Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Jun. 30, 2014 | Aug. 01, 2014 | |
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 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Jun-14 | ' |
Amendment Flag | 'false | ' |
Document Fiscal Period Focus | 'Q2 | ' |
Document Fiscal Year Focus | '2014 | ' |
Entity Common Stock, Shares Outstanding | ' | 30,308,023 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (Unaudited) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets | ' | ' |
Cash and cash equivalents | $12,226 | $15,031 |
Accounts receivable, net of allowances of $2,570 in 2014 and $2,540 in 2013 | 42,043 | 46,591 |
Inventories | 39,367 | 44,539 |
Prepaid expenses and other current assets | 1,322 | 2,403 |
Deferred income tax assets | 8,009 | 7,917 |
Total current assets | 102,967 | 116,481 |
Property and equipment, net of accumulated depreciation at $6,928 in 2014 and $5,778 in 2013 | 5,341 | 5,004 |
Intangible assets, net of accumulated amortization at $28,332 in 2014 and $23,431 in 2013 | 36,318 | 41,219 |
Deferred income tax assets | 11,981 | 11,377 |
Note receivable | 801 | 801 |
Other assets | 549 | 588 |
Total assets | 157,957 | 175,470 |
Current liabilities | ' | ' |
Accounts payable | 21,066 | 15,207 |
Income taxes payable | 688 | 6,359 |
Accrued liabilities | 2,382 | 2,608 |
Accrued wages and wage related expenses | 1,401 | 891 |
Deferred revenue | 57 | 159 |
Sales returns liability | 7,089 | 7,872 |
Total current liabilities | 32,683 | 33,096 |
Revolving line of credit | ' | 17,543 |
Total liabilities | 32,683 | 50,639 |
Stockholders' equity | ' | ' |
Common stock, $0.001 par value; 100,000 shares authorized; 32,608 and 32,331 shares issued in 2014 and 2013, respectively | 33 | 32 |
Additional paid-in capital | 84,078 | 82,807 |
Accumulated other comprehensive income (loss) | -28 | 93 |
Note receivable collateralized by stock | -348 | -348 |
Treasury stock, 2,312 and 1,756 common shares in 2014 and 2013 respectively, at cost | -12,485 | -9,997 |
Retained earnings | 54,024 | 52,244 |
Total stockholders' equity | 125,274 | 124,831 |
Total liabilities and stockholders' equity | $157,957 | $175,470 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, except Per Share data, unless otherwise specified | ||
Statement Of Financial Position [Abstract] | ' | ' |
Allowances for doubtful accounts (in dollars) | $2,570 | $2,540 |
Accumulated depreciation on property and equipment (in dollars) | 6,928 | 5,778 |
Accumulated amortization on Intangible assets (in dollars) | $28,332 | $23,431 |
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) | 32,608 | 32,331 |
Treasury stock (in shares) | 2,312 | 1,756 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (Unaudited) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Income Statement [Abstract] | ' | ' | ' | ' |
Net sales | $50,154 | $51,198 | $99,157 | $102,669 |
Cost of sales | 33,367 | 29,663 | 64,592 | 62,135 |
Gross profit | 16,787 | 21,535 | 34,565 | 40,534 |
Operating expenses: | ' | ' | ' | ' |
Advertising and marketing | 1,378 | 1,914 | 3,386 | 4,253 |
Selling, general and administrative | 11,402 | 11,831 | 22,805 | 24,110 |
Amortization of definite-lived intangibles | 2,427 | 2,374 | 4,855 | 4,748 |
Total operating expenses | 15,207 | 16,119 | 31,046 | 33,111 |
Income from operations | 1,580 | 5,416 | 3,519 | 7,423 |
Other income (expense): | ' | ' | ' | ' |
Interest expense | -40 | -144 | -83 | -371 |
Loss from equity method investment in HzO | ' | -617 | ' | -1,224 |
Other income and (expense) | 24 | -27 | 113 | -47 |
Total other income (expense) | -16 | -788 | 30 | -1,642 |
Income before provision for income taxes | 1,564 | 4,628 | 3,549 | 5,781 |
Income tax provision | -771 | -1,854 | -1,769 | -2,130 |
Net income | $793 | $2,774 | $1,780 | $3,651 |
Earnings per share: | ' | ' | ' | ' |
Basic earnings per share | $0.03 | $0.09 | $0.06 | $0.12 |
Diluted earnings per share | $0.03 | $0.09 | $0.06 | $0.12 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Statement Of Other Comprehensive Income [Abstract] | ' | ' | ' | ' |
Net income | $793 | $2,774 | $1,780 | $3,651 |
Other comprehenseive income (loss), net of tax: | ' | ' | ' | ' |
Foreign currency translation loss | -12 | -66 | -121 | -280 |
Total other comprehensive loss | -12 | -66 | -121 | -280 |
Comprehensive income | $781 | $2,708 | $1,659 | $3,371 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statement of Stockholders' Equity (Unaudited) (USD $) | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Notes Receivable Collateralized By Stock | Treasury Stock | Retained Earnings |
In Thousands | |||||||
Balances at Dec. 31, 2013 | $124,831 | $32 | $82,807 | $93 | ($348) | ($9,997) | $52,244 |
Balances (in shares) at Dec. 31, 2013 | ' | 32,331 | ' | ' | ' | ' | ' |
Net income | 1,780 | ' | ' | ' | ' | ' | 1,780 |
Other comprehensive loss | -121 | ' | ' | -121 | ' | ' | ' |
Purchase of treasury stock | -2,488 | ' | ' | ' | ' | -2,488 | ' |
Option exercises | 183 | 1 | 182 | ' | ' | ' | ' |
Option exercises (in shares) | ' | 116 | ' | ' | ' | ' | ' |
Restricted stock release | ' | ' | ' | ' | ' | ' | ' |
Restricted stock release (in shares) | ' | 161 | ' | ' | ' | ' | ' |
Stock-based compensation expense | 1,171 | ' | 1,171 | ' | ' | ' | ' |
Tax shortfall related to share - based payments | -82 | ' | -82 | ' | ' | ' | ' |
Balances at Jun. 30, 2014 | $125,274 | $33 | $84,078 | ($28) | ($348) | ($12,485) | $54,024 |
Balances (in shares) at Jun. 30, 2014 | ' | 32,608 | ' | ' | ' | ' | ' |
Condensed_Consolidated_Stateme3
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Cash flows from operating activities | ' | ' |
Net income | $1,780 | $3,651 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Stock-based compensation | 1,171 | 2,368 |
Excess tax benefits related to share-based payments | -4 | -48 |
Depreciation and amortization | 6,052 | 6,218 |
Loss from equity method investment in HzO | ' | 1,224 |
Deferred income taxes | -695 | -598 |
Amortization of deferred loan costs | 33 | 60 |
Impairment of investment | ' | 591 |
Changes in operating assets and liabilities | ' | ' |
Accounts receivable | 4,530 | 23,241 |
Inventories | 5,141 | -6,906 |
Prepaid expenses and other current assets | 1,028 | 4,236 |
Other assets | 55 | ' |
Accounts payable | 5,864 | -6,717 |
Income taxes payable | -5,754 | -1,159 |
Accrued liabilities | -218 | -1,478 |
Accrued wages and wage related expenses | 511 | -1,584 |
Deferred revenues | -101 | -536 |
Sales return liability | -782 | -2,830 |
Net cash provided by operating activities | 18,611 | 19,733 |
Cash flows from investing activities | ' | ' |
Purchase of property and equipment, including website development | -1,489 | -869 |
Net cash used in investing activities | -1,489 | -869 |
Cash flows from financing activities | ' | ' |
Proceeds from revolving credit facilities | 10,438 | 35,860 |
Payments on revolving credit facilities | -27,981 | -53,385 |
Payments on term loan | ' | -2,000 |
Purchase of treasury stock | -2,488 | -5,999 |
Proceeds from exercise of warrants and options | 182 | 186 |
Excess tax benefits related to share-based payments | 4 | 48 |
Net cash used in financing activities | -19,845 | -25,290 |
Effect of foreign currency exchange rates on cash and cash equivalents | -82 | -194 |
Net (decrease) in cash and cash equivalents | -2,805 | -6,620 |
Cash and cash equivalents at beginning of the period | 15,031 | 20,177 |
Cash and cash equivalents at end of the period | 12,226 | 13,557 |
Supplemental disclosure of cash flow information | ' | ' |
Cash paid during the period for interest | 69 | 241 |
