Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 28, 2018 | Jun. 30, 2017 | |
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, 2017 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,017 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 198,214,975 | ||
Entity Common Stock, Shares Outstanding | 28,224,073 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash and cash equivalents | $ 24,989,000 | $ 11,604,000 |
Accounts receivable, net of allowances of $734 and $824 | 123,220,000 | 83,835,000 |
Inventories | 75,046,000 | 72,769,000 |
Prepaid expenses and other current assets | 4,547,000 | 3,414,000 |
Income tax receivable | 0 | 2,814,000 |
Total current assets | 227,802,000 | 174,436,000 |
Property and equipment, net of accumulated depreciation of $12,540 and $18,371 | 13,444,000 | 17,755,000 |
Goodwill | 12,272,000 | 12,272,000 |
Intangible assets, net of accumulated amortization of $66,639 and $55,298 | 39,244,000 | 53,362,000 |
Deferred income tax assets | 24,403,000 | 50,363,000 |
Other assets | 3,426,000 | 2,541,000 |
Total assets | 320,591,000 | 310,729,000 |
Current liabilities | ||
Accounts payable | 96,472,000 | 85,022,000 |
Income tax payable | 2,052,000 | 0 |
Accrued liabilities | 10,515,000 | 22,216,000 |
Sales returns liability | 32,189,000 | 28,373,000 |
Accrued wages and wage related expenses | 5,652,000 | 6,169,000 |
Deferred revenue | 315,000 | 273,000 |
Line of credit | 23,475,000 | 31,307,000 |
Current portion of long-term debt, net of deferred loan costs of $141 and $65 | 13,922,000 | 10,484,000 |
Total current liabilities | 184,592,000 | 183,844,000 |
Non-current portion of long-term debt, net of deferred loan costs of $0 and $141 | 0 | 9,623,000 |
Total liabilities | 184,592,000 | 193,467,000 |
Stockholders' equity | ||
Common stock, $0.001 par value; 100,000 shares authorized; 34,104 and 33,840 shares issued | 34,000 | 34,000 |
Additional paid-in capital | 96,145,000 | 92,782,000 |
Accumulated other comprehensive loss | (348,000) | (2,114,000) |
Treasury stock, 6,065 and 5,831 common shares at cost | (37,637,000) | (36,145,000) |
Retained earnings | 77,805,000 | 62,705,000 |
Total stockholders' equity | 135,999,000 | 117,262,000 |
Total liabilities and stockholders' equity | $ 320,591,000 | $ 310,729,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Allowances for doubtful accounts | $ 734 | $ 824 |
Accumulated depreciation on property and equipment | 12,540 | 18,371 |
Accumulated amortization on intangible assets | 66,639 | 55,298 |
Deferred loan costs, current | 141 | 65 |
Deferred loan costs, non current | $ 0 | $ 141 |
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 34,104,000 | 33,840,000 |
Treasury stock (in shares) | 6,065,000 | 5,831,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | |||
Net sales | $ 519,495 | $ 401,857 | $ 269,311 |
Cost of sales | 350,497 | 274,255 | 167,627 |
Gross profit | 168,998 | 127,602 | 101,684 |
Operating expenses: | |||
Advertising and marketing | 11,101 | 12,440 | 10,436 |
Selling, general and administrative | 105,398 | 96,229 | 56,752 |
(Gain) loss on disputed mophie purchase price | (6,967) | 24,317 | 0 |
Transaction costs | 725 | 2,591 | 179 |
Impairment of intangible asset | 1,959 | 0 | 0 |
Amortization of long-lived intangibles | 12,047 | 13,385 | 8,453 |
Total operating expenses | 124,263 | 148,962 | 75,820 |
Income (loss) from operations | 44,735 | (21,360) | 25,864 |
Other income (expense): | |||
Interest expense | (2,081) | (1,851) | (97) |
Other income (expense) | 698 | (348) | (69) |
Total other expense | (1,383) | (2,199) | (166) |
Income (loss) before provision for income taxes | 43,352 | (23,559) | 25,698 |
Income tax (provision) benefit | (28,252) | 7,972 | (10,111) |
Net income (loss) | $ 15,100 | $ (15,587) | $ 15,587 |
Earnings (loss) per share attributable to stockholders: | |||
Basic earnings (loss) per share (in usd per share) | $ 0.54 | $ (0.56) | $ 0.54 |
Diluted earnings (loss) per share (in usd per share) | $ 0.53 | $ (0.56) | $ 0.54 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ 15,100 | $ (15,587) | $ 15,587 |
Other comprehensive gain (loss), net of tax: | |||
Foreign currency translation gain (loss) | 1,766 | (517) | (702) |
Total other comprehensive income (loss) | 1,766 | (517) | (702) |
Comprehensive income (loss) | $ 16,866 | $ (16,104) | $ 14,885 |
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) | Note Receivable Collateralized By Stock | Treasury Stock | Retained Earnings |
Balances at Dec. 31, 2014 | $ 127,073 | $ 33 | $ 85,154 | $ (895) | $ (348) | $ (19,576) | $ 62,705 |
Balances (in shares) at Dec. 31, 2014 | 32,686 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | 15,587 | ||||||
Other comprehensive income | (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 | $ 0 | 168 | ||||
Option exercises (in shares) | 118 | ||||||
Warrant exercises | 38 | $ 0 | 38 | ||||
Warrant exercises (in shares) | 45 | ||||||
Restricted stock release | 0 | $ 0 | |||||
Restricted stock release (in shares) | 349 | ||||||
Consideration for acquisition of patent | 198 | $ 0 | 198 | ||||
Consideration for acquisition of patent (in shares) | 21 | ||||||
Stock-based compensation expense | 3,893 | 3,893 | |||||
Payment of withholding taxes on restricted stock units | (724) | (724) | |||||
Excess tax benefit (shortfall) related to share-based payments | 256 | 256 | |||||
Balances at Dec. 31, 2015 | 130,517 | $ 33 | 88,983 | (1,597) | 0 | (35,194) | 78,292 |
Balances (in shares) at Dec. 31, 2015 | 33,219 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | (15,587) | ||||||
Other comprehensive income | (517) | (517) | |||||
Purchase of shares of treasury stock | (951) | (951) | |||||
Option exercises | 0 | $ 0 | |||||
Option exercises (in shares) | 21 | ||||||
Warrant exercises | 54 | $ 0 | 54 | ||||
Warrant exercises (in shares) | 7 | ||||||
Restricted stock release | 1 | $ 1 | |||||
Restricted stock release (in shares) | 589 | ||||||
Employee stock purchase plan release | 0 | $ 0 | |||||
Employee stock purchase plan release (in shares) | 4 | ||||||
Stock-based compensation expense | 3,830 | 3,830 | |||||
Payment of withholding taxes on restricted stock units | (630) | (630) | |||||
Excess tax benefit (shortfall) related to share-based payments | 545 | 545 | |||||
Balances at Dec. 31, 2016 | 117,262 | $ 34 | 92,782 | (2,114) | 0 | (36,145) | 62,705 |
Balances (in shares) at Dec. 31, 2016 | 33,840 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | 15,100 | ||||||
Other comprehensive income | 1,766 | 1,766 | |||||
Purchase of shares of treasury stock | (1,492) | (1,492) | |||||
Restricted stock release | 0 | $ 0 | |||||
Restricted stock release (in shares) | 262 | ||||||
Employee stock purchase plan release | 29 | $ 0 | 29 | ||||
Employee stock purchase plan release (in shares) | 2 | ||||||
Stock-based compensation expense | 3,602 | 3,602 | |||||
Payment of withholding taxes on restricted stock units | (268) | (268) | |||||
Balances at Dec. 31, 2017 | $ 135,999 | $ 34 | $ 96,145 | $ (348) | $ 0 | $ (37,637) | $ 77,805 |
Balances (in shares) at Dec. 31, 2017 | 34,104 |
Consolidated Statements of Equ7
Consolidated Statements of Equity (Parenthetical) shares in Thousands | 12 Months Ended |
Dec. 31, 2015shares | |
Statement of Stockholders' Equity [Abstract] | |
Treasury stock purchased (in shares) | 2,030 |
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, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities | |||
Net income (loss) | $ 15,100 | $ (15,587) | $ 15,587 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Stock-based compensation | 3,602 | 3,830 | 3,893 |
Excess tax costs (benefits) related to share-based payments | 0 | (641) | 256 |
Depreciation and amortization | 21,889 | 22,271 | 12,933 |
Loss on disposal of property and equipment | 34 | 0 | 0 |
Reduction in reserve on note receivable upon foreclosure recovery | 0 | 0 | (639) |
Deferred income taxes | 14,168 | (7,972) | (1,162) |
Revaluation of deferred income taxes from U.S. tax reform | 11,806 | 0 | 0 |
Amortization of deferred loan costs | 263 | 202 | 60 |
Impairment of intangible asset | 1,959 | 0 | 0 |
(Gain) loss on disputed mophie purchase price | (6,967) | 24,317 | 0 |
Changes in operating assets and liabilities (net of amounts acquired): | |||
Accounts receivable, net | (38,093) | (11,587) | 18,383 |
Inventories | (906) | (2,198) | 2,064 |
Prepaid expenses and other current assets | (1,113) | 422 | (651) |
Other assets | (928) | (330) | 551 |
Accounts payable | 10,677 | 14,094 | (14,635) |
Income taxes receivable (payable) | 4,866 | 9,994 | (7,366) |
Accrued liabilities | (4,505) | 2,836 | (3,410) |
Accrued wages and wage related expenses | (517) | 1,819 | (356) |
Deferred revenue | 42 | 246 | (162) |
Sales returns liability | 3,719 | (9,037) | (814) |
Other | (1,022) | 0 | 0 |
Net cash provided by operating activities | 34,074 | 32,679 | 24,532 |
Cash flows from investing activities | |||
Purchase of property and equipment (net of business acquired) | (5,766) | (8,633) | (4,910) |
Proceeds from disposal of equipment | 29 | 0 | 0 |
Purchase of mophie, net of cash acquired | 0 | (74,743) | 0 |
Net cash used in investing activities | (5,737) | (83,376) | (4,910) |
Cash flows from financing activities | |||
Payment of debt issuance costs | (157) | (1,144) | 0 |
Proceeds from revolving credit facility | 434,826 | 336,391 | 9,871 |
Payments on revolving credit facility | (442,659) | (305,084) | (9,871) |
Proceeds from term loan facility | 0 | 25,000 | 0 |
Payments on term loan facility | (6,250) | (4,688) | 0 |
Purchase of treasury stock | (1,492) | (951) | (14,930) |
Payment of withholdings tax on restricted stock units | (268) | (630) | (724) |
Proceeds from exercise of warrants and options | 29 | 54 | 207 |
Excess tax costs (benefits) related to share-based payments | 0 | 641 | (256) |
Net cash provided by (used in) financing activities | (15,971) | 49,589 | (15,703) |
Effect of foreign currency exchange rates on cash and cash equivalents | 1,019 | (290) | (378) |
Net increase (decrease) in cash and cash equivalents | 13,385 | (1,398) | 3,541 |
Cash and cash equivalents at beginning of the period | 11,604 | 13,002 | 9,461 |
Cash and cash equivalents at end of the period | 24,989 | 11,604 | 13,002 |
Supplemental disclosure of cash flow information | |||
Cash paid during the period for interest | 1,776 | 1,497 | 46 |
Cash paid (refunded) during the period for taxes, net | (2,174) | (9,521) | 18,710 |
Supplemental schedule of noncash investing and financing activities | |||
Purchase of fixed assets financed through accounts payable | $ 492 | 758 | 269 |
Purchase of mophie financed through accounts payable | $ 12,139 | ||
Purchase of patent or intangible assets | 1,218 | ||
Foreclosure on real property | 1,099 | ||
Foreclosure on common stock | $ 688 | ||
Issued shares of common stock with a fair value | 21 | ||
Fair value of intangible assets acquired | $ 198 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Company ZAGG Inc and its subsidiaries (“we,” “us,” “our,” “ZAGG,” or the “Company”) are innovation leaders in mobile tech accessories for smartphones and tablets. For over 10 years, ZAGG 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, personal audio, mobile keyboards, cases, and social tech sold under the ZAGG, InvisibleShield, mophie, and IFROGZ brands. In June 2011, ZAGG acquired IFROGZ, an audio and protective case company, which expanded the ZAGG product lines beyond screen protection and keyboards. In March 2016, ZAGG acquired mophie inc. ("mophie"), a leader in the power management and power case categories. This acquisition further diversified the ZAGG product lines into key growth product categories. The results of operations of mophie are included in the Company's results of operations beginning on March 3, 2016. 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 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. All intercompany transactions and balances have been eliminated in consolidation. 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, 2017 and 2016 totaled $116 and $264 , respectively. Cash equivalents as of December 31, 2017 and 2016 , 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, 2017 , 2016 and 2015 : 2017 2016 2015 Balance at beginning of year $ 824 $ 568 $ 1,910 Additions charged to expense 339 599 243 Assumed in acquisition of mophie — 91 — Write-offs charged against the allowance (444 ) (430 ) (1,585 ) Foreign currency translation gain (loss) 15 (4 ) — Balance at end of year $ 734 $ 824 $ 568 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 net realizable value. 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. Goodwill At least annually and when events and circumstances warrant an evaluation, we perform our impairment assessment of goodwill. This assessment initially permits an entity to make a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the goodwill impairment test. If an entity concludes that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, it would not need to perform the impairment test for the reporting unit. If it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the impairment analysis is performed, which incorporates a fair-value based approach. We determine the fair value of our reporting units based on discounted cash flows and market approach analyses as considered necessary. We consider factors such as the economy, reduced expectations for future cash flows coupled with a decline in the market price of our stock and market capitalization for a sustained period as indicators for potential goodwill impairment. If the reporting unit’s carrying amount exceeds its fair value, an entity will record an impairment charge based on that difference. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. Intangible assets Intangible assets include internet addresses, intellectual property, and acquired intangibles in connection with the acquisitions of IFROGZ and mophie, which include patents, technology, customer relationships, trademarks, tradenames, non-compete agreements, and other miscellaneous intangible assets. Long-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 amortizing intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, recoverability of long-lived assets is measured by comparison of its carrying amount to the undiscounted cash flows that the asset or asset group is expected to generate over the remaining life in measuring whether the assets are recoverable. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values, and third-party independent appraisals, as considered necessary. 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 or risk of loss has transferred to the customer, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. Revenue is recognized net of any taxes collected from customers and subsequently remitted to governmental authorities. 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 www.mophie.com and our corporate-owned and third-party-owned mall kiosks and ZAGG-branded stores; 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 as risk of loss has transferred to the customer at this point. 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 the return information is incorporated into the calculation of 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, warranty, and other credits liability for the years ended December 31, 2017 , 2016 and 2015 : 2017 2016 2015 Balance at beginning of year $ 28,373 $ 7,849 $ 8,674 Additions charged to sales 90,018 92,868 43,320 Assumed in acquisition of mophie — 29,584 — Sales returns & warranty claims charged against reserve (86,299 ) (101,928 ) (44,145 ) Foreign currency translation loss 97 — — Balance at end of year $ 32,189 $ 28,373 $ 7,849 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. On December 22, 2017, the U.S. government enacted comprehensive tax legislation (the “Tax Act”), which significantly revises the ongoing U.S. corporate income tax law by lowering the U.S. federal corporate income tax rate from 35% to 21% , implementing a territorial tax system, imposing one-time tax on foreign unremitted earnings and setting limitations on deductibility of certain costs, among other things. The Company re-measured certain deferred tax assets based on the rates at which they are expected to reverse in the future, which is generally 21% . However, we are still analyzing certain aspects of the Tax Act and refining our calculations, which could potentially affect the measurement of these balances or give rise to new deferred tax amounts. The provisional amount recorded related to the re-measurement of our deferred tax balance was a tax expense of $11,806 . The Company accrued a reasonable estimate of $547 of tax expense for the Tax Act’s one-time transition tax on the foreign subsidiaries’ accumulated, unremitted earnings. This amount includes the projected effect of foreign tax credits as well as projected state tax effects. 