Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Mar. 06, 2014 | Jun. 28, 2013 | |
Document and Entity Information [Abstract] | ' | ' | ' |
Entity Registrant Name | 'Zagg INC | ' | ' |
Entity Central Index Key | '0001296205 | ' | ' |
Trading Symbol | 'zagg | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Filer Category | 'Accelerated Filer | ' | ' |
Entity Well-Known Seasoned Issuer | 'No | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 30,793,818 | ' |
Entity Public Float | ' | ' | $142,488,241 |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets | ' | ' |
Cash and cash equivalents | $15,031 | $20,177 |
Accounts receivable, net of allowances of $2,540 in 2013 and $2,974 in 2012 | 46,591 | 54,561 |
Inventories | 44,539 | 39,988 |
Prepaid expenses and other current assets | 2,403 | 9,547 |
Deferred income tax assets | 7,917 | 6,912 |
Total current assets | 116,481 | 131,185 |
Investment in HzO | ' | 2,013 |
Property and equipment, net of accumulated depreciation at $5,778 in 2013 and $3,317 in 2012 | 5,004 | 4,862 |
Goodwill | ' | 1,484 |
Intangible assets, net of accumulated amortization at $23,431 in 2013 and $13,790 in 2012 | 41,219 | 57,905 |
Deferred income tax assets | 11,377 | 6,596 |
Note receivable | 801 | 583 |
Other assets | 588 | 1,457 |
Total assets | 175,470 | 206,085 |
Current liabilities | ' | ' |
Accounts payable | 15,207 | 19,027 |
Income taxes payable | 6,359 | 3,062 |
Accrued liabilities | 2,608 | 3,754 |
Accrued wages and wage related expenses | 891 | 2,554 |
Deferred revenue | 159 | 722 |
Current portion of note payable | ' | 6,000 |
Sales returns liability | 7,872 | 6,697 |
Total current liabilities | 33,096 | 41,816 |
Revolving line of credit | 17,543 | 22,173 |
Noncurrent portion of note payable | ' | 18,000 |
Total liabilities | 50,639 | 81,989 |
Stockholders' equity | ' | ' |
Common stock, $0.001 par value; 100,000 shares authorized; 32,331 and 31,215 shares issued in 2013 and 2012, respectively | 32 | 31 |
Additional paid-in capital | 82,807 | 77,234 |
Accumulated other comprehensive income | 93 | -57 |
Note receivable collateralized by stock | -348 | -566 |
Treasury stock, 1,756 and 0 common shares in 2013 and 2012 respectively, at cost | -9,997 | ' |
Retained earnings | 52,244 | 47,454 |
Total stockholders' equity | 124,831 | 124,096 |
Total liabilities and stockholders' equity | $175,470 | $206,085 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, except Share data, unless otherwise specified | ||
Statement Of Financial Position [Abstract] | ' | ' |
Allowances for doubtful accounts (in dollars) | $2,540 | $2,974 |
Accumulated depreciation on property and equipment (in dollars) | 5,778 | 3,317 |
Accumulated amortization on property and equipment (in dollars) | $23,431 | $13,790 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized (in shares) | 100,000 | 100,000 |
Common stock, shares issued (in shares) | 32,331 | 31,215 |
Common stock, shares outstanding (in shares) | 32,331 | 31,215 |
Treasury stock (in shares) | 1,756 | 0 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | |||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Income Statement [Abstract] | ' | ' | ' | |||
Net sales | $219,356 | $264,425 | $179,125 | |||
Cost of sales | 132,236 | 143,880 | 97,201 | |||
Gross profit | 87,120 | 120,545 | 81,924 | |||
Operating expenses: | ' | ' | ' | |||
Advertising and marketing | 8,952 | 12,495 | 10,246 | |||
Selling, general and administrative | 46,356 | 53,330 | 39,592 | |||
Impairment of goodwill and intangibles | 11,246 | 11,497 | ' | |||
Amortization of definite-lived intangibles | 9,620 | 9,732 | 3,949 | |||
Total operating expenses | 76,174 | 87,054 | 53,787 | |||
Income from operations | 10,946 | 33,491 | 28,137 | |||
Other income (expense): | ' | ' | ' | |||
Interest expense | -575 | -6,321 | -3,022 | |||
Loss from equity method investment in HzO | -2,013 | -2,866 | ' | |||
Gain on deconsolidation of HzO | ' | ' | 1,906 | |||
Other income and (expense) | 127 | -406 | -19 | |||
Total other expense | -2,461 | -9,593 | -1,135 | |||
Income before provision for income taxes | 8,485 | 23,898 | 27,002 | |||
Income tax provision | -3,695 | -9,393 | -9,418 | |||
Net income | 4,790 | 14,505 | 17,584 | |||
Net loss attributable to noncontrolling interest | ' | ' | 664 | |||
Net income attributable to stockholders | $4,790 | $14,505 | $18,248 | |||
Earnings per share attributable to stockholders: | ' | ' | ' | |||
Basic earnings per share | $0.16 | [1] | $0.48 | [1] | $0.67 | [1] |
Diluted earnings per share | $0.15 | [1] | $0.46 | [1] | $0.63 | [1] |
[1] | The earnings per share calculations for each of the quarters were based upon the weighted average number of shares outstanding during each period, and the sum of the quarters may not be equal to the full year earnings per common share amounts. |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Statement Of Other Comprehensive Income [Abstract] | ' | ' | ' |
Net income | $4,790 | $14,505 | $17,584 |
Other comprehenseive income (loss), net of tax: | ' | ' | ' |
Foreign currency translation gain (loss) | 150 | -24 | 27 |
Total other comprehensive income (loss) | 150 | -24 | 27 |
Comprehensive income | 4,940 | 14,481 | 17,611 |
Comprehensive loss attributable to noncontrolling interest | ' | ' | 664 |
Comprehensive income attributable to stockholders | $4,940 | $14,481 | $18,275 |
CONSOLIDATED_STATEMENT_OF_EQUI
CONSOLIDATED STATEMENT OF EQUITY (USD $) | Common Stock | Additional Paid-in Capital | Notes Receivable Collateralized By Stock | Treasury Stock | Retained Earnings | Cumulative Translation Adjustment | Total Stockholders' Equity | Noncontrolling Interest | Total | Redeemable Noncontrolling Interest |
In Thousands, except Share data, unless otherwise specified | ||||||||||
Balances at Dec. 31, 2010 | $24 | $15,495 | ' | ' | $14,701 | ($60) | $30,160 | $2,621 | $32,781 | ' |
Balances (in shares) at Dec. 31, 2010 | 23,926 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Addition to redeemable noncontrolling interest | ' | -165 | ' | ' | ' | ' | -165 | ' | -165 | ' |
Acquisition of noncontrolling interest | ' | ' | ' | ' | ' | ' | ' | -392 | -392 | ' |
Noncontrolling interest at fair value | ' | -36 | ' | ' | ' | ' | -36 | -2,017 | -2,053 | ' |
Adjustments to redemption value | ' | -22 | ' | ' | -319 | ' | -341 | ' | -341 | ' |
Reversal to adjustments to redemption value prior to deconsolidation | ' | 22 | ' | ' | 319 | ' | 341 | ' | 341 | ' |
Deconsolidation of HzO | ' | ' | ' | ' | ' | ' | ' | 64 | 64 | ' |
Net income | ' | ' | ' | ' | ' | ' | ' | ' | 17,584 | ' |
Net income (loss) excluding redeemable noncontrolling interest | ' | ' | ' | ' | 18,248 | ' | 18,248 | -276 | 17,972 | ' |
Other comprehensive income (loss) | ' | ' | ' | ' | ' | 27 | 27 | ' | 27 | ' |
Issuance of common stock to purchase iFrogz | 4 | 46,196 | ' | ' | ' | ' | 46,200 | ' | 46,200 | ' |
Issuance of common stock to purchase iFrogz (in shares) | 4,444 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of common stock to consultant | ' | 100 | ' | ' | ' | ' | 100 | ' | 100 | ' |
Issuance of common stock to consultant (in shares) | 10 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of common stock related to contract termination | ' | 899 | ' | ' | ' | ' | 899 | ' | 899 | ' |
Issuance of common stock related to contract termination (in shares) | 90 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Option exercises | 1 | 1,552 | ' | ' | ' | ' | 1,553 | ' | 1,553 | ' |
Option exercises (in shares) | 951 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrant exercises | 1 | 913 | ' | ' | ' | ' | 914 | ' | 914 | ' |
Warrant exercises (in shares) | 361 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Option expense | ' | 2,640 | ' | ' | ' | ' | 2,640 | ' | 2,640 | ' |
Warrant grant expense | ' | 377 | ' | ' | ' | ' | 377 | ' | 377 | ' |
Restricted stock expense | ' | 618 | ' | ' | ' | ' | 618 | ' | 618 | ' |
Excess tax benefits related to share-based payments | ' | 1,659 | ' | ' | ' | ' | 1,659 | ' | 1,659 | ' |
Reclassification of note receivable collateralized by stock | ' | ' | -566 | ' | ' | ' | -566 | ' | -566 | ' |
Temporary Equity [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Addition to redeemable noncontrolling interest | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,500 |
Acquisition of noncontrolling interest | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Noncontrolling interest at fair value | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,608 |
Adjustments to redemption value | ' | ' | ' | ' | ' | ' | ' | ' | ' | 341 |
Reversal to adjustments to redemption value prior to deconsolidation | ' | ' | ' | ' | ' | ' | ' | ' | ' | -341 |
Deconsolidation of HzO | ' | ' | ' | ' | ' | ' | ' | ' | ' | -6,720 |
Net income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | ' | -388 |
Balances at Dec. 31, 2011 | 30 | 70,248 | -566 | ' | 32,949 | -33 | 102,628 | ' | 102,628 | ' |
Balances (in shares) at Dec. 31, 2011 | 29,782 | ' | ' | ' | ' | ' | ' | ' | 29,782 | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income | ' | ' | ' | ' | 14,505 | ' | 14,505 | ' | 14,505 | ' |
Other comprehensive income (loss) | ' | ' | ' | ' | ' | -24 | -24 | ' | -24 | ' |
Option exercises | ' | 599 | ' | ' | ' | ' | 599 | ' | 599 | ' |
Option exercises (in shares) | 495 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrant exercises | 1 | 295 | ' | ' | ' | ' | 296 | ' | 296 | ' |
Warrant exercises (in shares) | 556 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Restricted stock release | 382 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Option expense | ' | 1,008 | ' | ' | ' | ' | 1,008 | ' | 1,008 | ' |
Warrant grant expense | ' | 311 | ' | ' | ' | ' | 311 | ' | 311 | ' |
Restricted stock expense | ' | 4,191 | ' | ' | ' | ' | 4,191 | ' | 4,191 | ' |
Excess tax benefits related to share-based payments | ' | 582 | ' | ' | ' | ' | 582 | ' | 582 | ' |
Balances at Dec. 31, 2012 | 31 | 77,234 | -566 | ' | 47,454 | -57 | 124,096 | ' | 124,096 | ' |
Balances (in shares) at Dec. 31, 2012 | 31,215 | ' | ' | ' | ' | ' | ' | ' | 31,215 | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income | ' | ' | ' | ' | 4,790 | ' | 4,790 | ' | 4,790 | ' |
Other comprehensive income (loss) | ' | ' | ' | ' | ' | 150 | 150 | ' | 150 | ' |
Purchase of 1,756 shares of treasury stock | ' | ' | ' | -9,997 | ' | ' | -9,997 | ' | -9,997 | ' |
Option exercises | ' | 270 | ' | ' | ' | ' | 270 | ' | 270 | ' |
Option exercises (in shares) | 135 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Restricted stock release | 481 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Consideration for acquisition of patent | 1 | 1,945 | ' | ' | ' | ' | 1,946 | ' | 1,945 | ' |
Consideration for acquisition of patent (in shares) | 500 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Option expense | ' | 280 | ' | ' | ' | ' | 280 | ' | 280 | ' |
Restricted stock expense | ' | 3,589 | ' | ' | ' | ' | 3,589 | ' | 3,589 | ' |
Tax shortfall related to share - based payments | ' | -511 | ' | ' | ' | ' | -511 | ' | -511 | ' |
Reclassification of note receivable collateralized by stock | ' | ' | 218 | ' | ' | ' | 218 | ' | 218 | ' |
Balances at Dec. 31, 2013 | $32 | $82,807 | ($348) | ($9,997) | $52,244 | $93 | $124,831 | ' | $124,831 | ' |
Balances (in shares) at Dec. 31, 2013 | 32,331 | ' | ' | ' | ' | ' | ' | ' | 32,331 | ' |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cash flows from operating activities | ' | ' | ' |
Net income | $4,790 | $14,505 | $17,584 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' | ' |
Stock-based compensation | 4,126 | 5,707 | 3,258 |
Impairment of goodwill and intangibles | 11,246 | 11,497 | ' |
Impairment of investment | 591 | ' | ' |
Excess tax benefits related to share-based payments | -52 | -707 | -1,670 |
Depreciation and amortization | 12,157 | 11,559 | 5,926 |
Deferred income taxes | -5,787 | -8,293 | -3,908 |
Amortization of deferred loan costs | 120 | 708 | 329 |
Write-off of deferred loan costs | 27 | 1,509 | ' |
Expense related to issuance of warrants | ' | 311 | 377 |
Expense related to issuance of stock for consulting | ' | ' | 100 |
Expense related to issuance of stock for royalties | ' | ' | 336 |
Impairment on notes receivable | ' | ' | 1,489 |
Loss on disposal of property and equipment | ' | 313 | ' |
Loss on investment in equity method investment | 2,013 | 2,866 | ' |
Gain on deconsolidation of HzO | ' | ' | -1,906 |
Changes in operating assets and liabilities, net of acquisition | ' | ' | ' |
Accounts receivable | 8,079 | -9,093 | -22,098 |
Inventories | -4,404 | -10,334 | 2,468 |
Prepaid expenses and other current assets | 7,335 | -7,600 | 1,607 |
Other assets | ' | -11 | 134 |
Accounts payable | -3,838 | 3,044 | 42 |
Income taxes payable | 2,787 | -656 | -2,092 |
Accrued liabilities | -1,557 | -262 | 3,369 |
Accrued wages and wage related expenses | -1,872 | 681 | -953 |
Deferred revenues | -564 | 403 | -72 |
Sales return liability | 1,167 | 1,299 | 2,811 |
Net cash provided by operating activities | 36,364 | 17,446 | 7,131 |
Cash flows from investing activities | ' | ' | ' |
Deposits on and purchase of intangible assets | -500 | -72 | -96 |
Purchase of property and equipment | -2,588 | -2,764 | -1,590 |
Deconsolidation of HzO, net of cash | ' | ' | -4,277 |
Proceeds from investment in note receivable | ' | ' | 496 |
Acquisition of iFrogz, net of cash acquired | ' | ' | -47,532 |
Net cash used in investing activities | -3,088 | -2,836 | -52,999 |
Cash flows from financing activities | ' | ' | ' |
Payment of debt issuance costs | -43 | -238 | -2,538 |
Purchase of treasury stock | -9,997 | ' | ' |
Proceeds from issuance of term note | ' | 24,000 | 45,000 |
Proceeds from revolving credit facilities | ' | 26,238 | 29,837 |
Payments on term note | -24,000 | -45,000 | ' |
Payments on revolving credit facilities, net | -4,630 | -27,396 | -11,546 |
Proceeds from exercise of warrants and options | 270 | 895 | 2,467 |
Excess tax benefits related to share-based payments | 52 | 707 | 1,670 |
Cash paid for investment in HzO | ' | ' | -392 |
Net HzO proceeds from issuance of Series B Preferred Stock | ' | ' | 5,335 |
Net cash provided by (used in) financing activities | -38,348 | -20,794 | 69,833 |
Effect of foreign currency exchange rates on cash and cash equivalents | -74 | -72 | 95 |
Net increase (decrease) in cash and cash equivalents | -5,146 | -6,256 | 24,060 |
Cash and cash equivalents at beginning of the period | 20,177 | 26,433 | 2,373 |
Cash and cash equivalents at end of the period | 15,031 | 20,177 | 26,433 |
Supplemental disclosure of cash flow information | ' | ' | ' |
Cash paid during the period for interest | 461 | 4,477 | 2,602 |
Cash paid during the period for taxes | 6,515 | 18,536 | 13,095 |
Cash Flow, Noncash Investing and Financing Activities Disclosure [Abstract] | ' | ' | ' |
Foreclosure on real property | ' | 250 | ' |
Foreclosure on private company stock and warrants | ' | 516 | ' |
Issued shares of common stock in connection with the acquisition of intellectual property and payment of royalties, shares | 500 | ' | 90 |
Fair value of issuance of common stock in connection with the acquisition of intellectual property and payment of royalties | ' | ' | 899 |
Issued shares of common stock in connection with the purchase of iFrogz, shares | ' | ' | 4,444 |
Fair value of issued shares of common stock in connection with the purchase of iFrogz | ' | ' | 46,200 |
Exchanged inventory for asset purchase credits | ' | ' | 785 |
Reclassification of note receivable to other asset | 218 | ' | ' |
Purchase of patent or intangible assets | 2,275 | ' | ' |
Consideration for acquisition of patent recorded within value of common stock | 1 | ' | ' |
Consideration for acquisition of patent | 1,945 | ' | ' |
Consideration for acquisition of patent recorded within accrued liabilities | $329 | ' | ' |
ORGANIZATION_AND_SUMMARY_OF_SI
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Business Description and Basis Of Presentation [Abstract] | ' | ||||||||||||
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||||||||||||
(1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||
The Company | |||||||||||||
We were formed as a Nevada corporation on April 2, 2004, under the name Amerasia Khan Enterprises Ltd (“AKE”). On February 8, 2007, AKE executed an Agreement and Plan of Merger (the “Merger Agreement”) by and between AKE and its wholly owned subsidiary, SZC Acquisition, Inc., a Nevada corporation (“Subsidiary”) on the one hand, and ShieldZone Corporation, a Utah corporation (“ShieldZone”) on the other hand. Pursuant to the Merger Agreement, ShieldZone merged with Subsidiary, with ShieldZone surviving the merger and Subsidiary ceasing to exist (the “Merger”). | |||||||||||||
Following the Merger, ShieldZone was reincorporated in Nevada as a subsidiary of AKE. On March 7, 2007, ShieldZone was merged into AKE and AKE changed its name to ZAGG Incorporated. As a result of these transactions, the historical financial statements of ZAGG Incorporated are the historical financial statements of ShieldZone. | |||||||||||||
The Company changed its name from ShieldZone Corporation to ZAGG Incorporated to better position the Company to become a large enterprise in the electronics’ accessories industry through organic growth and through making targeted acquisitions. The ShieldZone name was very specific to the invisibleSHIELD product line, and although the invisibleSHIELD is a core product, the name change has brought the Company the opportunity to easily add new products to its product offering. During 2011, the Company changed its name from ZAGG Incorporated to ZAGG Inc. | |||||||||||||
On June 21, 2011, ZAGG acquired 100% of the outstanding shares of iFrogz, which further diversified the existing ZAGG product line, particularly for audio and protective case accessories. | |||||||||||||
The Company designs, produces, and distributes professional and premium creative product solutions such as invisibleSHIELD screen protection, keyboards, keyboard cases, earbuds, headphones, portable power, cables, cases, Bluetooth speakers, and mobile device cleaning accessories for mobile and media devices under the family of ZAGG and invisibleSHIELD brands. In addition, the Company designs, produces, and distributes earbuds, headphones, Bluetooth speakers, Near-Field Audio amplifying speakers, cases, and cables for mobile and media devices under the family of iFrogz brands in the trendy and youth oriented lifestyle sector. | |||||||||||||
Use of estimates | |||||||||||||
The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (“US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates include the allowance for doubtful accounts, inventory reserve, sales returns liability, the useful life of property and equipment, the useful life of intangible assets, the recoverability of goodwill and indefinite-lived intangible assets, stock-based compensation, and income taxes. These estimates and assumptions 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 the economic environment, which management believes to be reasonable under the circumstances. Management adjusts such estimates and assumptions when facts and circumstances dictate an adjustment is necessary. | |||||||||||||
Principles of consolidation | |||||||||||||
The consolidated financial statements include the accounts of ZAGG Inc and its wholly owned subsidiaries ZAGG International Distribution Limited (“ZAGG International”), Patriot Corporation, ZAGG Intellectual Property Holding Co, Inc., and ZAGG Retail, Inc. All intercompany transactions and balances have been eliminated in consolidation. | |||||||||||||
At December 31, 2010, HzO, a private company engaged in the development of water-blocking technologies for consumer and industrial applications, was consolidated by the Company as a variable interest entity (VIE). On December 22, 2011, HzO entered into an Amended Series B Stock Purchase Agreement with a group of third party investors. ZAGG considered this a reconsideration event and concluded that as of December 22, 2011, HzO should no longer be considered a VIE under authoritative accounting literature, but was considered a voting interest entity. Ultimately, management concluded that HzO should no longer be consolidated into the ZAGG financials as of December 31, 2011. From December 22, 2011 to the fourth quarter of 2013, management accounted for its investment in HzO as an equity method investment. However, during the fourth quarter of 2013, HzO received additional equity financing, in which ZAGG did not participate. As a result of the additional investment, ZAGG’s investment declined below 20% and the investment is now accounted for as a cost method investment. The carrying amount of the investment in HzO is $0 at December 31, 2013. | |||||||||||||
Cash equivalents | |||||||||||||
The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. Amounts receivable from credit card processors are also considered cash equivalents because they are both short-term and highly liquid in nature and are typically converted to cash within three days of the sales transaction. Amounts receivable from credit card processors at December 31, 2013 and 2012 totaled $19 and $21, respectively. Cash equivalents as of December 31, 2013 and 2012, consisted primarily of money market fund investments and amounts receivable from credit card processors. | |||||||||||||
Fair value measurements | |||||||||||||
The Company measures at fair value certain financial and non-financial assets by using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price, based on the highest and best use of the asset or liability. The levels of the fair value hierarchy are: | |||||||||||||
Level 1 — Quoted market prices in active markets for identical assets or liabilities; | |||||||||||||
Level 2 — Significant other observable inputs (e.g., quoted prices for similar items in active markets, quoted prices for identical or similar items in markets that are not active, inputs other than quoted prices that are observable such as interest rate and yield curves, and market-corroborated inputs); and | |||||||||||||
Level 3 — Unobservable inputs in which there is little or no market data, which require the reporting unit to develop its own assumptions. | |||||||||||||
Accounts receivable | |||||||||||||
The Company sells its products to end users through indirect distribution channels and other resellers who are extended credit terms after an analysis of their financial condition and credit worthiness. Credit terms to distributors and resellers, when extended, are based on evaluation of the customers' financial condition. Accounts receivable are recorded at invoiced amounts and do not bear interest. | |||||||||||||
The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of customers to make required payments. Management regularly evaluates the allowance for doubtful accounts considering historical losses adjusted to take into account current market conditions, customers’ financial condition, receivables in dispute, receivables aging, and current payment patterns. Account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Payments subsequently received on written off receivables are credited to bad debt expense in the period of recovery. | |||||||||||||
The following summarizes the activity in the Company’s allowance for doubtful accounts for the years ended December 31, 2013, 2012 and 2011: | |||||||||||||
For the Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Balance at beginning of year | $ | 2,974 | $ | 2,070 | $ | 904 | |||||||
Additions charged to expense | 1,142 | 2,101 | 1,657 | ||||||||||
Write-offs charged against the allowance | (1,576 | ) | (1,197 | ) | (491 | ) | |||||||
Balance at end of year | $ | 2,540 | $ | 2,974 | $ | 2,070 | |||||||
Inventories | |||||||||||||
Inventories, consisting primarily of finished goods and raw materials, are valued at the lower of cost, determined on a first in, first out basis, or market. Management performs periodic assessments to determine the existence of obsolete, slow moving, and non-saleable inventories, and records necessary write downs in cost of sales to reduce such inventories to net realizable value. Once established, the original cost of the inventory less the related inventory write down represents the new cost basis of such products. | |||||||||||||
Property and equipment | |||||||||||||
Property and equipment are recorded at cost. Depreciation expense is computed using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized over the lesser of the useful life of the asset or the term of the lease. | |||||||||||||
Major additions and improvements are capitalized, while costs for minor replacements, maintenance and repairs that do not increase the useful life of an asset are expensed as incurred. Upon retirement or other disposition of property and equipment, the cost and related accumulated depreciation or amortization are removed from the accounts. The resulting gain or loss is reflected in selling, general and administrative expense. | |||||||||||||
Intangibles assets | |||||||||||||
Intangible assets include internet addresses, patents, intellectual property, and acquired intangibles in connection with the acquisition of iFrogz, which include customer relationships, trademarks, non-compete agreements, and other miscellaneous intangible assets. | |||||||||||||
Definite-lived intangible assets are amortized over their estimated economic lives, using a straight-line or accelerated method consistent with the underlying expected future cash flows related to the specific intangible asset. Amortization expense is recorded within cost of sales or operating expense depending on the underlying intangible assets. | |||||||||||||
Impairment of long-lived assets | |||||||||||||
Long-lived assets, such as property and equipment, and definite-lived intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, recoverability of long-lived assets is measured by comparison of its carrying amount to the undiscounted cash flows that the asset or asset group is expected to generate over the remaining life in measuring whether the assets are recoverable. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. | |||||||||||||
Impairment of goodwill and indefinite-lived intangible assets | |||||||||||||
The Company does not amortize goodwill and intangible assets with indefinite useful lives. At least annually and when events and circumstances warrant an evaluation, management performs an impairment assessment of goodwill. This assessment initially permits an entity to make a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the two-step goodwill impairment test. If an entity can support the conclusion that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, it would not need to perform the two-step impairment test for the reporting unit. | |||||||||||||
However, if it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the two step analysis is performed, which incorporates a fair-value based approach. Management determines the fair value of its reporting units based on discounted cash flows and market approach analyses as considered necessary, and consider factors such as a weakened economy, reduced expectations for future cash flows coupled with a decline in the market price of the Company’s stock and market capitalization for a sustained period as indicators for potential goodwill impairment. If the reporting unit’s carrying amount exceeds its estimated fair value, a second step must be performed to measure the amount of the goodwill impairment loss, if any. The second step compares the implied fair value of the reporting unit’s goodwill, determined in the same manner as the amount of goodwill recognized in a business combination, with the carrying amount of such goodwill. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. During the fourth quarter of 2013, management recorded a goodwill impairment of $1,484. During the fourth quarter of 2012, management recorded a goodwill impairment of $5,441. No impairment was recorded in 2011. | |||||||||||||
Indefinite-lived intangible assets are tested for impairment annually, or, more frequently upon the occurrence of a triggering event. Initially, a qualitative analysis is performed to determine whether it is necessary to perform the quantitative impairment test for indefinite-lived intangible assets. A quantitative assessment is only performed if it is determined in the qualitative analysis that it is more likely than not that the asset is impaired. | |||||||||||||
If it is determined in the qualitative analysis that it is more likely than not that the asset is impaired, the Company evaluates the recoverability of an indefinite-lived intangible asset by comparing the indefinite-lived intangible asset’s book value to its estimated fair value. The fair value for indefinite-lived intangible assets is determined by performing cash flow analysis and other market evaluations. If the fair value of the indefinite-lived intangible assets is less than book value, the difference is recognized as an impairment loss. | |||||||||||||
During the fourth quarter of 2013, the Company made a brand strategy decision to place greater emphasis on the promotion of the ZAGG and invisbleSHIELD brands, highlighted by the decision to brand the line of gaming controllers as ZAGG products instead of under the iFrogz brand, which was the original product branding. As a result of this decision, the Company determined that future cash flows under the iFrogz trademark would be less than previously estimated and that the trademark should be considered a definite-lived intangible asset. Management performed an impairment analysis and recorded a non-cash impairment of $9,762 related to the iFrogz trademark at December 31, 2013. As the trademark is now considered a definite-lived intangible, the Company will commence amortizing the remaining trademark balance of $7,038 on an accelerated basis over a ten-year life consistent with the trademark’s projected future cash flows from the trademark. | |||||||||||||
