the Plan, the Debtors entered into a $145,000,000 senior secured revolving credit facility (the "Revolving Credit Facility"), including a $10,000,000 swingline loan, and $150,000,000 in senior secured term loans (the "Term Loan Facility" and together with the Revolving Credit Facility, the "Credit Facilities") with the lenders party thereto, and Encina Private Credit SPV, LLC as administrative agent, swingline lender and L/C issuer. As of September 30, 2020, the Company had $600,000 available under a standby letter of credit issued. As of September 30, 2020, $120,900,000 is available for borrowing under the Revolving Credit Facility, subject to certain financial covenants. The maturity date of loans made under the Credit Facilities is July 3, 2024, subject to a springing maturity of March 29, 2024, or earlier, depending on any repayment, refinancing or changes in the maturity date of the Takeback Loan Facility. Interest on loans made under the Credit Facilities accrues at an interest rate per year equal to the LIBOR rate (with a floor of 1.5%) plus 5.0% or base rate (with a floor of 4.5%) plus 4.0%, dependent upon the type of borrowing requested by the Company. There is a commitment fee of 0.75% on unused portions of the Revolving Credit Facility. The Credit Facilities, subject to certain exceptions, are guaranteed by each of the Company's existing and future domestic subsidiaries and are secured by substantially all the assets of the Company and such subsidiary guarantors. See note 13, Consolidating Guarantor Financial Information for further information. The Credit Facilities contain customary representations, warranties, covenants and events of default and related remedies. On June 17, 2020, the Company entered into Amendment No. 1 to the Takeback Loan Facility and Amendment No. 1 to the Credit Facilities (collectively, the "Credit Agreements"). The Amendments amended the applicable Credit Agreement to, among other things, (a) exclude earnouts, holdbacks, and similar payments (including the Earnout Payments) from consideration in the determination of the maximum amount of bulk purchases of alarm monitoring contracts permitted annually, (b) limit the recurring monthly revenue attributable to monitoring contracts with an active earnout, holdback or similar payment for the calculation of certain leverage ratios, (c) limit the annual amount permitted to be paid by the Company to buy out, accelerate, or settle any earnout, holdback or similar payments for future acquisitions structured similarly to the Acquisition prior to the original due date of such payments and (d) permit a board observer appointed by a majority of the lenders party to the Takeback Loan Facility to attend meetings of the board of directors of the Company. The terms of the Takeback Loan Facility and the Credit Facilities provide for certain financial and nonfinancial covenants. As of September 30, 2020, the Company was in compliance with all required covenants under these financing arrangements. In order to reduce the financial risk related to changes in interest rates associated with the floating rate term loan under the Takeback Loan Facility, the Company entered into an interest rate cap agreement. The critical terms of the interest rate cap agreement were designed to mirror the terms of the Takeback Loan Facility and are highly effective at offsetting the cash flows being hedged. See note 6, Derivatives for further disclosures related to the settlement of these derivative instruments. As of September 30, 2020, principal payments scheduled to be made on the Company’s debt obligations are as follows (amounts in thousands): Remainder of 2020 $ 2,056 2021 8,225 2022 8,225 2023 8,225 2024 961,044 2025 — Thereafter — Total debt principal payments $ 987,775 |
Derivatives
Derivatives | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Derivatives Interest Rate Cap In November of 2019, the Company entered into an interest rate cap agreement to reduce the interest rate risk inherent in the Company's variable rate Takeback Loan Facility. The interest rate cap agreement provides the right to receive cash if the reference interest rate rises above a contractual rate. The premium paid for the interest rate cap agreement was $3,020,000, which was the initial fair value of the interest rate cap recorded on the condensed consolidated balance sheets. The critical terms of the interest rate cap were designed to mirror the terms of the Company's variable rate Takeback Loan Facility and are highly effective at offsetting the cash flows being hedged. The Company designated the interest rate cap as a cash flow hedge of the variability of the LIBOR-based interest payments on $750,000,000 of principal of the Takeback Loan Facility. The interest rate cap agreement will expire on December 31, 2023. The effective portion of the interest rate cap's change in fair value is recorded in Accumulated other comprehensive income (loss). Any ineffective portions of the interest rate cap's change in fair value are recognized in current earnings in Interest expense. During the Successor Company three and nine months ended September 30, 2020, interest expense of $186,000 and $554,000, respectively, was reclassified from Accumulated other comprehensive income (loss) to Interest expense on the condensed consolidated statements of operations and comprehensive income (loss). The Company expects to similarly reclassify approximately $737,000 from Accumulated other comprehensive income (loss) to Interest expense on the condensed consolidated statements of operations and comprehensive income (loss) in the next twelve months. The fair value of the interest rate cap was $137,000 at September 30, 2020, and constituted an asset of the Company. The fair value of the interest rate cap is included in non-current Other assets, net on the condensed consolidated balance sheets based on the maturity date of the derivative instrument. See note 7, Fair Value Measurements for related fair value disclosures. Interest Rate Swaps Historically, the Company entered into interest rate swap agreements (all interest rate swap agreements are collectively referred to as the "Swaps") to reduce the interest rate risk inherent in the Company's prior debt agreements. Prior to December of 2018, all of the Swaps were designated and qualified as cash flow hedging instruments, with the effective portion of the Swaps' change in fair value recorded in Accumulated other comprehensive income (loss). However, in December of 2018, given the potential for changes in the Company's future expected interest payments that these Swaps hedged, all of the Swaps no longer qualified as a cash flow hedge and were de-designated as such. Before the de-designation, changes in the fair value of the Swaps were recognized in Accumulated other comprehensive income (loss) and were reclassified to Interest expense when the hedged interest payments on the underlying debt were recognized. After the de-designation, changes in the fair value of the Swaps are recognized in Unrealized loss on derivative financial instruments on the condensed consolidated statements of operations and comprehensive income (loss). For the Predecessor Company three months ended March 31, 2019, the Company recorded an Unrealized loss on derivative financial instruments of $7,773,000. On April 30, 2019, the various counterparties and the Company agreed to settle and terminate all of the outstanding interest rate swap agreements, which required us to pay $8,767,000 in termination amount to certain counterparties and required a certain counterparty to pay $6,540,000 in termination amount to us, resulting in a Realized net loss on derivative financial instruments of $2,227,000. There are no Swaps outstanding as of September 30, 2020. The impact of the derivatives on the condensed consolidated financial statements is depicted below (amounts in thousands): Successor Company Predecessor Company Three Months Ended September 30, Period from September 1, 2019 through September 30, Period from July 1, 2019 through August 31, 2020 2019 2019 Effective portion of loss recognized in Accumulated other comprehensive income (loss) $ (661) $ — $ — Interest cost of interest rate cap reclassified into Net loss (a) $ 186 $ — $ — (a) Amounts are included in Interest expense in the condensed consolidated statements of operations and comprehensive income (loss). Successor Company Predecessor Company Nine Months Ended September 30, Period from September 1, 2019 through September 30, Period from January 1, 2019 through August 31, 2020 2019 2019 Effective portion of loss recognized in Accumulated other comprehensive income (loss) $ (2,823) $ — $ — Interest cost of interest rate cap reclassified into Net loss (b) $ 554 $ — $ — Effective portion of loss reclassified from Accumulated other comprehensive income (loss) into Net income (loss) (b) $ — $ — $ (940) (b) Amounts are included in Interest expense in the condensed consolidated statements of operations and comprehensive income (loss). |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements According to the FASB ASC Topic 820, Fair Value Measurement , fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants and requires that assets and liabilities carried at fair value are classified and disclosed in the following three categories: • Level 1 - Quoted prices for identical instruments in active markets. • Level 2 - Quoted prices for similar instruments in active or inactive markets and valuations derived from models where all significant inputs are observable in active markets. • Level 3 - Valuations derived from valuation techniques in which one or more significant inputs are unobservable in any market. The following summarizes the fair value level of assets that are measured on a recurring basis at September 30, 2020 and December 31, 2019 (amounts in thousands): Level 1 Level 2 Level 3 Total September 30, 2020 Interest rate cap agreement - assets (a) $ — $ 137 $ — $ 137 Total $ — $ 137 $ — $ 137 December 31, 2019 Interest rate cap agreement - assets (a) $ — $ 2,959 $ — $ 2,959 Total $ — $ 2,959 $ — $ 2,959 (a) Interest rate cap asset value is included in non-current Other assets on the condensed consolidated balance sheets. The Company has determined that the significant inputs used to value the interest rate cap fall within Level 2 of the fair value hierarchy. As a result, the Company has determined that its interest rate cap valuation is classified in Level 2 of the fair value hierarchy. Carrying values and fair values of financial instruments that are not carried at fair value are as follows (amounts in thousands): September 30, 2020 December 31, 2019 Long term debt, including current portion: Carrying value $ 987,775 $ 986,444 Fair value (a) $ 784,206 $ 857,717 (a) The fair value is based on market quotations from third party financial institutions and is classified as Level 2 in the hierarchy. The Company’s other financial instruments', including cash and cash equivalents, restricted cash, accounts receivable, accounts payable and contingent dealer liabilities, carrying values approximate their fair values because of their nature. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders' Equity Common Stock The Company had 22,500,000 issued and outstanding shares of Common Stock, par value $0.01 per share ("Common Stock") as of both September 30, 2020 and December 31, 2019. Accumulated Other Comprehensive Income (Loss) The following table provides a summary of the changes in Accumulated other comprehensive income (loss) for the nine months ended September 30, 2020 (amounts in thousands): Successor Company Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2019 $ 9 Unrealized loss on interest rate cap recognized through Accumulated other comprehensive income (loss), net of income tax of $0 (1,997) Interest cost of interest rate cap reclassified into Net loss, net of income tax of $0 (a) 184 Balance at March 31, 2020 $ (1,804) Unrealized loss on interest rate cap recognized through Accumulated other comprehensive income (loss), net of income tax of $0 (165) Interest cost of interest rate cap reclassified into Net loss, net of income tax of $0 (a) 184 Balance at June 30, 2020 $ (1,785) Unrealized loss on interest rate cap recognized through Accumulated other comprehensive income (loss), net of income tax of $0 (661) Interest cost of interest rate cap reclassified into Net loss, net of income tax of $0 (a) 186 Balance at September 30, 2020 $ (2,260) (a) Amounts reclassified into Net loss are included in Interest expense on the condensed consolidated statements of operations. See note 6, Derivatives for further information. The following table provides a summary of the changes in Accumulated other comprehensive income (loss) for the period January 1, 2019 through August 31, 2019 (amounts in thousands): Predecessor Company Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2018 $ 7,608 Reclassifications of unrealized loss on derivatives into Net loss, net of income tax of $0 (a) (468) Balance at March 31, 2019 $ 7,140 Reclassifications of unrealized loss on derivatives into Net loss, net of income tax of $0 (a) (472) Balance at June 30, 2019 $ 6,668 Fresh start adjustment (b) (6,668) Balance at August 31, 2019 $ — (a) Amounts reclassified into Net loss are included in Interest expense on the condensed consolidated statements of operations. See note 6, Derivatives for further information. (b) The remaining amount recognized in Accumulated other comprehensive income (loss) was evaluated to have no fair value upon the application of fresh start accounting pursuant to the Plan. Incentive Award Plan On August 3, 2020, the Board of Directors (the "Board") adopted the Monitronics International, Inc. 2020 Incentive Award Plan (the "Plan"), pursuant to which the company may grant cash, equity and equity-based incentive awards to eligible service providers. The Plan provides for the grant of non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalents and other stock or cash-based awards (collectively, "awards"). Non-employee directors of the Company, as well as employees and consultants of the Company or its subsidiaries (collectively, "participants") are eligible to receive awards under the Plan. The Plan authorizes the issuance of 2,500,000 shares of common stock. Through September 30, 2020, and pursuant to the Plan, the company granted a total of 994,000 Performance-Based Restricted Stock Unit awards ("PRSUs") and a total of 426,000 Time-Based Restricted Stock Unit awards ("TRSUs") covering shares of common stock to certain of the company's directors, executives and senior leadership employees. Each RSU represents a contractual right to receive one share of the company’s common stock upon becoming fully vested and payable subject to the terms and conditions of the respective award agreement. Both the PRSUs and the TRSUs are subject to performance condition such that the awards are not payable unless there is a change in control of the company. Because a change in control is not probable of occurring as of the reporting date, no compensation expense has been recognized for either the PRSUs or the TRSUs for the three and nine months ended September 30, 2020. |