Cash paid during the period for taxes | 8,179 | 3,759 |
Cash Flow, Noncash Investing and Financing Activities Disclosure [Abstract] | ' | ' |
Reclassification of note receivable to other asset | ' | $138 |
Nature_of_Operations_and_Basis
Nature of Operations and Basis of Presentation | 6 Months Ended | |
Jun. 30, 2014 | ||
Nature of Operations and Basis of Presentation [Abstract] | ' | |
NATURE OF OPERATIONS AND BASIS OF PRESENTATION | ' | |
-1 | NATURE OF OPERATIONS AND BASIS OF PRESENTATION | |
ZAGG Inc and subsidiaries (collectively, the “Company” or “ZAGG”) designs, produces, and distributes professional and premium creative product solutions such as InvisibleShield® screen protection, keyboards for tablet computers and mobile devices, keyboard cases, earbuds, mobile power solutions, cables, cases, Bluetooth® speakers, and cleaning accessories for mobile devices under the family of ZAGG and InvisibleShield brands. In addition, the Company designs, produces, and distributes cases, Bluetooth speakers, Near-Field Audio™ amplifying speakers, earbuds, traditional headphones, and gaming headphones for mobile devices under the family of iFrogz brands in the value-priced lifestyle sector. | ||
The accompanying unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) that, in the opinion of management, are necessary to present fairly the financial position, the results of operations, and cash flows of the Company for the periods presented. The Company suggests that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s 2013 Annual Report on Form 10-K. Operating results for the interim periods are not necessarily indicative of the results that may be expected for the full year. | ||
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. | ||
The condensed consolidated financial statements include the accounts of ZAGG Inc and its wholly owned subsidiaries ZAGG International Distribution Limited; Patriot Corporation; ZAGG Intellectual Property Holding Co, Inc.; ZAGG Retail, Inc.; and iFrogz, Inc. All intercompany transactions and balances have been eliminated in consolidation. | ||
New Accounting Policy – Website Development Costs | ||
During the second quarter of 2014, the Company commenced a website development project utilizing both internal and external developers to improve www.zagg.com and www.ifrogz.com. The development project will provide additional functionality to the website and will transition the websites to an improved software platform. During the three and six months ended June 30, 2014, the Company capitalized website development costs for internal and external developers totaling $289. These costs are included within property and equipment on the consolidated balance sheet. Depreciation of website development costs begins when the internal use software is ready for its intended use and placed in service; as the project is still in the development stage, no depreciation has been recorded. | ||
Recent Accounting Pronouncements | ||
In May 2014, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standard Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” This ASU includes a five-step process by which entities will recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which an entity expects to be entitled to in exchange for those goods or services. The standard also will require enhanced disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The ASU is effective for annual and interim reporting periods beginning after December 15, 2016, with early adoption prohibited. We are currently evaluating the impact this ASU will have on our consolidated financial statements. |
Inventories
Inventories | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Inventories [Abstract] | ' | ||||||||
INVENTORIES | ' | ||||||||
-2 | INVENTORIES | ||||||||
At June 30, 2014, and December 31, 2013, inventories consisted of the following: | |||||||||
30-Jun-14 | 31-Dec-13 | ||||||||
Finished goods | $ | 38,571 | $ | 40,992 | |||||
Raw materials | 796 | 3,547 | |||||||
Total inventory | $ | 39,367 | $ | 44,539 | |||||
In addition, included in prepaid expenses and other current assets were inventory deposits with third-party manufacturers at June 30, 2014 and December 31, 2013 of $384 and $735, respectively. |
Investment_in_HzO
Investment in HzO | 6 Months Ended | |
Jun. 30, 2014 | ||
Investment in HzO [Abstract] | ' | |
INVESTMENT IN HzO | ' | |
-3 | INVESTMENT IN HzO | |
HzO, Inc. (“HzO”) is a private company engaged in the development of water-blocking technologies for consumer and industrial electronics applications. Prior to the fourth quarter of 2013, the Company accounted for its investment in HzO under the equity method of accounting. However, due to an equity raise by HzO during the fourth quarter of 2013 that reduced ZAGG’s ownership percentage below 20%, the Company began accounting for the investment as a cost method investment. During the second quarter of 2014, HzO raised an additional $20,000 in equity capital. ZAGG did not participate in the capital raise, the result of which reduced ZAGG’s ownership interest in HzO from 15.3% to 11.4% at June 30, 2014. | ||
The carrying value of the investment at December 31, 2013 was $0 due to the accumulated losses. The balance at June 30, 2014 remains at $0. | ||
For the three and six months ended June 30, 2014, the Company recorded a loss from investment in HzO of $0 as the investment was reduced to $0 during the fourth quarter of 2013 and was accounted for as a cost method investment in 2014. For the three and six months ended June 30, 2013, the Company recorded a loss from investment in HzO of $617 and $1,224, respectively, under the equity method. The loss from investment in HzO was recorded as a component of other expense in the consolidated statement of operations in each respective period. |
Intangible_Assets
Intangible Assets | 6 Months Ended | |||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||
Intangible Assets [Abstract] | ' | |||||||||||||||||||||
INTANGIBLE ASSETS | ' | |||||||||||||||||||||
-4 | INTANGIBLE ASSETS | |||||||||||||||||||||
Definite-lived intangibles as of June 30, 2014, and December 31, 2013, were as follows: | ||||||||||||||||||||||
As of June 30, 2014 | ||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Write-off of Fully Amortized Intangible | Transfers from Indefinite-life Classification | Net Carrying Amount | Weighted Average Amortization Period | |||||||||||||||||
Customer relationships | $ | 41,500 | $ | (20,688 | ) | $ | — | $ | — | $ | 20,812 | 8.0 years | ||||||||||
Non-compete agreements | 4,100 | (2,559 | ) | — | — | 1,541 | 4.8 years | |||||||||||||||
Other Trademarks | 3,500 | (1,967 | ) | — | — | 1,533 | 9.7 years | |||||||||||||||
iFrogz Trademark | 7,038 | (576 | ) | — | — | 6,462 | 10.0 years | |||||||||||||||
EarPollution Trademark | 2,383 | (790 | ) | — | — | 1,593 | 8.0 years | |||||||||||||||
Other | 600 | (520 | ) | — | — | 80 | 5.0 years | |||||||||||||||
Acquired technology | 709 | (212 | ) | — | — | 497 | 7.0 years | |||||||||||||||
Internet address | 124 | (72 | ) | — | — | 52 | 10.0 years | |||||||||||||||
Patents | 4,696 | (948 | ) | — | — | 3,748 | 12.5-14.0 years | |||||||||||||||
Total amortizable assets | $ | 64,650 | $ | (28,332 | ) | $ | — | $ | — | $ | 36,318 | 8.4 years | ||||||||||
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 | |||||||||
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 three and six months ended June 30, 2014, amortization expense was $2,453 and $4,900, respectively. Amortization expense was primarily recorded as a component of operating expense. However, amortization expense related to acquired technology for the three and six months ended June 30, 2014, of $26 and $45, respectively, was recorded as a component of cost of sales. | ||||||||||||||||||||||