During the fourth quarter of 2012, the Company determined that future cash flows under the EarPollution trademark would be less than previously estimated and that the trademark should be considered a definite-lived intangible asset. Management performed an impairment analysis and recorded a non-cash impairment of $5,917 related to the EarPollution trademark at December 31, 2012. As the trademark was then considered a definite-lived intangible, the Company commenced amortizing the trademark on an accelerated basis over an eight-year life consistent with the trademark’s projected future cash flows from the trademark. | |||||||||||||
No impairments of definite-lived intangibles were recorded in 2011. | |||||||||||||
The Company performs its goodwill and intangible asset impairment tests in the fourth quarter of each fiscal year. The Company established reporting units based on its current reporting structure. For purposes of testing goodwill for impairment, goodwill is assigned to a reporting unit. Prior to performing the 2013 goodwill impairment test, all goodwill was assigned to the ZAGG Domestic reporting unit. | |||||||||||||
Contingencies | |||||||||||||
Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. | |||||||||||||
Revenue recognition | |||||||||||||
The Company records revenue when persuasive evidence of an arrangement exists, product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. The Company’s revenue is derived from sales of its products through its indirect channel, including retailers and distributors; through its direct channel including www.ZAGG.com, www.iFrogz.com, and its corporate-owned and third-party-owned mall kiosks and ZAGG branded stores; and from the fees derived from the sale of exclusive franchise rights related to the kiosk program. For sales of product, its standard shipping terms are FOB shipping point, and the Company records revenue when the product is shipped, net of estimated returns and discounts. For some customers, the contractual shipping terms are FOB destination. For these shipments, the Company records revenue when the product is delivered, net of estimated returns and discounts. For license fees, the Company recognizes revenue on a straight-line basis over the life of the license term. The Company records revenue from royalty agreements in the period in which the royalty is earned. | |||||||||||||
Promotional products given to customers or potential customers are recognized as a cost of sales. Cash incentives provided to customers are recognized as a reduction of the related sale price, and, therefore, are a reduction in sales. | |||||||||||||
Reserve for sales returns and warranty liability | |||||||||||||
For product sales, the Company records revenue, net of estimated returns and discounts, when delivery has occurred, collection of the relevant receivable is probable, persuasive evidence of an arrangement exists and the sales price is fixed or determinable. The Company’s return policy allows end users and retailers rights to return purchased products. In addition, the Company generally provides the ultimate consumer a warranty with each product. Due to the nature of the invisibleSHIELD product line, returns for the invisibleSHIELD are generally not salvageable and are not included in inventory. The Company estimates a reserve for sales returns and warranty and record the estimated reserve amount as a reduction of sales, and as a sales return reserve liability. When product is returned and is expected to be resold, as is the case with returns of keyboard, audio, case, and power products, the reserve is recorded as a reduction of revenues and cost of sales, and as a sales return reserve liability. The sales returns and warranty reserve requires management to make estimates regarding return rates for sales and warranty returns. Historical experience, actual claims, and customer return rights are the key factors used in determining the estimated sales return and warranty reserve. | |||||||||||||
The following summarizes the activity in the Company’s sales return and warranty liability for the years ended December 31, 2013, 2012 and 2011: | |||||||||||||
For the Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Balance at beginning of year | $ | 6,697 | $ | 5,387 | $ | 2,068 | |||||||
iFrogz sales reserve at acquisition | — | — | 524 | ||||||||||
Additions charged to sales | 12,194 | 12,954 | 12,906 | ||||||||||
Sales returns & warranty claims charged against reserve | (11,019 | ) | (11,644 | ) | (10,111 | ) | |||||||
Balance at end of year | $ | 7,872 | $ | 6,697 | $ | 5,387 | |||||||
Income taxes | |||||||||||||
The Company recognizes deferred income tax assets or liabilities for expected future tax consequences of events that have been recognized in the financial statements or tax returns. Under this method, deferred income tax assets or liabilities are determined based upon the difference between the financial statement and income tax bases of assets and liabilities using enacted tax rates expected to apply when differences are expected to be settled or realized. Deferred income tax assets are reviewed for recoverability and valuation allowances are provided when it is more likely than not that a deferred tax asset will not be realizable in the future. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. | |||||||||||||
The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records estimated interest and penalties related to unrecognized tax benefits, if any, as a component of income tax provision. | |||||||||||||
The Company has foreign subsidiaries formed or acquired to conduct or support its business outside the United States. The Company does not provide for U.S. income taxes on undistributed earnings for its foreign subsidiaries as the foreign earnings will be permanently reinvested in such foreign jurisdictions. | |||||||||||||
Stock-based compensation | |||||||||||||
The Company recognizes stock-based compensation expense in its consolidated financial statements for awards granted to employees and non-employees, which include restricted stock, stock options, and warrants. Equity-classified awards are measured at the grant date fair value of the award. The fair value of restricted stock is measured on the grant date based on the quoted closing market price of the Company’s common stock. The fair value of the stock options is measured on the grant date using the Black-Scholes option pricing model based on the underlying common stock closing price as of the date of grant, the expected term, stock price volatility, and risk-free interest rates. The Company recognizes compensation expense net of estimated forfeitures on a straight-line basis over the requisite service period of the award, which is generally the vesting term of the award. No compensation cost is ultimately recognized for awards for which employees do not render the requisite service and are forfeited. Excess tax benefits of awards that are recognized in equity related to stock option exercises are reflected as financing cash inflows. | |||||||||||||
Advertising and marketing | |||||||||||||
General advertising is expensed as incurred. Advertising allowances provided to retailers are recorded as an expense at the time of the related sale if the Company receives an identifiable benefit in exchange for the consideration and has evidence of fair value for the advertising; otherwise, the allowance is recorded as a reduction of revenue. Advertising expenses for the years ended December 31, 2013, 2012 and 2011 were $8,952, $12,495 and $10,246, respectively. | |||||||||||||
Foreign currency translation and transactions | |||||||||||||
The Company’s primary operations are at the parent level which uses the U.S. dollar (USD) as its functional currency. The Euro is the functional currency of the Company’s foreign subsidiaries. Accordingly, assets and liabilities for these subsidiaries are translated into USD using exchange rates in effect at the end of each period. Revenue and expenses for these subsidiaries are translated using rates that approximate those in effect during the period. Gains and losses from these translations are recorded as a component of stockholders’ equity. Gains and losses resulting from foreign currency transactions are included in income as a component of other income and (expense) in the consolidated statements of operations and totaled ($7), ($17) and $60 for the years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||||||
Earnings per share | |||||||||||||
Basic earnings per common share excludes dilution and is computed by dividing net income attributable to stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share reflects the potential dilution that could occur if stock options or other common stock equivalents were exercised or converted into common stock. The dilutive effect of stock options or other common stock equivalents is calculated using the treasury stock method. | |||||||||||||
The following is a reconciliation of the numerator and denominator used to calculate basic earnings per share and diluted earnings per share for the years ended December 31, 2013, 2012 and 2011: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Net income attributable to stockholders | $ | 4,790 | $ | 14,505 | $ | 18,248 | |||||||
Weighted average shares outstanding | 30,900 | 30,339 | 27,133 | ||||||||||
Dilutive effect of stock options, restricted stock, and warrants | 559 | 1,317 | 1,949 | ||||||||||
Diluted shares | 31,459 | 31,656 | 29,082 | ||||||||||
Earnings per share attributable to stockholders: | |||||||||||||
Basic | $ | 0.16 | $ | 0.48 | $ | 0.67 | |||||||
Dilutive | $ | 0.15 | $ | 0.46 | $ | 0.63 | |||||||
For the years ended December 31, 2013, 2012, and 2011, restricted stock, warrants and stock options to purchase 620, 169, and 103 shares of common stock, respectively, were not considered in calculating diluted earnings per share because the warrant or stock option exercise prices or the total expected proceeds under the treasury stock method for the warrants, restricted stock, or stock options was greater than the average market price of common shares during the period and, therefore, the effect would be anti-dilutive. | |||||||||||||
Recent accounting pronouncements | |||||||||||||
In November 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. ASU 2013-11 requires an entity to present an unrecognized tax benefit as a reduction of a deferred tax asset for a net operating loss (NOL) carryforward, or similar tax loss or tax credit carryforward, rather than as a liability when (1) the uncertain tax position would reduce the NOL or other carryforward under the tax law of the applicable jurisdiction and (2) the entity intends to use the deferred tax asset for that purpose. The ASU does not require new recurring disclosures. The ASU is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. The Company will implement the provisions of ASU 2011-11 as of January 1, 2014, and is still evaluating the impact on the Company’s financial statements. |
ACQUISITION_OF_IFROGZ
ACQUISITION OF IFROGZ | 12 Months Ended | |||||
Dec. 31, 2013 | ||||||
Business Combinations [Abstract] | ' | |||||
ACQUISITION OF IFROGZ | ' | |||||
(2) ACQUISITION OF IFROGZ | ||||||
On June 21, 2011, the Company, Reminderband Inc. dba iFrogz (“iFrogz”), and the owners of iFrogz entered into a Stock Purchase Agreement pursuant to which ZAGG acquired 100% of the outstanding shares of iFrogz. | ||||||
The Company purchased iFrogz for total consideration of $50,000 in cash and 4,444 shares of ZAGG common stock. The value of the shares of the Company’s common stock used in determining the purchase price was $12.60 per share, the closing price of the Company’s common stock on June 21, 2011. 2,222 of the shares issued were subject to a 12-month “lock-up” transfer restriction following the date of acquisition and, therefore, the fair value of these shares was determined considering the restriction resulting in a discount of 20.0% from the closing share price. This 12-month “lock-up” transfer restriction following the date of acquisition in accordance with SEC Rule 144 expired on June 21, 2012. The other 2,222 shares issued were subject to a 6-month “lock-up” transfer restriction that expired on December 21, 2011. The fair value of these shares was determined considering the restriction resulting in a discount of 15.0% from the closing share price. | ||||||
The following summarizes the components of the purchase price: | ||||||
Value of ZAGG shares issued: | ||||||
ZAGG shares issued with 6-month restriction | $ | 23,800 | ||||
ZAGG shares issued with 12-month restriction | 22,400 | |||||
46,200 | ||||||
Cash consideration | 50,000 | |||||
Total | $ | 96,200 | ||||
The total purchase price of $96,200 was allocated to tangible and intangible assets acquired and liabilities assumed based on their respective fair values. The excess of the purchase price over the fair value of tangible and intangible assets acquired and liabilities assumed was recorded as goodwill. Fair values assigned were based on reasonable methods applicable to the nature of the assets acquired and liabilities assumed. The following table summarizes the allocation of the purchase consideration: | ||||||
Cash and cash equivalents | $ | 2,469 | ||||
Trade receivables ($5,880 contractual gross receivables) | 5,832 | |||||
Inventories | 14,962 | |||||
Prepaid expenses | 579 | |||||
Property and equipment | 2,078 | |||||
Deposits | 138 | |||||
Definite-lived identifiable intangible assets | 49,900 | |||||
Indefinite-lived identifiable intangible assets | 25,100 | |||||
Goodwill | 6,925 | |||||
Current liabilities | (11,783 | ) | ||||
Total | $ | 96,200 | ||||
As part of the acquisition of iFrogz, the Company incurred legal, accounting, and other due diligence fees that were expensed when incurred. Total fees incurred related to the acquisition of iFrogz for the twelve months ended December 31, 2011, were $1,947, which were included as a component of selling, general, and administrative expenses in the consolidated statement of operations. No expenses were incurred in 2012 or 2013. | ||||||
Identifiable Intangible Assets | ||||||
Classes of acquired intangible assets include customer relationships, trademarks, non-compete agreements, and other intangibles. The fair value of the identifiable intangible assets was determined using various valuation methods, including the income and market approaches. For assets valued under the income approach, the estimate of the present value of expected future cash flows for each identifiable asset was based on discount rates which incorporate a risk premium to take into account the risks inherent in those expected cash flows. The expected cash flows were estimated using available historical data adjusted based on the Company’s historical experience and the expectations of market participants. The market approach was utilized to determine appropriate royalty rates applied to the valuation of the trademarks and patents. The amounts assigned to each class of intangible asset and the related weighted average amortization periods are as follows: | ||||||
Intangible asset class | Weighted-average amortization period | |||||
Customer relationships | $ | 41,500 | 8.0 years | |||
Trademarks (indefinite-lived) | 25,100 | Indefinite | ||||
Trademarks (definite-lived) | 3,500 | 9.7 years | ||||
Non-compete agreements | 4,100 | 4.8 years | ||||
Other | 800 | 3.8 years | ||||
Total | $ | 75,000 | ||||
As is discussed in Note 7, the iFrogz and EarPollution trademarks were originally recorded as an indefinite-lived intangible asset as presented in the table above. However, management concluded that the trademarks should be considered definite-lived assets due to changes in brand strategy in the fourth quarter of 2012 (EarPollution) and the fourth quarter of 2013 (iFrogz). | ||||||
Goodwill | ||||||
Goodwill represents the excess of the iFrogz purchase price over the fair value of the assets acquired and liabilities assumed. The goodwill acquired in the acquisition is deductible for income tax purposes and is being amortized over a period of 15 years. | ||||||
As is discussed in Note 7, the Company recorded impairments to goodwill during the fourth quarter of 2012 and the fourth quarter of 2013. | ||||||
Results of Operations | ||||||
For the year ended December 31, 2011, iFrogz contributed net sales of $36,046 and net loss before tax of $1,461 to the consolidated statement of operations. |
INVENTORIES
INVENTORIES | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
INVENTORIES | ' | ||||||||
(3) INVENTORIES | |||||||||
Inventory consisted of the following components: | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Finished goods | $ | 40,992 | $ | 34,690 | |||||
Raw materials | 3,547 | 5,298 | |||||||
Total inventory | $ | 44,539 | $ | 39,988 | |||||
In addition, included in prepaid expenses and other current assets were inventory deposits with third-party manufacturers at December 31, 2013 and 2012 of $735 and $8,034, respectively. |
ASSET_PURCHASE_CREDITS
ASSET PURCHASE CREDITS | 12 Months Ended |
Dec. 31, 2013 | |
Asset Purchase Credits [Abstract] | ' |
ASSET PURCHASE CREDITS | ' |
(4) ASSET PURCHASE CREDITS | |
The Company entered into a nonmonetary exchange transaction with Argent Trading Inc. (“Argent”) during the second quarter of 2011 whereby the Company transferred inventory with a carrying value of $986 to Argent in exchange for asset purchase credits with a face value of $1,350. The credits can be used for the purchase of goods or services from certain vendors until March 1, 2016, when the unused asset purchase credits expire. | |
The Company accounted for this nonmonetary transaction based on the fair value of the inventory transferred as the inventory’s fair value was more clearly evident than fair value of the asset purchase credits. The Company determined that the inventory had a fair value of $785 at the date of the transfer and thus recorded an impairment loss on the inventory of $201, which was recorded as a component of cost of sales in the accompanying consolidated statement of operations during the second quarter of 2011. | |
On May 2, 2012, the Company assigned these credits to a supplier in exchange for discounts on future purchases of products from the supplier. Management expects the discounts received to at least equal the value of the asset purchase credits assigned and will be realized over approximately a three-year period. Despite the change in character, the Company continues to classify these assets within prepaid expenses and other current assets, and noncurrent other assets on the consolidated balance sheet based on when the discounts are expected to be realized. During the years ended December 31, 2013 and 2012, management utilized $275 and $184, respectively, of the assets. Total discounts utilized at December 31, 2013 total $459. |
INVESTMENT_IN_HzO
INVESTMENT IN HzO | 12 Months Ended |
Dec. 31, 2013 | |
Investment In Hzo [Abstract] | ' |
INVESTMENT IN HzO | ' |
(5) INVESTMENT IN HzO | |
HzO, Inc. (“HzO”) is a private company engaged in the development of water-blocking technologies for consumer and industrial applications. Prior to the fourth quarter of 2013, the Company accounted for its investment in HzO under the equity method of accounting by recognizing ZAGG’s share of the earnings or losses of HzO in the periods in which they are reported by HzO in its separate financial statements, adjusted for the amortization of the basis difference between the Company’s investment in HzO and the Company’s underlying share in the net assets of HzO. During the fourth quarter of 2013, HzO raised $10,112 in additional equity capital through the sale of 39,205 additional Series B Preferred Shares. ZAGG did not participate in the capital raise, the result of which was to reduce ZAGG’s ownership interest in HzO to 15.3% at December 31, 2013. As ZAGG cannot exercise significant influence over HzO and its ownership interest is below 20.0%, the Company now accounts for the investment in HzO as a cost method investment. | |
For the year ended December 31, 2013 and 2012, the Company recorded a loss from investment in HzO of $2,013 and $2,866, respectively. The loss from investment in HzO was recorded as a component of other expense in the consolidated statement of operations in each respective period. The carrying value of the investment at December 31, 2013 was $0 due to the accumulated losses. |
PROPERTY_AND_EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
Property, Plant and Equipment [Abstract] | ' | |||||||||
PROPERTY AND EQUIPMENT | ' | |||||||||
(6) PROPERTY AND EQUIPMENT | ||||||||||
Property and equipment consisted of the following: | ||||||||||
December 31, | ||||||||||
2013 | 2012 | |||||||||
Useful Lives | ||||||||||
Computer equipment and software | 3 to 5 years | $ | 1,519 | $ | 1,343 | |||||
Equipment | 3 to10 years | 5,173 | 2,989 | |||||||
Furniture and fixtures | 7 years | 778 | 735 | |||||||
Automobiles | 5 years | 201 | 265 | |||||||
Leasehold improvements | 1 to 4.75 years | 3,111 | 2,847 | |||||||
10,782 | 8,179 | |||||||||
Less accumulated depreciation | (5,778 | ) | (3,317 | ) | ||||||
Net property and equipment | $ | 5,004 | $ | 4,862 |
GOODWILL_INTANGIBLE_ASSETS
GOODWILL & INTANGIBLE ASSETS | 12 Months Ended | |||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||||||||||||
GOODWILL & INTANGIBLE ASSETS | ' | |||||||||||||||||||||
(7) GOODWILL & INTANGIBLE ASSETS | ||||||||||||||||||||||
Impairment of Goodwill | ||||||||||||||||||||||
For the years ended December 31, 2013 and 2012, the Company recorded impairments of goodwill in the amounts of $1,484 and $5,441, respectively, when it was determined that the carrying value of goodwill exceeded its fair value. The determination was made during the impairment analyses performed during the fourth quarters of 2013 and 2012. In conjunction with the impairment tests, the Company considered factors such as the overall decline in the market price of the Company’s stock, a decline in market capitalization for a sustained period, and a decline in forecasted operations as indicators for potential goodwill impairment. In determining the amount of impairments within the analyses in 2013 and 2012, we considered both the income approach, utilizing a discounted cash flow analysis, and market approach, which considers what other purchasers and sellers in the market have paid for companies reasonably similar to the reporting unit. | ||||||||||||||||||||||
The goodwill impairments are included as a component of impairment of goodwill and intangibles in the consolidated statement of operations. | ||||||||||||||||||||||
The changes in the carrying amount of goodwill for the year ended December 31, 2013 and 2012, are as follows: | ||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||
Balance as of January 1 | ||||||||||||||||||||||
Gross goodwill | $ | 6,925 | $ | 6,925 | ||||||||||||||||||
Accumulated impairment losses | (5,441 | ) | — | |||||||||||||||||||
Net goodwill as of January 1 | 1,484 | 6,925 | ||||||||||||||||||||
Goodwill acquired during the year | — | — | ||||||||||||||||||||
Impairment loss | (1,484 | ) | (5,441 | ) | ||||||||||||||||||
Balance as of December 31 | ||||||||||||||||||||||
Gross goodwill | 6,925 | 6,925 | ||||||||||||||||||||
Accumulated impairment losses | (6,925 | ) | (5,441 | ) | ||||||||||||||||||
Net goodwill as of December 31 | $ | — | $ | 1,484 | ||||||||||||||||||
Impairment of Indefinite-lived Intangible Assets | ||||||||||||||||||||||
During the fourth quarter of 2013, the Company made a brand strategy change to place greater emphasis on the promotion of the ZAGG and invisibleSHIELD brands. This was highlighted by the decision to brand the line of gaming controllers as ZAGG products instead of under the iFrogz brand, which was the original product branding. As a result of this decision, we determined that future cash flows under the iFrogz trademark likely will be less than previously estimated and that the trademark should be considered a definite-lived intangible asset. Management incorporated this information into an impairment analysis performed during the fourth quarter of 2013, relying on a discounted cash flow analysis and market approach. Management determined the carrying amount of the trademark exceeded the fair value and an impairment charge of $9,762 was recorded at December 31, 2013 as a component of the goodwill and impairment line in the consolidated statement of operations. As the trademark is now considered a definite-lived intangible, management will commence amortizing the trademark over a ten-year useful life on an accelerated basis consistent with the projected future cash flows from the trademark. Future amortization of this trademark is included in the estimated future amortization table below in this Note. | ||||||||||||||||||||||
December 31, | ||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||
iFrogz trademark prior to impairment | $ | 16,800 | $ | 16,800 | ||||||||||||||||||
iFrogz trademark impairment | (9,762 | ) | — | |||||||||||||||||||
iFrogz trademark – definite-lived | $ | 7,038 | $ | 16,800 | ||||||||||||||||||
During the fourth quarter of 2012, the Company determined that future cash flows under the EarPollution trademark likely will be less than previously estimated and that the trademark should be considered a definite-lived intangible asset. Management performed an impairment analysis during the fourth quarter of 2012, relying on a discounted cash flow analysis and market approach, and determined that the carrying amount of the trademark exceeded the fair value and an impairment charge of $5,917 was recorded at December 31, 2012 as a component of the goodwill and impairment line in the consolidated statement of operations. As the trademark was considered a definite-lived intangible, management commenced amortizing the trademark over an eight-year period on an accelerated basis consistent with the projected future cash flows from the trademark. Amortization of this intangible commenced in the first quarter of 2013. | ||||||||||||||||||||||
31-Dec | ||||||||||||||||||||||
2012 | ||||||||||||||||||||||
EarPollution trademark prior to impairment | $ | 8,300 | ||||||||||||||||||||
EarPollution trademark impairment | (5,917 | ) | ||||||||||||||||||||
EarPollution trademark – definite-lived | $ | 2,383 | ||||||||||||||||||||
In addition, during the fourth quarter of 2012, the Company wrote-off $139 in internally developed software acquired in the iFrogz acquisition as it was abandoned in December 2012. The charge is included as a component of the goodwill and impairment line in the consolidated statement of operations. | ||||||||||||||||||||||
Definite-lived Intangibles | ||||||||||||||||||||||
Definite-lived intangibles as of December 31, 2013 and 2012, were as follows: | ||||||||||||||||||||||
3,962 | ||||||||||||||||||||||
As of December 31, 2013 | ||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Write-off of Fully Amortized Asset | Transfers from Indefinite-life Classification | Net Carrying Amount | Weighted Average Amortization Period | |||||||||||||||||
Customer relationships | $ | 41,500 | $ | (17,537 | ) | $ | — | $ | — | $ | 23,963 | 8.0 years | ||||||||||
Non-compete agreements | 4,100 | (2,169 | ) | — | — | 1,931 | 4.8 years | |||||||||||||||
Other Trademarks | 3,500 | (1,719 | ) | — | — | 1,781 | 9.7 years | |||||||||||||||
iFrogz Trademark | — | — | — | 7,038 | 7,038 | 10.0 years | ||||||||||||||||
EarPollution Trademark | 2,383 | (554 | ) | — | — | 1,829 | 8.0 years | |||||||||||||||
Other | 661 | (487 | ) | (61 | ) | — | 113 | 5.0 years | ||||||||||||||
Acquired technology | 709 | (165 | ) | — | — | 544 | 7.0 years | |||||||||||||||
Internet address | 124 | (66 | ) | — | — | 58 | 10.0 years | |||||||||||||||
Patents | 4,696 | (734 | ) | — | — | 12.5-14.0 years | ||||||||||||||||
Total amortizable assets | $ | 57,673 | $ | (23,431 | ) | $ | (61 | ) | $ | 7,038 | $ | 41,219 | 8.4 years | |||||||||
As of December 31, 2012 | ||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Write-off | Transfers from Indefinite-life Classification | Net Carrying Amount | Weighted Average Amortization Period | |||||||||||||||||
Customer relationships | $ | 41,500 | $ | (10,291 | ) | $ | — | $ | — | $ | 31,209 | 8.0 years | ||||||||||
Non-compete agreements | 4,100 | (1,389 | ) | — | — | 2,711 | 4.8 years | |||||||||||||||
Other Trademarks | 3,500 | (1,105 | ) | — | — | 2,395 | 9.7 years | |||||||||||||||
EarPollution Trademark | — | — | — | 2,383 | 2,383 | 8.0 years | ||||||||||||||||
Other | 800 | (446 | ) | (139 | ) | — | 215 | 5.0 years | ||||||||||||||
Acquired technology | 564 | (83 | ) | — | — | 481 | 7.0 years | |||||||||||||||
Internet address | 124 | (53 | ) | — | — | 71 | 10.0 years | |||||||||||||||
Patents | 2,063 | (423 | ) | — | — | 1,640 | 14.0 years | |||||||||||||||
Total amortizable assets | $ | 52,651 | $ | (13,790 | ) | $ | (139 | ) | $ | 2,383 | $ | 41,105 | 8.0 years | |||||||||
Customer relationships, trademarks, and other intangibles are amortized on an accelerated basis consistent with their expected future cash flows over their estimated useful life, which results in accelerated amortization. The remaining definite-lived intangible assets are amortized using the straight line method over their estimated useful life. For the years ended December 31, 2013, 2012, and 2011 amortization expense was $9,702, $9,801, and $4,921, respectively. Amortization expense was primarily recorded as a component of operating expense, however, amortization expense related to acquired technology in 2013, 2012, and 2011 of $82, $69, and $972, respectively, was recorded as a component of cost of sales. | ||||||||||||||||||||||
