Document and Entity Information
Document and Entity Information | 6 Months Ended |
Jun. 30, 2015 | |
Document and Entity Information | |
Entity Registrant Name | Everi Holdings Inc. |
Entity Central Index Key | 1,318,568 |
Document Type | 8-K |
Document Period End Date | Jun. 30, 2015 |
Amendment Flag | false |
Entity Filer Category | Accelerated Filer |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||
Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME | |||||||||||||||
Revenues | $ 206,364 | $ 207,473 | $ 152,055 | $ 145,481 | $ 144,946 | $ 150,571 | $ 140,456 | $ 146,101 | $ 149,065 | $ 146,822 | $ 413,837 | $ 295,517 | $ 593,053 | $ 582,444 | $ 584,486 |
Costs and expenses | |||||||||||||||
Cost of revenues (exclusive of depreciation and amortization) | 127,222 | 127,023 | 109,375 | 113,238 | 254,245 | 222,614 | 440,071 | 439,794 | 436,059 | ||||||
Operating expenses | 26,847 | 15,841 | 21,261 | 20,039 | 42,688 | 41,299 | 95,452 | 76,562 | 75,806 | ||||||
Research and Development | 4,470 | 5,436 | 9,906 | 804 | 0 | 0 | |||||||||
Depreciation | 10,717 | 10,377 | 1,919 | 1,927 | 21,094 | 3,846 | 8,745 | 7,350 | 6,843 | ||||||
Amortization | 20,772 | 20,655 | 2,769 | 2,354 | 41,427 | 5,123 | 14,199 | 9,588 | 9,796 | ||||||
Total costs and expenses | 190,028 | 179,332 | 135,324 | 137,558 | 369,360 | 272,882 | 559,271 | 533,294 | 528,504 | ||||||
Operating income | 16,336 | 28,141 | 376 | 10,771 | 9,622 | 13,013 | 11,196 | 11,420 | 13,633 | 12,901 | 44,477 | 22,635 | 33,782 | 49,150 | 55,982 |
Other expenses | |||||||||||||||
Interest expense, net of interest income | 24,958 | 25,655 | 2,083 | 1,546 | 50,613 | 3,629 | 10,756 | 10,265 | 15,519 | ||||||
Loss on extinguishment of debt | 12,977 | 0 | 12,977 | 2,725 | |||||||||||
Total other expenses | 37,935 | 25,655 | 2,083 | 1,546 | 63,590 | 3,629 | 13,481 | 10,265 | 15,519 | ||||||
(Loss) income from operations before tax | (21,599) | 2,486 | 7,539 | 11,467 | (19,113) | 19,006 | 20,301 | 38,885 | 40,463 | ||||||
Income tax (benefit) expense | (8,858) | 2,017 | 2,815 | 3,978 | (6,841) | 6,793 | 8,161 | 14,487 | 14,774 | ||||||
Net (loss) income | (12,741) | 469 | $ (5,749) | $ 5,676 | 4,724 | 7,489 | $ 5,704 | $ 5,782 | $ 6,776 | $ 6,136 | (12,272) | 12,213 | 12,140 | 24,398 | 25,689 |
Foreign currency translation | 811 | (873) | 381 | 1 | (62) | 382 | (1,258) | 269 | 218 | ||||||
Comprehensive (loss) income | $ (11,930) | $ (404) | $ 5,105 | $ 7,490 | $ (12,334) | $ 12,595 | $ 10,882 | $ 24,667 | $ 25,907 | ||||||
(Loss) earnings per share | |||||||||||||||
Basic (in dollars per share) | $ (0.19) | $ 0.01 | $ (0.09) | $ 0.09 | $ 0.07 | $ 0.11 | $ 0.09 | $ 0.09 | $ 0.10 | $ 0.09 | $ (0.19) | $ 0.19 | $ 0.18 | $ 0.37 | $ 0.39 |
Diluted (in dollars per share) | $ (0.19) | $ 0.01 | $ (0.09) | $ 0.09 | $ 0.07 | $ 0.11 | $ 0.08 | $ 0.09 | $ 0.10 | $ 0.09 | $ (0.19) | $ 0.18 | $ 0.18 | $ 0.36 | $ 0.38 |
Weighted average common shares outstanding | |||||||||||||||
Basic (in shares) | 65,844 | 65,623 | 65,608 | 65,589 | 65,970 | 65,910 | 65,730 | 65,525 | 66,116 | 66,697 | 65,734 | 65,940 | 65,780 | 66,014 | 65,933 |
Diluted (in shares) | 65,844 | 66,492 | 66,397 | 66,747 | 67,087 | 67,370 | 67,394 | 66,630 | 66,993 | 67,882 | 65,734 | 67,206 | 66,863 | 67,205 | 67,337 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
Current assets | |||||||||
Cash and cash equivalents | $ 165,017 | $ 145,013 | $ 89,095 | $ 161,998 | $ 194,566 | $ 114,254 | $ 153,020 | $ 55,535 | $ 55,535 |
Settlement receivables | 23,716 | 29,787 | 43,288 | 38,265 | |||||
Trade receivables, net of allowances for doubtful accounts of $2.9 million and $2.8 million at June 30, 2015 and December 31, 2014, respectively | 41,834 | 39,220 | 37,697 | 11,658 | |||||
Total other receivables, current portion | 11,372 | 20,392 | 20,553 | 4,605 | |||||
Inventory | 23,453 | 23,050 | 27,163 | 9,413 | |||||
Prepaid expenses and other assets | 21,090 | 18,889 | 18,988 | 16,674 | |||||
Deferred tax asset | 9,591 | 9,590 | 9,591 | 3,102 | |||||
Total current assets | 296,073 | 285,941 | 246,375 | 197,971 | |||||
Non-current assets | |||||||||
Property, equipment and leasehold improvements, net | 104,521 | 102,759 | 106,085 | 18,710 | |||||
Goodwill | 857,670 | 857,856 | 857,913 | 180,084 | $ 180,141 | ||||
Other intangible assets, net | 404,132 | 420,103 | 436,785 | 31,535 | |||||
Other receivables, non-current | 7,808 | 8,593 | 9,184 | 699 | |||||
Other assets, non-current | 36,915 | 50,012 | 50,943 | 10,386 | |||||
Total non-current assets | 1,411,046 | 1,439,323 | 1,460,910 | 329,356 | |||||
Total assets | 1,707,119 | 1,725,264 | 1,707,285 | 527,327 | |||||
Current Liabilities | |||||||||
Settlement liabilities | 141,211 | 141,649 | 119,157 | 145,022 | |||||
Accounts payable and accrued expenses | 36,712 | 113,543 | 104,668 | 53,601 | |||||
Current portion of long-term debt | 10,000 | 10,000 | 10,000 | 1,030 | |||||
Total current liabilities | 267,906 | 265,192 | 233,825 | 199,653 | |||||
Non-current liabilities | |||||||||
Deferred tax liability, non-current | 49,808 | 59,101 | 57,333 | ||||||
Long-term debt, less current portion | 1,157,506 | 1,161,731 | 1,178,787 | 101,970 | |||||
Other accrued expenses and liabilities | 4,927 | 5,381 | 5,867 | 7,100 | |||||
Total non-current liabilities | 1,212,241 | 1,226,213 | 1,241,987 | 109,070 | |||||
Total liabilities | $ 1,480,147 | $ 1,491,405 | $ 1,475,812 | $ 308,723 | |||||
Commitments and Contingencies (Note 14) | |||||||||
Stockholders' Equity | |||||||||
Common stock, $0.001 par value, 500,000 shares authorized and 90,743 and 90,405 shares issued at June 30, 2015 and December 31, 2014, respectively | $ 91 | $ 91 | $ 90 | $ 89 | |||||
Convertible preferred stock, $0.001 par value, 50,000 shares authorized and 0 shares outstanding at June 30, 2015 and December 31, 2014, respectively | |||||||||
Additional paid-in capital | 253,555 | $ 248,491 | $ 245,682 | $ 231,516 | |||||
Retained earnings (deficit) | 147,879 | 160,621 | 160,152 | 148,012 | |||||
Accumulated other comprehensive income (loss) | 1,507 | 696 | 1,569 | 2,827 | |||||
Treasury stock, at cost, 24,821 and 24,816 shares at June 30, 2015 and December 31, 2014, respectively | (176,060) | (176,040) | (176,020) | (163,840) | |||||
Total stockholders' equity (deficit) | 226,972 | 233,859 | 231,473 | 218,604 | |||||
Total liabilities and stockholders' equity | $ 1,707,119 | $ 1,725,264 | $ 1,707,285 | $ 527,327 |
CONDENSED CONSOLIDATED BALANCE4
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
Allowances for doubtful accounts | $ 2,900 | $ 2,700 | $ 2,784 | $ 2,777 | $ 6,908 | $ 6,756 |
Common stock par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||
Common stock, shares authorized | 500,000,000 | 500,000,000 | 500,000,000 | 500,000,000 | ||
Common stock, shares issued | 90,743,000 | 90,610,000 | 90,405,000 | 89,233,000 | ||
Convertible preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||
Convertible preferred stock, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 | 50,000,000 | ||
Convertible preferred stock, shares outstanding | 0 | 0 | 0 | 0 | ||
Treasury stock, shares | 24,821,000 | 24,819,000 | 24,816,000 | 23,303,000 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS $ in Thousands | 12 Months Ended | ||
Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | |
Cash flows from operating activities | |||
Net (loss) income | $ 12,140 | $ 24,398 | $ 25,689 |
Adjustments to reconcile net income to cash provided by operating activities: | |||
Depreciation and Amortization | 22,944 | 16,938 | 16,639 |
Amortization of financing costs | 2,035 | 1,793 | 1,485 |
Provision for bad debts | 8,991 | 7,874 | 5,182 |
Impairment Loss | 3,129 | ||
Loss on early extinguishment of debt | 2,725 | ||
Stock-based compensation | 8,876 | 5,078 | 6,655 |
Other non-cash items | 337 | 178 | 95 |
Changes in operating assets and liabilities: | |||
Settlement receivables | (5,156) | (8,793) | 50,823 |
Other receivables, net | (12,256) | (13,335) | 1,196 |
Inventory | (850) | (2,286) | 134 |
Prepaid and other assets | 904 | (9,482) | (3,425) |
Deferred income taxes | 6,613 | 13,643 | 14,376 |
Settlement liabilities | (25,523) | (37,200) | 40,530 |
Other current liabilities | (378) | 5,528 | (1,891) |
Net cash provided by operating activities | 24,531 | 4,334 | 157,488 |
Cash flows from investing activities | |||
Acquisitions, net of cash acquired | (1,068,000) | ||
Capital expenditures | (18,021) | (13,900) | (12,786) |
Repayments under development agreements | 276 | ||
Changes in restricted cash and cash equivalents | (102) | (90) | 255 |
Net cash provided by (used in) investing activities | (1,085,847) | (13,990) | (12,531) |
Cash flows from financing activities | |||
Repayments of prior credit facility | (103,000) | (18,500) | (52,500) |
Debt issuance costs | (52,735) | (764) | (676) |
Proceeds from exercise of stock options | 5,338 | 8,431 | 6,655 |
Purchase of treasury stock | (12,180) | (18,350) | (262) |
Net cash used in financing activities | 1,037,423 | (29,183) | (46,783) |
Effect of exchange rates on cash | (1,266) | 73 | (689) |
Cash and cash equivalents | |||
Net increase for the period | (25,159) | (38,766) | 97,485 |
Balance, beginning of the period | 114,254 | 153,020 | 55,535 |
Balance, end of the period | 89,095 | 114,254 | 153,020 |
Supplemental cash disclosures | |||
Cash paid for interest | 59,274 | 8,634 | 15,494 |
Cash (refunded) paid for income tax, net | 962 | 711 | $ 665 |
Supplemental non-cash disclosures | |||
Non-cash tenant improvements paid by landlord | 2,930 | ||
Accrued and unpaid capital expenditures | 731 | $ 1,073 | |
Accrued and unpaid contingent liability for NEWave acquisition | $ 2,463 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock [Member] | Additional Paid In Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income [Member] | Treasury Stock [Member] |
Balance at Dec. 31, 2011 | $ 159,858 | $ 86 | $ 204,735 | $ 97,925 | $ 2,340 | $ (145,228) |
Balance (in shares) at Dec. 31, 2011 | 85,651 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net (loss) income | 25,689 | 25,689 | ||||
Foreign currency translation | 218 | 218 | ||||
Share-based compensation expense | 6,655 | 6,655 | ||||
Exercise of options | 6,601 | $ 1 | 6,600 | |||
Exercise of options (in shares) | 1,726 | |||||
Restricted share vesting withholdings | (262) | (262) | ||||
Restricted shares vested (in shares) | 168 | |||||
Balance at Dec. 31, 2012 | 198,759 | $ 87 | 217,990 | 123,614 | 2,558 | (145,490) |
Balance (in shares) at Dec. 31, 2012 | 87,545 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net (loss) income | 24,398 | 24,398 | ||||
Foreign currency translation | 269 | 269 | ||||
Share-based compensation expense | 5,078 | 5,078 | ||||
Exercise of options | 8,450 | $ 2 | 8,448 | |||
Exercise of options (in shares) | 1,618 | |||||
Treasury share repurchases | (18,241) | (18,241) | ||||
Restricted share vesting withholdings | (109) | (109) | ||||
Restricted shares vested (in shares) | 70 | |||||
Balance at Dec. 31, 2013 | 218,604 | $ 89 | 231,516 | 148,012 | 2,827 | (163,840) |
Balance (in shares) at Dec. 31, 2013 | 89,233 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net (loss) income | 12,140 | 12,140 | ||||
Foreign currency translation | (1,258) | (1,258) | ||||
Share-based compensation expense | 8,876 | 8,876 | ||||
Exercise of options | 5,291 | $ 1 | 5,290 | |||
Exercise of options (in shares) | 971 | |||||
Treasury share repurchases | (11,721) | (11,721) | ||||
Restricted share vesting withholdings | (459) | (459) | ||||
Restricted shares vested (in shares) | 201 | |||||
Balance at Dec. 31, 2014 | $ 231,473 | $ 90 | $ 245,682 | $ 160,152 | $ 1,569 | $ (176,020) |
Balance (in shares) at Dec. 31, 2014 | 90,405 |
BUSINESS AND BASIS OF PRESENTAT
BUSINESS AND BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2014 | |
BUSINESS | |
BUSINESS AND BASIS OF PRESENTATION | 1. BUSINESS AND BASIS OF PRESENTATION Global Cash Access Holdings, Inc. (“Holdings”) is a holding company, the principal assets of which are the issued and outstanding capital stock of each of Global Cash Access, Inc. (“GCA”) and Multimedia Games Holding Company, Inc. (“Multimedia Games”). Unless otherwise indicated, the terms the “Company,” “we,” “us” and “our” refer to Holdings together with its consolidated subsidiaries. GCA is dedicated to providing integrated gaming payments solutions, video and mechanical reel gaming content and technology solutions, as well as compliance and efficiency software. The Company’s Payments business provides: (a) access to cash at gaming facilities via Automated Teller Machine ("ATM") cash withdrawals, credit card cash access transactions, point-of-sale ("POS") debit card transactions, and check verification and warranty services; (b) fully integrated gaming industry kiosks that provide cash access and related services; (c) products and services that improve credit decision making, automate cashier operations and enhance patron marketing activities for gaming establishments; (d) compliance, audit and data solutions; and, (e) online payment processing solutions for gaming operators in States that offer intra-state, Internet-based gaming and lottery activities. The Company’s Games business, under the Multimedia Games brand, provides: (a) comprehensive content, electronic gaming units and systems for Native American and commercial casinos, including the award-winning TournEvent ® slot tournament solution; and, (b) the central determinant system for the video lottery terminals (“VLTs”) installed at racetracks in the State of New York. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2014 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation All intercompany transactions and balances have been eliminated in consolidation. Business Combinations We apply the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC 805”), “Business Combinations”, in the accounting for acquisitions. It requires us to recognize separately from goodwill the assets acquired and the liabilities assumed, at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. Significant estimates and assumptions are required to value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable. These estimates are preliminary and typically include the calculation of an appropriate discount rate and projection of the cash flows associated with each acquired asset over its estimated useful life. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. In addition, deferred tax assets, deferred tax liabilities, uncertain tax positions and tax related valuation allowances assumed in connection with a business combination are initially estimated as of the acquisition date. We reevaluate these items quarterly based upon facts and circumstances that existed as of the acquisition date and any adjustments to its preliminary estimates are recorded to goodwill if identified within the measurement period. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the consolidated statements of operations. Acquisition-related Costs We recognize a liability for acquisition-related costs when the liability is incurred. Acquisition-related costs include financial advisory, legal and debt fees; accounting, consulting, and professional fees associated with due diligence, valuation and integration; severance; and other related costs and adjustments. Cash and Cash Equivalents Cash and cash equivalents include cash and all balances on deposit in banks and financial institutions. We consider all highly liquid investments with maturities of three months or less at the time of purchase to be cash and cash equivalents. Such balances generally exceed the federal insurance limits. However, we periodically evaluate the creditworthiness of thes e institutions to minimize risk. ATM Funding Agreements We obtain all of the cash required to operate our ATMs through various ATM Funding Agreements. Some gaming establishments provide the cash utilized within the ATM (“Site ‑Funded”). The Site ‑Funded receivables generated for the amount of cash dispensed from transactions performed at our ATMs are owned by us and we are liable to the gaming establishment for the face amount of the cash dispensed. In the consolidated balance sheets, the amount of the receivable for transactions processed on these ATM transactions is included within settlement receivables and the amount due to the gaming establishment for the face amount of dispensing transactions is included within settlement liabilities. For the Non ‑Site ‑Funded locations, our Contract Cash Solutions Agreement with Wells Fargo allows us to use funds owned by Wells Fargo to provide the currency needed for normal operating requirements for our ATMs. For the use of these funds, we pay Wells Fargo a cash usage fee on the average daily balance of funds utilized multiplied by a contractually defined cash usage rate. Under this agreement, all currency supplied by Wells Fargo remains the sole property of Wells Fargo at all times until it is dispensed, at which time Wells Fargo obtains an interest in the corresponding settlement receivable. As the cash is never an asset of ours, supplied cash is not reflected on our balance sheet. We are charged a cash usage fee for the cash used in these ATMs, which is included as interest expense in the consolidated statements of income and comprehensive income. We recognize the fees as interest expense due to the similar operational characteristics to a revolving line of credit, the fact that the fees are calculated on a financial index and the fees are paid for access to a capital resource. Allowance for Doubtful Accounts We maintain an allowance for doubtful accounts related to our trade and other receivables and notes receivable that have been deemed to have a high risk of uncollectibility. Management reviews its accounts and notes receivable on a quarterly basis to determine if any receivables will potentially be uncollectible. Management analyzes historical collection trends and changes in our customer payment patterns, customer concentration, and creditworthiness when evaluating the adequacy of our allowance for doubtful accounts. In our overall allowance for doubtful accounts we include any receivable balances for which uncertainty exists as to whether the account balance has become uncollectible. Based on the information available, management believes the allowance for doubtful accounts is adequate; however, actual write-offs may exceed the recorded allowance. Settlement Receivables and Settlement Liabilities In the credit card cash access and POS debit card cash access transactions provided by us, the gaming establishment is reimbursed for the cash disbursed to gaming patrons through the issuance of a negotiable instrument or through electronic settlement. We receive reimbursement from the patron’s credit or debit card issuer for the transaction in an amount equal to the amount owing to the gaming establishment plus the fee charged to the patron. This reimbursement is included within the settlement receivables on the consolidated balance sheets. The amounts owed to gaming establishments are included within settlement liabilities on the consolidated balance sheets. Warranty Receivables If a gaming establishment chooses to have a check warranted, it sends a request to our third party check warranty service provider, asking whether it would be willing to accept the risk of cashing the check. If the check warranty provider accepts the risk and warrants the check, the gaming establishment negotiates the patron’s check by providing cash for the face amount of the check. If the check is dishonored by the patron’s bank upon presentment, the gaming establishment invokes the warranty, and the check warranty service provider purchases the check from the gaming establishment for the full check amount and then pursues collection activities on its own. In our Central Credit Check Warranty product under our agreement with the third party service provider, we receive all of the check warranty revenue. We are exposed to risk for the losses associated with any warranted items that cannot be collected from patrons issuing the items. Warranty receivables are defined as any amounts paid by the third party check warranty service provider to gaming establishments to purchase dishonored checks. Additionally, we pay a fee to the third party check warranty service provider for its services. The warranty receivables amount is recorded in other receivables, net on our consolidated balance sheets. On a monthly basis, the Company evaluates the collectability of the outstanding balances and establishes a reserve for the face amount of the expected losses on these receivables. The warranty expense associated with this reserve is included within cost of revenues (exclusive of depreciation and amortization) on our consolidated statements of income and comprehensive income. Inventory We currently maintain separate inventories for our Payments and Games products. Our Payments related inventory primarily consists of parts as well as finished goods and work-in-progress and is stated at the lower of cost or market accounted for using the average cost method. Our Games related inventory primarily consists of component parts, completed player terminals and back-office computer equipment and is stated at fair value as a result of the Merger. However, our games segment historically accounted for inventory at lower of cost (first in, first out) or market. The cost of inventory includes cost of materials, labor, overhead and freight. Property, Equipment and Leased Assets Property, equipment and leased gaming equipment are stated at cost, less accumulated depreciation, computed using the straight-line method over the lesser of the estimated life of the related assets, generally three to five years, or the related lease term. Player terminals and related components and equipment are included in our rental pool. The rental pool can be further delineated as “rental pool – deployed,” which consists of assets deployed at customer sites under participation arrangements, and “rental pool – undeployed,” which consists of assets held by us that are available for customer use. Rental pool – undeployed consists of both new units awaiting deployment to a customer site and previously deployed units currently back with us to be refurbished awaiting re-deployment. Routine maintenance of property, equipment and leased gaming equipment is expensed in the period incurred, while major component upgrades are capitalized and depreciated over the estimated remaining useful life of the component. Sales and retirements of depreciable property are recorded by removing the related cost and accumulated depreciation from the accounts. Gains or losses on sales and retirements of property are reflected in our consolidated statements of income and comprehensive income. Property, equipment and leased gaming equipment are reviewed for impairment whenever events or circumstances indicate that their carrying amounts may not be recoverable. Impairment is indicated when undiscounted future cash flows do not exceed the asset’s carrying value. There was no material impairment for any of our property, equipment, or leasehold improvements for the years ended December 31, 2014, 2013 and 2012. Development and Placement Fee Agreements We enter into development and placement fee agreements to provide financing for new gaming facilities or for the expansion of existing facilities. All or a portion of the funds provided under development agreements are reimbursed to us, while funds provided under placement fee agreements are not reimbursed. In return, the facility dedicates a percentage of its floor space to placement of our player terminals, and we receive a fixed percentage of