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’s intention before enactment of the Tax Act was to permanently reinvest these earnings, thereby indefinitely postponing their remittance to the U.S. This will continue to be the Company’s intention. The Company recorded a provisional amount for our one-time transition tax liability for our foreign subsidiaries, resulting in an increase in income tax expense of $547 . The Company will continue to evaluate the impact of the tax law change as it relates to its foreign entities. Future foreign earnings will be taxed according to regulatory calculations in the period earned or eligible for a 100% dividends received deduction. No additional income taxes or withholding taxes have been provided for any remaining undistributed foreign earnings not subject to the transition tax, or any additional outside basis difference inherent in these entities, as these amounts continue to be indefinitely reinvested in foreign operations. Stock-based compensation The Company recognizes stock-based compensation expense in its consolidated financial statements for restricted stock unit awards granted to employees. 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 Company recognizes compensation expense net of estimated forfeitures on a straight-line basis over the requisite service period of the award, which is generally the vesting term of the award. The Company recognizes compensation expense on a straight-line basis for those performance-based awards that management estimates the performance criteria are probable to be achieved. No compensation expense is ultimately recognized for awards for which employees do not render the requisite service and are forfeited. 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, 2017 , 2016 and 2015 were $11,101 , $12,440 and $10,436 , 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 in Ireland and the Netherlands, while the Renminbi is the functional currency of the Company’s subsidiary in China. 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 (expense) in the consolidated statements of operations and totaled $590 , $(144) and $52 for the years ended December 31, 2017 , 2016 and 2015 , respectively. Earnings (loss) per share Basic earnings (loss) per common share excludes dilution and is computed by dividing net income (loss) attributable to stockholders 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 restricted stock units, stock options, warrants or other common stock equivalents were released, exercised or otherwise converted into common stock. The dilutive effect of 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, 2017 , 2016 and 2015 : 2017 2016 2015 Net (loss) income $ 15,100 $ (15,587 ) $ 15,587 Weighted average shares outstanding: Basic 27,996 28,006 28,773 Dilutive effect of stock options, restricted stock, and warrants 411 — 316 Diluted 28,407 28,006 29,089 Earnings (loss) per share: Basic $ 0.54 $ (0.56 ) $ 0.54 Dilutive $ 0.53 $ (0.56 ) $ 0.54 For the year ended December 31, 2017, 2016, and 2015, restricted stock units, warrants, or stock options to purchase 19 , 815 , and 250 shares of common stock, respectively, were not considered in calculating diluted earnings per share because the effect would be anti-dilutive. Business combinations We allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. The excess of the purchase price over these fair values is recorded as goodwill. We engaged an independent third-party valuation firm to assist us in determining the fair values of certain assets acquired and liabilities assumed. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. The significant purchased classes of intangible assets recorded by us include tradenames, technology, customer relationships, non-compete agreements, and backlog. The fair values assigned to the identified intangible assets are discussed in Note 5 to the consolidated financial statements. Significant estimates in valuing certain intangible assets include but are not limited to: future expected cash flows related to each individual asset, market position of the tradenames and assumptions about cash flow savings from the tradenames, determination of useful lives, and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and thus, actual results may differ from estimates. 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 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. The ASU may be adopted utilizing one of two methods. The first method is to adopt the ASU by recording the effect of the guidance in the ASU retrospectively to each prior period presented in the period of adoption. The second method is to adopt the ASU by recording the effect of the guidance in the ASU retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application. 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. In May 2016, the FASB issued ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 606) - Narrow-Scope Improvements and Practical Expedients”. The amendments and practical expedients presented in the ASU aim to simplify the transition to the new standard, to provide practical expedients for transition and sales taxes, and to clarify certain aspects of the standard. The Company will adopt the ASU on January 1, 2018, using the modified retrospective approach, with the cumulative effect of initially adopting the new standard recognized in retained earnings at the date of adoption. For most of the Company’s revenue arrangements, no significant impacts are expected as these transactions are not accounted for under industry-specific guidance that will be superseded by the ASU and generally consist of a single performance obligation to transfer promised goods or services. The Company does not expect the adoption of the ASU to have a material impact on its consolidated results of operations. However, provisions for post-invoice sales discounts and miscellaneous credits will be recognized on a gross basis as sales return liability and the estimated cost of inventory associated with the provision for sales returns will be recorded on a gross basis within prepaid expenses and other current assets on the consolidated balance sheets. Additionally, the Company expects increased disclosure of its revenue by key product lines, key distribution channels, judgments and changes in judgments. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)”, which requires lessees to recognize most leases, including operating leases, on-balance sheet via a right of use asset and lease liability. Lessees are allowed to account for short-term leases (i.e., leases with a term of 12 months or less) off-balance sheet, consistent with current operating lease accounting. A number of other significant changes to lease accounting have been effected through the issuance of this standard. The requirements of the new standard for leases shall be recognized and measured at the beginning of the earliest comparative period presented. When adopted, the Company will be required to adjust equity at the beginning of the earliest comparative period presented, and the other comparative amounts disclosed for each prior period presented in the financial statements, as if the requirements of the new standard had always been applied. The new standard also contains practical expedients which the Company may elect to follow. The new standard is effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements, including whether to elect the practical expedients outlined in the new standard. In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory,” which requires entities to recognize at the transaction date the income tax consequences of intercompany asset transfers other than inventory. This ASU is effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2017. The Company will adopt this standard in the first quarter of 2018. The adoption of this standard is not expected to have a material impact on our financial position or results of operations. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventory consisted of the following components at December 31, 2017 and 2016 : 2017 2016 Finished goods $ 74,734 $ 72,490 Raw materials 312 279 Total inventories $ 75,046 $ 72,769 Included in prepaid expenses and other current assets were inventory deposits with third-party manufacturers at December 31, 2017 and 2016 of $1,906 and $437 , respectively. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment, net consisted of the following at December 31, 2017 and 2016 : Useful Lives 2017 2016 Computer equipment and software 2 to 5 years $ 2,163 $ 3,634 Equipment and molds 2 to 10 years 12,395 16,609 Furniture and fixtures 1 to 7 years 1,824 3,409 Automobiles 5 years 126 230 Building and improvements 40 years 3,332 2,270 Land 325 325 Leasehold improvements 1 to 5 years 5,819 9,649 25,984 36,126 Less accumulated depreciation and amortization (12,540 ) (18,371 ) Property and equipment, net $ 13,444 $ 17,755 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Goodwill There was no change in goodwill during the year ended December 31, 2017 with a balance at December 31, 2017 of $12,272 . During the year ended December 31, 2016 , goodwill changed from $0 to $12,272 due to the Company’s acquisition of mophie on March 3, 2016. The following table summarizes the changes in goodwill during 2016: Balance at December 31, 2015 $ — Increase due to acquisitions 12,272 Balance at December 31, 2016 $ 12,272 The Company noted no impairment of goodwill for the year ended December 31, 2017 . Long-lived Intangibles December 31, 2017 Gross Carrying Amount Impairments Accumulated Amortization Net Carrying Amount Weighted Average Amortization Period Customer relationships $ 49,700 $ — $ (40,441 ) $ 9,259 7.5 years Tradenames 31,269 — (13,415 ) 17,854 9.8 years Patents and technology 21,228 (2,777 ) (7,470 ) 10,981 8.8 years Non-compete agreements 5,896 — (4,759 ) 1,137 4.9 years Other 567 — (554 ) 13 2.4 years Total amortizable assets $ 108,660 $ (2,777 ) $ (66,639 ) $ 39,244 8.2 years December 31, 2016 Gross Carrying Amount Acquisitions Accumulated Amortization Net Carrying Amount Weighted Average Amortization Period Customer relationships $ 41,500 $ 8,200 $ (35,088 ) $ 14,612 7.5 years Tradenames 12,921 18,348 (9,763 ) 21,506 9.8 years Patents and technology 6,003 15,225 (5,501 ) 15,727 8.8 years Non-compete agreements 4,100 1,796 (4,399 ) 1,497 4.9 years Other 324 243 (547 ) 20 2.4 years Total amortizable assets $ 64,848 $ 43,812 $ (55,298 ) $ 53,362 8.2 years On April 11, 2017, the Company received a final court order stating that the claims of one of its patents were either unpatentable or cancelled. Accordingly, management determined that the patent’s carrying value was not recoverable through future cash flows and was impaired as of March 31, 2017. Consequently, the Company recorded an impairment loss consisting of a reduction of gross carrying amount of $2,777 , accumulated amortization of $818 , and net carrying value of $1,959 to reduce the net carrying value of the cancelled patent to $0 . Customer relationships, trademarks, and other intangibles are amortized on an accelerated basis consistent with their expected future cash flows over their estimated useful lives, which results in accelerated amortization. The remaining long-lived intangible assets are amortized using the straight-line method over their estimated useful life. For the years ended December 31, 2017 , 2016 , and 2015 amortization expense was $12,159 , $13,495 , and $8,562 , respectively. Amortization expense was primarily recorded as a component of operating expense, however, amortization expense related to acquired technology for the years ended December 31, 2017 , 2016 , and 2015 of $112 , $110 , and $109 , respectively, was recorded as a component of cost of sales. Estimated future amortization expense for long-lived intangibles is as follows: 2018 $ 11,171 2019 9,122 2020 6,454 2021 3,876 2022 2,766 Thereafter 5,855 Total $ 39,244 |
Acquisition of Mophie Inc.
Acquisition of Mophie Inc. | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
ACQUISITION OF MOPHIE INC. | ACQUISITION OF MOPHIE INC. On February 2, 2016, ZAGG and ZM Acquisition, Inc. (“Merger Sub”), a Delaware corporation and wholly-owned subsidiary of the Company, entered into an Agreement and Plan of Merger (the “Merger Agreement”) with mophie, a California corporation, the principal shareholders of mophie named therein (the “Principal Shareholders”), and Daniel Huang as representative of the mophie shareholders, warrant holders, and option holders, pursuant to which Merger Sub agreed to merge with and into mophie, with mophie continuing as the surviving corporation (the “Merger”). On March 3, 2016 (the “Acquisition Date”), the Company completed the Merger. The Company purchased mophie for total gross up-front consideration of $100,000 in cash, subject to an adjustment based on the estimated and actual net working capital of mophie as of the Acquisition Date. The Merger Agreement included an earn-out provision whereby additional consideration could be paid based on whether mophie’s 12-month Adjusted EBITDA (as defined in the Merger Agreement) from April 1, 2016 to March 31, 2017 (the “Earnout Period”) exceeded $20,000 (the "Earnout Consideration"). mophie's 12-month Adjusted EBITDA did not exceed $20,000 and thus no additional earn-out consideration was earned or paid. In addition to the Earnout Consideration, the Merger Agreement identified three other contingent payments (the “Contingent Payments”) to be remitted to the Principal Shareholders upon receipt of such funds by ZAGG after the Acquisition Date, subject to any applicable offset rights of ZAGG under the Merger Agreement: • Federal and state tax refunds due to the Company related to 2012 and 2013 tax years; • Customs and duties refunds for pre-closing overpayments of customs and duties amounts to governmental agencies; and • Proceeds from the sale of real property located in Kalamazoo, Michigan. $2,000 of the cash consideration paid to the Principal Shareholders was placed in an escrow account to cover any net working capital shortfall and indemnification claims of ZAGG. ZAGG and the Principal Shareholders also jointly purchased a $10,000 insurance policy with a $2,000 deductible that insures against breaches by mophie and the Principal Shareholders of representations and warranties set forth in the Merger Agreement. At the Acquisition Date, mophie’s estimated closing balance sheet reflected negative working capital of $23,478 . Upon completion of the procedures to evaluate the working capital account, ZAGG determined that the closing balance sheet reflected actual closing negative working capital and losses from breaches of representations, warranties and covenants that directly impacted current assets and current liabilities in the aggregate amount of $49,795 , resulting in an additional actual closing working capital deficit and loss claims in the amount of $26,317 . As described in Note 12 , the Company commenced procedures to recover the amounts related to the aggregate net working capital deficit and losses from breaches of representations and warranties from the Principal Shareholders. This matter was ultimately settled on October 31, 2017. The following summarizes the components of the purchase consideration as of March 3, 2016: Preliminary Allocation March 3, 2016 Adjustments to Working Capital and Fair Value Final Allocation March 3, 2016 Cash consideration $ 100,000 $ — $ 100,000 Negative working capital at Acquisition Date (23,478 ) — (23,478 ) Additional negative working capital deficit — (26,317 ) (26,317 ) Contingent payments 11,283 856 12,139 Total purchase price $ 87,805 $ (25,461 ) $ 62,344 The total purchase price of $62,344 was allocated to identifiable assets acquired and liabilities assumed based on their respective fair values. The total purchase price was adjusted during the third quarter of 2016 because of (1) additional information related to the working capital reflected in the closing balance sheet and estimate of fair value of the assets acquired and liabilities assumed and (2) the determination that the fair value of the Earnout Consideration is insignificant. The excess of the purchase price over the fair value of tangible and intangible assets acquired and liabilities assumed was recorded as goodwill. The following table summarizes the final fair values of the identifiable assets acquired and liabilities assumed as of the Acquisition Date: Cash and cash equivalents $ 1,779 Trade receivables (gross contractual