Basic and Diluted Earnings Per
Basic and Diluted Earnings Per Common Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Earnings Per Common Share | Basic and Diluted Earnings Per Common ShareBasic earnings per common share ("EPS") is computed by dividing net income by the weighted average number of shares of Common Stock outstanding for the period. Diluted EPS is computed by dividing net income by the sum of the weighted average number of shares of Common Stock outstanding and the effect of dilutive securities. For the Successor Company three and nine months ended September 30, 2020, there were no anti-dilutive securities outstanding. For the Predecessor Company period from September 1, 2019 through September 30, 2019, there were no anti-dilutive securities outstanding. The weighted average number of basic and diluted shares of Common Stock was 22,500,000 for the Successor Company three and nine months ended September 30, 2020. The weighted average number of basic and dilutive shares of Common Stock was 22,500,000 for the Predecessor Company period from September 1, 2019 through September 30, 2019. There were no public shares of Common Stock outstanding during the Predecessor Company period January 1, 2019 through August 31, 2019 as Monitronics was wholly-owned by Ascent Capital. |
Commitments, Contingencies and
Commitments, Contingencies and Other Liabilities | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments, Contingencies and Other Liabilities | Commitments, Contingencies and Other Liabilities The Company is involved in litigation and similar claims incidental to the conduct of its business. Matters that are probable of unfavorable outcome to the Company and which can be reasonably estimated are accrued. Such accruals are based on information known about the matters, management's estimate of the outcomes of such matters and experience in contesting, litigating and settling similar matters. In management's opinion, none of the pending actions are likely to have a material adverse impact on the Company's financial position or results of operations. The Company accrues and expenses legal fees related to loss contingency matters as incurred. Asset Purchase Agreement On June 17, 2020, the Company acquired certain contracts for the provision of alarm monitoring and related services (the "Accounts") as well as the related accounts receivable, intellectual property and equipment inventory of Protect America, Inc. The Company paid approximately $16,600,000 at closing and will make 50 subsequent monthly payments ("Earnout Payments") consisting of a portion of the revenue attributable to the Accounts, subject to adjustment for Accounts that are no longer active. The transaction was accounted for as an asset acquisition with the cost of the assets acquired recorded as of June 17, 2020 and an estimated liability for the Earnout Payments of approximately $86,000,000. The Earnout Payments liability was estimated based on the terms of the payout and the forecasted attrition of the Protect America subscriber base. The current portion of the Earnout Payments liability is included in current Other accrued liabilities on the condensed consolidated balance sheets and the long-term portion of the Earnout Payments is included in non-current Other liabilities on the condensed consolidated balance sheets. The monthly Earnout Payments are classified as Cash flows from financing activities on the condensed consolidated statements of cash flows. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Disaggregation of Revenue Revenue is disaggregated by source of revenue as follows (in thousands): Successor Company Predecessor Company Three Months Ended September 30, Period from September 1, 2019 through September 30, Period from July 1, 2019 through August 31, 2020 2019 2019 Alarm monitoring revenue $ 119,164 $ 33,594 $ 78,608 Product, installation and service revenue 10,506 2,224 4,993 Other revenue 1,182 471 988 Total Net revenue $ 130,852 $ 36,289 $ 84,589 Successor Company Predecessor Company Nine Months Ended September 30, Period from September 1, 2019 through September 30, Period from January 1, 2019 through August 31, 2020 2019 2019 Alarm monitoring revenue $ 340,235 $ 33,594 $ 319,172 Product, installation and service revenue 30,513 2,224 19,111 Other revenue 3,487 471 4,003 Total Net revenue $ 374,235 $ 36,289 $ 342,286 Contract Balances The following table provides information about receivables, contract assets and contract liabilities from contracts with customers (in thousands): September 30, December 31, Trade receivables, net $ 10,854 $ 12,083 Contract assets, net - current portion (a) $ 13,490 $ 12,070 Contract assets, net - long-term portion (b) $ 14,827 $ 14,852 Deferred revenue $ 11,065 $ 12,008 (a) Amount is included in Prepaid and other current assets in the unaudited condensed consolidated balance sheets. (b) Amount is included in Other assets in the unaudited condensed consolidated balance sheets. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Leases | Leases The Company primarily leases buildings and equipment. The Company determines if a contract is a lease at the inception of the arrangement. The Company reviews all options to extend, terminate, or purchase its right of use assets at the inception of the lease and accounts for these options when they are reasonably certain of being exercised. Certain real estate leases contain lease and non-lease components, which are accounted for separately. Leases with an initial term of 12 months or less are not recorded on the condensed consolidated balance sheet. Lease expense for these leases is recognized on a straight-line basis over the lease term. All of the Company's leases are currently determined to be operating leases. Components of Lease Expense The components of lease expense were as follows (in thousands): Successor Company Predecessor Company Three Months Ended September 30, Period from September 1, 2019 through September 30, Period from July 1, 2019 through August 31, 2020 2019 2019 Operating lease cost (a) $ 178 $ 34 $ 70 Operating lease cost (b) 860 320 624 Total operating lease cost $ 1,038 $ 354 $ 694 (a) Amount is included in Cost of services in the unaudited condensed consolidated statements of operations and comprehensive income (loss). (b) Amount is included in Selling, general and administrative, including stock-based and long-term incentive compensation in the unaudited condensed consolidated statements of operations and comprehensive income (loss). Successor Company Predecessor Company Nine Months Ended September 30, Period from September 1, 2019 through September 30, Period from January 1, 2019 through August 31, 2020 2019 2019 Operating lease cost (c) $ 