those player terminals' hold per day over the term of the agreement which is generally for 12 to 83 months. Certain of the agreements contain player terminal performance standards that could allow the facility to reduce a portion of our guaranteed floor space. In addition, certain development agreements allow the facilities to buy out floor space after advances that are subject to repayment have been repaid. The agreements typically provide for a portion of the amounts retained by the gaming facility for their share of the operating profits of the facility to be used to repay some or all of the advances recorded as notes receivable. Goodwill Goodwill represents the excess of the purchase price over the identifiable tangible and intangible assets acquired plus liabilities assumed arising from business combinations. We test for impairment annually on a reporting unit basis, at the beginning of our fourth fiscal quarter, or more often under certain circumstances. The annual impairment test is completed using either: a qualitative Step 0 assessment based on reviewing relevant events and circumstances; or a quantitative Step 1 assessment, which determines the fair value of the reporting unit, using an income approach that discounts future cash flows based on the estimated future results of our reporting units and a market approach that compares market multiples of comparable companies to determine whether or not any impairment exists. If the fair value of a reporting unit is less than its carrying amount, we use the Step 2 assessment to determine the impairment. Our reporting units are identified as operating segments or one level below an operating segment. Reporting units must: (a) engage in business activities from which they earn revenues and incur expenses; (b) have operating results that are regularly reviewed by our chief operating decision maker to ascertain the resources to be allocated to the segment and assess its performance; and (c) have discrete financial information available. As of December 31, 2014, our reporting units included: Cash Advance, ATM, Check Services, Games, Fully Integrated Kiosk Sales and Services, Central Credit, and Anti-Money Laundering and Tax Compliance Software. Our goodwill was not impaired for the years ended December 31, 2014, 2013 and 2012. Other Intangible Assets Other intangible assets consist primarily of: ( a ) customer contracts (rights to provide Payments and Games services to gaming establishment customers), developed technology, trade names and trademarks and contract rights acquired through business combinations; ( b ) capitalized so ftware development costs; and (c ) the acquisition cost of our patent related to the 3-in-1 rollover technology acquired in 2005. Customer contracts require us to make renewal assumptions, which impact the estimated useful lives of such assets. Capitalized software development costs require us to make certain judgments as to the stages of development and costs eligible for capitalization. Capitalized software costs placed in service are amortized over their useful lives, generally not to exceed five years. The acquisition cost of the 3-in-1 Rollover patent is being amortized over the term of the patent, which expires in 2018. We review intangible assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Such events or circumstances include, but are not limited to, a significant decrease in the fair value of the underlying business or market price of the asset, a significant adverse change in legal factors or business climate that could affect the value of an asset, or a current period operating or cash flow loss combined with a history of operating or cash flow losses. We group intangible assets for impairment analysis at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Recoverability of intangible assets is measured by a comparison of the carrying amount of the asset to future, net cash flows expected to be generated by the asset, undiscounted and without interest. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. For the year ended December 31, 2014, we recognized $3.1 million of impairment on our other intangible assets. There was no impairment for any of our other intangible assets for the years ended December 31, 2013 and 2012. Debt Issuance Costs Debt issuance costs incurred in connection with long-term borrowings are capitalized and amortized to interest expense based upon the related debt agreements using the straight-line method, which approximates the effective interest method. Debt issuance costs are included in other assets on the consolidated balance sheets. Original Issue Discounts Original issue discounts incurred in connection with long-term borrowings are capitalized and amortized to interest expense based upon the related debt agreements using the straight-line method, which approximates the effective interest method. These amounts are recorded as contra-liabilities and included in long-term debt on the consolidated balance sheets. Deferred Revenue Deferred revenue represents amounts from the sale of fully integrated kiosks and related service contracts, anti-money laundering and tax compliance software, and gaming equipment and systems that have been billed, or for which notes receivable have been executed, but which transaction has not met our revenue recognition criteria. The cost of the fully integrated kiosks and related service contracts, anti-money laundering and tax compliance software, and gaming equipment and systems is deferred and recorded at the time revenue is recognized. Amounts are classified between current and long-term liabilities, based upon the expected period in which the revenue will be recognized. Revenue Recognition Overall We recognize revenue when evidence of an arrangement exists, services have been rendered or goods have been delivered , the price is fixed or determinable and collectability is reasonably assured. We evaluate our revenue streams for proper timing of revenue recognition. Payments Revenues Cash advance revenues are comprised of transaction fees assessed to gaming patrons in connection with credit card cash access and POS debit card transactions and are recognized at the time the transactions are authorized. Such fees are based on a combination of a fixed amount plus a percentage of the face amount of the credit card cash access or POS debit card transaction amount. ATM revenues are comprised of transaction fees in the form of cardholder surcharges assessed to gaming patrons in connection with ATM cash withdrawals at the time the transactions are authorized and reverse interchange fees paid to us by the patrons’ issuing banks. Cardholder surcharges are recognized as revenue when a transaction is initiated and reverse interchange is recognized as revenue on a monthly basis based on the total transactions occurring during the month. The cardholder surcharges assessed to gaming patrons in connection with ATM cash withdrawals are currently a fixed dollar amount and not a percentage of the transaction amount. Check services revenues are principally comprised of check warranty revenues and are generally based upon a percentage of the face amount of checks warranted. These fees are paid to us by gaming establishments. Other revenues include amounts derived from the sale of cash access devices, such as the provision of certain professional services, software licensing, and certain other ancillary fees associated with the sale, installation and maintenance of those devices. In addition, other revenues consist of Central Credit revenues that are based upon either a flat monthly unlimited usage fee or a variable fee structure driven by the volume of patron credit histories generated. Also included in other revenues are revenues generated from ancillary marketing, database and Internet gaming activities. Games Revenues Games revenue are primarily generated by our gaming operations under development, placement, and participation arrangements in which we provides our customers with player terminals, player terminal-content licenses and back-office equipment, collectively referred to herein as leased gaming equipment. Under these arrangements, we retain ownership of the leased gaming equipment installed at customer facilities, and we receive revenue based on a percentage of the net win per day generated by the leased gaming equipment or a fixed daily fee based on the number of player terminals installed at the facility. Revenue from lease participation or daily fee arrangements are considered both realizable and earned at the end of each gaming day. Games revenues generated by player terminals deployed at sites under development or placement fee agreements is reduced by the accretion of contract rights acquired as part of those agreements. Contract rights are amounts allocated to intangible assets for dedicated floor space resulting from such agreements, described under “Development and Placement Fee Agreements.” The related amortization expense, or accretion of contract rights, is netted against our respective revenue category in the consolidated statements of operations and other comprehensive income. We also generate games revenues from back-office fees with certain customers. Back-office fees cover the service and maintenance costs for back-office servers installed in each gaming facility to run our gaming equipment, as well as the cost of related software updates. Back-office fees are considered both realizable and earned at the end of each gaming day. Equipment and Systems Revenues We sell gaming equipment, fully integrated kiosks and gaming systems directly to our customers under independent sales contracts through normal credit terms, or may grant extended credit terms under contracts secured by the related equipment. For sales arrangements with multiple deliverables, we apply the guidance from ASU No. 2009-13, “Revenue Recognition (Topic 605), Multiple-Deliverable Revenue Arrangements.” In addition, we apply the guidance from ASU No. 2009-14, “Software (Topic 985), Certain Revenue Arrangements that Include Software Elements,” which affects vendors that sell or lease tangible products in an arrangement that contains software that is more than incidental to the tangible product as a whole and clarifies what guidance should be used in allocating and measuring revenue. The majority of our multiple element sales contracts are for some combination of gaming equipment, player terminals, content, system software, license fees, ancillary equipment and maintenance. Revenue related to systems arrangements that contain both software and non-software deliverables requires allocation of the arrangement fee to the separate deliverables using the relative selling price method. Revenue for software deliverables is recognized under software revenue recognition guidance. Revenue resulting from the sale of non-software deliverables, such as gaming devices and other hardware, are accounted for based on other applicable revenue recognition guidance as the devices are tangible products containing both software and non-software components that function together to deliver the product's essential functionality. In allocating the arrangement fees to separate deliverables, we evaluate whether we have vendor-specific objective evidence (“VSOE”) of selling price, third party evidence (“TPE”) or estimate of selling price (“ESP”) for gaming devices, maintenance and product support fees and other revenue sources. We generally use ESP to determine the selling price used in the allocation of separate deliverables, as VSOE and TPE are generally not available. We determine the ESP on separate deliverables by estimating a margin typically received on such items and applying that margin to the product cost incurred. Generally, player terminal sales include ancillary equipment, such as networking gear, bases, chairs, and occasionally signage, some of which may be necessary for the full functionality of the player terminals in a casino. This ancillary equipment comprises an install kit that is shipped simultaneously with the player terminals. Although our products are analyzed as multiple deliverable arrangements, revenue for the player terminal and ancillary equipment is not recognized until all elements essential for the functionality of the product have been shipped or delivered. This includes game theme software and essential ancillary equipment. If elements that are not essential to the functionality of the player terminals are shipped after the unit, such as signage, chairs, or bases, these items would be classified as deferred revenue until shipped or delivered. Cost of Revenues (exclusive of depreciation and amortization) The cost of revenues (exclusive of depreciation and amortization) represents the direct costs required to perform revenue generating transactions. The principal costs included within cost of revenues (exclusive of depreciation and amortization) are commissions paid to gaming establishments, interchange fees paid to credit and debit card networks, transaction processing fees to our transaction processor, inventory and related costs associated with the sale of our fully integrated kiosks, electronic gaming machines and system sales, check cashing warranties, field service and network operations personnel. Advertising, Marketing and Promotional Costs We expense advertising, marketing and promotional costs as incurred. Total advertising, marketing and promotional costs, included in operating expenses in the consolidated statements of income and comprehensive income, were $1.1 million, $0.7 million and $0.7 million for the years ended December 31, 2014, 2013 and 2012, respectively. Research and Development Costs We conduct research and development activities primarily to develop new gaming systems, gaming engines, casino data management systems, casino central monitoring systems, video lottery outcome determination systems, gaming platforms, and gaming content and to add enhancements to our existing product lines. We believe our ability to deliver differentiated, appealing products and services to the marketplace is based in our research and development investments, and we expect to continue to make such investments in the future. These research and development costs consist primarily of salaries and benefits, consulting fees, game lab testing fees, and an allocation of corporate facilities costs related to these activities. Once the technological feasibility of a project has been established, it is transferred from research to development, and capitalization of development costs begins until the product is available for general release. Research and development costs were $0.8 million for the year ended December 31, 2014. As research and development costs relate to our Games segment which was acquired in 2014, there were no material research and development costs for the years ended December 31, 2013 and 2012. Income Taxes Income tax expense includes U.S. and international income taxes, plus the provision for U.S. taxes on undistributed earnings of international subsidiaries not deemed to be permanently invested. Since it is management’s practice and intent to reinvest the earnings in the international operations of our foreign subsidiaries, U.S. federal income taxes have not been provided on the undistributed earnings of any foreign subsidiaries except for GCA Macau. Some items of income and expense are not reported in tax returns and the consolidated financial statements in the same year. The tax effect of such temporary differences is reported as deferred income taxes. Employee Benefits Plan We have a retirement savings plan (the “401(k) Plan”) under Section 401(k) of the Internal Revenue Code covering our employees. The 401(k) Plan allows employees to defer up to the lesser of the Internal Revenue Code prescribed maximum amount or 100% of their income on a pre-tax basis through contributions to the plan. As a benefit to employees, we match a percentage of these employee contributions. Expenses related to the matching portion of the contributions to the 401(k) Plan were $0.5 million, $0.5 million and $0.3 million for the years ended December 31, 2014, 2013 and 2012, respectively. Fair Values of Financial Instruments The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Fair value estimates are made at a specific point in time, based upon relevant market information about the financial instrument. In determining fair value, we use a hierarchy that includes three levels which are based on the extent to which inputs used in measuring fair value are observable in the market. Level 1 indicates that the fair value is determined by using quoted prices in the active markets for identical investments. Level 2 indicates that the fair value is determined using pricing inputs other than quoted prices in active markets such as models or other valuation methodologies. Level 3 indicates that the fair value is determined using pricing inputs that are unobservable for the investment and include situations where there is little, if any, market activity for the investment. Significant management estimates and judgment are used in the determination of the fair value of level 3 pricing inputs. The carrying amount of cash and cash equivalents, settlement receivables, trade receivables, other receivables, settlement liabilities, accounts payable and accrued expenses approximates fair value due to the short-term maturities of these instruments. The fair value of our borrowings are estimated based on various inputs to determine a market price, such as: market demand and supply, size of tranche, maturity and similar instruments trading in more active markets. As of December 31, 2014, the fair value of our long-term debt was considered to approximate the carrying amount of each instrument since the Merger occurred on December 19, 2014. As of December 31, 2013, the fair value of our Prior Credit Facility was approximately $104.0 million as compared to a carrying amount of $103.0 million using a Level 2 input. Foreign Currency Translation Foreign currency denominated assets and liabilities for those foreign entities for which the local currency is the functional currency are translated into U.S. dollars based on exchange rates prevailing at the end of each year. Revenues and expenses are translated at average exchange rates during the year. The effects of foreign exchange gains and losses arising from these translations are included as a component of other comprehensive income on the consolidated statements of income and comprehensive income. Translation adjustments on intercompany balances of a long-term investment nature are recorded as a component of accumulated other comprehensive income on our consolidated balance sheets. Use of Estimates We have made estimates and judgments affecting the amounts reported in these financial statements and the accompanying notes. The actual results may differ from these estimates. These accounting estimates incorporated into the consolidated financial statements include, but are not limited to: · the estimates and assumptions related to the preparation of the unaudited pro forma financial information contained herein; · the estimates and assumptions related to the preliminary purchase price allocation based on the estimated fair values of the assets acquired and liabilities assumed of Multimedia Games as of the date of Merger and the acquisition of NEWave; · the estimated reserve for warranty expense associated with our check warranty receivables; · the val uation and recognition of share- based compensation; · the valuation allowance on our deferred income tax assets; · the estimated cash flows in assessing the recoverability of long - lived assets; · the estimates of future operating performance, weighted average cost of capital (“WACC”) and growth rates as well as other factors used in our annual goodwill and other intangible assets impairment evaluations; · the renewal assumptions used for customer contracts to estimate the useful lives of such assets; and · the judgments used to determine the stages of development and costs eligible for capitalization as internally developed software. Earnings Applicable to Common Stock Basic earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the effect of potential common stock resulting from assumed stock option exercises and vesting of restricted stock. Share ‑Based Compensation Share-based payment awards result in a cost that is measured at fair value on the award’s grant date. Our time-based stock options, including our cliff vesting time-based awards, expected to be exercised currently, and in future periods, were measured at fair value on the grant date using the Black Scholes model. Our restricted stock awards expected to be vested currently, and in future periods, were measured at fair value based on the stock price on the grant date. The compensation expense is recognized on a straight-line basis over the awards’ vesting periods. Our market-based stock options will vest if our average stock price in any period of 30 consecutive trading days meets certain target prices during a four year period that commenced on the grant date of these options. If these target prices are not met during the four year period, the unvested shares underlying |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
BUSINESS COMBINATIONS | |||