receivables of $12,914) 12,823 Inventories 24,911 Prepaid expenses and other assets 1,073 Income tax receivable 11,814 Deferred tax assets 16,168 Property and equipment 10,191 Land held for sale 325 Amortizable identifiable intangible assets 43,812 Goodwill 12,272 Accounts payable (37,359 ) Income tax payable (196 ) Accrued liabilities (5,163 ) Deferred revenue (9 ) Sales returns liability (29,584 ) Other noncurrent liabilities (513 ) Total $ 62,344 The following table summarizes the purchase price allocation as of March 3, 2016: Preliminary Purchase Price Allocation March 3, 2016 Adjustments to Working Capital and Fair Value Final Purchase Price Allocation March 3, 2016 Cash and cash equivalents $ 1,779 $ — $ 1,779 Trade receivables 13,483 (660 ) 12,823 Inventories 32,335 (10,010 ) 22,325 Inventory step-up 6,937 (4,351 ) 2,586 Prepaid expenses 485 215 700 Other assets 200 173 373 Income tax receivable 10,958 856 11,814 Deferred tax assets 24,925 (8,757 ) 16,168 Property and equipment 10,191 — 10,191 Land held for sale 325 — 325 Amortizable identifiable intangible assets 45,463 (1,651 ) 43,812 Goodwill 14,092 (1,820 ) 12,272 Accounts payable (34,228 ) (3,131 ) (37,359 ) Income tax payable (196 ) — (196 ) Accrued liabilities (5,185 ) 22 (5,163 ) Deferred revenue (800 ) 791 (9 ) Sales returns liability (14,468 ) (15,116 ) (29,584 ) Deferred tax liabilities (17,978 ) 17,978 — Other noncurrent liabilities (513 ) — (513 ) Total $ 87,805 $ (25,461 ) $ 62,344 The 2016 adjustments to working capital represented in the table above consist of (1) the additional actual closing working capital deficit of $26,317 and (2) adjustments to fair value of $856 . As part of the acquisition of mophie, the Company incurred legal, accounting, investment banking and other due diligence fees that were expensed when incurred. Total fees incurred related to the acquisition of mophie for the years ended December 31, 2017 and 2016 were $725 and $2,591 , respectively, which are included as a component of operating expenses on the consolidated statement of operations. Identifiable Intangible Assets Classes of acquired intangible assets include tradenames, patents and technology, customer relationships, non-compete agreements, and backlog. The fair value of the identifiable intangible assets was determined using various valuation methods, including the income and market approaches. For assets valued under the income approach, the estimate of the present value of expected future cash flows for each identifiable asset was based on discount rates which incorporate a risk premium to take into account the risks inherent in those expected cash flows. The expected cash flows were estimated using available historical data adjusted based on the Company’s historical experience and the expectations of market participants. The market approach was utilized to determine appropriate royalty rates applied to the valuation of the trademarks and technology. The amounts assigned to each class of intangible asset and the related weighted average amortization periods are as follows: Intangible asset class Weighted-average amortization period Tradenames $ 18,348 10.0 years Patents and technology 15,225 7.5 years Customer relationships 8,200 5.0 years Non-compete agreements 1,796 5.0 years Backlog 243 0.3 years Total $ 43,812 Goodwill Goodwill represents the excess of the mophie purchase price over the fair value of the assets acquired and liabilities assumed. $160 of the acquired goodwill is deductible for tax purposes. 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. Results of Operations The results of operations of mophie are included in the Company’s results of operations beginning on March 3, 2016. For the year ended December 31, 2016, mophie generated net sales of $113,749 and had a net loss before tax of $31,145 . Pro forma Results from Operations The following unaudited pro-forma results of operations for the 12 months ended December 31, 2016 and 2015 give pro forma effect as if the acquisition and borrowings used to finance the acquisition had occurred on January 1, 2015, 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. 12 Months Ended December 31, 2016 December 31, 2015 Net sales $ 419,183 $ 455,165 Net loss $ (17,487 ) $ (5,393 ) Basic loss per share $ (0.62 ) $ (0.19 ) Diluted loss per share $ (0.62 ) $ (0.19 ) The unaudited 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, 2015. Furthermore, such unaudited 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. For the 12 months ended December 31, 2016 and 2015, pro forma net loss includes pro forma amortization expense of $6,770 and $7,432 , respectively. In addition, the Company included interest from the new credit facility and amortization of debt issuance costs for the 12 months ended December 31, 2016 and 2015 of $1,753 and $1,924 , respectively. Material non-recurring adjustments excluded from the pro forma financial information for the 12 months ended December 31, 2015 consists of the $2,586 step up of mophie inventory to its fair value, which has been recorded as an unfavorable adjustment to cost of goods sold during 2016 following the acquisition date. The unaudited pro forma results do not reflect events that either have occurred or may occur after the Merger, including, but not limited to, the anticipated realization of ongoing savings from operating synergies in subsequent periods. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Income (loss) from continuing operations before taxes for the years ended December 31, 2017 , 2016 , and 2015 consisted of the following: 2017 2016 2015 US operations $ 37,850 $ (22,220 ) $ 26,852 Foreign operations 5,502 (1,339 ) (1,154 ) Total $ 43,352 $ (23,559 ) $ 25,698 The components of income tax benefit (provision) for the years ended December 31, 2017 , 2016 and 2015 , are: 2017 2016 2015 Current benefit (provision): Federal $ (779 ) $ (89 ) $ (9,429 ) State (532 ) 138 (1,783 ) Foreign (786 ) (31 ) (61 ) Total current (2,097 ) 18 (11,273 ) Deferred benefit (provision): Federal (25,919 ) 7,612 973 State (345 ) 342 189 Foreign 109 — — Total deferred (26,155 ) 7,954 1,162 Total benefit (provision) $ (28,252 ) $ 7,972 $ (10,111 ) 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, 2017 , 2016 and 2015 : 2017 2016 2015 Tax at statutory rate (35%) (15,173 ) 8,246 (8,994 ) State tax, net of federal tax benefit (1,217 ) 1,041 (1,089 ) Non-deductible expense and other (830 ) 333 116 Restricted stock units (831 ) — — Foreign tax rate differential 1,248 (491 ) (464 ) Domestic production activities deduction — — 459 Mandatory repatriation of foreign earnings (547 ) — — Return to provision adjustment (212 ) (36 ) 126 Reserve related to unrecognized tax benefits 107 (452 ) (264 ) Interest and penalties (1 ) (14 ) (1 ) Effect of federal rate change (11,806 ) — — Effect of state rate changes, net of federal tax benefit 1,010 (655 ) — (28,252 ) 7,972 (10,111 ) On December 22, 2017, the U.S. President signed into law a sweeping tax reform bill known as the Tax Cuts and Jobs Act of 2017 (the “Tax Act”), which significantly revises the ongoing U.S. corporate income tax law by lowering the U.S. federal corporate income tax rate from 35% to 21% , implementing a territorial tax system, imposing one-time tax on foreign unremitted earnings and setting limitations on deductibility of certain costs, among other things. Due to the complexities involved in accounting for the recently enacted Tax Act, the U.S. Securities and Exchange Commission’s Staff Accounting Bulletin (“SAB”) 118 requires that the Company include in its financial statements the reasonable estimate of the impact of the Tax Act on earnings to the extent such reasonable estimate has been determined. Accordingly, the Company recorded the following reasonable estimates of the tax impact in its earnings for the year ended December 31, 2017 . • For the year ended December 31, 2017 , the Company accrued a reasonable estimate of $547 of tax expense for the Tax Act’s one-time transition tax on the foreign subsidiaries’ accumulated, unremitted earnings. This amount includes the projected effect of foreign tax credits as well as projected state tax effects. • For the year ended December 31, 2017 , the Company accrued $11,806 in provisional tax expense related to the net change in deferred tax assets stemming from the Tax Act’s reduction of the U.S. federal tax rate from 35% to 21% . The Tax Act also includes a provision to tax global intangible low-taxed income (“GILTI”) of foreign subsidiaries and a base erosion anti-abuse tax (“BEAT”) measure that taxes certain payments between a U.S. corporation and its subsidiaries. The Company will be subject to the GILTI and BEAT provisions effective beginning January 1, 2018 and is in the process of analyzing their effects, including how to account for the GILTI provision from an accounting policy standpoint. The final impact on the Company from the Tax Act’s transition tax legislation may differ from the aforementioned reasonable estimates of $11,806 and $547 due to the complexity of calculating and supporting with primary evidence such U.S. tax attributes as accumulated foreign earnings and profits, foreign tax paid, and other tax components involved in foreign tax credit calculations for prior years. Such differences could be material, due to, among other things, changes in interpretations of the Tax Act, future legislative action to address questions that arise because of the Tax Act, changes in accounting standards for income taxes or related interpretations in response to the Tax Act, or any updates or changes to estimates the Company has utilized to calculate the transition tax's reasonable estimate. Pursuant to the SAB118, the Company is allowed a measurement period of up to one year after the enactment date of the Tax Act to finalize the recording of the related tax impacts. Accordingly, the Company accrued the transition tax of $547 and a tax expense related to the net change in deferred tax assets of $11,806 for 2017 based on the reasonable estimate guidance. The Company will continue to calculate the impact of the U.S. Tax Act and will record any resulting tax adjustments during 2018. Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. We recorded a provisional adjustment to our U.S. deferred income taxes as of December 31, 2017 to reflect the reduction in the U.S. statutory tax rate from 35% to 21% resulting from the Tax Act. Significant components of our deferred tax assets and liabilities are as follows: 2017 2016 Deferred tax assets: Allowance for doubtful accounts $ 146 $ 286 Property and equipment 396 — Deferred revenue 11 27 Inventories 7,265 12,724 Stock-based compensation 790 1,857 Sales returns accrual 4,343 7,788 Acquisition costs, net of amortization 116 191 Intangible assets 2,230 77 Goodwill 1,009 1,663 HzO investment 1,007 1,483 Capital loss carry-over 184 271 Reserve on note receivable — 328 Net operating loss carryforward 3,338 21,313 Federal and state credit carryforwards 3,440 2,816 Other liabilities 1,586 1,619 Total gross deferred tax assets 25,861 52,443 Valuation allowance (1,458 ) (1,753 ) Total deferred tax assets $ 24,403 $ 50,690 Deferred tax liabilities: Property and equipment $ — $ 323 Other — 4 Total gross deferred tax liabilities — 327 Net deferred tax assets $ 24,403 $ 50,363 The Company recorded a full valuation allowance against a deferred tax asset generated by potential 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, 2017 and 2016 of $1,007 and $1,483 , respectively, has been recorded against this deferred tax asset. In addition, at December 31, 2017 and 2016 , the Company recorded a full valuation allowance against deferred tax assets resulting from capital loss carry-overs of $184 and $271 , respectively, as the Company determined that it was unlikely the capital loss carry-overs would be utilized. Additionally, a valuation allowance of $267 was recorded on California research and development credit carryforwards that were added upon the acquisition of mophie. At December 31, 2017 , we had federal net operating loss carryforwards of approximately $18,854 , and state net operating loss carryforwards of $3,150 , which may be used to offset future taxable income. The net operating loss carryforwards will expire on various dates from 2034 through 2036. Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, which will result in taxable or deductible amounts in the future. In evaluating our ability to recover our deferred tax assets, the Company considers all available positive and negative evidence, including but not limited to scheduled reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies, and results of recent operations. The assumptions about future taxable income require the use of significant judgment and are consistent with the plans and estimates we are using to manage the underlying businesses. Additionally, we consider historical performance in our evaluation of the realizability of deferred tax assets, specifically, three years of cumulative operating income (loss). Weighing both the positive and negative evidence, management concludes no valuation allowance needs to be recorded at December 31, 2017 except for the items discussed above. 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. Moreover, historical data provides evidence of sustained profitability. Immediately prior to the enactment of the Tax Act on December 22, 2017, the Company had approximately $3,608 of undistributed foreign earnings. Upon passage of the Tax Act, all $3,608 of undistributed foreign earnings became subject to U.S. federal tax. The Company recorded a provisional amount for our one-time transition tax liability for our foreign subsidiaries, resulting in an increase in income tax expense of $547 . This amount may change when we finalize both the calculation of post-1986 foreign E&P previously deferred from U.S. federal taxation and the amounts held in cash or other specified assets. Future foreign earnings will be taxed according to regulatory calculations in the period earned or eligible for a 100% dividends received deduction. No additional income taxes or withholding taxes have been provided for any remaining undistributed foreign earnings not subject to the transition tax, or any additional outside basis difference inherent in these entities, as these amounts continue to be indefinitely reinvested in foreign operations. The Company recognizes the impact of a tax position in the financial statements if that position is more likely than not of being sustained upon audit, based on the technical merits of the position. As of December 31, 2017 and 2016 , the Company recorded a tax contingency of $2,278 and $2,230 , respectively. The tax contingencies are primarily related to the Company's global tax strategy, certain transactions in foreign jurisdictions in prior periods, and research and development credits taken for federal and state purposes. Another component of the tax contingency relates to the mophie acquisition which relate to research and development credits taken for federal and state purposes. The tax contingencies, on a gross basis, are reconciled in the table below: 2017 2016 Unrecognized tax benefits, as of January 1 $ 2,230 $ 1,265 Unrecognized tax benefits assumed in acquisition — 513 Gross increases (decreases) – tax positions in current period 444 479 Gross increases (decreases) – prior year tax positions 58 — Gross increases (decreases) – lapse of statute (454 ) (27 ) Total benefit $ 2,278 $ 2,230 As of December 31, 2017 , the Company's liability related to unrecognized tax benefits was $2,278 of which $1,323 would impact the Company’s effective tax rate if recognized. mophie, on a separate company basis, is currently under examination by the IRS for the years 2012 to 2015. The Company and the IRS have agreed to the audit findings, however, the audit is still subject to IRS Joint Committee review. The Company has agreed to the adjustments for the 2012 to 2015 years of the following: (1) an increase taxable income by $231 during the 2012 to 2014 period, (2) increase the research and development credit by $21 during the 2012 to 2014 period and (3) an adjustment of a $11,948 increase to taxable income in relation to bad debt reserve for the 2015 period. mophie is not currently under examination by any state tax authority, but remains subject to income tax examinations for each of its open tax years, which extend back to 2013 for federal income tax purposes and 2012 for state income tax purposes. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair Value of Financial Instruments At December 31, 2017 and 2016 , the Company’s financial instruments included cash and cash equivalents, accounts receivable, accounts payable, a line of credit, and a term loan. The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable approximates fair value due to the short-term maturities of these financial instruments. The carrying value of the debt balances approximate fair value because the variable interest rates reflect current market rates. |