On September 4, 2013, the Company acquired a patent pursuant to an Amended Asset Purchase Agreement (“Purchase Agreement”). Under the terms of the Purchase Agreement, the Company agreed to transfer consideration of $500 in cash and 500 shares of ZAGG restricted common stock to acquire the patent, which protects elements of the Company’s invisibleSHIELD product line. The patent was recorded based on the fair value of the consideration transferred on the date of the Purchase Agreement. The components of consideration included the following items: | ||||||||||||||||||||||
Restricted common stock | $ | 2,275 | ||||||||||||||||||||
Cash consideration | 500 | |||||||||||||||||||||
Acquisition costs | 2 | |||||||||||||||||||||
Total | $ | 2,777 | ||||||||||||||||||||
Management valued the restricted common stock utilizing the stock price on September 4, 2013, also taking into consideration the six-month transfer restriction attached to the stock and the Company’s guarantee of the transaction date value of the restricted common stock when the stock becomes free-trading in March 2014. As the guarantee represents a put feature, management valued the put feature utilizing the Black-Scholes model to be $330 and classified that amount as a liability on the date of the Purchase Agreement. This liability will be marked to fair value each reporting period until settled with the change in fair value being recorded through the consolidated statement of operations. As of December 31, 2013, the Company recorded a reduction in the fair value of the liability of $53 and a corresponding benefit to other expense in the consolidated statement of operations. | ||||||||||||||||||||||
Estimated future amortization expense is as follows: | ||||||||||||||||||||||
2014 | $ | 9,813 | ||||||||||||||||||||
2015 | 8,560 | |||||||||||||||||||||
2016 | 7,125 | |||||||||||||||||||||
2017 | 5,649 | |||||||||||||||||||||
Thereafter | 10,072 | |||||||||||||||||||||
Total | $ | 41,219 | ||||||||||||||||||||
Indefinite-lived Intangibles | ||||||||||||||||||||||
The gross carrying amount of indefinite-lived intangibles as of December 31, 2013 and 2012 were as follows: | ||||||||||||||||||||||
31-Dec-13 | ||||||||||||||||||||||
Gross Carrying Amount | Impairment | Transfers to Definite-life Classification | Net Carrying Amount | |||||||||||||||||||
iFrogz trademark | $ | 16,800 | $ | (9,762 | ) | $ | (7,038 | ) | $ | — | ||||||||||||
EarPollution trademark | — | — | — | — | ||||||||||||||||||
Total non-amortizable assets | $ | 16,800 | $ | (9,762 | ) | $ | (7,038 | ) | $ | — | ||||||||||||
31-Dec-12 | ||||||||||||||||||||||
Gross Carrying Amount | Impairment | Transfers to Definite-life Classification | Net Carrying Amount | |||||||||||||||||||
iFrogz trademark | $ | 16,800 | $ | — | $ | — | $ | 16,800 | ||||||||||||||
EarPollution trademark | 8,300 | (5,917 | ) | (2,383 | ) | — | ||||||||||||||||
Total non-amortizable assets | $ | 25,100 | $ | (5,917 | ) | $ | (2,383 | ) | $ | 16,800 | ||||||||||||
INCOME_TAXES
INCOME TAXES | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||||||
INCOME TAXES | ' | ||||||||||||
(8) INCOME TAXES | |||||||||||||
The components of income tax (provision) benefit for the years ended December 31, 2013, 2012 and 2011, are: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Current (provision): | |||||||||||||
Federal | $ | (8,720 | ) | $ | (15,466 | ) | $ | (11,487 | ) | ||||
State | (766 | ) | (2,104 | ) | (1,767 | ) | |||||||
Foreign | — | (116 | ) | (72 | ) | ||||||||
Total current | (9,486 | ) | (17,686 | ) | (13,326 | ) | |||||||
Deferred (provision) benefit: | |||||||||||||
Federal | 5,036 | 7,209 | 3,402 | ||||||||||
State | 755 | 1,084 | 506 | ||||||||||
Foreign | — | — | — | ||||||||||
Total deferred | 5,791 | 8,293 | 3,908 | ||||||||||
Total (provision) benefit | $ | (3,695 | ) | $ | (9,393 | ) | $ | (9,418 | ) | ||||
The following is a reconciliation of the income taxes computed using the federal statutory rate to the provision for income taxes for the years ended December 31, 2013, 2012 and 2011: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Tax at statutory rate (35%) | $ | (2,970 | ) | $ | (8,364 | ) | $ | (9,451 | ) | ||||
State tax, net of federal tax benefit | 25 | (663 | ) | (888 | ) | ||||||||
Gain on deconsolidation of HzO | — | — | 316 | ||||||||||
Non-deductible expense and other | 428 | (341 | ) | (130 | ) | ||||||||
Domestic production activities deduction | 331 | 676 | 771 | ||||||||||
Return to provision adjustment | (148 | ) | (49 | ) | (36 | ) | |||||||
Liquidation of iFrogz EU | 5 | — | — | ||||||||||
Reserve related to FIN 48 | (382 | ) | — | — | |||||||||
Interest and penalties | (32 | ) | — | — | |||||||||
Increase in valuation allowance | (952 | ) | (652 | ) | — | ||||||||
$ | (3,695 | ) | $ | (9,393 | ) | $ | (9,418 | ) | |||||
The tax effects of temporary differences that gave rise to significant portions of deferred tax assets and liabilities at December 31, 2013 and 2012, are as follows: | |||||||||||||
2013 | 2012 | ||||||||||||
Deferred tax assets: | |||||||||||||
Allowance for doubtful accounts | $ | 958 | $ | 1,020 | |||||||||
Deferred revenue | 38 | 27 | |||||||||||
Inventories | 3,211 | 2,317 | |||||||||||
Stock-based compensation | 1,464 | 1,420 | |||||||||||
Sales returns accrual | 2,943 | 2,456 | |||||||||||
Acquisition costs, net of amortization | 252 | 282 | |||||||||||
Intangible assets | 8,320 | 4,372 | |||||||||||
Goodwill | 2,192 | 1,801 | |||||||||||
HzO investment | 1,483 | 713 | |||||||||||
Capital loss carry-over | 271 | — | |||||||||||
Reserve on note receivable | 569 | 569 | |||||||||||
Other liabilities | 39 | 38 | |||||||||||
Deferred tax assets | 21,740 | 15,015 | |||||||||||
Valuation allowance | (1,753 | ) | (713 | ) | |||||||||
Total deferred tax assets | $ | 19,987 | $ | 14,302 | |||||||||
Deferred tax liabilities: | |||||||||||||
Property and equipment | 693 | 794 | |||||||||||
Total gross deferred tax liabilities | 693 | 794 | |||||||||||
Net deferred tax assets | $ | 19, 294 | $ | 13,508 | |||||||||
Deferred tax assets, net – current | $ | 7,917 | $ | 6,912 | |||||||||
Deferred tax assets, net – noncurrent | 11,377 | 6,596 | |||||||||||
Net deferred tax assets | $ | 19,294 | $ | 13,508 | |||||||||
The Company recorded a full valuation allowance against a deferred tax asset generated by losses on its investment in HzO. HzO is a development stage enterprise and given current operations and uncertainty of future profitability, management has determined that it is more likely than not that the deferred tax asset will not be realizable. Given this, a full valuation allowance at December 31, 2013 and 2012 of $1,483 and $713, respectively, has been recorded against the deferred tax asset. In addition, at December 31, 2013, the Company recorded a full valuation allowance against deferred tax assets resulting from capital loss carry-overs as the Company determined that it was unlikely the capital loss carry-overs would be able to be utilized. | |||||||||||||
The Company has not recorded a tax benefit at December 31, 2012 for operating losses from operations in France (iFrogz Europe SAS) and the UK (ZAGG Europe). On a combined basis, the two entities had a gross cumulative operating loss of $1,280 at December 31, 2012. Operations for iFrogz Europe SAS and ZAGG Europe were transitioned to Ireland and therefore, we do not expect future taxable income within France or the UK to offset net operating losses. ZAGG Europe was liquidated and the entity closed during 2012. In addition, iFrogz Europe SAS was liquidated and the entity closed during the fourth quarter of 2013. | |||||||||||||
For all other deferred tax assets, no valuation allowance has been recorded at December 31, 2013 and 2012, as management believes it is more likely than not that the results of future operations will generate sufficient taxable income to realize its deferred tax assets. | |||||||||||||
The Company has not recognized a deferred tax liability for the undistributed earnings of its foreign operations that arose in 2013 and prior years as the Company considers these earnings to be indefinitely reinvested. Cash held by foreign entities that is considered permanently re-invested totaled $3,361 as of December 31, 2013. If this cash were repatriated to the United States, outside the settlement of intercompany payables or payment of intercompany royalties, the Company would need to accrue and pay the related tax. However, the Company considers these funds permanently re-invested and has no plans to repatriate these funds. | |||||||||||||
The Company recognizes the impact of a tax position in the financial statements if that position is more likely than not of being sustained on audit, based on the technical merits of the position. As of December 31, 2013 and 2012, the Company recorded a tax contingency of $460 and $61, respectively. The tax contingencies are primarily related to the Companies global tax strategy and certain transactions in foreign jurisdictions in prior periods. These tax contingencies, on a gross basis, are reconciled in the table below: | |||||||||||||
2013 | 2012 | ||||||||||||
Unrecognized tax benefits, as of January 1 | $ | 61 | $ | 61 | |||||||||
Gross increases – tax positions in current period | 399 | — | |||||||||||
Total (provision) benefit | $ | 460 | $ | 61 | |||||||||
As of December 31, 2013, the Company's liability related to unrecognized tax benefits was $460 of which $443 would impact the Company's effective tax rate if recognized. | |||||||||||||
For the years ended December 31, 2013, 2012, and 2011, the Company recorded $32, $0, and $0, respectively, in each year in interest and penalties. | |||||||||||||
The Company is currently not under examination by any federal or state tax authority, but remains subject to income tax examinations for each of its open tax years, which extend back to 2010 for federal income tax purposes and 2009 for state income tax purposes. |
STOCK_OPTIONS_AND_WARRANTS
STOCK OPTIONS AND WARRANTS | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract] | ' | ||||||||||||||||
STOCK OPTIONS AND WARRANTS | ' | ||||||||||||||||
(9) STOCK OPTIONS AND WARRANTS | |||||||||||||||||
In 2007, the Company’s board of directors adopted and in 2008 the Company’s shareholders approved the ZAGG Incorporated 2007 Stock Incentive Plan (the “2007 Plan”). The 2007 Plan was amended to increase the number of shares issuable under the 2007 Plan to 10,000. As of December 31, 2012, there were 6,161 shares available for grant under the 2007 Plan. | |||||||||||||||||
On January 15, 2013, the Company’s Board of Directors adopted and in June 2013, the Company’s shareholders approved the ZAGG Inc 2013 Equity Incentive Award Plan (the “2013 Plan”), a new equity incentive plan intended to replace the 2007 Plan. The 2013 Plan is an “omnibus plan” under which stock options, stock appreciation rights, performance share awards, restricted stock, and restricted stock units can be awarded. The 2013 Plan’s initial share reservation is 5,000 shares. The term of the plan is for 10 years from the date of its adoption. As of December 31, 2013, there were approximately 4,464 shares available for grant under the 2013 Plan. | |||||||||||||||||
Upon adoption of the 2013 Plan in January 2013, the Company ceased to grant awards pursuant to the 2007 Plan. All future awards will be granted under the 2013 Plan. All awards that are outstanding under the 2007 Plan will continue to vest, be exercisable, and expire according to their respective terms. | |||||||||||||||||
Common Stock Options | |||||||||||||||||
Option awards are granted with an exercise price equal to the market price of the Company’s stock at the date of grant; those option awards generally vest based on three years of continuous service and have five-year contractual terms. | |||||||||||||||||
The fair value of stock options has been estimated as of the grant date using the Black-Scholes option pricing model. No stock options were granted during 2012 or 2013. For the year ended December 31, 2011 the following assumptions were used in determining the fair value of option grants: | |||||||||||||||||
2011 | |||||||||||||||||
Expected dividend yield | 0 | % | |||||||||||||||
Risk-free interest rate | 1.21 | % | |||||||||||||||
Expected term (years) | 3.5 years | ||||||||||||||||
Expected volatility | 90.59 | % | |||||||||||||||
The Company determines the expected term of its stock option awards by using the simplified method, which assumes each vesting tranche of the award has a term equal to the midpoint between when the award vests and when the award expires. Expected volatility is calculated by weighting the Company’s historical stock price to calculate expected volatility over the expected term of each grant. If the Company’s historical stock price history does not cover the entire expected term, expected volatility is also weighted based on the average historical volatility of similar entities with publicly traded shares over the expected term of each grant. The risk-free interest rate for the expected term of each option granted is based on the U.S. Treasury yield curve in effect at the time of grant with a period that approximates the expected term of the option. | |||||||||||||||||
The following table summarizes the stock option activity for the Company’s stock incentive plans for the year ended December 31, 2013: | |||||||||||||||||
Weighted- | |||||||||||||||||
Average | |||||||||||||||||
Weighted- | Remaining | Aggregate | |||||||||||||||
Average | Contractual | Intrinsic | |||||||||||||||
Options | Exercise Price | Term | Value | ||||||||||||||
(In thousands) | (Per share) | (In years) | (In thousands) | ||||||||||||||
Outstanding at December 31, 2012 | 671 | $ | 3.7 | 2.1 | |||||||||||||
Granted | — | — | |||||||||||||||
Exercised | (145 | ) | 2.4 | ||||||||||||||
Forfeited/expired | (87 | ) | 4.69 | ||||||||||||||
Outstanding at December 31, 2013 | 439 | $ | 3.93 | 1.2 | $ | 186 | |||||||||||
Exercisable at December 31, 2013 | 410 | $ | 3.61 | 1.2 | $ | 303 | |||||||||||
The weighted-average grant-date fair value of options granted during the years ended December 31, 2013, 2012, and 2011 was $0, $0, and $4.98, respectively. The total intrinsic value of options exercised during the years ended December 31, 2013, 2012 and 2011, was $540, $3,555, and $8,170, respectively. | |||||||||||||||||
As of December 31, 2013, there was $29 of total unrecognized compensation cost related to nonvested stock options granted under the stock incentive plans. That cost is expected to be recognized over a weighted-average period of 0.2 years. The total grant date fair value of shares vested during the years ended December 31, 2013, 2012 and 2011, was $593, $1,060, and $2,638, respectively. | |||||||||||||||||
The Company recorded share-based compensation expense only for those options that are expected to vest. The estimated fair value of the stock options is recognized on a straight-line basis over the requisite service period of the award, which is generally the vesting term of the award. During the years ended December 31, 2013, 2012 and 2011, the Company recorded equity-based compensation expense of $280, $1,008 and $2,640, respectively, which is included as a component of selling, general and administrative expense. The net tax benefit recognized on equity-based compensation expense for the year ended December 31, 2013, 2012 and 2011 was $88, $181, and $28, respectively. The tax benefit realized from stock options exercised for the year ended December 31, 2013, 2012 and 2011 was $88, $599, and $1,838, respectively. | |||||||||||||||||
During the third quarter of 2012, the Company incurred an incremental charge of $154 that was the direct result of the Separation and Release of Claims Agreement (“Separation Agreement”) between the Company and Robert G. Pedersen II, the Company’s former chief executive officer. Under the terms of the Separation Agreement, Mr. Pedersen’s 32 unvested stock options continued to vest under the original terms of the option grant. However, because future services to be performed by Mr. Pedersen were not considered substantive under US GAAP, the options were re-measured and the expense associated with these options was accelerated. In addition, the Company incurred a $910 charge during the third quarter of 2012 related to consulting fees due to Mr. Pedersen under the Separation Agreement, which were payable in monthly installments over the one-year term of the Separation Agreement. | |||||||||||||||||
During the second quarter of 2011, the Company incurred a charge of $1,560 related to the modification of a previously granted stock option, which is included as a component of selling, general and administrative expenses and additional paid in capital in the accompanying consolidated financial statements (see Note 11, Note Receivable). | |||||||||||||||||
Warrants - During the years ended December 31, 2013, 2012, and 2011, the Company issued warrants to purchase common shares for investor relations consulting services of 0, 50, and 50, respectively. The 2013, 2012, and 2011 warrants are exercisable at $0, $9.02 and $9.05, respectively. The warrants expire five years from the grant date and were fully vested on the date of grant. The grants were independently valued using the Black-Scholes option pricing model with separate assumptions for each tranche based on the fair value of the Company’s common stock on each vesting date, expected term equal to the remaining contractual term on each vesting date, expected volatility weighted between the Company’s historical volatility and the average historical volatility of similar entities with publicly traded shares over the expected term for each vesting date, and risk-free rate for the expected term based on the U.S. Treasury yield curve in effect with a period that approximates the remaining contractual term for each vesting date. For the year ended December 31, 2013, 2012, and 2011, the Company recorded expense of $0, $311, and $377, respectively, for these warrants. | |||||||||||||||||
The fair value of warrants has been estimated as of the vesting date using the Black-Scholes option pricing model. For the years ended December 31, 2013, 2012, and 2011 the following assumptions were used in determining the fair value: | |||||||||||||||||
2012 | 2011 | ||||||||||||||||
Expected dividend yield | 0 | % | 0 | % | |||||||||||||
Risk-free interest rate | 0.81 | % | 2.02 | % | |||||||||||||
Expected term (years) | 5.0 years | 4.86 years | |||||||||||||||
Expected volatility | 89.5 | % | 90.71 | % | |||||||||||||
The following table summarizes the warrant activity for the year ended December 31, 2013: | |||||||||||||||||
Weighted- | |||||||||||||||||
Average | |||||||||||||||||
Weighted- | Remaining | Aggregate | |||||||||||||||
Average | Contractual | Intrinsic | |||||||||||||||
Warrants | Exercise Price | Term | Value | ||||||||||||||
(In thousands) | (Per share) | (In years) | (In thousands) | ||||||||||||||
Outstanding at December 31, 2012 | 390 | $ | 8.05 | 3 | $ | 191 | |||||||||||
Granted | — | — | |||||||||||||||
Exercised | — | — | |||||||||||||||
Forfeited/expired | — | — | |||||||||||||||
Outstanding at December 31, 2013 | 390 | $ | 8.05 | 2 | $ | (1,442 | ) | ||||||||||
Exercisable at December 31, 2013 | 390 | $ | 8.05 | 3 | $ | (1,442 | ) | ||||||||||
The weighted-average and grant-date or vest-date fair value of warrants granted during the years ended December 31, 2013, 2012, and 2011, was $0, $6.46, and $6.46, respectively. The total intrinsic value of warrants exercised during the years ended December 31, 2013, 2012 and 2011, was $0, $4,195, and $3,302, respectively. | |||||||||||||||||
As of December 31, 2013, there was $0 of total unrecognized estimated compensation cost related to nonvested warrants granted. The total fair value of warrants vested during the years ended December 31, 2013, 2012, and 2011 was $0, $311, and $377, respectively. | |||||||||||||||||
For warrants that are compensatory, the Company records share-based compensation expense related to warrants only for warrants that have vested. The amount of the expense recognized is based on the estimated fair value of the warrants on the vesting date. During the years ended December 31, 2013, 2012 and 2011, the Company recorded equity-based compensation expense related to warrants of $0, $311, and $377, respectively, which is included as a component of selling, general and administrative expense. The net tax benefit recognized on equity-based compensation expense related to warrants for the year ended December 31, 2013, 2012 and 2011 was $0, $119, and $144, respectively. The tax benefit realized from compensatory warrants exercised for the years ended December 31, 2013, 2012 and 2011 was $0, $114, and $0, respectively. | |||||||||||||||||
Restricted Stock | |||||||||||||||||
Restricted stock awards are granted with a fair value equal to the ending stock price on the date of grant. Prior to 2011, the Company had not granted any restricted stock. | |||||||||||||||||
A summary of the status of the Company’s restricted stock as of December 31, 2013, and changes during the year ended December 31, 2013, is presented below: | |||||||||||||||||
Weighted- | |||||||||||||||||
Restricted | Average | ||||||||||||||||
Stock | Grant Date | ||||||||||||||||
Fair Value | |||||||||||||||||
(In thousands) | (Per share) | ||||||||||||||||
Outstanding at December 31, 2012 | 452 | $ | 9.51 | ||||||||||||||
Granted | 491 | 5.95 | |||||||||||||||
Vested | (542 | ) | 8.55 | ||||||||||||||
Forfeited | (44 | ) | 9.14 | ||||||||||||||
Outstanding at December 31, 2013 | 357 | $ | 5.96 | ||||||||||||||
As of December 31, 2013, there was $1,245 of total unrecognized compensation cost related to nonvested restricted stock awards granted under the stock incentive plans. That cost is expected to be recognized over a weighted-average period of approximately 1.0 year. | |||||||||||||||||
The Company recorded share-based compensation expense only for restricted stock that is expected to vest. The estimated fair value of the restricted stock awards is recognized on a straight-line basis over the requisite service period of the award, which is generally the vesting term of the award. During the years ended December 31, 2013, 2012, and 2011, the Company recorded equity-based compensation expense of $3,846, $4,699 and $624, respectively, which is included as a component of selling, general and administrative expense. The net tax benefit recognized on equity-based compensation expense for the years ended December 31, 2013, 2012 and 2011, was $1,458, $1,809 and $236, respectively. The tax benefit realized from vested restricted stock for the years ended December 31, 2013, 2012, and 2011, was $1,042, $1,169 and $0, respectively. | |||||||||||||||||
Included in the 2011 grants of restricted stock were 124 shares issued to an employee by the Company subject to the employee’s continued employment. These shares vested quarterly over a two year vesting term and were expensed on a straight-line basis over the two-year vesting term. In connection with the issuance of 124 shares of restricted stock, the Company issued the employee an additional 90 shares of common stock with a fair value of $899 as consideration in full satisfaction of current and future royalties under a prior intellectual property agreement primarily related to the ZAGGmate. The portion of the consideration related to current royalties was $336 and was included as a component of cost of sales in the consolidated statement of operations in 2011. The remaining $563 portion of the consideration was capitalized as it represents a pre-payment of future royalties and will be amortized on an accelerated basis, consistent with the expected underlying cash flows of the intellectual property, over a seven year life. This capitalized amount is included as a component of intangible assets in the consolidated balance sheet. | |||||||||||||||||
During the third quarter of 2012, the Company incurred an incremental charge of $345 that was the direct result of the Separation Agreement. In accordance with the terms of the Separation Agreement, Mr. Pedersen’s 127 then unvested stock options became fully vested on August 17, 2013. However, under US GAAP, the expense associated with these options was accelerated as it was determined that the service to be performed by Mr. Pedersen was not considered to be substantive. | |||||||||||||||||
During the year ended December 31, 2012, certain ZAGG employees received grants of restricted stock and elected to file an Internal Revenue Code Section 83(b) election and thereby elected to receive a net amount of shares in exchange for the Company incurring the tax liability for the grant date fair value of the award. In addition, certain ZAGG employees elected to receive a net amount of shares upon the vesting of a restricted stock grant in exchange for the Company incurring the tax liability for the fair value of the award on the vest date. This resulted in the Company recording $508 in compensation expense, with the offset being originally recorded to accrued wages and wage related expenses rather than to additional paid-in capital. | |||||||||||||||||
During the year ended December 31, 2013, certain ZAGG employees elected to receive a net amount of shares upon the vesting of a restricted stock grant in exchange for the Company incurring the tax liability for the fair value of the award on the vest date. This resulted in the Company recording $257 in compensation expense, with the offset being originally recorded to accrued wages and wage related expenses rather than to additional paid-in capital. |
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||
FAIR VALUE MEASUREMENTS | ' | ||||||||||||||||
(10) FAIR VALUE MEASUREMENTS | |||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||
At December 31, 2013 and 2012, the Company’s financial instruments included cash and cash equivalents, accounts receivable, accounts payable, a note receivable, and a line of credit with Wells Fargo. The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable approximates fair value due to the short-term maturities of these financial instruments. The carrying value of the debt balances approximate fair value because the variable interest rates reflect current market rates. | |||||||||||||||||
In addition, as discussed in Note 11, management records an impairment on the note receivable if the fair value of the underlying collateral is less than the carrying amount. Management determined the fair value of assets that collateralize the note receivable, which includes real property, interests in entities that own real property, and 80 shares of the Company’s stock that carry a restrictive legend until two months after the note receivable is paid in full. Management determined that the fair value of the collateral exceeded the carrying value of the note receivable at December 31, 2013. | |||||||||||||||||
Fair Value Measurements | |||||||||||||||||
The Company measures at fair value certain financial and non-financial assets by using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price, based on the highest and best use of the asset or liability. The levels of the fair value hierarchy are: | |||||||||||||||||
Level 1 — Quoted market prices in active markets for identical assets or liabilities; | |||||||||||||||||
Level 2 — Significant other observable inputs (e.g., quoted prices for similar items in active markets, quoted prices for identical or similar items in markets that are not active, inputs other than quoted prices that are observable such as interest rate and yield curves, and market-corroborated inputs); and | |||||||||||||||||
Level 3 — Unobservable inputs in which there is little or no market data, which require the reporting unit to develop its own assumptions. | |||||||||||||||||
At December 31, 2013 and 2012, the following assets and liabilities were measured at fair value on a recurring basis using the level of inputs shown (in thousands): | |||||||||||||||||
Fair Value Measurements Using: | |||||||||||||||||
31-Dec-13 | Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | ||||||||||||||
Money market funds included in cash equivalents | $ | 163 | $ | 163 | — | — | |||||||||||
Fair Value Measurements Using: | |||||||||||||||||
31-Dec-12 | Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | ||||||||||||||
Money market funds included in cash equivalents | $ | 452 | $ | 452 | — | — | |||||||||||
Non-Recurring Fair Value Measurements | |||||||||||||||||
The Company also measures the fair value of certain assets on a non-recurring basis, generally quarterly, annually or when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. These assets include goodwill, intangible assets, property and equipment, asset purchase credits, and collateral securing the note receivable. | |||||||||||||||||
The following tables presents assets held as of December 31, 2013 and 2012, measured at fair value on a non-recurring basis using the level of inputs shown at the time of impairment (in thousands). | |||||||||||||||||
Fair Value Measurements Using: | |||||||||||||||||
31-Dec-13 | Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | ||||||||||||||
Goodwill | $ | — | — | — | $ | — | |||||||||||
iFrogz trademark | $ | 7,038 | — | — | $ | 7,038 | |||||||||||
As discussed in Note 7, at December 31, 2013, management performed an impairment analysis over each asset and ultimately recorded an impairment of goodwill of $1,484 and an impairment of the iFrogz trademark of $9,762. Thus, the balances in the table above reflect the fair value at December 31, 2013. The fair value of goodwill and the iFrogz trademark were determined using various valuation methods, including the income and market approaches. Under the income approach, the estimate of the present value of expected future cash flows was based on discount rates which incorporate a risk premium to take into account the risks inherent in those expected cash flows. The expected cash flows were estimated using available historical operating data projected into the future based on the Company’s current expectations. Various market approaches were utilized to determine appropriate royalty rates applicable to the valuation of the iFrogz trademark, to determine appropriate comparable company market multiples to estimate the value of the ZAGG Domestic reporting unit, and to estimate the overall value of the consolidated entity. | |||||||||||||||||
