Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Mar. 01, 2016 | Jun. 30, 2015 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | ZAGG Inc | ||
Entity Central Index Key | 1,296,205 | ||
Trading Symbol | zagg | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,015 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 201,435,759 | ||
Entity Common Stock, Shares Outstanding | 27,655,181 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets | ||
Cash and cash equivalents | $ 13,002 | $ 9,461 |
Accounts receivable, net of allowances of $568 in 2015 and $1,910 in 2014 | 57,647 | 75,729 |
Inventories | 45,912 | 48,378 |
Prepaid expenses and other current assets | 3,142 | $ 2,681 |
Income tax receivable | 1,158 | |
Deferred income tax assets | 10,840 | $ 10,774 |
Total current assets | 131,701 | 147,023 |
Property and equipment, net of accumulated depreciation at $10,539 in 2015 and $7,659 in 2014 | 8,309 | 7,300 |
Intangible assets, net of accumulated amortization at $41,803 in 2015 and $33,242 in 2014 | 23,045 | 31,408 |
Deferred income tax assets | $ 15,386 | 14,290 |
Note receivable, net | 801 | |
Other assets | $ 1,100 | 457 |
Total assets | 179,541 | 201,279 |
Current liabilities | ||
Accounts payable | $ 33,846 | 49,379 |
Income taxes payable | 6,464 | |
Accrued liabilities | $ 5,068 | 6,910 |
Accrued wages and wage related expenses | 2,244 | 2,600 |
Deferred revenue | 17 | 179 |
Sales returns liability | 7,849 | 8,674 |
Total current liabilities | 49,024 | 74,206 |
Stockholders' equity | ||
Common stock, $0.001 par value; 100,000 shares authorized; 33,219 and 32,686 shares issued in 2015 and 2014, respectively | 33 | 33 |
Additional paid-in capital | 88,983 | 85,154 |
Accumulated other comprehensive income (loss) | $ (1,597) | (895) |
Note receivable collateralized by stock, net | (348) | |
Treasury stock, 5,679 and 3,569 common shares in 2015 and 2014 respectively, at cost | $ (35,194) | (19,576) |
Retained earnings | 78,292 | 62,705 |
Total stockholders' equity | 130,517 | 127,073 |
Total liabilities and stockholders' equity | $ 179,541 | $ 201,279 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) shares in Thousands, $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Balance Sheets [Abstract] | ||
Allowances for doubtful accounts | $ 568 | $ 1,910 |
Accumulated depreciation on property and equipment | 10,539 | 7,659 |
Accumulated amortization on Intangible assets | $ 41,803 | $ 33,242 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000 | 100,000 |
Common stock, shares issued | 33,219 | 32,686 |
Treasury stock | 5,679 | 3,569 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Operations [Abstract] | |||
Net sales | $ 269,311 | $ 261,585 | $ 219,356 |
Cost of sales | 167,627 | 178,241 | 132,236 |
Gross profit | 101,684 | 83,344 | 87,120 |
Operating expenses: | |||
Advertising and marketing | 10,436 | 7,542 | 8,952 |
Selling, general and administrative | $ 56,931 | $ 49,110 | 46,356 |
Impairment of goodwill and intangibles | 11,246 | ||
Amortization of definite-lived intangibles | $ 8,453 | $ 9,709 | 9,620 |
Total operating expenses | 75,820 | 66,361 | 76,174 |
Income from operations | 25,864 | 16,983 | 10,946 |
Other income (expense): | |||
Interest expense | $ (97) | $ (170) | (575) |
Loss from equity method investment in HzO | (2,013) | ||
Other expense | $ (69) | $ 121 | 127 |
Total other income (expense) | (166) | (49) | (2,461) |
Income before provision for income taxes | 25,698 | 16,934 | 8,485 |
Income tax provision | (10,111) | (6,473) | (3,695) |
Net income | $ 15,587 | $ 10,461 | $ 4,790 |
Earnings per share attributable to stockholders: | |||
Basic earnings per share | $ 0.54 | $ 0.35 | $ 0.16 |
Diluted earnings per share | $ 0.54 | $ 0.34 | $ 0.15 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement Of Other Comprehensive Income [Abstract] | |||
Net income | $ 15,587 | $ 10,461 | $ 4,790 |
Other comprehenseive income (loss), net of loss: | |||
Foreign currency translation gain (loss) | (702) | (988) | 150 |
Total other comprehensive income (loss) | (702) | (988) | 150 |
Comprehensive income | $ 14,885 | $ 9,473 | $ 4,940 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Notes Receivable Collateralized By Stock | Treasury Stock | Retained Earnings |
Balances at Dec. 31, 2012 | $ 124,096 | $ 31 | $ 77,234 | $ (57) | $ (566) | $ 47,454 | |
Balances, Shares at Dec. 31, 2012 | 31,215 | ||||||
Net income | 4,790 | $ 4,790 | |||||
Other comprehensive loss | 150 | $ 150 | |||||
Purchase of shares of treasury stock | (9,997) | $ (9,997) | |||||
Option exercises | $ 270 | $ 270 | |||||
Option exercises (in shares) | 135 | ||||||
Restricted stock release | |||||||
Restricted stock release (in shares) | 481 | ||||||
Consideration for acquisition of patent | $ 1,946 | $ 1 | $ 1,945 | ||||
Consideration for acquisition of patent (in shares) | 500 | ||||||
Payment of withholding of restricted stock units | (257) | (257) | |||||
Tax shortfall related to share - based payments | (511) | (511) | |||||
Option expense | 280 | 280 | |||||
Restricted stock expense | 3,846 | $ 3,846 | |||||
Reclassification of note receivable collateralized by stock | 218 | $ 218 | |||||
Balances at Dec. 31, 2013 | 124,831 | $ 32 | $ 82,807 | $ 93 | $ (348) | $ (9,997) | $ 52,244 |
Balances, Shares at Dec. 31, 2013 | 32,331 | ||||||
Net income | 10,461 | $ 10,461 | |||||
Other comprehensive loss | (988) | $ (988) | |||||
Purchase of shares of treasury stock | (9,579) | $ (9,579) | |||||
Option exercises | $ 265 | $ 265 | |||||
Option exercises (in shares) | 148 | ||||||
Warrant exercises | |||||||
Warrant exercises (in shares) | 3 | ||||||
Restricted stock release | $ 1 | $ 1 | |||||
Restricted stock release (in shares) | 204 | ||||||
Consideration for acquisition of patent | |||||||
Stock-based compensation expense | $ 2,248 | $ 2,248 | |||||
Payment of withholding of restricted stock units | (75) | (75) | |||||
Tax shortfall related to share - based payments | (91) | (91) | |||||
Balances at Dec. 31, 2014 | 127,073 | $ 33 | 85,154 | $ (895) | $ (348) | $ (19,576) | $ 62,705 |
Balances, Shares at Dec. 31, 2014 | 32,686 | ||||||
Net income | 15,587 | $ 15,587 | |||||
Other comprehensive loss | (702) | $ (702) | |||||
Purchase of shares of treasury stock | (14,930) | (14,930) | |||||
Foreclosure of 80 shares of stock collateralizing note receivable | (340) | $ 348 | $ (688) | ||||
Option exercises | 168 | 168 | |||||
Option exercises (in shares) | 118 | ||||||
Warrant exercises | $ 38 | $ 38 | |||||
Warrant exercises (in shares) | 45 | ||||||
Restricted stock release | |||||||
Restricted stock release (in shares) | 349 | ||||||
Consideration for acquisition of patent | $ 198 | $ 198 | |||||
Consideration for acquisition of patent (in shares) | 21 | ||||||
Stock-based compensation expense | 3,893 | 3,893 | |||||
Payment of withholding of restricted stock units | (724) | (724) | |||||
Tax shortfall related to share - based payments | 256 | 256 | |||||
Balances at Dec. 31, 2015 | $ 130,517 | $ 33 | $ 88,983 | $ (1,597) | $ (35,194) | $ 78,292 | |
Balances, Shares at Dec. 31, 2015 | 33,219 |
Consolidated Statements of Equ7
Consolidated Statements of Equity (Parentheticals) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Stockholders' Equity [Abstract] | |||
Treasury stock purchased (in shares) | 2,030 | 1,813 | 1,756 |
Foreclosure shares of stock collateralizing note receivable (shares) | 80 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities | |||
Net income | $ 15,587 | $ 10,461 | $ 4,790 |
Adjustments to reconcile net income to net cash | |||
Stock-based compensation | $ 3,893 | $ 2,173 | 4,126 |
Impairment of goodwill and intangibles | 11,246 | ||
Impairment of investment | 591 | ||
Excess tax benefit (shortfall) related to share-based payments | $ 256 | $ (22) | (52) |
Depreciation and amortization | 12,933 | $ 12,899 | $ 12,157 |
Reduction in reserve on note receivable upon foreclosure recovery | (639) | ||
Deferred income taxes | (1,162) | $ (5,770) | $ (5,787) |
Amortization of deferred loan costs | $ 60 | $ 66 | 120 |
Write-off of deferred loan costs | 27 | ||
Loss on investment in equity method investment | 2,013 | ||
Changes in operating assets and liabilities | |||
Accounts receivable, net | $ 18,383 | $ (29,490) | 8,079 |
Inventories | 2,064 | (4,350) | (4,404) |
Prepaid expenses and other current assets | (651) | (421) | $ 7,335 |
Other assets | 551 | 160 | |
Accounts payable | (14,635) | 33,373 | $ (3,838) |
Income taxes payable | (7,366) | 13 | 2,787 |
Accrued liabilities | (3,410) | 4,616 | (1,557) |
Accrued wages and wage related expenses | (356) | 1,709 | (1,872) |
Deferred revenue | (162) | 21 | (564) |
Sales returns liability | (814) | 813 | 1,167 |
Net cash provided by operating activities | $ 24,532 | $ 26,251 | 36,364 |
Cash flows from investing activities | |||
Deposits on and purchase of intangible assets | (500) | ||
Purchase of property and equipment | $ (4,910) | $ (4,430) | (2,588) |
Net cash used in investing activities | $ (4,910) | $ (4,430) | (3,088) |
Cash flows from financing activities | |||
Payment of debt issuance costs | (43) | ||
Purchase of treasury stock | $ (14,930) | $ (9,579) | (9,997) |
Proceeds from revolving credit facilities | 9,871 | 56,075 | 69,291 |
Payments on revolving credit facilities | $ (9,871) | $ (73,618) | (73,921) |
Payments on term note | (24,000) | ||
Proceeds from exercise of warrants and options | $ 207 | $ 265 | $ 270 |
Payment of withholding of restricted stock units | (724) | ||
Excess tax benefits related to share-based payments | (256) | $ 22 | $ 52 |
Net cash used in financing activities | (15,703) | (26,835) | (38,348) |
Effect of foreign currency exchange rates on cash and cash equivalents | (378) | (556) | (74) |
Net increase (decrease) in cash and cash equivalents | 3,541 | (5,570) | (5,146) |
Cash and cash equivalents at beginning of the period | 9,461 | 15,031 | 20,177 |
Cash and cash equivalents at end of the period | 13,002 | 9,461 | 15,031 |
Supplemental disclosure of cash flow information | |||
Cash paid during the period for interest | 46 | 97 | 461 |
Cash paid during the period for taxes | 18,710 | 12,370 | $ 6,515 |
Supplemental schedule of noncash investing and financing activities | |||
Purchase of fixed assets financed through accounts payable | 269 | $ 975 | |
Purchase of fixed assets financed through tenant improvement allowance | 1,218 | ||
Foreclosure on real property | 1,099 | ||
Foreclosure on common stock | $ 688 | ||
Reclassification of note receivable to other asset | $ 218 | ||
Issued shares of common stock with a fair value | 21 | 500 | |
Purchase of patent or intangible assets | $ 2,275 | ||
Consideration for acquisition of patent | $ 198 | 1,945 | |
Consideration for acquisition of patent recorded within accrued liabilities | 1 | ||
Amount financed to purchase of patent through accrued liabilities | $ 329 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Organization and Summary of Significant Accounting Policies [Abstract] | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | (1) The Company In March 2007, the Company changed its name from ShieldZone Corporation to ZAGG Incorporated to better position the Company for expansion in the mobile device accessories industry through organic growth and targeted acquisitions. The ShieldZone name was very specific to the screen protection product line, and although screen protection is a core product line, the name change has provided the Company with the opportunity to add new product categories to its product portfolio. During 2011, the Company changed its name from ZAGG Incorporated to ZAGG Inc. In June 2011, ZAGG acquired 100% of the outstanding shares of iFrogz, which further diversified the existing ZAGG product lines, particularly for audio and protective case accessories. The Company designs, produces, and distributes professional and premium creative product solutions including screen protection, keyboards for tablet computers and mobile devices, keyboard cases, earbuds, mobile power solutions, cables, and cases under the ZAGG and InvisibleShield brands. In addition, the Company designs, produces, and distributes earbuds, headphones, mobile power solutions, Bluetooth speakers, cases, and cables for mobile devices under the iFrogz brand in the fashion and youth oriented lifestyle sector. Use of estimates The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (“US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates include the inventory write-downs, sales returns and warranty liability, and income taxes. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the economic environment, which management believes to be reasonable under the circumstances. Management adjusts such estimates and assumptions when facts and circumstances dictate an adjustment is necessary. Principles of consolidation The consolidated financial statements include the accounts of ZAGG Inc and its wholly owned subsidiaries ZAGG International Distribution Limited (“ZAGG International”), Patriot Corporation, ZAGG Intellectual Property Holding Co, Inc., and ZAGG Retail, Inc. All intercompany transactions and balances have been eliminated in consolidation. The Company holds an investment in HzO, Inc. (“HzO”), a private company engaged in the development of water-blocking technologies for consumer and industrial applications. The investment is less than 20% and thus is accounted for under the cost method. Cash equivalents The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. Amounts receivable from credit card processors are also considered cash equivalents because they are both short-term and highly liquid in nature and are typically converted to cash within three days of the sales transaction. Amounts receivable from credit card processors at December 31, 2015 and 2014 totaled $61 and $120, respectively. Cash equivalents as of December 31, 2015 and 2014, consisted primarily of money market fund investments and amounts receivable from credit card processors. Fair value measurements The Company measures at fair value certain financial and non-financial assets by using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price, based on the highest and best use of the asset or liability. The levels of the fair value hierarchy are: Level 1 — Quoted market prices in active markets for identical assets or liabilities; Level 2 — Significant other observable inputs (e.g., quoted prices for similar items in active markets, quoted prices for identical or similar items in markets that are not active, inputs other than quoted prices that are observable such as interest rate and yield curves, and market-corroborated inputs); and Level 3 — Unobservable inputs in which there is little or no market data, which require the reporting unit to develop its own assumptions. Accounts receivable The Company sells its products to end users through indirect distribution channels and other resellers who are extended credit terms after an analysis of their financial condition and credit worthiness. Credit terms to distributors and resellers, when extended, are based on evaluation of the customers’ financial condition. Accounts receivable are recorded at invoiced amounts and do not bear interest. The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of customers to make required payments. Management regularly evaluates the allowance for doubtful accounts considering historical losses adjusted to take into account current market conditions, customers’ financial condition, receivables in dispute, receivables aging, and current payment patterns. Account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Payments subsequently received on written off receivables are credited to bad debt expense in the period of recovery. The following summarizes the activity in the Company’s allowance for doubtful accounts for the years ended December 31, 2015, 2014 and 2013: For the Years Ended December 31, 2015 2014 2013 Balance at beginning of year $ 1,910 $ 2,540 $ 2,974 Additions charged to expense 243 389 1,142 Write-offs charged against the allowance (1,585 ) (1,019 ) (1,576 ) Balance at end of year $ 568 $ 1,910 $ 2,540 Inventories Inventories, consisting primarily of finished goods and raw materials, are valued at the lower of cost, determined on a first in, first out basis, or market. Management performs periodic assessments to determine the existence of obsolete, slow moving, and non-saleable inventories, and records necessary write downs in cost of sales to reduce such inventories to net realizable value. Once established, the original cost of the inventory less the related inventory write down represents the new cost basis of such products. Property and equipment Property and equipment are recorded at cost. Depreciation expense is computed using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized over the lesser of the useful life of the asset or the term of the lease. Major