Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 06, 2019 | |
Cover page. | ||
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Registrant Name | ZAGG INC | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-2559624 | |
Entity Address, Address Line One | 910 West Legacy Center Way | |
Entity Address, Address Line Two | Suite 500 | |
Entity Address, City or Town | Midvale | |
Entity Address, State or Province | UT | |
Entity Address, Postal Zip Code | 84047 | |
City Area Code | 801 | |
Local Phone Number | 263-0699 | |
Entity Central Index Key | 0001296205 | |
Entity File Number | 001-34528 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Shell Company | false | |
Title of 12(b) Security | Common Stock, $0.001 par value | |
Trading Symbol | ZAGG | |
Security Exchange Name | NASDAQ | |
Amendment Flag | false | |
Entity Interactive Data Current | Yes | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2019 | |
Entity Common Stock, Shares Outstanding | 29,080,293 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 12,885 | $ 15,793 |
Accounts receivable, net of allowances of $431 and $885 | 102,578 | 156,667 |
Income tax receivable | 3,427 | 375 |
Inventories | 110,565 | 82,919 |
Prepaid expenses and other current assets | 6,393 | 5,473 |
Total current assets | 235,848 | 261,227 |
Property and equipment, net of accumulated depreciation of $13,860 and $11,844 | 17,714 | 16,118 |
Intangible assets, net of accumulated amortization of $87,692 and $78,627 | 70,542 | 52,054 |
Deferred income tax assets | 15,396 | 19,403 |
Operating lease right of use assets | 10,380 | |
Goodwill | 43,560 | 27,638 |
Other assets | 1,315 | 1,571 |
Total assets | 394,755 | 378,011 |
Current liabilities: | ||
Accounts payable | 70,988 | 80,908 |
Sales returns liability | 37,522 | 54,432 |
Accrued wages and wage related expenses | 6,665 | 6,624 |
Accrued liabilities | 9,511 | 13,723 |
Current portion of operating lease liabilities | 2,154 | |
Total current liabilities | 126,840 | 155,687 |
Line of credit | 95,363 | 58,363 |
Operating lease liabilities | 11,889 | |
Other long-term liabilities | 7,913 | 5,470 |
Total liabilities | 242,005 | 219,520 |
Commitments and contingencies (Note 1 and Note 10) | ||
Stockholders’ equity: | ||
Common stock, $0.001 par value; 100,000 shares authorized; 36,140 and 34,457 shares issued | 36 | 34 |
Treasury stock, 7,055 and 6,983 common shares at cost | (50,455) | (49,733) |
Additional paid-in capital | 111,279 | 96,486 |
Accumulated other comprehensive loss | (1,425) | (1,410) |
Retained earnings | 93,315 | 113,114 |
Total stockholders’ equity | 152,750 | 158,491 |
Total liabilities and stockholders’ equity | $ 394,755 | $ 378,011 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Allowances for doubtful accounts | $ 431 | $ 885 |
Accumulated depreciation on property and equipment | 13,860 | 11,844 |
Accumulated amortization on intangible assets | $ 87,692 | $ 78,627 |
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 36,140,000 | 34,457,000 |
Treasury stock, common shares | 7,055,000 | 6,983,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Statement [Abstract] | ||||
Net sales | $ 106,796 | $ 118,565 | $ 185,546 | $ 230,631 |
Cost of sales | 69,037 | 80,908 | 123,965 | 155,381 |
Gross profit | 37,759 | 37,657 | 61,581 | 75,250 |
Operating expenses: | ||||
Advertising and marketing | 4,514 | 2,638 | 9,099 | 5,233 |
Selling, general and administrative | 34,491 | 27,035 | 66,075 | 51,342 |
Transaction costs | 374 | 18 | 621 | 18 |
Amortization of intangible assets | 4,599 | 2,773 | 9,065 | 5,545 |
Total operating expenses | 43,978 | 32,464 | 84,860 | 62,138 |
(Loss) income from operations | (6,219) | 5,193 | (23,279) | 13,112 |
Other income (expense): | ||||
Interest expense | (1,103) | (346) | (2,113) | (846) |
Other income (expense) | 1,192 | (681) | 676 | (186) |
Total other income (expense) | 89 | (1,027) | (1,437) | (1,032) |
(Loss) income before provision for income taxes | (6,130) | 4,166 | (24,716) | 12,080 |
Income tax benefit (provision) | 794 | (950) | 4,956 | (1,835) |
Net (loss) income | $ (5,336) | $ 3,216 | $ (19,760) | $ 10,245 |
(Loss) earnings per share attributable to stockholders: | ||||
Basic (loss) earnings per share (in usd per share) | $ (0.18) | $ 0.11 | $ (0.68) | $ 0.36 |
Diluted (loss) earnings per share (in usd per share) | $ (0.18) | $ 0.11 | $ (0.68) | $ 0.36 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net (loss) income | $ (5,336) | $ 3,216 | $ (19,760) | $ 10,245 |
Other comprehensive gain (loss), net of tax: | ||||
Foreign currency translation gain (loss) | 141 | (969) | (15) | (680) |
Total other comprehensive income (loss) | 141 | (969) | (15) | (680) |
Total comprehensive (loss) income | $ (5,195) | $ 2,247 | $ (19,775) | $ 9,565 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (19,760) | $ 10,245 |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ||
Stock-based compensation expense | 2,660 | 1,408 |
Depreciation and amortization | 12,256 | 9,230 |
Deferred income tax assets | (2,169) | 481 |
Loss on disposal of property and equipment | 6 | 9 |
Loss on deferred loan costs with debt modification | 0 | 243 |
Amortization of deferred loan costs | 101 | 106 |
Amortization of right of use assets | 1,066 | |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 55,006 | 37,318 |
Inventories | (24,313) | 5,080 |
Prepaid expenses and other current assets | 396 | 503 |
Other assets | 179 | (563) |
Accounts payable | (12,654) | (34,480) |
Income tax receivable | (3,555) | (3,512) |
Sales returns liability | (19,627) | (5,092) |
Accrued wages and wage related expenses | (360) | 153 |
Accrued liabilities | (1,904) | (1,404) |
Lease liabilities | (1,134) | 0 |
Other | 79 | 232 |
Net cash (used in) provided by operating activities | (13,727) | 19,957 |
Cash flows from investing activities: | ||
Purchase of property and equipment | (4,213) | (2,701) |
Proceeds from disposal of equipment | 2 | 26 |
Purchase of HALO, net of cash acquired | (20,368) | 0 |
Net cash used in investing activities | (24,579) | (2,675) |
Cash flows from financing activities: | ||
Proceeds from revolving credit facility | 176,566 | 198,761 |
Payments on revolving credit facility | (139,566) | (214,215) |
Payments on term loan facility | 0 | (2,084) |
Purchase of treasury stock | (722) | (3,006) |
Payment of withholding on restricted stock units | (782) | (2,610) |
Payment of deferred loan costs | 0 | (294) |
Proceeds from issuance of stock under employee stock purchase plan | 13 | 55 |
Net cash provided by (used in) financing activities | 35,509 | (23,393) |
Effect of foreign currency exchange rates on cash equivalents | (111) | (296) |
Net decrease in cash and cash equivalents | (2,908) | (6,407) |
Cash and cash equivalents at beginning of the period | 15,793 | 24,989 |
Cash and cash equivalents at end of the period | 12,885 | 18,582 |
Supplemental disclosure of cash flow information: | ||
Cash paid during the period for interest | 1,998 | 926 |
Cash paid during the period for income taxes, net | 629 | 4,683 |
Cash paid during the period for rent expenses included in the measurement of lease liabilities | 1,453 | |
Supplemental disclosure of non-cash investing and financing activities: | ||
Purchase of property and equipment financed through accounts payable | 451 | 541 |
Withholding tax on restricted stock units recorded in accrued wages and wage related expenses | 66 | 21 |
Purchase of HALO through amounts due to seller, contingent payments and common stock | 16,985 | 0 |
Modification of debt that resulted in payment of existing term loan balance | 0 | $ 11,991 |
Noncash change in lease asset and operating liabilities from remeasurement of existing leases and addition of new leases | $ 1,856 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Treasury Stock | Retained Earnings |
Beginning Balance (in shares) at Dec. 31, 2017 | 34,104 | |||||
Beginning Balance at Dec. 31, 2017 | $ 135,999 | $ 34 | $ 96,145 | $ (348) | $ (37,637) | $ 77,805 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income | 10,245 | 10,245 | ||||
Other comprehensive income (loss) | (680) | (680) | ||||
Treasury stock purchase | (3,006) | (3,006) | ||||
Restricted stock release (in shares) | 318 | |||||
Employee stock purchase plan release (in shares) | 1 | |||||
Employee stock purchase plan release | 55 | 55 | ||||
Stock-based compensation expense | 1,408 | 1,408 | ||||
Payment of withholding taxes on restricted stock units | (2,631) | (2,631) | ||||
Ending Balance (in shares) at Jun. 30, 2018 | 34,423 | |||||
Ending Balance at Jun. 30, 2018 | 137,510 | $ 34 | 94,977 | (1,028) | (40,643) | 84,170 |
Beginning Balance (in shares) at Mar. 31, 2018 | 34,416 | |||||
Beginning Balance at Mar. 31, 2018 | 137,426 | $ 34 | 94,134 | (59) | (37,637) | 80,954 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income | 3,216 | 3,216 | ||||
Other comprehensive income (loss) | (969) | (969) | ||||
Treasury stock purchase | (3,006) | (3,006) | ||||
Restricted stock release (in shares) | 7 | |||||
Employee stock purchase plan release | 55 | 55 | ||||
Stock-based compensation expense | 807 | 807 | ||||
Payment of withholding taxes on restricted stock units | (19) | (19) | ||||
Ending Balance (in shares) at Jun. 30, 2018 | 34,423 | |||||
Ending Balance at Jun. 30, 2018 | 137,510 | $ 34 | 94,977 | (1,028) | (40,643) | 84,170 |
Beginning Balance (in shares) at Dec. 31, 2018 | 34,457 | |||||
Beginning Balance at Dec. 31, 2018 | 158,491 | $ 34 | 96,486 | (1,410) | (49,733) | 113,114 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income | (19,760) | (19,760) | ||||
Other comprehensive income (loss) | (15) | (15) | ||||
Treasury stock purchase | (722) | (722) | ||||
Restricted stock release (in shares) | 222 | |||||
Employee stock purchase plan release (in shares) | 3 | |||||
Employee stock purchase plan release | 13 | 13 | ||||