Fair Value Measurements Using: | |||||||||||||||||
31-Dec-12 | Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | ||||||||||||||
Goodwill | $ | 1,484 | — | — | $ | 1,484 | |||||||||||
EarPollution trademark | $ | 2,383 | — | — | $ | 2,383 | |||||||||||
As discussed in Note 7, at December 31, 2012, management performed an impairment analysis over each asset and ultimately recorded an impairment of goodwill of $5,441 and an impairment of the EarPollution trademark of $5,917. Thus, the balances in the table above reflect the fair value at December 31, 2012. The fair value of goodwill and the EarPollution trademark were determined using various valuation methods, including the income and market approaches. Under the income approach, the estimate of the present value of expected future cash flows was based on discount rates which incorporate a risk premium to take into account the risks inherent in those expected cash flows. The expected cash flows were estimated using available historical operating data projected into the future based on the Company’s current expectations. Various market approaches were utilized to determine appropriate royalty rates applicable to the valuation of the EarPollution trademark, to determine appropriate comparable company market multiples to estimate the value of the iFrogz reporting unit, and to estimate the overall value of the consolidated entity. | |||||||||||||||||
Fair Value Measurements Using: | |||||||||||||||||
31-Dec-11 | Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | ||||||||||||||
Note receivable | $ | 1,915 | $ | 566 | $ | 1,089 | $ | 260 | |||||||||
In 2011, the note receivable (discussed in Note 11) was recorded at the fair value of the underlying collateral. Management considered the 80 shares of ZAGG common stock to be a Level 1 asset as quoted market prices exist. The real estate holdings were considered Level 2 assets as significant observable inputs exist for similar items in active markets. The investments in real estate companies, and private company preferred stock and warrants were considered Level 3 assets as the value was determined based on unobservable inputs. | |||||||||||||||||
The fair value of the real estate companies was determined using the market approach and the key inputs were comparable properties and investments. The fair value of the private company preferred stock was determined using various valuation methods, including the income and market approaches. Under the income approach, the estimate of the present value of expected future cash flows was based on discount rates which incorporate a risk premium to take into account the risks inherent in those expected cash flows. The expected cash flows were estimated using available historical operating data projected into the future based on the Company’s current expectations. The market approach was utilized to determine appropriate comparable company market multiples to estimate the value of the entity and the Company’s investment in preferred stock. The fair value of the warrants to purchase private company preferred stock were calculated using the Black-Scholes option pricing model whereby estimates of volatility, the private company’s preferred stock value, and the risk-free rate were key inputs. | |||||||||||||||||
The Company recorded impairment charges of $1,489 during the year ended December 31, 2011, related to the note receivable and the underlying collateral assets held as of December 31, 2011, measured at fair value on a non-recurring basis. Level 3 assets comprise $125 of the impairment charge. These impairment charges were recorded as a component of selling, general and administrative expenses in the 2011 consolidated statement of operations. |
NOTE_RECEIVABLE
NOTE RECEIVABLE | 12 Months Ended | |
Dec. 31, 2013 | ||
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | ' | |
NOTE RECEIVABLE | ' | |
(11) NOTE RECEIVABLE | ||
In June 2008, Lorence Harmer became a member of the Company’s board of directors and in December 2009, was appointed as the chairman of the Audit Committee. Mr. Harmer introduced the Company to a consumer electronics product, which became known as the ZAGGbox. The ZAGGbox was intended to aggregate digital content such as music, pictures, videos, and movies into a single location so that users could share the content with most other networked media players, including mobile devices. After investigating the market opportunity for the ZAGGbox, the Company determined in June 2009 that it wished to obtain certain rights for the development and sale of the ZAGGbox in North America. The Company entered into negotiations with Teleportall, LLC (“Teleportall”), the owner of the technology used in the ZAGGbox, regarding production and distribution of the ZAGGbox. On June 17, 2009, the Company issued its initial purchase order for ZAGGbox units in the amount of $3,500 and advanced to Teleportall a total of $1,153 representing a $200 non-recurring engineering (NRE) fee and $953 in payment of 30% of the total purchase price for the units ordered by the Company. Mr. Harmer participated in the negotiations between the Company and Teleportall, and continued to represent the Company throughout 2009 and 2010 concerning the ZAGGbox. In May 2010, the Company entered into a Distribution and License Agreement with Teleportall, which memorialized Teleportall’s agreement to manufacture and deliver ZAGGboxes to the Company and appointed the Company as the exclusive distributor for the ZAGGbox in North American. Additionally, in May 2010, the Company entered into an agreement with Harmer Holdings, LLC (“Holdings”), an affiliate of Mr. Harmer, under which Holdings agreed to repurchase unsold ZAGGboxes under certain circumstances. | ||
Teleportall proceeded to develop the ZAGGbox and provided periodic progress reports to the Company. However, Teleportall did not deliver the product in time for the 2009 Christmas selling season. Subsequently, during the December 1, 2009, meeting of the Board of Directors of the Company, Mr. Harmer disclosed to the other members of the Board that he owned an interest in Teleportall. After a discussion about his financial interest in Teleportall during that meeting, Mr. Harmer stated he was willing to divest himself of any ownership in Teleportall, and the Board of Directors voted unanimously to accept Mr. Harmer’s proposal that he would do so, and assumed thereafter that Mr. Harmer had completed his divestiture. | ||
The development of the product continued in 2010 with the expectation that the product would be delivered in time for the 2010 Christmas selling season. The Company made additional payments for long lead-time parts to Teleportall in the aggregate amount of $2,747. When it became obvious to the Company that the product would not be ready to market and sell during the 2010 Christmas season, the Company commenced discussions to restructure the Distribution and License Agreement with Teleportall. During the course of those discussions, the Company learned in January 2011 that Mr. Harmer did not divest himself of any interest in Teleportall following the December 2009 meeting of the Board of Directors of the Company where he agreed to do so, but retained an indirect ownership interest of 25% in Teleportall as well as other entities potentially affiliated with the ZAGGbox. As a result of the foregoing, the Company entered into an agreement with Teleportall, Mr. Harmer and several entities owned or controlled by Mr. Harmer (the “Harmer Agreement”), dated March 23, 2011, but subject to further negotiations and ratification through April 5, 2011. Pursuant to the Harmer Agreement, the parties agreed to terminate the Distribution and License Agreement on the following terms: | ||
· | Mr. Harmer, Teleportall, and certain of their affiliates delivered a promissory note (the “Note”) dated March 23, 2011, to the Company in the original principal amount of $4,126 which accrues interest at the rate of LIBOR plus 4% per annum (adjusted quarterly) payable as follows: (i) interest only payments (a) on September 23, 2011, and (b) thereafter on or before the last day of each calendar quarter, (ii) 50% of the net profits of each ZAGGbox sale by Teleportall and its affiliates to be applied, first, to accrued interest and, second, to the principal balance of the Note, and (iii) the unpaid balance of principal and interest due in full on March 23, 2013. The principal amount of the Note is equal to the aggregate amount of the payments made by the Company to Teleportall plus the internal cost of the ZAGGbox project incurred by the Company. The Note is secured by certain real property, interests in entities that own real property and restricted and free-trading securities. | |
· | Teleportall and the Company entered into a License Agreement on March 23, 2011 under which the Company licensed to Teleportall the use of certain ZAGG names and trademarks to sell and distribute the ZAGGbox product. Teleportall agreed to pay ZAGG a 10% royalty on net sales of ZAGGboxes per calendar quarter as a license fee. | |
· | Teleportall and ZAGG entered into a non-exclusive, two year Commission Agreement on March 23, 2011, under which Teleportall could make introductions of many ZAGG products in all countries where ZAGG did not then have exclusive dealing agreements in respect of the marketing, distribution or sale of its products. The Commission Agreement provided that (a) it would automatically terminate concurrent with any uncured default under the Note, and (b) the term could be extended for an additional time period on reasonable terms if Teleportall’s introductions during the initial two-year term resulted in the purchase of no less than $25,000 of ZAGG products during the initial term. Payment terms of the Commission Agreement are as follows: | |
· | 10.0% commission payments on orders received by the Company from retailers and distributors first introduced to the Company by Teleportall during the first 60 days after the introduction is made (the “Load-in Period”) to be split 50/50 between cash to Teleportall and principal payments on the Note. However, all commission payments will be paid to ZAGG if Teleportall is in breach of the terms of the Note or any other agreements between the parties; | |
· | 3.0% commission on all orders within the first 24 months after the Load-in Period, and 2.0% thereafter, from retailers and distributors first introduced to the Company as described under the terms set forth in the preceding bullet point. The 3.0% and 2.0% commissions will be split 50/50 between cash to Teleportall and principal payments on the Note; and | |
· | 3.0% commission on all orders generated in countries where Teleportall is paid commission under the terms of the preceding two bullet points (excluding the United States), regardless of Teleportall’s involvement in ZAGG’s receipt of the order until the first to occur of (i) payment in full of the Note, (ii) termination of the Commission Agreement or (iii) 24 months after the applicable Load-in Period. | |
No revenue has been recognized from Teleportall. | ||
As part of the Harmer Agreement, the Company modified a previously granted stock option award to Mr. Harmer, which resulted in a charge of $1,560 that was recorded in the second quarter of 2011. The charge was recorded in the second quarter of 2011 due to further negotiations and ratification on April 5, 2011. The further negotiations concerned the restricted legend placed on 80 shares of stock subject to repayment of the Note. | ||
The Note was originally accounted for under the cost recovery method and was originally included in the consolidated balance sheet at $3,900 which was the value of the ZAGGbox inventory advances. The original face value of the Note of $4,126 was for reimbursement of the inventory advances and other costs associated with the ZAGGbox and approximated fair value at March 23, 2011, as the variable interest rate on the Note approximated market rates. | ||
On September 20, 2011, and prior to the due date of the first interest-only payment due on the Note, Mr. Harmer and two of his affiliates, Holdings and Teleportall, filed a lawsuit in Utah state court against the Company, Robert G. Pedersen, II (ZAGG’s now-former CEO), Brandon T. O’Brien (ZAGG’s CFO) and KPMG LLP (ZAGG’s independent registered public accounting firm). KPMG and Messrs. Pedersen and O’Brien were subsequently dismissed from the lawsuit, as well as the plaintiff’s causes of action against the Company. In their lawsuit, the plaintiffs allege that the defendants defamed Mr. Harmer, breached the Harmer Agreement and interfered with other rights of the plaintiffs. The Company has responded to the plaintiffs’ claims, denying all of the material allegations made by the plaintiffs. The Company believes the plaintiffs’ claims to be without merit and intends to vigorously defend against them. | ||
Subsequently, Mr. Harmer failed to make the required interest-only payment to the Company due on September 23, 2011. Mr. Harmer failed to cure the default and ZAGG commenced foreclosure on the collateral securing the loan, which consists of real property, interests in entities that own real property, and restricted and free-trading securities, which included 45 shares of ZAGG common stock. In addition to the collateral, Mr. Harmer had also agreed that he would not sell 80 shares of ZAGG common stock until two months after the Note was paid in full. Given the Note is full recourse, and the 80 shares have a restrictive legend associated with repayment of the Note, the Company believes it can recover the 80 shares in partial payment of the Note balance. | ||
Following Mr. Harmer’s default on the loan, management determined that it was probable that the Company would be unable to collect all amounts due from Mr. Harmer according to the terms of the Note. As the Note became collateral-dependent upon Mr. Harmer’s default, management engaged various third-party certified valuation specialists to assist management in its determination of the fair value of the collateral and whether it is sufficient to recover the Note balance. As of December 31, 2013, management determined that the estimated fair value of the underlying collateral was between $1,335 and $1,471. As management has not been able to ascertain whether Mr. Harmer owns 50% or 100% of Holdings, management used the low end of the above range ($1,335) and compared it to the carrying amount of the Note of $1,149. The remaining Note balance of $1,149 appears to be collectable given management’s best estimate of the cash recovery on the collateral securing the Note (fair value, less cost to sell) of $1,335. Additionally, the Company has classified $348 of the Note as an offset to equity, representing the collateral secured by ZAGG common stock, which management has taken steps to recover to repay the Note, as noted below. If a decrease in the amount of the Note classified as an offset to equity occurs as a result of a decrease in the stock price, the Company reclassifies the difference back to the Note to the extent that there is sufficient underlying collateral in excess of the book value. During the years ended December 31, 2013 and 2012, the Company reclassified $218 and $0, respectively, from equity to the Note to reflect the decrease in the Company’s stock price. Ultimately, any recovery in excess of the carrying value of the Note will be recognized when realized. | ||
The Company determined the fair values of the collateral of the Note, which required estimates and assumptions. Management determined the value of the 80 shares of ZAGG common stock held by Mr. Harmer based on quoted market prices. The real estate holdings were valued primarily based on the sales comparison approach as sales of comparable properties were utilized. The investments in real estate companies were valued utilizing comparable market sales, a discounted cash flow analysis, and other valuation methodologies management deemed to be appropriate. | ||
Since the Note became collateral dependent in October 2011, management has (1) foreclosed and sold 45 shares of ZAGG common stock for $496 (December 2011); (2) foreclosed on real property valued at $250 (January 2012); and (3) foreclosed on stock and warrants in a private company of $516 (May 2012). These foreclosures were recorded as a reduction to the Note in the period in which the foreclosure occurred. Management continues to actively pursue the foreclosure of all remaining collateral. | ||
At December 31, 2013, the total unpaid principle balance, including accrued interest, late fees and costs incurred in collection, totaled $4,202. |
DEBT_AND_LETTERS_OF_CREDIT
DEBT AND LETTERS OF CREDIT | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Debt and Letters of Credit [Abstract] | ' | ||||
DEBT AND LETTERS OF CREDIT | ' | ||||
(12) DEBT AND LETTERS OF CREDIT | |||||
Wells Fargo Revolving Line of Credit Facility | |||||
On December 20, 2013, the Company and Wells Fargo, entered into the First Amendment to Credit Agreement (“Amendment”), which modifies the original Credit Agreement (the “Credit Agreement”) entered into between the Company and Wells Fargo on December 7, 2012. | |||||
The Amendment retains the $60,000 revolving line of credit facility (“Line of Credit”) and extends the maturity date from December 1, 2014 to December 1, 2015. At the time of the Amendment, the $18,000 outstanding on the original $24,000 term loan was paid in full utilizing proceeds from the Line of Credit. In addition, the Line of Credit includes a letter of credit sub-feature that allows the Company to issue standby commercial letters of credit against the Line of Credit, not to exceed at any time an aggregate of $5.0 million. During 2013 and 2012, the Company has not issued any standby commercial letters of credit. | |||||
As consideration for entering into the Amendment, the Company agreed to pay to Wells Fargo an amendment fee of $30 as well as reasonable legal and collateral examination fees. | |||||
Borrowings and repayments under the Line of Credit may occur from time to time in the Company’s ordinary course of business through December 1, 2015. Any outstanding borrowings under the Line of Credit mature and are due on December 1, 2015. | |||||
The outstanding principal balance under the Line of Credit bears interest at a fluctuating rate per annum determined to be the sum of the (1) LIBOR margin established under the Credit Agreement (with the initial LIBOR margin being set at 1.25%) and (2) Daily Three Month LIBOR (as defined in the Credit Agreement) in effect from time to time. Each change in the rate of interest will become effective on each business day on which a change in Daily Three Month LIBOR is announced by Wells Fargo. | |||||
Pursuant to the terms of the Amendment, Wells Fargo will adjust the LIBOR margin used to determine the rate of interest under the Line of Credit on a quarterly basis, commencing with the Company’s fiscal quarter ending December 31, 2013. The applicable Libor margin is calculated based on the Company's ratio of Total Liabilities to Tangible Net Worth (as these terms are defined in the Credit Agreement) in accordance with the following table: | |||||
Total Liabilities to Tangible Net Worth | Applicable LIBOR Margin | ||||
1.00 or greater | 1.25 | % | |||
.65 or greater, but less than 1.00 | 1 | % | |||
Less than .65 | 0.75 | % | |||
Under the Line of Credit, each such adjustment will be effective on the first business day of the Company’s fiscal quarter following the quarter during which Wells Fargo receives and reviews the Company’s most current fiscal quarter-end financial statements in accordance with the requirements established in the Credit Agreement. | |||||
In addition, under the Amendment the Company agreed to pay Wells Fargo a quarterly fee based on the average unused amount of the Line of Credit depending on the Company’s Leverage Ratio (which term is defined in the Credit Agreement as Total Liabilities divided by Tangible Net Worth) based on the following table: | |||||
Leverage Ratio | Applicable Unused Commitment Fee | ||||
(per annum) | |||||
1.00 or greater | 0.35 | % | |||
.65 or greater, but less than 1.0 0 | 0.25 | % | |||
Less than .65 | 0.15 | % | |||
For the years ended December 31, 2013 and 2012, $73 and $4, respectively, in unused line fees had been incurred and was included as a component of interest expense in the consolidated statement of operations. | |||||
At December 31, 2013, the weighted average interest rate on all outstanding borrowings under the Line of Credit was 1.00%. At December 31, 2012, the weighted average interest rate on all outstanding borrowings under the Line of Credit and Term Loan was 1.63%. At December 31, 2013 and 2012, the effective interest rate was 1.11% and 2.31%, respectively. | |||||
The Company originally incurred and capitalized $238 of direct costs related to the establishment of the Credit Agreement with Wells Fargo. For the years ended December 31, 2013 and 2012, the Company amortized $120 and $8, respectively of these loan costs, which is included as a component of interest expense in the consolidated statement of operations. In conjunction with the closing of the Amendment, the Company incurred $43 in additional direct costs related to the issuance of the Amendment because the borrowing capacity was expanded and wrote-off $27 in previously capitalized costs related to the Term Loan. The write-off of these costs was recorded as a component of interest expense. | |||||
The Company amortizes these deferred loan costs under the effective interest rate method. The carrying value of deferred loan costs at December 31, 2013 and 2012, was $126 and $230, respectively, and is included as a component of noncurrent other assets in the consolidated balance sheet. | |||||
Attached to the Credit Agreement are a number of financial and non-financial debt covenants. At December 31, 2013, the Company was in compliance with all covenants associated with the Credit Agreement. | |||||
Mandatory payments under the Credit Agreement are presented in the following table: | |||||
Mandatory | |||||
Payments | |||||
2014 | $ | — | |||
2015 | 17,543 | ||||
Total | $ | 17,543 | |||
PNC & Cerberus Term Loan and Revolving Credit Facility | |||||
On June 21, 2011, and in conjunction with the acquisition of iFrogz, the Company entered into a financing agreement (the “Financing Agreement”) led by Cerberus Business Finance, LLC (“Cerberus”) and PNC Bank National Association (“PNC”), which was acting as the administrative bank. The Financing Agreement consisted of a $45,000 term loan (“Cerberus Term Loan”), a $45,000 revolving credit facility (“Revolving Credit Facility”), and a $5,000 letter of credit facility, which was a subset of the $45,000 Revolving Credit Facility. The Company’s obligations under the Financing Agreement were secured by all or substantially all of the Company’s assets. The Cerberus Term Loan matured on June 20, 2016, and the Revolving Credit Facility and letters of credit matured on June 20, 2014. | |||||
At December 31, 2011, the weighted average interest rate on all outstanding borrowings was 7.25%. At December 31, 2011, the effective interest rate was 8.02%. | |||||
There were no scheduled payments on either the Cerberus Term Loan or Revolving Credit Facility prior to maturity, though the Company made a $4,000 payment on the Cerberus Term Loan and a $23,000 payment on the Revolving Credit Facility during the first quarter of 2012. The Financing Agreement called for prepayment of the Cerberus Term Loan if certain conditions are met. The prepayment requirement commenced with the fiscal year ended December 31, 2011, and was calculated based on a percentage of “excess cash flow” as defined in the Financing Agreement. Payment was required to be made within ten days of issuing the year-end consolidated financial statements. Based on projections at December 31, 2011, the Company estimated that a prepayment of $2,372 would be required to be made during March 2012. This amount was classified as current in the consolidated balance sheet, while the remaining Cerberus Term Loan balance and Revolving Credit Facility balance was classified as noncurrent. | |||||
Starting July 1, 2011, the Company began paying a commitment fee of 0.375% on the unused portion of the borrowing capacity under the Revolving Credit Facility based on the average principal amount outstanding for the month compared to $45,000. For the years ended December 31, 2012 and 2011, the Company incurred $133 and $46, respectively, in commitment fees, which is included as a component of interest expense in the consolidated statement of operations. | |||||
The Company incurred and capitalized $2,538 of direct costs related to the issuance of the Cerberus Term Loan and Revolving Credit Facility. Of the total amount incurred, $1,699 was directly related to the Cerberus Term Loan and $839 was directly related to the Revolving Credit Facility. The Company amortized the deferred loan costs on the Cerberus Term Loan on the effective interest rate method and the deferred loan costs on the Revolving Credit Facility on a straight-line basis over the respective terms of the loan: the Term Loan was being amortized through June 20, 2016, and the Revolving Credit Facility through June 20, 2014. For the years ended December 31, 2012 and 2011, the Company amortized $568 and $329, respectively, of these loan costs, which is included as a component of interest expense in the consolidated statement of operations. In addition, during the year ended December 31, 2012, the Company recorded additional amortization of $132 through interest expense due to the $4,000 payment on the Term Loan prior to maturity. | |||||
As discussed above, on December 7, 2012, the Company paid off the entire outstanding balance on the Cerberus Term Loan and Revolving Credit Facility, and the Financing Agreement with PNC and Cerberus was terminated. As this agreement was terminated, the Company wrote-off the remaining $1,509 balance of deferred loan costs during the fourth quarter of 2012, which is included as a component of interest expense on the consolidated statement of operations. In addition, the Company incurred a charge of $430 paid to PNC and Cerberus to terminate the credit agreement when the Company refinanced with Wells Fargo, which is classified as a component of interest expense in the consolidated statement of operations. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and Contingencies [Abstract] | ' | ||||
COMMITMENTS AND CONTINGENCIES | ' | ||||
(13) – COMMITMENTS AND CONTINGENCIES | |||||
Operating leases | |||||
The Company leases office and warehouse space, office equipment, and mall cart locations under operating leases that expire through 2017. Future minimum rental payments required under the operating leases at December 31, 2013 are as follows: | |||||
2014 | $ | 1,121 | |||
2015 | 778 | ||||
2016 | 696 | ||||
2017 | 302 | ||||
Thereafter | — | ||||
Total | $ | 2,897 | |||
For the years ended December 31, 2013, 2012 and 2011, rent expense was $1,564, $1,615 and $1,002, respectively. Rent expense is recognized on a basis which approximates straight line over the lease term. Rent expense for the years ended December 31, 2013, 2012, and 2011 was net of sublease income of $996, $751, and $0 respectively. | |||||
Commercial Litigation | |||||
Lorence A. Harmer, et al v ZAGG Inc et al, Third Judicial District Court, Salt Lake County, State of Utah, Civil No. 110917687. On September 20, 2011, Lorence A. Harmer, a former director of ZAGG and two of his affiliates, Harmer Holdings, LLC, and Teleportall, LLC, filed a lawsuit against the Company, Robert G. Pedersen II, Brandon T. O’Brien, and KPMG LLP. KPMG was dismissed from the lawsuit in January 2012. The plaintiffs allege that the defendants defamed Mr. Harmer, breached a Settlement Agreement and other agreements between the plaintiffs (alleging claims for breach of contract, breach of the covenant of good faith, and fair dealing) and the Company, and interfered with other rights of the plaintiffs. The defendants denied all of the material allegations made by the plaintiffs. On October 29, 2012, the Company filed a Counterclaim and Third-Party Complaint against Harmer, Holdings, Teleportall and third-party Global Industrial Services Limited asserting claims for breach of contract, deficiency, indemnity and attorneys’ fees, breach of the implied covenant of good faith and fair dealing, quasi contract, unjust enrichment, quantum meruit and declaratory judgment. On June 10, 2013, the court dismissed the plaintiffs’ claims for defamation, negligence, tortious interference, and interference with prospective economic relations and all claims against Mr. Pedersen and Mr. O’Brien. The Company believes the plaintiffs’ remaining claims of breach of contract, breach of the covenant of good faith and fair dealing, and declaratory relief to be without merit and intends to continue to vigorously defend against them. The plaintiffs have not yet made a specific damages claim. | |||||