additions and improvements are capitalized, while costs for minor replacements, maintenance and repairs that do not increase the useful life of an asset are expensed as incurred. Upon retirement or other disposition of property and equipment, the cost and related accumulated depreciation or amortization are removed from the accounts. The resulting gain or loss is reflected in selling, general and administrative expense. During the second quarter of 2014, the Company commenced a development project utilizing both internal and external developers to improve the company’s website. The development project was intended to provide additional functionality to the website and transition the website to an improved software platform. The Company capitalized website development costs for internal and external developers and commenced depreciation of the capitalized costs during 2015 when the resulting website functionality was ready for its intended use and placed in service. Intangibles assets Intangible assets include internet addresses, patents, intellectual property, and acquired intangibles in connection with the acquisition of iFrogz, which include customer relationships, trademarks, non-compete agreements, and other miscellaneous intangible assets. Definite-lived intangible assets are amortized over their estimated economic lives, using a straight-line or accelerated method consistent with the underlying expected future cash flows related to the specific intangible asset. Amortization expense is recorded within cost of sales or operating expense depending on the underlying intangible assets. Impairment of long-lived assets Long-lived assets, such as property and equipment, and definite-lived intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, recoverability of long-lived assets is measured by comparison of its carrying amount to the undiscounted cash flows that the asset or asset group is expected to generate over the remaining life in measuring whether the assets are recoverable. Contingencies Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. Revenue recognition The Company records revenue when persuasive evidence of an arrangement exists, product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. The Company’s revenue is derived from sales of our products through our indirect channel, including retailers and distributors; through our direct channel, including www.ZAGG.com, and our corporate-owned and third-party-owned mall kiosks; and from the franchise fees derived from the onboarding of new franchisees. For product sales, our standard shipping terms are FOB shipping point, and we record revenue when the product is shipped, net of estimated returns and discounts. For some customers, the contractual shipping terms are FOB destination. For these shipments, we record revenue when the product is delivered, net of estimated returns and discounts. For franchise fees, we recognize revenue on a straight-line basis over the franchise term. The Company records revenue from royalty agreements in the period in which the royalty is earned. Promotional products given to customers or potential customers are recognized as a cost of sales. Cash incentives provided to our customers are recognized as a reduction of the related sale price, and, therefore, are a reduction in sales. Allowance for sales returns, warranty, and other credits For product sales, the Company records revenue, net of estimated returns and discounts, when delivery has occurred, collection of the relevant receivable is reasonably assured, persuasive evidence of an arrangement exists and the sales price is fixed or determinable. Our return policy allows end users and certain retailers rights to return purchased products. In addition, the Company generally provides the ultimate consumer a warranty with each product. Due to the nature of the screen protection product line, end user returns for screen protection are generally not salvageable and are not included in inventory. We estimate a reserve for sales returns, warranty, and other credits, and record the estimated reserve amount as a reduction of sales, and as a sales return reserve liability. When product is returned and is expected to be resold, as is the case with returns of packaged screen protection, keyboards, audio products, cases, and power products, the impact is recorded as a reduction of revenues and cost of sales, and as a reduction in the sales return reserve liability. The sales returns and warranty reserve requires management to make estimates regarding return rates for sales and warranty returns. Historical experience, actual claims, and customer return rights are the key factors used in determining the estimated sales return and warranty reserve. The following summarizes the activity in the Company’s sales return and warranty liability for the years ended December 31, 2015, 2014 and 2013: For the Year Ended December 31, 2015 2014 2013 Balance at beginning of year $ 8,674 $ 7,872 $ 6,697 Additions charged to sales 43,320 35,923 30,450 Sales returns & warranty claims charged against reserve (44,145 ) (35,121 ) (29,275 ) Balance at end of year $ 7,849 $ 8,674 $ 7,872 Income taxes The Company recognizes deferred income tax assets or liabilities for expected future tax consequences of events that have been recognized in the financial statements or tax returns. Under this method, deferred income tax assets or liabilities are determined based upon the difference between the financial statement and income tax bases of assets and liabilities using enacted tax rates expected to apply when differences are expected to be settled or realized. Deferred income tax assets are reviewed for recoverability and valuation allowances are provided when it is more likely than not that a deferred tax asset will not be realizable in the future. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records estimated interest and penalties related to unrecognized tax benefits, if any, as a component of income tax provision. The Company has foreign subsidiaries that conduct or support its business outside the United States. The Company does not provide for U.S. income taxes on undistributed earnings for its foreign subsidiaries as the foreign earnings will be permanently reinvested in such foreign jurisdictions. Stock-based compensation The Company recognizes stock-based compensation expense in its consolidated financial statements for awards granted to employees and non-employees, which include restricted stock, stock options, and warrants. Equity-classified awards are measured at the grant date fair value of the award. The fair value of restricted stock is measured on the grant date based on the quoted closing market price of the Company’s common stock. The fair value of the stock options is measured on the grant date using the Black-Scholes option pricing model based on the underlying common stock closing price as of the date of grant, the expected term, stock price volatility, and risk-free interest rates Advertising and marketing General advertising is expensed as incurred. Advertising allowances provided to retailers are recorded as an expense at the time of the related sale if the Company receives an identifiable benefit in exchange for the consideration and has evidence of fair value for the advertising; otherwise, the allowance is recorded as a reduction of revenue. Advertising expenses for the years ended December 31, 2015, 2014 and 2013 were $10,436, $7,542 and $8,952, respectively. Foreign currency translation and transactions The Company’s primary operations are at the parent level which uses the U.S. dollar (USD) as its functional currency. The Euro is the functional currency of the Company’s foreign subsidiaries. Accordingly, assets and liabilities for these subsidiaries are translated into USD using exchange rates in effect at the end of each period. Revenue and expenses for these subsidiaries are translated using rates that approximate those in effect during the period. Gains and losses from these translations are recorded as a component of stockholders’ equity. Gains and losses resulting from foreign currency transactions are included in income as a component of other income and (expense) in the consolidated statements of operations and totaled $52, $149 and ($7) for the years ended December 31, 2015, 2014 and 2013, respectively. Earnings per share Basic earnings per common share excludes dilution and is computed by dividing net income attributable to stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share reflects the potential dilution that could occur if stock options or other common stock equivalents were exercised or converted into common stock. The dilutive effect of stock options or other common stock equivalents is calculated using the treasury stock method. The following is a reconciliation of the numerator and denominator used to calculate basic earnings per share and diluted earnings per share for the years ended December 31, 2015, 2014 and 2013: 2015 2014 2013 Net income attributable to stockholders $ 15,587 $ 10,461 $ 4,790 Weighted average shares outstanding 28,773 30,247 30,900 Dilutive effect of stock options, restricted stock, and warrants 316 363 559 Weighted average diluted potential shares 29,089 30,610 31,459 Earnings per share attributable to stockholders: Basic $ 0.54 $ 0.35 $ 0.16 Dilutive $ 0.54 $ 0.34 $ 0.15 For the years ended December 31, 2015, 2014, and 2013, restricted stock, warrants and stock options to purchase 250, 485, and 620 shares of common stock, respectively, 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 ASU 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. On July 9, 2015, the FASB voted to approve a one year deferral of the effective date of this ASU. This deferral was issued by the FASB in ASU No. 2015-14, “Revenue from Contracts with Customers (Topic 606) – Deferral of the Effective Date”. As a result of ASU No. 2015-14 the Company expects that it will apply the new revenue standard to annual and interim reporting periods beginning after December 15, 2017. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-11, “Simplifying the Measurement of Inventory.” This ASU provides guidance to entities that measure inventory using a method other than last-in, first-out (LIFO) or the retail inventory method. For entities using first-in, first-out (FIFO) or average cost, the measurement principle for their inventory changes from the lower of cost or market to lower of cost and net realizable value. Current U.S. GAAP requires, at each financial statement date, that entities measure inventory at the lower of cost or market. The measurement of market is commonly the current replacement cost. However, entities also need to consider net realizable value and net realizable value less an approximately normal profit margin in their measurement. For entities using a method other than LIFO or the retail inventory method, the ASU replaces market with net realizable value. This ASU requires prospective adoption for inventory measurement for annual and interim periods beginning after December 15, 2016 for public business entities. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements. In September 2015, the FASB issued ASU No. 2015-16, “Simplifying the Accounting for Measurement-Period Adjustments,” which eliminates the requirement for an acquirer to retrospectively adjust the financial statements for measurement-period adjustments that occur in periods after a business combination is consummated. The ASU is effective for public business entities for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, “Balance Sheet Classification of Deferred Taxes,” which requires entities with a classified balance sheet to present all deferred tax assets and liabilities as noncurrent. The ASU is effective for public business entities for interim and annual periods in fiscal years beginning after December 15, 2016. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2015 | |
Inventories [Abstract] | |
INVENTORIES | (2) INVENTORIES Inventory consisted of the following components: December 31, 2015 2014 Finished goods $ 44,764 $ 48,145 Raw materials 1,148 233 Total inventories $ 45,912 $ 48,378 Included in prepaid expenses and other current assets were inventory deposits with third-party manufacturers at December 31, 2015 and 2014 of $813 and $1,425, respectively. |
Investment in HzO
Investment in HzO | 12 Months Ended |
Dec. 31, 2015 | |
Investment in HzO [Abstract] | |
INVESTMENT IN HzO | (3) INVESTMENT IN HzO HzO is a private company engaged in the development of water-blocking technologies for consumer and industrial electronics applications. For the year ended December 31, 2013, the Company recorded a loss from investment in HzO of $2,013. The loss from investment in HzO was recorded as a component of other income (expense) in the consolidated statement of operations. The carrying value of the investment at December 31, 2015 and 2014 was $0 due to the accumulated losses. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2015 | |
Property and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | (4) PROPERTY AND EQUIPMENT Property and equipment, net consisted of the following: December 31, 2015 2014 Useful Lives Computer equipment and software 3 to 5 years $ 2,912 $ 2,627 Equipment and molds 3 to 7 years 9,536 8,238 Furniture and fixtures 7 years 745 770 Automobiles 5 years 199 234 Leasehold improvements 1 to 8 years 5,456 3,090 18,848 14,959 Less accumulated depreciation and amortization (10,539 ) (7,659 ) Net property and equipment $ 8,309 $ 7,300 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | (5) GOODWILL AND INTANGIBLE ASSETS Impairment of Goodwill For the year ended December 31, 2013, the Company recorded an impairment of goodwill of $1,484 when it was determined that the carrying value of goodwill exceeded its fair value. The determination was made during the impairment analyses performed during the fourth quarter of 2013. In conjunction with the impairment test, the Company considered factors such as the overall decline in the market price of the Company’s stock, a decline in market capitalization for a sustained period, and a decline in forecasted operations as indicators for potential goodwill impairment. In determining the amount of impairment, the Company considered both the income approach, utilizing a discounted cash flow analysis, and market approach, which considers what other purchasers and sellers in the market have paid for companies reasonably similar to the reporting unit. The goodwill impairment is included as a component of impairment of goodwill and intangibles in the consolidated statement of operations. No goodwill was acquired during the years ended December 31, 2015 and 2014. The changes in the carrying amount of goodwill for the year ended December 31, 2013, are as follows: 2013 Balance as of January 1 Gross goodwill $ 6,925 Accumulated impairment losses (5,441 ) Net goodwill as of January 1 1,484 Goodwill acquired during the year - Impairment loss (1,484 ) Balance as of December 31 Gross goodwill 6,925 Accumulated impairment losses (6,925 ) Net goodwill as of December 31 $ - Impairment of Indefinite-lived Intangible Assets During the fourth quarter of 2013, the Company made a brand strategy change to place greater emphasis on the promotion of the ZAGG and InvisibleShield brands. As a result of this decision, we determined that future cash flows under the iFrogz trademark likely will be less than previously estimated and that the trademark should be considered a definite-lived intangible asset. Management incorporated this information into an impairment analysis performed during the fourth quarter of 2013, relying on a discounted cash flow analysis and market approach. Management determined the carrying amount of the trademark exceeded the fair value and an impairment charge of $9,762 was recorded at December 31, 2013 as a component of the impairment of goodwill and intangibles line in the consolidated statement of operations December 31, 2013 iFrogz trademark prior to impairment $ 16,800 iFrogz trademark impairment (9,762 ) iFrogz trademark – definite-lived $ 7,038 Definite-lived Intangibles Definite-lived intangibles as of December 31, 2015 and 2014, were as follows: As of December 31, 2015 Gross Carrying Amount Accumulated Amortization Acquisitions Net Carrying Amount Weighted Average Amortization Period Customer relationships $ 41,500 $ (29,150 ) $ - $ 12,350 8.0 years Non-compete agreements 4,100 (3,729 ) - 371 4.8 years Other Trademarks 3,500 (2,604 ) - 896 9.7 years iFrogz Trademark 7,038 (2,219 ) - 4,819 10.0 years EarPollution Trademark 2,383 (1,430 ) - 953 8.0 years Other 600 (592 ) - 8 5.0 years Acquired technology 709 (375 ) - 334 7.0 years Internet address 124 (90 ) - 34 10.0 years Patents 4,696 (1,614 ) 198 3,280 12.5-14.0 years Total amortizable assets $ 64,650 $ (41,803 ) $ 198 $ 23,045 8.4 years As of December 31, 2014 Gross Carrying Amount Accumulated Amortization Acquisitions Net Carrying Amount Weighted Average Amortization Period Customer relationships $ 41,500 $ (23,839 ) $ - $ 17,661 8.0 years Non-compete agreements 4,100 (2,949 ) - 1,151 4.8 years Other Trademarks 3,500 (2,216 ) - 1,284 9.7 years iFrogz Trademark 7,038 (1,152 ) - 5,886 10.0 years EarPollution Trademark 2,383 (1,026 ) - 1,357 8.0 years Other 600 (554 ) - 46 5.0 years Acquired technology 709 (267 ) - 442 7.0 years Internet address 124 (78 ) - 46 10.0 years Patents 4,696 (1,161 ) - 3,535 12.5-14.0 years Total amortizable assets $ 64,650 $ (33,242 ) $ - $ 31,408 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 years ended December 31, 2015, 2014, and 2013 amortization expense was $8,562, $9,811, and $9,702, respectively. Amortization expense was primarily recorded as a component of operating expense, however, amortization expense related to acquired technology in 2015, 2014, and 2013 of $109, $102, and $82, respectively, was recorded as a component of cost of sales. During the fourth quarter of 2015, the Company acquired certain patents and patent applications from a third party. The patents and patent applications relate to the screen protection product line and were acquired for consideration of 21 shares of ZAGG Inc common stock, which had a value of $198 on the date of acquisition. The $198 in patent acquisition costs is being amortized over the 14-year remaining weighted average life of the patents. Estimated future amortization expense is as follows: 2016 $ 7,140 2017 5,663 2018 4,640 2019 2,304 2020 953 Thereafter 2,345 Total $ 23,045 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes [Abstract] | |
