Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | May. 05, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | GTT Communications, Inc. | |
Entity Central Index Key | 1,315,255 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Trading Symbol | gtt | |
Entity Common Stock, Shares Outstanding | 37,157,103 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,016 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
ASSETS | ||
Cash and cash equivalents | $ 10,177 | $ 14,630 |
Accounts receivable, net of allowances of $1,987 and $1,015 respectively | 69,264 | 60,446 |
Deferred contract costs | 3,902 | 4,159 |
Prepaid expenses and other current assets | 14,393 | 13,663 |
Total current assets | 97,736 | 92,898 |
Property and equipment, net | 40,072 | 38,823 |
Intangible assets, net | 172,956 | 182,184 |
Other assets | 11,607 | 11,593 |
Goodwill | 286,715 | 270,956 |
Total assets | 609,086 | 596,454 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Accounts payable | 21,673 | 22,725 |
Accrued expenses and other current liabilities | 40,700 | 43,115 |
Acquisition earn-outs and holdbacks | 13,643 | 12,842 |
Current portion of capital lease obligations | 983 | 1,392 |
Short-term debt | 4,000 | 4,000 |
Deferred revenue | 14,403 | 15,469 |
Total current liabilities | 95,402 | 99,543 |
Capital lease obligations, net of current portion | 590 | 961 |
Long-term debt | 396,011 | 382,243 |
Deferred revenue, less current portion | 2,290 | 2,292 |
Other long-term liabilities | 835 | 929 |
Total liabilities | $ 495,128 | $ 485,968 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock, par value $.0001 per share, 80,000,000 shares authorized, 37,152,201 and 36,533,634 shares issued and outstanding as of March 31, 2016 and December 31, 2015, respectively | $ 3 | $ 3 |
Additional paid-in capital | 185,549 | 182,797 |
Accumulated deficit | (69,003) | (69,901) |
Accumulated other comprehensive loss | (2,591) | (2,413) |
Total stockholders' equity | 113,958 | 110,486 |
Total liabilities and stockholders' equity | $ 609,086 | $ 596,454 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets [Parenthetical] - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable, current (in dollars) | $ 1,987 | $ 1,015 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 80,000,000 | 80,000,000 |
Common stock, shares, issued | 37,152,201 | 36,533,634 |
Common stock, shares, outstanding | 37,152,201 | 36,533,634 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Revenue: | ||
Telecommunications services | $ 124,437 | $ 62,353 |
Operating expenses: | ||
Cost of telecommunications services | 66,197 | 37,697 |
Selling, general and administrative expense | 32,194 | 14,869 |
Severance, restructuring and other exit costs | 1,495 | 0 |
Depreciation and amortization | 15,598 | 7,498 |
Total operating expenses | 115,484 | 60,064 |
Operating income | 8,953 | 2,289 |
Other expense: | ||
Interest expense, net | (7,370) | (1,581) |
Other expense, net | (280) | (48) |
Total other expense | (7,650) | (1,629) |
Income before income taxes | 1,303 | 660 |
Provision for (benefit from) income taxes | 405 | (407) |
Net income | $ 898 | $ 1,067 |
Earnings per share: | ||
Basic (in dollars per share) | $ 0.02 | $ 0.03 |
Diluted (in dollars per share) | $ 0.02 | $ 0.03 |
Weighted average shares: | ||
Basic (in shares) | 36,854,219 | 33,935,481 |
Diluted (in shares) | 37,455,379 | 34,659,757 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 898 | $ 1,067 |
Other comprehensive loss: | ||
Foreign currency translation adjustment | (178) | (1,460) |
Comprehensive income (loss) | $ 720 | $ (393) |
Condensed Consolidated Stateme6
Condensed Consolidated Statement of Stockholders' Equity - 3 months ended Mar. 31, 2016 - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Income (Loss) [Member] |
Balance at Dec. 31, 2015 | $ 110,486 | $ 3 | $ 182,797 | $ (69,901) | $ (2,413) |
Balance (in shares) at Dec. 31, 2015 | 36,533,634 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Share-based compensation for options issued | 427 | 427 | |||
Share-based compensation for restricted stock issued | 1,126 | 1,126 | |||
Share-based compensation for restricted stock issued (in shares) | 457,486 | ||||
Tax withholding related to the vesting of restricted stock units | (536) | (536) | |||
Tax withholding related to the vesting of restricted stock units (in shares) | (61,816) | ||||
Stock issued in connection with acquisition | 1,572 | 1,572 | |||
Stock issued in connection with acquisition (in shares) | 178,202 | ||||
Stock options exercised | 163 | 163 | |||
Stock options exercised (in shares) | 44,695 | ||||
Net income | 898 | 898 | |||
Foreign currency translation | (178) | (178) | |||
Balance at Mar. 31, 2016 | $ 113,958 | $ 3 | $ 185,549 | $ (69,003) | $ (2,591) |
Balance (in shares) at Mar. 31, 2016 | 37,152,201 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash flows from operating activities: | ||
Net income | $ 898 | $ 1,067 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 15,598 | 7,498 |
Share-based compensation | 1,553 | 1,359 |
Debt discount amortization | 323 | 0 |
Amortization of debt issuance costs | 445 | 165 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable, net | (7,776) | (738) |
Deferred costs | 185 | (1,167) |
Prepaid expenses and other current assets | (719) | 415 |
Other assets | 65 | (698) |
Accounts payable | (525) | 3,269 |
Accrued expenses and other current liabilities | (2,611) | (5,248) |
Deferred revenue and other liabilities | (1,185) | (54) |
Net cash provided by operating activities | 6,251 | 5,868 |
Cash flows from investing activities: | ||
Acquisition of business | (13,751) | 0 |
Purchases of property and equipment | (7,517) | (3,433) |
Net cash used in investing activities | (21,268) | (3,433) |
Cash flows from financing activities: | ||
Proceeds from revolving line of credit | 14,000 | 0 |
Repayment of term loan | (1,000) | (1,376) |
Payment of holdback | (999) | 0 |
Repayment of capital leases | (184) | 0 |
Repayment of subordinate notes payable | (536) | (529) |
Exercise of stock options | 163 | 193 |
Net cash provided by (used in) financing activities | 11,444 | (1,712) |
Effect of exchange rate changes on cash | (880) | 2,108 |
Net (decrease) increase in cash and cash equivalents | (4,453) | 2,831 |
Cash and cash equivalents at beginning of period | 14,630 | 49,256 |
Cash and cash equivalents at end of period | 10,177 | 52,087 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 6,604 | 498 |
Cash paid for taxes, net of refunds | 209 | (41) |
Fair value of current assets acquired | 889,000 | 0 |
Fair value of non-current assets acquired | 1,012,000 | 0 |
Fair value of current liabilities assumed | (640,000) | 0 |
Stock issued in connection with acquisition | $ 1,572 | $ 0 |
ORGANIZATION AND BUSINESS
ORGANIZATION AND BUSINESS | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BUSINESS | ORGANIZATION AND BUSINESS Organization and Business GTT Communications, Inc. (“GTT” or the "Company") is a provider of cloud networking services. The Company offers multinational clients a broad portfolio of global communications services including: EtherCloud® wide area network services; Internet services; managed network and security services; and voice and unified communication services. GTT's global Tier 1 IP network delivers connectivity to clients around the world. The Company provides services to leading multinational enterprises, carriers and government customers. GTT strives to differentiate itself from its competition by delivering service to its clients with simplicity, speed and agility. Basis of Presentation 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, 2015 , included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015 filed on March 9, 2016. 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 its results of operations. The operating results for the three months ended March 31, 2016 are not necessarily indicative of the results to be expected for the full fiscal year 2016 or for any other interim period. The December 31, 2015 consolidated balance sheet is condensed from the audited financial statements as of that date, but does not include all disclosures required by GAAP. 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. Significant estimates are used when establishing allowances for doubtful accounts and accruals for billing disputes, determining useful lives for depreciation and amortization and accruals for exit activities, assessing the need for impairment charges (including those related to intangible assets and goodwill), determining the fair values of assets acquired and liabilities assumed in business combinations, accounting for income taxes and related valuation allowances against deferred tax assets and estimating the grant date fair values used to compute the share-based compensation expense. Management evaluates these estimates and judgments on an ongoing basis and makes estimates based on historical experience, current conditions, and various other assumptions that are believed to be reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities as well as identifying and assessing the accounting treatment with respect to commitments and contingencies. Actual results may differ from these estimates under different assumptions or conditions. Segment Reporting The Company reports operating results and financial data in one operating and reporting segment. The chief operating decision maker manages the Company as a single profit center in order to promote collaboration, provide comprehensive service offerings across its entire customer base, and provide incentives to employees based on the success of the organization as a whole. Although certain information regarding selected products or services are discussed for purposes of promoting an understanding of the Company's complex business, the chief operating decision maker manages the Company and allocates resources at the consolidated level. Revenue Recognition The Company delivers four primary services to its customers — flexible Ethernet-based connectivity service (EtherCloud); high bandwidth internet connectivity services (Internet Services); managed network services and security (Managed Services); and global communication and collaboration services (Voice and UC Services). Certain of its revenue activities have features that may be considered multiple elements, specifically when the Company sells its subscription services in addition to customer premise equipment ("CPE"). The Company believes that there is sufficient evidence to determine each element’s fair value and as a result, in those arrangements where there are multiple elements, the subscription revenue is recorded ratably over the term of the agreement and the equipment is accounted for as a sale, at the time of sale. The Company's services are provided under contracts that typically include an installation charge along with payments of recurring charges on a monthly basis for use of the services over a committed term. Its contracts with customers specify the terms and conditions for providing such services, including installation date, recurring and non-recurring fees, payment terms, and contract length. These contracts call for the Company to provide the service in question (e.g., data transmission between point A and point Z), to manage the activation process, and to provide ongoing support (in the form of service maintenance and trouble-shooting) during the service term. The contracts do not typically provide the customer any rights to use specifically identifiable assets. Furthermore, the contracts generally provide the Company with discretion to engineer (or re-engineer) a particular network solution to satisfy each customer’s data transmission requirement, and typically prohibit physical access by the customer to the network infrastructure used by the Company and its suppliers to deliver the services. The Company recognizes revenue as follows: Monthly Recurring Revenue. Monthly recurring revenue represents the substantial majority of the Company's revenue, and consists of fees charged for ongoing services that are generally fixed in price and billed on a recurring monthly basis (one month in advance) for a specified term. At the end of the term, most contracts provide for a continuation of services on the same terms, either for a specified renewal period (e.g., one year) or on a month-to-month basis. The Company records recurring revenue based on the fees agreed to in each contract, as long as the contract is in effect, and as long as collectability is reasonably assured. Burst Revenue. Burst revenue represents variable charges for certain services, based on specific usage of those services, or usage above a fixed threshold, billed monthly in arrears. The Company records burst revenue based on actual usage charges billed using the rates and/or thresholds specified in each contract, as long as collectability is reasonably assured. Non-recurring Revenue. Non-recurring revenue consists of charges for installation in connection with the delivery of recurring communications services, late payments, cancellation fees, early termination fees, and equipment sales. Fees billed for installation services are initially recorded as deferred revenue then recognized ratably over the contractual term of the recurring service. Fees charged for late payments, cancellation (pre-installation) or early termination (post-installation) are typically fixed or determinable per the terms of the respective contract, and are recognized as revenue when billed if collectability is reasonably assured. In addition, from time to time the Company sells communications and/or networking equipment to its customers in connection with its data networking services. The Company recognizes revenue from the sale of equipment at the contracted selling price when title to the equipment passes to the customer (generally F.O.B. origin) and when collectability is reasonably assured. Universal Service Fund (USF), Gross Receipts Taxes and Other Surcharges The Company is liable in certain cases for collecting regulatory fees and/or certain sales taxes from its customers and remitting the fees and taxes to the applicable governing authorities. Where the Company collects on behalf of a regulatory agency, the Company does not record any revenue. The Company records applicable taxes on a net basis. Cost of Telecommunications Services Cost of telecommunications services includes direct costs incurred in accessing other telecommunications providers’ networks in order to provide telecommunication services to the Company's customers, and expenses for connection to other carriers. The cost of the Company's core network is usually renewed on an annual basis. Connectivity from the Company's core network to a customer premise is typically contracted using matching terms to the customer. Cost of telecommunications services also includes co-location charges, usage-based access charges and professional services fees incurred pursuant to a customer's service contract. Share-Based Compensation The Company recognizes share-based compensation expense for share-based payment awards based on the grant date fair value. The fair value of stock options is determined on the date of grant using the Black-Scholes option-pricing model. The expense is recognized on a straight-line basis over the requisite service period. Share-based compensation expense also includes grants for performance awards. The Company began recognizing share-based compensation expense for these grants when the achievement of the performance criteria was considered probable, which occurred in the third quarter of 2015. Income Taxes Income taxes are accounted for under the asset and liability method pursuant to GAAP. Under this method, deferred tax assets and liabilities are recognized for the expected future results attributable to the differences between the financial statement carrying amounts and the tax basis of assets and liabilities. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period of the change. Further, deferred tax assets are recognized for the expected realization of available net operating loss and tax credit carryforwards. A valuation allowance is recorded on gross deferred tax assets when it is “more likely than not” that such asset will not be realized. When evaluating the realizability of deferred tax assets, all evidence, both positive and negative is evaluated. Items considered in this analysis include the ability to carry back losses, the reversal of temporary differences, tax planning strategies, and expectations of future earnings. The Company reviews its deferred tax assets on a quarterly basis to determine if a valuation allowance is required based upon these factors. Changes in the Company's assessment of the need for a valuation allowance could give rise to a change in such allowance, potentially resulting in additional expense or benefit in the period of change. The Company's income tax provision includes U.S. federal, state, local and foreign income taxes and is based on pre-tax income or loss. In determining the annual effective income tax rate, the Company analyzes various factors, including its annual earnings and taxing jurisdictions in which the earnings were generated, the impact of state and local income taxes and its ability to use tax credits and net operating loss carryforwards. Under GAAP for income taxes, the amount of tax benefit to be recognized is the amount of benefit that is “more likely than not” to be sustained upon examination. The Company analyzes its tax filing positions in all of the U.S. federal, state, local and foreign tax jurisdictions where it is required to file income tax returns, as well as for all open tax years in these jurisdictions. If, based on this analysis, the Company determines that uncertainties in tax positions exist, a liability is established in the consolidated financial statements. The Company recognizes accrued interest and penalties related to unrecognized tax positions in the provision for income taxes. Comprehensive Income (Loss) In addition to net income (loss), comprehensive income (loss) includes certain 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. Earnings Per Share Basic earnings per share is computed by dividing net income or (loss) available to common stockholders by the weighted average number of common shares outstanding. Diluted earnings 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. The table below details the calculations of earnings per share (in thousands, except for share and per share amounts): Three months ended March 31, 2016 2015 Numerator for basic and diluted EPS – earnings available to common stockholders $ 898 $ 1,067 Denominator for basic EPS – weighted average shares 36,854,219 33,935,481 Effect of dilutive securities 601,160 724,276 Denominator for diluted EPS – weighted average shares 37,455,379 34,659,757 Earnings per share: basic $ 0.02 $ 0.03 Earnings per share: diluted $ 0.02 $ 0.03 The anti-dilutive common share items that were excluded in the computation of earnings per share were approximately 254,000 shares for the three months ended March 31, 2016. There were no anti-dilutive common shares for the three months ended March 31, 2015. Cash and Cash Equivalents Cash and cash equivalents may include deposits with financial institutions as well as short-term money market instruments, certificates of deposit and debt instruments with maturities of three months or less when purchased. Accounts Receivable, Net Accounts receivable balances are stated at amounts due from the customer net of an allowance for doubtful accounts. Credit extended is based on an evaluation of the customer’s financial condition and is granted to qualified customers on an unsecured basis. The Company, pursuant to its standard service contracts, is entitled to impose a monthly finance charge with respect to amounts that are past due. The Company’s standard terms require payment within 30 days of the date of the invoice. The Company treats invoices as past due when they remain unpaid, in whole or in part, beyond the payment date set forth in the applicable service contract. The Company determines its allowance for doubtful accounts by considering a number of factors, including the length of time trade receivables are past due, the customer’s payment history, current ability to pay its obligation, and the condition of the general economy and the industry as a whole. Specific reserves are also established on a case-by-case basis by management. Actual bad debts, when determined, reduce the allowance. The Company periodically evaluates the collectability of accounts receivable and writes off accounts after a determination is made that the amounts at issue are no longer likely to be collected, following the exercise of reasonable collection efforts. Deferred Costs Installation costs related to provisioning of recurring communications services that the Company incurs from independent third party suppliers, directly attributable and necessary to fulfill a particular service contract, and which would not have been incurred but for the occurrence of that service contract, are recorded as deferred costs and expensed ratably over the contractual term of service in the same manner as the deferred revenue arising from that contract. Based on historical experience, the Company believes the initial contractual term is the best estimate for the period of earnings. If any installation costs exceed the amount of corresponding deferred revenue, the excess cost is recognized in the current period. Property and Equipment Property and equipment is stated at cost, net of accumulated depreciation, computed using the straight-line method. Depreciation on these assets is computed over the estimated useful lives of the assets. Assets and liabilities under capital leases are recorded at the lesser of the present value of the aggregate future minimum lease payments or the fair value of the assets under lease. Leasehold improvements and assets under capital leases are amortized over the shorter of the term of the lease, excluding optional extensions, or the useful life. Depreciable lives used by the Company for its classes of assets are as follows: Furniture and Fixtures 7 years Network Equipment 5 years Leasehold Improvements up to 10 years Computer Hardware and Software 3-5 years The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, the asset is considered to be impaired. Impairment losses are measured as the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of are reported at the lower of the carrying amount or fair value less cost to sell or dispose. Software Capitalization Software development costs include costs to develop software programs to be used solely to meet the Company's internal needs. The Company capitalizes development costs related to these software applications once the preliminary project stage is complete and it is probable that the project will be completed and the software will be used to perform the function intended. Costs capitalized for developing such software applications were not material for the periods presented. Goodwill and Intangible Assets The Company assesses goodwill for impairment on at least an annual basis on October 1 unless interim indicators of impairment exist. Goodwill is considered to be impaired when the net book value of a reporting unit exceeds its estimated fair value. The Company operates as a single operating segment and as a single reporting unit for the purpose of evaluating goodwill. On October 1, 2015, the Company performed its annual impairment test of goodwill by comparing its fair value (primarily based on market capitalization) to the carrying value of equity, and concluded that the fair value of the reporting unit was greater than the carrying amount. During the three months ended March 31, 2016 and 2015 the Company did not record any goodwill impairment. Intangible assets consist of customer relationships, restrictive covenants related to employment agreements, license fees, intellectual property and trade names. Customer relationships, restrictive covenants related to employment agreements and trade names are amortized, on a straight-line basis, over periods of up to seven years. FCC Licenses are accounted for as definite lived intangibles and amortized over the average remaining useful life of such licenses which approximates three years. Intellectual property consisting of know-how related to the SIP trunking platform is amortized over the estimated useful life of ten years. One of the Company's trade names is not amortized, but is tested on at least an annual basis as of October 1 unless interim indicators of impairment exist. The trade name is considered to be impaired when the net book value exceeds its estimated fair value. As of October 1, 2015, the Company performed its annual impairment test of the trade name, and concluded that the fair value of the trade name was greater than the carrying amount. The Company used the relief from royalty method for valuation. At the end of the first quarter of 2016, the Company evaluated whether any triggering events had occurred that may require further testing. After assessing the totality of events and circumstances, the Company has determined that there were no indicators that the fair value of goodwill was below its carrying amounts and therefore an interim Step 1 goodwill impairment test was not required to be performed. Business Combinations The Company includes the results of operations of the businesses that it acquires commencing on the respective dates of acquisition. The Company allocates the fair value of the purchase price of its acquisitions to the assets acquired and liabilities assumed based on their estimated fair values. The excess of the fair value of the purchase price over the fair values of these identifiable assets and liabilities is recorded as goodwill. Accrued Supplier Expenses The Company accrues estimated charges owed to its suppliers for services. The Company bases this accrual on the supplier contract, the individual service order executed with the supplier for that service, and the length of time the service has been active. Disputed Supplier Expenses It is common in the telecommunications industry for customers and suppliers to engage in disputes over amounts billed (or not billed) in error or over interpretation of contract terms. Management estimates a liability for the amounts the Company believes are valid and that the Company owes to a supplier. This liability is reconciled with actual results as disputes are resolved, or as the appropriate statute of limitations with respect to a given dispute expires. As of March 31, 2016 , the Company had open disputes, not accrued for, of $7.5 million . As of December 31, 2015 , the Company had open disputes, not accrued for, of $6.9 million . Acquisition Earn-outs and Holdbacks Acquisition earn-outs and holdbacks represent either contingent consideration subject to re-measurement to fair value, or fixed deferred consideration due to be paid out typically on the one-year anniversary of an acquisition's closing. Contingent consideration is remeasured to fair value at each reporting period. The portion of the deferred consideration due within one year is recorded as a current liability until paid, and any consideration due beyond one year is recorded in other long-term liabilities. Debt Issuance Costs Debt issuance costs represent costs that qualify for deferral associated with the issuance of new debt or the modification of existing debt facilities. The unamortized balance of debt issuance costs is presented as a reduction to the carrying value of long-term debt. Debt issuance costs are amortized and recognized on the condensed consolidated statements of operations as interest expense. Translation of Foreign Currencies These consolidated financial statements have been reported in U.S. Dollars by translating asset and liability amounts of foreign subsidiaries at the closing exchange rate, equity amounts at historical rates, and the results of operations and cash flow at the average exchange rate prevailing during the periods reported. Transactions denominated in foreign currencies are recorded at the rates of exchange prevailing at the time of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange prevailing at the balance sheet date. Exchange differences arising upon settlement of a transaction are reported in the consolidated statements of operations in other expense, net. Fair Value Measurements Accounting guidance defines fair value as 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. Under this guidance, the Company is required to classify certain assets and liabilities based on the following hierarchy: Level 1: Quoted prices for identical assets or liabilities in