Stock-based compensation expense | 2,660 | 2,660 | ||||
Payment of withholding taxes on restricted stock units | (848) | (848) | ||||
Shares issued as consideration for acquisition (in shares) | 1,458 | |||||
Shares issued as consideration for acquisition | 12,970 | $ 2 | 12,968 | |||
Ending Balance (in shares) at Jun. 30, 2019 | 36,140 | |||||
Ending Balance at Jun. 30, 2019 | 152,750 | $ 36 | 111,279 | (1,425) | (50,455) | 93,315 |
Beginning Balance (in shares) at Mar. 31, 2019 | 36,117 | |||||
Beginning Balance at Mar. 31, 2019 | 156,536 | $ 36 | 109,870 | (1,566) | (50,455) | 98,651 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income | (5,336) | (5,336) | ||||
Other comprehensive income (loss) | 141 | 141 | ||||
Restricted stock release (in shares) | 22 | |||||
Employee stock purchase plan release (in shares) | 1 | |||||
Employee stock purchase plan release | 0 | 0 | ||||
Stock-based compensation expense | 1,475 | 1,475 | ||||
Payment of withholding taxes on restricted stock units | (66) | (66) | ||||
Ending Balance (in shares) at Jun. 30, 2019 | 36,140 | |||||
Ending Balance at Jun. 30, 2019 | $ 152,750 | $ 36 | $ 111,279 | $ (1,425) | $ (50,455) | $ 93,315 |
Nature of Operations and Basis
Nature of Operations and Basis of Presentation | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
NATURE OF OPERATIONS AND BASIS OF PRESENTATION | NATURE OF OPERATIONS AND BASIS OF PRESENTATION ZAGG Inc and its subsidiaries (the “Company”) are innovation leaders in mobile tech accessories for smartphones and tablets. For over 15 years, the Company has developed creative product solutions that enhance and protect mobile devices for consumers around the world. The Company has an award-winning product portfolio that includes screen protection, power cases, power management, wireless charging, audio, mobile keyboards, protective cases, and other mobile accessories sold under the ZAGG ® , InvisibleShield ® , mophie ® , IFROGZ ® , BRAVEN ® , Gear4 ® , and HALO ® brands. The accompanying unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) that, in the opinion of management, are necessary to present fairly the financial position, the results of operations, and cash flows of the Company for the periods presented. The Company suggests that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (the “2018 Form 10-K”). Operating results for the interim periods are not necessarily indicative of the results that may be expected for the full year. The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods, with related disclosures of these amounts in the notes to the financial statements. Actual results could differ from those estimates. Significant Accounting Policies The Company’s significant accounting policies are described in Note 1 to the Company’s consolidated financial statements included in the 2018 Form 10-K. Except for the changes below, the Company has consistently applied the accounting policies to all periods presented in these condensed consolidated financial statements. Adoption of Accounting Standards Codification (“ASC”) Topic 842, “Leases” (In thousands, except lease terms and discount rates) The Company adopted ASC Topic 842 ,“Leases” (“Topic 842”) with a date of initial application of January 1, 2019. As a result of this adoption, the Company has changed its accounting policy for leases as detailed below. The Company applied Topic 842 on January 1, 2019, using the modified retrospective approach. The adoption of Topic 842 includes the cumulative effect of adopting the new standard being recognized in retained earnings at January 1, 2019, which allows for the application of the standard solely to the transition period in 2019 but does not require application to prior fiscal comparative periods presented. Therefore, the prior period comparative information has not been adjusted and continues to be reported under the previous ASC Topic 840, “Leases” (“Topic 840”) standard. The Company also elected the package of available practical expedients allowable under Topic 842 guidelines in its adoption approach. The adoption of Topic 842 resulted in an increase in long-term lease liabilities of $10,684 which was included in operating lease liabilities; an increase in short-term lease liabilities of $2,362 which was included in current portion of operating lease liabilities; an initial recognition of right of use ( “ ROU”) assets of $8,842 which was included in operating lease right of use assets; an increase of deferred tax assets, net of $1,424; a derecognition of $3,346 related to lease liabilities under Topic 840 which was included in accrued liabilities; a decrease in deferred rent of $819 which was included in accrued liabilities; and a decrease of $39 in retained earnings as a cumulative effect of adoption. As the Company did not have any finance leases upon adoption of Topic 842 at January 1, 2019, the largest driver of changes for the adoption of Topic 842 was the addition of the Company’s operating leases to the condensed consolidated balance sheet, creating ROU assets and lease liabilities on the condensed consolidated balance sheet as of June 30, 2019. Under Topic 840, operating leases were not included on the condensed consolidated balance sheets, whereas under Topic 842, ROU assets and lease liabilities are calculated and recorded on the lease commencement date. The standard had a material impact in the Company’s consolidated balance sheets, but did not have a significant impact in its condensed consolidated statements of operations. In addition, the adoption of Topic 842 had no impact to cash provided by or used in operating, financing, or investing on the condensed consolidated statements of cash flows. Lease accounting policy The Company determines if an arrangement is a lease at contract inception and then determines if such qualifying lease is classified as an operating lease or a finance lease. As of June 30, 2019, the Company only has operating leases. For operating leases, the Company measures lease liabilities based on the present value of the future minimum lease payments over the lease term at commencement date. As most of its leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on relevant information available at each leases' commencement date in determining the present value of future payments for each individual lease. ROU assets are measured as the sum of the amount of the initial measurement of the lease liability, plus any prepaid lease payments made minus any lease incentives received, and any initial direct costs incurred. The Company’s lease terms may include options to extend or terminate leases that will be recognized when it is reasonably certain that the Company will exercise that option. Lease expense for operating leases is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components under the definition of Topic 842. Upon adoption of Topic 842, the Company elected a practical expedient not to separate the lease and non-lease components for its leases for physical space and equipment and accounts for them as a single lease component. Lease information The Company has operating leases for offices, retail stores, and warehouse space that expire through 2027. The Company’s leases have remaining lease terms of 7 months to 9 years, some of which include options to extend the leases up to 10 years. The following summarizes the activities in the Company’s ROU assets and lease liabilities for the six months ended June 30, 2019: Beginning Balance as of January 1, 2019 Adoption of Topic 842 Additions Amortization Ending Balance as of June 30, 2019 ROU assets $ — $ 8,842 $ 2,604 $ (1,066) $ 10,380 Lease liabilities — 13,046 2,131 (1,134) 14,043 For the three and six months ended June 30, 2019, the rent expense was $799 and $1,652, respectively. For the three and six months ended June 30, 2018, the rent expense was $818 and $1,546, respectively. Rent expense was recognized on a basis which approximates straight-line over the lease term and was recorded as a component of selling, general and administrative expense on the condensed consolidated statement of operations. As of June 30, 2019, the Company had a weighted-average remaining lease term of 5.4 years and a weighted-average discount rate used to calculate the lease liability of 4.42%. Future maturities of lease liabilities as of June 30, 2019 were as follows: Remaining 2019 $ 1,801 2020 3,199 2021 2,718 2022 2,738 2023 2,203 Thereafter 3,144 Total lease payments $ 15,803 Less: imputed interest (1,760) Lease liabilities $ 14,043 No other leases have been entered into under which the Company has significant rights and obligations as the lessee except those noted above. Minimum rental payments for operating leases required under Topic 840 as of December 31, 2018 are as follows: 2019 $ 3,198 2020 2,842 2021 2,457 2022 2,517 2023 1,976 Thereafter 2,098 Total operating lease commitments $ 15,088 |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | REVENUE Disaggregation of revenue from contracts with customers In the following tables, revenue from contracts with customers are disaggregated by key product lines, key distribution channels, and key geographic regions. The percentage of net sales related to the Company’s key product lines for the three and six months ended June 30, 2019 and 2018, was a pproximately as follows: For the Three Months Ended For the Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 Protection (screen protection and cases) 54% 55% 56% 52% Power (power management and power cases) 34% 34% 32% 36% Audio 3% 4% 4% 5% Productivity (keyboards and other) 9% 7% 8% 7% The percentage of net sales related to the Company’s key distribution channels for the three and six months ended June 30, 2019 and 2018, was approximately as follows: For the Three Months Ended For the Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 Indirect channel 85% 