INCOME TAXES | (6) INCOME TAXES 2015 2014 2013 Current provision: Federal $ (9,429 ) $ (9,705 ) $ (8,720 ) State (1,783 ) (2,502 ) (762 ) Foreign (61 ) (36 ) - Total current (11,273 ) (12,243 ) (9,482 ) Deferred provision: Federal 973 4,144 5,036 State 189 1,626 751 Foreign - - - Total deferred 1,162 5,770 5,787 Total provision $ (10,111 ) $ (6,473 ) $ (3,695 ) The following is a reconciliation of the income taxes computed using the federal statutory rate to the provision for income taxes for the years ended December 31, 2015, 2014 and 2013: 2015 2014 2013 Tax at statutory rate (35%) $ (8,994 ) $ (5,927 ) $ (2,970 ) State tax, net of federal tax benefit (1,089 ) (955 ) 25 Non-deductible expense and other 116 220 564 Affiliate tax rate differential (464 ) (900 ) (136 ) Domestic production activities deduction 459 688 331 Return to provision adjustment 126 453 (148 ) Liquidation of iFrogz EU - - 5 Reserve related to unrecognized tax benefits (264 ) (541 ) (382 ) Interest and penalties (1 ) (37 ) (32 ) Effect of state rate changes, net of federal tax benefit - 526 - Increase in valuation allowance - - (952 ) $ (10,111 ) $ (6,473 ) $ (3,695 ) The tax effects of temporary differences that gave rise to significant portions of deferred tax assets and liabilities at December 31, 2015 and 2014, are as follows: 2015 2014 Deferred tax assets: Allowance for doubtful accounts $ 196 $ 729 Deferred revenue 7 12 Inventories 5,581 5,584 Stock-based compensation 2,406 1,825 Sales returns accrual 2,974 3,374 Acquisition costs, net of amortization 217 238 Intangible assets 12,924 11,708 Goodwill 1,886 2,067 HzO investment 1,520 1,520 Capital loss carry-over 278 278 Reserve on note receivable 336 583 Other liabilities 499 66 Deferred tax assets 28,824 27,984 Valuation allowance (1,798 ) (1,798 ) Total deferred tax assets $ 27,026 $ 26,186 Deferred tax liabilities: Property and equipment 800 1,122 Total gross deferred tax liabilities 800 1,122 Net deferred tax assets $ 26,226 $ 25,064 Deferred tax assets, net – current $ 10,840 $ 10,774 Deferred tax assets, net – noncurrent 15,386 14,290 Net deferred tax assets $ 26,226 $ 25,064 The Company recorded a full valuation allowance against a deferred tax asset generated by capital losses on its investment in HzO. HzO is a development stage enterprise and given current operations and uncertainty of future profitability, management has determined that it is more likely than not that the deferred tax asset will not be realizable. Given this, a full valuation allowance at December 31, 2015 and 2014 of $1,520, has been recorded against the deferred tax asset. In addition, at December 31, 2015 and 2014, the Company recorded a full valuation allowance against deferred tax assets resulting from capital loss carry-overs of $278 as the Company determined that it was unlikely the capital loss carry-overs would be utilized. For all other deferred tax assets, no valuation allowance has been recorded at December 31, 2015 and 2014, as management believes it is more likely than not that the results of future operations will generate sufficient taxable income to realize its deferred tax assets. The Company has not recognized a deferred tax liability for the undistributed earnings of its foreign operations that arose in 2015 and prior years as the Company considers these earnings to be permanently reinvested. Cash held by foreign entities that is considered permanently re-invested totaled $4,873 as of December 31, 2015. Currently, there are no earnings and profits that reside in the Company’s foreign operations. A repatriation of cash would likely result in a return of basis. Upon the generation of future cumulative taxable income by the foreign operations and subsequent repatriation, the Company would need to accrue and pay the related tax. However, no tax would accrue in the case of the settlement of intercompany payables or payment of intercompany royalties. The Company considers these funds permanently re-invested and has no plans to repatriate them. The Company recognizes the impact of a tax position in the financial statements if that position is more likely than not of being sustained on audit, based on the technical merits of the position. As of December 31, 2015 and 2014, the Company recorded a tax contingency of $1,265 and $1,001, respectively. The tax contingencies are primarily related to the Company’s global tax strategy and certain transactions in foreign jurisdictions in prior periods. These tax contingencies, on a gross basis, are reconciled in the table below: 2015 2014 Unrecognized tax benefits, as of January 1 $ 1,001 $ 460 Gross increases – tax positions in current period 264 541 Total benefit $ 1,265 $ 1,001 As of December 31, 2015, the Company's liability related to unrecognized tax benefits was $1,265 of which $1,223 would impact the Company's effective tax rate if recognized. For the years ended December 31, 2015, 2014, and 2013, the Company recorded $2, $37, and $32, respectively, in each year in interest and penalties. The Company is currently not under examination by any state or federal tax authority, but remains subject to income tax examinations for each of its open tax years, which extend back to 2012 for federal income tax purposes and 2011 for state income tax purposes. |
Stock Options Warrants and Rest
Stock Options Warrants and Restricted Stock | 12 Months Ended |
Dec. 31, 2015 | |
Stock Options Warrants and Restricted Stock [Abstract] | |
STOCK OPTIONS, WARRANTS, AND RESTRICTED STOCK | (7) STOCK OPTIONS, WARRANTS, AND RESTRICTED STOCK Equity Incentive Award Plans In 2007, the Company’s board of directors adopted and in 2008 the Company’s shareholders approved the ZAGG Incorporated 2007 Stock Incentive Plan (the “2007 Plan”). The 2007 Plan was amended to increase the number of shares issuable under the 2007 Plan to 10,000. Upon adoption of the 2013 Plan in January 2013, the Company ceased to grant awards pursuant to the 2007 Plan, though 6,239 shares remained available to grant under the 2007 Plan. All subsequent awards were and all future awards will be granted under the 2013 Plan. All awards that are outstanding under the 2007 Plan will continue to vest, be exercisable, and expire according to their respective terms. On January 15, 2013, the Company’s board of directors adopted and in June 2013, the Company’s shareholders approved the ZAGG Inc 2013 Equity Incentive Award Plan (the “2013 Plan”), a new equity incentive plan intended to replace the 2007 Plan. The 2013 Plan is an “omnibus plan” under which stock options, stock appreciation rights, performance share awards, restricted stock, and restricted stock units can be awarded. The 2013 Plan’s initial share reservation is 5,000 shares. The term of the plan is for 10 years from the date of its adoption. Common Stock Options Option awards are granted with an exercise price equal to the market price of the Company’s stock at the date of grant; those option awards generally vest based on three years of continuous service and have five-year contractual terms. The fair value of stock options has historically been estimated as of the grant date using the Black-Scholes option pricing model, though no stock options were granted during 2015, 2014, or 2013. The following table summarizes the stock option activity for the Company’s stock incentive plans for the year ended December 31, 2015: Options (In thousands) Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Net Aggregate Intrinsic Value (In thousands) Outstanding at December 31, 2014 285 $ 5.02 0.6 $ 504 Exercised (192 ) 3.52 Outstanding at December 31, 2015 93 $ 8.14 0.2 $ 259 Exercisable at December 31, 2015 93 $ 8.14 0.2 $ 259 The total intrinsic value of options exercised during the years ended December 31, 2015, 2014, and 2013, was $416, $417, and $540, respectively. As of December 31, 2015, there was $0 of total unrecognized compensation cost related to nonvested stock options granted under the stock incentive plans. The total grant date fair value of options vested during the years ended December 31, 2015, 2014 and 2013, was $0 (no options vested in 2015), $154, and $593, respectively. The Company recorded share-based compensation expense only for those options that are expected to vest. The estimated fair value of the stock options is recognized on a straight-line basis over the requisite service period of the award, which is generally the vesting term of the award. During the years ended December 31, 2015, 2014 and 2013, the Company recorded equity-based compensation expense of $0 (no options vested in 2015), $28 and $280, respectively, which is included as a component of selling, general and administrative expense. The net tax benefit recognized on equity-based compensation expense for the year ended December 31, 2015, 2014 and 2013 was $0, $73, and $88, respectively. The tax benefit realized from stock options exercised for the year ended December 31, 2015, 2014, and 2013 was $151, $73, and $88, respectively. Warrants During the years ended December 31, 2015, 2014, and 2013, the Company did not grant warrants to purchase common stock. Warrants outstanding at December 31, 2015 were granted prior to 2013. For the year ended December 31, 2015, 2014, and 2013, the Company recorded expense of zero in each respective year related to warrant grants. The following table summarizes the warrant activity for the year ended December 31, 2015: Warrants (In thousands) Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Net Aggregate Intrinsic Value Outstanding at December 31, 2014 385 $ 8.12 1.0 $ (512 ) Exercised (307 ) 7.89 Outstanding at December 31, 2015 78 $ 9.03 0.7 $ 148 Exercisable at December 31, 2015 78 $ 9.03 0.7 $ 148 The weighted-average and grant-date or vest-date fair value of warrants granted during the years ended December 31, 2015, 2014, and 2013, was zero as no grants occurred from 2013 to 2015. The total intrinsic value of warrants exercised during the years ended December 31, 2015, 2014 and 2013, was $277, $18, and $0, respectively. As of December 31, 2015, there was $0 of total unrecognized estimated compensation cost related to nonvested warrants granted. The total fair value of warrants vested during the years ended December 31, 2015, 2014, and 2013 was $0, $33, and $0, respectively. For warrants that are compensatory, the Company records share-based compensation expense related to warrants only for warrants that have vested. The amount of the expense recognized is based on the estimated fair value of the warrants on the vesting date. During the years ended December 31, 2015, 2014 and 2013, the Company recorded equity-based compensation expense related to warrants of zero in each respective year. The net tax benefit recognized on equity-based compensation expense related to warrants for the year ended December 31, 2015, 2014 and 2013 was zero in each respective year. The tax benefit realized from compensatory warrants exercised for the years ended December 31, 2015, 2014, and 2013 was $69, $9, and $0, respectively. Restricted Stock Restricted stock awards are granted with a fair value equal to the ending stock price on the date of grant. A summary of the status of the Company’s restricted stock as of December 31, 2015, and changes during the year ended December 31, 2015, is presented below: Restricted Stock (In thousands) Weighted- Average Grant Date Fair Value (Per share) Outstanding at December 31, 2014 627 $ 4.83 Granted 673 7.03 Vested (445 ) 5.25 Forfeited (73 ) 6.02 Outstanding at December 31, 2015 782 $ 6.47 As of December 31, 2015, there was $1,775 of total unrecognized compensation cost related to nonvested restricted stock awards granted under the stock incentive plans. That cost is expected to be recognized over a weighted-average period of approximately 1.1 years. The Company recorded share-based compensation expense only for restricted stock that is expected to vest. The estimated fair value of the restricted stock awards is recognized on a straight-line basis over the requisite service period of the award, which is generally the vesting term of the award. The Company recognizes compensation expense on a straight-line basis for those performance-based awards that are probable to be achieved. During the years ended December 31, 2015, 2014, and 2013, the Company recorded equity-based compensation expense of $3,893, $2,053, and $3,846, respectively, which is included as a component of selling, general and administrative expense. The net tax benefit recognized on equity-based compensation expense for the years ended December 31, 2015, 2014, and 2013, was $1,489, $785, and $1,458, respectively. The tax benefit realized from vested restricted stock for the years ended December 31, 2015, 2014, and 2013, was $1,014, $378, and $1,042, respectively. During the years ended December 31, 2015, 2014, and 2013, certain ZAGG employees elected to receive a net amount of shares upon the vesting of a restricted stock grant in exchange for the Company incurring the tax liability for the fair value of the award on the vest date. This resulted in the Company recording $724, $75, and $257, respectively, in compensation expense, with the offset being originally recorded to accrued wages and wage related expenses rather than to additional paid-in capital. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Measurements [Abstract] | |
FAIR VALUE MEASUREMENTS | (8) FAIR VALUE MEASUREMENTS Fair Value of Financial Instruments At December 31, 2015 and 2014, the Company’s financial instruments included cash and cash equivalents, accounts receivable, and accounts payable. 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. Fair Value Measurements At December 31, 2015 and 2014, the following assets and liabilities were measured at fair value on a recurring basis using the level of inputs shown (in thousands): Fair Value Measurements Using: December 31, 2015 Level 1 Inputs Level 2 Inputs Level 3 Inputs Money market funds included in cash equivalents $ 375 $375 - - Fair Value Measurements Using: December 31, 2014 Level 1 Inputs Level 2 Inputs Level 3 Inputs Money market funds included in cash equivalents $ 374 $374 - - 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 intangible assets, property and equipment, and collateral securing the note receivable. |
Note Receivable
Note Receivable | 12 Months Ended |
Dec. 31, 2015 | |
Note Receivable [Abstract] | |