active markets that can be assessed at the measurement date. Level 2: Inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3: Inputs reflect management's best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instruments valuation. The guidance requires the use of observable market data if such data is available without undue cost and effort. As of March 31, 2016 and December 31, 2015 , the carrying amounts reflected in the accompanying consolidated balance sheets for cash and cash equivalents, accounts receivable, accounts payable, and other liabilities approximated fair value due to the short-term nature of these instruments. The carrying value of the Company's long-term debt, net of unamortized debt issuance costs and unamortized original issuance discount was $400.0 million and $386.2 million , as of March 31, 2016 and December 31, 2015, respectively. Based on trading activity of the Company's specific debt, the fair value of the Company's long-term debt as of March 31, 2016 and December 31, 2015 was estimated to be the same as its carrying value. The Company's fair value estimates of the long-term debt were based on level 2 inputs; quoted prices for similar instruments in active markets. The fair value of the earn-out was $0.5 million as of March 31, 2016 , which was estimated to be the same as its carrying value, based on level 3 inputs. The earn-out is expected to be settled in the second quarter of Fiscal 2016. Assets and liabilities measured at 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). C oncentrations of Credit Risk Financial instruments potentially subject to concentration of credit risk consist primarily of cash and cash equivalents and trade accounts receivable. At times during the periods presented, the Company had funds in excess of $250,000 insured by the U.S. Federal Deposit Insurance Corporation, or in excess of similar Deposit Insurance programs outside of the United States, on deposit at various financial institutions. Management believes the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. The Company's trade accounts receivable are generally unsecured and geographically dispersed. No single customer's trade accounts receivable balance as of March 31, 2016 and December 31, 2015 exceeded 10% of the Company's consolidated accounts receivable, net. No single customer accounted for more than 10% of revenue for the three months ended March 31, 2016 and 2015 . Related Party Transactions From time to time and in the ordinary course of business, the Company engages in contracts with various vendors for certain networking services and equipment, to support the Company's broad range of communication services it provides to its clients. Several members of the Company's Board of Directors have relationships with these vendors that meet the definition of a related party transaction, as described in the Securities and Exchange Commission ("SEC"), Item 404 of Regulation S-K. The majority of these contracts were in place before the Board member joined the Company's Board of Directors, or the contracts were assumed as part of a recent business acquisition. The related party relationships and the contractual obligations paid and received by the Company for the three months ended March 31, 2016 have not materially changed from Fiscal 2015, as disclosed in the Annual Report on Form 10-K for the fiscal year ended December 31, 2015. As a matter of corporate governance policy and practice, related party transactions are presented and considered by the Audit Committee of the Company's Board of Directors in accordance with the Company's Code of Business Conduct and Ethics, Conflict of Interest Policy . Newly Adopted Accounting Principles For information regarding newly adopted accounting principles, please refer to the "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2015 and Note 2 to our consolidated financial statements contained therein. The Company has not adopted any new accounting principles for the first quarter of 2016. Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which amends the existing accounting standards for revenue recognition. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , which delays the effective date of ASU 2014-09 by one year. The FASB also agreed to allow entities to choose to adopt the standard as of the original effective date. As such, the updated standard will be effective in the first quarter of 2018, with the option to adopt it in the first quarter of 2017. The Company is still evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases , which will require most leases (with the exception of leases with terms of less than one year) to be recognized on the balance sheet as an asset and a lease liability. Leases will be classified as an operating lease or a financing lease. Operating leases are expensed using the straight-line method whereas financing leases will be treated similarly to a capital lease under the current standard. The new standard will be effective for annual and interim periods, within those fiscal years, beginning after December 15, 2018 but early adoption is permitted. The new standard must be presented using the modified retrospective method beginning with the earliest comparative period presented. The Company is currently evaluating the effect of the new standard on its consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718) , which was issued as part of the FASB’s simplification initiative and cover such areas as (i) the recognition of excess tax benefits and deficiencies and the classification of those excess tax benefits on the statement of cash flows, (ii) an accounting policy election for forfeitures to be estimated or account for when incurred, (iii) the amount an employer can withhold to cover income taxes and still qualify for equity classification; and (iv) the classification of those taxes paid on the statement of cash flows. This update is effective for annual and interim periods beginning after December 15, 2016, which will require the Company to adopt these provisions in the first quarter of fiscal 2018. This guidance will be applied either prospectively, retrospectively or using a modified retrospective transition method, depending on the area covered in this update. Early adoption is permitted. The Company is still evaluating the effect of the new standard on its consolidated financial statements and related disclosures. Other recent accounting pronouncements issued by the FASB during fiscal 2015 and through the period ended March 31, 2016 are not believed by management to have a material impact on the Company's present or historical consolidated financial statements. Reclassification of Certain Item on Prior Year Presentation The Company reclassified the amortization of debt issuance costs on the consolidated statement of cash flows for the three months ended March 31, 2015 to match the presentation for the three months ended March 31, 2016. Amortization of debt issuance costs of $0.2 million were previously presented as part of changes in other assets, and are now presented as amortization of debt issuance costs. The reclassification had no impact on total revenues, total operating expenses or net income (loss) for any year presented. |
BUSINESS ACQUISITIONS
BUSINESS ACQUISITIONS | 3 Months Ended |
Mar. 31, 2016 | |
Business Combinations [Abstract] | |
BUSINESS ACQUISITIONS | BUSINESS ACQUISITIONS Since its formation, the Company has consummated a number of transactions accounted for as business combinations. The acquisitions were executed as part of the Company’s business strategy of expanding through acquisitions. The acquisitions of these businesses have allowed the Company to increase the scale at which it operates, which in turn affords the Company the ability to increase its operating leverage, extend its network, and broaden its customer base. The accompanying condensed consolidated financial statements include the operations of the acquired entities from their respective acquisition dates. All of the acquisitions have been accounted for as a business combination. Accordingly, consideration paid by the Company to complete the acquisitions is initially allocated to the respective assets and liabilities based upon their estimated fair values as of the date of completion of the acquisition. The recorded amounts for acquired assets and liabilities assumed are provisional and subject to change during the measurement period, which is 12 months from the date of acquisition. On February 4, 2016, the Company completed the acquisition of Telnes Broadband ("Telnes"), an internet and managed services provider. The Company paid $18.2 million , composed of approximately $15.5 million in cash and $2.7 million in the Company's common stock, valued at the variable weighted average market price per share. Approximately $1.8 million of the cash consideration is deferred for one year to cover undisclosed liabilities or other indemnification claims per the purchase agreement. For the purpose of purchase price allocation, the Company's common stock was valued at $1.6 million due to the lack of marketability. Therefore the purchase consideration for accounting purposes was valued at $17.1 million . For material acquisitions completed during fiscal 2015, 2014, and 2013, please refer to the Note 3 to the consolidated financial statements contained in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2015. Acquisition Method Accounting Estimates The Company initially recognizes the assets and liabilities acquired from the aforementioned acquisitions based on its preliminary estimates of their acquisition date fair values. As additional information becomes known concerning the acquired assets and assumed liabilities, management may make adjustments to the opening balance sheet of the acquired company up to the end of the measurement period, which is no longer than a one year period following the acquisition date. The determination of the fair values of the acquired assets and liabilities assumed (and the related determination of estimated lives of depreciable tangible and identifiable intangible assets) requires significant judgment. Acquisition Related Costs Acquisition related costs describe the broad category of costs the Company incurs in connection with signed and/or closed acquisitions. There are two types of costs that the Company accounts for: • Severance, restructuring and other exit costs • Transaction and integration costs Severance, restructuring and other exit costs are costs the Company incurs related to non-recurring benefits the Company pays to severed employees, termination charges for leases and supplier contracts, and other costs incurred associated with an exit activity. These costs are reported separately in the consolidated statements of operations during the three months ended March 31, 2016 and 2015. Refer to Note 8 of these Condensed Consolidated Financial Statements for further information on severance, restructuring and other exit costs. Transaction and integration costs include expenses associated with professional services (i.e., legal, accounting, regulatory, etc.) rendered in connection with signed and/or closed acquisitions, travel expense, and other non-recurring direct expenses incurred that are associated with such acquisitions. Transaction and integration costs are expensed as incurred, included in selling, general and administrative expenses, and may be incurred up to six months after the closing date of acquisition in support of the integration. The Company incurred transaction and integration costs of $1.3 million during the three months ended March 31, 2016 . Pro forma Financial Information (Unaudited) The pro forma results presented below include the effects of the Company's acquisition of MegaPath (closed on April 1, 2015) and One Source (closed on October 22, 2015) as if the acquisitions occurred on January 1, 2015. The pro forma net income (loss) for the year ended December 31, 2015 and three months ended March 31, 2016 includes the additional depreciation and amortization resulting from the adjustments to the value of property, plant and equipment and intangible assets resulting from acquisition accounting and adjustment to amortized revenue during fiscal 2015 and first quarter of 2016 as a result of the acquisition date valuation of assumed deferred revenue. The pro forma results also include interest expense associated with debt used to fund the acquisitions. The pro forma results do not include any anticipated synergies or other expected benefits of the acquisitions. The unaudited pro forma financial information below is not necessarily indicative of either future results of operations or results that might have been achieved had the acquisitions been consummated as of January 1, 2015. Three months ended March 31, 2016 2015 (Amounts in thousands, except per share and share data) Revenue $ 124,437 $ 112,088 Net income (loss) $ 898 $ (2,929 ) Earnings (loss) per share: Basic $ 0.02 $ (0.08 ) Diluted $ 0.02 $ (0.08 ) Basic 36,854,219 35,021,325 Diluted 37,455,379 35,021,325 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS At the end of the first quarter of 2016, the Company evaluated whether any triggering events had occurred that may require further testing. After assessing the totality of events and circumstances, the Company has determined that there were no indicators that the fair value is below its carrying amounts and therefore an interim Step 1 goodwill impairment test was not required to be performed. The goodwill balance was $286.7 million and $271.0 million as of March 31, 2016 and December 31, 2015 , respectively. Additionally, the Company's intangible asset balance was $173.0 million and $182.2 million as of March 31, 2016 and December 31, 2015 , respectively. The additions to both goodwill and intangible assets during the three months ended March 31, 2016 relate to the acquisition of Telnes and finalized fair value of estimates associated with the acquisition of Megapath (see Note 2 - Business Acquisitions ). The changes in the carrying amount of goodwill for the period ended December 31, 2015 and March 31, 2016 are as follows (amounts in thousands): Balance, December 31, 2015 $ 270,956 Adjustments to prior year's business combination (1) (101 ) Goodwill associated with acquisition 15,860 Balance, March 31, 2016 $ 286,715 (1) Finalization of fair value for certain capital lease and other assets. The following table summarizes the Company’s intangible assets as of March 31, 2016 and December 31, 2015 (amounts in thousands): March 31, 2016 December 31, 2015 Amortization Gross Asset Cost Accumulated Amortization Net Book Value Gross Asset Cost Accumulated Amortization Net Book Value Customer contracts 3-7 years $ 215,802 $ 62,500 $ 153,302 $ 215,802 $ 54,041 $ 161,761 Non-compete agreements 3-5 years 4,331 4,324 7 4,331 4,305 26 Point-to-point FCC license fees 3 years 1,695 1,695 843 852 1,695 701 994 Intellectual property 10 years 17,379 17,379 771 16,608 17,379 336 17,043 Trade name 3 years 2,079 2,080 693 1,387 2,079 519 1,560 Trade name (indefinite-lived) N/A 800 — 800 800 — 800 $ 242,087 $ 69,131 $ 172,956 $ 242,086 $ 59,902 $ 182,184 Amortization expense was $9.2 million and $4.4 million for the three months ended March 31, 2016 and 2015 , respectively. Estimated amortization expense related to intangible assets subject to amortization at March 31, 2016 in each of the years subsequent to March 31, 2016 is as follows (amounts in thousands): 2016 remaining $ 27,247 2017 34,669 2018 28,392 2019 23,735 2020 20,834 2021 and beyond 37,279 Total $ 172,156 |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 3 Months Ended |