BUSINESS COMBINATIONS | 3. BUSINESS COMBINATIONS Multimedia Games Holding Company, Inc. On December 19, 2014, Holdings completed its acquisition of Multimedia. Pursuant to the terms of the Agreement and Plan of Merger, dated as of September 8, 2014 (the “Merger Agreement”), by and among Holdings, Movie Merger Sub, Inc., a wholly owned subsidiary of Holdings (“Merger Sub”), and Multimedia, Merger Sub merged with and into Multimedia, with Multimedia continuing as the surviving corporation (the “Merger”). In the Merger, Multimedia became a wholly owned subsidiary of Holdings. Also, as a result of the Merger, each outstanding share of common stock, par value $0.01 per share, of Multimedia, other than shares held by Holdings, Multimedia, Merger Sub or their respective subsidiaries, was cancelled and converted into the right to receive $36.50 in cash, without interest (the “Merger Consideration”), together with the consideration paid in connection with the acceleration and full vesting of Multimedia equity awards, (collectively, the “Total Merger Consideration”). Multimedia designs, manufactures and supplies gaming machines and systems to commercial and Native American casino operators as well as select lottery operators and commercial bingo facility operators. Multimedia’s revenues are generated from the operation of gaming machines in revenue sharing or lease arrangements and from the sale of gaming machines and systems that feature proprietary game themes. The total purchase consideration for Multimedia was as follows (in thousands, except per share amounts): Amount Purchase consideration Total purchase price for Multimedia Games common stock (29,948 shares at $36.50 per share) $ Payment in respect to Multimedia Games outstanding equity awards Total merger consideration Repayments of Multimedia Games debt and other obligations Less: Multimedia Games outstanding cash at acquisition date Total purchase consideration $ The Merger was accounted for using the acquisition method of accounting, which requires, among other things, the assets acquired and liabilities assumed be recognized at their respective fair values as of the acquisition date. The excess of the purchase price over those fair values was recorded as goodwill, none of which is deductible for tax purposes. The goodwill recognized is attributable primarily to the income potential from Multimedia penetrating into the Class III commercial casino market, the assembled workforce of Multimedia and expected synergies. The estimates and assumptions used include the projected timing and amount of future cash flows and discount rates reflecting risk inherent in the future cash flows. The estimated fair values of Multimedia’s assets acquired and liabilities assumed and resulting goodwill are subject to adjustment as we finalize our fair value analysis. The significant items for which a final fair value has not been determined include, but not limited to: accrued liabilities, the valuation and estimated useful lives of tangible and intangible assets and deferred income taxes. We expect to complete our fair value determinations no later than the fourth quarter of 2015. We do not expect our fair value determinations to materially change; however, there may be differences compared to those amounts originally recorded as we complete our fair value analysis. The information below reflects the preliminary purchase price allocation (in thousands): Amount Purchase price allocation Current assets $ Property, equipment and leasehold improvements, net Goodwill Other intangible assets, net Other receivables, non-current Other assets, long-term Deferred tax asset, non-current Total assets Current liabilities Deferred tax liability, non-current Other accrued expenses and liabilities Total liabilities Net assets acquired $ Trade receivables acquired of $24.7 million were considered to be collectible and therefore the carrying amounts were considered to approximate fair value. Inventory acquired of $16.5 million was fair valued based on model-based valuations for which inputs and value drivers were observable. The following table summarizes acquired tangible assets (in thousands): Useful Life (years) Estimated Fair Value Property, Equipment and Leased Assets Gaming equipment 2 - 4 $ Leasehold and building improvements Lease Term Machinery and equipment 3 - 5 Other 2 - 7 Total property, equipment and leased assets $ The fair value of property, equipment and leased assets was determined using the cost approach as the primary approach for valuing the majority of the personal property. The market approach was used to estimate the value of vehicles. The income approach was used to quantify any economic obsolescence that may be present in the personal property. No economic obsolescence adjustments were made to the personal property, as the business enterprise valuation indicated sufficient cash flows to support the values established through the cost and market approaches. The following table summarizes acquired intangible assets (in thousands): Useful Life (years) Estimated Fair Value Other intangible assets Tradenames and trademarks 3 - 7 $ Computer software 3 - 5 Developed technology 2 - 6 Customer relationships 8 - 12 Contract rights 1 - 7 Total other intangible assets $ The fair values of trade names and trademarks and developed technology were determined by applying the income approach utilizing the relief from royalty methodology. The fair value of customer relationships was determined by applying the income approach utilizing the excess earnings methodology. The fair value of contract rights was considered to approximate the carrying amount based on contractual obligations associated with these other intangible assets. The discount rates utilized to estimate the fair value of these other intangible assets ranged from 10.0% to 11.0%. We expensed approximately $1.5 million of costs incurred related to the acquisition of Multimedia for financial advisory services, financing related fees, accounting and legal fees and other transaction-related expenses during the three months ended March 31, 2015. These expenses are included in the Condensed Consolidated Statements of Income and Comprehensive Income within operating expenses. These costs do not include any costs related to additional site consolidation or rationalization that we might consider in the future. NEWave, Inc. In April 2014, we acquired all of the outstanding capital stock of NEWave, Inc. (“NEWave”) for an aggregate purchase price of approximately $14.9 million, of which approximately $2.5 million is expected to be paid in the second quarter of 2015. NEWave is a supplier of anti-money laundering compliance, audit and data efficiency software to the gaming industry. We have not provided the supplemental pro forma impact of the NEWave acquisition on the revenue and earnings of the combined entity as if the acquisition date had been January 1, 2013, and the amount of revenue and earnings derived from NEWave have not been presented on a supplemental basis as such amounts are not material for the three months ended March 31, 2015 and 2014, respectively. | 3. BUSINESS COMBINATIONS Multimedia Games Holding Company, Inc. On December 19, 2014, Holdings completed its acquisition of Multimedia. Pursuant to the terms of the Agreement and Plan of Merger, dated as of September 8, 2014 (the “Merger Agreement”), by and among Holdings, Movie Merger Sub, Inc., a wholly owned subsidiary of Holdings (“Merger Sub”), and Multimedia, Merger Sub merged with and into Multimedia, with Multimedia continuing as the surviving corporation (the “Merger”). In the Merger, Multimedia became a wholly owned subsidiary of Holdings. Also, as a result of the Merger, each outstanding share of common stock, par value $0.01 per share, of Multimedia, other than shares held by Holdings, Multimedia, Merger Sub or their respective subsidiaries, was cancelled and converted into the right to receive $36.50 in cash, without interest (the “Merger Consideration”), together with the consideration paid in connection with the acceleration and full vesting of certain Multimedia equity awards, (collectively, the “Total Merger Consideration”). Multimedia designs, manufactures and supplies gaming machines and systems to commercial and Native American casino operators as well as select lottery operators and commercial bingo facility operators. Multimedia’s revenues are generated from the operation of gaming machines in revenue sharing or lease arrangements and from the sale of gaming machines and systems that feature proprietary game themes. The total purchase consideration for Multimedia was as follows (in thousands, except per share amounts): Amount Purchase consideration Total purchase price for Multimedia Games common stock ( 29,948 shares at $36.50 per share) $ Payment in respect to Multimedia Games outstanding equity awards Total merger consideration Repayments of Multimedia Games debt and other obligations Less: Multimedia Games outstanding cash at acquisition date Total purchase consideration $ The Merger was accounted for using the acquisition method of accounting, which requires, among other things, the assets acquired and liabilities assumed be recognized at their respective fair values as of the acquisition date. The excess of the purchase price over those fair values was recorded as goodwill, none of which is deductible for tax purposes. The goodwill recognized is attributable primarily to the income potential from Multimedia penetrating into the Class III commercial casino market, the assembled workforce of Multimedia and expected synergies. The estimates and assumptions used include the projected timing and amount of future cash flows and discount rates reflecting risk inherent in the future cash flows. The estimated fair values of Multimedia’s assets acquired and liabilities assumed and resulting goodwill are subject to adjustment as we finalize our fair value analysis. The significant items for which a final fair value has not been determined include, but not limited to: accrued liabilities, the valuation and estimated useful lives of tangible and intangible assets and deferred income taxes. We expect to complete our fair value determinations no later than the fourth quarter of 2015. We do not expect our fair value determinations to materially change; however, there may be differences compared to those amounts originally recorded as we complete our fair value analysis. The information below reflects the preliminary purchase price allocation (in thousands): Amount Purchase price allocation Current assets $ Property, equipment and leasehold improvements, net Goodwill Other intangible assets, net Other receivables, non-current Other assets, long-term Deferred tax asset, non-current Total assets Current liabilities Deferred tax liability, non-current Other accrued expenses and liabilities Total liabilities Net assets acquired $ Trade receivables acquired of $24.7 million were considered to be collectible and therefore the carrying amounts were considered to approximate fair value. Inventory acquired of $16.5 million was fair valued based on model-based valuations for which inputs and value drivers were observable. The following table summarizes acquired tangible assets (in thousands): Useful Life Estimated (years) Fair Value Property, equipment and leased assets Gaming equipment - 4 $ Leasehold and building improvements Lease Term Machinery and equipment - 5 Other - 7 Total property, equipment and leased assets $ The fair value of property, equipment and leased assets was determined using the cost approach as the primary approach for valuing the majority of the personal property. The market approach was used to estimate the value of vehicles. The income approach was used to quantify any economic obsolescence that may be present in the personal property. No economic obsolescence adjustments were made to the personal property, as the business enterprise valuation indicated sufficient cash flows to support the values established through the cost and market approaches. The following table summarizes acquired intangible assets (in thousands): Useful Life Estimated (years) Fair Value Other intangible assets Tradenames and trademarks - 7 $ Computer software - 5 Developed technology - 6 Customer relationships - 12 Contract rights - 7 Total other intangible assets $ The fair values of trade names and trademarks and developed technology were determined by applying the income approach utilizing the relief from royalty methodology. The fair value of customer relationships was determined by applying the income approach utilizing the excess earnings methodology. The fair value of contract rights was considered to approximate the carrying amount based on contractual obligations associated with these other intangible assets. The discount rates utilized to estimate the fair value of these other intangible assets ranged from 10.0% to 11.0% . We expensed approximately $0.4 million and $1.8 million of costs incurred related to the acquisition of Multimedia for financial advisory services, financing related fees, accounting and legal fees and other transaction-related expenses during the three and six months ended June 30, 2015, respectively. These expenses are included in the Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income within operating expenses. These costs do not include any costs related to additional site consolidation or rationalization that we might consider in the future. NEWave, Inc . In April 2014, we acquired all of the outstanding capital stock of NEWave, Inc. (“NEWave”) for an aggregate purchase price of approximately $14. 9 million, of which we estimated that approximately $2. 5 million would be paid in the second quarter of 2015. As of June 30, 2015, a final payment of $2. 3 million was remitted. NEWave is a supplier of anti-money laundering compliance, audit and data efficiency software to the gaming industry. The assets acquired, liabilities assumed and goodwill recorded were not material to the financial statements. We have not provided the supplemental pro forma impact of the NEWave acquisition on the revenue and earnings of the combined entity as if the acquisition date had been January 1, 2013, and the amount of revenue and earnings derived from NEWave have not been presented on a supplemental basis as such amounts are not material for the three and six months ended June 30, 2015 and 2014, respectively. | 3. BUSINESS COMBINATIONS We account for business combinations in accordance with the accounting standards, which require that the assets acquired and liabilities assumed be recorded at their estimated fair values. NEWave, Inc. In April 2014, we acquired all of the outstanding capital stock of NEWave, Inc., (“NEWave”) for an aggregate purchase price of approximately $14.9 million, of which approximately $2.5 million is expected to be paid in April 2015. NEWave is a supplier of compliance, audit and data efficiency software to the gaming industry. We have not provided the supplemental pro forma impact of the NEWave acquisition on the revenue and earnings of the combined entity as if the acquisition date had been January 1, 2013, and the amount of revenue and earnings derived from NEWave have not been presented on a supplemental basis as such amounts are not material for the twelve months ended December 31, 2014 and 2013, respectively. Multimedia Games Holding Company, Inc. On December 19, 2014, Holdings completed its acquisition of Multimedia Games. Pursuant to the terms of the Agreement and Plan of Merger, dated as of September 8, 2014 (the “Merger Agreement”), by and among Holdings, Movie Merger Sub, Inc., a wholly owned subsidiary of Holdings (“Merger Sub”), and Multimedia Games, Merger Sub merged with and into Multimedia Games, with Multimedia Games continuing as the surviving corporation (the “Merger”). In the Merger, Multimedia Games became a wholly owned subsidiary of Holdings. Also, as a result of the Merger, each outstanding share of common stock, par value $0.01 per share, of Multimedia Games, other than shares held by Holdings, Multimedia Games, Merger Sub or their respective subsidiaries, was cancelled and converted into the right to receive $36.50 in cash, without interest (“Merger Consideration”), together with the acceleration and full vesting of Multimedia equity awards, (collectively, the “Total Merger Consideration”). Multimedia Games designs, manufactures and supplies gaming machines and systems to commercial and Native American casino operators as well as select lottery operators and commercial bingo facility operators. Multimedia Games’ revenue is generated from the operation of gaming machines in revenue sharing or lease arrangements and from the sale of gaming machines and systems that feature proprietary game themes. Our combination with Multimedia Games creates a provider of Payments and Games solutions for our gaming establishment customers. The business combination provides us with: ( a) growth opportunities, (b ) enhanced scale, diversification and margins, and ( c ) the ability to increase profitability through cost synergies. The total purchase consideration for Multimedia Games was as follows (in thousands, except per share amounts): Amount Purchase consideration Total purchase price for Multimedia Games common stock (29,948 shares at $36.50 per share) $ Payment in respect to Multimedia Games outstanding equity awards Total merger consideration Repayments of Multimedia Games debt and other obligations Less: Multimedia Games outstanding cash at acquisition date Total purchase consideration $ The Merger was accounted for using the acquisition method of accounting, which requires, among other things, the assets acquired and liabilities assumed be recognized at their respective fair values as of the acquisition date. The excess of the purchase price over those fair values was recorded as goodwill, none of which is deductible for tax purposes. The goodwill recognized is attributable primarily to the income potential from Multimedia Games penetrating into the Class III commercial casino market, the assembled workforce of Multimedia Games and expected synergies. The estimates and assumptions used include the projected timing and amount of future cash flows and discount rates reflecting risk inherent in the future cash flows. The estimated fair values of Multimedia’s assets acquired and liabilities assumed and resulting goodwill are subject to adjustment as the Company finalizes its fair value analysis. The significant items for which a final fair value has not been determined as of the filing of this Annual Report on Form 10-K include accrued liabilities, the valuation and estimated useful lives of tangible and intangible assets and deferred income taxes. We expect to complete our fair value determinations no later than the fourth quarter of 2015. We do not expect our fair value determinations to materially change; however, there may be differences compared to those at December 31, 2014 as we finalize our fair value analysis. The information below reflects the preliminary purchase price allocation (in thousands): Amount Purchase price allocation Current assets $ Property, equipment and leasehold improvements, net Goodwill Other intangible assets, net Other receivables, non-current Other assets, long-term Deferred tax asset, non-current Total assets Current liabilities Deferred tax liability, non-current Other accrued expenses and liabilities Total liabilities Net assets acquired $ Trade receivables acquired of $24.7 million were considered to be collectible and therefore the carrying amounts were considered to approximate fair value. Inventory acquired of $16.5 million was fair valued based on model-based valuations for which inputs and value drivers were observable. The following table summarizes acquired tangible assets (in thousands): Useful Life Estimated (years) Fair Value Property, Equipment and Leased Assets Gaming equipment - 4 $ Leasehold and building improvements Lease Term Machinery and equipment - 5 Other - 7 Total property, equipment and leased assets $ The fair value of property, equipment and leased assets was determined using the cost approach as the primary approach for valuing the majority of the personal property. The market approach was used to estimate the value of vehicles. The income approach was used to quantify any economic obsolescence that may be present in the personal property. No economic obsolescence adjustments were made to the personal property, as the business enterprise valuation indicated sufficient cash flows to support the values established through the cost and market approaches. The following table summarizes acquired intangible assets (in thousands): Useful Life Estimated (years) Fair Value Other intangible assets Tradenames and trademarks - 7 $ Computer software - 5 Developed technology - 6 Customer relationships - 12 Contract rights - 7 Total other intangible assets $ The fair values of trade names and trademarks and developed technology were determined by applying the income approach utilizing the relief from royalty methodology. The fair value of customer relationships was determined by applying the income approach utilizing the excess earnings methodology. The fair value of contract rights was considered to approximate the carrying amount based on contractual obligations associated with these other intangible assets. The discount rates utilized to estimate the fair value of these other intangible assets ranged from 10.0% to 11.0% . GCA and Multimedia Games had different fiscal year ends. Accordingly, the unaudited pro forma condensed combined statements of income for the year ended December 31, 2014 combined historical GCA consolidated statement of income for its year ended December 31, 2014 with historical Multimedia Games consolidated statement of operations for its year ended September 30, 2014, giving effect to the Merger as if it had occurred on January 1, 2013. The unaudited pro forma condensed combined statements of income for the year ended December 31, 2013 combined historical GCA consolidated statement of income for its year ended December 31, 2013 with historical Multimedia Games consolidated statement of operations for its year ended September 30, 2013, giving effect to the Merger as if it had occurred on January 1, 2013. The unaudited pro forma condensed combined financial information does not purport to represent the results of operations of GCA that would have actually resulted had the Merger been completed as of the dates indicated, nor should the information be taken as indicative of the future results of operations or financial position of the combined company. The unaudited pro forma condensed combined financial statements do not reflect the impacts of any potential operational efficiencies, cost savings or economies of scale that GCA may achieve with respect to the combined operations of GCA and Multimedia Games. The unaudited pro forma amounts include the historical operating results of the Company and Multimedia Games prior to the Merger, with adjustments directly attributable to the Merger. The unaudited pro forma results include increases to depreciation and amortization expense based on the purchased intangible assets and the step-up in basis associated with tangible assets acquired and increases to interest expense, related to debt issued to fund the Merger. Also reflected in the year ended December 31, 2014 are adjustments for the impact of acquisition-related costs and other cost s as a result of the Merger of $27.4 million. There were no acquisition-related costs incurred for the year ended December 31, 2013. All adjustments utilized an effective federal statutory tax rate of 35.0% . The following table reflects selected financial data from the unaudited pro forma consolidated financial information assuming the Merger occurred as of January 1, 2013 (in thousands): Year Ended December 31, 2014 2013 Unaudited pro forma results of operations (in thousands, except per share amounts) Revenues $ $ Net (loss) Basic loss per share Diluted loss per share The financial results for Multimedia Games included in the consolidated statements of operations since the acquisition date of December 19, 2014 reflected revenues of approximately $7.4 million and net loss of approximately $3.0 million, including acquisition-related costs of $1.3 million. Through December 31, 2014, we expensed approximately $10.7 million of costs related to the acquisition of Multimedia Games for financial advisory services, financing related fees, accounting and legal fees and other transaction-related expenses and are included in the consolidated statements of income and comprehensive income within operating expenses. These costs do not include any costs related to additional site consolidation or rationalization that we might consider following the closing of the Merger. |
ATM FUNDING AGREEMENTS
ATM FUNDING AGREEMENTS | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
ATM FUNDING AGREEMENTS | |||