NOTE RECEIVABLE | (9) 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 Company subsequently entered into negotiations with Teleportall, LLC (“Teleportall”), the owner of the technology used in the ZAGGbox, regarding production and distribution of the ZAGGbox. In 2009 and 2010 the Company entered into various agreements with Teleportal, including agreements appointing the Company as the exclusive distributor for the ZAGGbox in North America, issued purchase orders for ZAGGbox units in the aggregate amount of $3,500 and advanced to Teleportall a total of $3,900 against the total purchase price for the units ordered by the Company. 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. In late 2010 the Company determined that the ZAGGbox product would not be ready to market and sell during the 2010 Christmas season and the Company commenced discussions to restructure its agreements with Teleportall. 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 prior agreements and convey all ZAGG rights in the ZAGGbox to Teleportall 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 accrued 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, and (iii) the unpaid balance of principal and interest due in full on March 23, 2013. The Note was secured by certain real property, interests in entities that own real property and restricted and free-trading securities. In exchange for a license fee to the Company, Teleportall and the Company entered into a License Agreement under which the Company licensed to Teleportall the use of certain ZAGG names and trademarks to sell and distribute the ZAGGbox product. In exchange for commissions to be paid by the Company, 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. No revenue has been recognized from Teleportall. 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 (the “Court”) against the Company, Robert G. Pedersen, II (ZAGG’s former CEO), Brandon T. O’Brien (ZAGG’s former CFO) and KPMG LLP (ZAGG’s independent registered public accounting firm). KPMG LLP and Messrs. Pedersen and O’Brien were subsequently dismissed from the lawsuit. In their lawsuit, the plaintiffs allege that the defendants defamed Mr. Harmer, breached the Harmer Agreement and interfered with other rights of the plaintiffs. Mr. Harmer failed to make the required interest-only payment to the Company due on September 23, 2011. Thereafter, the Company filed counterclaims against Mr. Harmer, Holdings and Teleportall to collect the balance due under the Note. Also, ZAGG commenced foreclosure on the collateral securing the Note, which consisted of real property, interests in entities that own real property, and restricted and free-trading securities, which included shares of ZAGG Inc common stock. On May 21, 2015, the Court issued a final judgment whereby all claims brought by Harmer were disposed of in favor of ZAGG and dismissed with prejudice. In addition, the Court granted summary judgment in favor of ZAGG on all counterclaims against Harmer, Holdings and Teleportall and ZAGG was awarded judgment in the amount of $4,735 with interest at 12% per annum until paid in full and reasonable attorney fees. Following the final judgment the Company began the foreclosure process on all remaining collateral securing the Note. On June 29, 2015, the Company foreclosed on certain real property securing the Note, which was valued by an independent appraiser and determined to have a current fair value of $1,099. In conjunction with the foreclosure, the Company reclassified $801 of the Note previously collateralized by the foreclosed real property and included in other assets, and $298 of the Note collateralized by ZAGG Inc stock, as a $1,099 asset held for sale and presented it as a component of other assets in the condensed consolidated balance sheets. After this reclassification, the remaining balance of the Note was $50. On July 13, 2015, the Company foreclosed on 80 shares of ZAGG Inc common stock that were determined by the Company to have a fair value of $688 on the date of foreclosure. At the time of the foreclosure, the Note receivable balance totaled $50 and was reduced to $0. The $639 excess in value of the common stock over the book value of the Note was recorded by the Company as a recovery of a previously established reserve in selling, general and administrative expense in the consolidated statement of operations, which is the same financial statement line item in which the Company previously recorded write-downs of the Note. As of December 31, 2015, management determined that the estimated fair value of the remaining underlying collateral was between $135 and $270, consisting of real property investments. Since the Note became collateral dependent in October 2011, management has (1) foreclosed on and sold 45 shares of ZAGG Inc common stock for $496 (December 2011); (2) foreclosed on real property valued at $250 (January 2012); (3) foreclosed on stock and warrants in a private company of $516 (May 2012); (4) foreclosed on real property valued at $1,099 as discussed above; and (5) foreclosed on 80 shares of ZAGG Inc common stock for $688. 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 and execution on other assets of Harmer, Holdings, and Teleportall. At December 31, 2015, the total unpaid principal balance, including accrued interest, late fees, attorney fees, and costs incurred in collection, totaled $4,836. At December 31, 2015, the entire unpaid balance on the note receivable was fully reserved. The balance of the reserve on the note receivable at December 31, 2014 was $3,585. Increases to the reserve during 2015 consisted of legal fees of $1,397 and accrued interest of $493. These additions were offset by recoveries of collateral, which reduced the reserve by $639, resulting in an ending balance of $4,836. |
Debt and Letters of Credit
Debt and Letters of Credit | 12 Months Ended |
Dec. 31, 2015 | |
Debt and Letters of Credit [Abstract] | |
DEBT AND LETTERS OF CREDIT | (10) DEBT AND LETTERS OF CREDIT On December 23, 2014, the Company and Wells Fargo, entered into the Third Amendment, which modified the original Credit Agreement entered into between the Company and Wells Fargo on December 7, 2012 and all subsequent amendments to the Credit Agreement (First Amendment to the Credit Agreement entered into on December 20, 2013 and Second Amendment to the Credit Agreement entered into on November 4, 2014). 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 2015 and 2014, ZAGG did not issue any standby commercial letters of credit. On August 24, 2015, the Company and Wells Fargo, entered into the Fourth Amendment to Credit Agreement (“Fourth Amendment”), which modified the original Credit Agreement entered into between the Company and Wells Fargo on December 7, 2012 and all subsequent amendments to the Credit Agreement. The Fourth Amendment modified a debt covenant to allow the Company to purchase up to $15,000 of ZAGG Inc common stock during each calendar year, including the 2015 calendar year, rather than during consecutive twelve month periods, as was documented in the Credit Agreement prior to the Fourth Amendment. As of December 31, 2015 and 2014, the total balance outstanding on the Line of Credit was zero. As of December 31, 2015 and 2014, the total amount available to borrow under the Line of Credit was $25,000. 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, 2016. Any outstanding borrowings under the Line of Credit mature and are due on December 1, 2016. Any outstanding principal balance under the Line of Credit bears interest at a fluctuating rate per annum determined to be the sum of the (1) LIBOR margin established under the Credit Agreement (with the initial LIBOR margin being set at 1.25%) and (2) Daily Three Month LIBOR (as defined in the Credit Agreement) in effect from time to time. Each change in the rate of interest will become effective on each business day on which a change in daily three month LIBOR is announced by Wells Fargo. In addition, the Company pays Wells Fargo a quarterly fee based on the average unused amount of the Line of Credit depending on the Company’s leverage ratio (as this term is defined in the Credit Agreement). For the years ended December 31, 2015 and 2014, $38 and $75, respectively, in unused line fees had been incurred and was included as a component of interest expense in the consolidated statement of operations. At December 31, 2015, the interest rate on the Line of Credit was 1.25%, though as noted above, the outstanding balance was $0. At December 31, 2014, the weighted average interest rate on all outstanding borrowings under the Line of Credit was 1.13%. At December 31, 2015 and 2014, the effective interest rate was 0% as there were no amounts outstanding. The Company originally incurred and capitalized $238 of direct costs related to the establishment of the Credit Agreement with Wells Fargo. For the years ended December 31, 2015 and 2014, the Company amortized $60 and $66, respectively of these loan costs, which is included as a component of interest expense in the consolidated statement of operations. The Company amortizes these deferred loan costs under the effective interest rate method. The carrying value of deferred loan costs at December 31, 2015 and 2014, was $0 and $60, respectively, and is included as a component of noncurrent other assets in the consolidated balance sheet. The Credit Agreement includes a number of financial and non-financial debt covenants. |
Treasury Stock
Treasury Stock | 12 Months Ended |
Dec. 31, 2015 | |
Treasury Stock [Abstract] | |
TREASURY STOCK | (11) TREASURY STOCK In fiscal year 2015 and 2014, the Company’s board of directors authorized the repurchase of up to $15,000 and $10,000, respectively, 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 years ended December 31 In addition, during the third quarter of 2015, the Company foreclosed on 80 shares of ZAGG Inc common stock linked to the full recourse note receivable described in Note 9. The Company foreclosed on these shares at a price per share of $8.59 and a total value of $688. These shares are currently being held by the Company as treasury stock. During the third quarter of 2015, the Company’s board of directors approved an additional $20,000 stock repurchase program with no expiration date. As of December 31, 2015, the Company had not purchased any shares under this stock repurchase program. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies [Abstract] | |
COMMITMENTS AND CONTINGENCIES | (12) COMMITMENTS AND CONTINGENCIES Operating leases The Company leases office and warehouse space, office equipment, and mall cart locations under operating leases that expire through 2023. Future minimum rental payments required under the operating leases at December 31, 2015 are as follows: 2016 $ 1,235 2017 1,476 2018 1,343 2019 1,366 2020 1,397 Thereafter 3,596 Total $ 10,413 For the years ended December 31, 2015, 2014 and 2013, rent expense was $1,642, $1,640, and $1,564, respectively. Rent expense is recognized on a basis which approximates straight line over the lease term. Rent expense for the years ended December 31, 2015, 2014, and 2013 was net of sublease income of $0, $910, and $996 respectively. Rent expense, net of sublease income, is recorded as a component of selling, general and administrative expense on the consolidated statement of operations. 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 Peter Kravitz v. ZAGG Inc., U.S. Bankruptcy Court, District of Delaware, Adv. Pro. No. 15-51558(BLS). Patent/Trademark Litigation ZAGG v. TrekStor, Regional Court, Dusseldorf, Germany. ZAGG Intellectual Property Holding Co v. Tech21 et al., U.S. District Court, District of Utah, 2:14-cv-00113-BCW. ZAGG Intellectual Property Holding Co v. Superior Communications, Inc., U.S. District Court, District of Utah 2:14-cv-00121-TS. Inter Partes Review of Patent No. 8,567,596 B1 in the United States Patent and Trademark Office, Patent Trial and Appeal Board (“PTAB”), Case IPR2014-01262. 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 Apple Draayer In re: Zagg, Inc. Securities Litigation Albert Pikk v. Robert G. Pedersen II, et al., U.S. District Court, District of Utah, Case No. 2:12-cv-01188 Rosenberg v. Robert G. Pedersen II, et al., U.S. District Court, District of Utah, Case No. 2:12-cv-01216 Pikk Rosenberg In re ZAGG Inc. Shareholder Derivative Litigation Arthur Morganstern, et al. v. Robert G. Pedersen II, et al., Third Judicial District Court, Salt Lake County, State of Utah, Civil No. 120908452 Morganstern SEC Investigation In the fourth quarter of 2012, the Company received requests to provide documentation and information to the staff of the SEC in connection with an 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, including whether the Company failed to disclose Mr. Pedersen’s margin account sales. The Company responded to these requests and is cooperating with the staff although there has been no resolution to date. Other Litigation The Company is not a party to any other material litigation or claims at this time. While the Company currently believes that the amount of any ultimate potential loss for known matters would not be material to the Company’s financial condition, the outcome of these actions is inherently difficult to predict. In the event of an adverse outcome, the ultimate potential loss could have a material adverse effect on the Company’s financial condition or results of operations in a particular period. The Company establishes reserves when a particular contingency is probable and estimable. Other than those discussed above, the Company has not accrued for any loss at December 31, 2015 in the condensed consolidated financial statements as the Company does not consider a loss to be probable or estimable. The Company faces contingencies that are reasonably possible to occur; however, the reasonably possible exposure to losses cannot currently be estimated. |
Concentrations
Concentrations | 12 Months Ended |
Dec. 31, 2015 | |
Concentrations [Abstract] | |
CONCENTRATIONS | (13) CONCENTRATIONS Concentration of credit risk Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and accounts receivable. The Company places its cash with high credit quality financial institutions. The Company maintains its cash in bank deposit accounts, which, at times, exceed federally insured limits. The Company has not experienced any losses in such accounts through December 31, 2015. At December 31, 2015 and 2014, the balance of accounts receivable from three separate customers has exceeded 10%: 2015 2014 Customer A 29% 48% Customer B 5% 14% Customer C 31% 4% No other customer account balances were more than 10% of accounts receivable at December 31, 2015 or 2014. 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 years ended December 31, 2015, 2014, or 2013, four customers accounted for over 10% of sales in a given year: 2015 2014 2013 Customer A 20% 30% 26% Customer B 9% 11% 18% Customer C 11% 11% 6% Customer D 17% 6% 5% No other customer account balances were more that 10% of sales during 2015, 2014, or 2013. If the Company loses one or more of the Company’s significant customers, it would have a material adverse effect on the Company’s financial condition and results of operations. The percentage of sales by geographic region for the years ended December 31, 2015, 2014, and 2013 was approximately: 2015 2014 2013 United States 91% 90% 90% Europe 8% 7% 5% Other 1% 3% 5% At December 31, 2015 and 2014, net assets located overseas in Shannon, Ireland totaled $8,387 and $8,050, respectively. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | (14) SEGMENT REPORTING The Company services North American customers out of its corporate headquarters located in Midvale, Utah (“ZAGG Domestic”). For rest of world customers, the Company operates out of its wholly-owned subsidiary located in Shannon, Ireland (“ZAGG International”). Both corporate locations have consistent business processes, sell the same basic products, and sell to the same type of customers at similar margins. Although discrete financial information for ZAGG Domestic and ZAGG International is regularly reviewed by the Company’s chief operating decision maker, the operations at both locations are consistent and ZAGG International’s operations do not rise to the level of significance to require separate segment reporting under US GAAP. Given this, management concluded that the Company should be considered a single reportable segment for disclosure purposes. |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Data [Abstract] | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | (15) – QUARTERLY FINANCIAL DATA (UNAUDITED) Quarterly financial information is presented in the following summary: Year ended December 31, 2015 First Quarter Second Quarter Third Quarter Fourth Quarter Year Net sales $ 57,216 $ 66,689 $ 66,774 $ 78,632 $ 269,311 Income from operations 5,439 6,253 6,228 7,944 25,864 Net income 3,200 3,691 3,739 4,957 15,587 Earnings per share attributable to stockholders: (1) Basic $ 0.11 $ 0.13 $ 0.13 $ 0.18 $ 0.54 Diluted 0.11 0.12 0.13 0.18 0.54 Weighted average common shares: Basic 29,380 29,521 28,734 27,483 28,773 Diluted 29,678 29,754 28,930 28,022 29,089 Year ended December 31, 2014 First Quarter Second Quarter Third Quarter Fourth Quarter Year Net sales $ 49,003 $ 50,154 $ 60,013 $ 102,415 $ 261,585 Income (loss) from operations 1,940 1,580 (6,611 ) 20,074 16,983 Net income (loss) 988 793 (4,319 ) 12,999 10,461 Earnings (loss) per share attributable to stockholders: (1) Basic $ 0.03 $ 0.03 $ (0.14 ) $ 0.44 $ 0.35 Diluted 0.03 0.03 (0.14 ) 0.43 0.34 Weighted average common shares: Basic 30,549 30,281 30,312 29,854 30,247 Diluted 30,864 30,575 30,312 30,288 30,610 (1) The earnings per share calculations for each of the quarters were based upon the weighted average number of shares outstanding during each period, and the sum of the quarters may not be equal to the full year earnings per common share amounts. The decline in income during the third quarter of 2014 was primarily linked to inventory write-downs recorded for product expected to be sold below the carrying value. |