For the three and six months ended June 30, 2013, amortization expense was $2,394 and $4,782, respectively. Amortization expense related to acquired technology for the three and six months ended June 30, 2013, of $20 and $34, respectively, was recorded as a component of cost of sales. | ||||||||||||||||||||||
Estimated future amortization expense is as follows: | ||||||||||||||||||||||
Remaining 2014 | $ | 4,911 | ||||||||||||||||||||
2015 | 8,560 | |||||||||||||||||||||
2016 | 7,125 | |||||||||||||||||||||
2017 | 5,649 | |||||||||||||||||||||
2018 and thereafter | 10,073 | |||||||||||||||||||||
Total | $ | 36,318 | ||||||||||||||||||||
Debt_and_Letters_of_Credit
Debt and Letters of Credit | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Debt and Letters of Credit [Abstract] | ' | ||||
DEBT AND LETTERS OF CREDIT | ' | ||||
-5 | DEBT AND LETTERS OF CREDIT | ||||
On December 20, 2013, the Company and Wells Fargo Bank, National Association (“Wells Fargo”), entered into a First Amendment to Credit Agreement (“Amendment”), which modifies a 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 $5,000. During the three and six months ending June 30, 2014 and 2013, the Company did not issue any standby commercial letters of credit. | |||||
As consideration for entering into the Amendment, the Company paid 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 equal to 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. 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 adjustment is 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 pays Wells Fargo a quarterly fee based on the average unused amount of the Line of Credit depending on the Company’s ratio of Total Liabilities to Tangible Net Worth (as these terms are defined in the Credit Agreement) 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 1.00 | 0.25 | % | |||
Less than .65 | 0.15 | % | |||
For the three and six months ended June 30, 2014, $22 and $45, respectively, in unused line fees had been incurred and was included as a component of interest expense in the consolidated statement of operations. For the three and six months ended June 30, 2013, $21 and $35, respectively, in unused line fees had been incurred and was included as a component of interest expense in the consolidated statement of operations. | |||||
At June 30, 2014 and 2013, the weighted average interest rate on all outstanding borrowings under the Line of Credit was 1.00% and 1.63%, respectively. At June 30, 2014 and 2013, 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. For the three and six months ended June 30, 2014, the Company amortized $16 and $32, respectively of these loan costs, which is included as a component of interest expense in the consolidated statement of operations. For the three and six months ended June 30, 2013, the Company amortized $30 and $60, respectively of these loan costs, which is included as a component of interest expense in the consolidated statement of operations. | |||||
The Company amortizes deferred loan costs under the straight-line method. The carrying value of deferred loan costs at June 30, 2014 and December 31, 2013, was $93 and $126, respectively, and is included as a component of noncurrent other assets in the consolidated balance sheet. | |||||
The Company is also subject to a number of financial and non-financial debt covenants under the Credit Agreement. At June 30, 2014, the Company was in compliance with all covenants associated with the Credit Agreement. | |||||
Payment in full under the Credit Agreement is due on December 1, 2015. However, at June 30, 2014, the balance on the line of credit was zero. |
StockBased_Compensation
Stock-Based Compensation | 6 Months Ended | |
Jun. 30, 2014 | ||
Stock-Based Compensation [Abstract] | ' | |
STOCK-BASED COMPENSATION | ' | |
(6) | STOCK-BASED COMPENSATION | |
Common Stock Options | ||
For the three and six months ended June 30, 2014 and 2013, the Company granted no stock option awards. | ||
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 three and six months ended June 30, 2014, the Company recorded equity-based compensation expense related to stock options of $28. During the three and six months ended June 30, 2013, the Company recorded equity-based compensation expense related to stock options of $66 and $162, respectively. | ||
Restricted Stock | ||
During the three and six months ended June 30, 2014, the Company granted 191 and 470 shares of restricted stock, respectively. During the three and six months ended June 30, 2013, the Company granted 7 and 265 shares of restricted stock, respectively. The shares of restricted stock granted during the three and six months ended June 30, 2014, were estimated to have a weighted-average fair value per share of $4.63 and $4.60, respectively. The shares of restricted stock granted during the three and six months ended June 30, 2013, were estimated to have a weighted-average fair value per share of $5.28 and $7.24, respectively. The fair value of the restricted stock granted is based on the closing share price of the Company’s common stock on the date of grant. The shares of restricted stock vest annually on a straight-line basis over a 12-month to three-year vesting term, depending on the terms of the individual grant. | ||
As part of the grants discussed above, during the second quarter of 2014, the Company granted 108 restricted stock units to certain executives of the Company. These restricted stock units only vest upon the Company’s achievement of certain thresholds of net sales, Adjusted EBITDA, and earnings per share for fiscal year 2014. If the Company achieves the target amount of net sales, Adjusted EBTIDA, and earnings per share, all 108 restricted stock units will vest under the terms of the grant. If the Company achieves less than 100% of the target, but above 85%, the number of restricted stock units vested will decrease proportionately. However, if the Company’s performance is below 85% of the target, all restricted stock units will be forfeited. If the Company achieves more than 100% of the target, but below 115%, the number of restricted stock units vested will increase proportionately, though will not exceed 115% of the target. As of June 30, 2014, the Company believes it is probable that it will achieve 100% of the target. | ||
The Company recorded share-based compensation expense only for those shares of restricted stock that are expected to vest. The estimated fair value of the restricted stock 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 three and six months ended June 30, 2014, the Company recorded equity-based compensation expense related to restricted stock of $650 and $1,143, respectively, which is included as a component of selling, general, and administrative expense. During the three and six months ended June 30, 2013, the Company recorded equity-based compensation expense related to restricted stock of $1,264 and $2,206, respectively, which is included as a component of selling, general, and administrative expense. |
Income_Taxes
Income Taxes | 6 Months Ended | |
Jun. 30, 2014 | ||
Income Tax [Abstract] | ' | |
INCOME TAXES | ' | |
-7 | INCOME TAXES | |