ATM FUNDING AGREEMENTS | 4. ATM FUNDING AGREEMENTS Contract Cash Solutions Agreement Our Contract Cash Solutions Agreement with Wells Fargo Bank, N.A. (“Wells Fargo”) allows us to use funds owned by Wells Fargo to provide the currency needed for normal operating requirements for our ATMs. For the use of these funds, we pay Wells Fargo a cash usage fee on the average daily balance of funds utilized multiplied by a contractually defined cash usage rate. These cash usage fees, reflected as interest expense within the Condensed Consolidated Statements of Income and Comprehensive Income, were $0.5 million and $0.6 million for the three months ended March 31, 2015 and 2014, respectively. We are exposed to interest rate risk to the extent that the applicable LIBOR increases. Under this agreement, all currency supplied by Wells Fargo remains the sole property of Wells Fargo at all times until it is dispensed, at which time Wells Fargo obtains an interest in the corresponding settlement receivable which is recorded on a net basis. As these funds are not our assets, supplied cash is not reflected on the Condensed Consolidated Balance Sheets. The outstanding balances of ATM cash utilized by us from Wells Fargo were $255.6 million and $396.3 million as of March 31, 2015 and December 31, 2014, respectively. In June 2012, we amended the Contract Cash Solutions Agreement to increase the maximum amount of cash to be provided to us from $400.0 million to $500.0 million, and to extend the initial term from November 30, 2013 to November 30, 2014. In November 2014, we amended the Contract Cash Solutions Agreement to extend the term one year until November 30, 2015. We are responsible for any losses of cash in the ATMs under this agreement and we self-insure for this risk. We incurred no material losses related to this self-insurance for the three months ended March 31, 2015 and 2014. Site-Funded ATMs We operate ATMs at certain customer gaming establishments where the gaming establishment provides the cash required for the ATM operational needs. We are required to reimburse the customer for the amount of cash dispensed from these Site-Funded ATMs. The Site-Funded ATM liability is included within “Settlement liabilities” in the accompanying Condensed Consolidated Balance Sheets and was $71.5 million and $69.3 million as of March 31, 2015 and December 31, 2014, respectively. | 4. ATM FUNDING AGREEMENTS Contract Cash Solutions Agreement Our Contract Cash Solutions Agreement with Wells Fargo Bank, N.A. (“Wells Fargo”) allows us to use funds owned by Wells Fargo to provide the currency needed for normal operating requirements for our ATMs. For the use of these funds, we pay Wells Fargo a cash usage fee on the average daily balance of funds utilized multiplied by a contractually defined cash usage rate. These cash usage fees, reflected as interest expense within the Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income, were $0.5 million and $1.0 million and $0.6 million and $1.2 million for the three and six months ended June 30, 2015 and 2014, respectively. We are exposed to interest rate risk to the extent that the applicable LIBOR increases. Under this agreement, all currency supplied by Wells Fargo remains the sole property of Wells Fargo at all times until it is dispensed, at which time Wells Fargo obtains an interest in the corresponding settlement receivable which is recorded on a net basis. As these funds are not our assets, supplied cash is not reflected on the Condensed Consolidated Balance Sheets. The outstanding balances of ATM cash utilized by us from Wells Fargo were $271.8 million and $396.3 million as of June 30, 2015 and December 31, 2014, respectively. In November 2014, we amended the Contract Cash Solutions Agreement to extend the term one year until November 30, 2015. In June 2015, we amended the Contract Cash Solutions Agreement to decrease the maximum amount of cash to be provided to us from $500.0 million to $425.0 million and to extend the term of the agreement from November 30, 2015 to June 30, 2018. We are responsible for any losses of cash in the ATMs under this agreement and we self ‑insure for this risk. We incurred no material losses related to this self ‑insurance for the three and six months ended June 30, 2015 and 2014. Site-Funded ATMs We operate ATMs at certain customer gaming establishments where the gaming establishment provides the cash required for the ATM operational needs. We are required to reimburse the customer for the amount of cash dispensed from these Site-Funded ATMs. The Site-Funded ATM liability is included within “Settlement liabilities” in the accompanying Condensed Consolidated Balance Sheets and was $69.4 million and $69.3 million as of June 30, 2015 and December 31, 2014, respectively. | 4. ATM FUNDING AGREEMENTS Wells Fargo Contract Cash Solutions Agreement Our Contract Cash Solutions Agreement with Wells Fargo allows us to use funds owned by Wells Fargo to provide the currency needed for normal operating requirements for our ATMs. For the use of these funds, we pay Wells Fargo a cash usage fee on the average daily balance of funds utilized multiplied by a contractually defined cash usage rate. Under this agreement, all currency supplied by Wells Fargo remains the sole property of Wells Fargo at all times until it is dispensed, at which time Wells Fargo obtains an interest in the corresponding settlement receivable. As the cash is never an asset of ours, supplied cash is not reflected on our balance sheet. In June 2012, we amended the Contract Cash Solutions Agreement with Wells Fargo to increase the maximum amount of cash to be provided to us from $400.0 million to $500.0 million, and the initial term of the Contract Cash Solutions Agreement has been extended from November 30, 2013 until November 30, 2015. The outstanding balances of ATM cash utilized by us from Wells Fargo were $396.3 million and $427.1 million as of December 31, 2014 and 2013, respectively. Under the terms of the Contract Cash Solutions Agreement, we pay a monthly cash usage fee based upon the product of the average daily dollars outstanding in all ATMs multiplied by a contractually defined cash usage rate. This cash usage rate is determined by an applicable LIBOR plus a mutually agreed upon margin. We are exposed to interest rate risk to the extent that the applicable LIBOR increases. Cash usage fees, reflected as interest expense within the consolidated statements of income and comprehensive income, were $2.3 million, $2.2 million and $3.1 million for the years ended December 31, 2014, 2013 and 2012, respectively. We are responsible for any losses of cash in the ATMs under our agreement with Wells Fargo and we self ‑insure for this risk. We incurred no material losses related to this self ‑insurance for the years ended December 31, 2014 and 2013. Site ‑Funded ATMs We operate ATMs at certain customer gaming establishments where the gaming establishment provides the cash required for the ATM operational needs. We are required to reimburse the customer for the amount of cash dispensed from these Site ‑Funded ATMs. The Site ‑Funded ATM liability is included within settlement liabilities in the accompanying consolidated balance sheets and was $69.3 million and $68.9 million as of December 31, 2014 and 2013, respectively. |
TRADE RECEIVABLES
TRADE RECEIVABLES | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
TRADE RECEIVABLES | |||
TRADE RECEIVABLES | 5. TRADE RECEIVABLES Trade receivables represent short-term credit granted to customers for which collateral is generally not required. The balance of trade receivables consists of outstanding balances owed to us by gaming establishments and casino patrons. The balance of trade receivables consisted of the following (in thousands): At March 31, At December 31, 2015 2014 Trade receivables, net Games trade receivables $ $ Kiosk trade receivables Warranty and other trade receivables Total trade receivables, net $ $ The material balance of the allowance for doubtful accounts for trade receivables is from warranty receivables. On a monthly basis, we evaluate the collectability of the outstanding balances and establish a reserve for the face amount of the expected losses on these receivables. The warranty expense associated with this reserve is included within cost of revenues (exclusive of depreciation and amortization) in the Condensed Consolidated Statements of Income and Comprehensive Income. The outstanding balance of the warranty reserve was $2.7 and $2.8 million as of March 31, 2015 and December 31, 2014, respectively. | 5. TRADE RECEIVABLES Trade receivables represent short-term credit granted to customers for which collateral is generally not required. The balance of trade receivables consists of outstanding balances owed to us by gaming establishments and casino patrons. The balance of trade receivables consisted of the following (in thousands): . At June 30, At December 31, 2015 2014 Trade receivables, net Games trade receivables $ $ Kiosk trade receivables Warranty and other trade receivables Total trade receivables, net $ $ The material balance of the allowance for doubtful accounts for trade receivables is from warranty receivables. On a monthly basis, we evaluate the collectability of the outstanding balances and establish a reserve for the face amount of the expected losses on these receivables. The warranty expense associated with this reserve is included within cost of revenues (exclusive of depreciation and amortization) in the Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income. The outstanding balance of the warranty reserve was $2.9 and $2.8 million as of June 30, 2015 and December 31, 2014, respectively. | 5. TRADE RECEIVABLES Trade receivables represent short-term credit granted to customers for which collateral is generally not required. The balance of trade receivables consists of outstanding balances owed to us by gaming establishments. The balance of trade receivables consisted of the following (in thousands): . At December 31, 2014 2013 Trade receivables, net Games trade receivables $ $ — Kiosk trade receivables Warranty and other trade receivables Total trade receivables, net $ $ The material balance of the allowance for doubtful accounts for trade receivables is from warranty receivables. On a monthly basis, we evaluate the collectability of the outstanding balances and establish a reserve for the face amount of the expected losses on these receivables. The warranty expense associated with this reserve is included within cost of revenues (exclusive of depreciation and amortization) in the consolidated statements of income and comprehensive income. A summary activity of the reserve for warranty losses is as follows (in thousands): Amount Balance, December 31, 2011 $ Warranty expense provision Charge offs against reserve Balance, December 31, 2012 $ Warranty expense provision Charge offs against reserve Balance, December 31, 2013 Warranty expense provision Charge offs against reserve Balance, December 31, 2014 $ |
OTHER RECEIVABLES
OTHER RECEIVABLES | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
OTHER RECEIVABLES. | |||
OTHER RECEIVABLES | 6. OTHER RECEIVABLES Other receivables include the balance of notes and loans receivable on our games and fully integrated kiosk products, development agreements, which are generated from reimbursable amounts advanced to tribal customers generally used by the customer to build, expand or renovate its facility, and an agreement with Bee Caves Games, Inc. (“Bee Caves Games”) in July 2014, under which the Company agreed to make a loan pursuant to a secured promissory note in the amount of $4.5 million. In association with the promissory note, the Company received warrants to purchase Bee Caves Games common stock, and recorded a discount to the note for the fair value of the warrants received. The warrants are included in the balance of other assets, non-current. The note, which bears interest at 7%, requires interest only payments for the first 24 months followed by repayments of principal and interest in 48 equal monthly installments. Other receivables also include income taxes receivable and other miscellaneous receivables. The balance of other receivables consisted of the following (in thousands): At March 31, At December 31, 2015 2014 Other receivables Notes and loans receivable, net of discount of $814 and $853, respectively $ $ Federal and state income tax receivable Other Total other receivables Less: Notes and loans receivable, non-current Total other receivables, current portion $ $ | 6. OTHER RECEIVABLES Other receivables include the balance of notes and loans receivable on our games and fully integrated kiosk products, development agreements, which are generated from reimbursable amounts advanced to tribal customers generally used by the customer to build, expand or renovate its facility, and an agreement with Bee Caves Games, Inc. (“Bee Caves Games”) in July 2014, under which the Company agreed to make a loan pursuant to a secured promissory note in the amount of $4.5 million. In association with the promissory note, the Company received warrants to purchase Bee Caves Games common stock, and recorded a discount to the note for the fair value of the warrants received. The warrants are included in the balance of other assets, non-current. The note, which bears interest at 7% , requires interest only payments for the first 24 months followed by repayments of principal and interest in 48 equal monthly installments. Other receivables also include income taxes receivable and other miscellaneous receivables. The balance of other receivables consisted of the following (in thousands): At June 30, At December 31, 2015 2014 Other receivables Notes and loans receivable, net of discount of $776 and $853 , respectively $ $ Federal and state income tax receivable Other Total other receivables Less: Notes and loans receivable, non-current Total other receivables, current portion $ $ | 6. OTHER RECEIVABLES Other receivables includes the balance of notes and loans receivable on our gaming and fully integrated kiosk products as well as income taxes receivable and other miscellaneous receivables. The balance of other receivables consisted of the following (in thousands): At December 31, 2014 2013 Other receivables Notes and loans receivable, net of discount of $853 and $0 , respectively $ $ Federal and state income tax receivable Other Total other receivables Less: Notes and loans receivable, non-current Total other receivables, current portion $ $ Notes receivable from development agreements are generated from reimbursable amounts advanced under development agreements. The notes receivable from development agreements balance includes a development agreement with the Chickasaw Nation for the Winstar Casino expansion entered into on November 19, 2012. On July 17, 2014, Multimedia Games entered into an agreement with Bee Caves Games, Inc. (“Bee Caves Games”) under which Multimedia Games agreed to make a loan pursuant to a secured promissory note in the amount of $4.5 million. In association with the promissory note, Multimedia Games received warrants to purchase Bee Caves Games common stock, and recorded a discount to the note for the fair value of the warrants received. The note, which bears interest at 7% , requires interest only payments for the first 24 months followed by repayments of principal and interest in 48 equal monthly installments. |
PREPAID AND OTHER ASSETS
PREPAID AND OTHER ASSETS | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
PREPAID AND OTHER ASSETS | |||
PREPAID AND OTHER ASSETS | 7. PREPAID AND OTHER ASSETS Prepaid and other assets include the balance of prepaid expenses, deposits, debt issuance costs and other assets. The short-term portion of these assets is included in prepaid and other assets and the long-term portion is included in other assets, non-current. The balance of prepaid and other assets consisted of the following (in thousands): At March 31, At December 31, 2015 2014 Prepaid expenses and other assets Prepaid expenses $ $ Deposits Other Total prepaid expenses and other assets $ $ The balance of other assets, non-current consisted of the following (in thousands): At March 31, At December 31, 2015 2014 Other assets, non-current Debt issuance costs $ $ Prepaid expenses and deposits, non-current Other Total other assets non-current $ $ | 7. PREPAID AND OTHER ASSETS Prepaid and other assets include the balance of prepaid expenses, deposits, debt issuance costs and other assets. The short-term portion of these assets is included in prepaid and other assets and the long-term portion is included in other assets, non-current. The balance of prepaid and other assets consisted of the following (in thousands): At June 30, At December 31, 2015 2014 Prepaid expenses and other assets Prepaid expenses $ $ Deposits Other Total prepaid expenses and other assets $ $ The balance of other assets, non-current consisted of the following (in thousands): At June 30, At December 31, 2015 2014 Other assets, non-current Debt issuance costs $ $ Prepaid expenses and deposits, non-current Other Total other assets, non-current $ $ | 7. PREPAID AND OTHER ASSETS Prepaid and other assets include the balance of prepaid expenses, deposits, debt issuance costs and other assets. The short-term portion of these assets is included in prepaid and other assets and the long-term portion is included in other assets, non-current. The balance of prepaid and other assets consisted of the following (in thousands): At December 31, 2014 2013 Prepaid expenses and other assets Prepaid expenses $ $ Deposits Other Total prepaid expenses and other assets $ $ The balance of other assets, non-current consisted of the following (in thousands): At December 31, 2014 2013 Other assets, non-current Debt issuance costs $ $ Prepaid expenses and deposits, non-current Other Total other assets non-current $ $ |
INVENTORY
INVENTORY | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
INVENTORY | |||
INVENTORY | 8. INVENTORY We currently maintain separate inventories for our Games and Payments businesses. Our Games inventory primarily consists of component parts, completed player terminals and back office computer equipment. This inventory was stated at the lower of cost or market and accounted for using the first in, first out method during the current reporting period; whereas the inventory that existed at the time of the Merger was stated at fair value. The cost of inventory includes cost of materials, labor, overhead and freight. Our Payments inventory primarily consists of parts as well as finished goods and work-in-progress. This inventory was stated at the lower of cost or market accounted for using the average cost method. Inventory consisted of the following (in thousands): At March 31, At December 31, 2015 2014 Inventory Raw materials and component parts, net of reserves of $82 and $22, respectively $ $ Work in progress Finished goods Total inventory $ $ | 8. INVENTORY We currently maintain separate inventories for our Games and Payments businesses. Our Games inventory primarily consists of component parts, completed player terminals and back office computer equipment. This inventory was stated at the lower of cost or market and accounted for using the first in, first out method during the current reporting period; whereas the inventory that existed at the time of the Merger was stated at fair value. The cost of inventory includes cost of materials, labor, overhead and freight. Our Payments inventory primarily consists of parts as well as finished goods and work-in-progress. This inventory was stated at the lower of cost or market accounted for using the average cost method. Inventory consisted of the following (in thousands): At June 30, At December 31, 2015 2014 Inventory Raw materials and component parts, net of reserves of $142 and $22 , respectively $ $ Work in progress Finished goods Total inventory $ $ | 8. INVENTORY We currently maintain separate inventories for our Payments and Games products. Our Payments related inventory primarily consists of parts as well as finished goods and work-in-progress and is stated at the lower of cost or market accounted for using the average cost method. Our Games related inventory primarily consists of component parts, completed player terminals and back-office computer equipment and is stated at fair value based as a result of the Merger. However, our Games segment historically accounted for inventory at lower of cost (first in, first out) or market. The cost of inventory includes cost of materials, labor, overhead and freight. Inventory consisted of the following (in thousands): At December 31, 2014 2013 Inventory Raw materials and component parts, net of reserves of $22 and $50 , respectively $ $ Work in progress Finished goods Total inventory $ $ |
DEVELOPMENT AND PLACEMENT FEE A
DEVELOPMENT AND PLACEMENT FEE AGREEMENTS | 12 Months Ended |
Dec. 31, 2014 | |
Development and Placement Fee Agreements Disclosure Abstract | |
DEVELOPMENT AND PLACEMENT FEE AGREEMENTS | 9. DEVELOPMENT AND PLACEMENT FEE AGREEMENTS We enter into development and placement fee agreements to provide financing for new gaming facilities or for the expansion or improvement of existing facilities. All or a portion of the funds provided under development agreements are reimbursed to us, while funding under placement fee agreements is not reimbursed. In return for the fees under the agreements, the facility dedicates a percentage of its floor space for the placement of our EGMs over the term of the agreement, which is generally for 12 to 83 months, and we receive a fixed percentage or flat fee of those machines' hold per day. Certain of the agreements contain EGM performance standards that could allow the facility to reduce a portion of our guaranteed floor space. In addition, certain development agreements allow the facilities to buy out floor space after advances that are subject to repayment have been repaid. The development agreements typically provide for a portion of the amounts retained by the gaming facility for their share of the operating profits of the facility to be used to repay some or all of the advances recorded as notes receivable. Placement fees and amounts advanced in excess of those to be reimbursed by the customer for real property and land improvements are allocated to intangible assets and are generally amortized over the term of the contract, which is recorded as a reduction of revenue generated from the gaming facility. In the past we have, and in the future, we may, by mutual agreement, amend these contracts to reduce our floor space at the facilities. Any proceeds received for the reduction of floor space is first applied against the intangible asset for that particular development or placement fee agreement, if any, and the remaining net book value of the intangible asset is prospectively amortized on a straight-line method over the remaining estimated useful life. On November 19, 2012, Multimedia Games entered into a development agreement with the Chickasaw Nation to assist with the expansion of the Winstar World Casino. As part of this agreement, Multimedia Games received the right to 150 unit placements for a period of 68 months in exchange for a payment of $6.5 million. The payment was made in two equal installments in November 2012 and January 2013. On March 7, 2013, Multimedia Games paid a placement fee of approximately $2.0 million to the Chickasaw Nation to extend the placement of 201 units in six casino locations across Oklahoma for an additional term of 50 months. Management reviews intangible assets related to development and placement fee agreements for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. There were no events or changes in circumstances during the period ended December 31, 2014 that required an impairment charge to the carrying value of intangible assets recorded in connection with these agreements. |
PROPERTY, EQUIPMENT AND LEASED
PROPERTY, EQUIPMENT AND LEASED ASSETS | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
PROPERTY, EQUIPMENT AND LEASED ASSETS | |||