Defined Contribution Plan
Defined Contribution Plan | 12 Months Ended |
Dec. 31, 2015 | |
Defined Contribution Plan [Abstract] | |
DEFINED CONTRIBUTION PLAN | (16) DEFINED CONTRIBUTION PLAN The Company offers a 401(k) plan for full-time employees that have been with the Company for over 90 days. The Company matches participant contributions of 100% up to 3% of an employees’ salary and 50% of contributions from 4-5% of an employees’ salary. Costs recognized for the year ended December 31, 2015, 2014, and 2013 related to the employer 401(k) match totaled $335, $414, and $263, respectively. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | (17) SUBSEQUENT EVENTS Acquisition of mophie On February 2, 2016, the Company and ZM Acquisition, Inc., a Delaware corporation and wholly-owned subsidiary of the Company, entered into an Agreement and Plan of Merger (the “Merger Agreement”) with mophie inc., a California corporation (“mophie”). On the terms and subject to the conditions set forth in the Merger Agreement, the former mophie owners are entitled to receive aggregate closing merger consideration of $100,000 in cash. The former mophie owners will participate in an earn-out period from April 1, 2016 to March 31, 2017 whereby the Company will pay-out additional consideration equal to five times mophie’s stand-alone EBITDA (as defined in the Merger Agreement) less the $100,000 upfront payment (subject to certain tax adjustments, escrow payments and bonus payments to mophie employees). The earn-out consideration, if any, shall be paid by issuance of up to $5,000 of shares of the Company’s common stock, and then in cash. Such shares of the Company’s common stock was valued as of February 1, 2016, the day prior to the announcement of the Merger Agreement. In addition to the consideration described above, the former mophie owners will be entitled to receive certain contingent payments that include (i) mophie tax refunds for certain California hiring credits for the 2012 and 2013 tax years, net operating losses carried back to 2012 for California income taxes and 2013 for federal income taxes, and write-downs and losses resulting from the dissolution of a Dutch limited partnership, (ii) any refund or credit for pre-closing overpayments of customs and duties by mophie when and as determined to be payable by applicable government entities, (iii) the total proceeds from the sale of certain mophie excess real property located in Kalamazoo, Michigan, and (iv) the settlement proceeds or collection receipts from a lawsuit currently on appeal. The payment of amounts due under (i) – (iv) above will be net of the Company’s expenses incurred/paid in connection with actions taken with respect to these matters. The Merger Agreement requires that cash in an amount equal to $5,000, plus 10% of earn-out consideration, if any, be placed in a third party escrow fund for eighteen months as partial security for the indemnification obligations under the Merger Agreement. The Company has agreed to use commercially reasonable efforts to obtain representation and warranty insurance which, if obtained, will reduce the escrow fund in an amount to be determined, but no less than $2,000. On March 3, 2016, the Company and mophie closed on the transaction described above. Credit Agreement Concurrent with the close of the merger with mophie, the Company entered into a Credit and Security Agreement with KeyBank National Association (“KeyBank”), acting as administrative agent and swing line lender; KeyBanc Capital Markets Inc., acting as joint lead arranger and sole book runner; Zions Bank (“Zions”), as joint lead arranger; and JP Morgan Chase, as a member of the bank syndicate (“Credit and Security Agreement”). The Credit and Security Agreement replaces the Credit Agreement with Wells Fargo described in Note 10, which was terminated upon signing the Credit and Security Agreement. The Credit and Security Agreement provides an $85,000 revolving credit commitment (“Revolver”). Borrowings and repayments under the Revolver may occur from time to time in the Company’s ordinary course of business through the maturity date of March 2, 2021, at which time any amounts outstanding are to be paid in full (60-month term). All borrowings under the Revolver are subject to a borrowing base limit, which is calculated from outstanding accounts receivable and inventory, and reported to the administrative agent monthly. Interest on the Revolver will accrue at the base rate plus 0.50% or LIBOR plus 1.50%. The Revolver is subject to an unused line fee calculated as 0.20% multiplied by the average unused amount of the Revolver. The Credit and Security Agreement also provides a $25,000 term loan commitment (“Term Loan”). Payments on the Term Loan are to be made in consecutive monthly installments commencing on April 1, 2016 and continuing until the Term Loan is paid in full on March 2, 2020 (48-month term). Interest on the Term Loan will accrue at the base rate plus 1.0% or at a rate of LIBOR plus 2.0%. The Credit and Security Agreement also provides for letters of credit with a fronting fee of 0.125% (paid per annum) for all issued and outstanding letters of credit The Credit and Security Agreement provides for a lockbox and cash collateral account that will be maintained with the administrative agent. The Credit and Security Agreement is collateralized by substantially all of the assets of the Company. The Credit and Security Agreement establishes two debt covenants that are measured on a quarterly basis: · Maximum Leverage Ratio: Defined as the ratio of total funded indebtedness to Consolidated EBITDA (as defined in the Credit and Security Agreement), which cannot be more than 3.50 on a trailing four quarter basis. · Minimum Fixed Charge Coverage Ratio: Defined as the ratio of Consolidated EBITDA (as defined in the Credit and Security Agreement) minus taxes, capital distributions and unfunded capital expenditures divided by the sum of interest payments, principal payments, and capital lease payments; the minimum allowed under the Credit and Security Agreement is 1.10 on a trailing four quarter basis. |
Organization and Summary of S26
Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Organization and Summary of Significant Accounting Policies [Abstract] | |
Use of estimates | Use of estimates The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (“US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates include the inventory write-downs, sales returns and warranty liability, and income taxes. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the economic environment, which management believes to be reasonable under the circumstances. Management adjusts such estimates and assumptions when facts and circumstances dictate an adjustment is necessary. |
Principles of consolidation | Principles of consolidation The consolidated financial statements include the accounts of ZAGG Inc and its wholly owned subsidiaries ZAGG International Distribution Limited (“ZAGG International”), Patriot Corporation, ZAGG Intellectual Property Holding Co, Inc., and ZAGG Retail, Inc. All intercompany transactions and balances have been eliminated in consolidation. The Company holds an investment in HzO, Inc. (“HzO”), a private company engaged in the development of water-blocking technologies for consumer and industrial applications. The investment is less than 20% and thus is accounted for under the cost method. |
Cash equivalents | Cash equivalents The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. Amounts receivable from credit card processors are also considered cash equivalents because they are both short-term and highly liquid in nature and are typically converted to cash within three days of the sales transaction. Amounts receivable from credit card processors at December 31, 2015 and 2014 totaled $61 and $120, respectively. Cash equivalents as of December 31, 2015 and 2014, consisted primarily of money market fund investments and amounts receivable from credit card processors. |
Fair value measurements | Fair value measurements The Company measures at fair value certain financial and non-financial assets by using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price, based on the highest and best use of the asset or liability. The levels of the fair value hierarchy are: Level 1 — Quoted market prices in active markets for identical assets or liabilities; Level 2 — Significant other observable inputs (e.g., quoted prices for similar items in active markets, quoted prices for identical or similar items in markets that are not active, inputs other than quoted prices that are observable such as interest rate and yield curves, and market-corroborated inputs); and Level 3 — Unobservable inputs in which there is little or no market data, which require the reporting unit to develop its own assumptions. |
Accounts receivable | Accounts receivable The Company sells its products to end users through indirect distribution channels and other resellers who are extended credit terms after an analysis of their financial condition and credit worthiness. Credit terms to distributors and resellers, when extended, are based on evaluation of the customers’ financial condition. Accounts receivable are recorded at invoiced amounts and do not bear interest. The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of customers to make required payments. Management regularly evaluates the allowance for doubtful accounts considering historical losses adjusted to take into account current market conditions, customers’ financial condition, receivables in dispute, receivables aging, and current payment patterns. Account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Payments subsequently received on written off receivables are credited to bad debt expense in the period of recovery. The following summarizes the activity in the Company’s allowance for doubtful accounts for the years ended December 31, 2015, 2014 and 2013: For the Years Ended December 31, 2015 2014 2013 Balance at beginning of year $ 1,910 $ 2,540 $ 2,974 Additions charged to expense 243 389 1,142 Write-offs charged against the allowance (1,585 ) (1,019 ) (1,576 ) Balance at end of year $ 568 $ 1,910 $ 2,540 |
Inventories | Inventories Inventories, consisting primarily of finished goods and raw materials, are valued at the lower of cost, determined on a first in, first out basis, or market. Management performs periodic assessments to determine the existence of obsolete, slow moving, and non-saleable inventories, and records necessary write downs in cost of sales to reduce such inventories to net realizable value. Once established, the original cost of the inventory less the related inventory write down represents the new cost basis of such products. |
Property and equipment | Property and equipment Property and equipment are recorded at cost. Depreciation expense is computed using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized over the lesser of the useful life of the asset or the term of the lease. Major additions and improvements are capitalized, while costs for minor replacements, maintenance and repairs that do not increase the useful life of an asset are expensed as incurred. Upon retirement or other disposition of property and equipment, the cost and related accumulated depreciation or amortization are removed from the accounts. The resulting gain or loss is reflected in selling, general and administrative expense. During the second quarter of 2014, the Company commenced a development project utilizing both internal and external developers to improve the company’s website. The development project was intended to provide additional functionality to the website and transition the website to an improved software platform. The Company capitalized website development costs for internal and external developers and commenced depreciation of the capitalized costs during 2015 when the resulting website functionality was ready for its intended use and placed in service. |
Intangibles assets | Intangibles assets Intangible assets include internet addresses, patents, intellectual property, and acquired intangibles in connection with the acquisition of iFrogz, which include customer relationships, trademarks, non-compete agreements, and other miscellaneous intangible assets. Definite-lived intangible assets are amortized over their estimated economic lives, using a straight-line or accelerated method consistent with the underlying expected future cash flows related to the specific intangible asset. Amortization expense is recorded within cost of sales or operating expense depending on the underlying intangible assets. |
Impairment of long-lived assets | Impairment of long-lived assets Long-lived assets, such as property and equipment, and definite-lived intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, recoverability of long-lived assets is measured by comparison of its carrying amount to the undiscounted cash flows that the asset or asset group is expected to generate over the remaining life in measuring whether the assets are recoverable. |
Contingencies | Contingencies Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. |
Revenue recognition | Revenue recognition The Company records revenue when persuasive evidence of an arrangement exists, product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. The Company’s revenue is derived from sales of our products through our indirect channel, including retailers and distributors; through our direct channel, including www.ZAGG.com, and our corporate-owned and third-party-owned mall kiosks; and from the franchise fees derived from the onboarding of new franchisees. For product sales, our standard shipping terms are FOB shipping point, and we record revenue when the product is shipped, net of estimated returns and discounts. For some customers, the contractual shipping terms are FOB destination. For these shipments, we record revenue when the product is delivered, net of estimated returns and discounts. For franchise fees, we recognize revenue on a straight-line basis over the franchise term. The Company records revenue from royalty agreements in the period in which the royalty is earned. Promotional products given to customers or potential customers are recognized as a cost of sales. Cash incentives provided to our customers are recognized as a reduction of the related sale price, and, therefore, are a reduction in sales. |
Allowance for sales returns, warranty, and other credits | Allowance for sales returns, warranty, and other credits For product sales, the Company records revenue, net of estimated returns and discounts, when delivery has occurred, collection of the relevant receivable is reasonably assured, persuasive evidence of an arrangement exists and the sales price is fixed or determinable. Our return policy allows end users and certain retailers rights to return purchased products. In addition, the Company generally provides the ultimate consumer a warranty with each product. Due to the nature of the screen protection product line, end user returns for screen protection are generally not salvageable and are not included in inventory. We estimate a reserve for sales returns, warranty, and other credits, and record the estimated reserve amount as a reduction of sales, and as a sales return reserve liability. When product is returned and is expected to be resold, as is the case with returns of packaged screen protection, keyboards, audio products, cases, and power products, the impact is recorded as a reduction of revenues and cost of sales, and as a reduction in the sales return reserve liability. The sales returns and warranty reserve requires management to make estimates regarding return rates for sales and warranty returns. Historical experience, actual claims, and customer return rights are the key factors used in determining the estimated sales return and warranty reserve. The following summarizes the activity in the Company’s sales return and warranty liability for the years ended December 31, 2015, 2014 and 2013: For the Year Ended December 31, 2015 2014 2013 Balance at beginning of year $ 8,674 $ 7,872 $ 6,697 Additions charged to sales 43,320 35,923 30,450 Sales returns & warranty claims charged against reserve (44,145 ) (35,121 ) (29,275 ) Balance at end of year $ 7,849 $ 8,674 $ 7,872 |