During the three and six months ended June 30, 2014, the Company’s effective tax rate was 49% and 50%, respectively. During the three and six months ended June 30, 2013, the Company’s effective tax rate was 40% and 37%, respectively. The Company’s effective tax rate will generally differ from the U.S. Federal Statutory rate of 35%, due to state taxes, permanent items, and the Company’s global tax strategy. During the first six months of 2013, the reduced tax rate was largely due to a tax law passed during the quarter that allowed a research and development credit for activities incurred during 2012. However, no comparative tax credit was available during the first six months of 2014. In addition, during the first six months of 2014, the increased tax rate was also due to losses incurred in low tax rate jurisdictions that do not benefit the overall corporate tax rate. All earnings at foreign locations are considered to be permanently re-invested for tax purposes. |
Earnings_Per_Share
Earnings Per Share | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Earnings Per Share [Abstract] | ' | ||||||||
EARNINGS PER SHARE | ' | ||||||||
-8 | EARNINGS PER SHARE | ||||||||
Basic earnings per common share excludes dilution and is computed by dividing net income by weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share reflect the potential dilution that could occur if stock options and restricted stock, 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 three and six months ended June 30, 2014 and 2013: | |||||||||
Three months ended | |||||||||
30-Jun-14 | 30-Jun-13 | ||||||||
Net income | $ | 793 | $ | 2,774 | |||||
Weighted average shares outstanding | 30,281 | 30,739 | |||||||
Dilutive effect of warrants, restricted stock | 294 | 479 | |||||||
and stock options | |||||||||
Diluted shares | 30,575 | 31,218 | |||||||
Earnings per share: | |||||||||
Basic | $ | 0.03 | $ | 0.09 | |||||
Dilutive | $ | 0.03 | $ | 0.09 | |||||
Six months ended | |||||||||
30-Jun-14 | 30-Jun-13 | ||||||||
Net income | $ | 1,780 | $ | 3,651 | |||||
Weighted average shares outstanding | 30,414 | 30,895 | |||||||
Dilutive effect of warrants, restricted stock | 305 | 576 | |||||||
and stock options | |||||||||
Diluted shares | 30,719 | 31,471 | |||||||
Earnings per share: | |||||||||
Basic | $ | 0.06 | $ | 0.12 | |||||
Dilutive | $ | 0.06 | $ | 0.12 | |||||
For the three months ended June 30, 2014 and 2013, warrants, restricted stock, and stock options to purchase 512 and 459 shares of common stock 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. Also excluded from the calculation of diluted earnings per share for the three months ended June 30, 2014, were 108 restricted stock units granted whose vesting is based on a performance condition (see further discussion in Note 6). | |||||||||
For the six months ended June 30, 2014 and 2013, warrants, restricted stock, and stock options to purchase 514 and 459 shares of common stock, 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. Also excluded from the calculation of diluted earnings per share for the six months ended June 30, 2014, were 108 restricted stock units granted whose vesting is based on a performance condition (see further discussion in Note 6). |
Treasury_Stock
Treasury Stock | 6 Months Ended | |
Jun. 30, 2014 | ||
Treasury Stock [Abstract] | ' | |
TREASURY STOCK | ' | |
-9 | TREASURY STOCK | |
In each of fiscal year 2014 and 2013, the Company’s board of directors authorized the repurchase of up to $10,000 of the Company’s outstanding common stock. The Company’s board of directors also authorized the Company to enter into a Rule 10b5-1 plan when appropriate. | ||
For the three and six months ended June 30, 2014 the Company purchased zero and 556 shares, respectively, of ZAGG Inc common stock. Cash consideration paid for the purchase of ZAGG Inc common stock for the three and six months ended June 30, 2014 was $0 and $2,488, respectively. Cash consideration for the three and six months ended June 30, 2014 included commissions paid to brokers of $0 and $16, respectively. Stock purchased in the three and six months ended June 30, 2014 had a weighted average price per share of $0 and $4.45, respectively. The consideration paid has been recorded within stockholders’ equity in the condensed consolidated balance sheet. | ||
For the three and six months ended June 30, 2013 the Company purchased zero and 797 shares, respectively, of ZAGG Inc common stock. Cash consideration paid for the purchase of ZAGG Inc common stock for the three and six months ended June 30, 2013 was $0 and $5,999, respectively. Cash consideration for the three and six months ended June 30, 2013 included commissions paid to brokers of $0 and $24, respectively. Stock purchased in the three and six months ended June 30, 2013 had a weighted average price per share of $0 and $7.50, respectively. The consideration paid has been recorded within stockholders’ equity in the condensed consolidated balance sheet. |
Note_Receivable
Note Receivable | 6 Months Ended | |
Jun. 30, 2014 | ||
Note Receivable [Abstract] | ' | |
NOTE RECEIVABLE | ' | |
-10 | 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 America. 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 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 are currently being held by the Third District Court in the State of Utah, 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 June 30, 2014, management determined that the estimated fair value of the underlying collateral was between $1,422 and $1,557. 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 ($1,422) 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 $1,422. 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 above. 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. 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 June 30, 2014, the total unpaid principle balance, including accrued interest, late fees and costs incurred in collection, totaled $4,458. |
Fair_Value_Measures
Fair Value Measures | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Fair Value Measures [Abstract] | ' | ||||||||||||||||
FAIR VALUE MEASURES | ' | ||||||||||||||||
-11 | FAIR VALUE MEASURES | ||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||
At June 30, 2014 and December 31, 2013, 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 line of credit balance approximates fair value because the variable interest rates reflect current market rates (though the balance at June 30, 2014 was $0). | |||||||||||||||||
In addition, as discussed in Note 10, 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 currently being held by the Third District Court in the State of Utah. Management determined that the fair value of the collateral exceeded the carrying value of the note receivable at June 30, 2014. | |||||||||||||||||
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 June 30, 2014, and December 31, 2013, the following assets and liabilities were measured at fair value on a recurring basis using the level of inputs shown: | |||||||||||||||||
Fair Value Measurements Using: | |||||||||||||||||
30-Jun-14 | Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | ||||||||||||||
Money market funds included in cash equivalents | $ | 254 | $ | 254 | — | — | |||||||||||
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 | — | — | |||||||||||
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. | |||||||||||||||||
There were no assets held at June 30, 2014, measured at fair value on a non-recurring basis that resulted in a change in carrying value during the period. | |||||||||||||||||
The following table presents assets held as of December 31, 2013, measured at fair value on a non-recurring basis using the level of inputs shown at the time of impairment. | |||||||||||||||||
Fair Value Measurements Using: | |||||||||||||||||
31-Dec-13 | Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | ||||||||||||||
