Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 7-May-15 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | GTT Communications, Inc. | |
Entity Central Index Key | 1315255 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Accelerated Filer | |
Trading Symbol | gtt | |
Entity Common Stock, Shares Outstanding | 34,857,446 | |
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2015 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
ASSETS | ||
Cash and cash equivalents | $52,087 | $49,256 |
Accounts receivable, net of allowances of $871 and $878, respectively | 29,084 | 29,328 |
Deferred contract costs | 3,457 | 2,351 |
Prepaid expenses and other current assets | 3,345 | 3,913 |
Total current assets | 87,973 | 84,848 |
Property and equipment, net | 22,675 | 25,184 |
Intangible assets, net | 54,222 | 58,630 |
Other assets | 7,672 | 7,933 |
Goodwill | 92,683 | 92,683 |
Total assets | 265,225 | 269,278 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Accounts payable | 21,221 | 20,336 |
Accrued expenses and other current liabilities | 31,200 | 35,464 |
Short-term debt | 7,156 | 6,188 |
Deferred revenue | 8,709 | 8,340 |
Total current liabilities | 68,286 | 70,328 |
Long-term debt | 115,094 | 117,438 |
Deferred revenue | 609 | 766 |
Other long-term liabilities | 3,040 | 3,180 |
Total liabilities | 187,029 | 191,712 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock, par value $.0001 per share, 80,000,000 shares authorized, 34,026,212, and 33,848,543 shares issued and outstanding as of March 31, 2015 and December 31, 2014, respectively | 3 | 3 |
Additional paid-in capital | 168,701 | 167,678 |
Accumulated deficit | -88,138 | -89,205 |
Accumulated other comprehensive loss | -2,370 | -910 |
Total stockholders' equity | 78,196 | 77,566 |
Total liabilities and stockholders' equity | $265,225 | $269,278 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets [Parenthetical] (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, except Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable, current (in dollars) | $871 | $878 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 80,000,000 | 80,000,000 |
Common stock, shares, issued | 34,026,212 | 33,848,543 |
Common stock, shares, outstanding | 34,026,212 | 33,848,543 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Revenue: | ||
Telecommunications services sold | $62,353 | $47,469 |
Operating expenses: | ||
Cost of telecommunications services provided | 37,697 | 29,888 |
Selling, general and administrative expense | 14,869 | 9,656 |
Depreciation and amortization | 7,498 | 5,556 |
Total operating expenses | 60,064 | 45,100 |
Operating income | 2,289 | 2,369 |
Other expense: | ||
Interest expense, net | -1,581 | -2,410 |
Other expense, net | -48 | -8,879 |
Total other expense | -1,629 | -11,289 |
Income (loss) before income taxes | 660 | -8,920 |
(Benefit from) provision for income taxes | -407 | 746 |
Net income (loss) | $1,067 | ($9,666) |
Income (loss) per share: | ||
Basic (in dollars per share) | $0.03 | ($0.41) |
Diluted (in dollars per share) | $0.03 | ($0.41) |
Weighted average shares: | ||
Basic (in shares) | 33,935,481 | 23,444,384 |
Diluted (in shares) | 34,659,757 | 23,444,384 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Income (Loss) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $1,067 | ($9,666) |
Other comprehensive income (loss): | ||
Foreign currency translation | -1,460 | -48 |
Comprehensive loss | ($393) | ($9,714) |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statement of Stockholders' Equity (USD $) | Total | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Income (Loss) [Member] |
In Thousands, except Share data, unless otherwise specified | |||||
Balance at Dec. 31, 2014 | $77,566 | $3 | $167,678 | ($89,205) | ($910) |
Balance (in shares) at Dec. 31, 2014 | 33,848,543 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Share-based compensation for options issued | 344 | 344 | |||
Share-based compensation for restricted stock issued | 1,015 | 1,015 | |||
Share-based compensation for restricted stock issued (in shares) | 115,670 | ||||
Tax withholding related to the vesting of restricted stock units | -529 | -529 | |||
Tax withholding related to the vesting of restricted stock units (in shares) | -42,528 | ||||
Stock options exercised | 193 | 193 | |||
Stock options exercised (in shares) | 104,527 | ||||
Net income | 1,067 | 1,067 | |||
Foreign currency translation | -1,460 | ||||
Balance at Mar. 31, 2015 | $78,196 | $3 | $168,701 | ($88,138) | ($2,370) |
Balance (in shares) at Mar. 31, 2015 | 34,026,212 |
Condensed_Consolidated_Stateme3
Condensed Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash flows from operating activities: | ||
Net income (loss) | $1,067 | ($9,666) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 7,498 | 5,556 |
Share-based compensation | 1,359 | 489 |
Debt discount amortization | 0 | 180 |
Change in fair value of warrant liability | 0 | 7,216 |
Change in fair value of acquisition earn-out | 0 | 1,554 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | -738 | 361 |
Deferred contract costs | -1,167 | -853 |
Prepaid expenses and other current assets | 415 | 702 |
Other assets | -533 | -354 |
Accounts payable | 3,269 | 3,042 |
Accrued expenses and other current liabilities | -5,248 | -5,784 |
Deferred revenue and other long-term liabilities | -54 | 356 |
Net cash provided by operating activities | 5,868 | 2,799 |
Cash flows from investing activities: | ||
Purchases of property and equipment | -3,433 | -1,719 |
Net cash used in investing activities | -3,433 | -1,719 |
Cash flows from financing activities: | ||
Proceeds from line of credit | 0 | 1,000 |
Repayment of term loan | -1,376 | -1,625 |
Proceeds from mezzanine debt | 0 | 1,500 |
Repayment of subordinate notes payable | -529 | -842 |
Exercise of stock options | 193 | 506 |
Net cash (used in) provided by financing activities | -1,712 | 539 |
Effect of exchange rate changes on cash | 2,108 | -163 |
Net increase in cash and cash equivalents | 2,831 | 1,456 |
Cash and cash equivalents at beginning of period | 49,256 | 5,785 |
Cash and cash equivalents at end of period | 52,087 | 7,241 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | $498 | $2,239 |
ORGANIZATION_AND_BUSINESS
ORGANIZATION AND BUSINESS | 3 Months Ended |
Mar. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BUSINESS | ORGANIZATION AND BUSINESS |
Organization and Business | |
GTT Communications, Inc. is a Delaware corporation (“GTT” and together with its consolidated subsidiaries, the “Company”)which was incorporated on January 3, 2005. The Company operates a global Tier 1 IP network connecting clients to locations and cloud applications around the world. The Company seeks to further extend its network globally while delivering exceptional client service with simplicity, speed and agility. | |
Unaudited Interim Financial Statements | |
The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") and should be read in conjunction with the Company’s audited financial statements and footnotes thereto for the fiscal year ended December 31, 2014, included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 filed on March 13, 2015. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been omitted pursuant to such rules and regulations. | |