Income taxes | Income taxes The Company recognizes deferred income tax assets or liabilities for expected future tax consequences of events that have been recognized in the financial statements or tax returns. Under this method, deferred income tax assets or liabilities are determined based upon the difference between the financial statement and income tax bases of assets and liabilities using enacted tax rates expected to apply when differences are expected to be settled or realized. Deferred income tax assets are reviewed for recoverability and valuation allowances are provided when it is more likely than not that a deferred tax asset will not be realizable in the future. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records estimated interest and penalties related to unrecognized tax benefits, if any, as a component of income tax provision. The Company has foreign subsidiaries that conduct or support its business outside the United States. The Company does not provide for U.S. income taxes on undistributed earnings for its foreign subsidiaries as the foreign earnings will be permanently reinvested in such foreign jurisdictions. |
Stock-based compensation | Stock-based compensation The Company recognizes stock-based compensation expense in its consolidated financial statements for awards granted to employees and non-employees, which include restricted stock, stock options, and warrants. Equity-classified awards are measured at the grant date fair value of the award. The fair value of restricted stock is measured on the grant date based on the quoted closing market price of the Company’s common stock. The fair value of the stock options is measured on the grant date using the Black-Scholes option pricing model based on the underlying common stock closing price as of the date of grant, the expected term, stock price volatility, and risk-free interest rates |
Advertising and marketing | Advertising and marketing General advertising is expensed as incurred. Advertising allowances provided to retailers are recorded as an expense at the time of the related sale if the Company receives an identifiable benefit in exchange for the consideration and has evidence of fair value for the advertising; otherwise, the allowance is recorded as a reduction of revenue. Advertising expenses for the years ended December 31, 2015, 2014 and 2013 were $10,436, $7,542 and $8,952, respectively. |
Foreign currency translation and transactions | Foreign currency translation and transactions The Company’s primary operations are at the parent level which uses the U.S. dollar (USD) as its functional currency. The Euro is the functional currency of the Company’s foreign subsidiaries. Accordingly, assets and liabilities for these subsidiaries are translated into USD using exchange rates in effect at the end of each period. Revenue and expenses for these subsidiaries are translated using rates that approximate those in effect during the period. Gains and losses from these translations are recorded as a component of stockholders’ equity. Gains and losses resulting from foreign currency transactions are included in income as a component of other income and (expense) in the consolidated statements of operations and totaled $52, $149 and ($7) for the years ended December 31, 2015, 2014 and 2013, respectively. |
Earnings per share | Earnings per share Basic earnings per common share excludes dilution and is computed by dividing net income attributable to stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share reflects the potential dilution that could occur if stock options or other common stock equivalents were exercised or converted into common stock. The dilutive effect of stock options or other common stock equivalents is calculated using the treasury stock method. The following is a reconciliation of the numerator and denominator used to calculate basic earnings per share and diluted earnings per share for the years ended December 31, 2015, 2014 and 2013: 2015 2014 2013 Net income attributable to stockholders $ 15,587 $ 10,461 $ 4,790 Weighted average shares outstanding 28,773 30,247 30,900 Dilutive effect of stock options, restricted stock, and warrants 316 363 559 Weighted average diluted potential shares 29,089 30,610 31,459 Earnings per share attributable to stockholders: Basic $ 0.54 $ 0.35 $ 0.16 Dilutive $ 0.54 $ 0.34 $ 0.15 For the years ended December 31, 2015, 2014, and 2013, restricted stock, warrants and stock options to purchase 250, 485, and 620 shares of common stock, respectively, |
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 ASU 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. On July 9, 2015, the FASB voted to approve a one year deferral of the effective date of this ASU. This deferral was issued by the FASB in ASU No. 2015-14, “Revenue from Contracts with Customers (Topic 606) – Deferral of the Effective Date”. As a result of ASU No. 2015-14 the Company expects that it will apply the new revenue standard to annual and interim reporting periods beginning after December 15, 2017. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-11, “Simplifying the Measurement of Inventory.” This ASU provides guidance to entities that measure inventory using a method other than last-in, first-out (LIFO) or the retail inventory method. For entities using first-in, first-out (FIFO) or average cost, the measurement principle for their inventory changes from the lower of cost or market to lower of cost and net realizable value. Current U.S. GAAP requires, at each financial statement date, that entities measure inventory at the lower of cost or market. The measurement of market is commonly the current replacement cost. However, entities also need to consider net realizable value and net realizable value less an approximately normal profit margin in their measurement. For entities using a method other than LIFO or the retail inventory method, the ASU replaces market with net realizable value. This ASU requires prospective adoption for inventory measurement for annual and interim periods beginning after December 15, 2016 for public business entities. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements. In September 2015, the FASB issued ASU No. 2015-16, “Simplifying the Accounting for Measurement-Period Adjustments,” which eliminates the requirement for an acquirer to retrospectively adjust the financial statements for measurement-period adjustments that occur in periods after a business combination is consummated. The ASU is effective for public business entities for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, “Balance Sheet Classification of Deferred Taxes,” which requires entities with a classified balance sheet to present all deferred tax assets and liabilities as noncurrent. The ASU is effective for public business entities for interim and annual periods in fiscal years beginning after December 15, 2016. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements. |
Organization and Summary of S27
Organization and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Organization and Summary of Significant Accounting Policies [Abstract] | |
Schedule of allowance for doubtful accounts activity | For the Years Ended December 31, 2015 2014 2013 Balance at beginning of year $ 1,910 $ 2,540 $ 2,974 Additions charged to expense 243 389 1,142 Write-offs charged against the allowance (1,585 ) (1,019 ) (1,576 ) Balance at end of year $ 568 $ 1,910 $ 2,540 |
Schedule of sales return and warranty liability activity | For the Year Ended December 31, 2015 2014 2013 Balance at beginning of year $ 8,674 $ 7,872 $ 6,697 Additions charged to sales 43,320 35,923 30,450 Sales returns & warranty claims charged against reserve (44,145 ) (35,121 ) (29,275 ) Balance at end of year $ 7,849 $ 8,674 $ 7,872 |
Schedule of reconciliation of the numerator and denominator used to calculate basic earnings per share and diluted earnings per share | 2015 2014 2013 Net income attributable to stockholders $ 15,587 $ 10,461 $ 4,790 Weighted average shares outstanding 28,773 30,247 30,900 Dilutive effect of stock options, restricted stock, and warrants 316 363 559 Weighted average diluted potential shares 29,089 30,610 31,459 Earnings per share attributable to stockholders: Basic $ 0.54 $ 0.35 $ 0.16 Dilutive $ 0.54 $ 0.34 $ 0.15 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Inventories [Abstract] | |
Schedule of inventories | December 31, 2015 2014 Finished goods $ 44,764 $ 48,145 Raw materials 1,148 233 Total inventories $ 45,912 $ 48,378 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property and Equipment [Abstract] | |
Schedule of property and equipment | December 31, 2015 2014 Useful Lives Computer equipment and software 3 to 5 years $ 2,912 $ 2,627 Equipment and molds 3 to 7 years 9,536 8,238 Furniture and fixtures 7 years 745 770 Automobiles 5 years 199 234 Leasehold improvements 1 to 8 years 5,456 3,090 18,848 14,959 Less accumulated depreciation and amortization (10,539 ) (7,659 ) Net property and equipment $ 8,309 $ 7,300 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets [Abstract] | |
Schedule of changes in the carrying amount of goodwill | 2013 Balance as of January 1 Gross goodwill $ 6,925 Accumulated impairment losses (5,441 ) Net goodwill as of January 1 1,484 Goodwill acquired during the year - Impairment loss (1,484 ) Balance as of December 31 Gross goodwill 6,925 Accumulated impairment losses (6,925 ) Net goodwill as of December 31 $ - |
Schedule of finite lived intangible assets trade mark future amortization expense | December 31, 2013 iFrogz trademark prior to impairment $ 16,800 iFrogz trademark impairment (9,762 ) iFrogz trademark – definite-lived $ 7,038 |
Schedule of definite-lived intangibles | As of December 31, 2015 Gross Carrying Amount Accumulated Amortization Acquisitions Net Carrying Amount Weighted Average Amortization Period Customer relationships $ 41,500 $ (29,150 ) $ - $ 12,350 8.0 years Non-compete agreements 4,100 (3,729 ) - 371 4.8 years Other Trademarks 3,500 (2,604 ) - 896 9.7 years iFrogz Trademark 7,038 (2,219 ) - 4,819 10.0 years EarPollution Trademark 2,383 (1,430 ) - 953 8.0 years Other 600 (592 ) - 8 5.0 years Acquired technology 709 (375 ) - 334 7.0 years Internet address 124 (90 ) - 34 10.0 years Patents 4,696 (1,614 ) 198 3,280 12.5-14.0 years Total amortizable assets $ 64,650 $ (41,803 ) $ 198 $ 23,045 8.4 years As of December 31, 2014 Gross Carrying Amount Accumulated Amortization Acquisitions Net Carrying Amount Weighted Average Amortization Period Customer relationships $ 41,500 $ (23,839 ) $ - $ 17,661 8.0 years Non-compete agreements 4,100 (2,949 ) - 1,151 4.8 years Other Trademarks 3,500 (2,216 ) - 1,284 9.7 years iFrogz Trademark 7,038 (1,152 ) - 5,886 10.0 years EarPollution Trademark 2,383 (1,026 ) - 1,357 8.0 years Other 600 (554 ) - 46 5.0 years Acquired technology 709 (267 ) - 442 7.0 years Internet address 124 (78 ) - 46 10.0 years Patents 4,696 (1,161 ) - 3,535 12.5-14.0 years Total amortizable assets $ 64,650 $ (33,242 ) $ - $ 31,408 8.4 years |
Schedule of estimated future amortization expense | 2016 $ 7,140 2017 5,663 2018 4,640 2019 2,304 2020 953 Thereafter 2,345 Total $ 23,045 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes [Abstract] | |
Summary of provision for (benefit from) income taxes | 2015 2014 2013 Current provision: Federal $ (9,429 ) $ (9,705 ) $ (8,720 ) State (1,783 ) (2,502 ) (762 ) Foreign (61 ) (36 ) - Total current (11,273 ) (12,243 ) (9,482 ) Deferred provision: Federal 973 4,144 5,036 State 189 1,626 751 Foreign - - - Total deferred 1,162 5,770 5,787 Total provision $ (10,111 ) $ (6,473 ) $ (3,695 ) |
Schedule of effective income tax rate reconciliation | 2015 2014 2013 Tax at statutory rate (35%) $ (8,994 ) $ (5,927 ) $ (2,970 ) State tax, net of federal tax benefit (1,089 ) (955 ) 25 Non-deductible expense and other 116 220 564 Affiliate tax rate differential (464 ) (900 ) (136 ) Domestic production activities deduction 459 688 331 Return to provision adjustment 126 453 (148 ) Liquidation of iFrogz EU - - 5 Reserve related to unrecognized tax benefits (264 ) (541 ) (382 ) Interest and penalties (1 ) (37 ) (32 ) Effect of state rate changes, net of federal tax benefit - 526 - Increase in valuation allowance - - (952 ) $ (10,111 ) $ (6,473 ) $ (3,695 ) |
Summary of deferred tax assets and liabilities | 2015 2014 Deferred tax assets: Allowance for doubtful accounts $ 196 $ 729 Deferred revenue 7 12 Inventories 5,581 5,584 Stock-based compensation 2,406 1,825 Sales returns accrual 2,974 3,374 Acquisition costs, net of amortization 217 238 Intangible assets 12,924 11,708 Goodwill 1,886 2,067 HzO investment 1,520 1,520 Capital loss carry-over 278 278 Reserve on note receivable 336 583 Other liabilities 499 66 Deferred tax assets 28,824 27,984 Valuation allowance (1,798 ) (1,798 ) Total deferred tax assets $ 27,026 $ 26,186 Deferred tax liabilities: Property and equipment 800 1,122 Total gross deferred tax liabilities 800 1,122 Net deferred tax assets $ 26,226 $ 25,064 Deferred tax assets, net – current $ 10,840 $ 10,774 Deferred tax assets, net – noncurrent 15,386 14,290 Net deferred tax assets $ 26,226 $ 25,064 |
Schedule of unrecognized tax benefits | 2015 2014 Unrecognized tax benefits, as of January 1 $ 1,001 $ 460 Gross increases – tax positions in current period 264 541 Total benefit $ 1,265 $ 1,001 |
Stock Options Warrants and Re32
Stock Options Warrants and Restricted Stock (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Stock Options Warrants and Restricted Stock [Abstract] | |
Schedule of stock option activity | Options (In thousands) Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Net Aggregate Intrinsic Value (In thousands) Outstanding at December 31, 2014 285 $ 5.02 0.6 $ 504 Exercised (192 ) 3.52 Outstanding at December 31, 2015 93 $ 8.14 0.2 $ 259 Exercisable at December 31, 2015 93 $ 8.14 0.2 $ 259 |
Schedule of warrant activity | Warrants (In thousands) Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Net Aggregate Intrinsic Value Outstanding at December 31, 2014 385 $ 8.12 1.0 $ (512 ) Exercised (307 ) 7.89 Outstanding at December 31, 2015 78 $ 9.03 0.7 $ 148 Exercisable at December 31, 2015 78 $ 9.03 0.7 $ 148 |
Schedule of restricted stock activity | Restricted Stock (In thousands) Weighted- Average Grant Date Fair Value (Per share) Outstanding at December 31, 2014 627 $ 4.83 Granted 673 7.03 Vested (445 ) 5.25 Forfeited (73 ) 6.02 Outstanding at December 31, 2015 782 $ 6.47 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Measurements [Abstract] | |
Schedule of assets and liabilities measured at fair value on recurring basis | Fair Value Measurements Using: December 31, 2015 Level 1 Inputs Level 2 Inputs Level 3 Inputs Money market funds included in cash equivalents $ 375 $375 - - Fair Value Measurements Using: December 31, 2014 Level 1 Inputs Level 2 Inputs Level 3 Inputs Money market funds included in cash equivalents $ 374 $374 - - |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies [Abstract] | |
Schedule of future minimum rental payments required under the operating leases | 2016 $ 1,235 2017 1,476 2018 1,343 2019 1,366 2020 1,397 Thereafter 3,596 Total $ 10,413 |
Concentrations (Tables)
Concentrations (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Concentrations [Abstract] | |
Schedules of concentration of accounts receivable and sales | 2015 2014 Customer A 29% 48% Customer B 5% 14% Customer C 31% 4% 2015 2014 2013 Customer A 20% 30% 26% Customer B 9% 11% 18% Customer C 11% 11% 6% Customer D 17% 6% 5% |
Schedule of percentage of sales by geographic region | 2015 2014 2013 United States 91% 90% 90% Europe 8% 7% 5% Other 1% 3% 5% |
Quarterly Financial Data (Una36
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Data [Abstract] | |
Quarterly financial information | Year ended December 31, 2015 First Quarter Second Quarter Third Quarter Fourth Quarter Year Net sales $ 57,216 $ 66,689 $ 66,774 $ 78,632 $ 269,311 Income from operations 5,439 6,253 6,228 7,944 25,864 Net income 3,200 3,691 3,739 4,957 15,587 Earnings per share attributable to stockholders: (1) Basic $ 0.11 $ 0.13 $ 0.13 $ 0.18 $ 0.54 Diluted 0.11 0.12 0.13 0.18 0.54 Weighted average common shares: Basic 29,380 29,521 28,734 27,483 28,773 Diluted 29,678 29,754 28,930 28,022 29,089 Year ended December 31, 2014 First Quarter Second Quarter Third Quarter Fourth Quarter Year Net sales $ 49,003 $ 50,154 $ 60,013 $ 102,415 $ 261,585 Income (loss) from operations 1,940 1,580 (6,611 ) 20,074 16,983 Net income (loss) 988 793 (4,319 ) 12,999 10,461 Earnings (loss) per share attributable to stockholders: (1) Basic $ 0.03 $ 0.03 $ (0.14 ) $ 0.44 $ 0.35 Diluted 0.03 0.03 (0.14 ) 0.43 0.34 Weighted average common shares: Basic 30,549 30,281 30,312 29,854 30,247 Diluted 30,864 30,575 30,312 30,288 30,610 (1) The earnings per share calculations for each of the quarters were based upon the weighted average number of shares outstanding during each period, and the sum of the quarters may not be equal to the full year earnings per common share amounts. |