Goodwill | $ | — | — | — | $ | — | |||||||||||
iFrogz trademark | $ | 7,038 | — | — | $ | 7,038 | |||||||||||
At December 31, 2013, management performed an impairment analysis 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. |
Concentrations
Concentrations | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Concentrations [Abstract] | ' | ||||||||
CONCENTRATIONS | ' | ||||||||
-12 | 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 June 30, 2014. | |||||||||
At June 30, 2014, approximately 62% of the balance of accounts receivable was due from two customers, each with a balance greater than 10% of the total accounts receivable balance. No other customer account balances were more than 10% of the balance of accounts receivable. At December 31, 2013, approximately 44% of the balance of accounts receivable was due from one customer. No other customer account balances were more that 10% of accounts receivable. 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 film products 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. | |||||||||
Concentration of sales | |||||||||
For the three months ended June 30, 2014, two customers individually accounted for over 10% of the quarterly revenues at 31% and 19%. No other customer account balances were more than 10% of sales. For the three months ended June 30, 2013, two customers individually accounted for over 10% of the quarterly revenues at 24% and 19%. No other customer account balances were more than 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 three months ended June 30, 2014 and 2013, was approximately: | |||||||||
Three months ended June 30, 2014 | Three months ended June 30, 2013 | ||||||||
United States | 90 | % | 90 | % | |||||
Europe | 7 | % | 5 | % | |||||
Other | 3 | % | 5 | % | |||||
For the six months ended June 30, 2014, two customers individually accounted for over 10% of the quarterly revenues at 25% and 19%. No other customer account balances were more than 10% of sales. For the six months ended June 30, 2013, two customers individually accounted for over 10% of the quarterly revenues at 23% and 17%. No other customer account balances were more than 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 six months ended June 30, 2014 and 2013, was approximately: | |||||||||
Six months ended June 30, 2014 | Six months ended June 30, 2013 | ||||||||
United States | 86 | % | 90 | % | |||||
Europe | 9 | % | 5 | % | |||||
Other | 5 | % | 5 | % | |||||
Commitments_and_Contingencies
Commitments and Contingencies | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
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 June 30, 2014 are as follows: | |||||
Remaining 2014 | $ | 620 | |||
2015 | 815 | ||||
2016 | 696 | ||||
2017 | 302 | ||||
2018 and thereafter | — | ||||
Total | $ | 2,433 | |||
For the three months ended June 30, 2014 and 2013, rent expense was $407 and $425, respectively. Rent expense for the three months ended June 30, 2014 and 2013 was net of sublease income of $181 and $269, respectively. | |||||
For the six months ended June 30, 2014 and 2013, rent expense was $968 and $836, respectively. Rent expense for the six months ended June 30, 2014 and 2013 was net of sublease income of $348 and $500, 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. | |||||
Patent 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 Armor, LLC that seeks to enforce rights under United States Patent No. 7,957,524. The defendants 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 (“USPTO”). The reexamination led to amendments to the claims of the patent, and the USPTO 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. This dismissal was appealed and again decided in the Company’s favor in a final decision by the appeals Court of Berlin. The oral hearing in the infringement matter was heard on July 1, 2014 during which the Court found in the Company’s favor and granted injunctive relief as well as damages and costs in an amount to be determined. 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. | |||||
ZAGG Intellectual Property Holding Co v. Tech21 et al., 2:14-cv-00113-BCW. On February 18, 2014, ZAGG IP filed a complaint against Tech21, Ltd. in U.S. District Court, District of Utah. The complaint alleges, among other things, that the defendant makes, uses, sells, offers for sale, and/or imports into the United States a kit for protecting a surface of an electronic device that infringes at least one claim of ZAGG IP’s U.S. patent No. 8,567,596 entitled Electronic Device Protective Film Application Kit and Method. The defendant has not filed any counterclaims and no material determinations have been made by the court in this matter. | |||||
ZAGG Intellectual Property Holding Co v. Superior Communications, Inc., 2:14-cv-00121-TS. On February 19, 2014, ZAGG IP filed a complaint against Superior Communications, Inc. in U.S. District Court, District of Utah. The complaint alleges, among other things, that the defendant makes, uses, sells, offers for sale, and/or imports into the United States kits for protecting a surface of an electronic device that infringe at least one claim of ZAGG IP’s U.S. patent No. 8,567,596 entitled Electronic Device Protective Film Application Kit and Method. The defendant has not filed any counterclaims and no material determinations have been made by the court in this matter. | |||||
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. On June 17, 2014, plaintiffs filed their opening appellate brief appealing the Courts decision with respect to some of their claims. The appeal is now pending in the Tenth Circuit. | |||||
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. On April 4, 2014, the defendants moved to dismiss the consolidated complaint. | |||||
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. The Company has not accrued for any loss at June 30, 2014 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. |
Nature_of_Operations_and_Basis1
Nature of Operations and Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2014 | |
Nature of Operations and Basis of Presentation [Abstract] | ' |
New Accounting Policy - Website Development Costs | ' |
New Accounting Policy – Website Development Costs | |
During the second quarter of 2014, the Company commenced a website development project utilizing both internal and external developers to improve www.zagg.com and www.ifrogz.com. The development project will provide additional functionality to the website and will transition the websites to an improved software platform. During the three and six months ended June 30, 2014, the Company capitalized website development costs for internal and external developers totaling $289. These costs are included within property and equipment on the consolidated balance sheet. Depreciation of website development costs begins when the internal use software is ready for its intended use and placed in service; as the project is still in the development stage, no depreciation has been recorded. | |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements | |
In May 2014, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standard Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” This ASU includes a five-step process by which entities will recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which an entity expects to be entitled to in exchange for those goods or services. The standard also will require enhanced disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The ASU is effective for annual and interim reporting periods beginning after December 15, 2016, with early adoption prohibited. We are currently evaluating the impact this ASU will have on our consolidated financial statements. |