Debt and Letters of Credit
Debt and Letters of Credit | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
DEBT AND LETTERS OF CREDIT | DEBT AND LETTERS OF CREDIT On March 3, 2016, the Company entered into a Credit and Security Agreement (“Credit and Security Agreement”) with KeyBank, as the administrative agent, KeyBanc Capital Markets Inc., JP Morgan Chase Bank, N.A. and ZB, N.A., dba Zions First National Bank. The Credit and Security Agreement provides an $85,000 revolving credit commitment (“Line of Credit”). Borrowings and repayments under the Line of Credit 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 Line of Credit are subject to a borrowing base limit, which is calculated from outstanding accounts receivable and inventory, and reported to the administrative agent at least monthly. Interest on the Line of Credit will accrue at the base rate plus 0.5% or LIBOR plus 1.5% . The Line of Credit is subject to an unused line fee calculated as 0.2% multiplied by the average unused amount of the Line of Credit. The Credit and Security Agreement also provides a $25,000 term loan commitment (“Term Loan”). Principal and interest payments on the Term Loan are to be made in consecutive monthly installments of $521 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 KeyBank. Line of Credit funds are swept into the Company's operating account when funds are needed based on draws on the operating account. 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. In connection with the establishment of the Credit and Security Agreement, the Company incurred and capitalized $1,144 of direct costs; $884 of the costs are related to the line of credit and as such are reflected as a component of other assets, and $260 was reflected as an offset to long-term debt in the consolidated balance sheet. For the years ended December 31, 2017 and 2016 , the Company amortized $263 and $202 of these loan costs respectively, which are included as a component of interest expense in the consolidated statements of operations. On July 17, 2017, ZAGG Inc, KeyBank National Association , Zions First National Bank, and JPMorgan Chase Bank, N.A. (collectively, the “Lenders”), and KeyBank, as the administrative agent for the Lenders, entered into a Third Amendment Agreement (“Amendment”), which amended the original Credit and Security Agreement as follows: • Increased the Maximum Revolving Amount, as defined in the Credit Agreement, from $85,000 to: ◦ $135,000 from July 17, 2017 to December 31, 2017; ◦ $110,000 from January 1, 2018 to May 31, 2018; and ◦ $100,000 from June 1, 2018, forward. • Expanded Permitted Foreign Subsidiary Loans, Guaranties and Investments, as defined in the Credit Agreement, to include: ◦ A $2,000 loan dated April 5, 2017, from the Company to ZAGG International Distribution Limited; and ◦ Any other loan or investment by the company or any domestic subsidiary of the Company in or to, or guaranty of indebtedness of, any foreign subsidiary of the Company for the period July 17, 2017, to March 31, 2018, in an aggregate amount not to exceed $8,000 . • Increased the Letter of Credit Commitment, as defined in the Credit Agreement, from $7,500 to an aggregate amount of $40,000 . • Increased the Borrowing Base, as defined the Credit Agreement, on a seasonal basis between August 1, 2017, and September 30, 2017, by $15,000 , which seasonal increase to the Borrowing Base was subsequently extended by the Lenders to October 31, 2017. In connection with the Amendment, the Company also entered into replacement revolving credit notes with each of the Lenders. As consideration for entering into the Amendment, the Company agreed to pay the administrative agent and Lenders total amendment and arrangement fees of $145 , pursuant to the terms of an administrative agent fee letter and a closing fee letter entered into with KeyBank. The changes to the Credit and Security Agreement described above were made to support core-business opportunities. Effective September 4, 2017, the Company directed KeyBank to establish an irrevocable standby letter of credit (“Letter of Credit”) to support purchases of inventory from a key supplier. The Credit Agreement requires that the face value of the Letter of Credit reduce the Borrowing Base under the existing Line of Credit. From September 4, 2017, through September 17, 2017, the face value amount of the Letter of Credit was $10,000 . From September 18, 2017, through February 28, 2018 (the end of the contractual period), the face value was increased to $25,000 . The Company agreed to pay interest at an annual rate of 1.625% calculated on the face value amount and paid quarterly, which interest is classified in interest expense on the consolidated statement of operations. Fees incurred associated with setting up the Letter of Credit for the year ended December 31, 2017 is $157 . Interest incurred for the available balance on the Letter of Credit for the year ended December 31, 2017 was $147 . No draws on the Letter of Credit occurred as of December 31, 2017 . For the years ended December 31, 2017 and 2016 , $129 and $65 , 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, 2017 , the outstanding balance on the Line of Credit was $23,475 . The interest rate on the Line of Credit was 3.00% for $20,000 of the balance, and 5.00% for $3,475 of the balance. At December 31, 2016 , the outstanding balance on the Line of Credit was $31,307 , and the interest rate on the entire balance on the Line of Credit was 2.21% . At December 31, 2017 , the weighted average interest rate on all outstanding borrowings under the Line of Credit was 3.30% . At December 31, 2016 , the weighted average interest rate on all outstanding borrowings under the Line of Credit was 2.21% . At December 31, 2017 , the interest rate on the Term Loan was 3.38% , and the effective rate was 3.01% . At December 31, 2016 , the interest rate on the Term Loan was 2.50% and effective rate was 3.16% . The Credit and Security Agreement includes a clause requiring a mandatory prepayment of a portion of the Term Loan calculated as 25% of Excess Cash Flows (as defined in the Credit and Security Agreement) for the year ended December 31, 2017 . Management performed the calculation as of December 31, 2017 and determined that a prepayment of $12,404 will be required under the terms of the Credit and Security Agreement, which will be due by April 15, 2018. The amount of the mandatory prepayment along with other scheduled monthly payments are included in the current portion of long-term debt, net of deferred loan costs on the consolidated balance sheet. For the year ended December 31, 2016 , the excess cash flow prepayment of $4,299 which was due on June 30, 2017 was permanently waived by a consent letter from the Lenders on June 23, 2017. Contractual future payments under the Credit and Security Agreement are as follows: Line of Credit Term Loan Total 2018 $ — $ 14,063 $ 14,063 2019 — — — 2020 23,475 — 23,475 Total $ 23,475 $ 14,063 $ 37,538 |
Restricted Stock
Restricted Stock | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
RESTRICTED STOCK | 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”). 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. 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. In April 2017, the compensation committee of the Company’s board of directors adopted, and in June 2017, the Company’s shareholders approved an amendment and restatement of the 2013 Plan (the “Amended Plan”). The Amended 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 Amended Plan’s initial share reservation is 5,000 shares. The term of the plan is for 10 years from the date of original adoption of the Amended Plan. As of December 31, 2017 , there were 2,498 shares available for grant under the Amended Plan. 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, 2017 , and changes during the year ended December 31, 2017 , is presented below: Restricted Stock (In thousands) Weighted-Average Grant Date Fair Value (Per share) Outstanding at December 31, 2016 766 $ 7.89 Granted 604 8.26 Vested (270 ) 7.13 Forfeited (66 ) 7.98 Outstanding at December 31, 2017 1,034 $ 8.29 As of December 31, 2017 , there was $5,072 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 1.2 years. 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 management estimates the performance criteria are probable to be achieved. During the years ended December 31, 2017 , 2016 , and 2015 , the Company recorded equity-based compensation expense of $3,602 , $3,830 , and $3,893 , respectively, which is included as a component of selling, general and administrative expense. The tax benefit recognized on equity-based compensation expense for the years ended December 31, 2017 , 2016 , and 2015 , was $1,378 , $1,465 , and $1,489 , respectively. The tax benefit realized from vested restricted stock for the years ended December 31, 2017 , 2016 , and 2015 , was $962 , $2,119 , and $1,014 , respectively. During the years ended December 31, 2017 , 2016 , and 2015 , certain ZAGG employees elected to receive a net amount of shares upon the vesting of restricted stock grants 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 $268 , $630 , and $724 , respectively, as a reduction to additional paid-in capital. |
Treasury Stock
Treasury Stock | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
TREASURY STOCK | TREASURY STOCK During 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. The Company’s board of directors also authorized the use of a Rule 10b5-1 plan, which was put into place during the fourth quarter of 2016. The 10b5-1 plan was subsequently terminated during the first quarter of 2017. As of December 31, 2017 and 2016 , a total of $17,558 and $19,049 remained authorized under the stock repurchase program, respectively. For the years ended December 31, 2017 and 2016 , the Company purchased 234 and 152 shares, respectively, of ZAGG Inc common stock. Cash consideration paid for the purchase of ZAGG Inc common stock for the years ended December 31, 2017 and 2016 was $1,492 and $951 , respectively, which included commissions paid to brokers of $9 and $6 , respectively. For the years ended December 31, 2017 and 2016 , the weighted average price per share was $6.35 and $6.27 , respectively. The consideration paid has been recorded within stockholders’ equity in the consolidated balance sheet. |
Defined Contribution Plan
Defined Contribution Plan | 12 Months Ended |
Dec. 31, 2017 | |
Defined Contribution Plan [Abstract] | |
DEFINED CONTRIBUTION PLAN | DEFINED CONTRIBUTION PLAN The Company offers a 401(k) plan for full-time employees that is effective on the first day of employment. The Company matches participant contributions of 100% up to 5% of an employees’ salary that is immediately vested. Costs recognized for the years ended December 31, 2017 , 2016 , and 2015 related to the employer 401(k) match totaled $1,298 , $941 , and $335 , respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Operating leases The Company leases office and warehouse space, office equipment, and a retail store location under operating leases that expire through 2025. Future minimum rental payments required under the operating leases at December 31, 2017 are as follows: 2018 $ 2,107 2019 1,594 2020 1,539 2021 1,465 2022 1,495 Thereafter 1,111 Total $ 9,311 For the years ended December 31, 2017 , 2016 and 2015 , rent expense was $2,847 , $3,190 , and $1,642 , respectively. Rent expense is recognized on a basis which approximates straight line over the lease term. Rent expense is recorded as a component of selling, general and administrative expense on the consolidated statement of operations. Commercial Litigation Daniel Huang, individually and as shareholder representative v. ZAGG Inc , Court of Chancery of the State of Delaware, C.A. No. 12842 (the “Huang Delaware Lawsuit”). On October 21, 2016, Daniel Huang, as the representative of the former mophie inc. shareholders, under the Merger Agreement as disclosed in Note 5 , filed the Huang Delaware Lawsuit alleging that the Company breached the Merger Agreement by failing to pay certain contingent payments (the “Contingent Payments”) related to tax refunds and customs duty recoveries and seeking damages in an amount no less than $11,420 . On December 16, 2016, the Company filed an Answer and Counterclaims in the lawsuit. In its Answer, the Company acknowledged its obligation under the Merger Agreement to make the Contingent Payments under certain circumstances, but averred that this obligation was subject to a right to withhold the tax refunds and customs duty recoveries received to date and, subject to the Court’s ruling on the Company’s Counterclaims, subsequently set-off its damages against the Contingent Payments. In its Answer, the Company denied that any payments were due at that time or that it was in breach of any provision of the Merger Agreement. Regarding the Counterclaims, after the closing of the merger, ZAGG discovered breaches of certain representations, warranties and covenants made by Huang and mophie that have resulted in damages exceeding $22,000 . On October 31, 2017, the Company and Daniel Huang as the representative of the former mophie inc. shareholders, entered into a settlement agreement (“Delaware Settlement Agreement”). The Delaware Settlement Agreement provides for a mutual general release of all claims asserted in the Huang Delaware Lawsuit, dismissal of the Huang Delaware Lawsuit with prejudice and that (1) the Company received the $2,000 in cash held in escrow in connection with the Merger Agreement, (2) the former mophie shareholders received $8,000 of the Contingent Payments in full settlement (“Settlement Amount”) of all claims asserted against the Company in the Huang Delaware Lawsuit, and (3) the Company retained the remaining Contingent Payments in full settlement of all claims asserted in the Counterclaim in the Huang Delaware Lawsuit, totaling $6,967 . The difference between the Contingent Payments recorded in purchase accounting and the Settlement Amount was recorded as a gain on the disputed mophie purchase price: Contingent payments recorded in purchase accounting $ 12,139 Cash collected from duty recoveries 2,828 Total contingent payments in accrued liabilities 14,967 Settlement amount 8,000 Gain on disputed mophie purchase price $ 6,967 ZAGG Inc et al. v. Daniel Huang et al. , Orange County Superior Court, State of California, Civil No. 30-2016-00892767-CU-BC-CJC (the “Huang California Lawsuit”). On December 15, 2016, ZAGG and mophie filed a complaint against Daniel Huang and Immotor, LLC (“Immotor”). The complaint alleged that Huang and the company he founded, Immotor, misappropriated confidential information belonging to mophie while Huang was serving as an officer and director of mophie. On October 31, 2017, the Company, mophie, Immotor and Daniel Huang entered into a settlement agreement (“California Settlement Agreement”). The California Settlement Agreement provides for a mutual general release of all claims asserted in the Huang California Lawsuit and of other claims asserted by Huang against the Company and mophie and that Huang would receive a non-exclusive license for certain power management technology for use solely in connection with two-wheeled vehicles. The Company continues to retain rights under a representations and warranties insurance policy obtained at the time of the acquisition of mophie to seek reimbursement for payments of third party claims or to recover losses relating to breaches of mophie’s representations and warranties, except in respect of the claims released in connection the dismissal of the Huang Delaware Lawsuit and the Huang California Lawsuit. The Huang California Lawsuit was dismissed with prejudice. Eric Stotz and Alan Charles v. mophie inc., U.S. District Court, Central District of California, Civil Action No. 2:16-cv-08898-GW-FFM. On January 13, 2017, Eric Stotz and Alan Charles, individually and on behalf of a purported class, filed a first amended class action complaint alleging that they purchased certain external battery packs and that the battery packs did not extend the life of the phones’ internal batteries as advertised and adversely affected the phones’ internal battery life. Plaintiffs allege violations of California’s unfair competition law, California’s Consumer Legal Remedies Act, New York’s unlawful deceptive acts and practices statute, and New York’s false advertising law. The case was settled by the Company in January 2018. The court ordered a dismissal with prejudice of all individual and putative class claims on January 23, 2018. The settlement amount is not considered material to the Company’s financial position, results of operations, or liquidity. 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 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. 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 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 establishes reserves when a particular contingency is probable and estimable. The Company has not accrued for any loss as of December 31, 2017, in the 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, 2017 | |