88% 82% 88% Website 10% 8% 12% 8% Franchisees 5% 4% 6% 4% The percentage of net sales related to the Company’s key geographic regions for the three and six months ended June 30, 2019 an d 2018, wa s approximately as follows: For the Three Months Ended For the Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 United States 74% 85% 72% 83% Europe 15% 10% 14% 10% Other 11% 5% 14% 7% Contract Balances Timing of revenue recognition may differ from timing of invoicing to customers or timing of consideration received. The following table provides information about receivables, right of return assets, contract liabilities, refund liabilities, and warranty liabilities from the Company’s contracts with customers as of June 30, 2019 and December 31, 2018: June 30, 2019 December 31, 2018 Receivables, which comprises the balance in accounts receivable, net of allowances $ 102,578 $ 156,667 Right of return assets, which are included in prepaid expenses and other current assets 706 999 Refund liabilities, which are included in sales return liability 33,904 49,786 Warranty liabilities, which are included in sales return liability 3,618 4,646 Contract liabilities, which are included in accrued liabilities 60 96 The current balance of the right of return assets is the estimated amount of inventory to be returned that is expected to be resold. The current balance of refund liabilities is the expected amount of estimated sales returns, discounts and other credits from sales that have occurred. The current balance of warranty liabilities is the expected amount of warranty claim returns from sales that have occurred. The current balance of contract liabilities primarily relates to the advance consideration received from customers for products for which transfer of control has not yet occurred and therefore, revenue is deferred and will be recognized when the transfer of control has been completed. During the three and six months ended June 30, 2019, revenue recognized that was included in the contract liability balance as of December 31, 2018, was $25 and $36, respectively. The following summarizes the activities in the Company’s warranty liabilities for the six months ended June 30, 2019: Balance as of December 31, 2018 $ 4,646 Additions 4,744 Warranty claims charged (5,772) Balance as of June 30, 2019 $ 3,618 |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS Acquisition of HALO On January 3, 2019, (the “HALO Acquisition Date”), ZAGG Hampton LLC, a Delaware limited liability company and wholly owned subsidiary of the Company, entered into a membership interest purchase agreement (the “Purchase Agreement”) with Halo2Cloud, LLC (“HALO”) and its equity owners to acquire all of the outstanding equity interests of HALO (the “HALO Acquisition”). HALO is a leading direct-to-consumer mobile accessories company with an extensive intellectual property portfolio that specializes in wireless charging, car and wall chargers, portable power, and other accessories. The Company acquired HALO to expand its product and intellectual property portfolio, and to enter into new distribution channels. The total purchase consideration for the HALO Acquisition was $23,943 in cash, 1,458 shares of the Company’s common stock valued at $12,968, and contingent consideration estimated at $1,593 (the “HALO Earnout Consideration”). The initial purchase price was subject to adjustment within 90 days of the HALO Acquisition Date based upon the final determination of HALO’s (i) working capital, (ii) indebtedness, and (iii) transaction expenses as set forth in the Purchase Agreement. As agreed in the Purchase Agreement, the Company retained $2,424 from the cash due to the sellers and will hold this amount for 18 months following the HALO Acquisition Date as security for HALO’s indemnification obligations. The $2,424 retained by the Company that is due HALO is recorded in other long-term liabilities in the condensed consolidated balance sheets. HALO is also entitled to the HALO Earnout Consideration from the Company if HALO achieves the target Adjusted EBITDA set forth in the Purchase Agreement for the year ending December 31, 2019. If, however, HALO’s actual Adjusted EBITDA is less than the target Adjusted EBITDA for the year ending December 31, 2019, the HALO Earnout Consideration will be reduced by the difference between the actual Adjusted EBITDA and the target Adjusted EBITDA. The following summarizes the components of the purchase consideration for HALO: Cash consideration $ 23,943 Company common stock 12,968 Contingent consideration 1,593 Total purchase price $ 38,504 The total purchase price of $38,504 has been allocated to identifiable assets acquired and liabilities assumed based on their preliminary fair values. The excess of the purchase price over the preliminary fair value of the tangible and intangible assets acquired and liabilities assumed is recorded as goodwill. The following table summarizes the preliminary estimates of the fair values of the identifiable assets acquired and liabilities assumed as of the HALO Acquisition Date. The preliminary estimates of the fair value of identifiable assets acquired and liabilities assumed are based on estimates and assumptions and are subject to revisions, which may result in adjustments to the preliminary values presented below, when management’s estimates are finalized: Cash $ 1,151 Accounts receivable 2,436 Inventory 2,889 Inventory step up 494 Prepaid expenses and other assets 1,310 Property and equipment 627 Amortizable identifiable intangible assets 27,554 Goodwill 15,922 Operating lease right of use assets 748 Accounts payable (2,867) Income tax payable (501) Accrued expenses (255) Accrued wages and wage related expenses (324) Sales return liability (2,728) Deferred tax liability (6,177) Lease liabilities (1,775) Total $ 38,504 The Company is still finalizing the fair value measurements of the assets acquired and liabilities assumed, and therefore, the Company’s fair value estimates for the assets acquired and liabilities assumed are preliminary and may change during the allowable measurement period. The allowable measurement period continues to the date the Company obtains and analyzes all relevant information that existed as of the HALO Acquisition Date necessary to determine the fair values of the assets acquired and liabilities assumed, but in no case is to exceed more than one year from the HALO Acquisition Date. The Company is analyzing information to verify assets acquired and liabilities assumed. Identifiable Intangible Assets Classes of acquired intangible assets include technologies, trade names, and customer relationships. The fair value of the identifiable intangible assets was determined using the income valuation method. For assets valued under the income approach, the estimate of the present value of expected future cash flows for each identifiable asset was based on discount rates which incorporate a risk premium to take into account the risks inherent in those expected cash flows. The expected cash flows were estimated using available historical data adjusted based on the Company’s historical experience and the expectations of market participants. The preliminary amounts assigned to each class of intangible asset and the related weighted average amortization periods are as follows: Intangible Asset Class Weighted Average Amortization Period Technologies $ 14,187 8.9 years Trade names 4,409 10.0 years Customer relationships 8,958 8.0 years Total 27,554 Goodwill Goodwill represents the excess of the HALO purchase price over the preliminary fair value of the assets acquired and liabilities assumed. The Company believes that the primary factors supporting the amount of goodwill recognized are the significant growth opportunities and expected synergies of the combined entity. Acquisition Costs As part of the HALO Acquisition, the Company incurred legal, accounting, and other due diligence fees that were expensed when incurred. Total fees incurred related to the HALO Acquisition for the three and six months ended June 30, 2019 was $36 and $283, respectively, which were included as a component of operating expenses on the consolidated statements of operations. Results of Operations The results of operations of HALO were included in the Company’s results of operations beginning on January 4, 2019. For HALO’s results of operations from January 4, 2019 through June 30, 2019, HALO generated net sales of $5,198 and had a net loss before tax of $3,761. Acquisition of Gear4 On November 30, 2018, Patriot Corporation Unlimited Company, an entity registered and incorporated in Ireland and a wholly-owned subsidiary of the Company, entered into a share purchase agreement with STRAX Holding GmbH, an entity registered and incorporated in Germany (“STRAX”), and Gear4 HK Limited, an entity registered and incorporated in Hong Kong and a wholly-owned subsidiary of STRAX (“Gear4”), to acquire from STRAX all of the issued and outstanding equity securities of Gear4 (the “Gear4 Acquisition”). Pro Forma Results of Operations for HALO and Gear4 The following pro-forma results of operations for the three months ended June 30, 2018, and for the six months ended June 30, 2019, and 2018, give pro forma effect as if the acquisitions of HALO and Gear4 and the related borrowings used to finance the acquisition had occurred on January 1, 2018, after giving effect to certain adjustments including the amortization of intangible assets, interest expense, tax adjustments, specific transaction related expenses incurred prior to the execution date, and assumes the purchase price was allocated to the assets purchased and liabilities assumed based on their fair market values at the date of purchase. For the Three Months Ended For the Six Months Ended June 30, 2018 June 30, 2019 June 30, 2018 Net sales $ 123,245 $ 185,546 $ 239,373 Net (loss) income $ (97) $ (18,538) $ 1,745 Basic (loss) earnings per share $ (0.01) $ (0.64) $ 0.06 Diluted (loss) earnings per share $ — $ (0.64) $ 0.06 The pro forma information is presented for illustrative purposes only and is not necessarily indicative of the operating results that would have occurred had the transaction been consummated as of January 1, 2018. Furthermore, such pro forma information is not necessarily indicative of future operating results of the combined companies, due to changes in operating activities following the purchase, and should not be construed as representative of the operating results of the combined companies for any future dates or periods. The nonrecurring pro forma adjustments attributable to the pro forma results of operations are as follows: For the Three Months Ended For the Six Months Ended June 30, 2018 June 30, 2019 June 30, 2018 Amortization expense $ 1,667 $ 59 $ 3,333 Transaction costs $ 327 $ (283) $ 606 Amortization of fair value adjustment to inventory $ 198 $ (494) $ 589 Interest from the amended credit facility and amortization of debt issuance costs $ 433 $ — $ 866 The pro forma results do not reflect events that either have occurred or may occur after the HALO Acquisition and Gear4 Acquisition, including, but not limited to, the anticipated realization of ongoing savings from operating synergies in subsequent periods. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2019 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories consisted of the following as of June 30, 2019, and December 31, 2018: June 30, 2019 December 31, 2018 Finished goods $ 108,781 $ 81,397 Raw materials 1,784 1,522 Total inventories $ 110,565 $ 82,919 Included in prepaid expenses and other current assets were inventory deposits with third-party manufacturers of $382 and $382 as of June 30, 2019, and December 31, 2018, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS There was no change in goodwill during the three months ended June 30, 2019. During the six months ended June 30, 2019, goodwill increased in connection with the HALO Acquisition. The following table summarizes the changes in goodwill during the six months ended June 30, 2019: Balance as of December 31, 2018 $ 27,638 Increase in connection with HALO Acquisition 15,922 Balance as of June 30, 2019 $ 43,560 There was no change in goodwill during the three and six months ended June 30, 2018. There were no additions to intangible assets for the three months ended June 30, 2019. In connection with the HALO Acquisition, intangible assets increased $27,554 for patents and technology, trade names, and customer relationships for the six months ended June 30, 2019. There were no additions to intangible assets for the three and six months ended June 30, 2018. Additionally, there were no impairments of intangible assets for the three and six months ended June 30, 2019, and 2018. Intangible assets, net of accumulated amortization as of June 30, 2019, and December 31, 2018, were as follows: June 30, 2019 December 31, 2018 Trade names $ 28,634 $ 26,988 Patents and technology 20,281 8,723 Customer relationships 21,027 15,560 Non-compete agreements 599 778 Other 1 5 Total intangible assets, net of accumulated amortization $ 70,542 $ 52,054 The total weighted average useful lives of intangible assets as of June 30, 2019, and December 31, 2018, was 8.3 years and 8.3 years, respectively. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES For interim periods, the tax provision is determined utilizing an estimate of the Company’s annual effective tax rate adjusted for discrete items, if any. The Company's effective tax rate for the three and six months ended June 30, 2019, was 13% and 20%, respectively. The Company’s effective tax rate for the three and six months ended June 30, 2018, was 23% and 15%, respectively. The change in the effective tax rate for the three months ended June 30, 2019, compared to the three months ended June 30, 2018, was primarily due to the impact of a discrete item for restricted stock unit awards relative to pre-tax book income for the period . The change in the effective tax rate for the six months ended June 30, 2019, compared to the six months ended June 30, 2018, was due to several factors including but not limited to a difference in the amount of the discrete item for restricted stock unit awards, as well as an increase in the amounts disallowed under §162(m) of the Internal Revenue Code. The Company’s effective tax rate will generally differ from the U.S. Federal statutory rate of 21%, due to state taxes, permanent items including amounts disallowed under §162(m) of the Internal Revenue Code, the Company’s global tax strategy, and the inclusion of global intangible low taxed income and the corresponding foreign tax credit. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION The grant of restricted stock units with respective weighted-average fair value per share for the three and six months ended June 30, 2019, and 2018, is summarized as follows: For the Three Months Ended For the Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 Granted — 197 643 278 Weighted average fair value per share $ — $ 11.65 $ 9.82 $ 12.48 The fair value of the restricted stock units granted is based on the closing share price of the Company’s common stock on the date of grant. The restricted stock units vest annually on a straight-line basis over a nine-month (annual board of directors’ grant) to a three-year vesting term, depending on the terms of the individual grant. As part of the 643 and 278 restricted stock units granted during the six months ended June 30, 2019, and 2018, the Company granted 287 and 167 restricted stock units to certain executives and employees of the Company where vesting is linked to specific performance criterion. These performance-based restricted stock units only vest upon the (1) Company’s achievement of specified thresholds of net sales, Adjusted EBITDA, and/or specific goals for the individual executive, and (2) continued employment through the applicable vesting date. The estimated fair value of the restricted stock units 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 following are stock-based compensation expenses related to restricted stock units recorded for the three and six months ended June 30, 2019, and 2018, which are included as a component of selling, general, and administrative expense on the condensed consolidated statement of operations: For the Three Months Ended For the Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 Stock-based compensation expense related to restricted stock units $ 1,475 $ 807 $ 2,660 $ 1,408 During the six months ended June 30, 2019, and 2018, certain Company employees elected to receive a net amount of shares upon the vesting of restricted stock unit grants in exchange for the Company paying up to the maximum statutory withholding amount of the employees’ tax liabilities for the fair value of the award on the vesting date. This resulted in the Company recording $848 and $2,631 reflected as a reduction of additional paid-in capital, respectively. Of the $848 recorded as a reduction of additional paid-in capital, $66 was included in accrued wages and wage related expenses as of June 30, 2019. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER SHARE | EARNINGS (LOSS) PER SHARE: Basic earnings (loss) per common share excludes dilution and is computed by dividing net earnings (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted earnings (loss) per common share reflects the potential dilution that could occur if stock options and restricted stock, or other common stock equivalents were exercised or converted into common stock. The dilutive effect of stock options or other common stock equivalents is calculated using the treasury stock method. The following is a reconciliation of the numerator and denominator used to calculate basic earnings (loss) per common share and diluted earnings (loss) per common share for the three and six months ended June 30, 2019, and 2018: For the Three Months Ended For the Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 Net (loss) income $ (5,336) $ 3,216 $ (19,760) $ 10,245 Weighted average shares outstanding: Basic 29,064 28,299 28,974 28,254 Dilutive effect of restricted stock units — 367 — 425 Diluted 29,064 28,666 28,974 28,679 Earnings (loss) per share: Basic $ (0.18) $ 0.11 $ (0.68) $ 0.36 Diluted $ (0.18) $ 0.11 $ (0.68) $ 0.36 For the three and six months ended June 30, 2019, 966 restricted stock units were not considered in calculating diluted loss per share because the Company was in a loss position and, therefore, the effect would have been anti-dilutive. For the three and six months ended June 30, 2018, 114 restricted stock units used to purchase shares of common stock were not considered in calculating diluted earnings per share as their effect would have been anti-dilutive. |
Treasury Stock
Treasury Stock | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Treasury Stock | TREASURY STOCKDuring the fourth quarter of 2015, the Company’s board of directors authorized the repurchase of up to $20,000 of the Company’s outstanding common stock with no expiration date. On March 11, 2019, the Company's board of directors authorized the cancellation of the 2015 stock repurchase program, and authorized a new stock repurchase program of up to $20,000 of the Company's outstanding common stock. As of June 30, 2019, and December 31, 2018, a total of $20,000 and $5,462 remained authorized under the respective stock repurchase programs. The Company repurchased shares for the three and six months ended June 30, 2019, and 2018, as follows: For the Three Months Ended For the Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 Shares repurchased — 182 72 182 Cash consideration paid $ — $ 3,006 $ 722 $ 3,006 Commissions to brokers included in cash consideration paid $ — $ 7 $ 2 $ 7 Weighted average price per share repurchased $ — $ 16.49 $ 10.00 $ 16.49 The consideration paid has been recorded within stockholders’ equity in the condensed consolidated balance sheet. |