Inventories_Tables
Inventories (Tables) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Inventories [Abstract] | ' | ||||||||
Schedule of summary of inventories | ' | ||||||||
30-Jun-14 | 31-Dec-13 | ||||||||
Finished goods | $ | 38,571 | $ | 40,992 | |||||
Raw materials | 796 | 3,547 | |||||||
Total inventory | $ | 39,367 | $ | 44,539 | |||||
Intangible_Assets_Tables
Intangible Assets (Tables) | 6 Months Ended | |||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||
Intangible Assets [Abstract] | ' | |||||||||||||||||||||
Schedule of definite-lived intangibles | ' | |||||||||||||||||||||
As of June 30, 2014 | ||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Write-off of Fully Amortized Intangible | Transfers from Indefinite-life Classification | Net Carrying Amount | Weighted Average Amortization Period | |||||||||||||||||
Customer relationships | $ | 41,500 | $ | (20,688 | ) | $ | — | $ | — | $ | 20,812 | 8.0 years | ||||||||||
Non-compete agreements | 4,100 | (2,559 | ) | — | — | 1,541 | 4.8 years | |||||||||||||||
Other Trademarks | 3,500 | (1,967 | ) | — | — | 1,533 | 9.7 years | |||||||||||||||
iFrogz Trademark | 7,038 | (576 | ) | — | — | 6,462 | 10.0 years | |||||||||||||||
EarPollution Trademark | 2,383 | (790 | ) | — | — | 1,593 | 8.0 years | |||||||||||||||
Other | 600 | (520 | ) | — | — | 80 | 5.0 years | |||||||||||||||
Acquired technology | 709 | (212 | ) | — | — | 497 | 7.0 years | |||||||||||||||
Internet address | 124 | (72 | ) | — | — | 52 | 10.0 years | |||||||||||||||
Patents | 4,696 | (948 | ) | — | — | 3,748 | 12.5-14.0 years | |||||||||||||||
Total amortizable assets | $ | 64,650 | $ | (28,332 | ) | $ | — | $ | — | $ | 36,318 | 8.4 years | ||||||||||
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 | |||||||||
Schedule of estimated future amortization expense | ' | |||||||||||||||||||||
Remaining 2014 | $ | 4,911 | ||||||||||||||||||||
2015 | 8,560 | |||||||||||||||||||||
2016 | 7,125 | |||||||||||||||||||||
2017 | 5,649 | |||||||||||||||||||||
2018 and thereafter | 10,073 | |||||||||||||||||||||
Total | $ | 36,318 |
Debt_and_Letters_of_Credit_Tab
Debt and Letters of Credit (Tables) | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
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 1.00 | 0.25 | % | |||
Less than .65 | 0.15 | % |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Earnings Per Share [Abstract] | ' | ||||||||
Schedule of reconciliation of the numerator and denominator used to calculate basic earnings per share and diluted earnings per share | ' | ||||||||
Three months ended | |||||||||
30-Jun-14 | 30-Jun-13 | ||||||||
Net income | $ | 793 | $ | 2,774 | |||||
Weighted average shares outstanding | 30,281 | 30,739 | |||||||
Dilutive effect of warrants, restricted stock | 294 | 479 | |||||||
and stock options | |||||||||
Diluted shares | 30,575 | 31,218 | |||||||
Earnings per share: | |||||||||
Basic | $ | 0.03 | $ | 0.09 | |||||
Dilutive | $ | 0.03 | $ | 0.09 | |||||
Six months ended | |||||||||
30-Jun-14 | 30-Jun-13 | ||||||||
Net income | $ | 1,780 | $ | 3,651 | |||||
Weighted average shares outstanding | 30,414 | 30,895 | |||||||
Dilutive effect of warrants, restricted stock | 305 | 576 | |||||||
and stock options | |||||||||
Diluted shares | 30,719 | 31,471 | |||||||
Earnings per share: | |||||||||
Basic | $ | 0.06 | $ | 0.12 | |||||
Dilutive | $ | 0.06 | $ | 0.12 |
Fair_Value_Measures_Tables
Fair Value Measures (Tables) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Fair Value Measures [Abstract] | ' | ||||||||||||||||
Schedule of assets and liabilities measured at fair value on a recurring basis | ' | ||||||||||||||||
Fair Value Measurements Using: | |||||||||||||||||
30-Jun-14 | Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | ||||||||||||||
Money market funds included in cash equivalents | $ | 254 | $ | 254 | — | — | |||||||||||
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 | — | — | |||||||||||
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 |
Concentrations_Tables
Concentrations (Tables) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Concentrations [Abstract] | ' | ||||||||
Schedule of percentage of sales by geographic region | ' | ||||||||
Three months ended June 30, 2014 | Three months ended June 30, 2013 | ||||||||
United States | 90 | % | 90 | % | |||||
Europe | 7 | % | 5 | % | |||||
Other | 3 | % | 5 | % | |||||
Six months ended June 30, 2014 | Six months ended June 30, 2013 | ||||||||
United States | 86 | % | 90 | % | |||||
Europe | 9 | % | 5 | % | |||||
Other | 5 | % | 5 | % |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Commitments and Contingencies [Abstract] | ' | ||||
Schedule of future minimum rental payments required under the operating leases | ' | ||||
Remaining 2014 | $ | 620 | |||
2015 | 815 | ||||
2016 | 696 | ||||
2017 | 302 | ||||
2018 and thereafter | — | ||||
Total | $ | 2,433 |
Nature_of_Operations_and_Basis2
Nature of Operations and Basis of Presentation (Details) (Software Development [Member], USD $) | 3 Months Ended | 6 Months Ended |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2014 |
Software Development [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Capitalized website development cost | $289 | $289 |
Inventories_Summary_of_invento
Inventories - Summary of inventory (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Inventories [Abstract] | ' | ' |
Finished goods | $38,571 | $40,992 |
Raw materials | 796 | 3,547 |
Total inventory | $39,367 | $44,539 |
Inventories_Detail_Textuals
Inventories (Detail Textuals) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Inventories [Abstract] | ' | ' |
Inventory deposits with third-party manufacturers | $384 | $735 |
Investment_in_HzO_Detail_Textu
Investment in HzO (Detail Textuals) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Mar. 31, 2014 |
HzO, Inc | HzO, Inc | HzO, Inc | |||||
Variable Interest Entity [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Percentage of equity method investment ownership | ' | ' | ' | ' | 11.40% | ' | 15.30% |
Reduced ownership interest | ' | ' | ' | ' | ' | 20.00% | ' |
Ownership interest, Description | ' | ' | ' | ' | 'HzO raised an additional $20,000 in equity capital. ZAGG did not participate in the capital raise, the result of which reduced ZAGG's ownership interest in HzO from 15.3% to 11.4% at June 30, 2014. | ' | ' |
Loss from equity method investment in HzO | ' | ($617) | ' | ($1,224) | ' | ' | ' |
Carrying value of the investment | ' | ' | ' | ' | $0 | $0 | ' |
Intangible_Assets_Details
Intangible Assets (Details) (USD $) | 6 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Dec. 31, 2013 |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | $64,650 | $57,673 |
Accumulated Amortization | -28,332 | -23,431 |
Write-off of Fully Amortized Intangible | ' | -61 |
Transfers from Indefinite-life Classification | ' | 7,038 |
Net Carrying Amount | 36,318 | 41,219 |
Weighted Average Amortization Period | '8 years 4 months 24 days | '8 years 4 months 24 days |
Customer relationships | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | 41,500 | 41,500 |
Accumulated Amortization | -20,688 | -17,537 |
Write-off of Fully Amortized Intangible | ' | ' |
Transfers from Indefinite-life Classification | ' | ' |
Net Carrying Amount | 20,812 | 23,963 |
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 | -2,559 | -2,169 |
Write-off of Fully Amortized Intangible | ' | ' |
Transfers from Indefinite-life Classification | ' | ' |
Net Carrying Amount | 1,541 | 1,931 |