The condensed consolidated financial statements reflect all adjustments (consisting primarily of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the Company’s consolidated financial position and the results of operations. The operating results for the three months ended March 31, 2015 are not necessarily indicative of the results to be expected for the full fiscal year 2015 or for any other interim period. The December 31, 2014 consolidated balance sheet has been derived from the audited financial statements as of that date, but does not include all disclosures required by GAAP. | |
There have been no changes in the Company’s significant accounting policies as of March 31, 2015 as compared to the significant accounting policies disclosed in Note 2, "Significant Accounting Policies" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31. 2014 that was filed with the SEC on March 13, 2015. | |
Use of Estimates and Assumptions | |
The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results can, and in many cases will, differ from those estimates. | |
Comprehensive Income (Loss) | |
In addition to net income (loss), comprehensive income (loss) includes charges or credits to equity occurring other than as a result of transactions with stockholders. For the Company, this consists of foreign currency translation adjustments. |
RECENT_ACCOUNTING_PRONOUNCEMEN
RECENT ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Mar. 31, 2015 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS |
On May 28, 2014, the Federal Accounting Standards Board ("FASB") issued Accounting Standards Codification ("ASC") Topic 606, Revenue From Contracts With Customers. The guidance in ASC Topic 606 supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the Codification. ASC Topic 606 states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. On April 2, 2015, the FASB proposed to defer the effective date of ASC Topic 606 by one year. The Company is assessing the impact of ASC Topic 606 and will adopt the guidance for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2017. | |
On April 7, 2015, the FASB issued Accounting Standards Update ("ASU") No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The amendments in this ASU require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. The amendments are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years; however, early adoption of the amendments is permitted. The amendments should be applied on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. Upon transition, an entity is required to comply with the applicable disclosures for a change in an accounting principle. The Company has not yet adopted the provisions in this ASU and is assessing the impact. |
BUSINESS_ACQUISITIONS
BUSINESS ACQUISITIONS | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Business Combinations [Abstract] | |||||||||
BUSINESS ACQUISITIONS | BUSINESS ACQUISITIONS | ||||||||
As discussed in the Company's Annual Report, in the fourth quarter of 2014, the Company acquired United Networks Services, Inc. ("UNSi"). The Company accounted for this acquisition as a business combination and have included its results of operations in the condensed consolidated financial statements starting on the acquisition date. | |||||||||
The following pro forma financial information summarizes the combined results of operations of the Company and UNSi as though it had been combined as of the beginning of fiscal 2014. | |||||||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
Amounts in thousands, except per share and share data | |||||||||
Revenue | $ | 62,353 | $ | 62,569 | |||||
Net income (loss) | $ | 1,067 | $ | (12,553 | ) | ||||
Net income (loss) per share: | |||||||||
Basic | $ | 0.03 | $ | (0.54 | ) | ||||
Diluted | $ | 0.03 | $ | (0.54 | ) | ||||
Basic | 33,935,481 | 23,444,384 | |||||||
Diluted | 34,659,757 | 23,444,384 | |||||||
The pro forma financial information presents unaudited consolidated pro forma results of operations as if the UNSi acquisition had occurred on January 1, 2014. This information does not purport to be indicative of the actual results that would have occurred if the UNSi acquisition had actually been completed on January 1, 2014, nor is it necessarily indicative of the future operating results or the financial position of the combined company. The unaudited pro forma results of operations do not reflect the cost of any integration activities or benefits that may result from synergies that may be derived from any integration activities. |
GOODWILL_AND_INTANGIBLE_ASSETS
GOODWILL AND INTANGIBLE ASSETS | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS | |||||||||||||
There has been no change in the carrying amount of goodwill since December 31, 2014. | ||||||||||||||
Intangible assets related to customer relationships and FCC licenses are subject to a straight-line amortization. | ||||||||||||||
Goodwill and intangible assets with indefinite lives are not amortized, but rather tested for impairment at least annually by comparing the estimated fair values to their carrying values. Acquired trade names are assessed as indefinite lived assets because there is no foreseeable limit on the period of time over which they are expected to contribute cash flows. | ||||||||||||||
The following table summarizes the Company’s intangible assets as of March 31, 2015 and December 31, 2014 (amounts in thousands): | ||||||||||||||
March 31, 2015 | ||||||||||||||
Amortization | Gross Asset | Accumulated | Net Book | |||||||||||
Period | Cost | Amortization | Value | |||||||||||
Customer contracts | 3-7 years | $ | 85,759 | $ | 33,878 | $ | 51,881 | |||||||
Non-compete agreements | 3-5 years | 4,331 | 4,207 | 124 | ||||||||||
Point-to-point FCC License fees | 3 years | 1,695 | 278 | 1,417 | ||||||||||
Trade name (non-amortizing) | N/A | 800 | — | 800 | ||||||||||
$ | 92,585 | $ | 38,363 | $ | 54,222 | |||||||||
December 31, 2014 | ||||||||||||||
Amortization | Gross Asset | Accumulated | Net Book | |||||||||||
Period | Cost | Amortization | Value | |||||||||||
Customer contracts | 3-7 years | $ | 85,759 | $ | 29,639 | $ | 56,120 | |||||||
Non-compete agreements | 3-5 years | 4,331 | 4,147 | 184 | ||||||||||
Point-to-point FCC License fees | 3 years | 1,665 | 139 | 1,526 | ||||||||||
Trade name (non-amortizing) | N/A | 800 | — | 800 | ||||||||||
$ | 92,555 | $ | 33,925 | $ | 58,630 | |||||||||
Amortization expense was $4.4 million and $3.0 million for the three months ended March 31, 2015 and 2014, respectively. | ||||||||||||||
Estimated amortization expense related to intangible assets subject to amortization at March 31, 2015 in each of the years subsequent to March 31, 2015 is as follows (amounts in thousands): | ||||||||||||||
2015 remaining | $ | 12,327 | ||||||||||||
2016 | 15,678 | |||||||||||||
2017 | 13,869 | |||||||||||||
2018 | 8,112 | |||||||||||||
2019 | 3,436 | |||||||||||||
Total | $ | 53,422 | ||||||||||||
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS | |||||||||||||||
The Company accounts for fair value measurements in accordance with the fair value accounting standard as it relates to financial assets and financial liabilities. The Company establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). | ||||||||||||||||