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, at times, exceed federally insured limits. The Company has not experienced any losses in cash accounts for the years ended December 31, 2017 , 2016 and 2015 . At December 31, 2017 , the balance of accounts receivable from two separate customers exceeded 10% : Superior Communications, Inc. (“Superior”) and Best Buy Co., Inc. (“Best Buy”). At December 31, 2016 , the balance of accounts receivable from three separate customers exceeded 10% : Superior, Best Buy, and GENCO Distribution Systems, Inc. (“GENCO”). 2017 2016 Superior 31 % 32 % Best Buy 18 % 22 % GENCO 7 % 10 % No other customer account balances were more than 10% of accounts receivable at December 31, 2017 or 2016 . 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 We do not directly manufacture any of our products, rather, we employ various third party manufacturing partners in the United States and Asia to perform these services on our behalf. The services employed by these third parties include the selection of sub-suppliers that provide raw materials and other components used in the manufacturing process. We have endeavored to use common components and readily available raw materials in the design of our products that can be sourced from multiple sub-suppliers. However, raw film used in our InvisibleShield film and InvisibleShield On-Demand (“ISOD”) products has been produced by a single supplier for many years. Our film supplier has contractually agreed to not sell the raw materials to any of our competitors. Below is a high-level summary by product category of the manufacturing sources used by the Company: • Screen Protection – Our screen product line is comprised of sales of InvisibleShield glass products, InvisibleShield film products, and ISOD film blanks. InvisibleShield glass products are sourced from factories in Asia with protective glass expertise, each of which uses a number of sub-suppliers for raw materials and other components. Our InvisibleShield film and ISOD products are sourced through our third-party logistics partner, who purchases the raw film inventory from a single supplier (as discussed above). • Battery Cases and Power Management – Our battery case and power management product lines consists of power products that are designed to provide on-the-go power for tablets, smartphones, laptops, cameras, and virtually all other electronic mobile devices. Our power products are sourced from factories in Asia with battery expertise, each of which uses a number of sub-suppliers for raw materials and other components. • Keyboards – Our keyboard product line consists of (1) device specific keyboards designed to fit individual tablets produced by original equipment manufacturers and (2) keyboards that are designed to be device agnostic and can be used on virtually any mobile device. Our keyboard products are sourced from factories in Asia with keyboard expertise, each of which uses a number of sub-suppliers for raw materials and other components. • Audio – Our audio product line consists of earbuds and headphones that are designed to be compatible with virtually all electronic mobile devices. Our audio products are sourced from factories in Asia with audio expertise, each of which uses a number of sub-suppliers for raw materials and other components. Our product and operations teams work closely with suppliers from initial product development and throughout the manufacturing process to ensure that (1) the supplier understands, and will build according to, the product specifications, (2) appropriate quality is maintained for the finished goods and for all sub-components, and (3) the supplier can meet our supply needs. Concentration of sales For the year ended December 31, 2017 , Superior was our largest customer and accounted for greater than 10% of net sales. For the years ended December 31, 2016 and 2015 , Superior, Best Buy, and GENCO were our largest customers. The amount of net sales for each of these customers are outlined as follows: 2017 2016 2015 Superior 30 % 27 % 17 % Best Buy 9 % 11 % 20 % GENCO 8 % 11 % 11 % During 2017 , 2016 , and 2015 , no other customers accounted for greater than 10% of net sales. Although we have contracts in place governing our relationships with customers, the contracts are not long-term and all of our retailers generally purchase from us on a purchase order basis. As a result, these retailers generally may, with little or no notice or penalty, cease ordering and selling our products, or materially reduce their orders. If any of these retailers cease selling our products, slow their rate of purchase of our products, or decrease the number of products they purchase, our results of operations could be adversely affected. The percentage of net sales by geographic region for the years ended December 31, 2017 , 2016 and 2015 , was approximately: 2017 2016 2015 United States 84 % 88 % 91 % Europe 9 % 7 % 8 % Other 7 % 5 % 1 % At December 31, 2017 and 2016 , net assets located overseas in international locations totaled $16,249 and $16,588 , respectively. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING As of June 30, 2017, the Company reported financial information on the following reportable segments: ZAGG and mophie. During the third quarter of 2017, management completed the consolidation of a number of ZAGG/mophie processes and functions, including the merging of the mophie enterprise resource planning (“ERP”) system into ZAGG’s ERP system. In addition, the executive team and related responsibilities were re-aligned such that global functional teams are directly managed by an executive from the corporate headquarters. These merged functional areas include the following: sales, marketing, product management, product development, operations, customer service, accounting, finance, legal, human resources, and IT. In addition, as the Company has continued to evolve as a mobile lifestyle company, the information regularly reviewed by the chief operating decision maker is at the consolidated level for all types of products and services generated by the Company, including relevant sales and budget reviews. Due to the changes described above, management reassessed its reportable segments during the third quarter of 2017, and concluded that the Company is a single reportable segment. As such, the Company has only one reportable segment as of December 31, 2017 . |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | QUARTERLY FINANCIAL DATA (UNAUDITED) Quarterly financial information is presented in the following summary: For the Year Ended December 31, 2017 First Second Third Fourth Year Net sales $ 92,946 $ 115,227 $ 134,398 $ 176,924 $ 519,495 Income (loss) from operations (6,649 ) 5,497 15,935 29,952 44,735 Net income (loss) (6,138 ) 3,403 9,776 8,059 15,100 Earnings (loss) per share: (1) Basic $ (0.22 ) $ 0.12 $ 0.35 $ 0.29 $ 0.54 Diluted (0.22 ) 0.12 0.34 0.28 0.53 Weighted average common shares: Basic 28,059 27,963 27,969 27,969 27,996 Diluted 28,059 28,213 28,381 28,781 28,407 For the Year Ended December 31, 2016 First Second Third Fourth Year Net sales $ 62,432 $ 99,833 $ 124,662 $ 114,930 $ 401,857 Loss from operations (3,703 ) (1,352 ) (12,710 ) (3,595 ) (21,360 ) Net loss (3,290 ) (1,046 ) (7,105 ) (4,146 ) (15,587 ) Loss per share: (1) Basic $ (0.12 ) $ (0.04 ) $ (0.25 ) $ (0.15 ) $ (0.56 ) Diluted (0.12 ) (0.04 ) (0.25 ) (0.15 ) (0.56 ) Weighted average common shares: Basic 27,710 28,126 28,125 28,061 28,006 Diluted 27,710 28,126 28,125 28,061 28,006 (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 S24
Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
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 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. All intercompany transactions and balances have been eliminated in consolidation. |
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, 2017 and 2016 totaled $116 and $264 , respectively. Cash equivalents as of December 31, 2017 and 2016 , 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 |
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 net realizable value. 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. |
Goodwill | Goodwill At least annually and when events and circumstances warrant an evaluation, we perform our impairment assessment of goodwill. This assessment initially permits an entity to make a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the goodwill impairment test. If an entity concludes that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, it would not need to perform the impairment test for the reporting unit. If it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the impairment analysis is performed, which incorporates a fair-value based approach. We determine the fair value of our reporting units based on discounted cash flows and market approach analyses as considered necessary. We consider factors such as the economy, reduced expectations for future cash flows coupled with a decline in the market price of our stock and market capitalization for a sustained period as indicators for potential goodwill impairment. If the reporting unit’s carrying amount exceeds its fair value, an entity will record an impairment charge based on that difference. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. |
Intangibles assets | Intangible assets Intangible assets include internet addresses, intellectual property, and acquired intangibles in connection with the acquisitions of IFROGZ and mophie, which include patents, technology, customer relationships, trademarks, tradenames, non-compete agreements, and other miscellaneous intangible assets. Long-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 amortizing intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, recoverability of long-lived assets is measured by comparison of its carrying amount to the undiscounted cash flows that the asset or asset group is expected to generate over the remaining life in measuring whether the assets are recoverable. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values, and third-party independent appraisals, as considered necessary. |
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 or risk of loss has transferred to the customer, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. Revenue is recognized net of any taxes collected from customers and subsequently remitted to governmental authorities. 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 www.mophie.com and our corporate-owned and third-party-owned mall kiosks and ZAGG-branded stores; 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 as risk of loss has transferred to the customer at this point. 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 the return information is incorporated into the calculation of 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. |
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. On December 22, 2017, the U.S. government enacted comprehensive tax legislation (the “Tax Act”), which significantly revises the ongoing U.S. corporate income tax law by lowering the U.S. federal corporate income tax rate from 35% to 21% , implementing a territorial tax system, imposing one-time tax on foreign unremitted earnings and setting limitations on deductibility of certain costs, among other things. The Company re-measured certain deferred tax assets based on the rates at which they are expected to reverse in the future, which is generally 21% . However, we are still analyzing certain aspects of the Tax Act and refining our calculations, which could potentially affect the measurement of these balances or give rise to new deferred tax amounts. The provisional amount recorded related to the re-measurement of our deferred tax balance was a tax expense of $11,806 . The Company accrued a reasonable estimate of $547 of tax expense for the Tax Act’s one-time transition tax on the foreign subsidiaries’ accumulated, unremitted earnings. This amount includes the projected effect of foreign tax credits as well as projected state tax effects. 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’s intention before enactment of the Tax Act was to permanently reinvest these earnings, thereby indefinitely postponing their remittance to the U.S. This will continue to be the Company’s intention. The Company recorded a provisional amount for our one-time transition tax liability for our foreign subsidiaries, resulting in an increase in income tax expense of $547 . The Company will continue to evaluate the impact of the tax law change as it relates to its foreign entities. Future foreign earnings will be taxed according to regulatory calculations in the period earned or eligible for a 100% dividends received deduction. No additional income taxes or withholding taxes have been provided for any remaining undistributed foreign earnings not subject to the transition tax, or any additional outside basis difference inherent in these entities, as these amounts continue to be indefinitely reinvested in foreign operations. |
Stock-based compensation | Stock-based compensation The Company recognizes stock-based compensation expense in its consolidated financial statements for restricted stock unit awards granted to employees. 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 Company recognizes compensation expense net of estimated forfeitures on a straight-line basis over the requisite service period of the award, which is generally the vesting term of the award. The Company recognizes compensation expense on a straight-line basis for those performance-based awards that management estimates the performance criteria are probable to be achieved. No compensation expense is ultimately recognized for awards for which employees do not render the requisite service and are forfeited. |
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. |
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 in Ireland and the Netherlands, while the Renminbi is the functional currency of the Company’s subsidiary in China. 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. |
Earnings (loss) per share | Earnings (loss) per share Basic earnings (loss) per common share excludes dilution and is computed by dividing net income (loss) attributable to stockholders 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 restricted stock units, stock options, warrants or other common stock equivalents were released, exercised or otherwise converted into common stock. The dilutive effect of common stock equivalents is calculated using the treasury stock method. |
Business combinations | Business combinations We allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. The excess of the purchase price over these fair values is recorded as goodwill. We engaged an independent third-party valuation firm to assist us in determining the fair values of certain assets acquired and liabilities assumed. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. The significant purchased classes of intangible assets recorded by us include tradenames, technology, customer relationships, non-compete agreements, and backlog. The fair values assigned to the identified intangible assets are discussed in Note 5 to the consolidated financial statements. Significant estimates in valuing certain intangible assets include but are not limited to: future expected cash flows related to each individual asset, market position of the tradenames and assumptions about cash flow savings from the tradenames, determination of useful lives, and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and thus, actual results may differ from estimates. |