Contingencies
Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | CONTINGENCIES Commercial Litigation ZAGG Inc and mophie, Inc. v. Anker Technology Co. Ltd. and Fantasia Trading LLC, United States District Court for the Central District of California, Case No. 8:17-CV-2193-DOC-DFM (the “Anker Lawsuit”) - On December 15, 2017, ZAGG and mophie filed the Anker Lawsuit alleging that Anker Technology Co. Ltd. (“Anker”) and Fantasia Trading LLC (“Fantasia”) infringe U.S. Patent Nos. 8,971,039, 9,077,013, 9,088,028, 9,088,029, 9,172,070, and 9,406,913 in connection with protective battery cases for smartphones. The Anker products accused of infringement include Anker’s Ultra Slim Extended Battery Case for iPhone® 6 / 6s (4.7 inch) with 2850mAh capacity; Premium Extended Battery Case for iPhone 6 / 6s (4.7 inch) with 3100mAh Capacity; PowerCore Case for iPhone 7 (4.7 inch), 80% Extra Battery; PowerCore Case for iPhone 7 (4.7 inch), 95% Extra Battery; and 2400mAh MFI Certified Rubber-Feel Premium Rechargeable Extended Battery Case for iPhone 5s, 5. The complaint filed by ZAGG and mophie seeks monetary damages and an injunction against Anker. On March 12, 2018, Anker and Fantasia filed answers and counterclaims in the lawsuit. In their answers, Anker and Fantasia denied infringement of any valid claim and asserted counterclaims for non-infringement and invalidity of the patents at issue. The parties have reached a confidential settlement, and Anker and Fantasia have ceased sales of the battery cases accused of infringement. The Anker Lawsuit was dismissed in June 2019. Best Case and Accessories, Inc. v. Zagg, Inc. United States District Court for the Eastern District of New York, Case No. 1:18-CV-04048-LDH-RML . On July 13, 2018, Best Case and Accessories, Inc. filed a complaint against the Company. The Company had previously sent a letter to Best Case and Accessories, Inc. alleging that it was using product packaging and display trade dress that is confusingly similar to the Company's trade dress. In the complaint, Best Case and Accessories, Inc. alleges that it does not infringe the Company's trade dress and that the Company tortuously interfered with Best Case and Accessories, Inc.'s business relationships, which the Company disputes. On February 8, 2019, the Company filed a Complaint for trade dress infringement against Best Case and Accessories, Inc. in the United States District Court for the District of Utah, Case No. 2:19-CV-00090-PMW, in order to respond to the allegations and defend against the claims. This matter is not expected to have a material adverse effect on the Company’s financial position, results of operations, or liquidity. Dan Dolar, an individual and on behalf of those similarly situated, Plaintiff, v. Mophie Inc., a California corporation, Defendant, Superior Court of the State of California, Orange County, Case No. 30-2019-01066228-CU-BT-CXC . On April 25, 2019, Dan Dolar (“Dolar”) filed a complaint against mophie inc. (“mophie”) alleging, among other things, violation of California Consumers Legal Remedies Act, California False Advertising Law, breach of express warranty, violation of the Magnuson-Moss Warranty Act, violation of California Unfair Competition Law, and violation of state Consumer Protection Statutes. The complaint alleged that mophie mischaracterizes the mAh ratings of the batteries in its products, and asked the court to certify a class of Californians who purchased mophie battery-enabled products. On June 14, 2019, the court dismissed the complaint without prejudice at Dolar’s request so that Dolar’s claims could be pursued in the United States District Court in the case of Young v. Mophie Inc. , Case No. 8:19-cv-00827-JVS-DFM, discussed below. Michael Young and Dan Dolar, individually and on behalf of other similarly situated individuals, Plaintiff, v. Mophie Inc., Defendant, United States District Court, Central District of California , Case No. 8:19-cv-00827-JVS-DFM. This action started with a complaint filed by Young against mophie inc. (“mophie”) on May 2, 2019. On June 13, 2019, Young and Dolar joined together as plaintiffs and filed a first amended complaint (the “FAC”). In the FAC, Young and Dolar allege, among other things, that mophie has engaged in unfair and deceptive acts and practices in violation of the California Consumer Legal Remedies Act, violation of California’s False Advertising Law, violation of California’s Unfair Competition Law, violation of the Florida Deceptive and Unfair Trade Practices Act, violation of purportedly material identical state consumer protection statutes in various other states, violation of the Magnuson-Moss Warranty Act, breach of express warranty, and unjust enrichment. The FAC is based on Young’s and Dolar’s allegation that mophie mischaracterizes the mAh ratings of the batteries in certain of its products. Young and Dolar seek to certify a class of consumer nationwide and in various states who purchased mophie battery-enabled products. The FAC does not specify an amount of damages claimed, but alleges that damages will be in excess of $5,000. On July 11, 2019, mophie filed a motion to dismiss all of the claims asserted in the action. mophie denies that it has engaged in the alleged practices and intends to vigorously defend the lawsuit. SEC Investigation The Company previously disclosed an investigation by the SEC related to facts and circumstances surrounding former Chief Executive Officer Robert Pedersen’s pledge and subsequent sale of Company shares and the fact that such pledges and sales were not disclosed in the Company’s 2011 10-K filed on March 15, 2012, or 2012 Proxy filed on April 27, 2012. On March 7, 2019, the Staff of the SEC informed the Company that, after additional consideration and analysis, it has decided to terminate the investigation and dismiss the matter. 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 probable 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 records a liability when a particular contingency is probable and estimable. The Company has not accrued for any losses in the condensed consolidated financial statements as of June 30, 2019, due to the fact that either the losses are immaterial or the losses are not considered 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 | 6 Months Ended |
Jun. 30, 2019 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS | 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 customarily exceed federally insured limits. The Company has not experienced any losses in cash accounts for the six months ended June 30, 2019, and 2018. As of June 30, 2019, and December 31, 2018, three and two separate customers were equal to or exceeded 10% of the balance of accounts receivable, respectively, as follows: June 30, 2019 December 31, 2018 Superior Communications, Inc. (“Superior”) 19% 50% Best Buy Co., Inc. (“Best Buy”) 11% 15% Verizon Wireless ("Verizon") 19% 1% The Company established a direct sales relationship with Verizon during the second half of 2018. Previous to the Company's direct sales relationship with Verizon, Verizon purchased the Company's products through Superior. No other customer account balances were more than 10% of accounts receivable as of June 30, 2019, and December 31, 2018. 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 net sales For the three months ended June 30, 2019, Verizon accounted for over 10% of net sales, and for the three and six months ended June 30, 2018, Superior and Best Buy accounted for over 10% of net sales, as follows: For the Three Months Ended For the Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 Superior 5% 34% 6% 31% Best Buy 9% 11% 9% 10% Verizon 13% —% 9% —% For the three and six months ended June 30, 2019, and 2018, no other customers accounted for greater than 10% of net sales. Although the Company has contracts in place governing the relationships with its retail distribution customers (“retailers”), the contracts are not long-term and all the retailers generally purchase from the Company on a purchase order basis. As a result, these retailers generally may, with little or no notice or penalty, cease ordering and selling the Company’s products, or materially reduce their orders. If any of these retailers cease selling the Company’s products, slow their rate of purchase of its products, or decrease the number of products they purchase, the Company’s results of operations could be adversely affected. |
Nature of Operations and Basi_2
Nature of Operations and Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Use of estimates | The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods, with related disclosures of these amounts in the notes to the financial statements. Actual results could differ from those estimates. |