PROPERTY, EQUIPMENT AND LEASED ASSETS | 9. PROPERTY, EQUIPMENT AND LEASED ASSETS Property, equipment and leased assets consist of the following (in thousands): At March 31, 2015 At December 31, 2014 Useful Life (years) Cost Accumulated Depreciation Net Book Value Cost Accumulated Depreciation Net Book Value Property, equipment and leased assets Rental pool - deployed 2 - 4 $ $ $ $ $ $ Rental pool - undeployed 2 - 4 ATM equipment 5 Office, computer and other equipment 3 Leasehold and building improvements Lease Term Machinery and equipment 3 - 5 Cash advance equipment 3 Other 2 - 5 Total $ $ $ $ $ $ Depreciation expense related to other property, equipment and leased assets totaled approximately $10.4 million and $1.9 million for the three months ended March 31, 2015 and 2014, respectively. Our property, equipment and leased assets were not impaired for the three months ended March 31, 2015 and 2014. | 9. PROPERTY, EQUIPMENT AND LEASED ASSETS Property, equipment and leased assets consist of the following (in thousands): At June 30, 2015 At December 31, 2014 Useful Life Accumulated Net Book Accumulated Net Book (Years) Cost Depreciation Value Cost Depreciation Value Property, equipment and leased assets Rental pool - deployed - 4 $ $ $ $ $ $ Rental pool - undeployed - 4 ATM equipment 5 Office, computer and other equipment 3 Leasehold and building improvements Lease Term Machinery and equipment - 5 Cash advance equipment 3 Other - 5 Total $ $ $ $ $ $ Depreciation expense related to other property, equipment and leased assets totaled approximately $10.7 million and $21.1 million and $1.9 million and $3.8 million for the three and six months ended June 30, 2015 and 2014, respectively. Our property, equipment and leased assets were not impaired for the three and six months ended June 30, 2015 and 2014. | 10. PROPERTY, EQUIPMENT AND LEASED ASSETS Property, equipment and leased assets consist of the following (amounts in thousands): At December 31, 2014 At December 31, 2013 Useful Life Accumulated Net Book Accumulated Net Book (Years) Cost Depreciation Value Cost Depreciation Value Property, equipment and leased assets Rental pool - deployed - 4 $ $ $ $ — $ — $ — Rental pool - undeployed - 4 — — — ATM equipment 5 Office, computer and other equipment 3 Leasehold and building improvements Lease Term Machinery and equipment - 5 — — — Cash advance equipment 3 Other - 5 — — — Total $ $ $ $ $ $ |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |||
GOODWILL AND OTHER INTANGIBLE ASSETS | 10. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill Goodwill represents the excess of the purchase price over the identifiable tangible and intangible assets acquired plus liabilities assumed arising from business combinations. The balance of goodwill was $857.9 million at both March 31, 2015 and December 31, 2014. Our goodwill was not impaired for the three months ended March 31, 2015 and 2014. Additionally, no impairment was identified during our annual impairment testing as of October 1, 2014. In accordance with ASC 350, we test goodwill at the reporting unit level, which in certain cases may be a component of an operating segment, for impairment on an annual basis and between annual tests if events and circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The estimate of fair value requires significant judgment. We based our fair value estimates on assumptions that we believe to be reasonable but that are unpredictable and inherently uncertain, including estimates of future growth rates and operating margins and assumptions about the overall economic climate and the competitive environment for our reporting units. There can be no assurance that our estimates and assumptions made for purposes of our goodwill and identifiable intangible asset testing as of the time of testing will prove to be accurate predictions of the future. If our assumptions regarding business plans, competitive environments or anticipated growth rates are not correct, we may be required to record goodwill and/or intangible asset impairment charges in future periods, whether in connection with our next annual impairment testing or earlier, if an indicator of an impairment is present before our next annual evaluation. Other Intangible Assets Other intangible assets consist of the following (in thousands): At March 31, 2015 At December 31, 2014 Useful Life (years) Cost Accumulated Amortization Net Book Value Cost Accumulated Amortization Net Book Value Other intangible assets Contract rights under development and placement fee agreements 1 - 7 $ $ $ $ $ $ Customer contracts 7 - 14 Customer relationships 8 - 12 Developed technology and software 1 - 6 Patents, trademarks and other 1 - 17 Total $ $ $ $ $ $ Amortization expense related to other intangible assets totaled approximately $20.7 million and $2.4 million for the three months ended March 31, 2015 and 2014, respectively. We capitalized and placed into service $1.0 million and $0.3 million of software development costs for the three months ended March 31, 2015 and 2014, respectively. On a quarterly basis, we evaluate our other intangible assets for potential impairment as part of our quarterly review process. No impairment was identified for our other intangible assets during our assessment for the three months ended March 31, 2015 and 2014. We enter into development and placement fee agreements to provide financing for new gaming facilities or for the expansion or improvement of existing facilities. All or a portion of the funds provided under development agreements are reimbursed to us, while funding under placement fee agreements is not reimbursed. In return for the fees under these agreements, each facility dedicates a percentage of its floor space, or an agreed upon unit count, for the placement of our EGMs over the term of the agreement, generally 12 to 83 months, and we receive a fixed percentage or flat fee of those machines’ hold per day. Certain of the agreements contain EGM performance standards that could allow the respective facility to reduce a portion of our guaranteed floor space. In addition, certain development agreements allow the facilities to buy out floor space after advances that are subject to repayment have been repaid. The development agreements typically provide for a portion of the amounts retained by each facility for its share of the operating profits of the facility to be used to repay some or all of the advances recorded as notes receivable. Placement fees and amounts advanced in excess of those to be reimbursed by the customer for real property and land improvements are allocated to intangible assets and are generally amortized over the term of the contract, which is recorded as a reduction of revenue generated from the facility. In the past we have, and in the future, we may, by mutual agreement, amend these agreements to reduce our floor space at the facilities. Any proceeds received for the reduction of floor space is first applied against the intangible asset for that particular development or placement fee agreement, if any, and the remaining net book value of the intangible asset is prospectively amortized on a straight-line method over the remaining estimated useful life. On January 15, 2015, Multimedia paid a placement fee of approximately $1.2 million to the Chickasaw Nation to extend the placement of 118 units in one of its location in Oklahoma for an additional term of 60 months. | 10. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill Goodwill represents the excess of the purchase price over the identifiable tangible and intangible assets acquired plus liabilities assumed arising from business combinations. The balance of goodwill was $857.9 million and $857.9 million at June 30, 2015 and December 31, 2014, respectively. Our goodwill was not impaired for the three and six months ended June 30, 2015 and 2014. Additionally, no impairment was identified during our annual impairment testing as of October 1, 2014. In accordance with ASC 350, we test goodwill at the reporting unit level, which in certain cases may be a component of an operating segment, for impairment on an annual basis and between annual tests if events and circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The estimate of fair value requires significant judgment. We based our fair value estimates on assumptions that we believe to be reasonable but that are unpredictable and inherently uncertain, including estimates of future growth rates and operating margins and assumptions about the overall economic climate and the competitive environment for our reporting units. There can be no assurance that our estimates and assumptions made for purposes of our goodwill and identifiable intangible asset testing as of the time of testing will prove to be accurate predictions of the future. If our assumptions regarding business plans, competitive environments or anticipated growth rates are not correct, we may be required to record goodwill and/or intangible asset impairment charges in future periods, whether in connection with our next annual impairment testing or earlier, if an indicator of an impairment is present before our next annual evaluation. Other Intangible Assets Other intangible assets consist of the following (in thousands): At June 30, 2015 At December 31, 2014 Useful Life Accumulated Net Book Accumulated Net Book (years) Cost Amortization Value Cost Amortization Value Other intangible assets Contract rights under development and placement fee agreements - 7 $ $ $ $ $ $ Customer contracts - 14 Customer relationships - 12 Developed technology and software - 6 Patents, trademarks and other - 17 Total $ $ $ $ $ $ Amortization expense related to other intangible assets totaled approximately $20.8 million and $41.4 million and $2.8 million and $5.1 million for the three and six months ended June 30, 2015 and 2014, respectively. We capitalized and placed into service $4.7 million and $5.7 million and $4.5 million and $4.9 million of software development costs for the three and six months ended June 30, 2015 and 2014, respectively. On a quarterly basis, we evaluate our other intangible assets for potential impairment as part of our quarterly review process. No impairment was identified for our other intangible assets during our assessment for the three and six months ended June 30, 2015 and 2014. We enter into development and placement fee agreements to provide financing for new gaming facilities or for the expansion or improvement of existing facilities. All or a portion of the funds provided under development agreements are reimbursed to us, while funding under placement fee agreements is not reimbursed. In return for the fees under these agreements, each facility dedicates a percentage of its floor space, or an agreed upon unit count, for the placement of our EGMs over the term of the agreement, generally 12 to 83 months, and we receive a fixed percentage or flat fee of those machines’ hold per day. Certain of the agreements contain EGM performance standards that could allow the respective facility to reduce a portion of our guaranteed floor space. In addition, certain development agreements allow the facilities to buy out floor space after advances that are subject to repayment have been repaid. The development agreements typically provide for a portion of the amounts retained by each facility for its share of the operating profits of the facility to be used to repay some or all of the advances recorded as notes receivable. Placement fees and amounts advanced in excess of those to be reimbursed by the customer for real property and land improvements are allocated to intangible assets and are generally amortized over the term of the contract, which is recorded as a reduction of revenue generated from the facility. In the past we have, and in the future, we may, by mutual agreement, amend these agreements to reduce our floor space at the facilities. Any proceeds received for the reduction of floor space is first applied against the intangible asset for that particular development or placement fee agreement, if any, and the remaining net book value of the intangible asset is prospectively amortized on a straight-line method over the remaining estimated useful life. On January 15, 2015, Multimedia paid a placement fee of approximately $1.2 million to the Chickasaw Nation to extend the placement of 118 units in one of its location in Oklahoma for an additional term of 60 months. | 11. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill The changes in the carrying amount of goodwill are as follows (in thousands): Cash Advance ATM Check Services Games Other Total Goodwill Balance, December 31, 2012 $ — Foreign translation adjustment — — — — Balance, December 31, 2013 $ $ $ $ — $ $ Goodwill acquired during the year — — — Foreign translation adjustment — — — — Balance, December 31, 2014 $ $ $ $ $ $ In accordance with ASC 350, we test goodwill at the reporting unit level, which in certain cases may be a component of an operating segment, for impairment on an annual basis and between annual tests if events and circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Our goodwill was not impaired as of December 31, 2014 and December 31, 2013 based upon the results of our testing. Goodwill Testing In performing the 2014 annual impairment test, we utilized the two-step approach prescribed under ASC 350. The first step required a comparison of the carrying value of each reporting unit to its estimated fair value. To estimate the fair value of our reporting units for Step 1, we used a combination of the income approach and the market approach. The income approach is based on a discounted cash flow analysis, or DCF method. This method involves estimating the after-tax cash flows attributable to a reporting unit and then discounting the after-tax cash flows to a present value (“DCF”), using a risk-adjusted discount rate. Assumptions used in the DCF require the exercise of significant judgment, including judgment about appropriate discount rates and terminal values, growth rates and the amount and timing of expected future cash flows. The forecasted cash flows are based on our most recent budget and for years beyond the budget. Our budgets are based on estimated future growth rates. We believe our assumptions are consistent with the plans and estimates used to manage the underlying businesses. The discount rates, which are intended to reflect the risks inherent in future cash flow projections, used in the DCF are based on estimates of the weighted average cost of capital, or WACC, of market participants relative to each respective reporting unit. The market approach considers comparable market data based on multiples of revenue or earnings before taxes, depreciation and amortization (“EBITDA”). If the carrying value of a reporting unit exceeds its estimated fair value, we are required to perform the second step of the goodwill impairment test to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of a reporting unit’s goodwill to its carrying value. The implied fair value of goodwill is derived by performing a hypothetical purchase price allocation for the reporting unit as of the measurement date, allocating the reporting unit’s estimated fair value to its assets and liabilities. The residual amount from performing this allocation represents the implied fair value of goodwill. To the extent this amount is below the carrying amount of goodwill, an impairment charge is recorded. Key assumptions used in estimating fair value under the discounted cash flow approach included a discount rate of: (a) 11.0% for the Cash Advance, ATM , Check Services and Central Credit reporting units ; (b) 11.5% for the Fully Integrated Kiosk Sales and Services reporting unit; and (c) 15.5% , for the Anti-Money Laundering and Tax Compliance Software reporting unit. In addition, projected compound average revenue growth rates of 0.0% to 4.0% and terminal value growth rates of 1.0% to 2.5% were used in the analyses. The discounted cash flow analyses for our reporting units included estimated future cash inflows from operations and estimated future cash outflows for capital expenditures. Key assumptions used in estimating fair value under the market approach were based on observed market multiples of enterprise value to revenue and EBITDA for both comparable publicly traded companies and recent merger and acquisition transactions involving similar companies to estimate appropriate controlling basis multiples to apply to each of the reporting units. Based on the multiples implied by this market data, we selected multiples of revenue of 0.0 to 5.2 times and multiples of EBITDA of 6.2 to 8.6 times. The estimate of fair value requires significant judgment. We based our fair value estimates on assumptions that we believe to be reasonable but that are unpredictable and inherently uncertain, including estimates of future growth rates and operating margins and assumptions about the overall economic climate and the competitive environment for our business units. There can be no assurance that our estimates and assumptions made for purposes of our goodwill and identifiable intangible asset testing as of the time of testing will prove to be accurate predictions of the future. If our assumptions regarding business plans, competitive environments or anticipated growth rates are not correct, we may be required to record goodwill and/or intangible asset impairment charges in future periods, whether in connection with our next annual impairment testing or earlier, if an indicator of an impairment is present before our next annual evaluation. We conducted our annual impairment test for our reporting units during the fourth quarter of 2014 and 2013 and no impairment was identified. Other Intangible Assets Other intangible assets consist of the following (in thousands): At December 31, 2014 At December 31, 2013 Useful Life Accumulated Net Book Accumulated Net Book (years) Cost Amortization Value Cost Amortization Value Intangible assets Contract rights under development and placement fee agreements - 7 $ $ $ $ — $ — $ — Customer contracts - 14 Customer relationships - 12 — — — Developed technology - 6 — — — Computer software - 5 Patents, trademarks and other - 17 Total $ $ $ $ $ $ In the fourth quarter 2014, we evaluated our other intangible assets for potential impairment as part of our review process. Our online payment processing intangible assets were identified for further testing. We determined that these definite-lived intangible assets were potentially impaired primarily due to a combination of the following factors: (a) legislative constraints at the state and federal level; (b) significant changes in management; and (c) lower than anticipated operating results. These definite-lived intangible assets were evaluated using an undiscounted cash flow approach to determine if an impairment existed. As impairment was indicated based on the undiscounted cash flow approach, we discounted the cash flows and applied probability factors to calculate the resulting fair values and compared to the existing carrying value to determine the amount of impairment. The amount of impairment was approximately $3.1 million. The revised cost basis of $1.6 million for our online payment processing intangible asset will be amortized over an estimated remaining useful life of three years. These assets have been valued using level 3 fair value inputs. Amortization expense related to other intangible assets totaled approximately $14.2 million, $9.6 million and $9.8 million for the years ended December 31, 2014, 2013 and 2012, respectively. We capitalized and placed into service $8.2 million, $ 5.1 million and $0. 7 million of software development costs for the years ended December 31, 2014, 2013 and 2012, respectively. The total net book value of amortizable intangible assets was approximately $436.8 million at December 31, 2014. The total net book value of amortizable intangible assets was approximately $ 31.5 million at December 31, 2013. The anticipated amortization expense related to other intangible assets, assuming no subsequent impairment of the underlying assets, is as follows (in thousands): Anticipated amortization expense Amount 2015 $ 2016 2017 2018 2019 Thereafter Total $ |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | |||
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 11. ACCOUNTS PAYABLE AND ACCRUED EXPENSES The following table presents our accounts payable and accrued expenses (in thousands): At March 31, At December 31, 2015 2014 Accounts payable and accrued expenses Trade accounts payable $ $ Accrued interest Payroll and related expenses Deferred and unearned revenues Cash access processing and related expenses Accrued taxes Other Total accounts payable and accrued expenses $ $ | 11. ACCOUNTS PAYABLE AND ACCRUED EXPENSES The following table presents our accounts payable and accrued expenses (in thousands): At June 30, At December 31, 2015 2014 Accounts payable and accrued expenses Trade accounts payable $ $ Accrued interest Payroll and related expenses Deferred and unearned revenues Cash access processing and related expenses Accrued taxes Other Total accounts payable and accrued expenses $ $ | 12. ACCOUNTS PAYABLE AND ACCRUED EXPENSES The following table presents our accounts payable and accrued expenses (amounts in thousands): At December 31, 2014 2013 Accounts payable and accrued expenses Trade accounts payable $ $ Payroll and related expenses Cash access processing and related expenses Deferred and unearned revenues Accrued taxes Accrued interest Other Total accounts payable and accrued expenses $ $ |
LONG-TERM DEBT
LONG-TERM DEBT | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
LONG-TERM DEBT. | |||