ZAGG Inc v. Joseph Ramelli, Third Judicial District Court, Salt Lake County, State of Utah, Civil No. 120903188. On May 10, 2012, ZAGG filed a lawsuit in Utah State Court against Joseph Ramelli (“Ramelli”), alleging causes of action for defamation and false light based on Ramelli’s authoring and causing to be published articles relating to ZAGG that contain false and defamatory statements. On October 17, 2013, ZAGG and Ramelli entered into a settlement agreement of ZAGG’s claims in the litigation. In the settlement agreement, Ramelli covenanted to never again make any comments whatsoever about ZAGG, or any person, entity, product or practice affiliated with ZAGG, and Ramelli provided a confession of judgment that can be enforced by ZAGG should Ramelli fail to perform any of his covenants under the agreement. Also, ZAGG and Ramelli exchanged mutual general releases. On October 22, 2013, the court entered an order dismissing the litigation. | |||||
Patent/Trademark Litigation | |||||
ZAGG Intellectual Property Holding Co. Inc. v. NLU Products et al, U.S. District Court, District of Utah, 2:11-cv-00517. On June 7, 2011, the Company filed a patent infringement lawsuit against NLU Products, LLC; Wrapsol, LLC; XO Skins, LLC; Fusion of Ideas, Inc.; Clear-Coat, LLC; Case-Ari, LLC; United SGP Corp.; Stealth Guards; Vituorsity Products, LLC; Skinomi LLC; Cellairis; Best Skins Ever; Headco, LLC; and Ghost Armour, LLC that seeks to enforce rights under United States Patent No. 7,957,524. The defendants in this case have raised defenses and, in some cases, asserted counterclaims against the Company, that seek declarations of unenforceability or non-infringement of the patent. These counterclaims do not assert any claims for affirmative relief, including claims for damages, against the Company, apart from a request for an award of costs and attorneys’ fees to the prevailing party. NLU Products, LLC; Wrapsol, LLC; XO Skins, LLC; Fusion of Ideas, Inc.; Clear-Coat, LLC; Case-Ari, LLC; United SGP Corp.; Stealth Guards; and Vituorsity Products, LLC have settled with the Company. Litigation of this action was stayed pending a reexamination of United States Patent No. 7,957,524 by the United States Patent and Trademark Office. The reexamination led to amendments to the claims of the patent, and the United States Patent and Trademark Office issued a Reexamination Certificate. In the opinion of management, the ultimate disposition of these patent infringement claims, including disposition of the counterclaims, will not have a material adverse effect on the Company’s consolidated financial position, results of operations, or liquidity. | |||||
ZAGG v. TrekStor, Regional Court, Dusseldorf, Germany. In September 2011, the Company brought suit in Dusseldorf, Germany against TrekStor for infringement of ZAGG design registrations for the ZAGGmate keyboard case and for unfair competition. After the Company completed briefing of its claims against TrekStor and presented its case at oral argument, TrekStor filed a separate proceeding alleging that it is the owner of the ZAGGmate keyboard case design. The Company’s action against TrekStor was then stayed pending the resolution of TrekStor’s case against the Company. On July 23, 2013, TrekStor’s claims were dismissed and the Company was awarded its costs in that action. Although that decision has been appealed, the stay on the Company’s action against TrekStor has been lifted, the necessary bond has been posted, and the court will proceed to issue a decision regarding the Company’s claims. In the opinion of management, the ultimate disposition of TrekStor’s appeal will not have a material adverse effect on the Company’s consolidated financial position, results of operations, or liquidity. | |||||
Fuhu Inc. et al v. ZAGG Inc et al, Central District of California, CV 13-06317 PA (SHx). The Company was a defendant in a lawsuit filed on August 28, 2013, (the “Fuhu I Case”) alleging trademark infringement, false designation of origin, trademark dilution, and copyright infringement based on the Company’s identification of the plaintiff’s product on packaging for an accessory designed for the plaintiff’s product. In March 2014, these claims were resolved by payment of an agreed amount to Fuhu and dismissal of the Fuhu I and Fuhu II Cases (see the description immediately below). | |||||
ZAGG Intellectual Property Holding Co. Inc. v. Fuhu Inc., U.S. District Court, District of Utah, 2:13-cv-01105-BSJ. The Company was the plaintiff in patent infringement litigation filed on December 16, 2013, (the “Fuhu II Case”) in Utah that sought to enforce rights under United States Patent No. 8,567,596. Fuhu raised defenses in the Fuhu II Case, but did not advance any counter claims. After the parties provided initial disclosures, in March 2014, these claims were resolved by payment of an agreed amount to ZAGG and dismissal of the Fuhu I and Fuhu II Cases (see also the description immediately above.) | |||||
Class Action Lawsuits | |||||
James H. Apple, et al. v. ZAGG Inc, et al., U.S. District Court, District of Utah, 2:12-cv-00852; Ryan Draayer, et al. v. Zagg Inc, et al., U.S. District Court, District of Utah, 2:12-cv-00859. On September 6 and 10, 2012, two putative class action lawsuits were filed by purported Company shareholders against the Company, Randall Hales, Brandon O’Brien, and Cheryl Larabee, as well as Robert G. Pedersen II, the Company’s former Chairman and CEO, and Edward Ekstrom and Shuichiro Ueyama, former members of the Company’s Board of Directors. These lawsuits were subsequently amended by a complaint filed on May 6, 2013. The plaintiffs seek certification of a class of purchasers of the Company’s stock between October 15, 2010 and August 17, 2012. The plaintiffs claim that as a result of Mr. Pedersen's alleged December 2011 margin account sales, the defendants initiated a succession plan to replace Mr. Pedersen as the Company’s CEO with Mr. Hales, but failed to disclose either the succession plan or Mr. Pedersen's margin account sales, in violation of Sections 10(b), 14(a), and 20(a), and SEC Rules 10b-5 and 14a-9, under the Securities Exchange Act of 1934 (the “Exchange Act”). On March 7, 2013, the U.S. District Court for the District of Utah (the “Court”) consolidated the Apple and Draayer actions and assigned the caption In re: Zagg, Inc. Securities Litigation, and on May 6, 2013, plaintiffs filed a consolidated complaint. On July 5, 2013, the defendants moved to dismiss the consolidated complaint. On February 7, 2014, the Court entered an order granting the Company’s motion to dismiss the consolidated complaint. On February 25, 2014, plaintiffs filed a notice of appeal. | |||||
Arthur Morganstern v. Robert G. Pedersen II et al., Third Judicial District Court, Salt Lake County, State of Utah, Civil No. 120908452; Albert Pikk v. Robert G. Pedersen II et al., U.S. District Court, District of Utah, Case No. 2:12-cv-1188; Rosenberg v. Robert G. Pedersen II et al., U.S. District Court, District of Utah, Case No. 2:12-cv-1216. On December 14, 2012, the first of three shareholder derivative complaints were filed against several of the Company’s current and former officers and directors. These complaints make allegations similar to those presented in the consolidated class action lawsuits, but they also assert various state law causes of action, including claims for breach of fiduciary duty, waste of corporate assets, unjust enrichment, and insider trading. Each of these derivative complaints seek unspecified damages on behalf of the Company, which is named solely as a nominal defendant against whom no recovery is sought. On February 26, 2013, the Court consolidated the Pikk and Rosenberg actions and assigned the caption In re ZAGG Inc. Shareholder Derivative Litigation, and on June 5, 2013, plaintiffs filed a consolidated complaint. The Company has not yet responded to these complaints. | |||||
In the fourth quarter of 2012, the Company received requests to provide documentation and information to the staff of the SEC in connection with a non-public investigation being conducted by the SEC’s Salt Lake City office. The Company believes the investigation includes a review of the facts and circumstances surrounding some of the same issues raised by the plaintiffs in the above lawsuits; specifically, whether the Company failed to disclose Mr. Pedersen's margin account sales or the alleged existence of a plan to have Mr. Hales succeed Mr. Pedersen as the Company’s CEO. The Company responded to these requests and is cooperating fully with the staff. The Company has chosen to disclose this non-public investigation due to the highly public nature of the lawsuits described above, which the Company intends to defend vigorously. | |||||
The Company is not a party to any other litigation or other material claims at this time. While the Company currently believes that the amount of any ultimate potential loss for known matters would not be material to the Company’s financial condition, the outcome of these actions is inherently difficult to predict. In the event of an adverse outcome, the ultimate potential loss could have a material adverse effect on the Company’s financial condition or results of operations in a particular period. | |||||
The Company establishes reserves when a particular contingency is probable and estimable. Other than those discussed above, the Company has not accrued for any loss at December 31, 2013 in the consolidated financial statements as the Company does not consider a loss to be probable nor estimable. The Company faces contingencies that are reasonably possible to occur; however, the reasonably possible exposure to losses cannot currently be estimated. |
CONCENTRATIONS
CONCENTRATIONS | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Risks and Uncertainties [Abstract] | ' | ||||||||||||
CONCENTRATIONS | ' | ||||||||||||
(14) CONCENTRATIONS | |||||||||||||
Concentration of credit risk | |||||||||||||
Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and accounts receivable. The Company places its cash with high credit quality financial institutions. The Company maintains its cash in bank deposit accounts, which, at times, exceed federally insured limits. The Company has not experienced any losses in such accounts through December 31, 2013. | |||||||||||||
At December 31, 2013 and 2012, approximately 44% and 56%, respectively, of the balance of accounts receivable was due from the Company’s largest customer. In addition at December 31, 2013, the Company’s second largest customer accounted for 14% of the accounts receivable balance. No other customer account balances were more that 10% of accounts receivable at December 31, 2013 or 2012. If one or more of the Company’s significant customers were to become insolvent or were otherwise unable to pay for the products provided, it would have a material adverse effect on the Company’s financial condition and results of operations. | |||||||||||||
Concentration of supplier | |||||||||||||
The Company’s logistics partners arrange for production of its raw materials related to the invisibleSHIELD product line primarily from one source. Management is aware of similar raw materials that would be available from other sources if required and has current plans to immediately engage such resources if necessary. A change in supplier, however, could cause a delay in manufacturing and a possible loss of sales, which could adversely affect operating results. | |||||||||||||
In addition, the Company purchases the majority of its inventory sourced in Asia through one third party sourcing company. Management is aware of other manufacturing sources that it could utilize if there was a disruption in the operations of the third party sourcing Company. A change in the sourcing Company, however, could cause a delay in manufacturing and a possible loss of sales, which could adversely affect operating results. | |||||||||||||
Concentration of sales | |||||||||||||
For the years ended December 31, 2013, 2012, and 2011, one customer accounted for 26%, 32%, and 30%, respectively, of the Company’s sales. In addition, during 2013, 2012, and 2011, a second customer accounted for 18%, 11%, and 11%, respectively, of sales. No other customer account balances were more that 10% of sales. If the Company loses one or more of the Company’s significant customers, it would have a material adverse effect on the Company’s financial condition and results of operations. | |||||||||||||
The percentage of sales by geographic region for the years ended December 31, 2013, 2012 and 2011 was approximately: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
United States | 90 | % | 87 | % | 88 | % | |||||||
Europe | 5 | % | 6 | % | 6 | % | |||||||
Other | 5 | % | 7 | % | 6 | % | |||||||
At December 31, 2013 and 2012, net assets located overseas in Shannon Ireland totaled $8,695 and $4,737, respectively. |
SEGMENT_REPORTING
SEGMENT REPORTING | 12 Months Ended |
Dec. 31, 2013 | |
Segment Reporting [Abstract] | ' |
SEGMENT REPORTING | ' |
(15) SEGMENT REPORTING | |
As of December 31, 2012, the Company reported financial information on the following three reportable segments: ZAGG, iFrogz, and HzO. During the first quarter of 2013, management consolidated a number of ZAGG/iFrogz processes and functions, which resulted in the announcement of the closure of the iFrogz office in Logan, Utah and the lay-off of a number of iFrogz employees during the first quarter of 2013. Ultimately, it was decided that the two offices would be consolidated and that the marketing, product development, product management, customer service, sales, accounting, and IT teams that had previously operated independently, would now be combined. | |
In addition, as the Company has continued to evolve as a mobile device accessories company, financial information reviewed and evaluated by the chief operating decision maker is at the consolidated company level, including budget and sales reviews. Further, due to the decrease in size and significance of the HzO investment ($0 balance at December 31, 2013), management determined it to be a corporate asset rather than a separate operating segment. | |
Ultimately, management concludes that the Company should be considered a single reportable segment. |
QUARTERLY_FINANCIAL_DATA_UNAUD
QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ' | ||||||||||||||||||||
QUARTERLY FINANCIAL DATA (UNAUDITED) | ' | ||||||||||||||||||||
(16) – QUARTERLY FINANCIAL DATA (UNAUDITED) | |||||||||||||||||||||
Quarterly financial information is presented in the following summary: | |||||||||||||||||||||
Year ended December 31, 2013 | |||||||||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Year | |||||||||||||||||
Net sales | $ | 51,471 | $ | 51,198 | $ | 49,869 | $ | 66,818 | $ | 219,356 | |||||||||||
Operating income (loss) | 2,007 | 5,416 | 6,436 | (2,912 | ) | 10,946 | |||||||||||||||
Net income (loss) | 876 | 2,774 | 3,184 | (2,044 | ) | 4,790 | |||||||||||||||
Earnings (loss) per share attributable to stockholders: (1) | |||||||||||||||||||||
Basic | $ | 0.03 | $ | 0.09 | $ | 0.1 | $ | (0.07 | ) | $ | 0.16 | ||||||||||
Diluted | 0.03 | 0.09 | 0.1 | (0.07 | ) | 0.15 | |||||||||||||||
Weighted average common shares: | |||||||||||||||||||||
Basic | 31,052 | 30,739 | 30,926 | 30,883 | 30,900 | ||||||||||||||||
Diluted | 31,726 | 31,218 | 31,466 | 30,883 | 31,459 | ||||||||||||||||
Year ended December 31, 2012 | |||||||||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Year | |||||||||||||||||
Net sales | $ | 55,480 | $ | 61,636 | $ | 59,827 | $ | 87,482 | $ | 264,425 | |||||||||||
Operating income | 10,228 | 10,885 | 7,118 | 5,260 | 33,491 | ||||||||||||||||
Net income | 5,112 | 5,812 | 3,388 | 193 | 14,505 | ||||||||||||||||
Earnings per share attributable to stockholders: (1) | |||||||||||||||||||||
Basic | $ | 0.17 | $ | 0.19 | $ | 0.11 | $ | 0.01 | $ | 0.48 | |||||||||||
Diluted | 0.16 | 0.18 | 0.11 | 0.01 | 0.46 | ||||||||||||||||
Weighted average common shares: | |||||||||||||||||||||
Basic | 29,924 | 30,277 | 30,351 | 30,797 | 30,339 | ||||||||||||||||
Diluted | 31,417 | 31,738 | 31,734 | 31,735 | 31,656 | ||||||||||||||||
-1 | The earnings per share calculations for each of the quarters were based upon the weighted average number of shares outstanding during each period, and the sum of the quarters may not be equal to the full year earnings per common share amounts. |
DEFINED_CONTRIBUTION_PLAN
DEFINED CONTRIBUTION PLAN | 12 Months Ended |
Dec. 31, 2013 | |
Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract] | ' |
DEFINED CONTRIBUTION PLAN | ' |
(17) DEFINED CONTRIBUTION PLAN | |
The Company offers a 401(k) for full-time employees that have been with the Company for over 90 days. The Company matches participant contributions of 100% up to 3% of an employees’ salary and 50% of contributions from 4-5% of an employees’ salary. Costs recognized for the year ended December 31, 2013, 2012, and 2011 related to the employer 401(k) match totaled $263, $153, and $267, respectively. |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2013 | |
Subsequent Events [Abstract] | ' |
SUBSEQUENT EVENTS | ' |
(18) SUBSEQUENT EVENTS | |
There were no subsequent events identified that would require disclosure or adjustment to the consolidated financial statements. |
CONSOLIDATED_STATEMENTS_OF_EQU
CONSOLIDATED STATEMENTS OF EQUITY ( (Parentheticals)) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 |
Statement Of Stockholders' Equity [Abstract] | ' |
Treasury stock purchased (in shares) | 1,756 |
ORGANIZATION_AND_SUMMARY_OF_SI1
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Business Description and Basis Of Presentation [Abstract] | ' | ||||||||||||
Use of estimates | ' | ||||||||||||
Use of estimates | |||||||||||||
The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (“US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates include the allowance for doubtful accounts, inventory reserve, sales returns liability, the useful life of property and equipment, the useful life of intangible assets, the recoverability of goodwill and indefinite-lived intangible assets, stock-based compensation, and income taxes. These estimates and assumptions 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 the economic environment, which management believes to be reasonable under the circumstances. Management adjusts such estimates and assumptions when facts and circumstances dictate an adjustment is necessary. | |||||||||||||
Principles of consolidation | ' | ||||||||||||
Principles of consolidation | |||||||||||||
The consolidated financial statements include the accounts of ZAGG Inc and its wholly owned subsidiaries ZAGG International Distribution Limited (“ZAGG International”), Patriot Corporation, ZAGG Intellectual Property Holding Co, Inc., and ZAGG Retail, Inc. All intercompany transactions and balances have been eliminated in consolidation. | |||||||||||||
At December 31, 2010, HzO, a private company engaged in the development of water-blocking technologies for consumer and industrial applications, was consolidated by the Company as a variable interest entity (VIE). On December 22, 2011, HzO entered into an Amended Series B Stock Purchase Agreement with a group of third party investors. ZAGG considered this a reconsideration event and concluded that as of December 22, 2011, HzO should no longer be considered a VIE under authoritative accounting literature, but was considered a voting interest entity. Ultimately, management concluded that HzO should no longer be consolidated into the ZAGG financials as of December 31, 2011. From December 22, 2011 to the fourth quarter of 2013, management accounted for its investment in HzO as an equity method investment. However, during the fourth quarter of 2013, HzO received additional equity financing, in which ZAGG did not participate. As a result of the additional investment, ZAGG’s investment declined below 20% and the investment is now accounted for as a cost method investment. The carrying amount of the investment in HzO is $0 at December 31, 2013. | |||||||||||||
Cash equivalents | ' | ||||||||||||
Cash equivalents | |||||||||||||
The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. Amounts receivable from credit card processors are also considered cash equivalents because they are both short-term and highly liquid in nature and are typically converted to cash within three days of the sales transaction. Amounts receivable from credit card processors at December 31, 2013 and 2012 totaled $19 and $21, respectively. Cash equivalents as of December 31, 2013 and 2012, consisted primarily of money market fund investments and amounts receivable from credit card processors. | |||||||||||||
Fair value measurements | ' | ||||||||||||
Fair value measurements | |||||||||||||
The Company measures at fair value certain financial and non-financial assets by using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price, based on the highest and best use of the asset or liability. The levels of the fair value hierarchy are: | |||||||||||||
Level 1 — Quoted market prices in active markets for identical assets or liabilities; | |||||||||||||
Level 2 — Significant other observable inputs (e.g., quoted prices for similar items in active markets, quoted prices for identical or similar items in markets that are not active, inputs other than quoted prices that are observable such as interest rate and yield curves, and market-corroborated inputs); and | |||||||||||||
Level 3 — Unobservable inputs in which there is little or no market data, which require the reporting unit to develop its own assumptions. | |||||||||||||
Accounts receivable | ' | ||||||||||||
Accounts receivable | |||||||||||||
The Company sells its products to end users through indirect distribution channels and other resellers who are extended credit terms after an analysis of their financial condition and credit worthiness. Credit terms to distributors and resellers, when extended, are based on evaluation of the customers' financial condition. Accounts receivable are recorded at invoiced amounts and do not bear interest. | |||||||||||||
The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of customers to make required payments. Management regularly evaluates the allowance for doubtful accounts considering historical losses adjusted to take into account current market conditions, customers’ financial condition, receivables in dispute, receivables aging, and current payment patterns. Account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Payments subsequently received on written off receivables are credited to bad debt expense in the period of recovery. | |||||||||||||
The following summarizes the activity in the Company’s allowance for doubtful accounts for the years ended December 31, 2012, 2011 and 2010: | |||||||||||||
For the Year Ended December 31, | |||||||||||||
2012 | 2011 | 2010 | |||||||||||
Balance at beginning of year | $ | 2,070 | $ | 904 | $ | 685 | |||||||
Additions charged to expense | 2,101 | 1,657 | 219 | ||||||||||
Write-downs charged against the allowance | (1,197 | ) | (491 | ) | — | ||||||||
Recoveries of amounts previously charged off | — | — | — | ||||||||||
Balance at end of year | $ | 2,974 | $ | 2,070 | $ | 904 | |||||||
Inventories | ' | ||||||||||||
Inventories | |||||||||||||
Inventories, consisting primarily of finished goods and raw materials, are valued at the lower of cost, determined on a first in, first out basis, or market. Management performs periodic assessments to determine the existence of obsolete, slow moving, and non-saleable inventories, and records necessary write downs in cost of sales to reduce such inventories to net realizable value. Once established, the original cost of the inventory less the related inventory write down represents the new cost basis of such products. | |||||||||||||
Property and equipment | ' | ||||||||||||
Property and equipment | |||||||||||||
Property and equipment are recorded at cost. Depreciation expense is computed using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized over the lesser of the useful life of the asset or the term of the lease. | |||||||||||||
Major additions and improvements are capitalized, while costs for minor replacements, maintenance and repairs that do not increase the useful life of an asset are expensed as incurred. Upon retirement or other disposition of property and equipment, the cost and related accumulated depreciation or amortization are removed from the accounts. The resulting gain or loss is reflected in selling, general and administrative expense. | |||||||||||||
Intangibles assets | ' | ||||||||||||
Intangibles assets | |||||||||||||
Intangible assets include internet addresses, patents, intellectual property, and acquired intangibles in connection with the acquisition of iFrogz, which include customer relationships, trademarks, non-compete agreements, and other miscellaneous intangible assets. | |||||||||||||
Definite-lived intangible assets are amortized over their estimated economic lives, using a straight-line or accelerated method consistent with the underlying expected future cash flows related to the specific intangible asset. Amortization expense is recorded within cost of sales or operating expense depending on the underlying intangible assets. | |||||||||||||
The sole indefinite-lived intangible asset at December 31, 2012 was the iFrogz trademark. | |||||||||||||
Impairment of long-lived assets | ' | ||||||||||||
Impairment of long-lived assets | |||||||||||||
Long-lived assets, such as property and equipment, and definite-lived intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, recoverability of long-lived assets is measured by comparison of its carrying amount to the undiscounted cash flows that the asset or asset group is expected to generate over the remaining life in measuring whether the assets are recoverable. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. | |||||||||||||
Impairment of goodwill and indefinite-lived intangible assets | ' | ||||||||||||
Impairment of goodwill and indefinite-lived intangible assets | |||||||||||||
The Company does not amortize goodwill and intangible assets with indefinite useful lives. At least annually and when events and circumstances warrant an evaluation, management performs an impairment assessment of goodwill. This assessment initially permits an entity to make a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the two-step goodwill impairment test. If an entity can support the conclusion that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, it would not need to perform the two-step impairment test for the reporting unit. | |||||||||||||
However, if it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the two step analysis is performed, which incorporates a fair-value based approach. Management determines the fair value of its reporting units based on discounted cash flows and market approach analyses as considered necessary, and consider factors such as a weakened economy, reduced expectations for future cash flows coupled with a decline in the market price of the Company’s stock and market capitalization for a sustained period as indicators for potential goodwill impairment. If the reporting unit’s carrying amount exceeds its estimated fair value, a second step must be performed to measure the amount of the goodwill impairment loss, if any. The second step compares the implied fair value of the reporting unit’s goodwill, determined in the same manner as the amount of goodwill recognized in a business combination, with the carrying amount of such goodwill. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. During the fourth quarter of 2013, management recorded a goodwill impairment of $1,484. During the fourth quarter of 2012, management recorded a goodwill impairment of $5,441. No impairment was recorded in 2011. | |||||||||||||
Indefinite-lived intangible assets are tested for impairment annually, or, more frequently upon the occurrence of a triggering event. Initially, a qualitative analysis is performed to determine whether it is necessary to perform the quantitative impairment test for indefinite-lived intangible assets. A quantitative assessment is only performed if it is determined in the qualitative analysis that it is more likely than not that the asset is impaired. | |||||||||||||
If it is determined in the qualitative analysis that it is more likely than not that the asset is impaired, the Company evaluates the recoverability of an indefinite-lived intangible asset by comparing the indefinite-lived intangible asset’s book value to its estimated fair value. The fair value for indefinite-lived intangible assets is determined by performing cash flow analysis and other market evaluations. If the fair value of the indefinite-lived intangible assets is less than book value, the difference is recognized as an impairment loss. | |||||||||||||
During the fourth quarter of 2013, the Company made a brand strategy decision to place greater emphasis on the promotion of the ZAGG and invisbleSHIELD brands, highlighted by the decision to brand the line of gaming controllers as ZAGG products instead of under the iFrogz brand, which was the original product branding. As a result of this decision, the Company determined that future cash flows under the iFrogz trademark would be less than previously estimated and that the trademark should be considered a definite-lived intangible asset. Management performed an impairment analysis and recorded a non-cash impairment of $9,762 related to the iFrogz trademark at December 31, 2013. As the trademark is now considered a definite-lived intangible, the Company will commence amortizing the remaining trademark balance of $7,038 on an accelerated basis over a ten-year life consistent with the trademark’s projected future cash flows from the trademark. | |||||||||||||
During the fourth quarter of 2012, the Company determined that future cash flows under the EarPollution trademark would be less than previously estimated and that the trademark should be considered a definite-lived intangible asset. Management performed an impairment analysis and recorded a non-cash impairment of $5,917 related to the EarPollution trademark at December 31, 2012. As the trademark was then considered a definite-lived intangible, the Company commenced amortizing the trademark on an accelerated basis over an eight-year life consistent with the trademark’s projected future cash flows from the trademark. | |||||||||||||