The fair value hierarchy consists of three broad levels, which prioritizes the inputs used in measuring fair value as follows: observable inputs such as quoted prices in active markets (Level 1); inputs other than quoted prices in active markets that are observable either directly or indirectly (Level 2); and unobservable inputs in which there is little or no market data, which requires the Company to develop its own assumptions (Level 3). The following section describes the valuation methodologies that the Company uses to measure financial instruments at fair value. | ||||||||||||||||
The remaining earn-out liability as of March 31, 2015 relates to business acquisitions in which the sellers will receive a cash payout based upon the performance of the entity the Company acquired. There have been no changes to the fair value of this contingent consideration. | ||||||||||||||||
The following table presents the liabilities that are measured and recognized at fair value on a recurring basis classified under the appropriate level of the fair value hierarchy as of March 31, 2015 (amounts in thousands): | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Liabilities: | ||||||||||||||||
Acquisition earn-outs | $ | — | $ | — | $ | 3,224 | $ | 3,224 | ||||||||
Rollforward of Level 3 liabilities are as follows (amounts in thousands): | ||||||||||||||||
Acquisition Earn-outs | ||||||||||||||||
Balance, December 31, 2014 | $ | 3,374 | ||||||||||||||
Paid in cash | (150 | ) | ||||||||||||||
Balance, March 31, 2015 | $ | 3,224 | ||||||||||||||
Assets and liabilities measured at a fair value on a non-recurring basis include goodwill, tangible assets, and intangible assets. Such assets are reviewed quarterly for impairment indicators. If a triggering event has occurred, the assets are re-measured when the estimated fair value of the corresponding asset group is less than the carrying value. The fair value measurements, in such instances, are based on significant unobservable inputs (Level 3). |
EMPLOYEE_SHAREBASED_COMPENSATI
EMPLOYEE SHARE-BASED COMPENSATION BENEFITS | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||
EMPLOYEE SHARE-BASED COMPENSATION BENEFITS | EMPLOYEE SHARE-BASED COMPENSATION BENEFITS | |||||||||||
The Company adopted its 2006 Employee, Director and Consultant Stock Plan (the “2006 Plan”) in October 2006. In addition to stock options, the Company may also grant restricted stock or other stock-based awards under the 2006 Plan. The maximum number of shares issuable over the term of the 2006 Plan is limited to 3,500,000 shares. | ||||||||||||
The Company adopted its 2011 Employee, Director and Consultant Stock Plan (the “2011 Plan” and together with the 2006 Plan, the “Plan”) in June 2011. In addition to stock options, the Company may also grant restricted stock or other stock-based awards under the 2011 Plan. The maximum number of shares issuable over the term of the 2011 Plan is limited to 3,000,000 shares. The 2006 Plan will continue according to its terms. | ||||||||||||
The Plan permits the granting of stock options and restricted stock to employees (including employee directors and officers) and consultants of the Company, and non-employee directors of the Company. Options granted under the Plan have an exercise price of at least 100% of the fair market value of the underlying stock on the grant date and expire no later than ten years from the grant date. The options generally vest over four years with 25% of the option shares becoming exercisable one year from the date of grant and the remaining 75% annually or quarterly over the following three years. The Compensation Committee of the Board of Directors, as administrator of the Plan, has the discretion to use a different vesting schedule. | ||||||||||||
Stock Options | ||||||||||||
The Company recognized compensation expense for stock options of approximately $344,000 and $151,000 for the three months ended March 31, 2015 and 2014, respectively, related to stock options issued to employees and consultants, which is included in selling, general and administrative expense on the accompanying consolidated statements of operations. The Company granted to employees 85,000 and 349,700 stock options with a total fair value of $0.6 million and $2.6 million during the three months ended March 31, 2015 and 2014, respectively. | ||||||||||||
Restricted Stock | ||||||||||||
During the three months ended March 31, 2015 and 2014, respectively, the Company granted to certain employees and members of its Board of Directors restricted stock. This includes shares issued to non-employee members of the Company’s Board of Directors who elected to be paid a portion of their annual fees in restricted stock. Total non-cash compensation expense is recorded in selling, general and administrative expenses on the accompanying condensed consolidated statement of operations. | ||||||||||||
The following tables summarize the Company’s restricted stock for the three months ended March 31, 2015 and 2014 (amounts in thousands): | ||||||||||||
Employees | Non-Employee | Total | ||||||||||
Members of Board | ||||||||||||
of Directors | ||||||||||||
Three months ended March 31, 2015 | ||||||||||||
Restricted stock shares granted | 110 | 3 | 113 | |||||||||
Fair value of shares granted | $ | 1,367 | $ | 49 | $ | 1,416 | ||||||
Restricted stock compensation expense | $ | 788 | $ | 227 | $ | 1,015 | ||||||
Employees | Non-Employee | Total | ||||||||||
Members of Board | ||||||||||||
of Directors | ||||||||||||
Three Months Ended March 31, 2014 | ||||||||||||
Restricted stock shares granted | 210 | 3 | 213 | |||||||||
Fair value of shares granted | $ | 2,621 | $ | 36 | $ | 2,657 | ||||||
Restricted stock compensation expense | $ | 302 | $ | 36 | $ | 338 | ||||||
DEBT
DEBT | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Debt Disclosure [Abstract] | ||||||||||||
DEBT | DEBT | |||||||||||
The following summarizes the debt activity of the Company during the three months ended March 31, 2015 (amounts in thousands): | ||||||||||||
Total Debt | Senior Term Loan | Delayed Draw Term Loan | ||||||||||
Debt obligation as of December 31, 2014 | $ | 123,626 | $ | 108,626 | $ | 15,000 | ||||||
Payments | (1,376 | ) | (1,376 | ) | — | |||||||
Debt obligation as of March 31, 2015 | 122,250 | 107,250 | 15,000 | |||||||||
Less: Current portion of long-term debt | (7,156 | ) | (6,875 | ) | (281 | ) | ||||||
Long-term debt, net of current portion | $ | 115,094 | $ | 100,375 | $ | 14,719 | ||||||
Estimated annual commitments for debt maturities are as follows at March 31, 2015 (amounts in thousands): | ||||||||||||
Total Debt | ||||||||||||
2015 remaining | $ | 4,812 | ||||||||||
2016 | 10,120 | |||||||||||
2017 | 12,331 | |||||||||||
2018 | 12,203 | |||||||||||
2019 | 82,784 | |||||||||||
Total | $ | 122,250 | ||||||||||
Senior Term Loan, Delayed Draw Term Loan and Line of Credit | ||||||||||||
On August 6, 2014, the Company completed a refinancing transaction (the “Refinancing Transaction”), which included amendments to the First Amended and Restated Credit Agreement ("Credit Agreement"). The Credit Agreement, as amended, provides for $110.0 million in term loans; a $15.0 million revolving credit facility; an available $15.0 million delayed draw term loan ("DDTL"); and an available uncommitted $30.0 million incremental term loan. The maturity of the facilities under the Credit Agreement, as amended, were extended to August 6, 2019. | ||||||||||||