Recent Accounting Pronouncements | Adoption of Accounting Standards Codification (“ASC”) Topic 842, “Leases” (In thousands, except lease terms and discount rates) The Company adopted ASC Topic 842 ,“Leases” (“Topic 842”) with a date of initial application of January 1, 2019. As a result of this adoption, the Company has changed its accounting policy for leases as detailed below. The Company applied Topic 842 on January 1, 2019, using the modified retrospective approach. The adoption of Topic 842 includes the cumulative effect of adopting the new standard being recognized in retained earnings at January 1, 2019, which allows for the application of the standard solely to the transition period in 2019 but does not require application to prior fiscal comparative periods presented. Therefore, the prior period comparative information has not been adjusted and continues to be reported under the previous ASC Topic 840, “Leases” (“Topic 840”) standard. The Company also elected the package of available practical expedients allowable under Topic 842 guidelines in its adoption approach. The adoption of Topic 842 resulted in an increase in long-term lease liabilities of $10,684 which was included in operating lease liabilities; an increase in short-term lease liabilities of $2,362 which was included in current portion of operating lease liabilities; an initial recognition of right of use ( “ ROU”) assets of $8,842 which was included in operating lease right of use assets; an increase of deferred tax assets, net of $1,424; a derecognition of $3,346 related to lease liabilities under Topic 840 which was included in accrued liabilities; a decrease in deferred rent of $819 which was included in accrued liabilities; and a decrease of $39 in retained earnings as a cumulative effect of adoption. |
Lease accounting policy | Lease accounting policy The Company determines if an arrangement is a lease at contract inception and then determines if such qualifying lease is classified as an operating lease or a finance lease. As of June 30, 2019, the Company only has operating leases. For operating leases, the Company measures lease liabilities based on the present value of the future minimum lease payments over the lease term at commencement date. As most of its leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on relevant information available at each leases' commencement date in determining the present value of future payments for each individual lease. ROU assets are measured as the sum of the amount of the initial measurement of the lease liability, plus any prepaid lease payments made minus any lease incentives received, and any initial direct costs incurred. The Company’s lease terms may include options to extend or terminate leases that will be recognized when it is reasonably certain that the Company will exercise that option. Lease expense for operating leases is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components under the definition of Topic 842. Upon adoption of Topic 842, the Company elected a practical expedient not to separate the lease and non-lease components for its leases for physical space and equipment and accounts for them as a single lease component. |
Nature of Operations and Basi_3
Nature of Operations and Basis of Presentation (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of New Accounting Pronouncements - Summary of Right of Use Assets and Lease Liabilities | The following summarizes the activities in the Company’s ROU assets and lease liabilities for the six months ended June 30, 2019: Beginning Balance as of January 1, 2019 Adoption of Topic 842 Additions Amortization Ending Balance as of June 30, 2019 ROU assets $ — $ 8,842 $ 2,604 $ (1,066) $ 10,380 Lease liabilities — 13,046 2,131 (1,134) 14,043 |
Future Maturities of Lease Liabilities | Future maturities of lease liabilities as of June 30, 2019 were as follows: Remaining 2019 $ 1,801 2020 3,199 2021 2,718 2022 2,738 2023 2,203 Thereafter 3,144 Total lease payments $ 15,803 Less: imputed interest (1,760) Lease liabilities $ 14,043 |
Schedule of Future Minimum Rental Payments for Operating Leases | Minimum rental payments for operating leases required under Topic 840 as of December 31, 2018 are as follows: 2019 $ 3,198 2020 2,842 2021 2,457 2022 2,517 2023 1,976 Thereafter 2,098 Total operating lease commitments $ 15,088 |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The percentage of net sales related to the Company’s key product lines for the three and six months ended June 30, 2019 and 2018, was a pproximately as follows: For the Three Months Ended For the Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 Protection (screen protection and cases) 54% 55% 56% 52% Power (power management and power cases) 34% 34% 32% 36% Audio 3% 4% 4% 5% Productivity (keyboards and other) 9% 7% 8% 7% The percentage of net sales related to the Company’s key distribution channels for the three and six months ended June 30, 2019 and 2018, was approximately as follows: For the Three Months Ended For the Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 Indirect channel 85% 88% 82% 88% Website 10% 8% 12% 8% Franchisees 5% 4% 6% 4% The percentage of net sales related to the Company’s key geographic regions for the three and six months ended June 30, 2019 an d 2018, wa s approximately as follows: For the Three Months Ended For the Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 United States 74% 85% 72% 83% Europe 15% 10% 14% 10% Other 11% 5% 14% 7% |
Schedule of Receivables, Right of Return Assets, Contract Liabilities, Refund Liabilities, and Warranty Liabilities | The following table provides information about receivables, right of return assets, contract liabilities, refund liabilities, and warranty liabilities from the Company’s contracts with customers as of June 30, 2019 and December 31, 2018: June 30, 2019 December 31, 2018 Receivables, which comprises the balance in accounts receivable, net of allowances $ 102,578 $ 156,667 Right of return assets, which are included in prepaid expenses and other current assets 706 999 Refund liabilities, which are included in sales return liability 33,904 49,786 Warranty liabilities, which are included in sales return liability 3,618 4,646 Contract liabilities, which are included in accrued liabilities 60 96 |
Schedule of Warrant Liabilities Activity | The following summarizes the activities in the Company’s warranty liabilities for the six months ended June 30, 2019: Balance as of December 31, 2018 $ 4,646 Additions 4,744 Warranty claims charged (5,772) Balance as of June 30, 2019 $ 3,618 |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
Summary of purchase consideration | The following summarizes the components of the purchase consideration for HALO: Cash consideration $ 23,943 Company common stock 12,968 Contingent consideration 1,593 Total purchase price $ 38,504 |
Schedule of identifiable assets acquired and liabilities assumed | The preliminary estimates of the fair value of identifiable assets acquired and liabilities assumed are based on estimates and assumptions and are subject to revisions, which may result in adjustments to the preliminary values presented below, when management’s estimates are finalized: Cash $ 1,151 Accounts receivable 2,436 Inventory 2,889 Inventory step up 494 Prepaid expenses and other assets 1,310 Property and equipment 627 Amortizable identifiable intangible assets 27,554 Goodwill 15,922 Operating lease right of use assets 748 Accounts payable (2,867) Income tax payable (501) Accrued expenses (255) Accrued wages and wage related expenses (324) Sales return liability (2,728) Deferred tax liability (6,177) Lease liabilities (1,775) Total $ 38,504 |
Summary of intangible asset class and related preliminary weighted average amortization periods | The preliminary amounts assigned to each class of intangible asset and the related weighted average amortization periods are as follows: Intangible Asset Class Weighted Average Amortization Period Technologies $ 14,187 8.9 years Trade names 4,409 10.0 years Customer relationships 8,958 8.0 years Total 27,554 |
Pro forma results of operations - HALO | The following pro-forma results of operations for the three months ended June 30, 2018, and for the six months ended June 30, 2019, and 2018, give pro forma effect as if the acquisitions of HALO and Gear4 and the related borrowings used to finance the acquisition had occurred on January 1, 2018, after giving effect to certain adjustments including the amortization of intangible assets, interest expense, tax adjustments, specific transaction related expenses incurred prior to the execution date, and assumes the purchase price was allocated to the assets purchased and liabilities assumed based on their fair market values at the date of purchase. For the Three Months Ended For the Six Months Ended June 30, 2018 June 30, 2019 June 30, 2018 Net sales $ 123,245 $ 185,546 $ 239,373 Net (loss) income $ (97) $ (18,538) $ 1,745 Basic (loss) earnings per share $ (0.01) $ (0.64) $ 0.06 Diluted (loss) earnings per share $ — $ (0.64) $ 0.06 |
Nonrecurring pro forma adjustments | The nonrecurring pro forma adjustments attributable to the pro forma results of operations are as follows: For the Three Months Ended For the Six Months Ended June 30, 2018 June 30, 2019 June 30, 2018 Amortization expense $ 1,667 $ 59 $ 3,333 Transaction costs $ 327 $ (283) $ 606 Amortization of fair value adjustment to inventory $ 198 $ (494) $ 589 Interest from the amended credit facility and amortization of debt issuance costs $ 433 $ — $ 866 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | Inventories consisted of the following as of June 30, 2019, and December 31, 2018: June 30, 2019 December 31, 2018 Finished goods $ 108,781 $ 81,397 Raw materials 1,784 1,522 Total inventories $ 110,565 $ 82,919 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table summarizes the changes in goodwill during the six months ended June 30, 2019: Balance as of December 31, 2018 $ 27,638 Increase in connection with HALO Acquisition 15,922 Balance as of June 30, 2019 $ 43,560 |
Schedule of long-lived intangible assets, net of amortization | Intangible assets, net of accumulated amortization as of June 30, 2019, and December 31, 2018, were as follows: June 30, 2019 December 31, 2018 Trade names $ 28,634 $ 26,988 Patents and technology 20,281 8,723 Customer relationships 21,027 15,560 Non-compete agreements 599 778 Other 1 5 Total intangible assets, net of accumulated amortization $ 70,542 $ 52,054 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Share-based Compensation, Restricted Stock Units Award Activity | The grant of restricted stock units with respective weighted-average fair value per share for the three and six months ended June 30, 2019, and 2018, is summarized as follows: For the Three Months Ended For the Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 Granted — 197 643 278 Weighted average fair value per share $ — $ 11.65 $ 9.82 $ 12.48 |