No impairments of definite-lived intangibles were recorded in 2011. | |||||||||||||
The Company performs its goodwill and intangible asset impairment tests in the fourth quarter of each fiscal year. The Company established reporting units based on its current reporting structure. For purposes of testing goodwill for impairment, goodwill is assigned to a reporting unit. Prior to performing the 2013 goodwill impairment test, all goodwill was assigned to the ZAGG Domestic reporting unit. | |||||||||||||
Contingencies | ' | ||||||||||||
Contingencies | |||||||||||||
Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. | |||||||||||||
Revenue recognition | ' | ||||||||||||
Revenue recognition | |||||||||||||
The Company records revenue when persuasive evidence of an arrangement exists, product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. The Company’s revenue is derived from sales of its products through its indirect channel, including retailers and distributors; through its direct channel including www.ZAGG.com, www.iFrogz.com, and its corporate-owned and third-party-owned mall kiosks and ZAGG branded stores; and from the fees derived from the sale of exclusive franchise rights related to the kiosk program. For sales of product, its standard shipping terms are FOB shipping point, and the Company records revenue when the product is shipped, net of estimated returns and discounts. For some customers, the contractual shipping terms are FOB destination. For these shipments, the Company records revenue when the product is delivered, net of estimated returns and discounts. For license fees, the Company recognizes revenue on a straight-line basis over the life of the license term. The Company records revenue from royalty agreements in the period in which the royalty is earned. | |||||||||||||
Promotional products given to customers or potential customers are recognized as a cost of sales. Cash incentives provided to customers are recognized as a reduction of the related sale price, and, therefore, are a reduction in sales. | |||||||||||||
Reserve for sales returns and warranty liability | ' | ||||||||||||
Reserve for sales returns and warranty liability | |||||||||||||
For product sales, the Company records revenue, net of estimated returns and discounts, when delivery has occurred, collection of the relevant receivable is probable, persuasive evidence of an arrangement exists and the sales price is fixed or determinable. The Company’s return policy allows end users and retailers rights to return purchased products. In addition, the Company generally provides the ultimate consumer a warranty with each product. Due to the nature of the invisibleSHIELD product line, returns for the invisibleSHIELD are generally not salvageable and are not included in inventory. The Company estimates a reserve for sales returns and warranty and record the estimated reserve amount as a reduction of sales, and as a sales return reserve liability. When product is returned and is expected to be resold, as is the case with returns of keyboard, audio, case, and power products, the reserve is recorded as a reduction of revenues and cost of sales, and as a sales return reserve liability. The sales returns and warranty reserve requires management to make estimates regarding return rates for sales and warranty returns. Historical experience, actual claims, and customer return rights are the key factors used in determining the estimated sales return and warranty reserve. | |||||||||||||
The following summarizes the activity in the Company’s sales return and warranty liability for the years ended December 31, 2013, 2012 and 2011: | |||||||||||||
For the Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Balance at beginning of year | $ | 6,697 | $ | 5,387 | $ | 2,068 | |||||||
iFrogz sales reserve at acquisition | — | — | 524 | ||||||||||
Additions charged to sales | 12,194 | 12,954 | 12,906 | ||||||||||
Sales returns & warranty claims charged against reserve | (11,019 | ) | (11,644 | ) | (10,111 | ) | |||||||
Balance at end of year | $ | 7,872 | $ | 6,697 | $ | 5,387 | |||||||
Income taxes | ' | ||||||||||||
Income taxes | |||||||||||||
The Company recognizes deferred income tax assets or liabilities for expected future tax consequences of events that have been recognized in the financial statements or tax returns. Under this method, deferred income tax assets or liabilities are determined based upon the difference between the financial statement and income tax bases of assets and liabilities using enacted tax rates expected to apply when differences are expected to be settled or realized. Deferred income tax assets are reviewed for recoverability and valuation allowances are provided when it is more likely than not that a deferred tax asset will not be realizable in the future. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. | |||||||||||||
The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records estimated interest and penalties related to unrecognized tax benefits, if any, as a component of income tax provision. | |||||||||||||
The Company has foreign subsidiaries formed or acquired to conduct or support its business outside the United States. The Company does not provide for U.S. income taxes on undistributed earnings for its foreign subsidiaries as the foreign earnings will be permanently reinvested in such foreign jurisdictions. | |||||||||||||
Stock-based compensation | ' | ||||||||||||
Stock-based compensation | |||||||||||||
The Company recognizes stock-based compensation expense in its consolidated financial statements for awards granted to employees and non-employees, which include restricted stock, stock options, and warrants. Equity-classified awards are measured at the grant date fair value of the award. The fair value of restricted stock is measured on the grant date based on the quoted closing market price of the Company’s common stock. The fair value of the stock options is measured on the grant date using the Black-Scholes option pricing model based on the underlying common stock closing price as of the date of grant, the expected term, stock price volatility, and risk-free interest rates. The Company recognizes compensation expense net of estimated forfeitures on a straight-line basis over the requisite service period of the award, which is generally the vesting term of the award. No compensation cost is ultimately recognized for awards for which employees do not render the requisite service and are forfeited. Excess tax benefits of awards that are recognized in equity related to stock option exercises are reflected as financing cash inflows. | |||||||||||||
Advertising and marketing | ' | ||||||||||||
Advertising and marketing | |||||||||||||
General advertising is expensed as incurred. Advertising allowances provided to retailers are recorded as an expense at the time of the related sale if the Company receives an identifiable benefit in exchange for the consideration and has evidence of fair value for the advertising; otherwise, the allowance is recorded as a reduction of revenue. Advertising expenses for the years ended December 31, 2013, 2012 and 2011 were $8,952, $12,495 and $10,246, respectively. | |||||||||||||
Foreign currency translation and transactions | ' | ||||||||||||
Foreign currency translation and transactions | |||||||||||||
The Company’s primary operations are at the parent level which uses the U.S. dollar (USD) as its functional currency. The Euro is the functional currency of the Company’s foreign subsidiaries. Accordingly, assets and liabilities for these subsidiaries are translated into USD using exchange rates in effect at the end of each period. Revenue and expenses for these subsidiaries are translated using rates that approximate those in effect during the period. Gains and losses from these translations are recorded as a component of stockholders’ equity. Gains and losses resulting from foreign currency transactions are included in income as a component of other income and (expense) in the consolidated statements of operations and totaled ($7), ($17) and $60 for the years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||||||
Earnings per share | ' | ||||||||||||
Earnings per share | |||||||||||||
Basic earnings per common share excludes dilution and is computed by dividing net income attributable to stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share reflects the potential dilution that could occur if stock options or other common stock equivalents were exercised or converted into common stock. The dilutive effect of stock options or other common stock equivalents is calculated using the treasury stock method. | |||||||||||||
The following is a reconciliation of the numerator and denominator used to calculate basic earnings per share and diluted earnings per share for the years ended December 31, 2013, 2012 and 2011: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Net income attributable to stockholders | $ | 4,790 | $ | 14,505 | $ | 18,248 | |||||||
Weighted average shares outstanding | 30,900 | 30,339 | 27,133 | ||||||||||
Dilutive effect of stock options, restricted stock, and warrants | 559 | 1,317 | 1,949 | ||||||||||
Diluted shares | 31,459 | 31,656 | 29,082 | ||||||||||
Earnings per share attributable to stockholders: | |||||||||||||
Basic | $ | 0.16 | $ | 0.48 | $ | 0.67 | |||||||
Dilutive | $ | 0.15 | $ | 0.46 | $ | 0.63 | |||||||
For the years ended December 31, 2013, 2012, and 2011, restricted stock, warrants and stock options to purchase 620, 169, and 103 shares of common stock, respectively, were not considered in calculating diluted earnings per share because the warrant or stock option exercise prices or the total expected proceeds under the treasury stock method for the warrants, restricted stock, or stock options was greater than the average market price of common shares during the period and, therefore, the effect would be anti-dilutive. | |||||||||||||
Recent accounting pronouncements | ' | ||||||||||||
Recent accounting pronouncements | |||||||||||||
In November 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. ASU 2013-11 requires an entity to present an unrecognized tax benefit as a reduction of a deferred tax asset for a net operating loss (NOL) carryforward, or similar tax loss or tax credit carryforward, rather than as a liability when (1) the uncertain tax position would reduce the NOL or other carryforward under the tax law of the applicable jurisdiction and (2) the entity intends to use the deferred tax asset for that purpose. The ASU does not require new recurring disclosures. The ASU is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. The Company will implement the provisions of ASU 2011-11 as of January 1, 2014, and is still evaluating the impact on the Company’s financial statements. |
ORGANIZATION_AND_SUMMARY_OF_SI2
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Business Description and Basis Of Presentation [Abstract] | ' | ||||||||||||
Schedule of allowance for doubtful accounts activity | ' | ||||||||||||
For the Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Balance at beginning of year | $ | 2,974 | $ | 2,070 | $ | 904 | |||||||
Additions charged to expense | 1,142 | 2,101 | 1,657 | ||||||||||
Write-offs charged against the allowance | (1,576 | ) | (1,197 | ) | (491 | ) | |||||||
Balance at end of year | $ | 2,540 | $ | 2,974 | $ | 2,070 | |||||||
Schedule of sales return and warranty liability activity | ' | ||||||||||||
The following summarizes the activity in the Company’s sales return and warranty liability for the years ended December 31, 2013, 2012 and 2011: | |||||||||||||
For the Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Balance at beginning of year | $ | 6,697 | $ | 5,387 | $ | 2,068 | |||||||
iFrogz sales reserve at acquisition | — | — | 524 | ||||||||||
Additions charged to sales | 12,194 | 12,954 | 12,906 | ||||||||||
Sales returns & warranty claims charged against reserve | (11,019 | ) | (11,644 | ) | (10,111 | ) | |||||||
Balance at end of year | $ | 7,872 | $ | 6,697 | $ | 5,387 | |||||||
Schedule of reconciliation of the numerator and denominator used to calculate basic earnings per share and diluted earnings per share | ' | ||||||||||||
2013 | 2012 | 2011 | |||||||||||
Net income attributable to stockholders | $ | 4,790 | $ | 14,505 | $ | 18,248 | |||||||
Weighted average shares outstanding | 30,900 | 30,339 | 27,133 | ||||||||||
Dilutive effect of stock options, restricted stock, and warrants | 559 | 1,317 | 1,949 | ||||||||||
Diluted shares | 31,459 | 31,656 | 29,082 | ||||||||||
Earnings per share attributable to stockholders: | |||||||||||||
Basic | $ | 0.16 | $ | 0.48 | $ | 0.67 | |||||||
Dilutive | $ | 0.15 | $ | 0.46 | $ | 0.63 |
ACQUISITION_OF_IFROGZ_Tables
ACQUISITION OF IFROGZ (Tables) | 12 Months Ended | |||||
Dec. 31, 2013 | ||||||
Business Combinations [Abstract] | ' | |||||
Schedule of business acquisitions | ' | |||||
Value of ZAGG shares issued: | ||||||
ZAGG shares issued with 6-month restriction | $ | 23,800 | ||||
ZAGG shares issued with 12-month restriction | 22,400 | |||||
46,200 | ||||||
Cash consideration | 50,000 | |||||
Total | $ | 96,200 | ||||
Schedule of purchase price allocation | ' | |||||
Cash and cash equivalents | $ | 2,469 | ||||
Trade receivables ($5,880 contractual gross receivables) | 5,832 | |||||
Inventories | 14,962 | |||||
Prepaid expenses | 579 | |||||
Property and equipment | 2,078 | |||||
Deposits | 138 | |||||
Definite-lived identifiable intangible assets | 49,900 | |||||
Indefinite-lived identifiable intangible assets | 25,100 | |||||
Goodwill | 6,925 | |||||
Current liabilities | (11,783 | ) | ||||
Total | $ | 96,200 | ||||
Schedule of finite-lived intangible assets acquired as part of business combination | ' | |||||
Intangible asset class | Weighted-average amortization period | |||||
Customer relationships | $ | 41,500 | 8.0 years | |||
Trademarks (indefinite-lived) | 25,100 | Indefinite | ||||
Trademarks (definite-lived) | 3,500 | 9.7 years | ||||
Non-compete agreements | 4,100 | 4.8 years | ||||
Other | 800 | 3.8 years | ||||
Total | $ | 75,000 |
INVENTORIES_Tables
INVENTORIES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Schedule of summary of inventories | ' | ||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Finished goods | $ | 40,992 | $ | 34,690 | |||||
Raw materials | 3,547 | 5,298 | |||||||
Total inventory | $ | 44,539 | $ | 39,988 |
PROPERTY_AND_EQUIPMENT_Tables
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
Property, Plant and Equipment [Abstract] | ' | |||||||||
Schedule of property and equipment | ' | |||||||||
December 31, | ||||||||||
2013 | 2012 | |||||||||
Useful Lives | ||||||||||
Computer equipment and software | 3 to 5 years | $ | 1,519 | $ | 1,343 | |||||
Equipment | 3 to10 years | 5,173 | 2,989 | |||||||
Furniture and fixtures | 7 years | 778 | 735 | |||||||
Automobiles | 5 years | 201 | 265 | |||||||
Leasehold improvements | 1 to 4.75 years | 3,111 | 2,847 | |||||||
10,782 | 8,179 | |||||||||
Less accumulated depreciation | (5,778 | ) | (3,317 | ) | ||||||
Net property and equipment | $ | 5,004 | $ | 4,862 |
GOODWILL_INTANGIBLE_ASSETS_Tab
GOODWILL & INTANGIBLE ASSETS (Tables) | 12 Months Ended | |||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||
Schedule of changes in the carrying amount of goodwill | ' | |||||||||||||||||||||
The changes in the carrying amount of goodwill for the year ended December 31, 2013 and 2012, are as follows: | ||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||
Balance as of January 1 | ||||||||||||||||||||||
Gross goodwill | $ | 6,925 | $ | 6,925 | ||||||||||||||||||
Accumulated impairment losses | (5,441 | ) | — | |||||||||||||||||||
Net goodwill as of January 1 | 1,484 | 6,925 | ||||||||||||||||||||
Goodwill acquired during the year | — | — | ||||||||||||||||||||
Impairment loss | (1,484 | ) | (5,441 | ) | ||||||||||||||||||
Balance as of December 31 | ||||||||||||||||||||||
Gross goodwill | 6,925 | 6,925 | ||||||||||||||||||||
Accumulated impairment losses | (6,925 | ) | (5,441 | ) | ||||||||||||||||||
Net goodwill as of December 31 | $ | — | $ | 1,484 | ||||||||||||||||||
Schedule of definite-lived intangibles | ' | |||||||||||||||||||||
As of December 31, 2013 | ||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Write-off of Fully Amortized Asset | Transfers from Indefinite-life Classification | Net Carrying Amount | Weighted Average Amortization Period | |||||||||||||||||
Customer relationships | $ | 41,500 | $ | (17,537 | ) | $ | — | $ | — | $ | 23,963 | 8.0 years | ||||||||||
Non-compete agreements | 4,100 | (2,169 | ) | — | — | 1,931 | 4.8 years | |||||||||||||||
Other Trademarks | 3,500 | (1,719 | ) | — | — | 1,781 | 9.7 years | |||||||||||||||
iFrogz Trademark | — | — | — | 7,038 | 7,038 | 10.0 years | ||||||||||||||||
EarPollution Trademark | 2,383 | (554 | ) | — | — | 1,829 | 8.0 years | |||||||||||||||
Other | 661 | (487 | ) | (61 | ) | — | 113 | 5.0 years | ||||||||||||||
Acquired technology | 709 | (165 | ) | — | — | 544 | 7.0 years | |||||||||||||||
Internet address | 124 | (66 | ) | — | — | 58 | 10.0 years | |||||||||||||||
Patents | 4,696 | (734 | ) | — | — | 3,962 | 12.5-14.0 years | |||||||||||||||
Total amortizable assets | $ | 57,673 | $ | (23,431 | ) | $ | (61 | ) | $ | 7,038 | $ | 41,219 | 8.4 years | |||||||||
As of December 31, 2012 | ||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Write-off | Transfers from Indefinite-life Classification | Net Carrying Amount | Weighted Average Amortization Period | |||||||||||||||||
Customer relationships | $ | 41,500 | $ | (10,291 | ) | $ | — | $ | — | $ | 31,209 | 8.0 years | ||||||||||
Non-compete agreements | 4,100 | (1,389 | ) | — | — | 2,711 | 4.8 years | |||||||||||||||
Other Trademarks | 3,500 | (1,105 | ) | — | — | 2,395 | 9.7 years | |||||||||||||||
EarPollution Trademark | — | — | — | 2,383 | 2,383 | 8.0 years | ||||||||||||||||
Other | 800 | (446 | ) | (139 | ) | — | 215 | 5.0 years | ||||||||||||||
Acquired technology | 564 | (83 | ) | — | — | 481 | 7.0 years | |||||||||||||||
Internet address | 124 | (53 | ) | — | — | 71 | 10.0 years | |||||||||||||||
Patents | 2,063 | (423 | ) | — | — | 1,640 | 14.0 years | |||||||||||||||
Total amortizable assets | $ | 52,651 | $ | (13,790 | ) | $ | (139 | ) | $ | 2,383 | $ | 41,105 | 8.0 years | |||||||||
Schedule of fair value consideration transferred date of amended asset purchase agreement | ' | |||||||||||||||||||||
Restricted common stock | $ | 2,275 | ||||||||||||||||||||
Cash consideration | 500 | |||||||||||||||||||||
Acquisition costs | 2 | |||||||||||||||||||||
Total | $ | 2,777 | ||||||||||||||||||||
Schedule of estimated future amortization expense | ' | |||||||||||||||||||||
2014 | $ | 9,813 | ||||||||||||||||||||
2015 | 8,560 | |||||||||||||||||||||
2016 | 7,125 | |||||||||||||||||||||
2017 | 5,649 | |||||||||||||||||||||
Thereafter | 10,072 | |||||||||||||||||||||
Total | $ | 41,219 | ||||||||||||||||||||
Schedule of indefinite-lived intangibles | ' | |||||||||||||||||||||
31-Dec-13 | ||||||||||||||||||||||
Gross Carrying Amount | Impairment | Transfers to Definite-life Classification | Net Carrying Amount | |||||||||||||||||||
iFrogz trademark | $ | 16,800 | $ | (9,762 | ) | $ | (7,038 | ) | $ | — | ||||||||||||
EarPollution trademark | — | — | — | — | ||||||||||||||||||
Total non-amortizable assets | $ | 16,800 | $ | (9,762 | ) | $ | (7,038 | ) | $ | — | ||||||||||||
31-Dec-12 | ||||||||||||||||||||||
Gross Carrying Amount | Impairment | Transfers to Definite-life Classification | Net Carrying Amount | |||||||||||||||||||
iFrogz trademark | $ | 16,800 | $ | — | $ | — | $ | 16,800 | ||||||||||||||
EarPollution trademark | 8,300 | (5,917 | ) | (2,383 | ) | — | ||||||||||||||||
Total non-amortizable assets | $ | 25,100 | $ | (5,917 | ) | $ | (2,383 | ) | $ | 16,800 | ||||||||||||
Ifrogz Trademark [Member] | ' | |||||||||||||||||||||
Schedule of finite lived intangible assets trade mark future amortization expense | ' | |||||||||||||||||||||
December 31, | ||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||
iFrogz trademark prior to impairment | $ | 16,800 | $ | 16,800 | ||||||||||||||||||
iFrogz trademark impairment | (9,762 | ) | — | |||||||||||||||||||
iFrogz trademark – definite-lived | $ | 7,038 | $ | 16,800 | ||||||||||||||||||
Ear Pollution Trademark [Member] | ' | |||||||||||||||||||||
Schedule of finite lived intangible assets trade mark future amortization expense | ' | |||||||||||||||||||||
31-Dec | ||||||||||||||||||||||
2012 | ||||||||||||||||||||||
EarPollution trademark prior to impairment | $ | 8,300 | ||||||||||||||||||||
EarPollution trademark impairment | (5,917 | ) | ||||||||||||||||||||
EarPollution trademark – definite-lived | $ | 2,383 | ||||||||||||||||||||
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||||||
Schedule of components of income tax (provision) benefit | ' | ||||||||||||
2013 | 2012 | 2011 | |||||||||||
Current (provision): | |||||||||||||
Federal | $ | (8,720 | ) | $ | (15,466 | ) | $ | (11,487 | ) | ||||
State | (766 | ) | (2,104 | ) | (1,767 | ) | |||||||
Foreign | — | (116 | ) | (72 | ) | ||||||||
Total current | (9,486 | ) | (17,686 | ) | (13,326 | ) | |||||||
Deferred (provision) benefit: | |||||||||||||
Federal | 5,036 | 7,209 | 3,402 | ||||||||||
State | 755 | 1,084 | 506 | ||||||||||
Foreign | — | — | — | ||||||||||
Total deferred | 5,791 | 8,293 | 3,908 | ||||||||||
Total (provision) benefit | $ | (3,695 | ) | $ | (9,393 | ) | $ | (9,418 | ) | ||||
Schedule of effective income tax rate reconciliation | ' | ||||||||||||
2013 | 2012 | 2011 | |||||||||||
Tax at statutory rate (35%) | $ | (2,970 | ) | $ | (8,364 | ) | $ | (9,451 | ) | ||||
State tax, net of federal tax benefit | 25 | (663 | ) | (888 | ) | ||||||||
Gain on deconsolidation of HzO | — | — | 316 | ||||||||||
Non-deductible expense and other | 428 | (341 | ) | (130 | ) | ||||||||
Domestic production activities deduction | 331 | 676 | 771 | ||||||||||
Return to provision adjustment | (148 | ) | (49 | ) | (36 | ) | |||||||
Liquidation of iFrogz EU | 5 | — | — | ||||||||||
Reserve related to FIN 48 | (382 | ) | — | — | |||||||||
Interest and penalties | (32 | ) | — | — | |||||||||
Increase in valuation allowance | (952 | ) | (652 | ) | — | ||||||||
$ | (3,695 | ) | $ | (9,393 | ) | $ | (9,418 | ) | |||||
Schedule of deferred tax assets and liabilities | ' | ||||||||||||
2013 | 2012 | ||||||||||||
Deferred tax assets: | |||||||||||||
Allowance for doubtful accounts | $ | 958 | $ | 1,020 | |||||||||
Deferred revenue | 38 | 27 | |||||||||||
Inventories | 3,211 | 2,317 | |||||||||||
Stock-based compensation | 1,464 | 1,420 | |||||||||||
Sales returns accrual | 2,943 | 2,456 | |||||||||||
Acquisition costs, net of amortization | 252 | 282 | |||||||||||
Intangible assets | 8,320 | 4,372 | |||||||||||
Goodwill | 2,192 | 1,801 | |||||||||||
HzO investment | 1,483 | 713 | |||||||||||
Capital loss carry-over | 271 | — | |||||||||||
Reserve on note receivable | 569 | 569 | |||||||||||
Other liabilities | 39 | 38 | |||||||||||
Deferred tax assets | 21,740 | 15,015 | |||||||||||
Valuation allowance | (1,753 | ) | (713 | ) | |||||||||
Total deferred tax assets | $ | 19,987 | $ | 14,302 | |||||||||
Deferred tax liabilities: | |||||||||||||
Property and equipment | 693 | 794 | |||||||||||
Total gross deferred tax liabilities | 693 | 794 | |||||||||||
Net deferred tax assets | $ | 19, 294 | $ | 13,508 | |||||||||
Deferred tax assets, net – current | $ | 7,917 | $ | 6,912 | |||||||||
Deferred tax assets, net – noncurrent | 11,377 | 6,596 | |||||||||||
Net deferred tax assets | $ | 19,294 | $ | 13,508 | |||||||||
Schedule of unrecognized tax benefits | ' | ||||||||||||
2013 | 2012 | ||||||||||||
Unrecognized tax benefits, as of January 1 | $ | 61 | $ | 61 | |||||||||
Gross increases – tax positions in current period | 399 | — | |||||||||||
Total (provision) benefit | $ | 460 | $ | 61 | |||||||||
STOCK_OPTIONS_AND_WARRANTS_Tab
STOCK OPTIONS AND WARRANTS (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract] | ' | ||||||||||||||||
Schedule of stock option assumptions used in determining the fair value of option granted | ' | ||||||||||||||||
2011 | |||||||||||||||||
Expected dividend yield | 0 | % | |||||||||||||||
Risk-free interest rate | 1.21 | % | |||||||||||||||
Expected term (years) | 3.5 years | ||||||||||||||||
Expected volatility | 90.59 | % | |||||||||||||||
Schedule of stock option activity | ' | ||||||||||||||||
Weighted- | |||||||||||||||||
Average | |||||||||||||||||
Weighted- | Remaining | Aggregate | |||||||||||||||
Average | Contractual | Intrinsic | |||||||||||||||
Options | Exercise Price | Term | Value | ||||||||||||||
(In thousands) | (Per share) | (In years) | (In thousands) | ||||||||||||||
Outstanding at December 31, 2012 | 671 | $ | 3.7 | 2.1 | |||||||||||||
Granted | — | — | |||||||||||||||
Exercised | (145 | ) | 2.4 | ||||||||||||||
Forfeited/expired | (87 | ) | 4.69 | ||||||||||||||
Outstanding at December 31, 2013 | 439 | $ | 3.93 | 1.2 | $ | 186 | |||||||||||
Exercisable at December 31, 2013 | 410 | $ | 3.61 | 1.2 | $ | 303 | |||||||||||
Schedule of valuation assumptions of warrants | ' | ||||||||||||||||
2012 | 2011 | ||||||||||||||||
Expected dividend yield | 0 | % | 0 | % | |||||||||||||
Risk-free interest rate | 0.81 | % | 2.02 | % | |||||||||||||
Expected term (years) | 5.0 years | 4.86 years | |||||||||||||||
Expected volatility | 89.5 | % | 90.71 | % | |||||||||||||
Schedule of warrant activity | ' | ||||||||||||||||
Weighted- | |||||||||||||||||
Average | |||||||||||||||||
Weighted- | Remaining | Aggregate | |||||||||||||||
Average | Contractual | Intrinsic | |||||||||||||||
Warrants | Exercise Price | Term | Value | ||||||||||||||
(In thousands) | (Per share) | (In years) | (In thousands) | ||||||||||||||
Outstanding at December 31, 2012 | 390 | $ | 8.05 | 3 | $ | 191 | |||||||||||
Granted | — | — | |||||||||||||||
Exercised | — | — | |||||||||||||||
Forfeited/expired | — | — | |||||||||||||||
Outstanding at December 31, 2013 | 390 | $ | 8.05 | 2 | $ | (1,442 | ) | ||||||||||
Exercisable at December 31, 2013 | 390 | $ | 8.05 | 3 | $ | (1,442 | ) | ||||||||||
Schedule of restricted stock activity | ' | ||||||||||||||||
Weighted- | |||||||||||||||||
Restricted | Average | ||||||||||||||||
Stock | Grant Date | ||||||||||||||||
Fair Value | |||||||||||||||||
(In thousands) | (Per share) | ||||||||||||||||
Outstanding at December 31, 2012 | 452 | $ | 9.51 | ||||||||||||||
Granted | 491 | 5.95 | |||||||||||||||
Vested | (542 | ) | 8.55 | ||||||||||||||
Forfeited | (44 | ) | 9.14 | ||||||||||||||
Outstanding at December 31, 2013 | 357 | $ | 5.96 |
FAIR_VALUE_MEASUREMENTS_Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||
Schedule of assets and liabilities measured at fair value on a recurring basis | ' | ||||||||||||||||
Fair Value Measurements Using: | |||||||||||||||||
31-Dec-13 | Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | ||||||||||||||
Money market funds included in cash equivalents | $ | 163 | $ | 163 | — | — | |||||||||||
Fair Value Measurements Using: | |||||||||||||||||
31-Dec-12 | Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | ||||||||||||||
Money market funds included in cash equivalents | $ | 452 | $ | 452 | — | — | |||||||||||
Schedule of assets measured at fair value on a non-recurring basis | ' | ||||||||||||||||
Fair Value Measurements Using: | |||||||||||||||||
31-Dec-13 | Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | ||||||||||||||
Goodwill | $ | — | — | — | $ | — | |||||||||||
iFrogz trademark | $ | 7,038 | — | — | $ | 7,038 | |||||||||||
Fair Value Measurements Using: | |||||||||||||||||
31-Dec-12 | Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | ||||||||||||||
Goodwill | $ | 1,484 | — | — | $ | 1,484 | |||||||||||
EarPollution trademark | $ | 2,383 | — | — | $ | 2,383 | |||||||||||
Fair Value Measurements Using: | |||||||||||||||||
31-Dec-11 | Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | ||||||||||||||
Note receivable | $ | 1,915 | $ | 566 | $ | 1,089 | $ | 260 | |||||||||
DEBT_AND_LETTERS_OF_CREDIT_Tab
DEBT AND LETTERS OF CREDIT (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Debt and Letters of Credit [Abstract] | ' | ||||
Schedule of total liabilities to tangible net worth ratio | ' | ||||
Total Liabilities to Tangible Net Worth | Applicable LIBOR Margin | ||||
1.00 or greater | 1.25 | % | |||
.65 or greater, but less than 1.00 | 1 | % | |||
Less than .65 | 0.75 | % | |||
Schedule of line of credit depending on leverage ratio | ' | ||||
Leverage Ratio | Applicable Unused Commitment Fee | ||||
(per annum) | |||||
1.00 or greater | 0.35 | % | |||
.65 or greater, but less than 1.0 0 | 0.25 | % | |||
Less than .65 | 0.15 | % | |||
Schedule of mandatory payments under the financing agreement | ' | ||||
Mandatory | |||||
Payments | |||||
2014 | $ | — | |||
2015 | 17,543 | ||||
Total | $ | 17,543 | |||
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and Contingencies [Abstract] | ' | ||||
Schedule of operating leases | ' | ||||
2014 | $ | 1,121 | |||
2015 | 778 | ||||
2016 | 696 | ||||
2017 | 302 | ||||
Thereafter | — | ||||
Total | $ | 2,897 | |||
CONCENTRATIONS_Tables
CONCENTRATIONS (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Risks and Uncertainties [Abstract] | ' | ||||||||||||
Schedule of percentage of sales by geographic region | ' | ||||||||||||
2013 | 2012 | 2011 | |||||||||||
United States | 90 | % | 87 | % | 88 | % | |||||||
Europe | 5 | % | 6 | % | 6 | % | |||||||
Other | 5 | % | 7 | % | 6 | % |
QUARTERLY_FINANCIAL_DATA_UNAUD1
QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ' | ||||||||||||||||||||
Schedule of quarterly financial information | ' | ||||||||||||||||||||