On September 30, 2014, the Company drew down $15.0 million on the DDTL. No amounts have been drawn on the revolving credit facility nor the uncommitted incremental term loan. The DDTL facility will be repaid on a quarterly basis starting March 31, 2016 at 1.875% of the aggregate outstanding balance, increasing to 2.5% of the aggregate outstanding balance starting December 31, 2016, with any remaining amount due on August 6, 2019. The term loan of $110.0 million will be repaid on a quarterly basis starting December 31, 2014 at $1.4 million of the aggregate outstanding balance, increasing to $2.1 million on December 31, 2015, and lastly increasing to $2.7 million on December 31, 2016, with any remaining amount due on August 6, 2019. | ||||||||||||
The interest rate on the Credit Agreement, as amended, is a LIBOR-based tiered pricing tied to the Company's net leverage ratio. As of March 31, 2015, the interest rate on the term loan and the DDTL was LIBOR plus 4.25% spread or 4.5%. | ||||||||||||
The obligations under the Credit Agreement, as amended, are secured by substantially all of the Company's assets. The Credit Agreement, as amended, contains customary representations and warranties and customary affirmative and negative covenants. The negative covenants are limited to the following, in each case subject to certain exceptions: a maximum net total leverage ratio; a minimum consolidated fixed charge ratio; limitations on indebtedness and liens; mergers, consolidations or amalgamations, or liquidations, wind-ups or dissolutions; dispositions of property; restricted payments; investments; transactions with affiliates; sale and leaseback transactions; change in fiscal periods; negative pledges; restrictive agreements; limitations on line of business; limitations on speculative hedging and limitations on changes of names and jurisdictions. In addition, the Company is required to meet certain financial covenants at each quarter end, namely Maximum Consolidated Net Total Leverage and Consolidated Fixed Charge Coverage Ratio. Both these financial covenants were amended on April 1, 2015, when the Company entered into an amended credit agreement, which amended the Credit Agreement, dated as of August 6, 2014 (refer to Note 12). As of March 31, 2015, the Company was compliant with these covenants. |
INCOME_TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES |
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. Valuation allowances are recorded against deferred tax assets when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which those temporary differences become deductible. The scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies are evaluated in determining whether it is more likely than not that deferred tax assets will be realized. On the basis of this evaluation, a valuation allowance has been provided to offset the net deferred tax assets in the US and certain foreign jurisdictions. | |
The Company and certain of its subsidiaries file income tax returns in the U.S. Federal jurisdiction, various states and foreign jurisdictions. The Company’s foreign jurisdictions are primarily in Italy and the United Kingdom. | |
The Company recorded a tax benefit of $0.4 million for the three months ended March 31, 2015. The Company recorded a $1.0 million benefit to the Company’s provision for income taxes for the three months ended March 31, 2015 related to deferred income taxes of a foreign subsidiary that were adjusted to reflect the tax attributes and temporary items as filed on the income tax return. For the three months ended March 31, 2014, the Company recorded tax expense of $0.7 million. |
RESTRUCTURING_COSTS_EMPLOYEE_T
RESTRUCTURING COSTS, EMPLOYEE TERMINATION AND OTHER ITEMS | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Restructuring and Related Activities [Abstract] | ||||||||||||
RESTRUCTURING COSTS, EMPLOYEE TERMINATION AND OTHER ITEMS | RESTRUCTURING COSTS, EMPLOYEE TERMINATION AND OTHER ITEMS | |||||||||||
During the year ended December 31, 2014, the Company incurred $6.1 million in costs associated with the acquisition of United Networks Services, Inc (“UNSi”), including payroll and employee severance costs, professional fees, termination costs associated with network grooming, and travel expenses. As of December 31, 2014, the Company had paid $4 million in cash. | ||||||||||||
No additional charges were incurred during the three months ended March 31, 2015. Approximately $1.2 million was paid during the three months ended March 31, 2015. The restructuring charges and accruals established by the Company are summarized as follows for the period ending March 31, 2015 (amounts in thousands): | ||||||||||||
Charges Net of Reversals | Cash Payments | Balance, March 31, 2015 | ||||||||||
Employment costs | $ | 3,725 | $ | 3,725 | $ | — | ||||||
Professional fees | 1,003 | 673 | 330 | |||||||||
Integration expenses | 100 | 75 | 25 | |||||||||
Travel and other expenses | 1,297 | 721 | 576 | |||||||||
Total | $ | 6,125 | $ | 5,194 | $ | 931 | ||||||
EARNINGS_LOSS_PER_SHARE
EARNINGS (LOSS) PER SHARE | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Earnings Per Share [Abstract] | ||||||||
EARNINGS (LOSS) PER SHARE | EARNINGS (LOSS) PER SHARE | |||||||
Basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding. Diluted earnings (loss) per share reflect, in periods with earnings and in which they have a dilutive effect, the effect of common shares issuable upon exercise of stock options and warrants. | ||||||||
The table below details the calculations of earnings (loss) per share (amounts in thousands, except for share and per share amounts): | ||||||||
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
Numerator for basic and diluted EPS – earnings (loss) available to common stockholders | $ | 1,067 | $ | (9,666 | ) | |||
Denominator for basic EPS – weighted average shares | 33,935,481 | 23,444,384 | ||||||
Effect of dilutive securities | 724,276 | — | ||||||
Denominator for diluted EPS – weighted average shares | 34,659,757 | 23,444,384 | ||||||
Income (loss) per share: basic | $ | 0.03 | $ | (0.41 | ) | |||
Income (loss) per share: diluted | $ | 0.03 | $ | (0.41 | ) | |||
The table below details the anti-dilutive items that were excluded in the computation of the earnings per share (amounts in thousands): | ||||||||
Three months ended March 31, | ||||||||
2015 | 2014 | |||||||
BIA warrant | — | 1,055 | ||||||
Plexus warrant | — | 960 | ||||||
Alcentra warrant | — | 329 | ||||||
Stock options | — | 1,692 | ||||||
Totals | — | 4,036 | ||||||
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Notes) | 3 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES |
As of March 31, 2015, the Company was not subject to any material legal proceedings. From time-to-time, the Company is a party to legal proceedings arising in the normal course of its business. The Company does not believe that it is a party to any pending legal action that could reasonably be expected to have a material adverse effect on its business or operating results, financial position or cash flows. |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 3 Months Ended | |