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 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. The ASU may be adopted utilizing one of two methods. The first method is to adopt the ASU by recording the effect of the guidance in the ASU retrospectively to each prior period presented in the period of adoption. The second method is to adopt the ASU by recording the effect of the guidance in the ASU retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application. 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. In May 2016, the FASB issued ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 606) - Narrow-Scope Improvements and Practical Expedients”. The amendments and practical expedients presented in the ASU aim to simplify the transition to the new standard, to provide practical expedients for transition and sales taxes, and to clarify certain aspects of the standard. The Company will adopt the ASU on January 1, 2018, using the modified retrospective approach, with the cumulative effect of initially adopting the new standard recognized in retained earnings at the date of adoption. For most of the Company’s revenue arrangements, no significant impacts are expected as these transactions are not accounted for under industry-specific guidance that will be superseded by the ASU and generally consist of a single performance obligation to transfer promised goods or services. The Company does not expect the adoption of the ASU to have a material impact on its consolidated results of operations. However, provisions for post-invoice sales discounts and miscellaneous credits will be recognized on a gross basis as sales return liability and the estimated cost of inventory associated with the provision for sales returns will be recorded on a gross basis within prepaid expenses and other current assets on the consolidated balance sheets. Additionally, the Company expects increased disclosure of its revenue by key product lines, key distribution channels, judgments and changes in judgments. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)”, which requires lessees to recognize most leases, including operating leases, on-balance sheet via a right of use asset and lease liability. Lessees are allowed to account for short-term leases (i.e., leases with a term of 12 months or less) off-balance sheet, consistent with current operating lease accounting. A number of other significant changes to lease accounting have been effected through the issuance of this standard. The requirements of the new standard for leases shall be recognized and measured at the beginning of the earliest comparative period presented. When adopted, the Company will be required to adjust equity at the beginning of the earliest comparative period presented, and the other comparative amounts disclosed for each prior period presented in the financial statements, as if the requirements of the new standard had always been applied. The new standard also contains practical expedients which the Company may elect to follow. The new standard is effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements, including whether to elect the practical expedients outlined in the new standard. In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory,” which requires entities to recognize at the transaction date the income tax consequences of intercompany asset transfers other than inventory. This ASU is effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2017. The Company will adopt this standard in the first quarter of 2018. The adoption of this standard is not expected to have a material impact on our financial position or results of operations. |
Organization and Summary of S25
Organization and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Schedule of allowance for doubtful accounts activity | The following summarizes the activity in the Company’s allowance for doubtful accounts for the years ended December 31, 2017 , 2016 and 2015 : 2017 2016 2015 Balance at beginning of year $ 824 $ 568 $ 1,910 Additions charged to expense 339 599 243 Assumed in acquisition of mophie — 91 — Write-offs charged against the allowance (444 ) (430 ) (1,585 ) Foreign currency translation gain (loss) 15 (4 ) — Balance at end of year $ 734 $ 824 $ 568 |
Schedule of sales return, warranty, and other credits liability | The following summarizes the activity in the Company’s sales return, warranty, and other credits liability for the years ended December 31, 2017 , 2016 and 2015 : 2017 2016 2015 Balance at beginning of year $ 28,373 $ 7,849 $ 8,674 Additions charged to sales 90,018 92,868 43,320 Assumed in acquisition of mophie — 29,584 — Sales returns & warranty claims charged against reserve (86,299 ) (101,928 ) (44,145 ) Foreign currency translation loss 97 — — Balance at end of year $ 32,189 $ 28,373 $ 7,849 |
Schedule of reconciliation of numerator and denominator used to calculate basic earnings per share and diluted earnings per share | 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, 2017 , 2016 and 2015 : 2017 2016 2015 Net (loss) income $ 15,100 $ (15,587 ) $ 15,587 Weighted average shares outstanding: Basic 27,996 28,006 28,773 Dilutive effect of stock options, restricted stock, and warrants 411 — 316 Diluted 28,407 28,006 29,089 Earnings (loss) per share: Basic $ 0.54 $ (0.56 ) $ 0.54 Dilutive $ 0.53 $ (0.56 ) $ 0.54 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | Inventory consisted of the following components at December 31, 2017 and 2016 : 2017 2016 Finished goods $ 74,734 $ 72,490 Raw materials 312 279 Total inventories $ 75,046 $ 72,769 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment, net | Property and equipment, net consisted of the following at December 31, 2017 and 2016 : Useful Lives 2017 2016 Computer equipment and software 2 to 5 years $ 2,163 $ 3,634 Equipment and molds 2 to 10 years 12,395 16,609 Furniture and fixtures 1 to 7 years 1,824 3,409 Automobiles 5 years 126 230 Building and improvements 40 years 3,332 2,270 Land 325 325 Leasehold improvements 1 to 5 years 5,819 9,649 25,984 36,126 Less accumulated depreciation and amortization (12,540 ) (18,371 ) Property and equipment, net $ 13,444 $ 17,755 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in goodwill | The following table summarizes the changes in goodwill during 2016: Balance at December 31, 2015 $ — Increase due to acquisitions 12,272 Balance at December 31, 2016 $ 12,272 |
Schedule of long-lived intangibles | Long-lived Intangibles December 31, 2017 Gross Carrying Amount Impairments Accumulated Amortization Net Carrying Amount Weighted Average Amortization Period Customer relationships $ 49,700 $ — $ (40,441 ) $ 9,259 7.5 years Tradenames 31,269 — (13,415 ) 17,854 9.8 years Patents and technology 21,228 (2,777 ) (7,470 ) 10,981 8.8 years Non-compete agreements 5,896 — (4,759 ) 1,137 4.9 years Other 567 — (554 ) 13 2.4 years Total amortizable assets $ 108,660 $ (2,777 ) $ (66,639 ) $ 39,244 8.2 years December 31, 2016 Gross Carrying Amount Acquisitions Accumulated Amortization Net Carrying Amount Weighted Average Amortization Period Customer relationships $ 41,500 $ 8,200 $ (35,088 ) $ 14,612 7.5 years Tradenames 12,921 18,348 (9,763 ) 21,506 9.8 years Patents and technology 6,003 15,225 (5,501 ) 15,727 8.8 years Non-compete agreements 4,100 1,796 (4,399 ) 1,497 4.9 years Other 324 243 (547 ) 20 2.4 years Total amortizable assets $ 64,848 $ 43,812 $ (55,298 ) $ 53,362 8.2 years |
Schedule of estimated future amortization expense for long-lived intangibles | Estimated future amortization expense for long-lived intangibles is as follows: 2018 $ 11,171 2019 9,122 2020 6,454 2021 3,876 2022 2,766 Thereafter 5,855 Total $ 39,244 |
Acquisition of Mophie Inc. (Tab
Acquisition of Mophie Inc. (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Summary of purchase consideration | The following summarizes the components of the purchase consideration as of March 3, 2016: Preliminary Allocation March 3, 2016 Adjustments to Working Capital and Fair Value Final Allocation March 3, 2016 Cash consideration $ 100,000 $ — $ 100,000 Negative working capital at Acquisition Date (23,478 ) — (23,478 ) Additional negative working capital deficit — (26,317 ) (26,317 ) Contingent payments 11,283 856 12,139 Total purchase price $ 87,805 $ (25,461 ) $ 62,344 |
Schedule of identifiable assets acquired and liabilities assumed | The following table summarizes the final fair values of the identifiable assets acquired and liabilities assumed as of the Acquisition Date: Cash and cash equivalents $ 1,779 Trade receivables (gross contractual receivables of $12,914) 12,823 Inventories 24,911 Prepaid expenses and other assets 1,073 Income tax receivable 11,814 Deferred tax assets 16,168 Property and equipment 10,191 Land held for sale 325 Amortizable identifiable intangible assets 43,812 Goodwill 12,272 Accounts payable (37,359 ) Income tax payable (196 ) Accrued liabilities (5,163 ) Deferred revenue (9 ) Sales returns liability (29,584 ) Other noncurrent liabilities (513 ) Total $ 62,344 |
Summary of assets acquired and liabilities assumed purchase price allocation | The following table summarizes the purchase price allocation as of March 3, 2016: Preliminary Purchase Price Allocation March 3, 2016 Adjustments to Working Capital and Fair Value Final Purchase Price Allocation March 3, 2016 Cash and cash equivalents $ 1,779 $ — $ 1,779 Trade receivables 13,483 (660 ) 12,823 Inventories 32,335 (10,010 ) 22,325 Inventory step-up 6,937 (4,351 ) 2,586 Prepaid expenses 485 215 700 Other assets 200 173 373 Income tax receivable 10,958 856 11,814 Deferred tax assets 24,925 (8,757 ) 16,168 Property and equipment 10,191 — 10,191 Land held for sale 325 — 325 Amortizable identifiable intangible assets 45,463 (1,651 ) 43,812 Goodwill 14,092 (1,820 ) 12,272 Accounts payable (34,228 ) (3,131 ) (37,359 ) Income tax payable (196 ) — (196 ) Accrued liabilities (5,185 ) 22 (5,163 ) Deferred revenue (800 ) 791 (9 ) Sales returns liability (14,468 ) (15,116 ) (29,584 ) Deferred tax liabilities (17,978 ) 17,978 — Other noncurrent liabilities (513 ) — (513 ) Total $ 87,805 $ (25,461 ) $ 62,344 |
Summary of intangible asset class and related preliminary weighted average amortization periods | The amounts assigned to each class of intangible asset and the related weighted average amortization periods are as follows: Intangible asset class Weighted-average amortization period Tradenames $ 18,348 10.0 years Patents and technology 15,225 7.5 years Customer relationships 8,200 5.0 years Non-compete agreements 1,796 5.0 years Backlog 243 0.3 years Total $ 43,812 |
Summary of unaudited pro-forma results of operations | The following unaudited pro-forma results of operations for the 12 months ended December 31, 2016 and 2015 give pro forma effect as if the acquisition and borrowings used to finance the acquisition had occurred on January 1, 2015, 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. 12 Months Ended December 31, 2016 December 31, 2015 Net sales $ 419,183 $ 455,165 Net loss $ (17,487 ) $ (5,393 ) Basic loss per share $ (0.62 ) $ (0.19 ) Diluted loss per share $ (0.62 ) $ (0.19 ) |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Summary of income (loss) from continuing operations before taxes | Income (loss) from continuing operations before taxes for the years ended December 31, 2017 , 2016 , and 2015 consisted of the following: 2017 2016 2015 US operations $ 37,850 $ (22,220 ) $ 26,852 Foreign operations 5,502 (1,339 ) (1,154 ) Total $ 43,352 $ (23,559 ) $ 25,698 |
Summary of income tax benefit (provision) | The components of income tax benefit (provision) for the years ended December 31, 2017 , 2016 and 2015 , are: 2017 2016 2015 Current benefit (provision): Federal $ (779 ) $ (89 ) $ (9,429 ) State (532 ) 138 (1,783 ) Foreign (786 ) (31 ) (61 ) Total current (2,097 ) 18 (11,273 ) Deferred benefit (provision): Federal (25,919 ) 7,612 973 State (345 ) 342 189 Foreign 109 — — Total deferred (26,155 ) 7,954 1,162 Total benefit (provision) $ (28,252 ) $ 7,972 $ (10,111 ) |
Schedule of effective income tax rate reconciliation | 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, 2017 , 2016 and 2015 : 2017 2016 2015 Tax at statutory rate (35%) (15,173 ) 8,246 (8,994 ) State tax, net of federal tax benefit (1,217 ) 1,041 (1,089 ) Non-deductible expense and other (830 ) 333 116 Restricted stock units (831 ) — — Foreign tax rate differential 1,248 (491 ) (464 ) Domestic production activities deduction — — 459 Mandatory repatriation of foreign earnings (547 ) — — Return to provision adjustment (212 ) (36 ) 126 Reserve related to unrecognized tax benefits 107 (452 ) (264 ) Interest and penalties (1 ) (14 ) (1 ) Effect of federal rate change (11,806 ) — — Effect of state rate changes, net of federal tax benefit 1,010 (655 ) — (28,252 ) 7,972 (10,111 ) |
Summary of deferred tax assets and liabilities | Significant components of our deferred tax assets and liabilities are as follows: 2017 2016 Deferred tax assets: Allowance for doubtful accounts $ 146 $ 286 Property and equipment 396 — Deferred revenue 11 27 Inventories 7,265 12,724 Stock-based compensation 790 1,857 Sales returns accrual 4,343 7,788 Acquisition costs, net of amortization 116 191 Intangible assets 2,230 77 Goodwill 1,009 1,663 HzO investment 1,007 1,483 Capital loss carry-over 184 271 Reserve on note receivable — 328 Net operating loss carryforward 3,338 21,313 Federal and state credit carryforwards 3,440 2,816 Other liabilities 1,586 1,619 Total gross deferred tax assets 25,861 52,443 Valuation allowance (1,458 ) (1,753 ) Total deferred tax assets $ 24,403 $ 50,690 Deferred tax liabilities: Property and equipment $ — $ 323 Other — 4 Total gross deferred tax liabilities — 327 Net deferred tax assets $ 24,403 $ 50,363 |
Schedule of unrecognized tax benefits | The tax contingencies, on a gross basis, are reconciled in the table below: 2017 2016 Unrecognized tax benefits, as of January 1 $ 2,230 $ 1,265 Unrecognized tax benefits assumed in acquisition — 513 Gross increases (decreases) – tax positions in current period 444 479 Gross increases (decreases) – prior year tax positions 58 — Gross increases (decreases) – lapse of statute (454 ) (27 ) Total benefit $ 2,278 $ 2,230 |
Debt and Letters of Credit (Tab
Debt and Letters of Credit (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Scedule of contractual future payments under the credit and security agreement | Contractual future payments under the Credit and Security Agreement are as follows: Line of Credit Term Loan Total 2018 $ — $ 14,063 $ 14,063 2019 — — — 2020 23,475 — 23,475 Total $ 23,475 $ 14,063 $ 37,538 |
Restricted Stock (Tables)
Restricted Stock (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of restricted stock activity | 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, 2017 , and changes during the year ended December 31, 2017 , is presented below: Restricted Stock (In thousands) Weighted-Average Grant Date Fair Value (Per share) Outstanding at December 31, 2016 766 $ 7.89 Granted 604 8.26 Vested (270 ) 7.13 Forfeited (66 ) 7.98 Outstanding at December 31, 2017 1,034 $ 8.29 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum rental payments required under the operating leases | The Company leases office and warehouse space, office equipment, and a retail store location under operating leases that expire through 2025. Future minimum rental payments required under the operating leases at December 31, 2017 are as follows: 2018 $ 2,107 2019 1,594 2020 1,539 2021 1,465 2022 1,495 Thereafter 1,111 Total $ 9,311 |
Schedule of Business Acquisitions by Acquisition, Contingent Consideration | The difference between the Contingent Payments recorded in purchase accounting and the Settlement Amount was recorded as a gain on the disputed mophie purchase price: Contingent payments recorded in purchase accounting $ 12,139 Cash collected from duty recoveries 2,828 Total contingent payments in accrued liabilities 14,967 Settlement amount 8,000 Gain on disputed mophie purchase price $ 6,967 |
Concentrations (Tables)
Concentrations (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Risks and Uncertainties [Abstract] | |
Schedules of concentration of accounts receivable and sales | 2017 2016 Superior 31 % 32 % Best Buy 18 % 22 % GENCO 7 % 10 % The amount of net sales for each of these customers are outlined as follows: 2017 2016 2015 Superior 30 % 27 % 17 % Best Buy 9 % 11 % 20 % GENCO 8 % 11 % 11 % |
Schedule of percentage of sales by geographic region | The percentage of net sales by geographic region for the years ended December 31, 2017 , 2016 and 2015 , was approximately: 2017 2016 2015 United States 84 % 88 % 91 % Europe 9 % 7 % 8 % Other 7 % 5 % 1 % |
Quarterly Financial Data (Una35