Mar. 31, 2016 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES The following table summarizes the Company’s accrued expenses and other current liabilities as of March 31, 2016 and December 31, 2015 (amounts in thousands): March 31, 2016 December 31, 2015 Accrued compensation and benefits $ 5,103 $ 9,465 Accrued supplier costs 22,482 21,637 Accrued restructuring 6,714 6,833 Accrued other 6,401 5,180 $ 40,700 $ 43,115 |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT As of March 31, 2016 and December 31, 2015 , long-term debt was as follows (amounts in thousands): March 31, 2016 December 31, 2015 Term loan $ 399,000 $ 400,000 Revolving line of credit 19,000 5,000 Delayed draw term loan — — Total debt obligations 418,000 405,000 Unamortized debt issuance costs (10,493 ) (10,938 ) Unamortized original issuance discount (7,496 ) (7,819 ) Carrying value of debt 400,011 386,243 Less current portion (4,000 ) (4,000 ) Long-term debt less current portion $ 396,011 $ 382,243 October 2015 Credit Agreement On October 22, 2015, the Company entered into a credit agreement (the “October 2015 Credit Agreement”) that provided for a $400.0 million term loan facility and a $50.0 million revolving line of credit (which includes a $15.0 million letter of credit facility and a $10.0 million swingline facility). In addition, the Company may request incremental term loan and/or incremental revolving loan commitments in an aggregate amount not to exceed the sum of $75.0 million and an unlimited amount that is subject to pro forma compliance with certain net secured leverage ratio tests, provided, however, that incremental revolving loan commitments may not exceed $25.0 million . The term loan facility was issued at a discount of $8 million . Approximately $0.4 million of the revolving line of credit is currently utilized for outstanding letters of credit relating to the Company’s real estate lease obligations. As of March 31, 2016 the Company had drawn $ 19 million under the revolving line of credit and had $30.6 million of borrowing capacity available. The Company used the proceeds from the October 2015 Credit Agreement to acquire One Source Networks Inc. on October 22, 2015 and Telnes on February 4, 2016, as well as to refinance existing debt. Details of prior year acquisitions and debt are included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2015. The maturity date of the term loan facility is October 22, 2022 and the maturity date of the revolving line of credit is October 22, 2020. The aggregate contractual maturities of long-term debt (excluding unamortized discounts and unamortized debt issuance costs) were as follows at December 31, 2015 (amounts in thousands): Total Debt 2016 remaining $ 3,000 2017 4,000 2018 4,000 2019 4,000 2020 23,000 2021 4,000 2022 376,000 Total $ 418,000 The Company may prepay loans under the October 2015 Credit Agreement at any time, subject to certain notice requirements and LIBOR breakage costs. The applicable rate for term loans is LIBOR plus 5.25% subject to a LIBOR floor of 1.00% . The applicable rate for revolving loans is LIBOR plus 4.75% with no floor. The effective interest rate on outstanding debt at March 31, 2016 and December 31, 2015 was 6.27% and 6.24% , respectively. Debt covenants The October 2015 Credit Agreement contains customary financial and operating covenants, including among others a consolidated net secured leverage ratio and covenants restricting the incurrence of debt, imposition of liens, the payment of dividends and entering into affiliate transactions. The October 2015 Credit Agreement also contains customary events of default, including nonpayment of principal or interest, material inaccuracy of representations and failure to comply with covenants. If an event of default occurs and is continuing under the October 2015 Credit Agreement, the entire outstanding balance may become immediately due and payable. In addition, the Company must comply with a Consolidated Net Secured Leverage Ratio covenant and is restricted from permitting the Consolidated Net Secured Leverage Ratio to be greater than the maximum ratio specified below during the period opposite such maximum ratio: Fiscal Quarter Ending Maximum Ratio March 31, 2016 5.00:1.00 June 30, 2016 5.00:1.00 September 30, 2016 4.75:1.00 December 31, 2016 4.75:1.00 March 31, 2017 4.50:1.00 June 30, 2017 4.50:1.00 September 30, 2017 4.25:1.00 December 31, 2017 4.25:1.00 March 31, 2018 4.00:1.00 June 30, 2018 4.00:1.00 September 30, 2018 3.75:1.00 December 31, 2018 3.75:1.00 March 31, 2019 and thereafter 3.50:1.00 The Company was in compliance with all financial covenants under the October 2015 Credit Agreement as of March 31, 2016 . Guarantees The Company's obligations under the October 2015 Credit Agreement are guaranteed by certain of its subsidiaries and secured by substantially all of its tangible and intangible assets. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION Share-Based Compensation Plan The Company grants share-based equity awards, including stock options and restricted stock, pursuant to three plans in effect as of March 31, 2016 ; the 2006 Plan adopted in October 2006, the 2011 Plan adopted in June 2011, and the 2015 Plan adopted in June 2015 (collectively referred to as the "GTT Stock Plan"). The GTT Stock Plan is limited to an aggregate 9,500,000 shares of which 7,747,572 have been issued and are outstanding as of March 31, 2016 . The GTT Stock Plan permits the granting of stock options, restricted stock and performance awards to employees (including employee directors and officers) and consultants of the Company, and non-employee directors of the Company. Options granted under the GTT Stock 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 10 years from the grant date. The stock options generally vest over four years with 25% of the options becoming exercisable one year from the date of grant and the remaining 75% annually or quarterly over the following three years . Restricted stock granted under the GTT Stock Plan is valued at the closing stock price on the day of grant. Restricted stock generally vests over four years with 25% of the shares becoming unrestricted one year from the date of grant and the remaining 75% annually or quarterly over the following three years . Performance awards are restricted shares granted under the GTT Stock plan subject to the achievement of certain performance measures. Once achievement of these performance measures is considered probable, the Company starts to expense the fair value of the grant over the requisite service period. The performance award is valued at the closing stock price on the day of grant. The performance grant will vest annually or quarterly over the requisite service period once achievement of the performance measure has been met and approved by the Compensation Committee. The Compensation Committee of the Board of Directors, as administrator of the Plan, has the discretion to authorize a different vesting schedule for any awards. The following tables summarize the share-based compensation expense recognized as a selling, general and administrative expense in the condensed consolidated statements of operations (amounts in thousands): Three Months Ended March 31, 2016 2015 Stock options $ 427 $ 344 Restricted stock (including performance awards) 1 1,126 1,015 Total $ 1,553 $ 1,359 1 Compensation expense includes $.3 million related to the shares issued to the OSN shareholders for continued employment, as discussed in more detail below. As of March 31, 2016 , there was $31.0 million of total unrecognized compensation cost related to unvested share-based compensation agreements. The following table summarizes the unrecognized compensation cost and the weighted average period over which the cost is expected to be amortized (amounts in thousands): March 31, 2016 Unrecognized Compensation Cost Weighted Average Remaining Period to be Recognized (Yrs) Stock options $ 4,911 2.0 Restricted stock (including performance awards) 26,055 2.4 Total $ 30,966 2.3 The Company uses the Black-Scholes option-pricing model to determine the fair value of its option awards at the time of grant. The fair value of the restricted stock awards was calculated using the value of GTT common stock on the grant date and is being amortized over the vesting periods in which the restrictions lapse. The following table summarizes the stock options and restricted stock granted during the three months ended March 31, 2016 (amounts in thousands, except shares data): Three Months Ended March 31, 2016 2015 Stock options granted 144,958 84,000 Fair value of stock options granted $ 851 $ 630 Restricted stock granted (including performance awards) 475,534 109,000 Fair value of restricted stock granted $ 6,369 $ 1,355 Performance Awards In 2014, the Company granted $7.8 million of restricted stock contingent upon the achievement of certain performance criteria (the 2014 Performance Awards). The fair value of the 2014 Performance Awards was calculated using the value of GTT common stock on the grant date. The Company started recognizing stock-based compensation expense for these grants once the achievement of the performance criteria was considered probable, which was in the third quarter of 2015. The 2014 Performance Awards started vesting in the fourth quarter of 2015 when the performance criteria were met and they will continue to vest ratably over the next two years. As of March 31, 2016 , unamortized compensation cost related to the unvested 2014 Performance Awards was $5.7 million . In 2015, the Company granted $17.2 million of restricted stock contingent upon the achievement of certain performance criteria (the 2015 Performance Awards). The fair value of the 2015 Performance Awards was calculated using the value of GTT common stock on the grant date. As the achievement of the performance criteria is not yet considered probable, the full $17.2 million remains unamortized as of March 31, 2016 . In conjunction with the acquisition of One Source, the Company issued $3.6 million , or 289,055 unregistered shares, of common stock to the selling shareholders of One Source subject to a continuing employment period of 18 months. The fair value of this issuance was calculated using the value of GTT common stock on the acquisition date less a discount for lack of marketability. The $3.6 million will be expensed over the 18 month service period. As of March 31, 2016 , unamortized compensation expense was $2.6 million and will be recognized over the next 12 months. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company’s provision for income taxes is determined using an estimate of our annual effective tax rate, adjusted for discrete items arising in that quarter. Our quarterly tax provision and our estimate of our annual effective tax rate are subject to volatility due to several factors, including our ability to accurately project our income (loss) before provision for income taxes in multiple jurisdictions including the effects of acquisitions and integrations. For the three months ended March 31, 2016, the Company earned income before taxes of $1.3 million and incurred tax expense of $0.4 million , which resulted in an effective tax rate of 30.0% , as compared to an effective tax rate of (61.7)% for the three months ended March 31, 2015. The effective tax rate for the three months ended March 31, 2016 differs from the statutory U.S. federal income tax rate of 35.0% primarily due to foreign tax rate differences and a discrete benefit related to foreign provision-to-return adjustments. The effective tax rate for the three months ended March 31, 2015 differed from the statutory U.S. federal income tax rate of 35.0% primarily due to the tax impact of U.S. losses that did not produce a tax benefit and a discrete benefit related to foreign provision-to-return adjustments. The change in the current quarter effective tax rate compared to prior years was primarily due to change in the amount of income before income taxes in the U.S. and foreign countries. Realization of deferred tax assets in any jurisdictions depends on various factors, including the expectation of generating sufficient taxable income in that jurisdiction. Although realization is not assured, management believes it is more-likely-than-not that the results of operations will generate sufficient taxable income to support the realization of existing deferred tax assets in the U.S. The Company maintains a valuation allowance against certain foreign deferred tax assets. |
SEVERANCE, RESTRUCTURING AND OT
SEVERANCE, RESTRUCTURING AND OTHER EXIT COSTS | 3 Months Ended |
Mar. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