Organization and Summary of S37
Organization and Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Organization and Summary of Significant Accounting Policies [Abstract] | |||
Balance at beginning of year | $ 1,910 | $ 2,540 | $ 2,974 |
Additions charged to expense | 243 | 389 | 1,142 |
Write-offs charged against the allowance | (1,585) | (1,019) | (1,576) |
Balance at end of year | $ 568 | $ 1,910 | $ 2,540 |
Organization and Summary of S38
Organization and Summary of Significant Accounting Policies (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Organization and Summary of Significant Accounting Policies [Abstract] | |||
Balance at beginning of year | $ 8,674 | $ 7,872 | $ 6,697 |
Additions charged to sales | 43,320 | 35,923 | 30,450 |
Sales returns & warranty claims charged against reserve | (44,145) | (35,121) | (29,275) |
Balance at end of year | $ 7,849 | $ 8,674 | $ 7,872 |
Organization and Summary of S39
Organization and Summary of Significant Accounting Policies (Details 2) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |||||||||
Organization and Summary of Significant Accounting Policies [Abstract] | |||||||||||||||||||
Net income attributable to stockholders | $ 4,957 | $ 3,739 | $ 3,691 | $ 3,200 | $ 12,999 | $ (4,319) | $ 793 | $ 988 | $ 15,587 | $ 10,461 | $ 4,790 | ||||||||
Weighted average shares outstanding | 27,483 | 28,734 | 29,521 | 29,380 | 29,854 | 30,312 | 30,281 | 30,549 | 28,773 | 30,247 | 30,900 | ||||||||
Dilutive effect of stock options, restricted stock, and warrants | 316 | 363 | 559 | ||||||||||||||||
Weighted average diluted potential shares | 28,022 | 28,930 | 29,754 | 29,678 | 30,288 | 30,312 | 30,575 | 30,864 | 29,089 | 30,610 | 31,459 | ||||||||
Earnings per share attributable to stockholders: | |||||||||||||||||||
Basic | $ 0.18 | [1] | $ 0.13 | [1] | $ 0.13 | [1] | $ 0.11 | [1] | $ 0.44 | [1] | $ (0.14) | [1] | $ 0.03 | [1] | $ 0.03 | [1] | $ 0.54 | $ 0.35 | $ 0.16 |
Dilutive | $ 0.18 | [1] | $ 0.13 | [1] | $ 0.12 | [1] | $ 0.11 | [1] | $ 0.43 | [1] | $ (0.14) | [1] | $ 0.03 | [1] | $ 0.03 | [1] | $ 0.54 | $ 0.34 | $ 0.15 |
[1] | The earnings per share calculations for each of the quarters were based upon the weighted average number of shares outstanding during each period, and the sum of the quarters may not be equal to the full year earnings per common share amounts. |
Organization and Summary of S40
Organization and Summary of Significant Accounting Policies (Details Textual) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 21, 2011 | |
Business Acquisition [Line Items] | ||||
Amounts receivable from credit card processors | $ 61 | $ 120 | ||
Percentage of investment decline | 20.00% | |||
Investment in HzO | $ 0 | 0 | ||
Tax benefits recognized provided percentage of likelihood of realization more than | 50.00% | |||
Advertising expense | $ 10,436 | 7,542 | $ 8,952 | |
Gains (losses) from foreign currency transactions | $ 52 | $ 149 | $ (7) | |
Restricted Stock [Member] | ||||
Business Acquisition [Line Items] | ||||
Shares excluded from computation of diluted earnings per share | 250 | 485 | ||
Warrant [Member] | ||||
Business Acquisition [Line Items] | ||||
Shares excluded from computation of diluted earnings per share | 620 | |||
iFrogz [Member] | ||||
Business Acquisition [Line Items] | ||||
Percentage of acquired outstanding shares of iFrogz | 100.00% | |||
Maturity term | Three months or less |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Inventories [Abstract] | ||
Finished goods | $ 44,764 | $ 48,145 |
Raw materials | 1,148 | 233 |
Total inventories | $ 45,912 | $ 48,378 |
Inventories (Details Textual)
Inventories (Details Textual) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Inventories (Textual) | ||
Inventory deposits with third-party manufacturers | $ 813 | $ 1,425 |
Investment in HzO (Details)
Investment in HzO (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Variable Interest Entity [Line Items] | |||
Loss from equity method investment in HzO | $ (2,013) | ||
HzO, Inc | |||
Variable Interest Entity [Line Items] | |||
Reduced ownership interest | 10.00% | 20.00% | |
Ownership interest, Description | HzO raised additional equity capital, which has reduced ZAGG's ownership interest below 10% at December 31, 2015. | ||
Carrying value of investment | $ 0 | $ 0 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 18,848 | $ 14,959 |
Less accumulated depreciation and amortization | (10,539) | (7,659) |
Net property and equipment | 8,309 | 7,300 |
Computer equipment and software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 2,912 | 2,627 |
Computer equipment and software [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, Useful Lives | 3 years | |
Computer equipment and software [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, Useful Lives | 5 years | |
Equipment and molds [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 9,536 | 8,238 |
Equipment and molds [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, Useful Lives | 3 years | |
Equipment and molds [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, Useful Lives | 7 years | |
Furniture and fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 745 | 770 |
Property, plant and equipment, Useful Lives | 7 years | |
Automobiles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 199 | 234 |
Property, plant and equipment, Useful Lives | 5 years | |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 5,456 | $ 3,090 |
Leasehold improvements [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, Useful Lives | 1 year | |
Leasehold improvements [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, Useful Lives | 8 years |
Goodwill and Intangible Asset45
Goodwill and Intangible Assets (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2013USD ($) | |
Goodwill [Roll Forward] | |
Gross goodwill, Beginning Balance | $ 6,925 |
Accumulated impairment losses, Beginning Balance | (5,441) |
Net goodwill, Beginning Balance | $ 1,484 |
Goodwill acquired during the year | |
Impairment loss | $ (1,484) |
Gross goodwill, Ending Balance | 6,925 |
Accumulated impairment losses, Ending Balance | $ (6,925) |
Net goodwill, Ending Balance |
Goodwill and Intangible Asset46
Goodwill and Intangible Assets (Details 1) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Finite-Lived Intangible Assets [Line Items] | |||
Definite-lived | $ 23,045 | $ 31,408 | |
iFrogz Trademark [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Trademark prior to impairment | $ 16,800 | ||
Trademark impairment | (9,762) | ||
Definite-lived | $ 7,038 |
Goodwill and Intangible Asset47
Goodwill and Intangible Assets (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 64,650 | $ 64,650 |
Accumulated Amortization | (41,803) | $ (33,242) |
Acquisitions | 198 | |
Net Carrying Amount | $ 23,045 | $ 31,408 |
Weighted Average Amortization Period | 8 years 4 months 24 days | 8 years 4 months 24 days |
Customer relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 41,500 | $ 41,500 |
Accumulated Amortization | $ (29,150) | $ (23,839) |
Acquisitions | ||
Net Carrying Amount | $ 12,350 | $ 17,661 |
Weighted Average Amortization Period | 8 years | 8 years |
Non-compete agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 4,100 | $ 4,100 |
Accumulated Amortization | $ (3,729) | $ (2,949) |
Acquisitions | ||
Net Carrying Amount | $ 371 | $ 1,151 |
Weighted Average Amortization Period | 4 years 9 months 18 days | 4 years 9 months 18 days |
Other Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 3,500 | $ 3,500 |
Accumulated Amortization | $ (2,604) | $ (2,216) |
Acquisitions | ||
Net Carrying Amount | $ 896 | $ 1,284 |
Weighted Average Amortization Period | 9 years 8 months 12 days | 9 years 8 months 12 days |
iFrogz Trademark [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 7,038 | $ 7,038 |
Accumulated Amortization | $ (2,219) | $ (1,152) |
Acquisitions | ||
Net Carrying Amount | $ 4,819 | $ 5,886 |
Weighted Average Amortization Period | 10 years | 10 years |
EarPollution Trademark [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 2,383 | $ 2,383 |
Accumulated Amortization | $ (1,430) | $ (1,026) |
Acquisitions | ||
Net Carrying Amount | $ 953 | $ 1,357 |
Weighted Average Amortization Period | 8 years | 8 years |
Other [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 600 | $ 600 |
Accumulated Amortization | $ (592) | $ (554) |
Acquisitions | ||
Net Carrying Amount | $ 8 | $ 46 |
Weighted Average Amortization Period | 5 years | 5 years |
Acquired technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 709 | $ 709 |
Accumulated Amortization | $ (375) | $ (267) |
Acquisitions | ||
Net Carrying Amount | $ 334 | $ 442 |
Weighted Average Amortization Period | 7 years | 7 years |
Internet address [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 124 | $ 124 |
Accumulated Amortization | $ (90) | $ (78) |
Acquisitions | ||
Net Carrying Amount | $ 34 | $ 46 |
Weighted Average Amortization Period | 10 years | 10 years |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 4,696 | $ 4,696 |
Accumulated Amortization | (1,614) | $ (1,161) |
Acquisitions | 198 | |
Net Carrying Amount | $ 3,280 | $ 3,535 |
Patents [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period | 12 years 6 months | 12 years 6 months |
Patents [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period | 14 years | 14 years |
Goodwill and Intangible Asset48
Goodwill and Intangible Assets (Details 3) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Goodwill and Intangible Assets [Abstract] | ||
2,016 | $ 7,140 | |
2,017 | 5,663 | |
2,018 | 4,640 | |
2,019 | 2,304 | |
2,020 | 953 | |
Thereafter | 2,345 | |
Total | $ 23,045 | $ 31,408 |
Goodwill and Intangible Asset49
Goodwill and Intangible Assets (Details Textual) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Impairment of goodwill | $ 1,484 | ||||
Amortization expenses | $ 8,453 | $ 9,709 | 9,620 | ||
Acquisitions | 198 | ||||
Consideration for acquisition of patent | $ 198 | $ 198 | 1,946 | ||
Common Stock | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Consideration for acquisition of patent | $ 1 | ||||
Consideration for acquisition of patent (in shares) | 21 | 21 | 500 | ||
Acquired technology [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Impairment of goodwill | $ 109 | $ 102 | $ 82 | ||
Acquisitions | |||||
Ifrogz Trademarks [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Impairment of goodwill | 9,762 | ||||
Acquisitions | |||||
Ear Pollution Trademark [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Impairment of goodwill | $ 5,917 | ||||
Acquisitions | |||||
Remaining Definite Lived Intangible Asset [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization expenses | $ 8,562 | $ 9,811 | $ 9,702 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Current (provision): | |||
Federal | $ (9,429) | $ (9,705) | $ (8,720) |
State | (1,783) | (2,502) | $ (762) |
Foreign | (61) | (36) | |
Total current | (11,273) | (12,243) | $ (9,482) |
Deferred provision | |||
Federal | 973 | 4,144 | 5,036 |
State | $ 189 | $ 1,626 | $ 751 |
Foreign | |||
Total deferred | $ (1,162) | $ (5,770) | $ (5,787) |
Total provision | $ 10,111 | $ 6,473 | $ 3,695 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Taxes [Abstract] | |||
Tax at statutory rate (35%) | $ (8,994) | $ (5,927) | $ (2,970) |
State tax, net of federal tax benefit | (1,089) | (955) | 25 |
Non-deductible expense and other | 116 | 220 | 564 |
Affiliate tax rate differential | (464) | (900) | (136) |
Domestic production activities deduction | 459 | 688 | 331 |
Return to provision adjustment | $ 126 | $ 453 | (148) |
Liquidation of iFrogz EU | 5 | ||
Reserve related to unrecognized tax benefits | $ (264) | $ (541) | (382) |
Interest and penalties | $ (1) | (37) | $ (32) |
Effect of state rate changes, net of federal tax benefit | $ 526 | ||
Increase in valuation allowance | $ (952) | ||
Income tax benefit (provision) | $ 10,111 | $ 6,473 | $ 3,695 |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets: | ||
Allowance for doubtful accounts | $ 196 | $ 729 |
Deferred revenue | 7 | 12 |
Inventories | 5,581 | 5,584 |
Stock-based compensation | 2,406 | 1,825 |
Sales returns accrual | 2,974 | 3,374 |
Acquisition costs, net of amortization | 217 | 238 |
Intangible assets | 12,924 | 11,708 |
Goodwill | 1,886 | 2,067 |
HzO investment | 1,520 | 1,520 |
Capital loss carry-over | 278 | 278 |
Reserve on note receivable | 336 | 583 |
Other liabilities | 499 | 66 |
Deferred tax assets | 28,824 | 27,984 |
Valuation allowance | (1,798) | (1,798) |
Total deferred tax assets | 27,026 | 26,186 |
Deferred tax liabilities: | ||
Property and equipment | 800 | 1,122 |
Total gross deferred tax liabilities | 800 | 1,122 |
Net deferred tax assets | 26,226 | 25,064 |
Deferred tax assets, net - current | 10,840 | 10,774 |
Deferred tax assets, net - noncurrent | 15,386 | 14,290 |
Net deferred tax assets | $ 26,226 | $ 25,064 |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Taxes [Abstract] | ||
Unrecognized tax benefits, as of January 1 | $ 1,001 | $ 460 |
Gross increases - tax positions in current period | 264 | 541 |
Total benefit | $ 1,265 | $ 1,001 |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Taxes Textual [Abstract] | |||
Federal statutory rate | 35.00% | ||
Deferred tax assets, valuation allowance | $ 1,798 | $ 1,798 | |
Change in valuation allowance | 278 | 278 | |
Cash held by foreign entities permanently reinvested | 4,873 | ||
Tax contingency | 1,265 | 1,001 | |
Unrecognized tax benefits | 1,265 | 1,001 | $ 460 |
Unrecognized tax benefits that would impact effective tax rate | 1,233 | ||
Income Tax Interest and Penalties | 2 | 37 | $ 32 |
HzO, Inc | |||
Income Taxes Textual [Abstract] | |||
Deferred tax assets, valuation allowance | $ 1,520 | $ 1,520 |
Stock Options Warrants and Re55
Stock Options Warrants and Restricted Stock (Details) - Stock options [Member] - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding at December 31, 2014 | 285 | |
Exercised | (192) | |
Outstanding at December 31, 2015 | 93 | 285 |
Exercisable at December 31, 2015 | 93 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Stock option outstanding, Weighted-Average Remaining Contractual Term | 2 months 12 days | 7 months 6 days |
Stock option exercisable, Weighted-Average Remaining Contractual Term | 2 months 12 days | |
Stock option outstanding, Aggregate Intrinsic Value | $ 259 | $ 504 |
Stock option exercisable, Aggregate Intrinsic Value | $ 259 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||
Outstanding at December 31, 2014 | $ 5.02 | |
Exercised | 3.52 | |
Outstanding at December 31, 2015 | 8.14 | $ 5.02 |
Exercisable at December 31, 2015 | $ 8.14 |
Stock Options Warrants and Re56
Stock Options Warrants and Restricted Stock (Details 1) - Warrant [Member] $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2015USD ($)$ / shares$ / Warrantshares | Dec. 31, 2014USD ($)$ / Warrantshares | |
Warrants Outstanding Rollforward [Abstract] | ||
Outstanding at December 31, 2014 | 385 | |
Exercised | (307) | |
Outstanding at December 31, 2015 | 78 | 385 |
Exercisable at December 31, 2015 | 78 | |
Class Of Warrant Or Right Outstanding Weighted Average Exercise Price Rollforward [Abstract] | ||
Outstanding at December 31, 2015 | $ / Warrant | 8.12 | |
Exercised | $ / shares | $ 7.89 | |
Outstanding at December 31, 2015 | $ / Warrant | 9.03 | 8.12 |
Exercisable at December 31, 2015 | $ / Warrant | 9.03 | |
Class Of Warrant Or Right Additional Disclosures [Abstract] | ||
Warrants Outstanding, Weighted-Average Remaining Contractual Term | 8 months 12 days | 1 year |
Warrants Exercisable, Weighted-Average Remaining Contractual Term | 8 months 12 days | |
Warrants Outstanding, Aggregate Intrinsic Value | $ | $ 148 | $ (512) |
Warrants Exercisable, Aggregate Intrinsic Value | $ | $ 148 |
Stock Options Warrants and Re57
Stock Options Warrants and Restricted Stock (Details 2) - Restricted Stock [Member] shares in Thousands | 12 Months Ended |
Dec. 31, 2015$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding at December 31, 2013 | shares | 627 |
Granted | shares | 673 |
Vested | shares | (445) |
Forfeited | shares | (73) |
Outstanding at December 31, 2014 | shares | 782 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Outstanding at December 31, 2013 | $ / shares | $ 4.83 |
Granted | $ / shares | 7.03 |
Vested | $ / shares | 5.25 |
Forfeited | $ / shares | 6.02 |
Outstanding at December 31, 2014 | $ / shares | $ 6.47 |
Stock Options Warrants and Re58
Stock Options Warrants and Restricted Stock (Details Textual) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Jan. 15, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2007 |
Stock Options Warrants and Restricted Stock (Textual) | |||||
Intrinsic value of warrants exercised | $ 277 | $ 18 | $ 0 | ||
Unrecognized estimated compensation cost related to nonvested warrants granted | 0 | ||||