569 $ 34 $ 321 Operating lease cost (d) 2,997 320 2,595 Total operating lease cost $ 3,566 $ 354 $ 2,916 (c) Amount is included in Cost of services in the unaudited condensed consolidated statements of operations and comprehensive income (loss). (d) Amount is included in Selling, general and administrative, including stock-based and long-term incentive compensation in the unaudited condensed consolidated statements of operations and comprehensive income (loss). Remaining Lease Term and Discount Rate The following table presents the weighted-average remaining lease term and the weighted-average discount rate: As of September 30, 2020 Weighted-average remaining lease term for operating leases (in years) 8.9 Weighted-average discount rate for operating leases 11.7 % All of the Company's lease contracts do not provide a readily determinable implicit rate. For these contracts, the Company's estimated incremental borrowing rate is based on information available either upon adoption of ASU 2016-02, Leases (Topic 842) or at the inception of the lease. Supplemental Cash Flow Information The following is the supplemental cash flow information associated with the Company's leases (in thousands): Successor Company Predecessor Company Nine Months Ended September 30, Period from September 1, 2019 through September 30, Period from January 1, 2019 through August 31, 2020 2019 2019 Cash paid for amounts included in the measurement of lease liabilities: Lease payments included in cash flows from operating activities (a) $ 3,460 $ 345 $ 2,804 Right-of-use assets obtained in exchange for new: Operating lease liabilities $ 738 $ 69 $ 89 (a) Cash flow impacts from Operating lease right-of-use assets and Operating lease liabilities are presented net on the cash flow statement in changes in Payables and other liabilities. Maturities of Lease Liabilities As of September 30, 2020, maturities of lease liabilities were as follows: Remainder of 2020 $ 728 2021 3,800 2022 3,549 2023 3,182 2024 3,065 Thereafter 17,264 Total lease payments $ 31,588 Less: Interest (12,499) Total lease obligations $ 19,089 |
Consolidating Guarantor Financi
Consolidating Guarantor Financial Information | 9 Months Ended |
Sep. 30, 2020 | |
Condensed Financial Information Disclosure [Abstract] | |
Consolidating Guarantor Financial Information | Consolidating Guarantor Financial InformationMonitronics (the "Parent Issuer") entered into the Takeback Loan Facility and the Credit Facilities in August 2019 and both are guaranteed by all of the Company's existing domestic subsidiaries. Consolidating guarantor financial information has not been presented in this Form 10-Q as substantially all of the Company's operations are now conducted by the Parent Issuer entity. The Company believes that disclosing such information would not provide investors with any additional information that would be material in evaluating the sufficiency of the guarantees. |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments-Credit Losses (Topic 326) ("ASU 2016-13"), and related amendments, which replaces the incurred loss impairment methodology under prior GAAP with an expected credit loss model. ASU 2016-13 affects trade receivables, loans, contract assets, certain beneficial interests, off-balance sheet credit exposures not accounted for as insurance and other financial assets that are not subject to fair value through net income, as defined by the standard. Under the expected credit loss model, we are required to consider future economic trends to estimate expected credit losses over the lifetime of the asset. We adopted ASU 2016-13 In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes ("ASU 2019-12"). ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles in ASC 740, Income Taxes , and becomes effective on January 1, 2021. The adoption of the new guidance is not expected to have a material impact on our condensed consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) ("ASU 2020-04"). ASU 2020-04 provides optional guidance for a limited period of time to ease potential accounting impact associated with transitioning away from reference rates that are expected to be discontinued, such as the London Interbank Offered Rate ("LIBOR"). The amendments in this ASU apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued. The amendments in ASU 2020-04 can be adopted as of March 12, 2020 and are effective through December 31, 2022. The guidance is optional and may be elected over time as reference rate reform activities occur. During the second quarter of 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Supplemental Cash Flow Information | Supplemental Cash Flow Information Successor Company Predecessor Company Nine Months Ended September 30, Period from September 1, 2019 through September 30, Period from January 1, 2019 through August 31, 2020 2019 2019 State taxes paid, net $ 2,532 $ — $ 2,637 Interest paid 59,686 7,238 72,710 Accrued capital expenditures 713 1,471 1,405 Earnout Payments liability 84,799 — — |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Activity and Balances of Goodwill | The following table provides the activity and balances of goodwill by reporting unit (amounts in thousands): Brinks Home Balance at 12/31/2019 $ 81,943 Goodwill impairment (81,943) Balance at 9/30/2020 $ — |
Other Accrued Liabilities (Tabl
Other Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of Other Accrued Liabilities | Other accrued liabilities consisted of the following (amounts in thousands): September 30, December 31, Accrued payroll and related liabilities $ 8,966 $ 5,908 Interest payable 258 291 Income taxes payable 2,046 2,603 Operating lease liabilities 3,441 3,725 Contingent dealer liabilities 2,591 3,274 Earnout Payments liability 21,786 — Other 6,718 9,153 Total Other accrued liabilities $ 45,806 $ 24,954 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Debt consisted of the following (amounts in thousands): September 30, December 31, Takeback Loan Facility, matures March 29, 2024, LIBOR plus 6.5%, subject to a LIBOR floor of 1.25%, with an effective rate of 8.0% $ 814,275 $ 820,444 Term Loan Facility, matures July 3, 2024, LIBOR plus 5.0%, subject to a LIBOR floor of 1.5%, with an effective rate of 6.7% 150,000 150,000 Revolving Credit Facility, matures July 3, 2024, LIBOR plus 5.0%, subject to a LIBOR floor of 1.5%, or base rate (with a floor of 4.5%) plus 4.0%, with an effective rate of 9.0% 23,500 16,000 $ 987,775 $ 986,444 Less: Current portion of long-term debt (8,225) (8,225) Long-term debt $ 979,550 $ 978,219 |
Schedule of Maturities of Debt Obligations | As of September 30, 2020, principal payments scheduled to be made on the Company’s debt obligations are as follows (amounts in thousands): Remainder of 2020 $ 2,056 2021 8,225 2022 8,225 2023 8,225 2024 961,044 2025 — Thereafter — Total debt principal payments $ 987,775 |
Derivatives (Tables)