Year ended December 31, 2013 | |||||||||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Year | |||||||||||||||||
Net sales | $ | 51,471 | $ | 51,198 | $ | 49,869 | $ | 66,818 | $ | 219,356 | |||||||||||
Operating income (loss) | 2,007 | 5,416 | 6,436 | (2,912 | ) | 10,946 | |||||||||||||||
Net income (loss) | 876 | 2,774 | 3,184 | (2,044 | ) | 4,790 | |||||||||||||||
Earnings (loss) per share attributable to stockholders: (1) | |||||||||||||||||||||
Basic | $ | 0.03 | $ | 0.09 | $ | 0.1 | $ | (0.07 | ) | $ | 0.16 | ||||||||||
Diluted | 0.03 | 0.09 | 0.1 | (0.07 | ) | 0.15 | |||||||||||||||
Weighted average common shares: | |||||||||||||||||||||
Basic | 31,052 | 30,739 | 30,926 | 30,883 | 30,900 | ||||||||||||||||
Diluted | 31,726 | 31,218 | 31,466 | 30,883 | 31,459 | ||||||||||||||||
Year ended December 31, 2012 | |||||||||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Year | |||||||||||||||||
Net sales | $ | 55,480 | $ | 61,636 | $ | 59,827 | $ | 87,482 | $ | 264,425 | |||||||||||
Operating income | 10,228 | 10,885 | 7,118 | 5,260 | 33,491 | ||||||||||||||||
Net income | 5,112 | 5,812 | 3,388 | 193 | 14,505 | ||||||||||||||||
Earnings per share attributable to stockholders: (1) | |||||||||||||||||||||
Basic | $ | 0.17 | $ | 0.19 | $ | 0.11 | $ | 0.01 | $ | 0.48 | |||||||||||
Diluted | 0.16 | 0.18 | 0.11 | 0.01 | 0.46 | ||||||||||||||||
Weighted average common shares: | |||||||||||||||||||||
Basic | 29,924 | 30,277 | 30,351 | 30,797 | 30,339 | ||||||||||||||||
Diluted | 31,417 | 31,738 | 31,734 | 31,735 | 31,656 | ||||||||||||||||
-1 | The earnings per share calculations for each of the quarters were based upon the weighted average number of shares outstanding during each period, and the sum of the quarters may not be equal to the full year earnings per common share amounts. |
ORGANIZATION_AND_SUMMARY_OF_SI3
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Activity of allowance for doubtful accounts (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Allowance for Doubtful Accounts Receivable [Roll Forward] | ' | ' | ' |
Balance at beginning of year | $2,974 | $2,070 | $904 |
Additions charged to expense | 1,142 | 2,101 | 1,657 |
Write-offs charged against the allowance | -1,576 | -1,197 | -491 |
Balance at end of year | $2,540 | $2,974 | $2,070 |
ORGANIZATION_AND_SUMMARY_OF_SI4
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Activity of sales return and warranty liability (Details 1) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Sales Return and Warranty Liability [Roll Forward] | ' | ' | ' |
Balance at beginning of year | $6,697 | $5,387 | $2,068 |
iFrogz sales reserve at acquisition | ' | ' | 524 |
Additions charged to sales | 12,194 | 12,954 | 12,906 |
Sales returns & warranty claims charged against reserve | -11,019 | -11,644 | -10,111 |
Balance at end of year | $7,872 | $6,697 | $5,387 |
ORGANIZATION_AND_SUMMARY_OF_SI5
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Reconciliation of numerator and denominator used to calculate basic and diluted earnings per share (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||||||||||
Business Description and Basis Of Presentation [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Net income attributable to stockholders | ($2,044) | $3,184 | $2,774 | $876 | $193 | $3,388 | $5,812 | $5,112 | $4,790 | $14,505 | $18,248 | |||||||||||
Weighted average shares outstanding | 30,883 | 30,926 | 30,739 | 31,052 | 30,797 | 30,351 | 30,277 | 29,924 | 30,900 | 30,339 | 27,133 | |||||||||||
Dilutive effect of stock options, restricted stock, and warrants | ' | ' | ' | ' | ' | ' | ' | ' | 559 | 1,317 | 1,949 | |||||||||||
Diluted shares | 30,883 | 31,466 | 31,218 | 31,726 | 31,735 | 31,734 | 31,738 | 31,417 | 31,459 | 31,656 | 29,082 | |||||||||||
Earnings per share attributable to stockholders: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Basic | ($0.07) | [1] | $0.10 | [1] | $0.09 | [1] | $0.03 | [1] | $0.01 | [1] | $0.11 | [1] | $0.19 | [1] | $0.17 | [1] | $0.16 | [1] | $0.48 | [1] | $0.67 | [1] |
Dilutive | ($0.07) | [1] | $0.10 | [1] | $0.09 | [1] | $0.03 | [1] | $0.01 | [1] | $0.11 | [1] | $0.18 | [1] | $0.16 | [1] | $0.15 | [1] | $0.46 | [1] | $0.63 | [1] |
[1] | The earnings per share calculations for each of the quarters were based upon the weighted average number of shares outstanding during each period, and the sum of the quarters may not be equal to the full year earnings per common share amounts. |
ORGANIZATION_AND_SUMMARY_OF_SI6
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Detail Textuals) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Jun. 21, 2011 |
In Thousands, unless otherwise specified | iFrogz | iFrogz | ||
Business Acquisition [Line Items] | ' | ' | ' | ' |
Percentage of acquired outstanding shares of iFrogz | ' | ' | ' | 100.00% |
Amounts receivable from credit card processors | $19 | $21 | ' | ' |
Maturity term for liquid instruments to be cash equivalents | ' | ' | 'three months or less | ' |
Percentage of investment decline | 20.00% | ' | ' | ' |
Investment in HzO | ' | $2,013 | ' | ' |
ORGANIZATION_AND_SUMMARY_OF_SI7
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Detail Textuals 1) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Depreciation method | 'straight-line method | ' |
Impairment of goodwill | $1,484 | $5,441 |
Trademark impairment | -9,762 | -5,917 |
Trademark balance | 7,038 | ' |
EarPollution Trademark | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Trademark impairment | -9,762 | -5,917 |
Estimated amortizing period for trademark | '10 years | ' |
Ifrogz Trademark [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Trademark impairment | ($9,762) | $0 |
ORGANIZATION_AND_SUMMARY_OF_SI8
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Detail Textuals 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Business Description and Basis Of Presentation [Abstract] | ' | ' | ' |
Tax benefits recognized provided percentage of likelihood of realization more than | 50.00% | ' | ' |
Advertising expense | $8,952 | $12,495 | $10,246 |
ORGANIZATION_AND_SUMMARY_OF_SI9
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Detail Textuals 3) (Other Income and Expenses, USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Other Income and Expenses | ' | ' | ' |
Trading Activity, Gains and Losses, Net [Line Items] | ' | ' | ' |
Gains (losses) from foreign currency transactions | ($7) | ($17) | $60 |
Recovered_Sheet1
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Detail Textuals 4) (Restricted Stock Warrants and Stock Options) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Restricted Stock Warrants and Stock Options | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' |
Restricted stock, warrants and stock options not considered in calculation of diluted earnings per share | 620 | 169 | 103 |
ACQUISITION_OF_IFROGZ_Componen
ACQUISITION OF IFROGZ - Components of purchase price (Details) (iFrogz, USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 |
Business Acquisition [Line Items] | ' |
ZAGG shares issued with restriction | $46,200 |
Cash consideration | 50,000 |
Total | 96,200 |
6-month restriction | ' |
Business Acquisition [Line Items] | ' |
ZAGG shares issued with restriction | 23,800 |
12-month restriction | ' |
Business Acquisition [Line Items] | ' |
ZAGG shares issued with restriction | $22,400 |
ACQUISITION_OF_IFROGZ_Allocati
ACQUISITION OF IFROGZ - Allocation of purchase consideration (Details 1) (iFrogz, USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
iFrogz | ' |
Business Acquisition [Line Items] | ' |
Cash and cash equivalents | $2,469 |
Trade receivables ($5,880 contractual gross receivables) | 5,832 |
Inventories | 14,962 |
Prepaid expenses | 579 |
Property and equipment | 2,078 |
Deposits | 138 |
Definite-lived identifiable intangible assets | 49,900 |
Indefinite-lived identifiable intangible assets | 25,100 |
Goodwill | 6,925 |
Current liabilities | -11,783 |
Total | $96,200 |
ACQUISITION_OF_IFROGZ_Allocati1
ACQUISITION OF IFROGZ - Allocation of purchase consideration (Parentheticals) (Details 1) (iFrogz, USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
iFrogz | ' |
Business Acquisition [Line Items] | ' |
Contractual gross receivables | $5,880 |
ACQUISITION_OF_IFROGZ_Amounts_
ACQUISITION OF IFROGZ - Amounts assigned to each class of intangible asset and related weighted average amortization periods(Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | iFrogz | Customer relationships | Trademarks (indefinite-lived) | Trademarks (definite-lived) | Non-compete agreements | Other | ||
iFrogz | iFrogz | iFrogz | iFrogz | iFrogz | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Acquired finite-lived intangible asset, amount | ' | ' | ' | $41,500 | $25,100 | $3,500 | $4,100 | $800 |
Weighted-average amortization period | ' | ' | ' | '8 years | ' | '9 years 8 months 12 days | '4 years 9 months 18 days | '3 years 9 months 18 days |
Intangible assets, net of accumulated amortization at $23,431 in 2013 and $13,790 in 2012 | $41,219 | $57,905 | $75,000 | ' | ' | ' | ' | ' |
ACQUISITION_OF_IFROGZ_Detail_T
ACQUISITION OF IFROGZ (Detail Textuals) (USD $) | 3 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2011 | Jun. 21, 2011 | Dec. 31, 2013 | Dec. 31, 2011 | Jun. 21, 2011 | Jun. 21, 2011 |
iFrogz | iFrogz | iFrogz | iFrogz | iFrogz | iFrogz | iFrogz | ||||||||||||
Goodwill [Member] | Selling, general and administrative expenses | 12-month restriction | 6-month restriction | |||||||||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of acquired outstanding shares of iFrogz | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' |
Total consideration in cash | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $50,000 | ' | ' | ' | ' | ' | ' |
Purchase price per share of iFrogz | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $12.60 | ' | ' | ' | ' |
Common stock issued under lock in period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20.00% | 15.00% |
Total Consideration | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 96,200 | ' | ' | ' | ' | ' | ' |
Total fees incurred for acquisition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,947 | ' | ' |
Revenue | 66,818 | 49,869 | 51,198 | 51,471 | 87,482 | 59,827 | 61,636 | 55,480 | 219,356 | 264,425 | 179,125 | ' | 36,046 | ' | ' | ' | ' | ' |
Net loss before tax | ' | ' | ' | ' | ' | ' | ' | ' | $8,485 | $23,898 | $27,002 | ' | $1,461 | ' | ' | ' | ' | ' |
Equity consideration | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,444 | ' | ' | 2,222 | 2,222 |
Acquired goodwill amortization period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '15 years | ' | ' | ' |
INVENTORIES_Summary_of_invento
INVENTORIES - Summary of inventory (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ' | ' |
Finished goods | $40,992 | $34,690 |
Raw materials | 3,547 | 5,298 |
Total inventory | $44,539 | $39,988 |
INVENTORIES_Detail_Textuals
INVENTORIES (Detail Textuals) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ' | ' |
Inventory deposits with third-party manufacturers | $735 | $8,034 |
ASSET_PURCHASE_CREDITS_Detail_
ASSET PURCHASE CREDITS (Detail Textuals) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2011 | Jun. 30, 2011 |
In Thousands, unless otherwise specified | Nonmonetary exchange transaction with Argent Trading Inc. | Nonmonetary exchange transaction with Argent Trading Inc. | Nonmonetary exchange transaction with Argent Trading Inc. | Nonmonetary exchange transaction with Argent Trading Inc. | ||
Cost of Sales | ||||||
Asset Purchase Credits [Line Items] | ' | ' | ' | ' | ' | ' |
Inventory | $44,539 | $39,988 | ' | ' | $986 | ' |
Asset purchase credits with a face value | ' | ' | ' | ' | 1,350 | ' |
Fair value of inventory | ' | ' | ' | ' | 785 | ' |
Impairment loss on the inventory | ' | ' | ' | ' | ' | 201 |
Number of years of discounts realized | ' | ' | '3 years | ' | ' | ' |
Utilized asset purchase credits | ' | ' | 275 | 184 | ' | ' |
Total discounts utilized | ' | ' | $459 | ' | ' | ' |
INVESTMENT_IN_HzO_Detail_Textu
INVESTMENT IN HzO (Detail Textuals) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Variable Interest Entity [Line Items] | ' | ' | ' |
Additional capital raised by HzO through issuance of series B preferred shares | $10,112 | ' | ' |
Series B shares issued for additional capital | 39,205 | ' | ' |
Investment in HzO | ' | 2,013,000 | ' |
Loss from equity method investment in HzO | ($2,013,000) | ($2,866,000) | ' |
HzO, Inc. | ' | ' | ' |
Variable Interest Entity [Line Items] | ' | ' | ' |
Percentage of equity method investment ownership | 15.30% | ' | ' |
Ownership interest, Description | 'ZAGG cannot exercise significant influence over HzO and its ownership interest is below 20.0%,. | ' | ' |
PROPERTY_AND_EQUIPMENT_Details
PROPERTY AND EQUIPMENT (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, plant and equipment, gross | $10,782 | $8,179 |
Less accumulated depreciation | -5,778 | -3,317 |
Net property and equipment | 5,004 | 4,862 |
Computer equipment and software | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, plant and equipment, gross | 1,519 | 1,343 |
Computer equipment and software | Maximum | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Useful Lives | '5 years | ' |
Computer equipment and software | Minimum | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Useful Lives | '3 years | ' |
Equipment | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, plant and equipment, gross | 5,173 | 2,989 |
Equipment | Maximum | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Useful Lives | '10 years | ' |
Equipment | Minimum | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Useful Lives | '3 years | ' |
Furniture and fixtures | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, plant and equipment, gross | 778 | 735 |
Useful Lives | '7 years | ' |
Automobiles | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, plant and equipment, gross | 201 | 265 |
Useful Lives | '5 years | ' |
Leasehold improvements | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, plant and equipment, gross | $3,111 | $2,847 |
Leasehold improvements | Maximum | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Useful Lives | '4 years 9 months | ' |
Leasehold improvements | Minimum | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Useful Lives | '1 year | ' |
GOODWILL_INTANGIBLE_ASSETS_Cha
GOODWILL & INTANGIBLE ASSETS - Changes in carrying amount of goodwill (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Goodwill [Roll Forward] | ' | ' |
Gross goodwill, Beginning Balance | $6,925 | $6,925 |
Accumulated impairment losses, Beginning Balance | -5,441 | ' |
Net goodwill, Beginning Balance | 1,484 | 6,925 |
Goodwill acquired during the year | ' | ' |
Impairment loss | -1,484 | -5,441 |
Gross goodwill, Ending Balance | 6,925 | 6,925 |
Accumulated impairment losses, Ending Balance | -6,925 | -5,441 |
Net goodwill, Ending Balance | ' | $1,484 |
GOODWILL_INTANGIBLE_ASSETS_Fut
GOODWILL & INTANGIBLE ASSETS - Future amortization of trademark (Details 1) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Trademark prior to impairment | $16,800 | $25,100 |
Trademark impairment | -9,762 | -5,917 |
Definite-lived | 41,219 | 41,105 |
EarPollution Trademark | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Trademark prior to impairment | ' | 8,300 |
Trademark impairment | -9,762 | -5,917 |
Definite-lived | 1,829 | 2,383 |
Ifrogz Trademark [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Trademark prior to impairment | 16,800 | 16,800 |
Trademark impairment | -9,762 | 0 |
Definite-lived | $7,038 | $16,800 |
GOODWILL_INTANGIBLE_ASSETS_Act
GOODWILL & INTANGIBLE ASSETS - Activity of definite-lived Intangibles (Details 2) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | $57,673 | $52,651 |
Accumulated Amortization | -23,431 | -13,790 |
Write-off of Fully Amortized Asset | -61 | -139 |
Transfers from Indefinite-life Classification | 7,038 | 2,383 |
Net Carrying Amount | 41,219 | 41,105 |
Weighted Average Amortization Period | '8 years 4 months 24 days | '8 years |
Customer relationships | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | 41,500 | 41,500 |
Accumulated Amortization | -17,537 | -10,291 |
Write-off of Fully Amortized Asset | ' | ' |
Transfers from Indefinite-life Classification | ' | ' |
Net Carrying Amount | 23,963 | 31,209 |
Weighted Average Amortization Period | '8 years | '8 years |
Non-compete agreements | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | 4,100 | 4,100 |
Accumulated Amortization | -2,169 | -1,389 |
Write-off of Fully Amortized Asset | ' | ' |
Transfers from Indefinite-life Classification | ' | ' |
Net Carrying Amount | 1,931 | 2,711 |
Weighted Average Amortization Period | '4 years 9 months 18 days | '4 years 9 months 18 days |
Other Trademarks | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | 3,500 | 3,500 |
Accumulated Amortization | -1,719 | -1,105 |
Write-off of Fully Amortized Asset | ' | ' |
Transfers from Indefinite-life Classification | ' | ' |
Net Carrying Amount | 1,781 | 2,395 |
Weighted Average Amortization Period | '9 years 8 months 12 days | '9 years 8 months 12 days |
iFrogz trademark | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | ' | ' |
Accumulated Amortization | ' | ' |
Write-off of Fully Amortized Asset | ' | ' |
Transfers from Indefinite-life Classification | 7,038 | ' |
Net Carrying Amount | 7,038 | 16,800 |
Weighted Average Amortization Period | '10 years | ' |
EarPollution Trademark | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | 2,383 | ' |
Accumulated Amortization | -554 | ' |
Write-off of Fully Amortized Asset | ' | ' |
Transfers from Indefinite-life Classification | ' | 2,383 |
Net Carrying Amount | 1,829 | 2,383 |
Weighted Average Amortization Period | '8 years | '8 years |
Other | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | 661 | 800 |
Accumulated Amortization | -487 | -446 |
Write-off of Fully Amortized Asset | -61 | -139 |
Transfers from Indefinite-life Classification | ' | ' |
Net Carrying Amount | 113 | 215 |
Weighted Average Amortization Period | '5 years | '5 years |
Acquired technology | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | 709 | 564 |
Accumulated Amortization | -165 | -83 |
Write-off of Fully Amortized Asset | ' | ' |
Transfers from Indefinite-life Classification | ' | ' |
Net Carrying Amount | 544 | 481 |
Weighted Average Amortization Period | '7 years | '7 years |
Internet address | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | 124 | 124 |
Accumulated Amortization | -66 | -53 |
Write-off of Fully Amortized Asset | ' | ' |
Transfers from Indefinite-life Classification | ' | ' |
Net Carrying Amount | 58 | 71 |
Weighted Average Amortization Period | '10 years | '10 years |
Patents | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | 4,696 | 2,063 |
Accumulated Amortization | -734 | -423 |
Write-off of Fully Amortized Asset | ' | ' |
Transfers from Indefinite-life Classification | ' | ' |
Net Carrying Amount | $3,962 | $1,640 |
Weighted Average Amortization Period | ' | '14 years |
Patents | Maximum [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Weighted Average Amortization Period | '14 years | ' |
Patents | Minimum [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Weighted Average Amortization Period | '12 years 6 months | ' |
GOODWILL_INTANGIBLE_ASSETS_Sch
GOODWILL & INTANGIBLE ASSETS - Schedule of fair value consideration transferred date of amended asset purchase agreement (Details 3) (Patents [Member], USD $) | 0 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 04, 2013 | Dec. 31, 2013 |
Patents [Member] | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Restricted common stock | ' | $2,275 |
Cash consideration | -500 | 500 |
Acquisition costs | ' | 2 |
Total | ' | $2,777 |
GOODWILL_INTANGIBLE_ASSETS_Est
GOODWILL & INTANGIBLE ASSETS - Estimated future amortization expense (Details 4) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Goodwill and Intangible Assets Disclosure [Abstract] | ' |
2014 | $9,813 |
2015 | 8,560 |
2016 | 7,125 |
2017 | 5,649 |
Thereafter | 10,072 |
Total | $41,219 |
GOODWILL_INTANGIBLE_ASSETS_Act1
GOODWILL & INTANGIBLE ASSETS - Activity of indefinite-lived Intangibles (Details 5) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Indefinite-lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | $16,800 | $25,100 |
Trademark Impairment | -9,762 | -5,917 |
Transfers to Definite-life Classification | -7,038 | -2,383 |
Net Carrying Amount | ' | 16,800 |
EarPollution Trademark | ' | ' |
Indefinite-lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | ' | 8,300 |
Trademark Impairment | ' | -5,917 |
Transfers to Definite-life Classification | ' | -2,383 |
Net Carrying Amount | ' | ' |
iFrogz trademark | ' | ' |
Indefinite-lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | 16,800 | 16,800 |
Trademark Impairment | -9,762 | ' |
Transfers to Definite-life Classification | -7,038 | ' |
Net Carrying Amount | ' | $16,800 |
GOODWILL_INTANGIBLE_ASSETS_Det
GOODWILL & INTANGIBLE ASSETS (Detail Textuals) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Impairment of goodwill | ($1,484) | ($5,441) |
Impairment Of Goodwill and Intangibles | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Impairment of goodwill | $1,484 | $5,441 |
GOODWILL_INTANGIBLE_ASSETS_Det1
GOODWILL & INTANGIBLE ASSETS (Detail Textuals 1) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Trademark Impairment | ($9,762) | ($5,917) |
Period for amortization | '8 years 4 months 24 days | '8 years |
Internally developed acquired software | 61 | 139 |
iFrogz | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Internally developed acquired software | ' | 139 |
Acquired internally developed software | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Period for amortization | '5 years | '5 years |
Internally developed acquired software | 61 | 139 |
Acquired internally developed software | iFrogz | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Internally developed acquired software | ' | 139 |
Ifrogz Trademark [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Trademark Impairment | -9,762 | 0 |
Period for amortization | '10 years | ' |
Internally developed acquired software | ' | ' |
EarPollution Trademark | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Trademark Impairment | -9,762 | -5,917 |
Period for amortization | '8 years | '8 years |
Internally developed acquired software | ' | ' |
GOODWILL_INTANGIBLE_ASSETS_Det2
GOODWILL & INTANGIBLE ASSETS (Detail Textuals 2) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 04, 2013 | Sep. 04, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Patents | Patents | Operating Expense | Operating Expense | Operating Expense | Cost of Sales | Cost of Sales | Cost of Sales | |||||
Acquired technology | Acquired technology | Acquired technology | ||||||||||
Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization expenses | $9,620 | $9,732 | $3,949 | ' | ' | ' | $9,702 | $9,801 | $4,921 | $82 | $69 | $972 |
Cash consideration | ' | ' | ' | ' | 500 | -500 | ' | ' | ' | ' | ' | ' |
Restricted stock release (in shares) | ' | ' | ' | ' | 500 | ' | ' | ' | ' | ' | ' | ' |
Restricted common stock, Black-Scholes model | ' | ' | ' | 330 | ' | ' | ' | ' | ' | ' | ' | ' |
Reduction in fair value of the liability | ' | ' | ' | $53 | ' | ' | ' | ' | ' | ' | ' | ' |
INCOME_TAXES_Income_tax_provis
INCOME TAXES - Income tax (provision) benefit (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Current (provision): | ' | ' | ' |
Federal | ($8,720) | ($15,466) | ($11,487) |
State | -766 | -2,104 | -1,767 |
Foreign | ' | -116 | -72 |
Total current | -9,486 | -17,686 | -13,326 |
Deferred (provision) benefit: | ' | ' | ' |
Federal | 5,036 | 7,209 | 3,402 |
State | 755 | 1,084 | 506 |
Foreign | ' | ' | ' |
Total deferred | 5,787 | 8,293 | 3,908 |
Total (provision) benefit | ($3,695) | ($9,393) | ($9,418) |
INCOME_TAXES_Reconciliation_of
INCOME TAXES - Reconciliation of income taxes computed using federal statutory rate to provision for income tax (Details 1) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Income Tax Disclosure [Abstract] | ' | ' | ' |
Tax at statutory rate (35%) | ($2,970) | ($8,364) | ($9,451) |
State tax, net of federal tax benefit | 25 | -663 | -888 |
Gain on deconsolidation of HzO | ' | ' | 316 |
Non-deductible expense and other | 428 | -341 | -130 |
Domestic production activities deduction | 331 | 676 | 771 |
Return to provision adjustment | -148 | -49 | -36 |
Liquidation of iFrogz EU | 5 | ' | ' |
Reserve related to FIN 48 | -382 | ' | ' |
Interest and penalties | -32 | ' | ' |
Increase in valuation allowance | -952 | -652 | ' |
Total (provision) benefit | ($3,695) | ($9,393) | ($9,418) |
INCOME_TAXES_Reconciliation_of1
INCOME TAXES - Reconciliation of income taxes computed using federal statutory rate to provision for income tax (Parentheticals) (Details 1) | 12 Months Ended |
Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | ' |
Federal statutory rate | 35.00% |
INCOME_TAXES_Deferred_tax_asse
INCOME TAXES - Deferred tax assets and liabilities (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Deferred tax assets: | ' | ' |
Allowance for doubtful accounts | $958 | $1,020 |
Deferred revenue | 38 | 27 |
Inventories | 3,211 | 2,317 |
Stock-based compensation | 1,464 | 1,420 |
Sales returns accrual | 2,943 | 2,456 |
Acquisition costs, net of amortization | 252 | 282 |
Intangible assets | 8,320 | 4,372 |
Goodwill | 2,192 | 1,801 |
HzO investment | 1,483 | 713 |
Capital loss carry-over | 271 | ' |
Reserve on note receivable | 569 | 569 |
Other liabilities | 39 | 38 |
Deferred tax assets | 21,740 | 15,015 |
Valuation allowance | -1,753 | -713 |
Total deferred tax assets | 19,987 | 14,302 |
Deferred tax liabilities: | ' | ' |
Property and equipment | 693 | 794 |
Total gross deferred tax liabilities | 693 | 794 |
Deferred tax assets, net - current | 7,917 | 6,912 |
Deferred tax assets, net - noncurrent | 11,377 | 6,596 |
Net deferred tax assets | $19,294 | $13,508 |
INCOME_TAXES_Unrecognized_tax_
INCOME TAXES - Unrecognized tax benefit (Details 3) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | ' | ' |
Unrecognized tax benefits, as of January 1 | $61 | $61 |
Gross increases - tax positions in current period | 399 | ' |
Total (provision) benefit | $460 | $61 |
INCOME_TAXES_Detail_Textuals
INCOME TAXES (Detail Textuals) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Operating Loss Carryforwards [Line Items] | ' | ' | ' |
Unrecognized Tax Benefits | $460 | $61 | $61 |
Deferred tax assets, valuation allowance | 1,753 | 713 | ' |
Gross cumulative operating loss of iFrogz Europe SAS and ZAGG Europe | ' | 1,280 | ' |
Cash held by foreign entities permanently reinvested | 3,361 | ' | ' |
Income tax reconciliation, tax contingencies, foreign | 460 | 61 | ' |
Income tax examination, penalties and interest expense | 32 | 0 | ' |
Impact of unrecognized tax benefit liabilities on tax rate | 443 | ' | ' |
HzO, Inc. | ' | ' | ' |
Operating Loss Carryforwards [Line Items] | ' | ' | ' |
Deferred tax assets, valuation allowance | $1,483 | $713 | ' |
STOCK_OPTIONS_AND_WARRANTS_Fai
STOCK OPTIONS AND WARRANTS - Fair value assumptions of option grants (Details) (Stock options) | 12 Months Ended |
Dec. 31, 2011 | |
Stock options | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Expected dividend yield | 0.00% |
Risk-free interest rate | 1.21% |
Expected term (years) | '3 years 6 months |
Expected volatility | 90.59% |
STOCK_OPTIONS_AND_WARRANTS_Sum
STOCK OPTIONS AND WARRANTS - Summary of stock option activity under Incentive Plan (Details 1) (Stock options, USD $) | 12 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Stock options | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ' | ' |
Outstanding at December 31, 2012 | 671 | 1,298,000 |
Granted | ' | ' |
Exercised | -145 | ' |
Forfeited/expired | -87 | ' |
Outstanding at December 31, 2013 | 439 | 671 |
Exercisable at December 31, 2013 | 410 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ' | ' |
Outstanding at December 31, 2012 | $3.70 | $2.73 |
Granted | ' | ' |
Exercised | $2.40 | ' |
Forfeited/expired | $4.69 | ' |
Outstanding at December 31, 2013 | $3.93 | $3.70 |
Exercisable at December 31, 2013 | $3.61 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ' | ' |
Stock option outstanding, Weighted-Average Remaining Contractual Term | '1 year 2 months 12 days | '2 years 1 month 6 days |
Stock option exercisable, Weighted-Average Remaining Contractual Term | '1 year 2 months 12 days | ' |
Stock option outstanding, Aggregate Intrinsic Value | $186 | ' |
Stock option exercisable, Aggregate Intrinsic Value | $303 | ' |
STOCK_OPTIONS_AND_WARRANTS_Fai1
STOCK OPTIONS AND WARRANTS - Fair value assumptions of warrants (Details 2) (Warrants) | 12 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2011 | |
Warrants | ' | ' |
Class of Warrant or Right [Line Items] | ' | ' |
Expected dividend yield | 0.00% | 0.00% |
Risk-free interest rate | 0.81% | 2.02% |
Expected term (years) | '5 years | '4 years 10 months 10 days |
Expected volatility | 89.50% | 90.71% |
STOCK_OPTIONS_AND_WARRANTS_Sum1
STOCK OPTIONS AND WARRANTS - Summary of warrants activity (Details 3) (Warrants, USD $) | 12 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Warrants | ' | ' |
Warrants Outstanding [Roll Forward] | ' | ' |
Outstanding at December 31, 2012 | 390 | 999,000 |
Granted | ' | ' |
Exercised | ' | ' |
Forfeited/expired | ' | ' |
Outstanding at December 31, 2013 | 390 | 390 |
Exercisable at December 31, 2013 | 390 | ' |
Class Of Warrant Or Right Outstanding Weighted Average Exercise Price [Roll Forward] | ' | ' |
Outstanding at December 31, 2012 | 8.05 | 3.6 |
Granted | ' | ' |
Exercised | ' | ' |
Forfeited/expired | ' | ' |
Outstanding at December 31, 2013 | 8.05 | 8.05 |
Exercisable at December 31, 2013 | 8.05 | ' |
Class Of Warrant Or Right Additional Disclosures [Abstract] | ' | ' |
Warrants Outstanding, Weighted-Average Remaining Contractual Term | '2 years | ' |