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 | -1,967 | -1,719 |
Write-off of Fully Amortized Intangible | ' | ' |
Transfers from Indefinite-life Classification | ' | ' |
Net Carrying Amount | 1,533 | 1,781 |
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 | 7,038 | ' |
Accumulated Amortization | -576 | ' |
Write-off of Fully Amortized Intangible | ' | ' |
Transfers from Indefinite-life Classification | ' | 7,038 |
Net Carrying Amount | 6,462 | 7,038 |
Weighted Average Amortization Period | '10 years | '10 years |
EarPollution Trademark | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | 2,383 | 2,383 |
Accumulated Amortization | -790 | -554 |
Write-off of Fully Amortized Intangible | ' | ' |
Transfers from Indefinite-life Classification | ' | ' |
Net Carrying Amount | 1,593 | 1,829 |
Weighted Average Amortization Period | '8 years | '8 years |
Other | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | 600 | 661 |
Accumulated Amortization | -520 | -487 |
Write-off of Fully Amortized Intangible | ' | -61 |
Transfers from Indefinite-life Classification | ' | ' |
Net Carrying Amount | 80 | 113 |
Weighted Average Amortization Period | '5 years | '5 years |
Acquired technology | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | 709 | 709 |
Accumulated Amortization | -212 | -165 |
Write-off of Fully Amortized Intangible | ' | ' |
Transfers from Indefinite-life Classification | ' | ' |
Net Carrying Amount | 497 | 544 |
Weighted Average Amortization Period | '7 years | '7 years |
Internet address | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | 124 | 124 |
Accumulated Amortization | -72 | -66 |
Write-off of Fully Amortized Intangible | ' | ' |
Transfers from Indefinite-life Classification | ' | ' |
Net Carrying Amount | 52 | 58 |
Weighted Average Amortization Period | '10 years | '10 years |
Patents | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | 4,696 | 4,696 |
Accumulated Amortization | -948 | -734 |
Write-off of Fully Amortized Intangible | ' | ' |
Transfers from Indefinite-life Classification | ' | ' |
Net Carrying Amount | $3,748 | $3,962 |
Patents | Minimum | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Weighted Average Amortization Period | '12 years 6 months | '12 years 6 months |
Patents | Maximum | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Weighted Average Amortization Period | '14 years | '14 years |
Intangible_Assets_Details_1
Intangible Assets (Details 1) (USD $) | Jun. 30, 2014 |
In Thousands, unless otherwise specified | |
Intangible Assets [Abstract] | ' |
Remaining 2014 | $4,911 |
2015 | 8,560 |
2016 | 7,125 |
2017 | 5,649 |
2018 and thereafter | 10,073 |
Total | $36,318 |
Intangible_Assets_Detail_Textu
Intangible Assets (Detail Textuals) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' |
Amortization expenses | $2,427 | $2,374 | $4,855 | $4,748 |
Cost of Sales | Acquired technology | ' | ' | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' |
Amortization expenses | 26 | 20 | 45 | 34 |
Operating Expense | ' | ' | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' |
Amortization expenses | $2,453 | $2,394 | $4,900 | $4,782 |
Debt_and_Letters_of_Credit_App
Debt and Letters of Credit - Applicable Libor Margin (Details) | 6 Months Ended |
Jun. 30, 2014 | |
Total Liabilities To Tangible Net Worth [Line Items] | ' |
Applicable LIBOR Margin | 1.25% |
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) | 6 Months Ended |
Jun. 30, 2014 | |
1.00 or greater | ' |
Total Liabilities To Tangible Net Worth [Line Items] | ' |
Applicable Unused Commitment Fee (per annum) | 0.35% |
.65 or greater, but less than 1.00 | ' |
Total Liabilities To Tangible Net Worth [Line Items] | ' |
Applicable Unused Commitment Fee (per annum) | 0.25% |
Less than .65 | ' |
Total Liabilities To Tangible Net Worth [Line Items] | ' |
Applicable Unused Commitment Fee (per annum) | 0.15% |
Debt_and_Letters_of_Credit_Wel
Debt and Letters of Credit - Wells Fargo Term Loan and Revolving Line of Credit Facility (Detail Textuals) (USD $) | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 6 Months Ended | ||||||||||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 20, 2013 | Dec. 07, 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 | Wells Fargo Bank | Wells Fargo Bank | Wells Fargo Bank | Term Loan Facility | Term Loan Facility | Term Loan Facility | Standby commercial letters of credit | |||
Interest Expense | Interest Expense | Interest Expense | Interest Expense | Other Noncurrent Assets | Other Noncurrent Assets | 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 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $60,000 | $24,000 | $5,000 |
Maturity date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'December 1, 2014 to December 1, 2015 | ' | ' | ' |
Line of credit facility, outstanding balance | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 18,000 | ' | ' |
Amendment fee | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 30 | ' | ' | ' |
Line of credit maturity date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1-Dec-15 | ' | ' | ' |
Basis spread on variable rate (in percent) | 1.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unused line fees | ' | ' | ' | ' | ' | ' | 22 | 21 | 45 | 35 | ' | ' | ' | ' | ' | ' |
Weighted average interest rate on all outstanding borrowings | ' | ' | 1.00% | 1.63% | 1.00% | 1.63% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Effective interest rate | 1.11% | 2.31% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payment of debt issuance costs | 238 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization of deferred loan costs | ' | ' | 16 | 30 | 32 | 60 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred loan costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $93 | $126 | ' | ' | ' | ' |
StockBased_Compensation_Detail
Stock-Based Compensation (Detail Textuals) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Restricted stock | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Number of restricted stock granted | 191 | 7 | 470 | 265 |
Weighted average fair value of restricted stock per share | $4.63 | $5.28 | $4.60 | $7.24 |
Restricted stock | Selling, general and administrative expenses | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Equity based compensation expense | $650 | $1,264 | $1,143 | $2,206 |
Restricted stock | Minimum | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Term of restricted stock vested | ' | ' | '12 months | ' |
Restricted stock | Maximum | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Term of restricted stock vested | ' | ' | '3 years | ' |
Restricted stock | Executives [Member] | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Number of restricted stock granted | 108 | ' | ' | ' |
Restricted stock performance target, Description | 'If the Company achieves less than 100% of the target, but above 85%, the number of restricted stock units vested will decrease proportionately. However, if the Company's performance is below 85% of the target, all restricted stock units will be forfeited. If the Company achieves more than 100% of the target, but below 115%, the number of restricted stock units vested will increase proportionately, though will not exceed 115% of the target. As of June 30, 2014, the Company believes it is probable that it will achieve 100% of the target. | ' | ' | ' |
Common stock options | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Net tax benefit recognized on equity-based compensation expense | $28 | $66 | $28 | $162 |
Income_Taxes_Details_Textuals