SEVERANCE, RESTRUCTURING AND OTHER EXIT COSTS | Telnes The Company incurred $1.5 million in exit costs associated with the acquisition of Telnes, which includes employee severance costs, termination costs associated with facility leases and network agreements, and other exit costs related to the transaction. The Company did not make any payments during the three months ended March 31, 2016. The exit costs recorded are summarized as follows for the three months ended March 31, 2016 (amounts in thousands): Charges Cash Payments Balance, March 31, 2016 Employment costs $ 870 $ — $ 870 Lease and contract network termination charges 625 — 625 Other exit costs — — — Total $ 1,495 $ — $ 1,495 One Source During the fourth quarter of 2015, the Company incurred $4.9 million in exit costs associated with the acquisition of One Source, which includes employee severance costs, termination costs associated with facility leases and network agreements, and other related exit costs since the close of the transaction. Approximately $0.9 million was paid during the three months ended March 31, 2016 . The exit costs recorded and paid are summarized as follows for the three months ended March 31, 2016 (amounts in thousands): Charges Cash Payments Balance, March 31, 2016 Employment costs $ 2,903 $ 1,978 $ 925 Lease and contract network termination charges 1,910 241 1,669 Other exit costs 124 7 117 Total $ 4,937 $ 2,226 $ 2,711 Other exit costs include costs directly related to the exit activities associated with the acquisition of One Source. Transaction and integration costs are recorded as a component of selling, general and administrative expense. MegaPath During the second quarter of fiscal 2015, the Company incurred $7.7 million in exit costs associated with the acquisition of MegaPath including employee severance costs and termination costs associated with facility leases and network agreements and other related exit costs since the close of the transaction. Approximately $0.6 million was paid during the three months ended March 31, 2016 . The exit costs recorded and paid are summarized as follows for the period ended March 31, 2016 (amounts in thousands): Charges Cash Payments Balance, March 31, 2016 Employee termination benefits $ 4,132 $ 4,132 $ — Lease and contract network termination charges 2,886 845 2,041 Other exit costs 729 262 467 Total $ 7,747 $ 5,239 $ 2,508 Other exit costs include third party costs directly related to the exit activities associated with the acquisition of MegaPath. Transaction and integration costs are recorded as a component of selling, general and administrative expense. |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Notes) | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES The annual commitments, contractual obligations, and non-cancelable leases as of March 31, 2016 have not materially changed from the year ended December 31, 2015. For details on the Company's commitments and obligations, please refer to Note 13 to the consolidated financial statements contained in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2015. Legal Proceedings From time to time, the Company is a party to legal proceedings arising in the normal course of its business. As of March 31, 2016 , the Company does not believe that it is a party to any current or pending legal action that could reasonably be expected to have a material adverse effect on its financial condition or results of operations. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On May 3, 2016 the Company entered into an amendment to the October 2015 Credit Agreement to issue a $30 million add-on term loan, with the same terms and conditions as the existing term loan issued under the October 2015 Credit Agreement. The Company used the proceeds of the add-on term loan to pay down the drawn balance under its revolving line of credit facility. |
ORGANIZATION AND BUSINESS (Poli
ORGANIZATION AND BUSINESS (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation 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, 2015 , included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015 filed on March 9, 2016. 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 its results of operations. The operating results for the three months ended March 31, 2016 are not necessarily indicative of the results to be expected for the full fiscal year 2016 or for any other interim period. The December 31, 2015 consolidated balance sheet is condensed from the audited financial statements as of that date, but does not include all disclosures required by GAAP. |
Use of Estimates and Assumptions | 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. Significant estimates are used when establishing allowances for doubtful accounts and accruals for billing disputes, determining useful lives for depreciation and amortization and accruals for exit activities, assessing the need for impairment charges (including those related to intangible assets and goodwill), determining the fair values of assets acquired and liabilities assumed in business combinations, accounting for income taxes and related valuation allowances against deferred tax assets and estimating the grant date fair values used to compute the share-based compensation expense. Management evaluates these estimates and judgments on an ongoing basis and makes estimates based on historical experience, current conditions, and various other assumptions that are believed to be reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities as well as identifying and assessing the accounting treatment with respect to commitments and contingencies. Actual results may differ from these estimates under different assumptions or conditions. |
Segment Reporting | Segment Reporting The Company reports operating results and financial data in one operating and reporting segment. The chief operating decision maker manages the Company as a single profit center in order to promote collaboration, provide comprehensive service offerings across its entire customer base, and provide incentives to employees based on the success of the organization as a whole. Although certain information regarding selected products or services are discussed for purposes of promoting an understanding of the Company's complex business, the chief operating decision maker manages the Company and allocates resources at the consolidated level. |
Revenue Recognition | Revenue Recognition The Company delivers four primary services to its customers — flexible Ethernet-based connectivity service (EtherCloud); high bandwidth internet connectivity services (Internet Services); managed network services and security (Managed Services); and global communication and collaboration services (Voice and UC Services). Certain of its revenue activities have features that may be considered multiple elements, specifically when the Company sells its subscription services in addition to customer premise equipment ("CPE"). The Company believes that there is sufficient evidence to determine each element’s fair value and as a result, in those arrangements where there are multiple elements, the subscription revenue is recorded ratably over the term of the agreement and the equipment is accounted for as a sale, at the time of sale. The Company's services are provided under contracts that typically include an installation charge along with payments of recurring charges on a monthly basis for use of the services over a committed term. Its contracts with customers specify the terms and conditions for providing such services, including installation date, recurring and non-recurring fees, payment terms, and contract length. These contracts call for the Company to provide the service in question (e.g., data transmission between point A and point Z), to manage the activation process, and to provide ongoing support (in the form of service maintenance and trouble-shooting) during the service term. The contracts do not typically provide the customer any rights to use specifically identifiable assets. Furthermore, the contracts generally provide the Company with discretion to engineer (or re-engineer) a particular network solution to satisfy each customer’s data transmission requirement, and typically prohibit physical access by the customer to the network infrastructure used by the Company and its suppliers to deliver the services. The Company recognizes revenue as follows: Monthly Recurring Revenue. Monthly recurring revenue represents the substantial majority of the Company's revenue, and consists of fees charged for ongoing services that are generally fixed in price and billed on a recurring monthly basis (one month in advance) for a specified term. At the end of the term, most contracts provide for a continuation of services on the same terms, either for a specified renewal period (e.g., one year) or on a month-to-month basis. The Company records recurring revenue based on the fees agreed to in each contract, as long as the contract is in effect, and as long as collectability is reasonably assured. Burst Revenue. Burst revenue represents variable charges for certain services, based on specific usage of those services, or usage above a fixed threshold, billed monthly in arrears. The Company records burst revenue based on actual usage charges billed using the rates and/or thresholds specified in each contract, as long as collectability is reasonably assured. Non-recurring Revenue. Non-recurring revenue consists of charges for installation in connection with the delivery of recurring communications services, late payments, cancellation fees, early termination fees, and equipment sales. Fees billed for installation services are initially recorded as deferred revenue then recognized ratably over the contractual term of the recurring service. Fees charged for late payments, cancellation (pre-installation) or early termination (post-installation) are typically fixed or determinable per the terms of the respective contract, and are recognized as revenue when billed if collectability is reasonably assured. In addition, from time to time the Company sells communications and/or networking equipment to its customers in connection with its data networking services. The Company recognizes revenue from the sale of equipment at the contracted selling price when title to the equipment passes to the customer (generally F.O.B. origin) and when collectability is reasonably assured. |
Share-Based Compensation | Share-Based Compensation The Company recognizes share-based compensation expense for share-based payment awards based on the grant date fair value. The fair value of stock options is determined on the date of grant using the Black-Scholes option-pricing model. The expense is recognized on a straight-line basis over the requisite service period. Share-based compensation expense also includes grants for performance awards. The Company began recognizing share-based compensation expense for these grants when the achievement of the performance criteria was considered probable, which occurred in the third quarter of 2015. |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method pursuant to GAAP. Under this method, deferred tax assets and liabilities are recognized for the expected future results attributable to the differences between the financial statement carrying amounts and the tax basis of assets and liabilities. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period of the change. Further, deferred tax assets are recognized for the expected realization of available net operating loss and tax credit carryforwards. A valuation allowance is recorded on gross deferred tax assets when it is “more likely than not” that such asset will not be realized. When evaluating the realizability of deferred tax assets, all evidence, both positive and negative is evaluated. Items considered in this analysis include the ability to carry back losses, the reversal of temporary differences, tax planning strategies, and expectations of future earnings. The Company reviews its deferred tax assets on a quarterly basis to determine if a valuation allowance is required based upon these factors. Changes in the Company's assessment of the need for a valuation allowance could give rise to a change in such allowance, potentially resulting in additional expense or benefit in the period of change. The Company's income tax provision includes U.S. federal, state, local and foreign income taxes and is based on pre-tax income or loss. In determining the annual effective income tax rate, the Company analyzes various factors, including its annual earnings and taxing jurisdictions in which the earnings were generated, the impact of state and local income taxes and its ability to use tax credits and net operating loss carryforwards. Under GAAP for income taxes, the amount of tax benefit to be recognized is the amount of benefit that is “more likely than not” to be sustained upon examination. The Company analyzes its tax filing positions in all of the U.S. federal, state, local and foreign tax jurisdictions where it is required to file income tax returns, as well as for all open tax years in these jurisdictions. If, based on this analysis, the Company determines that uncertainties in tax positions exist, a liability is established in the consolidated financial statements. The Company recognizes accrued interest and penalties related to unrecognized tax positions in the provision for income taxes. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) In addition to net income (loss), comprehensive income (loss) includes certain 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. |
Earnings (Loss) Per Share | Earnings Per Share Basic earnings per share is computed by dividing net income or (loss) available to common stockholders by the weighted average number of common shares outstanding. Diluted earnings 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. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents may include deposits with financial institutions as well as short-term money market instruments, certificates of deposit and debt instruments with maturities of three months or less when purchased |
Accounts Receivable, Net | Accounts Receivable, Net Accounts receivable balances are stated at amounts due from the customer net of an allowance for doubtful accounts. Credit extended is based on an evaluation of the customer’s financial condition and is granted to qualified customers on an unsecured basis. The Company, pursuant to its standard service contracts, is entitled to impose a monthly finance charge with respect to amounts that are past due. The Company’s standard terms require payment within 30 days of the date of the invoice. The Company treats invoices as past due when they remain unpaid, in whole or in part, beyond the payment date set forth in the applicable service contract. The Company determines its allowance for doubtful accounts by considering a number of factors, including the length of time trade receivables are past due, the customer’s payment history, current ability to pay its obligation, and the condition of the general economy and the industry as a whole. Specific reserves are also established on a case-by-case basis by management. Actual bad debts, when determined, reduce the allowance. The Company periodically evaluates the collectability of accounts receivable and writes off accounts after a determination is made that the amounts at issue are no longer likely to be collected, following the exercise of reasonable collection efforts. |