Total fair value of warrants vested | 0 | $ 33 | $ 0 | ||
Total unrecognized compensation cost related to nonvested restricted stock awards granted | $ 1,775 | ||||
Weighted-average period for recognition of compensation cost | 1 year 1 month 6 days | ||||
Warrant [Member] | |||||
Stock Options Warrants and Restricted Stock (Textual) | |||||
Weighted-average grant-date fair value of options granted | $ 0 | $ 0 | $ 0 | ||
Warrant related expenses | $ 0 | $ 0 | $ 0 | ||
Selling, General and Administrative Expenses [Member] | |||||
Stock Options Warrants and Restricted Stock (Textual) | |||||
Equity-based compensation expense | 3,893 | 2,053 | 3,846 | ||
Net tax benefit recognized on equity-based compensation expense | 1,489 | 785 | 1,458 | ||
Amount of tax benefit realized from restricted stock | 1,014 | 378 | 1,042 | ||
Selling, General and Administrative Expenses [Member] | Warrant [Member] | |||||
Stock Options Warrants and Restricted Stock (Textual) | |||||
Compensation expense related to warrants | 0 | 0 | 0 | ||
Net tax benefit on equity-based compensation expense of warrants | 0 | 0 | 0 | ||
Amount of tax benefit realized from compensatory warrants exercised | 69 | 9 | 0 | ||
Stock options [Member] | |||||
Stock Options Warrants and Restricted Stock (Textual) | |||||
Total intrinsic value of options exercised | 416 | 417 | 540 | ||
Unrecognized compensation cost related to nonvested stock options granted | 0 | ||||
Fair value of shares vested during period | 0 | 154 | 593 | ||
Net tax benefit recognized on equity-based compensation expense | 0 | 73 | 88 | ||
Tax benefit realized from stock options exercised | 151 | 73 | 88 | ||
Stock options [Member] | Selling, General and Administrative Expenses [Member] | |||||
Stock Options Warrants and Restricted Stock (Textual) | |||||
Equity-based compensation expense | 0 | 28 | 280 | ||
Restricted Stock [Member] | |||||
Stock Options Warrants and Restricted Stock (Textual) | |||||
Equity-based compensation expense | $ 724 | $ 75 | $ 257 | ||
2007 Plan [Member] | |||||
Stock Options Warrants and Restricted Stock (Textual) | |||||
Issuance of common stock to directors, employees, consultants and advisors | 10,000 | ||||
Number of shares available for grant | 6,239 | ||||
2013 Plan [Member] | |||||
Stock Options Warrants and Restricted Stock (Textual) | |||||
Issuance of common stock to directors, employees, consultants and advisors | 5,000 | ||||
Number of shares available for grant | 3,601 | ||||
Term of the plan | 10 years |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Fair value measurements recurring basis [Member] - Money market funds [Member] - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Estimate of Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Money market funds included in cash equivalents | $ 375 | $ 374 |
Level 1 Inputs [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Money market funds included in cash equivalents | $ 375 | $ 374 |
Level 2 Inputs [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Money market funds included in cash equivalents | ||
Level 3 Inputs [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Money market funds included in cash equivalents |
Note Receivable (Details Textua
Note Receivable (Details Textual) - USD ($) $ in Thousands | Oct. 02, 2015 | May. 21, 2015 | Mar. 23, 2011 | Dec. 31, 2015 | Dec. 31, 2014 | Jul. 13, 2015 | Jun. 29, 2015 | Jan. 31, 2012 | Dec. 31, 2009 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Advance payments for ZAGGbox in aggregate amount | $ 50 | $ 50 | |||||||
Fixed rate | 1.25% | 0.75% | |||||||
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 accrued 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, and (iii) the unpaid balance of principal and interest due in full on March 23, 2013. The Note was secured by certain real property, interests in entities that own real property and restricted and free-trading securities. | ||||||||
Foreclosed on real estate property valued | 1,099 | $ 250 | |||||||
Litigation settlement amount | $ 1,396 | $ 4,735 | |||||||
Litigation settlement interest rate | 12.00% | ||||||||
ZAGG products | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Advance payments for ZAGGbox in aggregate amount | $ 3,900 | $ 639 | |||||||
Original principal amount | $ 4,126 | ||||||||
Teleportall, LLC ('Teleportall') | Promissory note (the 'Note') | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Fixed rate | 4.00% | ||||||||
Original principal amount | $ 4,126 | ||||||||
Description of reference rate | LIBOR | ||||||||
Percentage of the net profits of selling product | 50.00% | ||||||||
Teleportall, LLC ('Teleportall') | ZAGG products | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Advance payments for ZAGGbox in aggregate amount | $ 3,900 | ||||||||
Initial purchase order price for ZAGGbox units | $ 3,500 | ||||||||
Zagg Inc [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Advance payments for ZAGGbox in aggregate amount | 298 | ||||||||
Real estate property other assets | 801 | ||||||||
Asset held for sale | $ 1,099 |
Note Receivable (Details Text61
Note Receivable (Details Textual 1) - USD ($) shares in Thousands, $ in Thousands | Jul. 13, 2015 | Dec. 31, 2011 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 29, 2015 | May. 31, 2012 | Jan. 31, 2012 | Mar. 23, 2011 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Number of shares issued in the process of foreclosure | 80 | 45 | |||||||
Value of shares issued in the process of foreclosure | $ 688 | $ 496 | |||||||
Foreclosed on real estate property valued | $ 1,099 | $ 250 | |||||||
Foreclosed on stock and warrants | $ 516 | ||||||||
Note receivable carrying amount | $ 50 | ||||||||
Notes receivable net | 50 | $ 50 | |||||||
Reduced balance | 0 | ||||||||
Reduction in reserve on note receivable upon foreclosure recovery | (639) | ||||||||
Balance of the reserve | 4,836 | $ 3,585 | |||||||
Legal fees | 1,397 | ||||||||
Accrued interest | 493 | ||||||||
Reduced amount of reserve | 639 | ||||||||
ZAGG products | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Notes receivable net | $ 639 | $ 3,900 | |||||||
ZAGG products | Minimum [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Estimated value of the underlying collateral security | 135 | ||||||||
ZAGG products | Maximum [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Estimated value of the underlying collateral security | $ 270 |
Debt and Letters of Credit (Det
Debt and Letters of Credit (Details Textual) - USD ($) $ in Thousands | Aug. 24, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 23, 2014 |
Line Of Credit Facility [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 25,000 | $ 25,000 | |||
Line of credit facility, outstanding balance | 0 | $ 0 | |||
Amendment fee | $ 1,397 | ||||
Line of credit maturity date | Dec. 1, 2016 | ||||
Basis spread on variable rate (in percent) | 1.25% | 0.75% | |||
Effective interest rate | 0.00% | 0.00% | |||
Payment of debt issuance costs | $ 43 | ||||
Line of credit interest rate, description | Under the Line of Credit bears interest at a fluctuating rate per annum determined to be the sum of the (1) LIBOR margin established under the Credit Agreement (with the initial LIBOR margin being set at 1.25%) and (2) Daily Three Month LIBOR (as defined in the Credit Agreement) in effect from time to time. Each change in the rate of interest will become effective on each business day on which a change in daily three month LIBOR is announced by Wells Fargo. | ||||
Wells Fargo Bank | |||||
Line Of Credit Facility [Line Items] | |||||
Purchase of common stock shares | $ 15,000 | ||||
Weighted average interest rate on all outstanding borrowings | 1.13% | ||||
Payment of debt issuance costs | $ 238 | ||||
Amortization of deferred loan costs | 60 | $ 66 | |||
Wells Fargo Bank | Interest Expense | |||||
Line Of Credit Facility [Line Items] | |||||
Unused line fees | 38 | 75 | |||
Wells Fargo Bank | Other Noncurrent Assets | |||||
Line Of Credit Facility [Line Items] | |||||
Deferred loan costs | $ 0 | $ 60 | |||
Standby commercial letters of credit | Wells Fargo Bank | |||||
Line Of Credit Facility [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 5,000 |
Treasury Stock (Details Textual
Treasury Stock (Details Textual) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Number of repurchase of shares authorized by board of directors | $ 15,000 | $ 10,000 | ||
Number of common stock repurchased under plan | 2,030 | 1,813 | 1,756 | |
Cash consideration paid for repurchase of common stock | $ 14,930 | $ 9,579 | $ 9,997 | |
Weighted average price per share of stock repurchase | $ 7.32 | $ 5.25 | ||
Commissions paid to brokers | $ 61 | $ 54 | ||
Foreclose shares of common stock | 80 | |||
Total value of foreclose shares of common stock | $ 688 | |||
Foreclose price per share | $ 8.59 | |||
Addition to repurchase of common stock | $ 20,000 | |||
Treasury Stock [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Number of common stock repurchased under plan | 2,110 | 1,813 |
Commitments and Contingencies64
Commitments and Contingencies (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Commitments and Contingencies [Abstract] | |
2,016 | $ 1,235 |
2,017 | 1,476 |
2,018 | 1,343 |
2,019 | 1,366 |
2,020 | 1,397 |
Thereafter | 3,596 |
Total | $ 10,413 |
Commitments and Contingencies65
Commitments and Contingencies (Details Textual) - USD ($) $ in Thousands | Oct. 02, 2015 | May. 21, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Loss Contingencies [Line Items] | |||||
Rental payment of leases | $ 1,642 | $ 1,640 | $ 1,564 | ||
Litigation settlement amount | $ 1,396 | $ 4,735 | |||
Litigation settlement interest rate | 12.00% | ||||
Acquisition costs | $ 2,235 | ||||
Complaint against the Company | Kravitz, as Liquidating Trustee (the "Trustee'') of the RSH Liquidating Trust (formally known as RadioShack) filed a complaint against the Company, alleging, among other things, that the Company received preference payments for product the Company sold and delivered to RadioShack in the amount of $1,834 pursuant to Section 547 of the Bankruptcy Code and in the alternative pursuant to Section 548 of the Bankruptcy Code. | ||||
Sublease Income [Member] | |||||
Loss Contingencies [Line Items] | |||||
Rental payment of leases | $ 0 | $ 910 | $ 996 |
Concentrations (Details)
Concentrations (Details) - Customer Concentration Risk [Member] | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accounts Receivable [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 10.00% | 10.00% | |
Accounts Receivable [Member] | Customer A [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 29.00% | 48.00% | |
Accounts Receivable [Member] | Customer B [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 5.00% | 14.00% | |
Accounts Receivable [Member] | Customer C [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 31.00% | 4.00% | |
Sales Revenue, Net [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 10.00% | 10.00% | 10.00% |
Sales Revenue, Net [Member] | Customer A [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 20.00% | 30.00% | 26.00% |
Sales Revenue, Net [Member] | Customer B [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 9.00% | 11.00% | 18.00% |
Sales Revenue, Net [Member] | Customer C [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 11.00% | 11.00% | 6.00% |
Sales Revenue, Net [Member] | Customer D [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 17.00% | 6.00% | 5.00% |
Concentrations (Details 1)
Concentrations (Details 1) - Sales revenue [Member] | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
United States [Member] | |||
Concentration Risk [Line Items] | |||
Percentage of sales | 91.00% | 90.00% | 90.00% |
Europe [Member] | |||
Concentration Risk [Line Items] | |||
Percentage of sales | 8.00% | 7.00% | 5.00% |
Other [Member] | |||
Concentration Risk [Line Items] | |||
Percentage of sales | 1.00% | 3.00% | 5.00% |
Concentrations (Details Textual
Concentrations (Details Textual) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015USD ($)Customer | Dec. 31, 2014USD ($)Customer | Dec. 31, 2013Customer | |
Shannon Ireland [Member] | |||
Concentrations (Textual) | |||
Net assets located overseas | $ | $ 8,387 | $ 8,050 | |
Customer Concentration Risk [Member] | Accounts Receivable [Member] | |||
Concentrations (Textual) | |||
Percentage of sales | 10.00% | 10.00% | |
Number of customer | 3 | 3 | |
Accounts revenues in percentage of all customers | No other customer account balances were more than 10% of accounts receivable. | No other customer account balances were more than 10% of accounts receivable. | |
Customer Concentration Risk [Member] | Sales Revenue, Net [Member] | |||
Concentrations (Textual) | |||
Percentage of sales | 10.00% | 10.00% | 10.00% |
Number of customer | 4 | 4 | 4 |
Accounts revenues in percentage of all customers | No other customer account balances were more that 10% of sales. | No other customer account balances were more that 10% of sales. | No other customer account balances were more that 10% of sales. |
Quarterly Financial Data (Una69
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |||||||||
Quarterly Financial Data [Abstract] | |||||||||||||||||||
Net sales | $ 78,632 | $ 66,774 | $ 66,689 | $ 57,216 | $ 102,415 | $ 60,013 | $ 50,154 | $ 49,003 | $ 269,311 | $ 261,585 | $ 219,356 | ||||||||
Income from operations | 7,944 | 6,228 | 6,253 | 5,439 | 20,074 | (6,611) | 1,580 | 1,940 | 25,864 | 16,983 | 10,946 | ||||||||
Net income | $ 4,957 | $ 3,739 | $ 3,691 | $ 3,200 | $ 12,999 | $ (4,319) | $ 793 | $ 988 | $ 15,587 | $ 10,461 | $ 4,790 | ||||||||
Earnings per share attributable to stockholders: (1) | |||||||||||||||||||
Basic | $ 0.18 | [1] | $ 0.13 | [1] | $ 0.13 | [1] | $ 0.11 | [1] | $ 0.44 | [1] | $ (0.14) | [1] | $ 0.03 | [1] | $ 0.03 | [1] | $ 0.54 | $ 0.35 | $ 0.16 |
Diluted | $ 0.18 | [1] | $ 0.13 | [1] | $ 0.12 | [1] | $ 0.11 | [1] | $ 0.43 | [1] | $ (0.14) | [1] | $ 0.03 | [1] | $ 0.03 | [1] | $ 0.54 | $ 0.34 | $ 0.15 |
Weighted average common shares: | |||||||||||||||||||
Basic | 27,483 | 28,734 | 29,521 | 29,380 | 29,854 | 30,312 | 30,281 | 30,549 | 28,773 | 30,247 | 30,900 | ||||||||
Diluted | 28,022 | 28,930 | 29,754 | 29,678 | 30,288 | 30,312 | 30,575 | 30,864 | 29,089 | 30,610 | 31,459 | ||||||||
[1] | The earnings per share calculations for each of the quarters were based upon the weighted average number of shares outstanding during each period, and the sum of the quarters may not be equal to the full year earnings per common share amounts. |
Defined Contribution Plan (Deta
Defined Contribution Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Defined Contribution Plan (Textual) | |||
Percentage of employees salary matches participant contributions | 100.00% | ||
Percentage of maximum employees salary | 3.00% | ||
Percentage of contributions | 50.00% | ||
Costs recognized related to employer | $ 335 | $ 414 | $ 263 |
Maximum [Member] | |||
Defined Contribution Plan (Textual) | |||
Percentage of employees salary | 5.00% | ||
Minimum [Member] | |||
Defined Contribution Plan (Textual) | |||
Percentage of employees salary | 4.00% |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Feb. 02, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Subsequent Event [Line Items] | ||||
Line of credit interest rate, description | Under the Line of Credit bears interest at a fluctuating rate per annum determined to be the sum of the (1) LIBOR margin established under the Credit Agreement (with the initial LIBOR margin being set at 1.25%) and (2) Daily Three Month LIBOR (as defined in the Credit Agreement) in effect from time to time. Each change in the rate of interest will become effective on each business day on which a change in daily three month LIBOR is announced by Wells Fargo. | |||
Payments of Debt Issuance Costs | $ 43 | |||
Term loan commitment | $ 25,000 | $ 25,000 | ||
Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Closing merger consideration of cash | $ 100,000 | |||
Payments to mophie employees | 100,000 | |||
Issuance common stock | $ 5,000 | |||
Credit commitment | Mar. 2, 2021 | |||
Line of credit fee Percentage | 0.20% | |||
Line of credit interest rate, description | Interest on the Revolver will accrue at the base rate plus 0.50% or LIBOR plus 1.50%. | |||
Term loan commitment | $ 25,000 | |||
Earn-out consideration, Rate | 10.00% | |||
Escrow fund | $ 2,000 | |||
Revolving credit commitment | 85,000 | |||
Subsequent Event [Member] | Merger Agreement [Member] | ||||
Subsequent Event [Line Items] | ||||
Closing merger consideration of cash | $ 5,000 | |||
Subsequent Event [Member] | Security Agreement [Member] | ||||
Subsequent Event [Line Items] | ||||
Line of credit fee Percentage | 0.125% | |||
Line of credit interest rate, description | Interest on the Term Loan will accrue at the base rate plus 1.0% or at a rate of LIBOR plus 2.0%. |