Mar. 31, 2015 | ||
Subsequent Events [Abstract] | ||
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS | |
MegaPath Acquisition | ||
On April 1, 2015, the Company completed the acquisition of MegaPath Corporation, which provides private wide-area-networking, Internet access services, managed services and managed security to multinational clients from MegaPath Group, Inc. | ||
The Company paid MegaPath Group, Inc. an aggregate purchase price of $152.3 million, subject to adjustment, which included the following: | ||
•$134.8 million paid in cash and the assumption of capital leases at the closing of the transaction, subject to various post-closing adjustments related to working capital, transaction expenses and indebtedness; | ||
•$7.5 million paid at the closing of the transaction by delivery of 610,843 unregistered shares of the Company’s common stock, par value $0.0001 per share, valued for this purpose at $12.28 per share; and | ||
•$10.0 million paid in cash on the first anniversary of the closing, subject to reduction for any indemnification claims made by the Purchaser prior to such date. | ||
MegaPath Corporation produced recurring revenue of approximately $124 million in 2014, which we expect to continue in 2015. | ||
The Company expects to incur a restructuring charge in the second quarter of 2015 for severance costs, professional fees, network grooming costs, and travel expenses related to the acquisition. | ||
Amended Credit Agreement | ||
On April 1, 2015, the Company entered into an amended credit agreement (the "Amendment Agreement"), which amends the Credit Agreement, dated as of August 6, 2014. The Amendment Agreement provides for a term loan facility, a revolving line of credit facility, a letter of credit facility, and an uncommitted incremental credit facility. | ||
The material amendments to the Credit Agreement implemented by the Amendment Agreement include the following: | ||
•an increase in the term loan commitment from $110.0 million to $230.0 million; | ||
•an increase in the revolving credit commitment from $15.0 million to $25.0 million with a letter of credit facility sublimit of $7.5 million and a new swingline loan under the revolving credit commitment with a swingline loan sublimit of $5.0 million; | ||
•an increase in the uncommitted incremental credit facility from up to $30.0 million to $50.0 million in term loans and/or revolving credit commitments; | ||
•extension of the maturity date of the loans to March 31, 2020; and | ||
•adding (1) KeyBanc National Association, as the new administrative agent for the lenders and as a new lender, joint lead arranger, swingline lender and letter of credit issuer, (2) Webster Bank N.A., as a syndication agent, joint lead arranger, letter of credit issuer and a lender and (3) Pacific Western Bank, CoBank, ACB and MUFG Union Bank, N.A., as co-documentation agents. | ||
The obligations under the Amendment Agreement are secured by substantially all of the Company's tangible and intangible assets . The Credit Agreement, as amended, contains customary representations and warranties and customary affirmative and negative covenants. The negative covenants are limited to the following, in each case subject to certain exceptions: a maximum net total leverage ratio; a minimum consolidated fixed charge ratio; limitations on indebtedness and liens; mergers, consolidations or amalgamations, or liquidations, wind-ups or dissolutions; dispositions of property; restricted payments; investments; transactions with affiliates; sale and leaseback transactions; change in fiscal periods; negative pledges; restrictive agreements; limitations on line of business; limitations on speculative hedging and limitations on changes of names and jurisdictions. In addition, we are required to meet certain financial covenants at each quarter end, namely Maximum Consolidated Net Total Leverage in accordance with the table below and Minimum Consolidated Fixed Charge Coverage Ratio of 1.15 : 1 throughout the life of the loan. | ||
Fiscal Quarters Ending | Maximum Consolidated Net Total Leverage Ratio | |
June 30, 2015 through December 31, 2015 | 4.25 : 1.00 | |
March 31, 2016 through December 31, 2016 | 3.75 : 1.00 | |
March 31, 2017 through December 31, 2017 | 3.25 : 1.00 | |
March 31, 2018 through December 31, 2018 | 3.00 : 1.00 | |
March 31, 2019 and all fiscal quarters thereafter | 2.75 : 1.00 | |
The interest rate on borrowings under the term loan facility is LIBOR plus 4.50% spread. The revolving credit facility margin is subject to the leveraged based pricing grid, as set forth in the Amendment Agreement; and the commitment fee is equal to 0.50% per annum of the available revolver. | ||
The net result of the MegaPath Acquisition and the Amendment Agreement reduced the Company's available cash balance by approximately $28.2 million on April 1, 2015 and increased the total outstanding term debt to $230 million, of which approximately $11.5 million is due within the next 12 months. |
BUSINESS_ACQUISITIONS_Tables
BUSINESS ACQUISITIONS (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Business Combinations [Abstract] | |||||||||
Summary of Pro Forma Financial Information | The following pro forma financial information summarizes the combined results of operations of the Company and UNSi as though it had been combined as of the beginning of fiscal 2014. | ||||||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
Amounts in thousands, except per share and share data | |||||||||
Revenue | $ | 62,353 | $ | 62,569 | |||||
Net income (loss) | $ | 1,067 | $ | (12,553 | ) | ||||
Net income (loss) per share: | |||||||||
Basic | $ | 0.03 | $ | (0.54 | ) | ||||
Diluted | $ | 0.03 | $ | (0.54 | ) | ||||
Basic | 33,935,481 | 23,444,384 | |||||||
Diluted | 34,659,757 | 23,444,384 | |||||||
GOODWILL_AND_INTANGIBLE_ASSETS1
GOODWILL AND INTANGIBLE ASSETS (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||
Schedule of Finite-Lived Intangible Assets | The following table summarizes the Company’s intangible assets as of March 31, 2015 and December 31, 2014 (amounts in thousands): | |||||||||||||
March 31, 2015 | ||||||||||||||
Amortization | Gross Asset | Accumulated | Net Book | |||||||||||
Period | Cost | Amortization | Value | |||||||||||
Customer contracts | 3-7 years | $ | 85,759 | $ | 33,878 | $ | 51,881 | |||||||
Non-compete agreements | 3-5 years | 4,331 | 4,207 | 124 | ||||||||||
Point-to-point FCC License fees | 3 years | 1,695 | 278 | 1,417 | ||||||||||
Trade name (non-amortizing) | N/A | 800 | — | 800 | ||||||||||
$ | 92,585 | $ | 38,363 | $ | 54,222 | |||||||||
December 31, 2014 | ||||||||||||||
Amortization | Gross Asset | Accumulated | Net Book | |||||||||||
Period | Cost | Amortization | Value | |||||||||||
Customer contracts | 3-7 years | $ | 85,759 | $ | 29,639 | $ | 56,120 | |||||||
Non-compete agreements | 3-5 years | 4,331 | 4,147 | 184 | ||||||||||
Point-to-point FCC License fees | 3 years | 1,665 | 139 | 1,526 | ||||||||||
Trade name (non-amortizing) | N/A | 800 | — | 800 | ||||||||||
$ | 92,555 | $ | 33,925 | $ | 58,630 | |||||||||