Schedule of Stock-Based Compensation Expense Related To Restricted Stock Units | The following are stock-based compensation expenses related to restricted stock units recorded for the three and six months ended June 30, 2019, and 2018, which are included as a component of selling, general, and administrative expense on the condensed consolidated statement of operations: For the Three Months Ended For the Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 Stock-based compensation expense related to restricted stock units $ 1,475 $ 807 $ 2,660 $ 1,408 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation of the numerator and denominator used to calculate basic earnings (loss) per share and diluted earnings (loss) per share | The following is a reconciliation of the numerator and denominator used to calculate basic earnings (loss) per common share and diluted earnings (loss) per common share for the three and six months ended June 30, 2019, and 2018: For the Three Months Ended For the Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 Net (loss) income $ (5,336) $ 3,216 $ (19,760) $ 10,245 Weighted average shares outstanding: Basic 29,064 28,299 28,974 28,254 Dilutive effect of restricted stock units — 367 — 425 Diluted 29,064 28,666 28,974 28,679 Earnings (loss) per share: Basic $ (0.18) $ 0.11 $ (0.68) $ 0.36 Diluted $ (0.18) $ 0.11 $ (0.68) $ 0.36 |
Treasury Stock (Tables)
Treasury Stock (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Class of Treasury Stock | The Company repurchased shares for the three and six months ended June 30, 2019, and 2018, as follows: For the Three Months Ended For the Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 Shares repurchased — 182 72 182 Cash consideration paid $ — $ 3,006 $ 722 $ 3,006 Commissions to brokers included in cash consideration paid $ — $ 7 $ 2 $ 7 Weighted average price per share repurchased $ — $ 16.49 $ 10.00 $ 16.49 |
Concentrations (Tables)
Concentrations (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Risks and Uncertainties [Abstract] | |
Schedule of concentration risk by accounts receivable | As of June 30, 2019, and December 31, 2018, three and two separate customers were equal to or exceeded 10% of the balance of accounts receivable, respectively, as follows: June 30, 2019 December 31, 2018 Superior Communications, Inc. (“Superior”) 19% 50% Best Buy Co., Inc. (“Best Buy”) 11% 15% Verizon Wireless ("Verizon") 19% 1% |
Schedule of concentration risk by net sales | For the three months ended June 30, 2019, Verizon accounted for over 10% of net sales, and for the three and six months ended June 30, 2018, Superior and Best Buy accounted for over 10% of net sales, as follows: For the Three Months Ended For the Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 Superior 5% 34% 6% 31% Best Buy 9% 11% 9% 10% Verizon 13% —% 9% —% |
Nature of Operations and Basi_4
Nature of Operations and Basis of Presentation - Adoption of ASC Topic 842, "Leases" Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jan. 01, 2019 | Dec. 31, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Operating lease liabilities | $ 11,889 | $ 11,889 | ||||
Current portion of operating lease liabilities | 2,154 | 2,154 | ||||
Operating lease right of use assets | 10,380 | 10,380 | ||||
Deferred tax assets, net | $ 1,424 | |||||
Accrued liabilities | $ 9,511 | $ 9,511 | $ 13,723 | |||
Lease term, option to extend | 10 years | 10 years | ||||
Rent expense, under Topic 842 | $ 799 | $ 1,652 | ||||
Rent expense, before Topic 842 | $ 818 | $ 1,546 | ||||
Weighted average remaining lease term | 5 years 4 months 24 days | 5 years 4 months 24 days | ||||
Weighted average discount rate, percent | 4.42% | 4.42% | ||||
ASU 2016-02 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Operating lease liabilities | 10,684 | |||||
Current portion of operating lease liabilities | 2,362 | |||||
Operating lease right of use assets | 8,842 | |||||
Accrued liabilities | 819 | |||||
Retained earnings | 39 | |||||
Minimum | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Remaining lease term | 7 months | |||||
Maximum | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Remaining lease term | 9 years | |||||
Build to suit lease | ASU 2016-02 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Accrued liabilities | $ 3,346 |
Nature of Operations and Basi_5
Nature of Operations and Basis of Presentation - Activities in ROU Assets and Lease Liabilities (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jan. 01, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
ROU assets | $ 10,380 | |
Lease liabilities | 14,043 | |
ASU 2016-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
ROU assets | $ 8,842 | |
ROU assets, Additions | 2,604 | |
ROU asset, Amortization | (1,066) | |
Lease liabilities | $ 13,046 | |
Lease liabilities, Additions | 2,131 | |
Lease Liabilities, Amortization | $ (1,134) |
Nature of Operations and Basi_6
Nature of Operations and Basis of Presentation - Future Maturities of Leases (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Accounting Policies [Abstract] | |
Remaining 2019 | $ 1,801 |
2020 | 3,199 |
2021 | 2,718 |
2022 | 2,738 |
2023 | 2,203 |
Thereafter | 3,144 |
Total lease payments | 15,803 |
Less: imputed interest | (1,760) |
Lease liabilities | $ 14,043 |
Nature of Operations and Basi_7
Nature of Operations and Basis of Presentation - Minimum Rental Payments for Operating Leases (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Operating Leases, Future Minimum Payments Due, Rolling Maturity [Abstract] | |
2019 | $ 3,198 |
2020 | 2,842 |
2021 | 2,457 |
2022 | 2,517 |
2023 | 1,976 |
Thereafter | 2,098 |
Total operating lease commitments | $ 15,088 |
Revenue - Percentage of Net Sal
Revenue - Percentage of Net Sales (Details) - Revenue from Contract with Customer | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Distribution Channel Concentration Risk | Indirect channel | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of sales | 85.00% | 88.00% | 82.00% | 88.00% |
Distribution Channel Concentration Risk | Website | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of sales | 10.00% | 8.00% | 12.00% | 8.00% |
Distribution Channel Concentration Risk | Franchisees | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of sales | 5.00% | 4.00% | 6.00% | 4.00% |
Geographic Concentration Risk | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of sales | 74.00% | 85.00% | 72.00% | 83.00% |
Geographic Concentration Risk | Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of sales | 15.00% | 10.00% | 14.00% | 10.00% |
Geographic Concentration Risk | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of sales | 11.00% | 5.00% | 14.00% | 7.00% |
Protection (screen protection and cases) | Product Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of sales | 54.00% | 55.00% | 56.00% | 52.00% |
Power (power management and power cases) | Product Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of sales | 34.00% | 34.00% | 32.00% | 36.00% |
Audio | Product Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of sales | 3.00% | 4.00% | 4.00% | 5.00% |
Productivity (keyboards and other) | Product Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of sales | 9.00% | 7.00% | 8.00% | 7.00% |
Revenue - Contract with Custome
Revenue - Contract with Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |||
Receivables, which comprises the balance in accounts receivable, net of allowances | $ 102,578 | $ 102,578 | $ 156,667 |
Right of return assets, which are included in prepaid expenses and other current assets | 706 | 706 | 999 |
Refund liabilities, which are included in sales return liability | 33,904 | 33,904 | 49,786 |
Warranty liabilities, which are included in sales return liability | 3,618 | 3,618 | 4,646 |
Contract liabilities, which are included in accrued liabilities | 60 | 60 | $ 96 |
Revenue recognized, included in contract liabilities | $ 25 | $ 36 |
Revenue - Warranty Liability Ac
Revenue - Warranty Liability Activity (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward] | |
Beginning Balance | $ 4,646 |
Additions | 4,744 |
Warranty claims charged | (5,772) |
Ending Balance | $ 3,618 |
Acquisitions - Components of Pu
Acquisitions - Components of Purchase Consideration for HALO (Details) - USD ($) shares in Thousands, $ in Thousands | Jan. 03, 2019 | Jun. 30, 2019 |
Restructuring Cost and Reserve [Line Items] | ||
Shares issued as consideration for acquisition | $ 12,970 | |
HALO | ||
Restructuring Cost and Reserve [Line Items] | ||
Total consideration for acquisition | $ 38,504 | |
HALO | Earnout Consideration | ||
Restructuring Cost and Reserve [Line Items] | ||
Total cash outflow | $ 23,943 | |
Shares included in total consideration | 1,458 | |
Shares issued as consideration for acquisition | $ 12,968 | |
Contingent payments | $ 1,593 | |
Contingent consideration adjustment period | 90 days | |
Total consideration for acquisition | $ 38,504 | |
HALO | Third Party Indemnification Liability | ||
Restructuring Cost and Reserve [Line Items] | ||
Shares issued as consideration for acquisition | $ 2,424 | |
Contingent consideration period | 18 months |
Acquisitions - Fair Value of Ac
Acquisitions - Fair Value of Acquisition (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Jan. 03, 2019 | Dec. 31, 2018 |
Restructuring Cost and Reserve [Line Items] | |||
Goodwill | $ 43,560 | $ 27,638 | |
HALO | |||
Restructuring Cost and Reserve [Line Items] | |||
Cash | $ 1,151 | ||
Accounts receivable | 2,436 | ||
Inventory | 2,889 | ||
Inventory step up | 494 | ||
Prepaid expenses and other assets | 1,310 | ||