Income Taxes (Details Textuals) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Income Tax [Abstract] | ' | ' | ' | ' |
Effective tax rate | 49.00% | 40.00% | 50.00% | 37.00% |
Federal statutory rate | ' | ' | 35.00% | ' |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Earnings Per Share [Abstract] | ' | ' | ' | ' |
Net income | $793 | $2,774 | $1,780 | $3,651 |
Weighted average shares outstanding | 30,281 | 30,739 | 30,414 | 30,895 |
Dilutive effect of warrants, restricted stock and stock options | 294 | 479 | 305 | 576 |
Diluted shares | 30,575 | 31,218 | 30,719 | 31,471 |
Earnings per share: | ' | ' | ' | ' |
Basic | $0.03 | $0.09 | $0.06 | $0.12 |
Dilutive | $0.03 | $0.09 | $0.06 | $0.12 |
Earnings_Per_ShareDetail_Textu
Earnings Per Share(Detail Textuals) (Restricted Stock Warrants and Stock Options) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
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 | 512 | 459 | 514 | 459 |
Number of restricted stock granted | 108 | ' | 108 | ' |
Treasury_Stock_Detail_Textuals
Treasury Stock (Detail Textuals) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Treasury Stock [Abstract] | ' | ' | ' | ' |
Number of repurchase of shares authorized by board of directors | 10,000 | 10,000 | 10,000 | 10,000 |
Number of common stock repurchased under plan | 0 | 0 | 556 | 797 |
Cash consideration paid for repurchase of common stock | $0 | $0 | $2,488 | $5,999 |
Weighted average price per share of stock repurchase | $0 | $0 | $4.45 | $7.50 |
Commissions paid to brokers | $0 | $0 | $16 | $24 |
Note_Receivable_Detail_Textual
Note Receivable (Detail Textuals) (USD $) | 6 Months Ended | 1 Months Ended | ||||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Mar. 23, 2011 | Dec. 31, 2010 | Mar. 23, 2011 | Jun. 17, 2009 | Mar. 23, 2011 |
ZAGG products | ZAGG products | Teleportall, LLC ('Teleportall') | Teleportall, LLC ('Teleportall') | Teleportall, LLC ('Teleportall') | ||
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% | ' |
Original principal amount | ' | $4,126 | ' | $4,126 | ' | ' |
Fixed rate | 1.25% | ' | ' | 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 $) | 6 Months Ended | 1 Months Ended |
In Thousands, unless otherwise specified | Jun. 30, 2014 | 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 |
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; and | ' |
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 face value of Note for reimbursement of inventory advances and other costs | ' | $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 | Jun. 30, 2014 | 31-May-12 | Jan. 31, 2012 |
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 | ' | 348 | ' | ' |
Total unpaid principal balance, including accrued interest, late fees and costs | ' | 4,458 | ' | ' |
Teleportall, LLC ('Teleportall') | Minimum | Harmer agreement | ' | ' | ' | ' |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' | ' | ' |
Estimated fair value of the underlying collateral security | ' | 1,422 | ' | ' |
Percentage of holdings | ' | 50.00% | ' | ' |
Teleportall, LLC ('Teleportall') | Maximum | Harmer agreement | ' | ' | ' | ' |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' | ' | ' |
Estimated fair value of the underlying collateral security | ' | $1,557 | ' | ' |
Percentage of holdings | ' | 100.00% | ' | ' |
Fair_Value_Measures_Assets_and
Fair Value Measures - Assets and liabilities measured at fair value on recurring basis (Details) (Fair value measurements recurring basis, Money market funds, USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
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 | $254 | $163 |
Level 1 Inputs | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Money market funds included in cash equivalents | 254 | 163 |
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_Measures_Assets_and1
Fair Value Measures - Assets and liabilities measured at fair value on non-recurring basis (Details 1) (Fair value measurements nonrecurring basis, USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Estimate of Fair Value | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' |
Goodwill | ' |
iFrogz trademark | 7,038 |
Level 1 Inputs | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' |
Goodwill | ' |
iFrogz trademark | ' |
Level 2 Inputs | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' |
Goodwill | ' |
iFrogz trademark | ' |
Level 3 Inputs | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' |
Goodwill | ' |
iFrogz trademark | $7,038 |
Fair_Value_Measures_Detail_Tex
Fair Value Measures (Detail Textuals) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Jun. 30, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Number of common stock as underlying collateral for fair value measurement of notes receivables (in shares) | ' | 80 |
Impairment of goodwill | $1,484 | ' |
Trademark impairment | 9,762 | ' |
Line of credit , Fair value | ' | $0 |
Concentrations_Percentage_of_s
Concentrations - Percentage of sales by geographic region (Details) (Sales revenue) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
UNITED STATES | ' | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' | ' |
Percentage of sales | 90.00% | 90.00% | 86.00% | 90.00% |
Europe | ' | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' | ' |
Percentage of sales | 7.00% | 5.00% | 9.00% | 5.00% |
Other | ' | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' | ' |
Percentage of sales | 3.00% | 5.00% | 5.00% | 5.00% |
Concentrations_Detail_Textuals
Concentrations (Detail Textuals) (Concentration of credit risk, Accounts receivable) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2014 | Dec. 31, 2013 | |
Customer | Customer | |
Concentration of credit risk | Accounts receivable | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Balance of accounts receivable due from two customers | 62.00% | 44.00% |
Number of customers | 2 | 1 |
Minimum account balance of accounts receivable in percentages for all other customers | 'No other customer account balances were more that 10% of accounts receivable. | 'No other customer account balances were more that 10% of accounts receivable. |
Concentrations_Detail_Textuals1
Concentrations (Detail Textuals 1) (Sales revenue, Concentration of sales) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Concentration Risk [Line Items] | ' | ' | ' | ' |
Deferred Revenue, Description | 'Two customers individually accounted for over 10% of the quarterly revenues | 'No other customer account balances were more that 10% of sales. | 'Two customers individually accounted for over 10% of the quarterly revenues | 'No other customer account balances were more that 10% of sales. |
Customer 1 | ' | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' | ' |
Percentage of sales | 31.00% | 24.00% | 25.00% | 23.00% |
Customer 2 | ' | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' | ' |
Percentage of sales | 19.00% | 19.00% | 19.00% | 17.00% |
Commitments_and_Contingencies_1
Commitments and Contingencies - Future minimum rental payments required under operating leases (Details) (USD $) | Jun. 30, 2014 |
In Thousands, unless otherwise specified | |
Commitments and Contingencies [Abstract] | ' |
Remaining 2014 | $620 |
2015 | 815 |
2016 | 696 |
2017 | 302 |
2018 and thereafter | ' |
Total | $2,433 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Detail Textuals) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Commitments and Contingencies [Line Items] | ' | ' | ' | ' |
Rental payment of leases | $407 | $425 | $968 | $836 |
Sublease Income | ' | ' | ' | ' |
Commitments and Contingencies [Line Items] | ' | ' | ' | ' |
Rental payment of leases | $181 | $269 | $348 | $500 |