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated amortization expense related to intangible assets subject to amortization at March 31, 2015 in each of the years subsequent to March 31, 2015 is as follows (amounts in thousands): | |||||||||||||
2015 remaining | $ | 12,327 | ||||||||||||
2016 | 15,678 | |||||||||||||
2017 | 13,869 | |||||||||||||
2018 | 8,112 | |||||||||||||
2019 | 3,436 | |||||||||||||
Total | $ | 53,422 | ||||||||||||
FAIR_VALUE_MEASUREMENTS_Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||
Fair Value Inputs, Liabilities, Quantitative Information | The following table presents the liabilities that are measured and recognized at fair value on a recurring basis classified under the appropriate level of the fair value hierarchy as of March 31, 2015 (amounts in thousands): | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Liabilities: | ||||||||||||||||
Acquisition earn-outs | $ | — | $ | — | $ | 3,224 | $ | 3,224 | ||||||||
Fair Value Liabilities Roll Forward | Rollforward of Level 3 liabilities are as follows (amounts in thousands): | |||||||||||||||
Acquisition Earn-outs | ||||||||||||||||
Balance, December 31, 2014 | $ | 3,374 | ||||||||||||||
Paid in cash | (150 | ) | ||||||||||||||
Balance, March 31, 2015 | $ | 3,224 | ||||||||||||||
EMPLOYEE_SHAREBASED_COMPENSATI1
EMPLOYEE SHARE-BASED COMPENSATION BENEFITS (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity | Total non-cash compensation expense is recorded in selling, general and administrative expenses on the accompanying condensed consolidated statement of operations. | |||||||||||
The following tables summarize the Company’s restricted stock for the three months ended March 31, 2015 and 2014 (amounts in thousands): | ||||||||||||
Employees | Non-Employee | Total | ||||||||||
Members of Board | ||||||||||||
of Directors | ||||||||||||
Three months ended March 31, 2015 | ||||||||||||
Restricted stock shares granted | 110 | 3 | 113 | |||||||||
Fair value of shares granted | $ | 1,367 | $ | 49 | $ | 1,416 | ||||||
Restricted stock compensation expense | $ | 788 | $ | 227 | $ | 1,015 | ||||||
Employees | Non-Employee | Total | ||||||||||
Members of Board | ||||||||||||
of Directors | ||||||||||||
Three Months Ended March 31, 2014 | ||||||||||||
Restricted stock shares granted | 210 | 3 | 213 | |||||||||
Fair value of shares granted | $ | 2,621 | $ | 36 | $ | 2,657 | ||||||
Restricted stock compensation expense | $ | 302 | $ | 36 | $ | 338 | ||||||
DEBT_Tables
DEBT (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Debt Disclosure [Abstract] | ||||||||||||
Schedule of Debt | The following summarizes the debt activity of the Company during the three months ended March 31, 2015 (amounts in thousands): | |||||||||||
Total Debt | Senior Term Loan | Delayed Draw Term Loan | ||||||||||
Debt obligation as of December 31, 2014 | $ | 123,626 | $ | 108,626 | $ | 15,000 | ||||||
Payments | (1,376 | ) | (1,376 | ) | — | |||||||
Debt obligation as of March 31, 2015 | 122,250 | 107,250 | 15,000 | |||||||||
Less: Current portion of long-term debt | (7,156 | ) | (6,875 | ) | (281 | ) | ||||||
Long-term debt, net of current portion | $ | 115,094 | $ | 100,375 | $ | 14,719 | ||||||
Schedule Of Estimated Annual Commitment For Debt Maturities | Estimated annual commitments for debt maturities are as follows at March 31, 2015 (amounts in thousands): | |||||||||||
Total Debt | ||||||||||||
2015 remaining | $ | 4,812 | ||||||||||
2016 | 10,120 | |||||||||||
2017 | 12,331 | |||||||||||
2018 | 12,203 | |||||||||||
2019 | 82,784 | |||||||||||
Total | $ | 122,250 | ||||||||||
RESTRUCTURING_COSTS_EMPLOYEE_T1
RESTRUCTURING COSTS, EMPLOYEE TERMINATION AND OTHER ITEMS (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Restructuring and Related Activities [Abstract] | ||||||||||||
Schedule of Restructuring and Related Costs | The restructuring charges and accruals established by the Company are summarized as follows for the period ending March 31, 2015 (amounts in thousands): | |||||||||||
Charges Net of Reversals | Cash Payments | Balance, March 31, 2015 | ||||||||||
Employment costs | $ | 3,725 | $ | 3,725 | $ | — | ||||||
Professional fees | 1,003 | 673 | 330 | |||||||||
Integration expenses | 100 | 75 | 25 | |||||||||
Travel and other expenses | 1,297 | 721 | 576 | |||||||||
Total | $ | 6,125 | $ | 5,194 | $ | 931 | ||||||
EARNINGS_LOSS_PER_SHARE_Tables
EARNINGS (LOSS) PER SHARE (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Earnings Per Share [Abstract] | ||||||||
Schedule of Earnings Per Share Reconciliation | The table below details the calculations of earnings (loss) per share (amounts in thousands, except for share and per share amounts): | |||||||
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
Numerator for basic and diluted EPS – earnings (loss) available to common stockholders | $ | 1,067 | $ | (9,666 | ) | |||
Denominator for basic EPS – weighted average shares | 33,935,481 | 23,444,384 | ||||||
Effect of dilutive securities | 724,276 | — | ||||||
Denominator for diluted EPS – weighted average shares | 34,659,757 | 23,444,384 | ||||||
Income (loss) per share: basic | $ | 0.03 | $ | (0.41 | ) | |||
Income (loss) per share: diluted | $ | 0.03 | $ | (0.41 | ) | |||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The table below details the anti-dilutive items that were excluded in the computation of the earnings per share (amounts in thousands): | |||||||
Three months ended March 31, | ||||||||
2015 | 2014 | |||||||
BIA warrant | — | 1,055 | ||||||
Plexus warrant | — | 960 | ||||||
Alcentra warrant | — | 329 | ||||||
Stock options | — | 1,692 | ||||||
Totals | — | 4,036 | ||||||
SUBSEQUENT_EVENTS_Tables
SUBSEQUENT EVENTS (Tables) | 3 Months Ended | |
Mar. 31, 2015 | ||
Subsequent Events [Abstract] | ||
Schedule of Debt Covenants | ||
Fiscal Quarters Ending | Maximum Consolidated Net Total Leverage Ratio | |
June 30, 2015 through December 31, 2015 | 4.25 : 1.00 | |
March 31, 2016 through December 31, 2016 | 3.75 : 1.00 | |
March 31, 2017 through December 31, 2017 | 3.25 : 1.00 | |
March 31, 2018 through December 31, 2018 | 3.00 : 1.00 | |
March 31, 2019 and all fiscal quarters thereafter | 2.75 : 1.00 |
BUSINESS_ACQUISITIONS_Details
BUSINESS ACQUISITIONS (Details) (United Network Services, Inc. [Member], USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
United Network Services, Inc. [Member] | ||
Business Acquisition [Line Items] | ||
Revenue | $62,353 | $62,569 |
Net income (loss) | $1,067 | ($12,553) |
Net income (loss) per share - Basic (in dollars per share) | $0.03 | ($0.54) |
Net income (loss) per share - Diluted (in dollars per share) | $0.03 | ($0.54) |
Weighted average shares outstanding - Basic (in shares) | 33,935,481 | 23,444,384 |
Weighted average shares outstanding - Diluted (in shares) | 34,659,757 | 23,444,384 |
GOODWILL_AND_INTANGIBLE_ASSETS2
GOODWILL AND INTANGIBLE ASSETS (Details) (USD $) | 3 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Gross Asset Cost | 92,585 | 92,555 |
Accumulated Amortization | 38,363 | 33,925 |
Net Book Value | 54,222 | 58,630 |
Trade name (non-amortizing) [Member] | ||
Trade name (non-amortizing) | 800 | 800 |
Customer contracts [Member] | ||
Gross Asset Cost | 85,759 | 85,759 |
Accumulated Amortization | 33,878 | 29,639 |
Net Book Value | 51,881 | 56,120 |