Derivatives (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Impact of the Derivatives on the Condensed Consolidated Financial Statements | The impact of the derivatives on the condensed consolidated financial statements is depicted below (amounts in thousands): Successor Company Predecessor Company Three Months Ended September 30, Period from September 1, 2019 through September 30, Period from July 1, 2019 through August 31, 2020 2019 2019 Effective portion of loss recognized in Accumulated other comprehensive income (loss) $ (661) $ — $ — Interest cost of interest rate cap reclassified into Net loss (a) $ 186 $ — $ — (a) Amounts are included in Interest expense in the condensed consolidated statements of operations and comprehensive income (loss). Successor Company Predecessor Company Nine Months Ended September 30, Period from September 1, 2019 through September 30, Period from January 1, 2019 through August 31, 2020 2019 2019 Effective portion of loss recognized in Accumulated other comprehensive income (loss) $ (2,823) $ — $ — Interest cost of interest rate cap reclassified into Net loss (b) $ 554 $ — $ — Effective portion of loss reclassified from Accumulated other comprehensive income (loss) into Net income (loss) (b) $ — $ — $ (940) (b) Amounts are included in Interest expense in the condensed consolidated statements of operations and comprehensive income (loss). |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Level of Assets Measured on a Recurring Basis | The following summarizes the fair value level of assets that are measured on a recurring basis at September 30, 2020 and December 31, 2019 (amounts in thousands): Level 1 Level 2 Level 3 Total September 30, 2020 Interest rate cap agreement - assets (a) $ — $ 137 $ — $ 137 Total $ — $ 137 $ — $ 137 December 31, 2019 Interest rate cap agreement - assets (a) $ — $ 2,959 $ — $ 2,959 Total $ — $ 2,959 $ — $ 2,959 (a) Interest rate cap asset value is included in non-current Other assets on the condensed consolidated balance sheets. |
Schedule of Carrying Values and Fair Values of Financial Instruments Not Carried at Fair Value | Carrying values and fair values of financial instruments that are not carried at fair value are as follows (amounts in thousands): September 30, 2020 December 31, 2019 Long term debt, including current portion: Carrying value $ 987,775 $ 986,444 Fair value (a) $ 784,206 $ 857,717 (a) The fair value is based on market quotations from third party financial institutions and is classified as Level 2 in the hierarchy. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Summary of Changes in Accumulated Other Comprehensive Income (Loss) | The following table provides a summary of the changes in Accumulated other comprehensive income (loss) for the nine months ended September 30, 2020 (amounts in thousands): Successor Company Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2019 $ 9 Unrealized loss on interest rate cap recognized through Accumulated other comprehensive income (loss), net of income tax of $0 (1,997) Interest cost of interest rate cap reclassified into Net loss, net of income tax of $0 (a) 184 Balance at March 31, 2020 $ (1,804) Unrealized loss on interest rate cap recognized through Accumulated other comprehensive income (loss), net of income tax of $0 (165) Interest cost of interest rate cap reclassified into Net loss, net of income tax of $0 (a) 184 Balance at June 30, 2020 $ (1,785) Unrealized loss on interest rate cap recognized through Accumulated other comprehensive income (loss), net of income tax of $0 (661) Interest cost of interest rate cap reclassified into Net loss, net of income tax of $0 (a) 186 Balance at September 30, 2020 $ (2,260) (a) Amounts reclassified into Net loss are included in Interest expense on the condensed consolidated statements of operations. See note 6, Derivatives for further information. The following table provides a summary of the changes in Accumulated other comprehensive income (loss) for the period January 1, 2019 through August 31, 2019 (amounts in thousands): Predecessor Company Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2018 $ 7,608 Reclassifications of unrealized loss on derivatives into Net loss, net of income tax of $0 (a) (468) Balance at March 31, 2019 $ 7,140 Reclassifications of unrealized loss on derivatives into Net loss, net of income tax of $0 (a) (472) Balance at June 30, 2019 $ 6,668 Fresh start adjustment (b) (6,668) Balance at August 31, 2019 $ — (a) Amounts reclassified into Net loss are included in Interest expense on the condensed consolidated statements of operations. See note 6, Derivatives for further information. (b) The remaining amount recognized in Accumulated other comprehensive income (loss) was evaluated to have no fair value upon the application of fresh start accounting pursuant to the Plan. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue Disaggregated by Source | Revenue is disaggregated by source of revenue as follows (in thousands): Successor Company Predecessor Company Three Months Ended September 30, Period from September 1, 2019 through September 30, Period from July 1, 2019 through August 31, 2020 2019 2019 Alarm monitoring revenue $ 119,164 $ 33,594 $ 78,608 Product, installation and service revenue 10,506 2,224 4,993 Other revenue 1,182 471 988 Total Net revenue $ 130,852 $ 36,289 $ 84,589 Successor Company Predecessor Company Nine Months Ended September 30, Period from September 1, 2019 through September 30, Period from January 1, 2019 through August 31, 2020 2019 2019 Alarm monitoring revenue $ 340,235 $ 33,594 $ 319,172 Product, installation and service revenue 30,513 2,224 19,111 Other revenue 3,487 471 4,003 Total Net revenue $ 374,235 $ 36,289 $ 342,286 |
Schedule of Receivables, Contract Assets and Contract Liabilities from Contracts with Customers | The following table provides information about receivables, contract assets and contract liabilities from contracts with customers (in thousands): September 30, December 31, Trade receivables, net $ 10,854 $ 12,083 Contract assets, net - current portion (a) $ 13,490 $ 12,070 Contract assets, net - long-term portion (b) $ 14,827 $ 14,852 Deferred revenue $ 11,065 $ 12,008 (a) Amount is included in Prepaid and other current assets in the unaudited condensed consolidated balance sheets. (b) Amount is included in Other assets in the unaudited condensed consolidated balance sheets. |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Components of Lease Expense and Supplemental Cash Flow Information | The components of lease expense were as follows (in thousands): Successor Company Predecessor Company Three Months Ended September 30, Period from September 1, 2019 through September 30, Period from July 1, 2019 through August 31, 2020 2019 2019 Operating lease cost (a) $ 178 $ 34 $ 70 Operating lease cost (b) 860 320 624 Total operating lease cost $ 1,038 $ 354 $ 694 (a) Amount is included in Cost of services in the unaudited condensed consolidated statements of operations and comprehensive income (loss). (b) Amount is included in Selling, general and administrative, including stock-based and long-term incentive compensation in the unaudited condensed consolidated statements of operations and comprehensive income (loss). Successor Company Predecessor Company Nine Months Ended September 30, Period from September 1, 2019 through September 30, Period from January 1, 2019 through August 31, 2020 2019 2019 Operating lease cost (c) $ 569 $ 34 $ 321 Operating lease cost (d) 2,997 320 2,595 Total operating lease cost $ 3,566 $ 354 $ 2,916 (c) Amount is included in Cost of services in the unaudited condensed consolidated statements of operations and comprehensive income (loss). (d) Amount is included in