Warrants Exercisable, Weighted-Average Remaining Contractual Term | '3 years | '3 years |
Warrants Outstanding, Aggregate Intrinsic Value | ($1,442) | $191 |
Warrants Exercisable, Aggregate Intrinsic Value | ($1,442) | ' |
STOCK_OPTIONS_AND_WARRANTS_Sum2
STOCK OPTIONS AND WARRANTS - Summary of restricted stock activity (Details 4) (Restricted Stock, USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2011 | |
Restricted Stock | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ' | ' |
Balance at December 31, 2012 | 452 | 424,000 |
Granted | 491 | ' |
Vested | -542 | ' |
Forfeited | -44 | ' |
Balance at December 31, 2013 | 357 | 424,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ' | ' |
Balance at December 31, 2012 | $9.51 | $8.55 |
Granted | $5.95 | ' |
Vested | $8.55 | ' |
Forfeited | $9.14 | ' |
Balance at December 31, 2013 | $5.96 | $8.55 |
STOCK_OPTIONS_AND_WARRANTS_Det
STOCK OPTIONS AND WARRANTS (Detail Textuals) (USD $) | 12 Months Ended | 3 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2012 | Jun. 30, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2007 | Dec. 31, 2013 |
Stock options | Stock options | Stock options | Stock options | Stock options | Stock options | Stock options | Stock options | Stock options | Stock options | Incentive plan 2007 | Incentive plan 2007 | Equity incentive award plan 2013 | |
Separation And Release Of Claims Agreement | Mr. Robert G. Pedersen | Selling, general and administrative expenses | Selling, general and administrative expenses | Selling, general and administrative expenses | Selling, general and administrative expenses | Selling, general and administrative expenses | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of common stock to directors, employees, consultants and advisors | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,000 | 5,000 |
Term of the plan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '10 years |
Number of shares available for grant | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,161 | ' | 4,464 |
Weighted-average grant-date fair value of options granted | $0 | $0 | $4.98 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total intrinsic value of options exercised | $540 | $3,555 | $8,170 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unrecognized compensation cost related to nonvested stock options granted | 29 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted-average period for recognition of compensation cost | '2 months 12 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of shares vested during period | 593 | 1,060 | 2,638 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Equity-based compensation expense | ' | ' | ' | ' | ' | ' | ' | 280 | 1,008 | 2,640 | ' | ' | ' |
Net tax benefit recognized on equity-based compensation expense | 88 | 181 | 28 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Tax benefit realized from stock options exercised | 88 | 599 | 1,838 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Charge related to modification of previously granted stock option | ' | ' | ' | 154 | ' | 154 | 1,560 | ' | ' | ' | ' | ' | ' |
Number of unvested stock options | ' | ' | ' | ' | 32 | ' | ' | ' | ' | ' | ' | ' | ' |
Consulting fees under separation agreement | ' | ' | ' | ' | $910 | ' | ' | ' | ' | ' | ' | ' | ' |
Period for payment of consulting fees under separation agreement | ' | ' | ' | ' | '1 year | ' | ' | ' | ' | ' | ' | ' | ' |
STOCK_OPTIONS_AND_WARRANTS_Det1
STOCK OPTIONS AND WARRANTS (Detail Textuals 1) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Class of Warrant or Right [Line Items] | ' | ' | ' |
Weighted-average and grant-date or vest-date fair value of warrants granted | 0 | 6.46 | 6.46 |
Intrinsic value of warrants exercised during period | $0 | $4,195 | $3,302 |
Unrecognized estimated compensation cost related to nonvested warrants granted | 0 | ' | ' |
Total fair value of warrants vested during period | 0 | 311 | 377 |
Warrants | ' | ' | ' |
Class of Warrant or Right [Line Items] | ' | ' | ' |
Exercise price of warrants | ' | ' | ' |
Exercise price of warrants | ' | ' | ' |
Warrants | Selling, general and administrative expenses | ' | ' | ' |
Class of Warrant or Right [Line Items] | ' | ' | ' |
Compensation expense related to warrants | 0 | 311 | 377 |
Net tax benefit on equity-based compensation expense of warrants | 0 | 119 | 144 |
Amount of tax benefit realized from compensatory warrants exercised | 0 | 114 | 0 |
Warrants issued for investor relations consulting services | ' | ' | ' |
Class of Warrant or Right [Line Items] | ' | ' | ' |
Number of common stock called by warrants | 0 | 50 | 50 |
Exercise price of warrants | 0 | 9.02 | 9.05 |
Term of warrants | '5 years | ' | ' |
Warrants related expenses | $0 | $311 | $377 |
STOCK_OPTIONS_AND_WARRANTS_Det2
STOCK OPTIONS AND WARRANTS (Detail Textuals 2) (USD $) | 12 Months Ended | 9 Months Ended | 12 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2012 | Jun. 30, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Restricted Stock | Restricted Stock | Restricted Stock | Restricted Stock | Restricted Stock | Restricted Stock | Restricted Stock | Restricted Stock | Restricted Stock | Stock options | Stock options | Stock options | Stock options | Stock options | Stock options | Stock options | Stock options | Stock options | Stock options | ||||
Separation And Release Of Claims Agreement | Mr. Robert G. Pedersen | Selling, general and administrative expenses | Selling, general and administrative expenses | Selling, general and administrative expenses | Cost of Sales | Separation And Release Of Claims Agreement | Mr. Robert G. Pedersen | Selling, general and administrative expenses | Selling, general and administrative expenses | Selling, general and administrative expenses | Selling, general and administrative expenses | Selling, general and administrative expenses | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total unrecognized compensation cost related to nonvested restricted stock awards granted | ' | ' | ' | $1,245 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted-average period for recognition of compensation cost | ' | ' | ' | '1 year | ' | ' | ' | ' | ' | ' | ' | ' | '2 months 12 days | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Equity based compensation expense | ' | ' | ' | 257 | 508 | ' | ' | ' | 3,846 | 4,699 | 624 | ' | ' | ' | ' | ' | ' | ' | ' | 280 | 1,008 | 2,640 |
Net tax benefit recognized on equity-based compensation expense | ' | ' | ' | ' | ' | ' | ' | ' | 1,458 | 1,809 | 236 | ' | 88 | 181 | 28 | ' | ' | ' | ' | ' | ' | ' |
Restricted stock release (in shares) | ' | ' | ' | ' | ' | 124,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term of restricted stock vested | ' | ' | ' | ' | ' | '2 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of common stock related to contract termination (in shares) | ' | ' | ' | ' | ' | 90,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of additional number of common stock shares issued | ' | ' | ' | ' | ' | 899 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Portion of the consideration related to current royalties | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 336 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Capitalized portion of consideration | ' | ' | ' | ' | ' | 563 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization period for prepayment of future royalties | ' | ' | ' | ' | ' | '7 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Charge related to modification of previously granted stock option | ' | ' | ' | ' | ' | ' | 345 | ' | ' | ' | ' | ' | ' | ' | ' | 154 | ' | 154 | 1,560 | ' | ' | ' |
Number of unvested stock options | ' | ' | ' | ' | ' | ' | ' | 127,000 | ' | ' | ' | ' | ' | ' | ' | ' | 32,000 | ' | ' | ' | ' | ' |
Consulting fees under separation agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 910 | ' | ' | ' | ' | ' |
Amount of tax benefit realized from restricted stock | ' | ' | ' | 1,042 | 1,169 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock-based compensation | $4,126 | $5,707 | $3,258 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
FAIR_VALUE_MEASUREMENTS_Assets
FAIR VALUE MEASUREMENTS - Assets and liabilities measured at fair value on recurring basis (Details) (Fair value measurements recurring basis, Money market funds, USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Estimate of Fair Value | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Money market funds included in cash equivalents | $163 | $452 |
Level 1 Inputs | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Money market funds included in cash equivalents | 163 | 452 |
Level 2 Inputs | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Money market funds included in cash equivalents | ' | ' |
Level 3 Inputs | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Money market funds included in cash equivalents | ' | ' |
FAIR_VALUE_MEASUREMENTS_Assets1
FAIR VALUE MEASUREMENTS - Assets and liabilities measured at fair value on non-recurring basis (Details 1) (Fair value measurements nonrecurring basis, USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | |||
Estimate of Fair Value | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Goodwill | ' | $1,484 | ' |
EarPollution trademark | 7,038 | 2,383 | ' |
Note receivable | ' | ' | 1,915 |
Level 1 Inputs | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Goodwill | ' | ' | ' |
EarPollution trademark | ' | ' | ' |
Note receivable | ' | ' | 566 |
Level 2 Inputs | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Goodwill | ' | ' | ' |
EarPollution trademark | ' | ' | ' |
Note receivable | ' | ' | 1,089 |
Level 3 Inputs | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' |
Goodwill | ' | 1,484 | ' |
EarPollution trademark | 7,038 | 2,383 | ' |
Note receivable | ' | ' | $260 |
FAIR_VALUE_MEASUREMENTS_Detail
FAIR VALUE MEASUREMENTS (Detail Textuals) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Impairment on notes receivable | ' | ' | $1,489 |
Number of common stock as underlying collateral for fair value measurement of notes receivables (in shares) | 80 | ' | 80 |
Impairment of goodwill | 1,484 | 5,441 | ' |
Trademark Impairment | -9,762 | -5,917 | ' |
EarPollution Trademark | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Trademark Impairment | ' | -5,917 | ' |
Fair value measurements nonrecurring basis | Level 3 Inputs | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Asset Impairment Charges | ' | ' | $125 |
NOTE_RECEIVABLE_Detail_Textual
NOTE RECEIVABLE (Detail Textuals) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | ||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Mar. 23, 2011 | Dec. 31, 2010 | Mar. 23, 2011 | Dec. 31, 2011 | Jun. 17, 2009 | Mar. 23, 2011 |
ZAGG products | ZAGG products | Teleportall, LLC ('Teleportall') | Teleportall, LLC ('Teleportall') | Teleportall, LLC ('Teleportall') | Teleportall, LLC ('Teleportall') | ||
Promissory note (the 'Note') | Promissory note (the 'Note') | ZAGG products | ZAGG products | ||||
License Agreement | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Initial purchase order price for ZAGGbox units | ' | ' | ' | ' | ' | $3,500 | ' |
Additional payments for ZAGGbox in aggregate amount | ' | ' | 2,747 | ' | ' | 1,153 | ' |
Non-recurring engineering (NRE) fee | ' | ' | ' | ' | ' | 200 | ' |
Payment of 30% of the total purchase price for the units ordered | ' | ' | ' | ' | ' | 953 | ' |
Payment in percentages of the total purchase price for the units ordered | ' | ' | ' | ' | ' | 30.00% | ' |
Indirect ownership interest | ' | ' | ' | ' | ' | 25.00% | ' |
Terms Or Conditions To Terminate Agreement [Abstract] | ' | ' | ' | ' | ' | ' | ' |
Original principal amount | ' | $4,126 | ' | $4,126 | ' | ' | ' |
Fixed rate | ' | ' | ' | ' | 4.00% | ' | ' |
Description of reference rate | ' | ' | ' | 'LIBOR | ' | ' | ' |
Percentage of the net profits of selling product | ' | ' | ' | 50.00% | ' | ' | ' |
Description of first term or condition to terminate agreement | 'Mr. Harmer, Teleportall, and certain of their affiliates delivered a promissory note (the ''Note'') dated March 23, 2011, to the Company in the original principal amount of $4,126 which accrues interest at the rate of LIBOR plus 4% per annum (adjusted quarterly) payable as follows: (i) interest only payments (a) on September 23, 2011, and (b) thereafter on or before the last day of each calendar quarter, (ii) 50% of the net profits of each ZAGGbox sale by Teleportall and its affiliates to be applied, first, to accrued interest and, second, to the principal balance of the Note, and (iii) the unpaid balance of principal and interest due in full on March 23, 2013. The principal amount of the Note is equal to the aggregate amount of the payments made by the Company to Teleportall plus the internal cost of the ZAGGbox project incurred by the Company. The Note is secured by certain real property, interests in entities that own real property and restricted and free-trading securities. | ' | ' | ' | ' | ' | ' |
Royalty on net sales of ZAGGboxes per calendar quarter as a license fee | ' | ' | ' | ' | ' | ' | 10.00% |
Description of second term or condition to terminate agreement | 'Teleportall and the Company entered into a License Agreement on March 23, 2011 under which the Company licensed to Teleportall the use of certain ZAGG names and trademarks to sell and distribute the ZAGGbox product. Teleportall agreed to pay ZAGG a 10% royalty on net sales of ZAGGboxes per calendar quarter as a license fee. | ' | ' | ' | ' | ' | ' |
NOTE_RECEIVABLE_Detail_Textual1
NOTE RECEIVABLE (Detail Textuals 1) (USD $) | 12 Months Ended | 1 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Mar. 23, 2011 |
Teleportall, LLC ('Teleportall') | ||
Commission Agreement | ||
ZAGG products | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' |
Initial term of agreement | ' | '2 years |
Minimum purchase price during initial term of product | ' | $25,000 |
Percentage of commission during first 60 days of introduction | ' | 10.00% |
Introductory period of product | ' | '60 days |
Term of agreement | ' | '24 months |
Percentage of commission after 24 months | ' | 2.00% |
Percentage of commission within 24 months after load in period | ' | 3.00% |
Proportional percentage of commission | ' | '50/50 |
Payment Terms Of Commission Agreement [Abstract] | ' | ' |
Description of first payment terms of commission agreement | '10.0% commission payments on orders received by the Company from retailers and distributors first introduced to the Company by Teleportall during the first 60 days after the introduction is made (the ''Load-in Period'') to be split 50/50 between cash to Teleportall and principal payments on the Note. However, all commission payments will be paid to ZAGG if Teleportall is in breach of the terms of the Note or any other agreements between the parties. | ' |
Description of second payment terms of commission agreement | '3.0% commission on all orders within the first 24 months after the Load-in Period, and 2.0% thereafter, from retailers and distributors first introduced to the Company as described under the terms set forth in the preceding bullet point. The 3.0% and 2.0% commissions will be split 50/50 between cash to Teleportall and principal payments on the Note. | ' |
Description of third payment terms of commission agreement | '3.0% commission on all orders generated in countries where Teleportall is paid commission under the terms of the preceding two bullet points (excluding the United States), regardless of Teleportall's involvement in ZAGG's receipt of the order until the first to occur of (i) payment in full of the Note, (ii) termination of the Commission Agreement or (iii) 24 months after the applicable Load-in Period. | ' |
NOTE_RECEIVABLE_Detail_Textual2
NOTE RECEIVABLE (Detail Textuals 2) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2011 | Mar. 23, 2011 |
ZAGG products | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' |
Granted stock option award | $1,560 | ' |
Advance payments for ZAGGbox in aggregate amount | ' | 3,900 |
Original principal amount | ' | $4,126 |
Number of shares authorized to be issued for repayment of note | 80 | ' |
NOTE_RECEIVABLE_Detail_Textual3
NOTE RECEIVABLE (Detail Textuals 3) (USD $) | 3 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | 31-May-12 | Jan. 31, 2012 | Sep. 30, 2011 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' | ' | ' | ' | ' |
Number of shares issued in the process of foreclosure | 45 | ' | ' | ' | ' | ' |
Value of shares issued in the process of foreclosure | $496 | ' | ' | ' | ' | ' |
Foreclosed on real estate property valued | ' | ' | ' | ' | 250 | ' |
Foreclosed on stock and warrants | ' | ' | ' | 516 | ' | ' |
Note receivable carrying amount | ' | ' | 1,149 | ' | ' | ' |
Note receivable offset to equity | ' | 218 | 0 | ' | ' | 348 |
Total unpaid principal balance, including accrued interest, late fees and costs | ' | 4,202 | ' | ' | ' | ' |
Teleportall, LLC ('Teleportall') | Maximum | Harmer agreement | ' | ' | ' | ' | ' | ' |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' | ' | ' | ' | ' |
Estimated fair value of the underlying collateral security | ' | 1,471 | ' | ' | ' | ' |
Percentages of holding | ' | 100.00% | ' | ' | ' | ' |
Teleportall, LLC ('Teleportall') | Minimum | Harmer agreement | ' | ' | ' | ' | ' | ' |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' | ' | ' | ' | ' |
Estimated fair value of the underlying collateral security | ' | $1,335 | ' | ' | ' | ' |
Percentages of holding | ' | 50.00% | ' | ' | ' | ' |
DEBT_AND_LETTERS_OF_CREDIT_App
DEBT AND LETTERS OF CREDIT - Applicable Libor Margin (Details) | 12 Months Ended |
Dec. 31, 2013 | |
1.00 or greater | ' |
Total Liabilities To Tangible Net Worth [Line Items] | ' |
Applicable LIBOR Margin | 1.25% |
.65 or greater, but less than 1.00 | ' |
Total Liabilities To Tangible Net Worth [Line Items] | ' |
Applicable LIBOR Margin | 1.00% |
Less than .65 | ' |
Total Liabilities To Tangible Net Worth [Line Items] | ' |
Applicable LIBOR Margin | 0.75% |
DEBT_AND_LETTERS_OF_CREDIT_App1
DEBT AND LETTERS OF CREDIT - Applicable Unused Commitment Fee (per annum) (Details 1) | 12 Months Ended |
Dec. 31, 2013 | |
1.00 or greater | ' |
Total Liabilities To Tangible Net Worth [Line Items] | ' |
Commitment fees paid of the unused portion of the borrowing capacity under the Revolving Credit Facility | 0.35% |
.65 or greater, but less than 1.00 | ' |
Total Liabilities To Tangible Net Worth [Line Items] | ' |
Commitment fees paid of the unused portion of the borrowing capacity under the Revolving Credit Facility | 0.25% |
Less than .65 | ' |
Total Liabilities To Tangible Net Worth [Line Items] | ' |
Commitment fees paid of the unused portion of the borrowing capacity under the Revolving Credit Facility | 0.15% |
DEBT_AND_LETTERS_OF_CREDIT_Man
DEBT AND LETTERS OF CREDIT - Mandatory payments (Details 2) (Term Loan and Revolving Credit Facility, USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Term Loan and Revolving Credit Facility | ' |
Debt Instrument [Line Items] | ' |
2014 | ' |
2015 | 17,543 |
Total | $17,543 |
DEBT_AND_LETTERS_OF_CREDIT_Wel
DEBT AND LETTERS OF CREDIT - Wells Fargo Term Loan and Revolving Line of Credit Facility (Detail Textuals) (USD $) | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 07, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 20, 2013 | Dec. 31, 2012 | Dec. 07, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 07, 2012 |
Wells Fargo Bank | Wells Fargo Bank | Wells Fargo Bank | Wells Fargo Bank | Wells Fargo Bank | Wells Fargo Bank | Wells Fargo Bank | Term Loan Facility | Term Loan Facility | Term Loan Facility | Term Loan Facility | Revolving credit facility | Revolving credit facility | Standby commercial letters of credit | ||||
Interest Expense | Interest Expense | Other Noncurrent Assets | Other Noncurrent Assets | Wells Fargo Bank | Wells Fargo Bank | Wells Fargo Bank | Wells Fargo Bank | Wells Fargo Bank | Wells Fargo Bank | Wells Fargo Bank | |||||||
Line of Credit Facility [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line of credit facility, maximum borrowing capacity | ' | ' | ' | ' | ' | $84,000 | ' | ' | ' | ' | ' | $60,000 | ' | $24,000 | ' | ' | $5,000 |
Maturity date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'December 1, 2014 to December 1, 2015 | ' | ' | ' | ' | ' | ' |
Line of credit facility, outstanding balance | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 18,000 | 24,000 | ' | ' | 22,173 | ' |
Proceeds from issuance of term note | ' | 24,000 | 45,000 | ' | ' | ' | ' | ' | ' | ' | 24,000 | ' | ' | ' | ' | ' | ' |
Amentment fee | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 30 | ' | ' | ' | ' | ' | ' |
Line of credit maturity date | ' | ' | ' | 1-Dec-15 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basis spread on variable rate (in percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.25% | ' | ' |
Unused line fees | ' | ' | ' | ' | ' | ' | 73 | 4 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average interest rate on all outstanding borrowings | ' | ' | ' | 1.00% | 1.63% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Effective interest rate | ' | ' | ' | 1.11% | 2.31% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payment of debt issuance costs | 43 | 238 | 2,538 | 238 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization of deferred loan costs | ' | ' | ' | 120 | 8 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional direct costs | ' | ' | ' | 43 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Capitalized costs written off recorded as interesr expense | ' | ' | ' | 27 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred loan costs | ' | ' | ' | ' | ' | ' | ' | ' | $126 | $230 | ' | ' | ' | ' | ' | ' | ' |
DEBT_AND_LETTERS_OF_CREDIT_PNC
DEBT AND LETTERS OF CREDIT - PNC & Cerberus Term Loan and Revolving Credit Facility (Detail Textuals 1) (USD $) | 12 Months Ended | 3 Months Ended | 12 Months Ended | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Mar. 31, 2012 | Dec. 31, 2011 | Jun. 21, 2011 | Jul. 31, 2011 | Mar. 31, 2012 | Dec. 31, 2011 | Jun. 21, 2011 | Jun. 21, 2011 |
Cerberus Business Finance, LLC ("Cerberus") | Cerberus Business Finance, LLC ("Cerberus") | Cerberus Business Finance, LLC ("Cerberus") | Cerberus Business Finance, LLC ("Cerberus") | Term Loan Facility | Term Loan Facility | Term Loan Facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Letter Of Credit | ||||
Interest Expense | Interest Expense | Interest Expense | Cerberus Business Finance, LLC ("Cerberus") | Cerberus Business Finance, LLC ("Cerberus") | Cerberus Business Finance, LLC ("Cerberus") | Cerberus Business Finance, LLC ("Cerberus") | Cerberus Business Finance, LLC ("Cerberus") | Cerberus Business Finance, LLC ("Cerberus") | Cerberus Business Finance, LLC ("Cerberus") | Cerberus Business Finance, LLC ("Cerberus") | |||||
Line of Credit Facility [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line of credit facility, maximum borrowing capacity | ' | ' | ' | ' | ' | ' | ' | ' | ' | $45,000 | ' | ' | ' | $45,000 | $5,000 |
Weighted average interest rate on all outstanding borrowings | ' | ' | ' | 7.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Effective interest rate | ' | ' | ' | 8.02% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payment of credit facility | ' | ' | ' | ' | 4,000 | ' | ' | 4,000 | ' | ' | ' | 23,000 | ' | ' | ' |
Estimated prepayment of debt within next three months | ' | ' | ' | 2,372 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Commitment fees paid of the unused portion of the borrowing capacity under the Revolving Credit Facility | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.38% | ' | ' | ' | ' |
Average principal amount outstanding for the month | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 45,000 | ' | ' | ' | ' |
Commitment Fees | ' | ' | ' | ' | ' | 133 | 46 | ' | ' | ' | ' | ' | ' | ' | ' |
Payment of debt issuance costs | 43 | 238 | 2,538 | 2,538 | ' | ' | ' | ' | 1,699 | ' | ' | ' | 839 | ' | ' |
Amortization of deferred loan costs | 120 | 708 | 329 | ' | ' | 568 | 329 | ' | ' | ' | ' | ' | ' | ' | ' |
Additional amortization | ' | ' | ' | ' | ' | 132 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Write-off of deferred loan costs | 27 | 1,509 | ' | ' | ' | 1,509 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Charge paid to PNC and Cerberus | ' | $430 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES - Future minimum rental payments required under operating leases (Details) (USD $) | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |
Commitments and Contingencies [Abstract] | ' |
2014 | $1,121 |
2015 | 778 |
2016 | 696 |
2017 | 302 |
Thereafter | ' |
Total | $2,897 |
COMMITMENTS_AND_CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Detail Textuals) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Nov. 11, 2010 | Dec. 31, 2011 | Dec. 31, 2012 |
Litigation Settlement Patent Acquisition Payments | Litigation Settlement Patent Acquisition Payments | Litigation Settlement Patent Acquisition Payments | ||||
Customer | ||||||
Commitments and Contingencies [Line Items] | ' | ' | ' | ' | ' | ' |
Rental payment of leases | $1,564 | $1,615 | $1,002 | $200 | $150 | ' |
Sublease income | $996 | $751 | $0 | ' | ' | ' |
Number of affiliates | ' | ' | ' | ' | ' | 2 |
CONCENTRATIONS_Percentage_of_s
CONCENTRATIONS - Percentage of sales by geographic region (Details) (Sales revenue) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
United States | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' |
Percentage of sales | 90.00% | 87.00% | 88.00% |
Europe | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' |
Percentage of sales | 5.00% | 6.00% | 6.00% |
Other | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' |
Percentage of sales | 5.00% | 7.00% | 6.00% |
CONCENTRATIONS_Detail_Textuals
CONCENTRATIONS (Detail Textuals) (Concentration of credit risk, Accounts receivable) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Customer | Customer | |
Concentration Risk [Line Items] | ' | ' |
Number of customers | 1 | 1 |
Minimum account balance of accounts receivable in percentages for all other customers | 'more than 10 | 'more than 10 |
Customer 1 | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Balance of accounts receivable due from two customers | 44.00% | 56.00% |
Customer 2 | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Balance of accounts receivable due from two customers | 14.00% | ' |
CONCENTRATIONS_Detail_Textuals1
CONCENTRATIONS (Detail Textuals 1) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Shannon Ireland | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' |
Net assets located overseas in Shannon Ireland | 8,695 | 4,737 | ' |
Customer 1 | Sales revenue | Concentration of sales | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' |
Percentage of sales | 26.00% | 32.00% | 30.00% |
Customer 2 | Sales revenue | Concentration of sales | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' |
Percentage of sales | 18.00% | 11.00% | 11.00% |
SEGMENT_REPORTING_Details
SEGMENT REPORTING (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Segment | ||
Segment Reporting Information [Line Items] | ' | ' |
Number of Reportable Segments | 3 | ' |
Corporate asset | $175,470 | $206,085 |
Hzo Investment [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Corporate asset | $0 | ' |
QUARTERLY_FINANCIAL_DATA_UNAUD2
QUARTERLY FINANCIAL DATA (UNAUDITED) - Summary of quarterly financial information (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||||||||||
Quarterly Financial Information Disclosure [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Net sales | $66,818 | $49,869 | $51,198 | $51,471 | $87,482 | $59,827 | $61,636 | $55,480 | $219,356 | $264,425 | $179,125 | |||||||||||
Operating income (loss) | -2,912 | 6,436 | 5,416 | 2,007 | 5,260 | 7,118 | 10,885 | 10,228 | 10,946 | 33,491 | 28,137 | |||||||||||
Net income (loss) | ($2,044) | $3,184 | $2,774 | $876 | $193 | $3,388 | $5,812 | $5,112 | $4,790 | $14,505 | $18,248 | |||||||||||
Earnings (loss) per share attributable to stockholders: (1) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Basic | ($0.07) | [1] | $0.10 | [1] | $0.09 | [1] | $0.03 | [1] | $0.01 | [1] | $0.11 | [1] | $0.19 | [1] | $0.17 | [1] | $0.16 | [1] | $0.48 | [1] | $0.67 | [1] |
Dilutive | ($0.07) | [1] | $0.10 | [1] | $0.09 | [1] | $0.03 | [1] | $0.01 | [1] | $0.11 | [1] | $0.18 | [1] | $0.16 | [1] | $0.15 | [1] | $0.46 | [1] | $0.63 | [1] |
Weighted average common shares: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Basic | 30,883 | 30,926 | 30,739 | 31,052 | 30,797 | 30,351 | 30,277 | 29,924 | 30,900 | 30,339 | 27,133 | |||||||||||
Dilutive | 30,883 | 31,466 | 31,218 | 31,726 | 31,735 | 31,734 | 31,738 | 31,417 | 31,459 | 31,656 | 29,082 | |||||||||||
[1] | The earnings per share calculations for each of the quarters were based upon the weighted average number of shares outstanding during each period, and the sum of the quarters may not be equal to the full year earnings per common share amounts. |
DEFINED_CONTRIBUTION_PLAN_Deta
DEFINED CONTRIBUTION PLAN (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Period of completion of services for qualification of defined contribution plan | '90 days | ' | ' |
Employer contributions | $263 | $153 | $267 |
Participant Contribution Of 100% | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Defined contribution plan, employer matching contribution, percent | 3.00% | ' | ' |
Participant Contribution Of 50% | Maximum | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Defined contribution plan, employer matching contribution, percent | 5.00% | ' | ' |
Participant Contribution Of 50% | Minimum | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Defined contribution plan, employer matching contribution, percent | 4.00% | ' | ' |