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly financial information | Quarterly financial information is presented in the following summary: For the Year Ended December 31, 2017 First Second Third Fourth Year Net sales $ 92,946 $ 115,227 $ 134,398 $ 176,924 $ 519,495 Income (loss) from operations (6,649 ) 5,497 15,935 29,952 44,735 Net income (loss) (6,138 ) 3,403 9,776 8,059 15,100 Earnings (loss) per share: (1) Basic $ (0.22 ) $ 0.12 $ 0.35 $ 0.29 $ 0.54 Diluted (0.22 ) 0.12 0.34 0.28 0.53 Weighted average common shares: Basic 28,059 27,963 27,969 27,969 27,996 Diluted 28,059 28,213 28,381 28,781 28,407 For the Year Ended December 31, 2016 First Second Third Fourth Year Net sales $ 62,432 $ 99,833 $ 124,662 $ 114,930 $ 401,857 Loss from operations (3,703 ) (1,352 ) (12,710 ) (3,595 ) (21,360 ) Net loss (3,290 ) (1,046 ) (7,105 ) (4,146 ) (15,587 ) Loss per share: (1) Basic $ (0.12 ) $ (0.04 ) $ (0.25 ) $ (0.15 ) $ (0.56 ) Diluted (0.12 ) (0.04 ) (0.25 ) (0.15 ) (0.56 ) Weighted average common shares: Basic 27,710 28,126 28,125 28,061 28,006 Diluted 27,710 28,126 28,125 28,061 28,006 (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 S36
Organization and Summary of Significant Accounting Policies - Allowance For Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Allowance for Doubtful Accounts [Roll Forward] | |||
Balance at beginning of year | $ 824 | $ 568 | $ 1,910 |
Additions charged to expense | 339 | 599 | 243 |
Assumed in acquisition of mophie | 0 | 91 | 0 |
Write-offs charged against the allowance | (444) | (430) | (1,585) |
Foreign currency translation gain (loss) | 15 | (4) | 0 |
Balance at end of year | $ 734 | $ 824 | $ 568 |
Organization and Summary of S37
Organization and Summary of Significant Accounting Policies - Sales Return, Waranty, and Other Credits Liability (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Sales Return and Warranty Liability [Roll Forward] | |||
Balance at beginning of year | $ 28,373 | $ 7,849 | $ 8,674 |
Additions charged to sales | 90,018 | 92,868 | 43,320 |
Assumed in acquisition of mophie | 0 | 29,584 | 0 |
Sales returns & warranty claims charged against reserve | (86,299) | (101,928) | (44,145) |
Foreign currency translation loss | 97 | 0 | 0 |
Balance at ending of year | $ 32,189 | $ 28,373 | $ 7,849 |
Organization and Summary of S38
Organization and Summary of Significant Accounting Policies - Reconciliation of Basic and Dilutive Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | |||||||||||
Net income (loss) | $ 15,100 | $ (15,587) | $ 15,587 | ||||||||
Weighted average shares outstanding: | |||||||||||
Basic (in shares) | 27,969 | 27,969 | 27,963 | 28,059 | 28,061 | 28,125 | 28,126 | 27,710 | 27,996 | 28,006 | 28,773 |
Dilutive effect of stock options, restricted stock, and warrants (in shares) | 411 | 0 | 316 | ||||||||
Diluted (in shares) | 28,781 | 28,381 | 28,213 | 28,059 | 28,061 | 28,125 | 28,126 | 27,710 | 28,407 | 28,006 | 29,089 |
Earnings (loss) per share: | |||||||||||
Basic (in usd per share) | $ 0.29 | $ 0.35 | $ 0.12 | $ (0.22) | $ (0.15) | $ (0.25) | $ (0.04) | $ (0.12) | $ 0.54 | $ (0.56) | $ 0.54 |
Dilutive (in usd per share) | $ 0.28 | $ 0.34 | $ 0.12 | $ (0.22) | $ (0.15) | $ (0.25) | $ (0.04) | $ (0.12) | $ 0.53 | $ (0.56) | $ 0.54 |
Organization and Summary of S39
Organization and Summary of Significant Accounting Policies - Narrative (Details) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Organization and summary of significant accounting policies (Textual) | |||
Amounts receivable from credit card processors | $ 116 | $ 264 | |
Revaluation of deferred income taxes from U.S. tax reform | 11,806 | 0 | $ 0 |
Transition tax on accumulated foreign earnings, amount | $ 547 | ||
Percentage of recognized income tax positions | 50.00% | ||
Advertising expense | $ 11,101 | 12,440 | 10,436 |
Gains (losses) from foreign currency transactions | $ 590 | $ (144) | $ 52 |
Antidilutive securities excluded from calculation of diluted earnings per share (in shares) | 19 | 815 | 250 |
Inventories - Components Of Inv
Inventories - Components Of Inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 74,734 | $ 72,490 |
Raw materials | 312 | 279 |
Total inventories | $ 75,046 | $ 72,769 |
Inventories - Narrative (Detail
Inventories - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Inventory deposits with third-party manufacturers | $ 1,906 | $ 437 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 25,984 | $ 36,126 |
Less accumulated depreciation and amortization | (12,540) | (18,371) |
Property and equipment, net | 13,444 | 17,755 |
Computer equipment and software | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 2,163 | 3,634 |
Computer equipment and software | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful Lives | 2 years | |
Computer equipment and software | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful Lives | 5 years | |
Equipment and molds | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 12,395 | 16,609 |
Equipment and molds | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful Lives | 2 years | |
Equipment and molds | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful Lives | 10 years | |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 1,824 | 3,409 |
Furniture and fixtures | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful Lives | 1 year | |
Furniture and fixtures | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful Lives | 7 years | |
Automobiles | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 126 | 230 |
Useful Lives | 5 years | |
Building and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 3,332 | 2,270 |
Useful Lives | 40 years | |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 325 | 325 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 5,819 | $ 9,649 |
Leasehold improvements | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful Lives | 1 year | |
Leasehold improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful Lives | 5 years |
Goodwill and Intangible Asset43
Goodwill and Intangible Assets - Goodwill Rollforward (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill [Roll Forward] | ||
Beginning Balance | $ 12,272,000 | $ 0 |
Increase due to acquisitions | 0 | 12,272,000 |
Ending Balance | $ 12,272,000 | $ 12,272,000 |
Goodwill and Intangible Asset44
Goodwill and Intangible Assets - Schedule of Long-lived Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 108,660 | $ 64,848 |
Impairments | (2,777) | |
Acquisitions | 43,812 | |
Accumulated Amortization | (66,639) | (55,298) |
Net Carrying Amount | $ 39,244 | $ 53,362 |
Weighted Average Amortization Period | 8 years 2 months 12 days | 8 years 2 months 12 days |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 49,700 | $ 41,500 |
Impairments | 0 | |
Acquisitions | 8,200 | |
Accumulated Amortization | (40,441) | (35,088) |
Net Carrying Amount | $ 9,259 | $ 14,612 |
Weighted Average Amortization Period | 7 years 6 months | 7 years 6 months |
Tradenames | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 31,269 | $ 12,921 |
Impairments | 0 | |
Acquisitions | 18,348 | |
Accumulated Amortization | (13,415) | (9,763) |
Net Carrying Amount | $ 17,854 | $ 21,506 |
Weighted Average Amortization Period | 9 years 9 months 18 days | 9 years 9 months 18 days |
Patents and technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 21,228 | $ 6,003 |
Impairments | (2,777) | |
Acquisitions | 15,225 | |
Accumulated Amortization | (7,470) | (5,501) |
Net Carrying Amount | $ 10,981 | $ 15,727 |
Weighted Average Amortization Period | 8 years 9 months 18 days | 8 years 9 months 18 days |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 5,896 | $ 4,100 |
Impairments | 0 | |
Acquisitions | 1,796 | |
Accumulated Amortization | (4,759) | (4,399) |
Net Carrying Amount | $ 1,137 | $ 1,497 |
Weighted Average Amortization Period | 4 years 10 months 24 days | 4 years 10 months 24 days |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 567 | $ 324 |
Impairments | 0 | |
Acquisitions | 243 | |
Accumulated Amortization | (554) | (547) |
Net Carrying Amount | $ 13 | $ 20 |
Weighted Average Amortization Period | 2 years 4 months 24 days | 2 years 4 months 24 days |
Goodwill and Intangible Asset45
Goodwill and Intangible Assets - Future Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2,018 | $ 11,171 | |
2,019 | 9,122 | |
2,020 | 6,454 | |
2,021 | 3,876 | |
2,022 | 2,766 | |
Thereafter | 5,855 | |
Total | $ 39,244 | $ 53,362 |
Goodwill and Intangible Asset46
Goodwill and Intangible Assets - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | |||
Increase in goodwill | $ 0 | $ 12,272,000 | |
Goodwill | 12,272,000 | 12,272,000 | $ 0 |
Goodwill, impairment | 0 | ||
Impairments on cancelled patent | 2,777,000 | ||
Impairment of intangible asset | 1,959,000 | 0 | 0 |
Net carrying value | 39,244,000 | 53,362,000 | |
Impairment of intangible asset | 12,047,000 | 13,385,000 | 8,453,000 |
Canceled Patent | |||
Finite-Lived Intangible Assets [Line Items] | |||
Impairments on cancelled patent | 2,777,000 | ||
Write-off of accumulated amortization on intangible assets | 818,000 | ||
Impairment of intangible asset | 1,959,000 | ||
Net carrying value | 0 | ||
Operating Expense | |||
Finite-Lived Intangible Assets [Line Items] | |||
Impairment of intangible asset | 12,159,000 | 13,495,000 | 8,562,000 |
Cost of Sales | |||
Finite-Lived Intangible Assets [Line Items] | |||
Impairment of intangible asset | $ 112,000 | $ 110,000 | $ 109,000 |
Acquisition of Mophie Inc. - Pu
Acquisition of Mophie Inc. - Purchase Consideration (Details) - Mophie Inc - USD ($) $ in Thousands | Mar. 03, 2016 | Oct. 31, 2017 |
Business Acquisition [Line Items] | ||
Cash consideration | $ 100,000 | |
Negative working capital at Acquisition Date | (23,478) | |
Additional negative working capital deficit | (26,317) | |
Contingent payments | 12,139 | $ 14,967 |
Total purchase price | 62,344 | |
Prelminary Allocation | ||
Business Acquisition [Line Items] | ||
Cash consideration | 100,000 | |
Negative working capital at Acquisition Date | (23,478) | |
Additional negative working capital deficit | 0 | |
Contingent payments | 11,283 | |
Total purchase price | 87,805 | |
Adjustments to Working Capital and Fair Value | ||
Business Acquisition [Line Items] | ||
Cash consideration | 0 | |
Negative working capital at Acquisition Date | 0 | |
Additional negative working capital deficit | (26,317) | |
Contingent payments | 856 | |
Total purchase price | $ (25,461) |
Acquisition of Mophie Inc. - As
Acquisition of Mophie Inc. - Assets Acquired and Liabilities Assumed (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | Mar. 03, 2016 | Dec. 31, 2015 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 12,272,000 | $ 12,272,000 | $ 0 | |
Mophie Inc | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | $ 1,779,000 | |||
Trade receivables (gross contractual receivables of $12,914) | 12,823,000 | |||
Inventories | 24,911,000 | |||
Inventories | 22,325,000 | |||
Inventory step-up | 2,586,000 | |||
Prepaid expenses and other assets | 1,073,000 | |||
Prepaid expenses | 700,000 | |||
Other assets | 373,000 | |||
Income tax receivable | 11,814,000 | |||
Deferred tax assets | 16,168,000 | |||
Property and equipment | 10,191,000 | |||
Land held for sale | 325,000 | |||
Amortizable identifiable intangible assets | 43,812,000 | |||
Goodwill | 12,272,000 | |||
Accounts payable | (37,359,000) | |||
Income tax payable | (196,000) | |||
Accrued liabilities | (5,163,000) | |||
Deferred revenue | (9,000) | |||
Sales returns liability | (29,584,000) | |||
Deferred tax liabilities | 0 | |||
Other noncurrent liabilities | (513,000) | |||
Total | 62,344,000 | |||
Business Acquisitions [Parenthetical] [Abstract] | ||||
Gross contractual receivables | 12,914,000 | |||
Prelminary Allocation | Mophie Inc | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | 1,779,000 | |||
Trade receivables (gross contractual receivables of $12,914) | 13,483,000 | |||
Inventories | 32,335,000 | |||
Inventory step-up | 6,937,000 | |||
Prepaid expenses | 485,000 | |||
Other assets | 200,000 | |||
Income tax receivable | 10,958,000 | |||
Deferred tax assets | 24,925,000 | |||
Property and equipment | 10,191,000 | |||
Land held for sale | 325,000 | |||
Amortizable identifiable intangible assets | 45,463,000 | |||
Goodwill | 14,092,000 | |||
Accounts payable | (34,228,000) | |||
Income tax payable | (196,000) | |||
Accrued liabilities | (5,185,000) | |||
Deferred revenue | (800,000) | |||
Sales returns liability | (14,468,000) | |||
Deferred tax liabilities | (17,978,000) | |||
Other noncurrent liabilities | (513,000) | |||
Total | 87,805,000 | |||
Adjustments to Working Capital and Fair Value | Mophie Inc | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | 0 | |||
Trade receivables (gross contractual receivables of $12,914) | (660,000) | |||
Inventories | (10,010,000) | |||
Inventory step-up | (4,351,000) | |||
Prepaid expenses | 215,000 | |||
Other assets | 173,000 | |||
Income tax receivable | 856,000 | |||
Deferred tax assets | (8,757,000) | |||
Property and equipment | 0 | |||
Land held for sale | 0 | |||
Amortizable identifiable intangible assets | (1,651,000) | |||
Goodwill | (1,820,000) | |||
Accounts payable | (3,131,000) | |||
Income tax payable | 0 | |||
Accrued liabilities | 22,000 | |||
Deferred revenue | 791,000 | |||
Sales returns liability | (15,116,000) | |||
Deferred tax liabilities | 17,978,000 | |||
Other noncurrent liabilities | 0 | |||
Total | $ (25,461,000) |
Acquisition of Mophie Inc. - Id
Acquisition of Mophie Inc. - Identifiable Intangible Assets (Details) - Mophie Inc $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Business Acquisition [Line Items] | |
Intangible asset class | $ 43,812 |
Tradenames | |
Business Acquisition [Line Items] | |
Intangible asset class | $ 18,348 |
Weighted-average amortization period | 10 years |
Patents and technology | |
Business Acquisition [Line Items] | |
Intangible asset class | $ 15,225 |
Weighted-average amortization period | 7 years 6 months |
Customer relationships | |
Business Acquisition [Line Items] | |
Intangible asset class | $ 8,200 |
Weighted-average amortization period | 5 years |
Non-compete agreements | |
Business Acquisition [Line Items] | |
Intangible asset class | $ 1,796 |
Weighted-average amortization period | 5 years |
Backlog | |
Business Acquisition [Line Items] | |
Intangible asset class | $ 243 |
Weighted-average amortization period | 3 months 18 days |
Acquisition of Mophie Inc. - Un
Acquisition of Mophie Inc. - Unaudited Pro Forma Results of Operations (Details) - Mophie Inc - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Business Acquisition [Line Items] | ||
Net sales | $ 419,183 | $ 455,165 |
Net loss | $ (17,487) | $ (5,393) |
Basic loss per share (in usd per share) | $ (0.62) | $ (0.19) |
Diluted loss per share (in usd per share) | $ (0.62) | $ (0.19) |
Acquisition of Mophie Inc. - Na
Acquisition of Mophie Inc. - Narrative (Details) - USD ($) $ in Thousands | Mar. 03, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Oct. 31, 2017 |
Aquisition of Mophie Inc. (Textual) | |||||
Transaction costs | $ 725 | $ 2,591 | $ 179 | ||
Mophie Inc | |||||
Aquisition of Mophie Inc. (Textual) | |||||
Cash consideration | $ 100,000 | ||||
Earn out consideration | 20,000 | ||||
Paid to principal shareholders in escrow account | 2,000 | ||||
Insurance policy amount | 10,000 | ||||
Insurance policy deductible amount | 2,000 | ||||
Negative working capital at Acquisition Date | (23,478) | ||||
Working capital adjustment, net | 49,795 | ||||
Additional working capital deficit | (26,317) | ||||
Purchase price | 62,344 | ||||
Adjustments to fair value of working capital | 12,139 | $ 14,967 | |||
Goodwill acquired for deductible for tax purposes | 160 | ||||
Net sales | 113,749 | ||||
Net loss before tax | (31,145) | ||||
Pro forma net loss amortization expense | 6,770 | 7,432 | |||
Amortization of debt issuance cost | $ 1,753 | 1,924 | |||
Business acquisition pro forma information | $ 2,586 | ||||
Prelminary Allocation | Mophie Inc | |||||
Aquisition of Mophie Inc. (Textual) | |||||
Cash consideration | 100,000 | ||||
Negative working capital at Acquisition Date | (23,478) | ||||
Additional working capital deficit | 0 | ||||
Purchase price | 87,805 | ||||
Adjustments to fair value of working capital | 11,283 | ||||
Adjustments to Working Capital and Fair Value | Mophie Inc | |||||
Aquisition of Mophie Inc. (Textual) | |||||
Cash consideration | 0 | ||||
Negative working capital at Acquisition Date | 0 | ||||
Additional working capital deficit | (26,317) | ||||
Purchase price | (25,461) | ||||
Adjustments to fair value of working capital | $ 856 |
Income Taxes - Income (Loss) Fr
Income Taxes - Income (Loss) From Continuing Operations Before Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
US operations | $ 37,850 | $ (22,220) | $ 26,852 |
Foreign operations | 5,502 | (1,339) | (1,154) |
Income (loss) before provision for income taxes | $ 43,352 | $ (23,559) | $ 25,698 |
Income Taxes - Income Tax Benef