Deferred Costs | Deferred Costs Installation costs related to provisioning of recurring communications services that the Company incurs from independent third party suppliers, directly attributable and necessary to fulfill a particular service contract, and which would not have been incurred but for the occurrence of that service contract, are recorded as deferred costs and expensed ratably over the contractual term of service in the same manner as the deferred revenue arising from that contract. Based on historical experience, the Company believes the initial contractual term is the best estimate for the period of earnings. If any installation costs exceed the amount of corresponding deferred revenue, the excess cost is recognized in the current period. |
Property and Equipment | Property and Equipment Property and equipment is stated at cost, net of accumulated depreciation, computed using the straight-line method. Depreciation on these assets is computed over the estimated useful lives of the assets. Assets and liabilities under capital leases are recorded at the lesser of the present value of the aggregate future minimum lease payments or the fair value of the assets under lease. Leasehold improvements and assets under capital leases are amortized over the shorter of the term of the lease, excluding optional extensions, or the useful life. Depreciable lives used by the Company for its classes of assets are as follows: Furniture and Fixtures 7 years Network Equipment 5 years Leasehold Improvements up to 10 years Computer Hardware and Software 3-5 years The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, the asset is considered to be impaired. Impairment losses are measured as the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of are reported at the lower of the carrying amount or fair value less cost to sell or dispose. |
Software Capitalization | Software Capitalization Software development costs include costs to develop software programs to be used solely to meet the Company's internal needs. The Company capitalizes development costs related to these software applications once the preliminary project stage is complete and it is probable that the project will be completed and the software will be used to perform the function intended. Costs capitalized for developing such software applications were not material for the periods presented. |
Goodwill | The Company assesses goodwill for impairment on at least an annual basis on October 1 unless interim indicators of impairment exist. Goodwill is considered to be impaired when the net book value of a reporting unit exceeds its estimated fair value. The Company operates as a single operating segment and as a single reporting unit for the purpose of evaluating goodwill. On October 1, 2015, the Company performed its annual impairment test of goodwill by comparing its fair value (primarily based on market capitalization) to the carrying value of equity, and concluded that the fair value of the reporting unit was greater than the carrying amount. During the three months ended March 31, 2016 and 2015 the Company did not record any goodwill impairment. |
Intangible Assets | Intangible assets consist of customer relationships, restrictive covenants related to employment agreements, license fees, intellectual property and trade names. Customer relationships, restrictive covenants related to employment agreements and trade names are amortized, on a straight-line basis, over periods of up to seven years. FCC Licenses are accounted for as definite lived intangibles and amortized over the average remaining useful life of such licenses which approximates three years. Intellectual property consisting of know-how related to the SIP trunking platform is amortized over the estimated useful life of ten years. One of the Company's trade names is not amortized, but is tested on at least an annual basis as of October 1 unless interim indicators of impairment exist. The trade name is considered to be impaired when the net book value exceeds its estimated fair value. As of October 1, 2015, the Company performed its annual impairment test of the trade name, and concluded that the fair value of the trade name was greater than the carrying amount. The Company used the relief from royalty method for valuation. At the end of the first quarter of 2016, the Company evaluated whether any triggering events had occurred that may require further testing. After assessing the totality of events and circumstances, the Company has determined that there were no indicators that the fair value of goodwill was below its carrying amounts and therefore an interim Step 1 goodwill impairment test was not required to be performed. |
Business Combinations | Business Combinations The Company includes the results of operations of the businesses that it acquires commencing on the respective dates of acquisition. The Company allocates the fair value of the purchase price of its acquisitions to the assets acquired and liabilities assumed based on their estimated fair values. The excess of the fair value of the purchase price over the fair values of these identifiable assets and liabilities is recorded as goodwill. |
Accrued Supplier Expenses | Accrued Supplier Expenses The Company accrues estimated charges owed to its suppliers for services. The Company bases this accrual on the supplier contract, the individual service order executed with the supplier for that service, and the length of time the service has been active. |
Disputed Supplier Expenses | Disputed Supplier Expenses It is common in the telecommunications industry for customers and suppliers to engage in disputes over amounts billed (or not billed) in error or over interpretation of contract terms. Management estimates a liability for the amounts the Company believes are valid and that the Company owes to a supplier. This liability is reconciled with actual results as disputes are resolved, or as the appropriate statute of limitations with respect to a given dispute expires. |
Earnouts And Holdbacks | Acquisition Earn-outs and Holdbacks Acquisition earn-outs and holdbacks represent either contingent consideration subject to re-measurement to fair value, or fixed deferred consideration due to be paid out typically on the one-year anniversary of an acquisition's closing. Contingent consideration is remeasured to fair value at each reporting period. The portion of the deferred consideration due within one year is recorded as a current liability until paid, and any consideration due beyond one year is recorded in other long-term liabilities. |
Translation of Foreign Currencies | Translation of Foreign Currencies These consolidated financial statements have been reported in U.S. Dollars by translating asset and liability amounts of foreign subsidiaries at the closing exchange rate, equity amounts at historical rates, and the results of operations and cash flow at the average exchange rate prevailing during the periods reported. Transactions denominated in foreign currencies are recorded at the rates of exchange prevailing at the time of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange prevailing at the balance sheet date. Exchange differences arising upon settlement of a transaction are reported in the consolidated statements of operations in other expense, net. |
Fair Value of Financial Instruments | Fair Value Measurements Accounting guidance defines fair value as 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. Under this guidance, the Company is required to classify certain assets and liabilities based on the following hierarchy: Level 1: Quoted prices for identical assets or liabilities in active markets that can be assessed at the measurement date. Level 2: Inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3: Inputs reflect management's best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instruments valuation. The guidance requires the use of observable market data if such data is available without undue cost and effort. As of March 31, 2016 and December 31, 2015 , the carrying amounts reflected in the accompanying consolidated balance sheets for cash and cash equivalents, accounts receivable, accounts payable, and other liabilities approximated fair value due to the short-term nature of these instruments. The carrying value of the Company's long-term debt, net of unamortized debt issuance costs and unamortized original issuance discount was $400.0 million and $386.2 million , as of March 31, 2016 and December 31, 2015, respectively. Based on trading activity of the Company's specific debt, the fair value of the Company's long-term debt as of March 31, 2016 and December 31, 2015 was estimated to be the same as its carrying value. The Company's fair value estimates of the long-term debt were based on level 2 inputs; quoted prices for similar instruments in active markets. The fair value of the earn-out was $0.5 million as of March 31, 2016 , which was estimated to be the same as its carrying value, based on level 3 inputs. The earn-out is expected to be settled in the second quarter of Fiscal 2016. Assets and liabilities measured at 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). |
Concentrations of Credit Risk | C oncentrations of Credit Risk Financial instruments potentially subject to concentration of credit risk consist primarily of cash and cash equivalents and trade accounts receivable. At times during the periods presented, the Company had funds in excess of $250,000 insured by the U.S. Federal Deposit Insurance Corporation, or in excess of similar Deposit Insurance programs outside of the United States, on deposit at various financial institutions. Management believes the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. The Company's trade accounts receivable are generally unsecured and geographically dispersed. No single customer's trade accounts receivable balance as of March 31, 2016 and December 31, 2015 exceeded 10% of the Company's consolidated accounts receivable, net. No single customer accounted for more than 10% of revenue for the three months ended March 31, 2016 and 2015 . |
Recent Accounting Pronouncements | Newly Adopted Accounting Principles For information regarding newly adopted accounting principles, please refer to the "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2015 and Note 2 to our consolidated financial statements contained therein. The Company has not adopted any new accounting principles for the first quarter of 2016. Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which amends the existing accounting standards for revenue recognition. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , which delays the effective date of ASU 2014-09 by one year. The FASB also agreed to allow entities to choose to adopt the standard as of the original effective date. As such, the updated standard will be effective in the first quarter of 2018, with the option to adopt it in the first quarter of 2017. The Company is still evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases , which will require most leases (with the exception of leases with terms of less than one year) to be recognized on the balance sheet as an asset and a lease liability. Leases will be classified as an operating lease or a financing lease. Operating leases are expensed using the straight-line method whereas financing leases will be treated similarly to a capital lease under the current standard. The new standard will be effective for annual and interim periods, within those fiscal years, beginning after December 15, 2018 but early adoption is permitted. The new standard must be presented using the modified retrospective method beginning with the earliest comparative period presented. The Company is currently evaluating the effect of the new standard on its consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718) , which was issued as part of the FASB’s simplification initiative and cover such areas as (i) the recognition of excess tax benefits and deficiencies and the classification of those excess tax benefits on the statement of cash flows, (ii) an accounting policy election for forfeitures to be estimated or account for when incurred, (iii) the amount an employer can withhold to cover income taxes and still qualify for equity classification; and (iv) the classification of those taxes paid on the statement of cash flows. This update is effective for annual and interim periods beginning after December 15, 2016, which will require the Company to adopt these provisions in the first quarter of fiscal 2018. This guidance will be applied either prospectively, retrospectively or using a modified retrospective transition method, depending on the area covered in this update. Early adoption is permitted. The Company is still evaluating the effect of the new standard on its consolidated financial statements and related disclosures. Other recent accounting pronouncements issued by the FASB during fiscal 2015 and through the period ended March 31, 2016 are not believed by management to have a material impact on the Company's present or historical consolidated financial statements. |
ORGANIZATION AND BUSINESS (Tabl
ORGANIZATION AND BUSINESS (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The table below details the calculations of earnings per share (in thousands, except for share and per share amounts): Three months ended March 31, 2016 2015 Numerator for basic and diluted EPS – earnings available to common stockholders $ 898 $ 1,067 Denominator for basic EPS – weighted average shares 36,854,219 33,935,481 Effect of dilutive securities 601,160 724,276 Denominator for diluted EPS – weighted average shares 37,455,379 34,659,757 Earnings per share: basic $ 0.02 $ 0.03 Earnings per share: diluted $ 0.02 $ 0.03 |