LONG-TERM DEBT | 12. LONG-TERM DEBT The following table summarizes our outstanding indebtedness (in thousands): At March 31, At December 31, 2015 2014 Long-term debt Senior secured term loan $ $ Senior secured notes Senior unsecured notes Total debt Less: original issue discount Total debt after discount Less: current portion of long-term debt Long-term debt, less current portion $ $ Credit Facilities In December 2014, we entered into a credit agreement that provided for a $500.0 million six-year senior secured term loan that matures in 2020 (the “Term Loan”) and a $50.0 million five-year revolver that matures in 2019 (the “Revolving Credit Facility”, and together with the Term Loan, the “Credit Facilities”). The fees associated with the Credit Facilities included original issue discounts of approximately $7.5 million and debt issuance costs of approximately $13.9 million. We are required to repay the Term Loan in an amount equal to 0.50% per quarter of the initial aggregate principal with the final principal repayment installment on the maturity date. Interest is due quarterly in arrears each March, June, September and December and the maturity date. The Revolving Credit Facility remained undrawn as of March 31, 2015. The interest rate per annum applicable to the Revolving Credit Facility is, at GCA’s option, the base rate or LIBOR plus, in each case, an applicable margin. The interest rate per annum applicable to the Term Loan is also, at GCA’s option, the base rate or LIBOR plus, in each case, an applicable margin. LIBOR will be reset at the beginning of each selected interest period based on the LIBOR rate then in effect; provided that, with respect to the Revolving Credit Facility, if LIBOR is below zero, then such rate will be equal to zero plus the applicable margin, and, with respect to the Term Loan, if LIBOR is below 1.0%, then such rate will be equal to 1.0% plus the applicable margin. The base rate is a fluctuating interest rate equal to the highest of (a) the prime lending rate announced by the administrative agent, (b) the federal funds effective rate from time to time plus 0.50%, and (c) LIBOR (after taking account of any applicable floor) applicable for an interest period of one month plus 1.00%. The applicable margins of 4.75% and 5.25% for the Revolving Credit Facility and Term Loan, respectively, are subject to adjustment based on our consolidated secured leverage ratio. Voluntary prepayments of the Term Loan and the Revolving Credit Facility and voluntary reductions in the unused commitments are permitted in whole or in part, in minimum amounts as set forth in the credit agreement governing the Credit Facilities, with prior notice but without premium or penalty, except that certain refinancing transactions of the Term Loan within twelve months after the closing of the Credit Facilities will be subject to a prepayment premium of 1.00% of the principal amount repaid. Subject to certain exceptions, the obligations under the Credit Facilities are secured by substantially all of the present and after acquired assets of each of GCA, Holdings and the subsidiary guarantors (the “Collateral”) including: (a) a perfected first priority pledge of all the capital stock of GCA and each domestic direct, wholly owned material restricted subsidiary held by Holdings, GCA or any such subsidiary guarantor; and (b) a perfected first priority security interest in substantially all other tangible and intangible assets of Holdings, GCA, and such subsidiary guarantors (including, but not limited to, accounts receivable, inventory, equipment, general intangibles, investment property, real property, intellectual property and the proceeds of the foregoing). Subject to certain exceptions, the Credit Facilities are unconditionally guaranteed by Holdings and such subsidiary guarantors and Multimedia Games and its material domestic subsidiaries. The Term Loan had an applicable interest rate of 6.25% as of March 31, 2015 and December 31, 2014. We were in compliance with the terms of the Credit Facilities as of March 31, 2015 and December 31, 2014. Senior Secured Notes In December 2014, we issued $350.0 million in aggregate principal amount of 7.75% Senior Secured Notes due 2021 (“the “Secured Notes”). The fees associated with the Secured Notes included debt issuance costs of approximately $13.6 million. Interest is due semi-annually in arrears each March and September. The Secured Notes were acquired by the initial purchasers pursuant to the terms of a purchase agreement. Under the terms of the purchase agreement, during a one year period following the closing and upon prior notice from the initial purchasers, the Company must use commercially reasonable efforts to aid the purchasers in the resale of the Secured Notes, including by preparing an updated offering memorandum and participating in reasonable marketing efforts including road shows, to the extent required therein. We were in compliance with the terms of the Secured Notes as of March 31, 2015 and December 31, 2014. Senior Unsecured Notes In December 2014, we issued $350 million in aggregate principal amount of 10.0% Senior Unsecured Notes due 2022 (the “Unsecured Notes”). The fees associated with the Unsecured Notes included original issue discounts of approximately $3.8 million and debt issuance costs of approximately $14.0 million. Interest is due semi-annually in arrears each January and July. The Unsecured Notes were acquired by the initial purchasers pursuant to the terms of a purchase agreement. Under the terms of the purchase agreement, during a one-year period following the closing and upon prior notice from the initial purchasers, the Company must use commercially reasonable efforts to aid the purchasers in the resale of the Unsecured Notes, including by preparing an updated offering memorandum and participating in reasonable marketing efforts including road shows, to the extent required therein. In connection with the issuance of the Unsecured Notes, the Company entered into a registration rights agreement pursuant to which the Company agreed, for the benefit of the holders of the Unsecured Notes, to file with the SEC, and use its commercially reasonable efforts to cause to become effective, a registration statement relating to an offer to exchange the Unsecured Notes for an issue of SEC-registered notes (the “Exchange Notes”) with terms identical to the Unsecured Notes (except that the Exchange Notes will not be subject to restrictions on transfer or to any increase in annual interest rate as described below). Under certain circumstances, including if applicable interpretations of the staff of the SEC do not permit the Company to effect the exchange offer, the Company and the guarantors must use their commercially reasonable efforts to cause to become effective a shelf registration statement relating to resales of the Unsecured Notes and to keep that shelf registration statement effective until the first anniversary of the date such shelf registration statement becomes effective, or such shorter period that will terminate when all Unsecured Notes covered by the shelf registration statement have been sold. The obligation to complete the exchange offer and/or file a shelf registration statement will terminate on the second anniversary of the date of the Registration Rights Agreement. If the exchange offer is not completed (or, if required, the shelf registration statement is not declared effective) on or before December 19, 2015, the annual interest rate borne by the Unsecured Notes will be increased by 0.25% per annum for the first 90-day period immediately following such date and by an additional 0.25% per annum with respect to each subsequent 90-day period, up to a maximum additional rate of 1.00% per annum thereafter until the exchange offer is completed or the shelf registration statement is declared effective, at which time the interest rate will revert to the original interest rate on the date the Unsecured Notes were originally issued. We were in compliance with the terms of the Unsecured Notes as of March 31, 2015 and December 31, 2014. | 12. LONG-TERM DEBT The following table summarizes our outstanding indebtedness (in thousands): At June 30, At December 31, 2015 2014 Long-term debt Senior secured term loan $ $ Senior secured notes Senior unsecured notes Total debt Less: original issue and warrant discount Total debt after discount Less: current portion of long-term debt Long-term debt, less current portion $ $ Credit Facilities In December 2014, we entered into a credit agreement that provided for a $500.0 million six -year senior secured term loan that matures in 2020 (the “Term Loan”) and a $50.0 million five -year revolver that matures in 2019 (the “Revolving Credit Facility”, and together with the Term Loan, the “Credit Facilities”). The fees associated with the Credit Facilities included original issue discounts of approximately $7.5 million and debt issuance costs of approximately $13.9 million. We are required to repay the Term Loan in an amount equal to 0.50% per quarter of the initial aggregate principal with the final principal repayment installment on the maturity date. Interest is due in arrears each March, June, September and December and at the maturity date; however, interest may be remitted within one to three months of such dates. The Revolving Credit Facility remained undrawn as of June 30, 2015. The interest rate per annum applicable to the Revolving Credit Facility is, at GCA’s option, the base rate or LIBOR plus, in each case, an applicable margin. The interest rate per annum applicable to the Term Loan is also, at GCA’s option, the base rate or LIBOR plus, in each case, an applicable margin. LIBOR will be reset at the beginning of each selected interest period based on the LIBOR rate then in effect; provided that, with respect to the Revolving Credit Facility, if LIBOR is below zero, then such rate will be equal to zero plus the applicable margin, and, with respect to the Term Loan, if LIBOR is below 1.0% , then such rate will be equal to 1.0% plus the applicable margin. The base rate is a fluctuating interest rate equal to the highest of (a) the prime lending rate announced by the administrative agent, (b) the federal funds effective rate from time to time plus 0.50% , and (c) LIBOR (after taking account of any applicable floor) applicable for an interest period of one month plus 1.00% . The applicable margins of 4.75% and 5.25% for the Revolving Credit Facility and Term Loan, respectively, are subject to adjustment based on our consolidated secured leverage ratio. Voluntary prepayments of the Term Loan and the Revolving Credit Facility and voluntary reductions in the unused commitments are permitted in whole or in part, in minimum amounts as set forth in the credit agreement governing the Credit Facilities, with prior notice but without premium or penalty, except that certain refinancing transactions of the Term Loan within twelve months after the closing of the Credit Facilities will be subject to a prepayment premium of 1.00% of the principal amount repaid. Subject to certain exceptions, the obligations under the Credit Facilities are secured by substantially all of the present and after acquired assets of each of GCA, Holdings and the subsidiary guarantors (the “Collateral”) including: (a) a perfected first priority pledge of all the capital stock of GCA and each domestic direct, wholly owned material restricted subsidiary held by Holdings, GCA or any such subsidiary guarantor; and (b) a perfected first priority security interest in substantially all other tangible and intangible assets of Holdings, GCA, and such subsidiary guarantors (including, but not limited to, accounts receivable, inventory, equipment, general intangibles, investment property, real property, intellectual property and the proceeds of the foregoing). Subject to certain exceptions, the Credit Facilities are unconditionally guaranteed by Holdings and such subsidiary guarantors and Multimedia Games and its material domestic subsidiaries. The Term Loan had an applicable interest rate of 6.25% as of June 30, 2015 and December 31, 2014. We were in compliance with the terms of the Credit Facilities as of June 30, 2015 and December 31, 2014. Senior Secured Notes and Refinance of Senior Secured Notes In December 2014, we issued $350.0 million in aggregate principal amount of 7.75% Senior Secured Notes due 2021 (the “Secured Notes”). The fees associated with the Secured Notes included debt issuance costs of approximately $13.6 million. Interest is due quarterly in arrears each January, April, July and October. The Secured Notes were acquired by the initial purchasers pursuant to the terms of a purchase agreement. Under the terms of the purchase agreement, during a one year period following the closing and upon prior notice from the initial purchasers, the Company was required to use commercially reasonable efforts to aid the initial purchasers in the resale of the Secured Notes, including by preparing an updated offering memorandum and participating in reasonable marketing efforts including road shows, to the extent required therein. Alternatively, GCA had the ability to redeem the Secured Notes from the initial purchasers without penalty. On April 15, 2015, the Company entered into a note purchase agreement (the “Note Purchase Agreement”) among GCA, CPPIB Credit Investments III Inc. (the “Purchaser”), and Deutsche Bank Trust Company Americas, as collateral agent (the “Collateral Agent”), and issued $335.0 million in aggregate principal amount of its 7.25% Senior Secured Notes due 2021 (the “Refinanced Secured Notes”) in a private offering to the Purchaser. With the proceeds from the issuance of the Refinanced Secured Notes, GCA redeemed, in full, the Company’s then outstanding Secured Notes from the initial purchasers in accordance with the terms of the indenture governing the Secured Notes. In connection with the issuance of the Refinanced Secured Notes during the second quarter of 2015, we expensed $13.0 million of related debt issuance costs and fees to “Loss on extinguishment of debt” associated with the redeemed Senior Secured Notes that were outstanding prior to the refinance transaction. In connection with the issuance of the Refinanced Secured Notes and pursuant to the terms of the Note Purchase Agreement, the Company issued to the Purchaser a warrant to purchase 700,000 shares of Holdings’ common stock, with an exercise price equal to $9.88 per share, representing a 30% premium to the volume-weighted average price of Holdings’ common stock for the ten trading days prior to the issuance of the warrant. The warrant expires on the sixth anniversary of the date of issuance. The number of shares issuable pursuant to the warrant and the warrant exercise price are subject to adjustment for stock splits, reverse stock splits, stock dividends, mergers and certain other events. The warrants were valued at $2.2 million using a modified Black-Scholes model and were accounted for as a debt discount. We were in compliance with the terms of the Secured Notes as of June 30, 2015 and December 31, 2014. Senior Unsecured Notes In December 2014, we issued $350 million in aggregate principal amount of 10.0% Senior Unsecured Notes due 2022 (the “Unsecured Notes”). The fees associated with the Unsecured Notes included original issue discounts of approximately $3.8 million and debt issuance costs of approximately $14.0 million. Interest is due semi-annually in arrears each January and July. The Unsecured Notes were acquired by the initial purchasers pursuant to the terms of a purchase agreement. Under the terms of the purchase agreement, during a one-year period following the closing and upon prior notice from the initial purchasers, the Company was required to use commercially reasonable efforts to aid the initial purchasers in the resale of the Unsecured Notes, including by preparing an updated offering memorandum and participating in reasonable marketing efforts including road shows, to the extent required therein. The Unsecured Notes were resold by the initial purchasers to third parties in the second quarter of 2015. In connection with the issuance of the Unsecured Notes, the Company entered into a registration rights agreement pursuant to which the Company agreed, for the benefit of the initial holders of the Unsecured Notes, to file with the SEC, and use its commercially reasonable efforts to cause to become effective, a registration statement relating to an offer to exchange the Unsecured Notes for an issue of SEC-registered notes (the “Exchange Notes”) with terms identical to the Unsecured Notes (except that the Exchange Notes will not be subject to restrictions on transfer or to any increase in annual interest rate as described below). Under certain circumstances, including if applicable interpretations of the staff of the SEC do not permit the Company to effect the exchange offer, the Company and the guarantors must use their commercially reasonable efforts to cause to become effective a shelf registration statement relating to resales of the Unsecured Notes and to keep that shelf registration statement effective until the first anniversary of the date such shelf registration statement becomes effective, or such shorter period that will terminate when all Unsecured Notes covered by the shelf registration statement have been sold. The obligation to complete the exchange offer and/or file a shelf registration statement will terminate on the second anniversary of the date of the Registration Rights Agreement. If the exchange offer is not completed (or, if required, the shelf registration statement is not declared effective) on or before December 19, 2015, the annual interest rate borne by the Unsecured Notes will be increased by 0.25% per annum for the first 90-day period immediately following such date and by an additional 0.25% per annum with respect to each subsequent 90-day period, up to a maximum additional rate of 1.00% per annum thereafter until the exchange offer is completed or the shelf registration statement is declared effective, at which time the interest rate will revert to the original interest rate on the date the Unsecured Notes were originally issued. We were in compliance with the terms of the Unsecured Notes as of June 30, 2015 and December 31, 2014. | 13. LONG-TERM DEBT The following table summarizes our indebtedness at December 31, (in thousands): At December 31, 2014 2013 Long-term debt Senior credit facility $ — $ Senior secured term loan $ $ — Senior secured notes — Senior unsecured notes — Total debt Less: original issue discount — Total debt after discount Less: current portion of long-term debt Long-term debt, less current portion $ $ On December 19, 2014 and in connection with the Merger, we refinanced all of our indebtedness outstanding under the Prior Credit Facilities with proceeds from the Credit Facilities and the Notes. Credit Facilities On December 19, 2014, GCA, as borrower, and Holdings entered into a credit agreement among GCA, Holdings, Bank of America, N.A. as administrative agent, collateral agent, swing line lender and letter of credit issuer; Deutsche Bank Securities Inc., as syndication agent; and Merrill Lynch, Pierce, Fenner & Smith Incorporated and Deutsche Bank Securities, Inc. as joint lead arrangers and joint book managers (the “Credit Agreement”). The Credit Agreement provides for a $50.0 million five -year Revolving Credit Facility that matures in 2019 and a $500.0 million six -year Term Loan that matures in 2020. The fees associated with the Credit Facilities included discounts of approximately $7.5 million and debt issuance costs of approximately $13.9 million. All borrowings under the Credit Facilities are subject to the satisfaction of customary conditions, including the absence of a default and compliance with representations and warranties. The interest rate per annum applicable to the Revolving Credit Facility is, at GCA’s option, the base rate or LIBOR plus , in each case, an applicable margin . The interest rate per annum applicable to the Term Loan is also, at GCA’s option, the base rate or LIBOR plus, in each case, an applicable margin. LIBOR will be reset at the beginning of each selected interest period based on the LIBOR rate then in effect; provided that, with respect to the Revolving Credit Facility, if LIBOR is below zero, then such rate will be equal to zero plus the applicable margin, and, with respect to the Term Loan, if LIBOR is below 1.0% then such rate will be equal to 1.0% plus the applicable margin. The base rate is a fluctuating interest rate equal to the highest of ( a ) the prime lending rate announced by the administrative agent, (b ) the federal funds effective rate from time to time plus 0.50% , and ( c ) LIBOR (after taking account of any applicable floor) applicable for an interest period of one month plus 1.00% . The applicable margins of 4.75% and 5.25% for the Revolving Credit Facility and Term Loan, respectively, are subject to adjustment based on our consolidated secured leverage ratio. Voluntary prepayments of the term loan and the revolving loans and voluntary reductions in the unused commitments are permitted in whole or in part, in minimum amounts as set forth in the Credit Agreement governing the Credit Facilities, with prior notice but without premium or penalty, except that certain refinancing transactions of the Term Loan within twelve months after the closing of the Credit Facilities will be subject to a prepayment premium of 1.00% of the principal amount repaid. Subject to certain exceptions, the obligations under the Credit Facilities are secured by substantially all of the present and after acquired assets of each of GCA, Holdings and the subsidiary guarantors (the “Collateral”) including: (a) a perfected first priority pledge of all the capital stock of GCA and each domestic direct, wholly owned material restricted subsidiary held by Holdings, GCA or any such subsidiary guarantor; and (b) a perfected first priority security interest in substantially all other tangible and intangible assets of Holdings, GCA, and such subsidiary guarantors (including, but not limited to, accounts receivable, inventory, equipment, general intangibles, investment property, real property, intellectual property and the proceeds of the foregoing). Subject to certain exceptions, the Credit Facilities are unconditionally guaranteed by Holdings and such subsidiary guarantors and Multimedia Games and its material domestic subsidiaries. The Credit Agreement governing the Credit Facilities contains certain covenants that, among other things, limit Holdings’ ability, and the ability of certain of its subsidiaries, to incur additional indebtedness; sell assets or consolidate or merge with or into other companies; pay dividends or repurchase or redeem capital stock; make certain investments; issue capital stock of subsidiaries; incur liens; prepay, redeem or repurchase subordinated debt; and enter into certain types of transactions with our affiliates. The Credit Agreement governing the Credit Facilities also requires Holdings, together with its subsidiaries, to comply with a consolidated secured leverage ratio as well as an annual excess cash flow requirement. Events of default under the Credit Agreement governing the Credit Facilities include customary events such as a cross-default provision with respect to other material debt (which includes the Notes). In addition, an event of default will occur if Holdings undergoes a change of control. This is defined to include the case where Holdings ceases to own 100% of the equity interests of GCA, or where any person or group acquires a percentage of the economic or voting interests of Holdings’ capital stock of 35% or more (determined on a fully diluted basis), or where a majority of the board of directors of Holdings ceases to consist of persons who are directors of Holdings on the closing date of the Credit Facilities or other directors whose nomination for election to the board of directors of GCA was recommended by a majority of the then continuing directors. At December 31, 2014, we had appro ximately $500.0 million of borrowings outstanding under the Term Loan and $50.0 million of additional borrowing availability under the Revolving Credit Facility, based upo n borrowing base calculations as of such date. We were in compliance with the terms of the Credit Facilities as of December 31, 2014. Senior Notes At December 31, 2014, we had two series of outstanding notes: ( a ) $350.0 million aggregate principal amount of 7.75% Senior Secured Notes due 2021 (the “Secured Notes”) and ( b ) $350.0 million aggregate principal amount of 10.00% Senior Unsecured Notes due 2022 (the “Unsecured Notes”). On December 19, 2014, we issued the Secured Notes at an initial offering price of 100% and the Unsecured Notes at an initial offering price of 98.921% . Our net proceeds from the sale of the Notes were approximately $680.0 million after deducting discounts of approximately $3.8 million and commissions of approximately $16.2 million and before deducting any other fees and expenses related to the Notes offering. Other fees and expenses included additional debt issuance costs associated with the Notes of approximately $11.2 million. The Secured Notes are senior secured obligations of the Company, equally and ratably secured with the Company’s obligations under the Credit Facilities. The Secured Notes rank equally with the Company’s existing and future senior debt and senior to the Company’s existing and future senior subordinated debt. The Unsecured Notes are senior unsecured obligations of the Company, and rank equally with the Company’s existing and future senior debt and senior to the Company’s existing and future senior subordinated debt. The Secured Notes are guaranteed on a senior secured basis by Holdings and all of its material domestic subsidiaries (other than GCA) and the Unsecured Notes are guaranteed on a senior unsecured basis by Holdings and all of its material domestic subsidiaries (other than GCA). The indentures governing the Notes contain certain covenants that, among other things, limit our ability, and the ability of certain of our subsidiaries, to incur additional indebtedness, pay dividends or make distributions or certain other restricted