Property and equipment | 627 | ||
Amortizable identifiable intangible assets | 27,554 | ||
Goodwill | 15,922 | ||
Operating lease right of use assets | 748 | ||
Accounts payable | (2,867) | ||
Income tax payable | (501) | ||
Accrued expenses | (255) | ||
Accrued wages and wage related expenses | (324) | ||
Sales return liability | (2,728) | ||
Deferred tax liability | (6,177) | ||
Lease liabilities | (1,775) | ||
Fair value of identifiable assets acquired and liabilities assumed | $ 38,504 |
Acquisitions - Intangible Asset
Acquisitions - Intangible Asset Class (Details) - HALO $ in Thousands | Jan. 03, 2019USD ($) |
Finite-Lived Intangible Assets [Line Items] | |
Intangible Asset Class | $ 27,554 |
Technologies | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible Asset Class | $ 14,187 |
Weighted Average Amortization Period | 8 years 10 months 24 days |
Trade names | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible Asset Class | $ 4,409 |
Weighted Average Amortization Period | 10 years |
Customer relationships | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible Asset Class | $ 8,958 |
Weighted Average Amortization Period | 8 years |
Acquisitions - Results of Opera
Acquisitions - Results of Operations and Pro Forma Results of Operations (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Transaction costs | $ 374 | $ 18 | $ 621 | $ 18 |
Pro forma net loss before tax | 3,761 | |||
Net (loss) income | (5,336) | 3,216 | (19,760) | 10,245 |
Interest from the amended credit facility and amortization of debt issuance costs | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net (loss) income | 433 | 0 | 866 | |
HALO | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Transaction costs | $ 36 | 283 | ||
Pro forma net sales | 5,198 | |||
Amortization expense | 1,667 | 59 | 3,333 | |
Business Acquisition, Pro Forma Information [Abstract] | ||||
Net sales | 123,245 | 185,546 | 239,373 | |
Net (loss) income | $ (97) | $ (18,538) | $ 1,745 | |
Basic (loss) earnings per share (in usd per share) | $ (0.01) | $ (0.64) | $ 0.06 | |
Diluted (loss) earnings per share (in usd per share) | $ 0 | $ (0.64) | $ 0.06 | |
HALO | Transaction costs | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net (loss) income | $ 327 | $ (283) | $ 606 | |
HALO | Amortization of fair value adjustment to inventory | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net (loss) income | $ 198 | $ (494) | $ 589 |
Inventories - Schedule Of Inven
Inventories - Schedule Of Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 108,781 | $ 81,397 |
Raw materials | 1,784 | 1,522 |
Total inventories | $ 110,565 | $ 82,919 |
Inventories - Narrative (Detail
Inventories - Narrative (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Inventory deposits with third-party manufacturers | $ 382 | $ 382 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill Reconciliation (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Goodwill [Roll Forward] | ||||
Goodwill, Beginning Balance | $ 27,638,000 | |||
Increase in connection with HALO Acquisition | $ 0 | $ 0 | 15,922,000 | $ 0 |
Goodwill, Ending Balance | $ 43,560,000 | $ 43,560,000 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Jan. 03, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||||||
Increase in intangible assets | $ 0 | $ 0 | $ 0 | |||
Impairment of finite-lived intangible asset | $ 0 | $ 0 | $ 0 | $ 0 | ||
Weighted average useful lives of amortizable intangible assets | 8 years 3 months 18 days | 8 years 3 months 18 days | ||||
HALO | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Amortizable identifiable intangible assets | $ 27,554,000 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Long-lived Intangible Assets, Net of Amortization (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets, net of accumulated amortization | $ 70,542 | $ 52,054 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets, net of accumulated amortization | 28,634 | 26,988 |
Patents and technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets, net of accumulated amortization | 20,281 | 8,723 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets, net of accumulated amortization | 21,027 | 15,560 |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets, net of accumulated amortization | 599 | 778 |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets, net of accumulated amortization | $ 1 | $ 5 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 13.00% | 2300.00% | 20.00% | 1500.00% |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Adjustments to additional paid-in capital | $ 848 | $ 2,631 | ||
Withholding tax on restricted stock units recorded in accrued wages and wage related expenses | 66 | 21 | ||
Selling, general, and administrative expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense related to restricted stock units | $ 1,475 | $ 807 | $ 2,660 | $ 1,408 |
Restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock granted (in shares) | 0 | 197 | 643 | 278 |
Weighted-average fair value of restricted stock per share (in usd per share) | $ 0 | $ 11.65 | $ 9.82 | $ 12.48 |
Restricted stock units | Employees | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock granted (in shares) | 287 | 167 | ||
Restricted stock units | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 9 months | |||
Restricted stock units | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years |
Earnings (Loss) Per Share - Rec
Earnings (Loss) Per Share - Reconciliation of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Net (loss) income | $ (5,336) | $ 3,216 | $ (19,760) | $ 10,245 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 29,064 | 28,299 | 28,974 | 28,254 |
Dilutive effect of restricted stock units and warrants (in shares) | 0 | 367 | 0 | 425 |
Diluted (in shares) | 29,064 | 28,666 | 28,974 | 28,679 |
Earnings (loss) per share: | ||||
Basic (in usd per share) | $ (0.18) | $ 0.11 | $ (0.68) | $ 0.36 |
Diluted (in usd per share) | $ (0.18) | $ 0.11 | $ (0.68) | $ 0.36 |
Earnings (Loss) Per Share - Nar
Earnings (Loss) Per Share - Narrative (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Restricted stock (in shares) | 966 | 114 | 966 | 114 |
Treasury Stock (Details)
Treasury Stock (Details) - USD ($) $ / shares in Units, shares in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Mar. 11, 2019 | Dec. 31, 2018 | Dec. 31, 2015 | |
Equity [Abstract] | |||||||
Authorized stock repurchase amount | $ 20,000,000 | $ 20,000,000 | |||||
Remaining amount authorized under stock repurchase program | $ 20,000,000 | $ 20,000,000 | $ 5,462,000 | ||||
Shares repurchased | 0 | 182 | 72 | 182 | |||
Cash consideration paid | $ 0 | $ 3,006,000 | $ 722,000 | $ 3,006,000 | |||
Commissions to brokers included in cash consideration paid | $ 0 | $ 7,000 | $ 2,000 | $ 7,000 | |||
Weighted average price per share repurchased (in dollars per share) | $ 0 | $ 16.49 | $ 10 | $ 16.49 |
Commitment and Contingencies (D
Commitment and Contingencies (Details) $ in Thousands | Jun. 13, 2019USD ($) |
Minimum | Pending Litigation | Young and Dolar | |
Loss Contingencies [Line Items] | |
Estimated damages sought, minimum | $ 5,000 |
Concentrations - Concentration
Concentrations - Concentration of Credit Risk and Concentration of Net Sales (Details) - Customer | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Concentration Risk [Line Items] | |||||
Number of major customers | 3 | 3 | 2 | ||
Customer Concentration Risk | Accounts Receivable | Superior | |||||
Concentration Risk [Line Items] | |||||
Percentage of sales | 19.00% | 50.00% | |||
Customer Concentration Risk | Accounts Receivable | Best Buy | |||||
Concentration Risk [Line Items] | |||||
Percentage of sales | 11.00% | 15.00% | |||
Customer Concentration Risk | Accounts Receivable | Verizon | |||||
Concentration Risk [Line Items] | |||||
Percentage of sales | 19.00% | 1.00% | |||
Customer Concentration Risk | Revenue from Contract with Customer | Superior | |||||
Concentration Risk [Line Items] | |||||
Percentage of sales | 5.00% | 34.00% | 6.00% | 31.00% | |
Customer Concentration Risk | Revenue from Contract with Customer | Best Buy | |||||
Concentration Risk [Line Items] | |||||
Percentage of sales | 9.00% | 11.00% | 9.00% | 10.00% | |
Customer Concentration Risk | Revenue from Contract with Customer | Verizon | |||||
Concentration Risk [Line Items] | |||||
Percentage of sales | 13.00% | 0.00% | 9.00% | 0.00% |
Uncategorized Items - zagg-2019
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (3,880,000) |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (39,000) |
Common Stock [Member] | ||
Stockholders' Equity Attributable to Parent | us-gaap_StockholdersEquity | 34,000 |
Stockholders' Equity Attributable to Parent | us-gaap_StockholdersEquity | $ 34,000 |
Shares, Outstanding | us-gaap_SharesOutstanding | 34,104,000 |
Shares, Outstanding | us-gaap_SharesOutstanding | 34,457,000 |
Retained Earnings [Member] | ||
Stockholders' Equity Attributable to Parent | us-gaap_StockholdersEquity | $ 113,075,000 |
Stockholders' Equity Attributable to Parent | us-gaap_StockholdersEquity | 73,925,000 |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (39,000) |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (3,880,000) |
Treasury Stock [Member] | ||
Stockholders' Equity Attributable to Parent | us-gaap_StockholdersEquity | (49,733,000) |
Stockholders' Equity Attributable to Parent | us-gaap_StockholdersEquity | (37,637,000) |
Additional Paid-in Capital [Member] | ||
Stockholders' Equity Attributable to Parent | us-gaap_StockholdersEquity | 96,145,000 |
Stockholders' Equity Attributable to Parent | us-gaap_StockholdersEquity | 96,486,000 |
AOCI Attributable to Parent [Member] | ||
Stockholders' Equity Attributable to Parent | us-gaap_StockholdersEquity | (1,410,000) |
Stockholders' Equity Attributable to Parent | us-gaap_StockholdersEquity | $ (348,000) |