Customer contracts [Member] | Minimum [Member] | ||
Amortization Period | 3 years | 3 years |
Customer contracts [Member] | Maximum [Member] | ||
Amortization Period | 7 years | 7 years |
Non-compete agreements [Member] | ||
Gross Asset Cost | 4,331 | 4,331 |
Accumulated Amortization | 4,207 | 4,147 |
Net Book Value | 124 | 184 |
Non-compete agreements [Member] | Minimum [Member] | ||
Amortization Period | 3 years | 3 years |
Non-compete agreements [Member] | Maximum [Member] | ||
Amortization Period | 5 years | 5 years |
Point-to-point FCC License fees [Member] | ||
Amortization Period | 3 years | 3 years |
Gross Asset Cost | 1,695 | 1,665 |
Accumulated Amortization | 278 | 139 |
Net Book Value | 1,417 | 1,526 |
GOODWILL_AND_INTANGIBLE_ASSETS3
GOODWILL AND INTANGIBLE ASSETS (Details Textual) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of Intangible Assets | $4.40 | $3 |
GOODWILL_AND_INTANGIBLE_ASSETS4
GOODWILL AND INTANGIBLE ASSETS (Details 1) (USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2015 remaining | $12,327 |
2016 | 15,678 |
2017 | 13,869 |
2018 | 8,112 |
2019 | 3,436 |
Total | $53,422 |
FAIR_VALUE_MEASUREMENTS_Detail
FAIR VALUE MEASUREMENTS (Details) (Earn-out Liability [Member], USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Liabilities, Fair Value Disclosure | $3,224 |
Fair Value, Inputs, Level 1 [Member] | |
Liabilities, Fair Value Disclosure | 0 |
Fair Value, Inputs, Level 2 [Member] | |
Liabilities, Fair Value Disclosure | 0 |
Fair Value, Inputs, Level 3 [Member] | |
Liabilities, Fair Value Disclosure | $3,224 |
FAIR_VALUE_MEASUREMENTS_Detail1
FAIR VALUE MEASUREMENTS (Details 1) (Earn-out Liability [Member], USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance, March 31, 2015 | $3,224 |
Fair Value, Inputs, Level 3 [Member] | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance, March 31, 2015 | 3,224 |
Fair Value, Inputs, Level 3 [Member] | nLayer Communications [Member] | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance, December 31, 2014 | 3,374 |
Paid in cash | -150 |
Balance, March 31, 2015 | $3,224 |
EMPLOYEE_SHAREBASED_COMPENSATI2
EMPLOYEE SHARE-BASED COMPENSATION BENEFITS (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Restricted stock shares granted | 113 | 213 |
Fair value of shares granted | $1,416 | $2,657 |
Restricted stock compensation expense | 1,015 | 338 |
Employees [Member] | ||
Restricted stock shares granted | 110 | 210 |
Fair value of shares granted | 1,367 | 2,621 |
Restricted stock compensation expense | 788 | 302 |
Non Employee Member Of Board Of Directors [Member] | ||
Restricted stock shares granted | 3 | 3 |
Fair value of shares granted | 49 | 36 |
Restricted stock compensation expense | $227 | $36 |
EMPLOYEE_SHAREBASED_COMPENSATI3
EMPLOYEE SHARE-BASED COMPENSATION BENEFITS (Details Textual) (USD $) | 3 Months Ended | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2011 | Dec. 31, 2006 |
Adjustments to Additional Paid in Capital, Share-based Compensation, Stock Options, Requisite Service Period Recognition | $344 | |||
Share-Based Compensation | 1,359 | 489 | ||
Employees and Consultants [Member] | ||||
Share-Based Compensation | 344 | 151 | ||
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Grants In Period, Gross | 85,000 | 349,700 | ||
Stock Options Granted Fair Value | 600 | 2,621 | ||
Additional Paid-In Capital [Member] | ||||
Adjustments to Additional Paid in Capital, Share-based Compensation, Stock Options, Requisite Service Period Recognition | $344 | |||
Periodic Vesting [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent | 100.00% | |||
Employee Director Consultant Stock Plan [Member] | ||||
Stock Issued During Period, Shares, New Issues | 3,000,000 | 3,500,000 | ||
Employee Director Consultant Stock Plan [Member] | Periodic Vesting [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Term of Award | 10 years | |||
Stock Option 25 [Member] | ||||
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Vested and Expected To Vest, Outstanding, Weighted Average Remaining Contractual Term | 4 years | |||
Stock Option 25 [Member] | Periodic Vesting [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Annual Vesting Percentage | 25.00% | |||
Stock Option 75 [Member] | ||||
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Vested and Expected To Vest, Outstanding, Weighted Average Remaining Contractual Term | 3 years | |||
Share-based Compensation Arrangement by Share-based Payment Award, Percent of Awards Vesting After Initial Year | 75.00% |
DEBT_Details
DEBT (Details) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 |
Debt [Roll Forward] | |
Debt obligation | $123,626 |
Payments | -1,376 |
Debt obligation | 122,250 |
Less: Current portion of long-term debt | -7,156 |
Long-term debt, net of current portion | 115,094 |
Senior Term Loan [Member] | |
Debt [Roll Forward] | |
Debt obligation | 108,626 |
Payments | -1,376 |
Debt obligation | 107,250 |
Less: Current portion of long-term debt | -6,875 |
Long-term debt, net of current portion | 100,375 |
Delayed Draw Term Loan [Member] | |
Debt [Roll Forward] | |
Debt obligation | 15,000 |
Payments | 0 |
Debt obligation | 15,000 |
Less: Current portion of long-term debt | -281 |
Long-term debt, net of current portion | $14,719 |
DEBT_Details_1
DEBT (Details 1) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Debt Disclosure [Abstract] | ||
2015 remaining | $4,812 | |
2016 | 10,120 | |
2017 | 12,331 | |
2018 | 12,203 | |
2019 | 82,784 | |
Total | $122,250 | $123,626 |
DEBT_Details_Textual
DEBT (Details Textual) (Amended Credit Agreement, August 2014 [Member], USD $) | 3 Months Ended | 0 Months Ended | |
Mar. 31, 2015 | Sep. 30, 2014 | Aug. 06, 2014 | |
Debt Instrument, Interest Rate at Period End | 4.50% | ||
London Interbank Offered Rate (LIBOR) [Member] | |||
Debt Instrument, Basis Spread on Variable Rate | 4.25% | ||
Term Loan [Member] | |||
Debt Instrument, Face Amount | $110,000,000 | ||
Term Loan [Member] | Debt Instrument, Redemption, Period One [Member] | |||
Debt Instrument, Periodic Payment, Percent | 1.88% | ||
Debt Instrument, Periodic Payment | 1,400,000 | ||
Term Loan [Member] | Debt Instrument, Redemption, Period Three [Member] | |||
Debt Instrument, Periodic Payment, Percent | 2.50% | ||
Debt Instrument, Periodic Payment | 2,700,000 | ||
Term Loan [Member] | Debt Instrument, Redemption, Period Two [Member] | |||
Debt Instrument, Periodic Payment | 2,100,000 | ||
Revolving Credit Facility [Member] | |||
Line of Credit Facility, Maximum Borrowing Capacity | 15,000,000 | ||
Long-term Debt | 0 | ||
Delayed Term Revolver Facility [Member] | |||
Line of Credit Facility, Maximum Borrowing Capacity | 15,000,000 | ||
Long-term Debt | 15,000,000 | ||
Incremental Revolver [Member] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $30,000,000 |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Income Tax Disclosure [Abstract] | ||
(Benefit) Provision for income taxes | ($407,000) | $746,000 |
Deferred Foreign Income Tax Expense (Benefit) | ($1,000,000) |
RESTRUCTURING_COSTS_EMPLOYEE_T2
RESTRUCTURING COSTS, EMPLOYEE TERMINATION AND OTHER ITEMS (Details Textual) (USD $) | 3 Months Ended | 12 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Restructuring Cost and Reserve [Line Items] | ||
Payments for Restructuring | $1.20 | $4 |