payments, purchase or redeem capital stock, make investments or extend credit, engage in certain transactions with affiliates, consummate certain asset sales, effect a consolidation or merger, or sell, transfer, lease or otherwise dispose of all or substantially all of our assets, or create certain liens and other encumbrances on our assets. The indentures governing the Notes contain events of default customary for agreements of their type (with customary grace periods, as applicable) and provide that, upon the occurrence of an event of default arising from certain events of bankruptcy or insolvency with respect to Holdings or GCA, all outstanding notes will become due and payable immediately without further action or notice. If any other type of event of default occurs and is continuing, then the trustee or the holders of at least 25% in principal amount of the then outstanding Secured Notes or Unsecured Notes, as applicable, may declare all such notes to be due and payable immediately. At the closing of the offering of the Notes, the Notes were acquired by the initial purchasers pursuant to the terms of a purchase agreement. Under the terms of the purchase agreement, during a one year period following the closing and upon prior notice from the initial purchasers, the Company must use commercially reasonable efforts to aid the purchasers in the resale of the Notes, including by preparing an updated offering memorandum and participating in reasonable marketing efforts including road shows, to the extent required therein. In connection with the issuance of the Unsecured Notes, the Company entered into a registration rights agreement pursuant to which the Company agreed, for the benefit of the holders of the Unsecured Notes, to file with the Securities and Exchange Commission (the “SEC”), and use its commercially reasonable efforts to cause to become effective, a registration statement relating to an offer to exchange the Unsecured Notes for an issue of SEC-registered notes (the “Exchange Notes”) with terms identical to the Unsecured Notes (except that the Exchange Notes will not be subject to restrictions on transfer or to any increase in annual interest rate as described below). Under certain circumstances, including if applicable interpretations of the staff of the SEC do not permit the Company to effect the exchange offer, the Company and the guarantors must use their commercially reasonable efforts to cause to become effective a shelf registration statement relating to resales of the Unsecured Notes and to keep that shelf registration statement effective until the first anniversary of the date such shelf registration statement becomes effective, or such shorter period that will terminate when all Unsecured Notes covered by the shelf registration statement have been sold. The obligation to complete the exchange offer and/or file a shelf registration statement will terminate on the second anniversary of the date of the Registration Rights Agreement. If the exchange offer is not completed (or, if required, the shelf registration statement is not declared effective) on or before December 19, 2015, the annual interest rate borne by the Unsecured Notes will be increased by 0.25% per annum for the first 90 -day period immediately following such date and by an additional 0.25% per annum with respect to each subsequent 90 -day period, up to a maximum additional rate of 1.00% per annum thereafter until the exchange offer is completed or the shelf registration statement is declared effective, at which time the interest rate will revert to the original interest rate on the date the Unsecured Notes were originally issued. We were in compliance with the covenants of the Notes as of December 31, 2014. Principal Repayments The maturities of our borrowings at December 31, 2014 are as follows (in thousands): Amount Maturities of borrowings 2015 $ 2016 2017 2018 2019 Thereafter Total $ |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
COMMITMENTS AND CONTINGENCIES | |||
COMMITMENTS AND CONTINGENCIES | 13. COMMITMENTS AND CONTINGENCIES Multimedia Shareholder Litigation In connection with the Merger, certain actions were filed by putative shareholders of Multimedia in the United States District Court for the Western District of Texas (the “Texas Federal Action”) and the District Court of Travis County, Texas (the “Texas State Court Action”). In both the Texas Federal Action and the Texas State Court Action, plaintiffs alleged that Multimedia’s directors breached their fiduciary duties to Multimedia and/or its shareholders because, among other things, the Merger allegedly involved an unfair price, an inadequate sales process, self-dealing and unreasonable deal protection devices. The complaints further alleged that Holdings and its formerly wholly owned merger subsidiary, Merger Sub aided and abetted those purported breaches of fiduciary duty. On November 20, 2014, the defendants in the Texas Federal Action reached an agreement in principle with the plaintiffs in the Texas Federal Action regarding settlement of all claims asserted on behalf of the alleged class of Multimedia shareholders and on behalf of Multimedia, and that agreement is reflected in a memorandum of understanding. In connection with the settlement contemplated by the memorandum of understanding, Multimedia agreed to make certain additional disclosures in its proxy statement related to the Merger, which disclosure Multimedia made in a Current Report on Form 8-K filed on November 21, 2014. In addition, the defendants in the Texas Federal Action agreed not to oppose an application by plaintiffs in the Texas Federal Action for an attorneys’ fee award from the United States District Court for the Western District of Texas (the “District Court”) of up to $310,000. As contemplated in the memorandum of understanding, the parties entered into a Stipulation of Non-Opt Out Class and Derivative Settlement (the “Stipulation”) as of April 7, 2015, which was filed with the District Court on April 16, 2015. The Stipulation is subject to customary conditions, including District Court approval. On April 16, 2015, Plaintiffs filed an unopposed motion for preliminary approval of the Stipulation. On April 22, 2015, the District Court entered an order preliminarily approving the Stipulation, providing for notice of the settlement to be provided to certain Multimedia shareholders and scheduling a hearing for final approval of the Stipulation on August 7, 2015. There can be no assurance that the District Court will finally approve the Stipulation. In such event, the settlement as reflected in the Stipulation may be terminated. The Texas State Court Action remains pending as of May 8, 2015, the date these condensed consolidated financial statements were issued. All of the defendants have filed answers containing general denials in that action. Alabama Litigation The Company is currently involved in two lawsuits, as further described below, related to Multimedia’s former charity bingo operations in the State of Alabama, neither of which it believes are material from a damages perspective. The lawsuits are currently pending in federal court, and include claims related to the alleged illegality of electronic charity bingo in the State of Alabama. Dollie Williams, et al., v. Macon County Greyhound Park, Inc., et al., a civil action, was filed on March 8, 2010, in the United States District Court for the Middle District of Alabama, Eastern Division, against Multimedia and others. The plaintiffs, who claim to have been patrons of VictoryLand, allege that Multimedia participated in gambling operations that violated Alabama state law by supplying to VictoryLand purportedly unlawful electronic bingo machines played by the plaintiffs, and the plaintiffs seek recovery of the monies lost on all electronic bingo games played by the plaintiffs in the six months prior to the filing of the complaint under Ala. Code Sec. 8-1-150(A). The plaintiffs have requested that the court certify the action as a class action. On March 29, 2013, the court entered an order granting the plaintiffs’ motion for class certification. On April 12, 2013, the defendants jointly filed a petition with the Eleventh Circuit Court of Appeals seeking permission to appeal the court’s ruling on class certification. On June 18, 2013, the Eleventh Circuit Court of Appeals entered an order granting the petition to appeal. Following briefing and oral argument, on April 2, 2014, the Eleventh Circuit Court of Appeals entered an order reversing the district court’s ruling on class certification and remanding the case to the district court. The parties have reached a settlement that will become final upon approval of the bankruptcy court overseeing the bankruptcy of one of the plaintiffs. Until the settlement becomes final, the Company will continue to vigorously defend this matter. Given the inherent uncertainties in this litigation, however, the Company is unable to make any prediction as to the ultimate outcome. Ozetta Hardy v. Whitehall Gaming Center, LLC, et al., a civil action, was filed against Whitehall Gaming Center, LLC (an entity that does not exist), Cornerstone Community Outreach, Inc., and Freedom Trail Ventures, Ltd., in the Circuit Court of Lowndes County, Alabama. On June 3, 2010, Multimedia and other manufacturers were added as defendants. The plaintiffs, who claim to have been patrons of White Hall, allege that Multimedia participated in gambling operations that violated Alabama state law by supplying to White Hall purportedly unlawful electronic bingo machines played by the plaintiffs, and the plaintiffs seek recovery of the monies lost on all electronic bingo games played by the plaintiffs in the six months prior to the filing of the complaint under Ala. Code, Sec 8-1-150(A). The plaintiffs requested that the court certify the action as a class action. On July 2, 2010, the defendants removed the case to the United States District Court for the Middle District of Alabama, Northern Division. The court has not ruled on the plaintiffs’ motion for class certification. The Company continues to vigorously defend this matter. Given the inherent uncertainties in this litigation, however, the Company is unable to make any prediction as to the ultimate outcome. Gain Contingency Settlement In January 2014, we filed a complaint against certain third party defendants alleging conspiracy in restraint of competition regarding interchange fees, monopolization by defendants in the relevant market, and attempted monopolization of the defendants in the relevant market. We demanded a trial by jury of all issues so triable. The defendants filed a motion to dismiss on March 13, 2014. A settlement agreement was made as of January 16, 2015 and on January 22, 2015 the settlement agreement was executed and delivered for which we received $14.4 million in cash and recorded the settlement proceeds in the first quarter of 2015. This settlement is included as a reduction of operating expenses in our Condensed Consolidated Statement of Income and Comprehensive Income for the three months ended March 31, 2015. We are subject to other claims and suits that arise from time to time in the ordinary course of business, including those discussed above. We do not believe the liabilities, if any, which may ultimately result from the outcome of such matters, individually or in the aggregate, will have a material adverse impact on our financial position, liquidity or results of operations. | 13. COMMITMENTS AND CONTINGENCIES Multimedia Shareholder Litigation In connection with the Merger, certain actions were filed by putative shareholders of Multimedia in the United States District Court for the Western District of Texas (the “Texas Federal Action”) and the District Court of Travis County, Texas (the “Texas State Court Action”). In both the Texas Federal Action and the Texas State Court Action, plaintiffs alleged that Multimedia’s directors breached their fiduciary duties to Multimedia and/or its shareholders because, among other things, the Merger allegedly involved an unfair price, an inadequate sales process, self-dealing and unreasonable deal protection devices. The complaints further alleged that Holdings and its formerly wholly owned merger subsidiary, Merger Sub, aided and abetted those purported breaches of fiduciary duty. On November 20, 2014, the defendants in the Texas Federal Action reached an agreement in principle with the plaintiffs in the Texas Federal Action regarding settlement of all claims asserted on behalf of the alleged class of Multimedia shareholders and on behalf of Multimedia, and that agreement is reflected in a memorandum of understanding. In connection with the settlement contemplated by the memorandum of understanding, Multimedia agreed to make certain additional disclosures in its proxy statement related to the Merger, which disclosure Multimedia made in a Current Report on Form 8-K filed on November 21, 2014. In addition, the defendants in the Texas Federal Action agreed not to oppose an application by plaintiffs in the Texas Federal Action for an attorneys’ fee award from the United States District Court for the Western District of Texas (the “District Court”) of up to $310,000 . As contemplated in the memorandum of understanding, the parties entered into a Stipulation of Non-Opt Out Class and Derivative Settlement (the “Stipulation”) as of April 7, 2015, which was filed with the District Court on April 16, 2015. The Stipulation is subject to customary conditions, including District Court approval. On April 16, 2015, Plaintiffs filed an unopposed motion for preliminary approval of the Stipulation. On April 22, 2015, the District Court entered an order preliminarily approving the Stipulation, providing for notice of the settlement to be provided to certain Multimedia shareholders and scheduling a hearing for final approval of the Stipulation on August 7, 2015. On July 10, 2015, Plaintiffs filed an unopposed motion for final approval of the Stipulation. The deadline for class members to file objections to the Stipulation passed on July 17, 2015. As of August 3, 2015, no such objections had been filed. There can be no assurance that the District Court will finally approve the Stipulation. In such event, the settlement as reflected in the Stipulation may be terminated. The Texas State Court Action remains pending as of August 3, 2015, the date these condensed consolidated financial statements were issued. All of the defendants have filed answers containing general denials in that action. The Stipulation preliminarily approved in the Texas Federal Action includes a release of the claims asserted in the Texas State Court Action. Alabama Litigation The Company is currently involved in one lawsuit and recently resolved another, as further described below, related to Multimedia’s former charity bingo operations in the State of Alabama, neither of which it believes is material from a damages perspective. The active lawsuit is currently pending in federal court and the resolved lawsuit was pending in federal court, and both include claims related to the alleged illegality of electronic charity bingo in the State of Alabama. Dollie Williams, et al., v. Macon County Greyhound Park, Inc., et al., a civil action, was filed on March 8, 2010, in the United States District Court for the Middle District of Alabama, Eastern Division, against Multimedia and others. The plaintiffs, who claim to have been patrons of VictoryLand, allege that Multimedia participated in gambling operations that violated Alabama state law by supplying to VictoryLand purportedly unlawful electronic bingo machines played by the plaintiffs, and the plaintiffs seek recovery of the monies lost on all electronic bingo games played by the plaintiffs in the six months prior to the filing of the complaint under Ala. Code Sec. 8-1-150(A). The plaintiffs have requested that the court certify the action as a class action. On March 29, 2013, the court entered an order granting the plaintiffs' motion for class certification. On April 12, 2013, the defendants jointly filed a petition with the Eleventh Circuit Court of Appeals seeking permission to appeal the court's ruling on class certification. On June 18, 2013, the Eleventh Circuit Court of Appeals entered an order granting the petition to appeal. Following briefing and oral argument, on April 2, 2014, the Eleventh Circuit Court of Appeals entered an order reversing the district court's ruling on class certification and remanding the case to the district court. The parties reached a settlement that became final upon approval of the bankruptcy court overseeing the bankruptcy of one of the plaintiffs. The lawsuit was dismissed with prejudice by court order dated June 10, 2015. Ozetta Hardy v. Whitehall Gaming Center, LLC, et al., a civil action, was filed against Whitehall Gaming Center, LLC (an entity that does not exist), Cornerstone Community Outreach, Inc., and Freedom Trail Ventures, Ltd., in the Circuit Court of Lowndes County, Alabama. On June 3, 2010, Multimedia and other manufacturers were added as defendants. The plaintiffs, who claim to have been patrons of White Hall, allege that Multimedia participated in gambling operations that violated Alabama state law by supplying to White Hall purportedly unlawful electronic bingo machines played by the plaintiffs, and the plaintiffs seek recovery of the monies lost on all electronic bingo games played by the plaintiffs in the six months prior to the filing of the complaint under Ala. Code, Sec 8-1-150(A). The plaintiffs requested that the court certify the action as a class action. On July 2, 2010, the defendants removed the case to the United States District Court for the Middle District of Alabama, Northern Division. The court has not ruled on the plaintiffs' motion for class certification. The Company continues to vigorously defend this matter. Given the inherent uncertainties in this litigation, however, the Company is unable to make any prediction as to the ultimate outcome. Gain Contingency Settlement In January 2014, we filed a complaint against certain third party defendants alleging conspiracy in restraint of competition regarding interchange fees, monopolization by defendants in the relevant market, and attempted monopolization of the defendants in the relevant market. We demanded a trial by jury of all issues so triable. The defendants filed a motion to dismiss on March 13, 2014. A settlement agreement was made as of January 16, 2015 and on January 22, 2015 the settlement agreement was executed and delivered for which we received $14.4 million in cash and recorded the settlement proceeds in the first quarter of 2015. This settlement is included as a reduction of operating expenses in our Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income for the six months ended June 30, 2015. We are also subject to other claims and suits that arise from time to time in the ordinary course of business. We do not believe the liabilities, if any, which may ultimately result from the outcome of such matters, individually or in the aggregate, will have a material adverse impact on our financial position, liquidity or results of operations. | 14. COMMITMENTS AND CONTINGENCIES Lease Obligations We lease office facilities and operating equipment under cancelable and non ‑cancelable agreements. Total rent expense was approximately $1.9 million, $1.8 million and $0.7 million for the years ended December 31, 2014, 2013 and 2012, respectively. In October 2012, we entered into a long ‑term lease agreement related to office space for our new corporate headquarters located in Las Vegas, Nevada, which we occupied in the first half of 2013. In September 2014, the long-term lease agreement for office space in Austin, Texas, was extended through March 2021. As of December 31, 2014, the minimum aggregate rental commitment under all non ‑cancelable operating leases were as follows (in thousands): Amount Minimum aggregate rental commitments 2015 $ 2016 2017 2018 2019 Thereafter Total $ Litigation Claims and Assessments Multimedia Games Shareholder Litigation In connection with the Merger, certain actions were filed by putative shareholders of Multimedia Games in the United States District Court for the Western District of Texas (the “Texas Federal Action”) and the District Court of Travis County, Texas (the “Texas State Court Action”). In both the Texas Federal Action and the Texas State Court Action, plaintiffs alleged that Multimedia Games’ directors breached their fiduciary duties to Multimedia Games and/or its shareholders because, among other things, the Merger allegedly involved an unfair price, an inadequate sales process, self-dealing and unreasonable deal protection devices. The complaints further alleged that Holdings and its formerly wholly owned merger subsidiary, Movie Merger Sub, Inc., aided and abetted those purported breaches of fiduciary duty. On November 20, 2014, the defendants in the Texas Federal Action reached an agreement in principle with the plaintiffs in the Texas Federal Action regarding settlement of all claims asserted on behalf of the alleged class of Multimedia Games shareholders and on behalf of Multimedia Games, and that agreement is reflected in a memorandum of understanding. In connection with the settlement contemplated by the memorandum of understanding, Multimedia Games agreed to make certain additional disclosures in its proxy statement related to the Merger, which disclosure Multimedia Games made in a Current Report on Form 8-K filed on November 21, 2014. The memorandum of understanding contemplates that the parties will enter into a stipulation of settlement. The stipulation of settlement will be subject to customary conditions, including court approval. In the event that the parties enter into a stipulation of settlement, a hearing will be scheduled at which the United States District Court for the Western District of Texas will consider the fairness, reasonableness, and adequacy of the settlement. If the settlement is approved by the court in the form contemplated by the parties, it will resolve and release all claims in the Texas Federal Action that were or could have been brought challenging any aspect of the Merger, the Merger Agreement, and any disclosure made in connection therewith, including in Multimedia Games’ definitive proxy statement, pursuant to terms that will be disclosed to shareholders prior to final approval of the settlement. In addition, in connection with the settlement, the defendants in the Texas Federal Action agreed not to oppose an application by plaintiffs in the Texas Federal Action for an attorneys’ fee award from the United States District Court for the Western District of Texas of up to $310,000 , which fee has been paid by Holdings. There can be no assurance that the parties will ultimately enter into a stipulation of settlement or that the United States District Court for the Western District of Texas will approve the settlement even if the parties were to enter into such stipulation. In such event, the proposed settlement as contemplated by the memorandum of understanding may be terminated. The Texas State Court Action remains pending as of March 16, 2015, the date these consolidated financial statements were issued. Alabama Litigation The Company is currently involved in two lawsuits, as further described below, related to Multimedia Games’ former charity bingo operations in the State of Alabama, neither of which it believes are material from a damages perspective. The lawsuits are currently pending in federal court, and include claims related to the alleged illegality of electronic charity bingo in the State of Alabama. Dollie Williams, et al., v. Macon County Greyhound Park, Inc., et al., a civil action, was filed on March 8, 2010, in the United States District Court for the Middle District of Alabama, Eastern Division, against Multimedia Games and others. The plaintiffs, who claim to have been patrons of VictoryLand, allege that Multimedia Games participated in gambling operations that violated Alabama state law by supplying to VictoryLand purportedly unlawful electronic bingo machines played by the plaintiffs, and the plaintiffs seek recovery of the monies lost on all electronic bingo games played by the plaintiffs in the six months prior to the filing of the complaint under Ala. Code Sec. 8-1-150(A). The plaintiffs requested that the court certify the action as a class action. On March 29, 2013, the court entered an order granting the plaintiffs' motion for class certification. On April 12, 2013, the defendants jointly filed a petition with the Eleventh Circuit Court of Appeals seeking permission to appeal the court's ruling on class certification. On June 18, 2013, the Eleventh Circuit Court of Appeals entered an order granting the petition to appeal. Following briefing and oral argument, on April 2, 2014, the Eleventh Circuit Court of Appeals entered an order reversing the district court’s ruling on class certification and remanding the case to the district court. The Company continues to vigorously defend this matter. Given the inherent uncertainties in this litigation, however, the Company is unable to make any prediction as to the ultimate outcome. Ozetta Hardy v. Whitehall G aming Center, LLC, et al., a civil actio n, was filed against Whitehall G aming Center, LLC (an entity that does not exist), Cornerstone Community Outreach, Inc., and Freedom Trail Ventures, Ltd., in the Circuit Court of Lowndes County, Alabama. On June 3, 2010, Multimedia Games and other manufacturers were added as defendants. The plaintiffs, who claim to have been patrons of White Hall, allege that Multimedia Games participated in gambling operations that violated Alabama state law by supplying to White Hall purportedly unlawful electronic bingo machines played by the plaintiffs, and the plaintiffs seek recovery of the monies lost on all electronic bingo games played by the plaintiffs in the six months prior to the filing of the complaint under Ala. Code, Sec 8-1-150(A). The plaintiffs requested that the court certify the action as a class action. On July 2, 2010, the defendants removed the case to the United States District Court for the Middle District of Alabama, Northern Division. The court has not ruled on the plaintiffs' motion for class certification. The Company continues to vigorously defend this matter. Given the inherent uncertainties in this litigation, however, the Company is unable to make any prediction as to the ultimate outcome. We are subject to other claims and suits that arise from time to time in the ordinary course of business, including those discussed above. We do not believe the liabilities, if any, which may ultimately result from the outcome of such matters, individually or in the aggregate, will have a material adverse impact on our financial position, liquidity or results of operations. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