Schedule Of Property Plan And Equipment Estimated Useful Life | Depreciable lives used by the Company for its classes of assets are as follows: Furniture and Fixtures 7 years Network Equipment 5 years Leasehold Improvements up to 10 years Computer Hardware and Software 3-5 years |
BUSINESS ACQUISITIONS (Tables)
BUSINESS ACQUISITIONS (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Business Combinations [Abstract] | |
Summary of Pro Forma Financial Information | The unaudited pro forma financial information below is not necessarily indicative of either future results of operations or results that might have been achieved had the acquisitions been consummated as of January 1, 2015. Three months ended March 31, 2016 2015 (Amounts in thousands, except per share and share data) Revenue $ 124,437 $ 112,088 Net income (loss) $ 898 $ (2,929 ) Earnings (loss) per share: Basic $ 0.02 $ (0.08 ) Diluted $ 0.02 $ (0.08 ) Basic 36,854,219 35,021,325 Diluted 37,455,379 35,021,325 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The changes in the carrying amount of goodwill for the period ended December 31, 2015 and March 31, 2016 are as follows (amounts in thousands): Balance, December 31, 2015 $ 270,956 Adjustments to prior year's business combination (1) (101 ) Goodwill associated with acquisition 15,860 Balance, March 31, 2016 $ 286,715 (1) Finalization of fair value for certain capital lease and other assets. |
Schedule of Finite-Lived Intangible Assets | The following table summarizes the Company’s intangible assets as of March 31, 2016 and December 31, 2015 (amounts in thousands): March 31, 2016 December 31, 2015 Amortization Gross Asset Cost Accumulated Amortization Net Book Value Gross Asset Cost Accumulated Amortization Net Book Value Customer contracts 3-7 years $ 215,802 $ 62,500 $ 153,302 $ 215,802 $ 54,041 $ 161,761 Non-compete agreements 3-5 years 4,331 4,324 7 4,331 4,305 26 Point-to-point FCC license fees 3 years 1,695 1,695 843 852 1,695 701 994 Intellectual property 10 years 17,379 17,379 771 16,608 17,379 336 17,043 Trade name 3 years 2,079 2,080 693 1,387 2,079 519 1,560 Trade name (indefinite-lived) N/A 800 — 800 800 — 800 $ 242,087 $ 69,131 $ 172,956 $ 242,086 $ 59,902 $ 182,184 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated amortization expense related to intangible assets subject to amortization at March 31, 2016 in each of the years subsequent to March 31, 2016 is as follows (amounts in thousands): 2016 remaining $ 27,247 2017 34,669 2018 28,392 2019 23,735 2020 20,834 2021 and beyond 37,279 Total $ 172,156 |
ACCRUED EXPENSES AND OTHER CU22
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | The following table summarizes the Company’s accrued expenses and other current liabilities as of March 31, 2016 and December 31, 2015 (amounts in thousands): March 31, 2016 December 31, 2015 Accrued compensation and benefits $ 5,103 $ 9,465 Accrued supplier costs 22,482 21,637 Accrued restructuring 6,714 6,833 Accrued other 6,401 5,180 $ 40,700 $ 43,115 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | As of March 31, 2016 and December 31, 2015 , long-term debt was as follows (amounts in thousands): March 31, 2016 December 31, 2015 Term loan $ 399,000 $ 400,000 Revolving line of credit 19,000 5,000 Delayed draw term loan — — Total debt obligations 418,000 405,000 Unamortized debt issuance costs (10,493 ) (10,938 ) Unamortized original issuance discount (7,496 ) (7,819 ) Carrying value of debt 400,011 386,243 Less current portion (4,000 ) (4,000 ) Long-term debt less current portion $ 396,011 $ 382,243 |
Schedule of Maturities of Long-term Debt | The aggregate contractual maturities of long-term debt (excluding unamortized discounts and unamortized debt issuance costs) were as follows at December 31, 2015 (amounts in thousands): Total Debt 2016 remaining $ 3,000 2017 4,000 2018 4,000 2019 4,000 2020 23,000 2021 4,000 2022 376,000 Total $ 418,000 |
Schedule of Debt Covenants | In addition, the Company must comply with a Consolidated Net Secured Leverage Ratio covenant and is restricted from permitting the Consolidated Net Secured Leverage Ratio to be greater than the maximum ratio specified below during the period opposite such maximum ratio: Fiscal Quarter Ending Maximum Ratio March 31, 2016 5.00:1.00 June 30, 2016 5.00:1.00 September 30, 2016 4.75:1.00 December 31, 2016 4.75:1.00 March 31, 2017 4.50:1.00 June 30, 2017 4.50:1.00 September 30, 2017 4.25:1.00 December 31, 2017 4.25:1.00 March 31, 2018 4.00:1.00 June 30, 2018 4.00:1.00 September 30, 2018 3.75:1.00 December 31, 2018 3.75:1.00 March 31, 2019 and thereafter 3.50:1.00 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | The following tables summarize the share-based compensation expense recognized as a selling, general and administrative expense in the condensed consolidated statements of operations (amounts in thousands): Three Months Ended March 31, 2016 2015 Stock options $ 427 $ 344 Restricted stock (including performance awards) 1 1,126 1,015 Total $ 1,553 $ 1,359 1 Compensation expense includes $.3 million related to the shares issued to the OSN shareholders for continued employment, as discussed in more detail below. |
Schedule of Unrecognized Compensation Cost, Nonvested Awards | The following table summarizes the unrecognized compensation cost and the weighted average period over which the cost is expected to be amortized (amounts in thousands): March 31, 2016 Unrecognized Compensation Cost Weighted Average Remaining Period to be Recognized (Yrs) Stock options $ 4,911 2.0 Restricted stock (including performance awards) 26,055 2.4 Total $ 30,966 2.3 |
Schedule of Share-based Compensation, Activity | The following table summarizes the stock options and restricted stock granted during the three months ended March 31, 2016 (amounts in thousands, except shares data): Three Months Ended March 31, 2016 2015 Stock options granted 144,958 84,000 Fair value of stock options granted $ 851 $ 630 Restricted stock granted (including performance awards) 475,534 109,000 Fair value of restricted stock granted $ 6,369 $ 1,355 |
SEVERANCE, RESTRUCTURING AND 25
SEVERANCE, RESTRUCTURING AND OTHER EXIT COSTS (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring and Related Costs | The exit costs recorded and paid are summarized as follows for the period ended March 31, 2016 (amounts in thousands): Charges Cash Payments Balance, March 31, 2016 Employee termination benefits $ 4,132 $ 4,132 $ — Lease and contract network termination charges 2,886 845 2,041 Other exit costs 729 262 467 Total $ 7,747 $ 5,239 $ 2,508 The exit costs recorded are summarized as follows for the three months ended March 31, 2016 (amounts in thousands): Charges Cash Payments Balance, March 31, 2016 Employment costs $ 870 $ — $ 870 Lease and contract network termination charges 625 — 625 Other exit costs — — — Total $ 1,495 $ — $ 1,495 The exit costs recorded and paid are summarized as follows for the three months ended March 31, 2016 (amounts in thousands): Charges Cash Payments Balance, March 31, 2016 Employment costs $ 2,903 $ 1,978 $ 925 Lease and contract network termination charges 1,910 241 1,669 Other exit costs 124 7 117 Total $ 4,937 $ 2,226 $ 2,711 |
ORGANIZATION AND BUSINESS (Deta
ORGANIZATION AND BUSINESS (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Numerator for basic and diluted EPS – income (loss) available to common stockholders (in dollars) | $ 898 | $ 1,067 |
Denominator for basic EPS - weighted average shares | 36,854,219 | 33,935,481 |
Effect of dilutive securities | 601,160 | 724,276 |
Denominator for diluted EPS - weighted average shares | 37,455,379 | 34,659,757 |
Earnings (loss) per share: basic (in dollars per share) | $ 0.02 | $ 0.03 |
Earnings (loss) per share: diluted (in dollars per share) | $ 0.02 | $ 0.03 |
Anti-dilutive items | 254,000 |
ORGANIZATION AND BUSINESS (De27
ORGANIZATION AND BUSINESS (Details Textual) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Point-to-point FCC Licenses [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 3 years | 3 years |
Intellectual Property [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 10 years | 10 years |
Maximum [Member] | Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 7 years | |
Weighted Average [Member] | Point-to-point FCC Licenses [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 3 years |
ORGANIZATION AND BUSINESS (De28
ORGANIZATION AND BUSINESS (Details 1) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 7 years | |
Network Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 5 years | |
Leasehold Improvements [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 10 years | |
Computer Hardware and Software [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 5 years | |
Computer Hardware and Software [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 3 years |
ORGANIZATION AND BUSINESS (De29
ORGANIZATION AND BUSINESS (Details Textual 1) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016USD ($)customer | Mar. 31, 2015USD ($)customer | Dec. 31, 2015USD ($)customer | |
Concentration Risk [Line Items] | |||
Disputed Supplier Expense | $ 7,500 | $ 6,900 | |
Long-term Debt | $ 400,011 | $ 386,243 | |
Liabilities Reclassification [Member] | |||
Concentration Risk [Line Items] | |||
Capital Lease Obligations | $ 200 | ||
Customer Concentration Risk [Member] | Sales Revenue, Services, Net [Member] | |||
Concentration Risk [Line Items] | |||
Number of major customers | customer | 0 | 0 | |
Customer Concentration Risk [Member] | Accounts Receivable [Member] | |||
Concentration Risk [Line Items] | |||
Number of major customers | customer | 0 | 0 | |
Earn-out Liability [Member] | |||
Concentration Risk [Line Items] | |||
Financial and Nonfinancial Liabilities, Fair Value Disclosure | $ 500 | ||
Svb Line Of Credit [Member] | |||
Concentration Risk [Line Items] | |||
Unamortized Debt Issuance Expense And Discount | $ 386,200 |
BUSINESS ACQUISITIONS (Details)
BUSINESS ACQUISITIONS (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 04, 2016 | Mar. 31, 2016 | Mar. 31, 2015 |
Business Acquisition [Line Items] | |||
Business Combination, Integration Related Costs | $ 1,300 | ||
Denominator for basic EPS – weighted average shares (in shares) | 36,854,219 | 33,935,481 | |
Denominator for diluted EPS – weighted average shares (in shares) | 37,455,379 | 34,659,757 | |
Telnes Broadband [Member] | |||
Business Acquisition [Line Items] | |||
Total consideration to be allocated in acquisition accounting | $ 18,200 | ||
Cash paid at closing | 15,500 | ||
Total common stock consideration | 2,700 | ||
Payments To Acquire Businesses, Delayed Portion | $ 1,800 | ||
Payments To Acquire Businesses, Delayed Portion, Term | 1 year | ||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Equity Interests | $ 1,600 | ||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Consideration Transferred | $ 17,100 | ||
Recent Acquisitions [Member] | |||
Business Acquisition [Line Items] | |||
Revenue | $ 124,437 | $ 112,088 | |
Net income (loss) | $ 898 | $ (2,929) | |
Earnings (loss) per share: basic (in dollars per share) | $ 0.02 | $ (0.08) | |
Earnings (loss) per share: diluted (in dollars per share) | $ 0.02 | $ (0.08) | |
Denominator for basic EPS – weighted average shares (in shares) | 36,854,219 | 35,021,325 | |
Denominator for diluted EPS – weighted average shares (in shares) | 37,455,379 | 35,021,325 |
GOODWILL AND INTANGIBLE ASSET31
GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Goodwill [Roll Forward] | ||
Goodwill | $ 270,956 | |
Adjustments to prior year's business combination | (101) | |
Goodwill associated with acquisition | 15,860 | |
Goodwill | 286,715 | $ 270,956 |
Finite-Lived Intangible Assets, Net | 172,156 | |
Intangible Assets, Gross | 242,087 | 242,086 |
Accumulated Amortization | 69,131 | 59,902 |
Net Book Value | 172,956 | 182,184 |
Trade name [Member] | ||
Goodwill [Roll Forward] | ||
Trade name (non-amortizing) | 800 | 800 |
Customer contracts [Member] | ||
Goodwill [Roll Forward] | ||
Gross Asset Cost | 215,802 | 215,802 |
Finite-Lived Intangible Assets, Net | 153,302 | 161,761 |
Accumulated Amortization | $ 62,500 | $ 54,041 |
Customer contracts [Member] | Minimum [Member] | ||
Goodwill [Roll Forward] | ||
Amortization Period | 3 years | 3 years |
Customer contracts [Member] | Maximum [Member] | ||
Goodwill [Roll Forward] | ||
Amortization Period | 7 years | 7 years |
Non-compete agreements [Member] | ||
Goodwill [Roll Forward] | ||
Gross Asset Cost | $ 4,331 | $ 4,331 |
Finite-Lived Intangible Assets, Net | 7 | 26 |
Accumulated Amortization | $ 4,324 | $ 4,305 |
Non-compete agreements [Member] | Minimum [Member] | ||
Goodwill [Roll Forward] | ||
Amortization Period | 3 years | 3 years |
Non-compete agreements [Member] | Maximum [Member] | ||
Goodwill [Roll Forward] | ||
Amortization Period | 5 years | 5 years |
Point-to-point FCC Licenses [Member] | ||
Goodwill [Roll Forward] | ||
Amortization Period | 3 years | 3 years |
Gross Asset Cost | $ 1,695 | $ 1,695 |
Finite-Lived Intangible Assets, Net | 852 | 994 |
Accumulated Amortization | $ 843 | $ 701 |
Intellectual Property [Member] | ||
Goodwill [Roll Forward] | ||
Amortization Period | 10 years | 10 years |
Gross Asset Cost | $ 17,379 | $ 17,379 |
Finite-Lived Intangible Assets, Net | 16,608 | 17,043 |
Accumulated Amortization | $ 771 | $ 336 |
Trade name [Member] | ||
Goodwill [Roll Forward] | ||
Amortization Period | 3 years | 3 years |
Gross Asset Cost | $ 2,080 | $ 2,079 |
Finite-Lived Intangible Assets, Net | 1,387 | 1,560 |
Accumulated Amortization | $ 693 | $ 519 |
GOODWILL AND INTANGIBLE ASSET32
GOODWILL AND INTANGIBLE ASSETS (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill | $ 286,715 | $ 270,956 | |
Intangible Assets, Net (Excluding Goodwill) | 172,956 | $ 182,184 | |
Amortization of Intangible Assets | $ 9,200 | $ 4,400 |
GOODWILL AND INTANGIBLE ASSET33
GOODWILL AND INTANGIBLE ASSETS (Details 1) $ in Thousands | Mar. 31, 2016USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2016 remaining | $ 27,247 |
2,017 | 34,669 |
2,018 | 28,392 |
2,019 | 23,735 |
2,020 | 20,834 |
2021 and beyond | 37,279 |
Total | $ 172,156 |
ACCRUED EXPENSES AND OTHER CU34
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | ||
Accrued compensation and benefits | $ 5,103 | $ 9,465 |
Accrued compensation and benefits | 22,482 | 21,637 |
Accrued restructuring | 6,714 | 6,833 |
Accrued other | 6,401 | 5,180 |