Selling, general and administrative, including stock-based and long-term incentive compensation in the unaudited condensed consolidated statements of operations and comprehensive income (loss). Remaining Lease Term and Discount Rate The following table presents the weighted-average remaining lease term and the weighted-average discount rate: As of September 30, 2020 Weighted-average remaining lease term for operating leases (in years) 8.9 Weighted-average discount rate for operating leases 11.7 % The following is the supplemental cash flow information associated with the Company's leases (in thousands): Successor Company Predecessor Company Nine Months Ended September 30, Period from September 1, 2019 through September 30, Period from January 1, 2019 through August 31, 2020 2019 2019 Cash paid for amounts included in the measurement of lease liabilities: Lease payments included in cash flows from operating activities (a) $ 3,460 $ 345 $ 2,804 Right-of-use assets obtained in exchange for new: Operating lease liabilities $ 738 $ 69 $ 89 (a) Cash flow impacts from Operating lease right-of-use assets and Operating lease liabilities are presented net on the cash flow statement in changes in Payables and other liabilities. |
Maturities of Lease Liabilities | As of September 30, 2020, maturities of lease liabilities were as follows: Remainder of 2020 $ 728 2021 3,800 2022 3,549 2023 3,182 2024 3,065 Thereafter 17,264 Total lease payments $ 31,588 Less: Interest (12,499) Total lease obligations $ 19,089 |
Basis of Presentation - Schedul
Basis of Presentation - Schedule of Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 8 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Aug. 31, 2019 | Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
State taxes paid, net | $ 0 | $ 2,637 | $ 2,532 |
Interest paid | 7,238 | 72,710 | 59,686 |
Accrued capital expenditures | 1,471 | 1,405 | 713 |
Earnout Payments liability | $ 0 | $ 0 | $ 84,799 |
Recent Accounting Pronounceme_3
Recent Accounting Pronouncements - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2020 | Mar. 31, 2020 | Jan. 01, 2020 | Sep. 30, 2019 | Sep. 01, 2019 | Aug. 31, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Reduction accumulated deficit | $ 187,361 | $ 346,078 | $ 207,000 | $ 228,633 | $ 368,593 | $ 379,400 | $ 379,400 | $ (678,864) | $ (623,775) | $ (588,975) | |
Reduction contract assets, net current portion, included in prepaid and other current assets | $ (20,387) | $ (19,953) | |||||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | us-gaap:AccountingStandardsUpdate201613Member | |||||||||
Cumulative Effect, Period of Adoption, Adjustment | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Reduction accumulated deficit | $ (1,627) | ||||||||||
Reduction contract assets, net current portion, included in prepaid and other current assets | $ 1,627 | ||||||||||
Accumulated Deficit | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Reduction accumulated deficit | $ (189,779) | (33,331) | $ (170,615) | $ (148,963) | $ (10,807) | $ 0 | $ 0 | $ (1,122,266) | $ (1,068,064) | $ (1,036,294) | |
Accumulated Deficit | Cumulative Effect, Period of Adoption, Adjustment | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Reduction accumulated deficit | $ (1,627) | $ 1,627 |
Goodwill - Schedule of Goodwill
Goodwill - Schedule of Goodwill (Details) - USD ($) $ in Thousands | 1 Months Ended | 8 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Aug. 31, 2019 | Sep. 30, 2020 | |
Goodwill [Roll Forward] | |||
Balance at 12/31/2019 | $ 81,943 | ||
Goodwill impairment | $ 0 | $ 0 | (81,943) |
Balance at 9/30/2020 | $ 0 |
Goodwill - Narrative (Details)
Goodwill - Narrative (Details) $ in Thousands | 1 Months Ended | 8 Months Ended | 9 Months Ended |
Sep. 30, 2019USD ($) | Aug. 31, 2019USD ($) | Sep. 30, 2020USD ($)reporting_unit | |
Goodwill [Line Items] | |||
Number of reporting units | reporting_unit | 1 | ||
Goodwill impairment | $ 0 | $ 0 | $ 81,943 |
Brinks Home Security | Valuation technique, discounted cash flow | COVID-19 Pandemic | |||
Goodwill [Line Items] | |||
Goodwill impairment | $ 81,943 |
Other Accrued Liabilities - Sch
Other Accrued Liabilities - Schedule of Other Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Accrued payroll and related liabilities | $ 8,966 | $ 5,908 |
Interest payable | 258 | 291 |
Income taxes payable | 2,046 | 2,603 |
Operating lease liabilities | 3,441 | 3,725 |
Contingent dealer liabilities | 2,591 | 3,274 |
Earnout Payments liability | 21,786 | 0 |
Other | 6,718 | 9,153 |
Total Other accrued liabilities | $ 45,806 | $ 24,954 |
Debt - Schedule of Long-Term De
Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Aug. 31, 2019 | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | |||
Total carrying value of debt | $ 987,775 | $ 986,444 | |
Less: Current portion of long-term debt | (8,225) | (8,225) | |
Long-term debt | 979,550 | 978,219 | |
Takeback Loan Facility | Takeback Loan Facility Due March 2024 | |||
Debt Instrument [Line Items] | |||
Total carrying value of debt | $ 814,275 | 820,444 | |
Effective interest rate | 8.00% | ||
Takeback Loan Facility | Takeback Loan Facility Due March 2024 | LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable debt | 6.50% | 6.50% | |
Floor on variable debt | 1.25% | 1.25% | |
Takeback Loan Facility | Takeback Loan Facility Due March 2024 | Base Rate | |||
Debt Instrument [Line Items] | |||
Basis spread on variable debt | 5.50% | ||
Term Loan Facility | Term Loan Due July 2024 | |||
Debt Instrument [Line Items] | |||
Total carrying value of debt | $ 150,000 | 150,000 | |
Effective interest rate | 6.70% | ||
Term Loan Facility | Term Loan Due July 2024 | LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable debt | 5.00% | ||
Floor on variable debt | 1.50% | ||
Revolving Credit Facility | Revolving Credit Facility Due July 2024 | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Total carrying value of debt | $ 23,500 | $ 16,000 | |
Effective interest rate | 9.00% | ||
Revolving Credit Facility | Revolving Credit Facility Due July 2024 | Revolving Credit Facility | LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable debt | 5.00% | ||
Floor on variable debt | 1.50% | ||
Revolving Credit Facility | Revolving Credit Facility Due July 2024 | Revolving Credit Facility | Base Rate | |||
Debt Instrument [Line Items] | |||
Basis spread on variable debt | 4.00% | ||
Floor on variable debt | 4.50% |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | Aug. 31, 2019 | Sep. 30, 2020 | Nov. 30, 2019 |
Takeback Loan Facility | Takeback Loan Facility Due March 2024 | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 822,500,000 | $ 750,000,000 | |
Quarterly principal payments | $ 2,056,250 | ||
Takeback Loan Facility | Takeback Loan Facility Due March 2024 | LIBOR | |||
Debt Instrument [Line Items] | |||
Floor on variable debt | 1.25% | 1.25% | |
Basis spread on variable debt | 6.50% | 6.50% | |
Takeback Loan Facility | Takeback Loan Facility Due March 2024 | Base Rate | |||
Debt Instrument [Line Items] | |||
Basis spread on variable debt | 5.50% | ||
Revolving Credit Facility | Swingline Loan | |||
Debt Instrument [Line Items] | |||
Maximum borrowing, amount | $ 10,000,000 | ||
Revolving Credit Facility | Letter of Credit | |||
Debt Instrument [Line Items] | |||