Income Taxes - Income Tax Benefit (Provision) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current benefit (provision): | |||
Federal | $ (779) | $ (89) | $ (9,429) |
State | (532) | 138 | (1,783) |
Foreign | (786) | (31) | (61) |
Total current | (2,097) | 18 | (11,273) |
Deferred benefit (provision): | |||
Federal | (25,919) | 7,612 | 973 |
State | (345) | 342 | 189 |
Foreign | 109 | 0 | 0 |
Total deferred | (26,155) | 7,954 | 1,162 |
Total benefit (provision) | $ (28,252) | $ 7,972 | $ (10,111) |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Tax at statutory rate (35%) | $ (15,173) | $ 8,246 | $ (8,994) |
State tax, net of federal tax benefit | (1,217) | 1,041 | (1,089) |
Non-deductible expense and other | (830) | 333 | 116 |
Restricted stock units | (831) | 0 | 0 |
Foreign tax rate differential | 1,248 | (491) | (464) |
Domestic production activities deduction | 0 | 0 | 459 |
Mandatory repatriation of foreign earnings | 547 | 0 | 0 |
Return to provision adjustment | (212) | (36) | 126 |
Reserve related to unrecognized tax benefits | 107 | (452) | (264) |
Interest and penalties | (1) | (14) | (1) |
Effect of federal rate change | (11,806) | 0 | 0 |
Effect of state rate changes, net of federal tax benefit | 1,010 | (655) | 0 |
Total benefit (provision) | $ (28,252) | $ 7,972 | $ (10,111) |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Allowance for doubtful accounts | $ 146 | $ 286 |
Property and equipment | 396 | 0 |
Deferred revenue | 11 | 27 |
Inventories | 7,265 | 12,724 |
Stock-based compensation | 790 | 1,857 |
Sales returns accrual | 4,343 | 7,788 |
Acquisition costs, net of amortization | 116 | 191 |
Intangible assets | 2,230 | 77 |
Goodwill | 1,009 | 1,663 |
HzO investment | 1,007 | 1,483 |
Capital loss carry-over | 184 | 271 |
Reserve on note receivable | 0 | 328 |
Net operating loss carryforward | 3,338 | 21,313 |
Federal and state credit carryforwards | 3,440 | 2,816 |
Other liabilities | 1,586 | 1,619 |
Total gross deferred tax assets | 25,861 | 52,443 |
Valuation allowance | (1,458) | (1,753) |
Total deferred tax assets | 24,403 | 50,690 |
Deferred tax liabilities: | ||
Property and equipment | 0 | 323 |
Other | 0 | 4 |
Total gross deferred tax liabilities | 0 | 327 |
Net deferred tax assets | $ 24,403 | $ 50,363 |
Income Taxes - Tax Contingencie
Income Taxes - Tax Contingencies Reconciled (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Unrecognized tax benefits, as of January 1 | $ 2,230 | $ 1,265 |
Unrecognized tax benefits assumed in acquisition | 0 | 513 |
Gross increases (decreases) – tax positions in current period | 444 | 479 |
Gross increases (decreases) – prior year tax positions | 58 | 0 |
Gross increases (decreases) – lapse of statute | (454) | (27) |
Total benefit | $ 2,278 | $ 2,230 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Taxes Textual [Abstract] | |||
Transition tax on accumulated foreign earnings, amount | $ 547 | ||
Mandatory repatriation of foreign earnings | 547 | $ 0 | $ 0 |
Revaluation of deferred income taxes from U.S. tax reform | 11,806 | 0 | 0 |
Deferred tax assets, valuation allowance | 1,458 | 1,753 | |
Federal net operating loss carryforwards | 18,854 | ||
State net operating loss carryforwards | 3,150 | ||
Undistributed foreign earnings | 3,608 | ||
Tax contingency | 2,278 | 2,230 | |
Unrecognized tax benefits | 2,278 | 2,230 | $ 1,265 |
Unrecognized tax benefits that would impact effective tax rate | 1,323 | ||
HzO, Inc | |||
Income Taxes Textual [Abstract] | |||
Deferred tax assets, valuation allowance | 1,007 | 1,483 | |
Tax year 2012-2014 | |||
Income Taxes Textual [Abstract] | |||
Increase taxable income | 231 | ||
Research and development expense | 21 | ||
Tax Year 2015 | |||
Income Taxes Textual [Abstract] | |||
Bad debt reserve for tax purposes | 11,948 | ||
Capital Loss Carryforward | |||
Income Taxes Textual [Abstract] | |||
Tax credit carryforward, valuation allowance | 184 | $ 271 | |
Research Tax Credit Carryforward | |||
Income Taxes Textual [Abstract] | |||
Tax credit carryforward, valuation allowance | $ 267 |
Debt and Letters of Credit - Na
Debt and Letters of Credit - Narrative (Details) - USD ($) | Jul. 17, 2017 | Mar. 03, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jun. 01, 2018 | Jan. 01, 2018 | Sep. 18, 2017 | Sep. 17, 2017 | Apr. 05, 2017 |
Line of Credit Facility and Term Loan [Line Items] | ||||||||||
Incurred and capitalized direct cost | $ 157,000 | $ 1,144,000 | $ 0 | |||||||
Credit and Security Agreement | ||||||||||
Line of Credit Facility and Term Loan [Line Items] | ||||||||||
Incurred and capitalized direct cost | $ 1,144,000 | |||||||||
Cost related to line of credit | 884,000 | |||||||||
Cost related to long-term debt | $ 260,000 | |||||||||
Amortization of capitalization costs | 263,000 | 202,000 | ||||||||
Seasonal borrowing base | $ 15,000,000 | |||||||||
Amendment and arrangement fees | 145,000 | |||||||||
Line of credit facility, commitment fee amount | $ 129,000 | 65,000 | ||||||||
Mandatory prepayment portion of term loans percentage | 25.00% | |||||||||
Prepayment amount | $ 12,404,000 | 4,299,000 | ||||||||
Maximum | Credit and Security Agreement | ||||||||||
Line of Credit Facility and Term Loan [Line Items] | ||||||||||
Leverage ratio | 350.00% | |||||||||
Minimum | Credit and Security Agreement | ||||||||||
Line of Credit Facility and Term Loan [Line Items] | ||||||||||
Leverage ratio | 110.00% | |||||||||
Line of Credit | Credit and Security Agreement | ||||||||||
Line of Credit Facility and Term Loan [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | 135,000,000 | $ 85,000,000 | ||||||||
Debt instrument, term | 60 months | |||||||||
Line of credit fee percentage | 0.20% | 2.21% | ||||||||
Line of credit facility, outstanding balance | $ 23,475,000 | $ 31,307,000 | $ 2,000,000 | |||||||
Debt covenants, maximum other loans allowable | 8,000,000 | |||||||||
Weighted average interest rate on all outstanding borrowings | 3.30% | 2.21% | ||||||||
Line of Credit | Security Agreement, Balance Accruing At 3.00% | ||||||||||
Line of Credit Facility and Term Loan [Line Items] | ||||||||||
Line of credit fee percentage | 3.00% | |||||||||
Line of credit facility, outstanding balance | $ 20,000,000 | |||||||||
Line of Credit | Security Agreement, Balance Accruing At 5.00% | ||||||||||
Line of Credit Facility and Term Loan [Line Items] | ||||||||||
Line of credit fee percentage | 5.00% | |||||||||
Line of credit facility, outstanding balance | $ 3,475,000 | |||||||||
Line of Credit | Base Rate | Credit and Security Agreement | ||||||||||
Line of Credit Facility and Term Loan [Line Items] | ||||||||||
Interest rate, stated percentage | 0.50% | |||||||||
Line of Credit | London Interbank Offered Rate (LIBOR) | Credit and Security Agreement | ||||||||||
Line of Credit Facility and Term Loan [Line Items] | ||||||||||
Interest rate, stated percentage | 1.50% | |||||||||
Term Loan | Credit and Security Agreement | ||||||||||
Line of Credit Facility and Term Loan [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | $ 25,000,000 | |||||||||
Debt instrument, term | 48 months | |||||||||
Line of credit facility principal payment | $ 521,000 | |||||||||
Term loan, interest rate (as a percent) | 3.38% | 2.50% | ||||||||
Effective interest rate | 3.01% | 3.16% | ||||||||
Term Loan | Base Rate | Credit and Security Agreement | ||||||||||
Line of Credit Facility and Term Loan [Line Items] | ||||||||||
Interest rate, stated percentage | 1.00% | |||||||||
Term Loan | London Interbank Offered Rate (LIBOR) | Credit and Security Agreement | ||||||||||
Line of Credit Facility and Term Loan [Line Items] | ||||||||||
Interest rate, stated percentage | 2.00% | |||||||||
Letter of Credit | Credit and Security Agreement | ||||||||||
Line of Credit Facility and Term Loan [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | $ 40,000,000 | $ 7,500,000 | $ 25,000,000 | |||||||
Fronting fee | 0.125% | |||||||||
Letters of credit outstanding amount | $ 10,000,000 | |||||||||
Term loan, interest rate (as a percent) | 1.625% | |||||||||
Line of credit facility, commitment fee amount | $ 157,000 | |||||||||
Increase in accrued interest | $ 147,000 | |||||||||
Scenario, Forecast | Line of Credit | Credit and Security Agreement | ||||||||||
Line of Credit Facility and Term Loan [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | $ 100,000,000 | |||||||||
Subsequent Event | Line of Credit | Credit and Security Agreement | ||||||||||
Line of Credit Facility and Term Loan [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | $ 110,000,000 |
Debt and Letters of Credit - Co
Debt and Letters of Credit - Contractual Future Payments (Details) - Credit and Security Agreement $ in Thousands | Dec. 31, 2017USD ($) |
Debt Instrument [Line Items] | |
2,018 | $ 14,063 |
2,019 | 0 |
2,020 | 23,475 |
Total | 37,538 |
Line of Credit | |
Debt Instrument [Line Items] | |
2,018 | 0 |
2,019 | 0 |
2,020 | 23,475 |
Total | 23,475 |
Term Loan | |
Debt Instrument [Line Items] | |
2,018 | 14,063 |
2,019 | 0 |
2,020 | 0 |
Total | $ 14,063 |
Restricted Stock - Changes in R
Restricted Stock - Changes in Restricted Stock (Details) - Restricted stock shares in Thousands | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Restricted Stock [Roll Forward] | |
Outstanding at December 31, 2016 | shares | 766 |
Granted | shares | 604 |
Vested | shares | (270) |
Forfeited | shares | (66) |
Outstanding at December 31, 2017 | shares | 1,034 |
Weighted-Average Grant Date Fair Value (Per share) | |
Outstanding at December 31, 2016 (in usd per share) | $ / shares | $ 7.89 |
Granted (in usd per share) | $ / shares | 8.26 |
Vested (in usd per share) | $ / shares | 7.13 |
Forfeited (in usd per share) | $ / shares | 7.98 |
Outstanding at December 31, 2017 (in usd per share) | $ / shares | $ 8.29 |
Restricted Stock - Narrative (D
Restricted Stock - Narrative (Details) - USD ($) shares in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Jun. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jun. 30, 2013 | |
Selling, General and Administrative Expenses | |||||
Stock Options Warrants and Restricted Stock (Textual) | |||||
Equity-based compensation expense | $ 3,602 | $ 3,830 | $ 3,893 | ||
Net tax benefit recognized on equity-based compensation expense | 1,378 | 1,465 | 1,489 | ||
Amount of tax benefit realized from restricted stock | 962 | 2,119 | 1,014 | ||
Restricted stock | |||||
Stock Options Warrants and Restricted Stock (Textual) | |||||
Total unrecognized compensation cost related to nonvested restricted stock awards granted | $ 5,072 | ||||
Weighted average period for recognition | 1 year 2 months 12 days | ||||
Reduction to additional paid-in capital | $ 268 | $ 630 | $ 724 | ||
2007 Plan | |||||
Stock Options Warrants and Restricted Stock (Textual) | |||||
Number of shares available for grant (in shares) | 6,239 | ||||
2013 Plan | |||||
Stock Options Warrants and Restricted Stock (Textual) | |||||
Number of shares available for grant (in shares) | 2,498 | ||||
Issuance of common stock to directors, employees, consultants and advisors (in shares) | 5,000 | ||||
Term of the plan | 10 years |
Treasury Stock (Details)
Treasury Stock (Details) - USD ($) $ / shares in Units, shares in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Treasury Stock (Textual) | |||
Number of repurchase of shares authorized by board of directors | $ 20,000,000 | ||
Remaining authorized repurchase amount | $ 17,558,000 | $ 19,049,000 | |
Treasury stock purchased (in shares) | 234 | 152 | 2,030 |
Cash consideration paid for repurchase of common stock | $ 1,492,000 | $ 951,000 | $ 14,930,000 |
Commissions paid to brokers | $ 9,000 | $ 6,000 | |
Weighted average price per share of stock repurchase (in usd per share) | $ 6.35 | $ 6.27 |
Defined Contribution Plan (Deta
Defined Contribution Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Contribution Plan (Textual) | |||
Percentage of employees salary matches participant contributions | 100.00% | ||
Percentage of maximum employees salary | 5.00% | ||
Costs recognized related to employer | $ 1,298 | $ 941 | $ 335 |
Commitments and Contingencies -
Commitments and Contingencies - Future Minimum Rental Payments (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,018 | $ 2,107 |
2,019 | 1,594 |
2,020 | 1,539 |
2,021 | 1,465 |
2,022 | 1,495 |
Thereafter | 1,111 |
Total | $ 9,311 |
Commitments and Contingencies65
Commitments and Contingencies - Contingent Payments (Details) - USD ($) $ in Thousands | Oct. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Mar. 03, 2016 |
Business Acquisition, Contingent Consideration [Line Items] | |||||
(Gain) loss on disputed mophie purchase price | $ 6,967 | $ 6,967 | $ (24,317) | $ 0 | |
Mophie Inc | |||||
Business Acquisition, Contingent Consideration [Line Items] | |||||
Contingent payments | 14,967 | $ 12,139 | |||
Cash collected from duty recoveries | 2,828 | ||||
Settlement amount | 8,000 | ||||
(Gain) loss on disputed mophie purchase price | $ 6,967 |
Commitments and Contingencies66
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Thousands | Oct. 31, 2017 | Dec. 16, 2016 | Oct. 21, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Mar. 03, 2016 |
Loss Contingencies [Line Items] | |||||||
Rental payment of leases | $ 2,847 | $ 3,190 | $ 1,642 | ||||
(Gain) loss on disputed mophie purchase price | $ 6,967 | $ 6,967 | $ (24,317) | $ 0 | |||
Mophie Inc | |||||||
Loss Contingencies [Line Items] | |||||||
Damages exceeding value | $ 22,000 | ||||||
Paid to principal shareholders in escrow account | $ 2,000 | ||||||
Settlement amount | 8,000 | ||||||
(Gain) loss on disputed mophie purchase price | $ 6,967 | ||||||
Daniel Huang, Individually and As Shareholder Representative v. ZAGG , Inc | |||||||
Loss Contingencies [Line Items] | |||||||
Damages sought | $ 11,420 |
Concentrations - Concentration
Concentrations - Concentration Risk Percentage (Details) - Customer Concentration Risk | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 10.00% | 10.00% | |
Accounts Receivable | Superior | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 31.00% | 32.00% | |
Accounts Receivable | Best Buy | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 18.00% | 22.00% | |
Accounts Receivable | GENCO | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 7.00% | 10.00% | |
Sales Revenue, Net | Superior | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 30.00% | 27.00% | 17.00% |
Sales Revenue, Net | Best Buy | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 9.00% | 11.00% | 20.00% |
Sales Revenue, Net | GENCO | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 8.00% | 11.00% | 11.00% |
Concentrations - Net Sales By G
Concentrations - Net Sales By Geographic Region (Details) - Sales revenue | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
United States | |||
Concentration Risk [Line Items] | |||
Percentage of sales | 84.00% | 88.00% | 91.00% |
Europe | |||
Concentration Risk [Line Items] | |||
Percentage of sales | 9.00% | 7.00% | 8.00% |
Other | |||
Concentration Risk [Line Items] | |||
Percentage of sales | 7.00% | 5.00% | 1.00% |
Concentrations - Narrative (Det
Concentrations - Narrative (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017USD ($)Customer | Dec. 31, 2016USD ($)Customer | |
International Locations | ||
Concentrations (Textual) | ||
Net assets located overseas | $ | $ 16,249 | $ 16,588 |
Customer Concentration Risk | Accounts Receivable | ||
Concentrations (Textual) | ||
Number of customers | Customer | 2 | 3 |
Percentage of sales | 10.00% | 10.00% |
Segment Reporting (Details)
Segment Reporting (Details) | 12 Months Ended |
Dec. 31, 2017Segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |
Quarterly Financial Data (Una71
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net sales | $ 176,924 | $ 134,398 | $ 115,227 | $ 92,946 | $ 114,930 | $ 124,662 | $ 99,833 | $ 62,432 | $ 519,495 | $ 401,857 | $ 269,311 |
Income (loss) from operations | 29,952 | 15,935 | 5,497 | (6,649) | (3,595) | (12,710) | (1,352) | (3,703) | 44,735 | (21,360) | $ 25,864 |
Net income (loss) | $ 8,059 | $ 9,776 | $ 3,403 | $ (6,138) | $ (4,146) | $ (7,105) | $ (1,046) | $ (3,290) | $ 15,100 | $ (15,587) | |
Earnings (loss) per share: | |||||||||||
Basic (in usd per share) | $ 0.29 | $ 0.35 | $ 0.12 | $ (0.22) | $ (0.15) | $ (0.25) | $ (0.04) | $ (0.12) | $ 0.54 | $ (0.56) | $ 0.54 |
Dilutive (in usd per share) | $ 0.28 | $ 0.34 | $ 0.12 | $ (0.22) | $ (0.15) | $ (0.25) | $ (0.04) | $ (0.12) | $ 0.53 | $ (0.56) | $ 0.54 |
Weighted average common shares: | |||||||||||
Basic (in shares) | 27,969 | 27,969 | 27,963 | 28,059 | 28,061 | 28,125 | 28,126 | 27,710 | 27,996 | 28,006 | 28,773 |
Diluted (in shares) | 28,781 | 28,381 | 28,213 | 28,059 | 28,061 | 28,125 | 28,126 | 27,710 | 28,407 | 28,006 | 29,089 |