Accrued Liabilities and Other Liabilities | $ 40,700 | $ 43,115 |
DEBT (Details)
DEBT (Details) $ in Thousands | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Oct. 31, 2015 | Oct. 22, 2015USD ($) |
Total debt obligations | $ 418,000 | $ 405,000 | ||
Unamortized debt issuance costs | (10,493) | (10,938) | ||
Unamortized original issuance discount | (7,496) | (7,819) | ||
Carrying value of debt | 400,011 | 386,243 | ||
Less current portion | (4,000) | (4,000) | ||
Long-term debt less current portion | 396,011 | 382,243 | ||
2016 remaining | 3,000 | |||
2,017 | 4,000 | |||
2,018 | 4,000 | |||
2,019 | 4,000 | |||
2,020 | 23,000 | |||
2,021 | 4,000 | |||
2,022 | 376,000 | |||
Credit Agreement, October 2015 [Member] | ||||
Unamortized original issuance discount | $ (8,000) | |||
Credit Agreement, October 2015 [Member] | Fiscal Quarter Ending March 31, 2016 [Member] | ||||
Maximum Consolidated Net Total Leverage Ratio | 5 | |||
Credit Agreement, October 2015 [Member] | Fiscal Quarter Ending June 30, 2016 [Member] | ||||
Maximum Consolidated Net Total Leverage Ratio | 5 | |||
Credit Agreement, October 2015 [Member] | Fiscal Quarter Ending September 30, 2016 [Member] | ||||
Maximum Consolidated Net Total Leverage Ratio | 4.75 | |||
Credit Agreement, October 2015 [Member] | Fiscal Quarter Ending December 31, 2016 [Member] | ||||
Maximum Consolidated Net Total Leverage Ratio | 4.75 | |||
Credit Agreement, October 2015 [Member] | Fiscal Quarter Ending March 31, 2017 [Member] | ||||
Maximum Consolidated Net Total Leverage Ratio | 4.50 | |||
Credit Agreement, October 2015 [Member] | Fiscal Quarter Ending June 30, 2017 [Member] | ||||
Maximum Consolidated Net Total Leverage Ratio | 4.50 | |||
Credit Agreement, October 2015 [Member] | Fiscal Quarter Ending September 30, 2017 [Member] | ||||
Maximum Consolidated Net Total Leverage Ratio | 4.25 | |||
Credit Agreement, October 2015 [Member] | Fiscal Quarter Ending December 31, 2017 [Member] | ||||
Maximum Consolidated Net Total Leverage Ratio | 4.25 | |||
Credit Agreement, October 2015 [Member] | Fiscal Quarter Ending March 31, 2018 [Member] | ||||
Maximum Consolidated Net Total Leverage Ratio | 4 | |||
Credit Agreement, October 2015 [Member] | Fiscal Quarter Ending June 30, 2018 [Member] | ||||
Maximum Consolidated Net Total Leverage Ratio | 4 | |||
Credit Agreement, October 2015 [Member] | Fiscal Quarter Ending September 30, 2018 [Member] | ||||
Maximum Consolidated Net Total Leverage Ratio | 3.75 | |||
Credit Agreement, October 2015 [Member] | Fiscal Quarter Ending December 31, 2018 [Member] | ||||
Maximum Consolidated Net Total Leverage Ratio | 3.75 | |||
Credit Agreement, October 2015 [Member] | Fiscal Quarter Ending March 31, 2019 and thereafter [Member] | ||||
Maximum Consolidated Net Total Leverage Ratio | 3.50 | |||
Senior Term Loan [Member] | ||||
Total debt obligations | 399,000 | 400,000 | ||
Svb Line Of Credit [Member] | ||||
Total debt obligations | 19,000 | 5,000 | ||
Delayed Draw Term Loan [Member] | ||||
Total debt obligations | $ 0 | $ 0 |
DEBT (Details Textual)
DEBT (Details Textual) - USD ($) | Oct. 22, 2015 | Mar. 31, 2016 | Dec. 31, 2015 |
Debt Instrument, Unamortized Discount | $ 7,496,000 | $ 7,819,000 | |
Long-term Debt, Gross | 418,000,000 | 405,000,000 | |
Svb Line Of Credit [Member] | |||
Debt and Capital Lease Obligations | 400,000 | ||
Long-term Debt, Gross | 19,000,000 | $ 5,000,000 | |
Line of Credit Facility, Remaining Borrowing Capacity | $ 30,600,000 | ||
Credit Agreement, October 2015 [Member] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 400,000,000 | ||
Debt Instrument, Unamortized Discount | 8,000,000 | ||
Debt Instrument, Interest Rate, Effective Percentage | 6.27% | 6.24% | |
Credit Agreement, October 2015 [Member] | Revolving Credit Facility [Member] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 50,000,000 | ||
Credit Agreement, October 2015 [Member] | Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||
Debt Instrument, Basis Spread on Variable Rate | 4.75% | ||
Credit Agreement, October 2015 [Member] | Letter of Credit [Member] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 15,000,000 | ||
Credit Agreement, October 2015 [Member] | Swingline Loan [Member] | |||
Line of Credit Facility, Maximum Borrowing Capacity | 10,000,000 | ||
Credit Agreement, October 2015 [Member] | Incremental Term Loan And Incremental Revolving Loan [Member] | |||
Line of Credit Facility, Maximum Borrowing Capacity | 75,000,000 | ||
Credit Agreement, October 2015 [Member] | Incremental Revolver [Member] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 25,000,000 | ||
Credit Agreement, October 2015 [Member] | Term Loan [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||
Debt Instrument, Basis Spread on Variable Rate | 5.25% | ||
Debt Instrument, Interest Rate, Effective Percentage Rate Range, Minimum | 1.00% |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Allocated Share-based Compensation Expense | $ 1,553 | $ 1,359 | |
Unrecognized Compensation Cost | $ 30,966 | ||
Weighted Average Remaining Period to be Recognized | 2 years 3 months 18 days | ||
One Source Networks Inc. [Member] | |||
Unrecognized Compensation Cost | $ 2,600 | ||
Weighted Average Remaining Period to be Recognized | 12 months | ||
Employee Stock Option [Member] | |||
Allocated Share-based Compensation Expense | 427 | $ 344 | |
Unrecognized Compensation Cost | $ 4,911 | ||
Weighted Average Remaining Period to be Recognized | 2 years | ||
Stock options granted | 144,958 | 84,000 | |
Fair value of shares granted | $ 851,000 | $ 630,000 | |
Restricted Stock [Member] | |||
Allocated Share-based Compensation Expense | 1,126 | 1,015 | |
Unrecognized Compensation Cost | $ 26,055 | ||
Weighted Average Remaining Period to be Recognized | 2 years 4 months 24 days | ||
Fair value of shares granted | $ 6,369,000 | $ 1,355,000 | |
Restricted stock shares granted | 475,534 | 109,000 | |
Restricted Stock [Member] | One Source Networks Inc. [Member] | |||
Allocated Share-based Compensation Expense | $ 300 |
SHARE-BASED COMPENSATION (Det38
SHARE-BASED COMPENSATION (Details Textual) - USD ($) $ in Thousands | Oct. 22, 2015 | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 9,500,000 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Outstanding, Number1 | 7,747,572 | ||||||
Unrecognized Compensation Cost | $ 30,966 | ||||||
Stock issued in connection with acquisition | $ 1,572 | $ 0 | |||||
Weighted Average Remaining Period to be Recognized | 2 years 3 months 18 days | ||||||
One Source Networks Inc. [Member] | |||||||
Unrecognized Compensation Cost | $ 2,600 | ||||||
Stock issued in connection with acquisition | $ 3,600 | ||||||
Stock issued in connection with acquisition (in shares) | 289,055 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Requisite Service Period | 18 months | ||||||
Weighted Average Remaining Period to be Recognized | 12 months | ||||||
Performance Shares [Member] | |||||||
Unrecognized Compensation Cost | $ 5,700 | ||||||
Fair Value Of Stock Granted | $ 17,200 | $ 7,800 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 2 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 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% | ||||||
Periodic Vesting [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent | 100.00% | ||||||
Periodic Vesting [Member] | Employee Director Consultant Stock Plan [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Term of Award | 10 years | ||||||
Periodic Vesting [Member] | Stock Option 25 [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Annual Vesting Percentage | 25.00% |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Taxable earnings | $ 1,300 | |
Provision for (benefit from) income taxes | $ 405 | $ (407) |
Effective Income Tax Rate Reconciliation, Percent | 30.00% | 61.70% |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% | 35.00% |
SEVERANCE, RESTRUCTURING AND 40
SEVERANCE, RESTRUCTURING AND OTHER EXIT COSTS (Details Textual) $ in Thousands | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Telnes Broadband [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring Reserve | $ 1,495 |
Telnes Broadband [Member] | Charges Net Of Reversals [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring Reserve | 1,495 |
Telnes Broadband [Member] | Cash Payments [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring Reserve | 0 |
One Source Networks Inc. [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring Reserve | 2,711 |
One Source Networks Inc. [Member] | Charges Net Of Reversals [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring Reserve | 4,937 |
One Source Networks Inc. [Member] | Cash Payments [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring Reserve | 2,226 |
Payments for Restructuring | 900 |
MegaPath Group, Inc. [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring Reserve | 2,508 |
MegaPath Group, Inc. [Member] | Charges Net Of Reversals [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring Reserve | 7,747 |
MegaPath Group, Inc. [Member] | Cash Payments [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring Reserve | 5,239 |
Payments for Restructuring | $ 600 |
SEVERANCE, RESTRUCTURING AND 41
SEVERANCE, RESTRUCTURING AND OTHER EXIT COSTS (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Telnes Broadband [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring accrual | $ 1,495 |
Telnes Broadband [Member] | Employment termination benefits [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 870 |
Telnes Broadband [Member] | Lease and network termination charges [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 625 |
Telnes Broadband [Member] | Other exit costs [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 0 |
Telnes Broadband [Member] | Charges Net Of Reversals [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring accrual | 1,495 |
Telnes Broadband [Member] | Charges Net Of Reversals [Member] | Employment termination benefits [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 870 |
Telnes Broadband [Member] | Charges Net Of Reversals [Member] | Lease and network termination charges [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 625 |
Telnes Broadband [Member] | Charges Net Of Reversals [Member] | Other exit costs [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 0 |
Telnes Broadband [Member] | Cash Payments [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring accrual | 0 |
Telnes Broadband [Member] | Cash Payments [Member] | Employment termination benefits [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 0 |
Telnes Broadband [Member] | Cash Payments [Member] | Lease and network termination charges [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 0 |
Telnes Broadband [Member] | Cash Payments [Member] | Other exit costs [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 0 |
One Source Networks Inc. [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring accrual | 2,711 |
One Source Networks Inc. [Member] | Employment termination benefits [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 925 |
One Source Networks Inc. [Member] | Lease and network termination charges [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 1,669 |
One Source Networks Inc. [Member] | Other exit costs [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 117 |
One Source Networks Inc. [Member] | Charges Net Of Reversals [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring accrual | 4,937 |
One Source Networks Inc. [Member] | Charges Net Of Reversals [Member] | Employment termination benefits [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 2,903 |
One Source Networks Inc. [Member] | Charges Net Of Reversals [Member] | Lease and network termination charges [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 1,910 |
One Source Networks Inc. [Member] | Charges Net Of Reversals [Member] | Other exit costs [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 124 |
One Source Networks Inc. [Member] | Cash Payments [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring accrual | 2,226 |
One Source Networks Inc. [Member] | Cash Payments [Member] | Employment termination benefits [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 1,978 |
One Source Networks Inc. [Member] | Cash Payments [Member] | Lease and network termination charges [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 241 |
One Source Networks Inc. [Member] | Cash Payments [Member] | Other exit costs [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 7 |
MegaPath Group, Inc. [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring accrual | 2,508 |
MegaPath Group, Inc. [Member] | Employment termination benefits [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 0 |
MegaPath Group, Inc. [Member] | Lease and network termination charges [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 2,041 |
MegaPath Group, Inc. [Member] | Other exit costs [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 467 |
MegaPath Group, Inc. [Member] | Charges Net Of Reversals [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring accrual | 7,747 |
MegaPath Group, Inc. [Member] | Charges Net Of Reversals [Member] | Employment termination benefits [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 4,132 |
MegaPath Group, Inc. [Member] | Charges Net Of Reversals [Member] | Lease and network termination charges [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 2,886 |
MegaPath Group, Inc. [Member] | Charges Net Of Reversals [Member] | Other exit costs [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 729 |
MegaPath Group, Inc. [Member] | Cash Payments [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring accrual | 5,239 |
MegaPath Group, Inc. [Member] | Cash Payments [Member] | Employment termination benefits [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 4,132 |
MegaPath Group, Inc. [Member] | Cash Payments [Member] | Lease and network termination charges [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 845 |
MegaPath Group, Inc. [Member] | Cash Payments [Member] | Other exit costs [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | $ 262 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | May. 03, 2016USD ($) |
Subsequent Event [Member] | Loans Payable [Member] | Credit Agreement, October 2015 [Member] | |
Subsequent Event [Line Items] | |
Debt Instrument, Face Amount | $ 30,000,000 |