Available for borrowing, amount | $ 600,000 | ||
Revolving Credit Facility | Revolving Credit Facility Due July 2024 | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Maximum borrowing, amount | 145,000,000 | ||
Available for borrowing, amount | $ 120,900,000 | ||
Commitment fee on unused portion of line of credit | 0.75% | ||
Revolving Credit Facility | Revolving Credit Facility Due July 2024 | LIBOR | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Floor on variable debt | 1.50% | ||
Basis spread on variable debt | 5.00% | ||
Revolving Credit Facility | Revolving Credit Facility Due July 2024 | Base Rate | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Floor on variable debt | 4.50% | ||
Basis spread on variable debt | 4.00% | ||
Term Loan | Term Loan Due July 2024 | |||
Debt Instrument [Line Items] | |||
Maximum borrowing, amount | $ 150,000,000 | ||
Term Loan | Term Loan Due July 2024 | LIBOR | |||
Debt Instrument [Line Items] | |||
Floor on variable debt | 1.50% | ||
Basis spread on variable debt | 5.00% |
Debt - Schedule of Long Term De
Debt - Schedule of Long Term Debt Maturity (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | ||
Remainder of 2020 | $ 2,056 | |
2021 | 8,225 | |
2022 | 8,225 | |
2023 | 8,225 | |
2024 | 961,044 | |
2025 | 0 | |
Thereafter | 0 | |
Total carrying value of debt | $ 987,775 | $ 986,444 |
Derivatives - Narrative (Detail
Derivatives - Narrative (Details) | Apr. 30, 2019USD ($) | Sep. 30, 2019USD ($) | Aug. 31, 2019USD ($) | Sep. 30, 2020USD ($)interest_rate_swap | Mar. 31, 2019USD ($) | Aug. 31, 2019USD ($) | Sep. 30, 2020USD ($)interest_rate_swap | Nov. 30, 2019USD ($) | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||||
Unrealized loss on derivatives | $ 0 | $ 7,773,000 | $ 4,577,000 | $ 0 | |||||||||
Takeback Loan Facility Due March 2024 | Takeback Loan Facility | |||||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||||
Debt instrument, face amount | $ 822,500,000 | 822,500,000 | $ 750,000,000 | ||||||||||
Interest Rate Cap | Cash flow hedge | |||||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||||
Interest rate cap, fair value | $ 137,000 | 137,000 | $ 3,020,000 | ||||||||||
Interest expense reclassified into Accumulated other comprehensive income (loss) | 186,000 | 554,000 | |||||||||||
Amount expected to be reclassified from accumulated other comprehensive income (loss) into interest expense during the next twelve months | $ 737,000 | $ 737,000 | |||||||||||
Interest Rate Swap | |||||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||||
Termination amount | $ 8,767,000 | ||||||||||||
Realized loss on derivatives | 2,227,000 | ||||||||||||
Derivatives outstanding | interest_rate_swap | 0 | 0 | |||||||||||
Interest Rate Swap | Counterparty | |||||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||||
Termination amount | $ 6,540,000 | ||||||||||||
Interest Rate Swap | Cash flow hedge | |||||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||||
Interest expense reclassified into Accumulated other comprehensive income (loss) | $ 0 | [1] | $ 0 | [1] | $ 186,000 | [1] | $ 0 | [2] | $ 554,000 | [2] | |||
[1] | Amounts are included in Interest expense in the condensed consolidated statements of operations and comprehensive income (loss). | ||||||||||||
[2] | Amounts are included in Interest expense in the condensed consolidated statements of operations and comprehensive income (loss). |
Derivatives - Summary of Deriva
Derivatives - Summary of Derivatives Designated as Cash Flow Hedges (Details) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2019 | Aug. 31, 2019 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Aug. 31, 2019 | Sep. 30, 2020 | |||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||||
Effective portion of loss recognized in Accumulated other comprehensive income (loss) | $ (661) | $ (165) | $ (1,997) | ||||||||||
Interest Rate Swap | Cash flow hedge | |||||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||||
Effective portion of loss recognized in Accumulated other comprehensive income (loss) | $ 0 | $ 0 | (661) | $ 0 | $ (2,823) | ||||||||
Interest cost of interest rate cap reclassified into Net loss | 0 | [1] | $ 0 | [1] | $ 186 | [1] | 0 | [2] | 554 | [2] | |||
Effective portion of loss reclassified from Accumulated other comprehensive income (loss) into Net income (loss) | [2] | $ 0 | $ (940) | $ 0 | |||||||||
[1] | Amounts are included in Interest expense in the condensed consolidated statements of operations and comprehensive income (loss). | ||||||||||||
[2] | Amounts are included in Interest expense in the condensed consolidated statements of operations and comprehensive income (loss). |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value Measured On Recurring Basis (Details) - Recurring - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest rate cap agreement - assets | [1] | $ 137 | $ 2,959 |
Total | 137 | 2,959 | |
Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest rate cap agreement - assets | [1] | 0 | 0 |
Total | 0 | 0 | |
Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest rate cap agreement - assets | [1] | 137 | 2,959 |
Total | 137 | 2,959 | |
Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest rate cap agreement - assets | [1] | 0 | 0 |
Total | $ 0 | $ 0 | |
[1] | Interest rate cap asset value is included in non-current Other assets on the condensed consolidated balance sheets. |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Instruments Not Carried at Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | |
Long term debt, including current portion: | |||
Carrying value | $ 987,775 | $ 986,444 | |
Level 2 | Interest Rate Cap | |||
Long term debt, including current portion: | |||
Carrying value | 987,775 | 986,444 | |
Fair value | [1] | $ 784,206 | $ 857,717 |
[1] | The fair value is based on market quotations from third party financial institutions and is classified as Level 2 in the hierarchy. |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock Narrative (Details) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 | Aug. 31, 2019 |
Equity [Abstract] | |||
Common stock, shares issued (in shares) | 22,500,000 | 22,500,000 | |
Common stock, shares outstanding (in shares) | 22,500,000 | 22,500,000 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended | |||||
Sep. 30, 2019 | Aug. 31, 2019 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Aug. 31, 2019 | Sep. 30, 2020 | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||||||
Beginning Balance | $ 379,400 | $ (678,864) | $ 207,000 | $ 228,633 | $ 346,078 | $ (623,775) | $ (588,975) | $ (588,975) | $ 346,078 | |
Unrealized loss on interest rate cap recognized through Accumulated other comprehensive income (loss), net of income tax | (661) | (165) | (1,997) | |||||||
Ending Balance | 368,593 | 379,400 | 187,361 | 207,000 | 228,633 | (678,864) | (623,775) | 379,400 | 187,361 | |
Fresh start adjustment | [1] | (6,668) | ||||||||
Unrealized gain on derivatives recognized through Accumulated other comprehensive income (loss), tax | 0 | 0 | 0 | |||||||
AOCI Attributable to Parent | ||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||||||
Beginning Balance | 0 | 6,668 | (1,785) | (1,804) | 9 | 7,140 | 7,608 | 7,608 | 9 | |
Ending Balance | $ 0 | $ 0 | (2,260) | (1,785) | (1,804) | 6,668 | 7,140 | $ 0 | $ (2,260) | |