United Network Services, Inc. [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Business Combination, Acquisition Related Costs | $6.10 |
RESTRUCTURING_COSTS_EMPLOYEE_T3
RESTRUCTURING COSTS, EMPLOYEE TERMINATION AND OTHER ITEMS (Details) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 |
Restructuring Cost and Reserve [Line Items] | |
Restructuring accrual | $931 |
Employment costs [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 0 |
Professional fees [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 330 |
Integration expenses [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 25 |
Travel and other expenses [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 576 |
Charges Net Of Reversals [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring accrual | 6,125 |
Charges Net Of Reversals [Member] | Employment costs [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 3,725 |
Charges Net Of Reversals [Member] | Professional fees [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 1,003 |
Charges Net Of Reversals [Member] | Integration expenses [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 100 |
Charges Net Of Reversals [Member] | Travel and other expenses [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 1,297 |
Cash Payments [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring accrual | 5,194 |
Cash Payments [Member] | Employment costs [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 3,725 |
Cash Payments [Member] | Professional fees [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 673 |
Cash Payments [Member] | Integration expenses [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 75 |
Cash Payments [Member] | Travel and other expenses [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | $721 |
EARNINGS_LOSS_PER_SHARE_Detail
EARNINGS (LOSS) PER SHARE (Details) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Earnings Per Share [Abstract] | ||
Numerator for basic and diluted EPS b earnings (loss) available to common stockholders | $1,067 | ($9,666) |
Denominator for basic EPS b weighted average shares | 33,935,481 | 23,444,384 |
Effect of dilutive securities | 724,276 | 0 |
Denominator for diluted EPS b weighted average shares | 34,659,757 | 23,444,384 |
Income (loss) per share: basic (in dollars per share) | $0.03 | ($0.41) |
Income (loss) per share: diluted (in dollars per share) | $0.03 | ($0.41) |
EARNINGS_LOSS_PER_SHARE_Detail1
EARNINGS (LOSS) PER SHARE (Details 1) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Totals | 0 | 4,036 |
Stock Options [Member] | ||
Totals | 0 | 1,692 |
Bia Warrant [Member] | ||
Totals | 0 | 1,055 |
Plexus Warrant [Member] | ||
Totals | 0 | 960 |
Alecentra Warrants [Member] | ||
Totals | 0 | 329 |
SUBSEQUENT_EVENTS_Details
SUBSEQUENT EVENTS (Details) (USD $) | 3 Months Ended | 12 Months Ended | 0 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2014 | Apr. 01, 2015 | Aug. 06, 2014 | |
Subsequent Event [Line Items] | ||||
Common stock, par value (in dollars per share) | 0.0001 | $0.00 | ||
Amended Credit Agreement, August 2014 [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||
Subsequent Event [Line Items] | ||||
Debt Instrument, Basis Spread on Variable Rate | 4.25% | |||
Amended Credit Agreement, August 2014 [Member] | Term Loan [Member] | ||||
Subsequent Event [Line Items] | ||||
Debt Instrument, Face Amount | $110,000,000 | |||
Amended Credit Agreement, August 2014 [Member] | Revolving Credit Facility [Member] | ||||
Subsequent Event [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | 15,000,000 | |||
Long-term Debt | 0 | |||
Amended Credit Agreement, August 2014 [Member] | Incremental Revolver [Member] | ||||
Subsequent Event [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | 30,000,000 | |||
MegaPath Group, Inc. [Member] | ||||
Subsequent Event [Line Items] | ||||
Revenue | 124,000,000 | |||
Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Cash, Period Increase (Decrease) | 28,200,000 | |||
Long-term Debt | 230,000,000 | |||
Long-term Debt, Current Maturities | 11,500,000 | |||
Subsequent Event [Member] | Amended Credit Agreement, April 2015 [Member] | ||||
Subsequent Event [Line Items] | ||||
Minimum Consolidated Fixed Charge Coverage Ratio | 1.15 | |||
Subsequent Event [Member] | Amended Credit Agreement, April 2015 [Member] | June 30, 2015 through December 31, 2015 [Member] | ||||
Subsequent Event [Line Items] | ||||
Maximum Consolidated Net Total Leverage Ratio | 4.25 | |||
Subsequent Event [Member] | Amended Credit Agreement, April 2015 [Member] | March 31, 2016 through December 31, 2016 [Member] | ||||
Subsequent Event [Line Items] | ||||
Maximum Consolidated Net Total Leverage Ratio | 3.75 | |||
Subsequent Event [Member] | Amended Credit Agreement, April 2015 [Member] | March 31, 2017 through December 31, 2017 [Member] | ||||
Subsequent Event [Line Items] | ||||
Maximum Consolidated Net Total Leverage Ratio | 3.25 | |||
Subsequent Event [Member] | Amended Credit Agreement, April 2015 [Member] | March 31, 2018 through December 31, 2018 [Member] | ||||
Subsequent Event [Line Items] | ||||
Maximum Consolidated Net Total Leverage Ratio | 3 | |||
Subsequent Event [Member] | Amended Credit Agreement, April 2015 [Member] | March 31, 2019 and all fiscal quarters thereafter [Member] | ||||
Subsequent Event [Line Items] | ||||
Maximum Consolidated Net Total Leverage Ratio | 2.75 | |||
Subsequent Event [Member] | Amended Credit Agreement, April 2015 [Member] | Term Loan [Member] | ||||
Subsequent Event [Line Items] | ||||
Debt Instrument, Face Amount | 230,000,000 | |||
Subsequent Event [Member] | Amended Credit Agreement, April 2015 [Member] | Term Loan [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||
Subsequent Event [Line Items] | ||||
Debt Instrument, Basis Spread on Variable Rate | 4.50% | |||
Subsequent Event [Member] | Amended Credit Agreement, April 2015 [Member] | Revolving Credit Facility [Member] | ||||
Subsequent Event [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | 25,000,000 | |||
Line of Credit Facility, Commitment Fee Percentage | 0.50% | |||
Subsequent Event [Member] | Amended Credit Agreement, April 2015 [Member] | Letter of Credit [Member] | ||||
Subsequent Event [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | 7,500,000 | |||
Subsequent Event [Member] | Amended Credit Agreement, April 2015 [Member] | Swingline Loan [Member] | ||||
Subsequent Event [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | 5,000,000 | |||
Subsequent Event [Member] | Amended Credit Agreement, April 2015 [Member] | Incremental Revolver [Member] | ||||
Subsequent Event [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | 50,000,000 | |||
Subsequent Event [Member] | MegaPath Group, Inc. [Member] | ||||
Subsequent Event [Line Items] | ||||
Business Combination, Consideration Transferred | 152,300,000 | |||
Payments to Acquire Businesses, Gross | 134,800,000 | |||
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | 7,500,000 | |||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 610,843 | |||
Common stock, par value (in dollars per share) | $0.00 | |||
Shares Issued, Price Per Share (in dollars per share) | $12.28 | |||
Business Combination, Consideration Transferred, Other | $10,000,000 |