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | ||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||||||
Reclassifications | [2] | (472) | (468) | |||||||
Reclassifications, tax | $ 0 | $ 0 | ||||||||
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | Interest Rate Cap | ||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||||||
Reclassifications | [3] | 186 | 184 | 184 | ||||||
Reclassifications, tax | $ 0 | $ 0 | $ 0 | |||||||
[1] | The remaining amount recognized in Accumulated other comprehensive income (loss) was evaluated to have no fair value upon the application of fresh start accounting pursuant to the Plan. | |||||||||
[2] | Amounts reclassified into Net loss are included in Interest expense on the condensed consolidated statements of operations. See note 6, Derivatives for further information. | |||||||||
[3] | Amounts reclassified into Net loss are included in Interest expense on the condensed consolidated statements of operations. See note 6, Derivatives for further information. |
Stockholders' Equity - Incentiv
Stockholders' Equity - Incentive Award Plan Narrative (Details) - USD ($) | 2 Months Ended | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2020 | Aug. 03, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense recognized | $ 0 | $ 0 | ||
Performance-Based Restricted Stock Units (PRSU) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares granted (in shares) | 994,000 | |||
Time-Based Restricted Stock Units (TRSU) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares granted (in shares) | 426,000 | |||
Common Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized (in shares) | 2,500,000 |
Basic and Diluted Earnings Pe_2
Basic and Diluted Earnings Per Common Share - Narrative (Details) - shares | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Aug. 31, 2019 | |
Earnings Per Share [Abstract] | |||||
Antidilutive securities (in shares) | 0 | 0 | 0 | ||
Weighted average shares of common stock, basic and diluted (in shares) | 22,500,000 | 22,500,000 | 22,500,000 | ||
Number of public shares of common stock outstanding (in shares) | 22,500,000 | 22,500,000 | 22,500,000 | 0 |
Commitments, Contingencies an_2
Commitments, Contingencies and Other Liabilities - Narrative (Details) - Protect America $ in Millions | Jun. 17, 2020USD ($)payment |
Schedule Of Asset Acquisition [Line Items] | |
Up-front purchase price | $ 16.6 |
Protect America Earnout Payments | |
Schedule Of Asset Acquisition [Line Items] | |
Number of monthly earnout payments | payment | 50 |
Estimated earnout liability | $ 86 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregated Revenue by Source (Details) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Aug. 31, 2019 | Sep. 30, 2020 | Aug. 31, 2019 | Sep. 30, 2020 | |
Disaggregation of Revenue [Line Items] | |||||
Total Net revenue | $ 36,289 | $ 84,589 | $ 130,852 | $ 342,286 | $ 374,235 |
Alarm monitoring revenue | |||||
Disaggregation of Revenue [Line Items] | |||||
Total Net revenue | 33,594 | 78,608 | 119,164 | 319,172 | 340,235 |
Product, installation and service revenue | |||||
Disaggregation of Revenue [Line Items] | |||||
Total Net revenue | 2,224 | 4,993 | 10,506 | 19,111 | 30,513 |
Other revenue | |||||
Disaggregation of Revenue [Line Items] | |||||
Total Net revenue | $ 471 | $ 988 | $ 1,182 | $ 4,003 | $ 3,487 |
Revenue Recognition - Contract
Revenue Recognition - Contract Balances (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |||
Trade receivables, net | $ 10,854 | $ 12,083 | |
Contract assets, net - current portion | [1] | 13,490 | 12,070 |
Contract assets, net - long-term portion | [2] | 14,827 | 14,852 |
Deferred revenue | $ 11,065 | $ 12,008 | |
[1] | Amount is included in Prepaid and other current assets in the unaudited condensed consolidated balance sheets. | ||
[2] | Amount is included in Other assets in the unaudited condensed consolidated balance sheets. |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended | |||||
Sep. 30, 2019 | Aug. 31, 2019 | Sep. 30, 2020 | Aug. 31, 2019 | Sep. 30, 2020 | ||||||
Lessee, Lease, Description [Line Items] | ||||||||||
Total operating lease cost | $ 354 | $ 694 | $ 1,038 | $ 2,916 | $ 3,566 | |||||
Cost of Services | ||||||||||
Lessee, Lease, Description [Line Items] | ||||||||||
Total operating lease cost | 34 | [1] | 70 | [1] | 178 | [1] | 321 | [2] | 569 | [2] |
Selling, General and Administrative Expenses | ||||||||||
Lessee, Lease, Description [Line Items] | ||||||||||
Total operating lease cost | $ 320 | [3] | $ 624 | [3] | $ 860 | [3] | $ 2,595 | [4] | $ 2,997 | [4] |
[1] | Amount is included in Cost of services in the unaudited condensed consolidated statements of operations and comprehensive income (loss). | |||||||||
[2] | Amount is included in Cost of services in the unaudited condensed consolidated statements of operations and comprehensive income (loss). | |||||||||
[3] | Amount is included in Selling, general and administrative, including stock-based and long-term incentive compensation in the unaudited condensed consolidated statements of operations and comprehensive income (loss). | |||||||||
[4] | Amount is included in Selling, general and administrative, including stock-based and long-term incentive compensation in the unaudited condensed consolidated statements of operations and comprehensive income (loss). |
Leases - Remaining Lease Term a
Leases - Remaining Lease Term and Discount Rate (Details) | Sep. 30, 2020 |
Leases [Abstract] | |
Weighted-average remaining lease term for operating leases (in years) | 8 years 10 months 24 days |
Weighted-average discount rate for operating leases | 11.70% |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 8 Months Ended | 9 Months Ended | |
Sep. 30, 2019 | Aug. 31, 2019 | Sep. 30, 2020 | ||
Cash paid for amounts included in the measurement of lease liabilities: | ||||
Lease payments included in cash flows from operating activities | [1] | $ 345 | $ 2,804 | $ 3,460 |
Right-of-use assets obtained in exchange for new: | ||||
Operating lease liabilities | $ 69 | $ 89 | $ 738 | |
[1] | Cash flow impacts from Operating lease right-of-use assets and Operating lease liabilities are presented net on the cash flow statement in changes in Payables and other liabilities. |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Leases [Abstract] | |
Remainder of 2020 | $ 728 |
2021 | 3,800 |
2022 | 3,549 |
2023 | 3,182 |
2024 | 3,065 |
Thereafter | 17,264 |
Total lease payments | 31,588 |
Less: Interest | (12,499) |
Total lease obligations | $ 19,089 |
Uncategorized Items - mtii-2020
Label | Element | Value |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | us-gaap_CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents | $ 24,640,000 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | us-gaap_CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents | 2,377,000 |
Additional Paid-in Capital [Member] | ||
Stockholders' Equity Attributable to Parent | us-gaap_StockholdersEquity | $ 379,175,000 |
Common Stock [Member] | ||
Common Stock, Shares, Outstanding | us-gaap_CommonStockSharesOutstanding | 22,500,000 |
Stockholders' Equity Attributable to Parent | us-gaap_StockholdersEquity | $ 225,000 |
AOCI Attributable to Parent [Member] | ||
Stockholders' Equity Attributable to Parent | us-gaap_StockholdersEquity | $ 0 |