SHAREHOLDERS' EQUITY | |||
SHAREHOLDERS' EQUITY | 14. SHAREHOLDERS’ EQUITY Preferred Stock. Our amended and restated certificate of incorporation, as amended, allows our Board of Directors, without further action by stockholders, to issue up to 50,000,000 shares of preferred stock in one or more series and to fix the designations, powers, preferences, privileges and relative participating, optional, or special rights as well as the qualifications, limitations or restrictions of the preferred stock, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences. As of March 31, 2015 and December 31, 2014, we had no shares outstanding of preferred stock. Common Stock. Subject to the preferences that may apply to shares of preferred stock that may be outstanding at the time, the holders of outstanding shares of common stock are entitled to receive dividends out of assets legally available at the times and in the amounts as our Board of Directors may from time to time determine. All dividends are non-cumulative. In the event of the liquidation, dissolution or winding up of the Company, the holders of common stock are entitled to share ratably in all assets remaining after the payment of liabilities, subject to the prior distribution rights of preferred stock, if any, then outstanding. Each stockholder is entitled to one vote for each share of common stock held on all matters submitted to a vote of stockholders. Cumulative voting for the election of directors is not provided for. The common stock is not entitled to preemptive rights and is not subject to conversion or redemption. There are no sinking fund provisions applicable to the common stock. Each outstanding share of common stock is fully paid and non-assessable. As of March 31, 2015 and December 31, 2014, we had 90,610,087 and 90,405,450 shares of common stock issued. Treasury Stock. Employees may direct us to withhold vested shares of restricted stock to satisfy the minimum statutory withholding requirements applicable to their restricted stock vesting. We repurchased or withheld from restricted stock awards 2,845 and 31,000 shares of common stock at an aggregate purchase price of $19,743 and $0.3 million, for the three months ended March 31, 2015 and 2014, respectively, to satisfy the minimum applicable tax withholding obligations related to the vesting of such restricted stock awards. | 14. SHAREHOLDERS’ EQUITY Preferred Stock. Our amended and restated certificate of incorporation, as amended, allows our Board of Directors, without further action by stockholders, to issue up to 50,000,000 shares of preferred stock in one or more series and to fix the designations, powers, preferences, privileges and relative participating, optional, or special rights as well as the qualifications, limitations or restrictions of the preferred stock, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences. As of June 30, 2015 and December 31, 2014, we had no shares outstanding of preferred stock. Common Stock. Subject to the preferences that may apply to shares of preferred stock that may be outstanding at the time, the holders of outstanding shares of common stock are entitled to receive dividends out of assets legally available at the times and in the amounts as our Board of Directors may from time to time determine. All dividends are non-cumulative. In the event of the liquidation, dissolution or winding up of the Company, the holders of common stock are entitled to share ratably in all assets remaining after the payment of liabilities, subject to the prior distribution rights of preferred stock, if any, then outstanding. Each stockholder is entitled to one vote for each share of common stock held on all matters submitted to a vote of stockholders. Cumulative voting for the election of directors is not provided for. The common stock is not entitled to preemptive rights and is not subject to conversion or redemption. There are no sinking fund provisions applicable to the common stock. Each outstanding share of common stock is fully paid and non-assessable. As of June 30, 2015 and December 31, 2014, we had 90, 743,001 and 90,405,450 shares of common stock issued, respectively. Treasury Stock. Employees may direct us to withhold vested shares of restricted stock to satisfy the minimum statutory withholding requirements applicable to their restricted stock vesting. We repurchased or withheld from restricted stock awards 2,599 and 5,444 , and 11,963 and 43,129 shares of common stock, at an aggregate purchase price of $20,167 and $39,910 , and $0.1 million and $0.4 million, for the three and six months ended June 30, 2015 and 2014, respectively, to satisfy the minimum applicable tax withholding obligations related to the vesting of such restricted stock awards. | 15. SHAREHOLDERS’ EQUITY Preferred Stock. Our amended and restated certificate of incorporation allows our Board of Directors, without further action by stockholders, to issue up to 50,000,000 shares of preferred stock in one or more series and to fix the designations, powers, preferences, privileges and relative participating, optional, or special rights as well as the qualifications, limitations or restrictions of the preferred stock, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences. As of December 31, 2014, we had no shares of preferred stock outstanding. Common Stock. Subject to the preferences that may apply to shares of preferred stock that may be outstanding at the time, the holders of outstanding shares of common stock are entitled to receive dividends out of assets legally available at the times and in the amounts as our Board of Directors may from time to time determine. All dividends are non ‑cumulative. In the event of the liquidation, dissolution or winding up of the Company, the holders of common stock are entitled to share ratably in all assets remaining after the payment of liabilities, subject to the prior distribution rights of preferred stock, if any, then outstanding. Each stockholder is entitled to one vote for each share of common stock held on all matters submitted to a vote of stockholders. Cumulative voting for the election of directors is not provided for. The common stock is not entitled to preemptive rights and is not subject to conversion or redemption. There are no sinking fund provisions applicable to the common stock. Each outstanding share of common stock is fully paid and non ‑assessable. As of December 31, 2014, we had 90,405,450 shares of common stock issued. Common Stock Repurchase Program. Our share repurchase program granted us the authority to repurchase up to $40.0 million of our outstanding common stock over a two -year period, which commenced in the first quarter of 2013 and expired at the end of the fourth quarter of 2014. We repurchased approximately 1.5 million shares of common stock for cash of approx imately $ 11.7 million under t he share repurchase program for the year ended December 31, 2014. We repurchased approximately 2.6 million shares of common stock for cash of approximately $18.2 million under the share repurchase program for the year ended December 31, 2013. We completed the share repurchases with cash on hand. The repurchase program authorized us to buy our common stock from time to time through open market, privately negotiated or other transactions, including pursuant to trading plans established in accordance with Rules 10b5-1 and 10b-18 of the Exchange Act, or by a combination of such methods. Treasury Stock. Employees may direct us to withhold vested shares of restricted stock to satisfy the minimum statutory withholding requirements applicable to their restricted stock vesting. We repurchased or withheld from restricted stock awards 5 5,502 and 14,901 shares of common stock at an aggregate purchase price of $0 .5 million and $0.1 million, for the years ended December 31, 2014 and 2013, respectively, to satisfy the minimum applicable tax withholding obligations related to the vesting of such restricted stock awards. The following table provides the treasury stock activity that occurred in 2014 (number of shares and cost in thousands): Total Number of Average Price Cost of Shares Shares Purchased Purchased or Purchased or or Withheld Withheld Withheld (in thousands) (per share) (in thousands) Outstanding, December 31, 2013 $ $ Shares repurchased under current plan $ Shares withheld from restricted stock vesting $ Outstanding, December 31, 2014 $ $ |
WEIGHTED AVERAGE COMMON SHARES
WEIGHTED AVERAGE COMMON SHARES | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
WEIGHTED AVERAGE COMMON SHARES | |||
WEIGHTED AVERAGE COMMON SHARES | 15. WEIGHTED AVERAGE COMMON SHARES The weighted average number of common shares outstanding used in the computation of basic and diluted earnings per share is as follows (in thousands): At March 31, At March 31, 2015 2014 Weighted average shares Weighted average number of common shares outstanding - basic Potential dilution from equity grants (1) Weighted average number of common shares outstanding - diluted (1) The potential dilution excludes the weighted average effect of equity awards to acquire 8.4 million and 5.1 million of our common stock for the three months ended March 31, 2015 and 2014, respectively, because the application of the treasury stock method, as required, makes them anti-dilutive. | 15. WEIGHTED AVERAGE COMMON SHARES The weighted average number of common shares outstanding used in the computation of basic and diluted earnings per share is as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Weighted average shares Weighted average number of common shares outstanding - basic Potential dilution from equity grants (1) — — Weighted average number of common shares outstanding - diluted (1) The Company was in a net loss position for the three and six months ended June 30, 2015, and therefore, no potential dilution from the application of the treasury stock method was applicable. The potential dilution excludes the weighted average effect of equity awards to acquire 7.5 million and 6.5 million of our common stock for the three and six months ended June 30, 2014 as the application of the treasury stock method, as required, makes them anti-dilutive. | 16. WEIGHTED AVERAGE SHARES OF COMMON STOCK The weighted average number of common stock outstanding used in the computation of basic and diluted earnings per share is as follows (in thousands): At December 31, 2014 2013 2012 Weighted average shares Weighted average number of common shares outstanding - basic Potential dilution from equity grants (1) Weighted average number of common shares outstanding - diluted (1) The potential dilution excludes the weighted average effect of stock options to acquire 7.6 million, 5.9 million and 5.1 million shares of our common stock at December 31, 2014, 2013 and 2012, respectively, because the application of the treasury stock method, as required, makes them anti ‑dilutive . |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
SHARE-BASED COMPENSATION | |||
SHARE-BASED COMPENSATION | 16. SHARE-BASED COMPENSATION Equity Incentive Awards Our 2014 Equity Incentive Plan (the “2014 Plan”) is used to attract and retain the best available personnel, to provide additional incentives to employees, directors and consultants and to promote the success of our business. The 2014 Plan superseded the then current 2005 Stock Incentive Plan (the “2005 Plan”). The 2014 Plan is administered by our Compensation Committee, which has the authority to select individuals who are to receive options or other equity incentive awards and to specify the terms and conditions of grants of options or other equity incentive awards, the vesting provisions, the term and the exercise price. Generally, we grant the following award types: (a) time-based options, (b) cliff-vesting time-based options, (c) market-based options and (d) restricted stock. These awards have varying vesting provisions, but generally have 10-year expiration periods. There have been no changes to our equity incentive awards vesting disclosures since the most recent filing of our Annual Report on Form 10-K. A summary of award activity is as follows (in thousands): Stock Options Restricted Stock Granted Granted Outstanding, December 31, 2014 Additional authorized shares - - Granted - - Exercised options or vested shares Canceled or forfeited - Outstanding, March 31, 2015 The maximum number of shares available for future equity awards under the 2014 Plan is approximately 12.1 million shares of our common stock; and there are no shares available for future equity awards under the 2005 Plan. Stock Options The fair value of options was determined as of the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions: Three Months Ended March 31, 2015 2014 Risk-free interest rate - Expected life of options (in years) - Expected volatility - Expected dividend yield - The following tables present the options activity: Number of Common Shares (in thousands) Weighted Average Exercise Price (per share) Weighted Average Life Remaining (years) Aggregate Intrinsic Value (in thousands) Outstanding, December 31, 2014 $ $ Granted - - Exercised Canceled or forfeited Outstanding, March 31, 2015 $ $ Vested and expected to vest, March 31, 2015 $ $ Exercisable, March 31, 2015 $ $ There were no options granted for the three months ended March 31, 2015. There were 2.0 million options granted for the three months ended March 31, 2014. The weighted average grant date fair value per share of the options granted was $3.88 for the three months ended March 31, 2014. The total intrinsic value of options exercised was $0.4 million and $1.7 million for the three months ended March 31, 2015 and 2014, respectively. There was $13.6 million in unrecognized compensation expense related to options expected to vest as of March 31, 2015. This cost was expected to be recognized on a straight-line basis over a weighted average period of 3.0 years. We received $1.0 million in proceeds from the exercise of options and recorded $1.6 million in non-cash compensation expense related to options granted that were expected to vest for the three months ended March 31, 2015. There was $12.0 million in unrecognized compensation expense related to options expected to vest as of March 31, 2014. This cost was expected to be recognized on a straight-line basis over a weighted average period of 3.1 years. We recorded $1.6 million in non-cash compensation expense related to options granted that were expected to vest as of March 31, 2014. We received $2.4 million in cash from the exercise of options for the three months ended March 31, 2014. Restricted Stock The following is a summary of non-vested share awards for our time-based restricted shares: Shares Outstanding (in thousands) Weighted Average Grant Date Fair Value (per share) Outstanding, December 31, 2014 $ Granted - - Vested Forfeited - Outstanding, March 31, 2015 $ There were no shares of restricted stock granted for the three months ended March 31, 2015 and March 31, 2014. The total fair value of restricted stock vested was $0.1 million and $0.7 million for the three months ended March 31, 2015 and 2014, respectively. There was $2.7 million in unrecognized compensation expense related to shares of time-based restricted shares expected to vest as of March 31, 2015. This cost is expected to be recognized on a straight-line basis over a weighted average period of 3.0 years. There was 10.9 thousand shares of restricted stock that vested and we recorded $0.2 million in non-cash compensation expense related to the restricted stock granted that was expected to vest during the three months ended March 31, 2015. There was $1.7 million in unrecognized compensation expense related to shares of time-based restricted shares expected to vest as of March 31, 2014. This cost was expected to be recognized on a straight-line basis over a weighted average period of 2.8 years. There were 0.1 million shares of time-based restricted shares vested and we recorded $0.4 million in non-cash compensation expense related to the restricted stock granted that was expected to vest for the three months ended March 31, 2014. | 16. SHARE-BASED COMPENSATION Equity Incentive Awards Our 2014 Equity Incentive Plan (the “2014 Plan”) is used to attract and retain the best available personnel, to provide additional incentives to employees, directors and consultants and to promote the success of our business. The 2014 Plan superseded the then current 2005 Stock Incentive Plan (the “2005 Plan”). The 2014 Plan is administered by our Compensation Committee of our Board of Directors, which has the authority to select individuals who are to receive options or other equity incentive awards and to specify the terms and conditions of grants of options or other equity incentive awards, the vesting provisions, the term and the exercise price. Generally, we grant the following award types: (a) time-based options, (b) cliff-vesting time-based options, (c) market-based options and (d) restricted stock. These awards have varying vesting provisions and expiration periods. For the three and six months ended June 30, 2015, we granted time-based options and market-based options. Our time-based stock options granted under the 2014 Plan vest at a rate of 25% per year on each of the first four yearly anniversaries of the option grant dates. These options expire after a ten -year period. Our market-based stock options granted under the 2014 Plan vest if our average stock price in any period of 30 consecutive trading days meets certain target prices during a four-year period that commenced on the date of grant for these options. If these target prices are not met during such four-year period, the unvested shares underlying the options will terminate, however, upon the Participant’s termination of Service if the Participant’s Service is terminated by the Participating Company without Cause within ten days prior to, or within eighteen (18) months after, the date a Change in Control is consummated, the unvested options granted would become fully vested. These options expire after a seven-year period. A summary of award activity is as follows (in thousands): Stock Options Restricted Stock Granted Granted Outstanding, December 31, 2014 Additional authorized shares — — Granted — Exercised options or vested shares Canceled or forfeited Outstanding, June 30, 2015 The maximum number of shares available for future equity awards under the 2014 Plan is approximately 6.6 million shares of our common stock; and there are no shares available for future equity awards under the 2005 Plan. Stock Options The fair value of time-based options was determined as of the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions: Six months ended June 30, 2015 2014 Risk-free interest rate % % Expected life of options (in years) Expected volatility % % Expected dividend yield % % The fair value of market-based options was determined as of the date of grant using a lattice-based option valuation model. For the market-based options issued in the second quarter 2015, the assumptions were: (a) risk-free interest rate of 1%; (b) measurement period of four years; (c) expected volatility of 47%; and (d) no expected dividend yield. The following tables present the options activity: Weighted Number of Weighted Average Average Life Aggregate Common Shares Exercise Price Remaining Intrinsic Value (in thousands) (per share) (years) (in thousands) Outstanding, December 31, 2014 $ $ Granted Exercised Canceled or forfeited Outstanding, June 30, 2015 $ $ Vested and expected to vest, June 30, 2015 $ $ Exercisable, June 30, 2015 $ $ There were $6.1 million options granted for the three and six months ended June 30, 2015. There were 3.0 million and 5.0 million options granted for the three and six months ended June 30, 2014, respectively. The weighted average grant date fair value per share of the options granted was $2.49 for the three and six months ended June 30, 2015. The weighted average grant date fair value per share of the options granted was $2.86 and $3. 2 7 for the three and six months ended June 30, 2014, respectively. The total intrinsic value of options exercised was $0.3 million and $0.8 million and $ 0 .7 million and $2.4 million for the three and six months ended June 30, 2015 and 2014, respectively. There was $21.8 million in unrecognized compensation expense related to options expected to vest as of June 30, 2015. This cost was expected to be recognized on a straight-line basis over a weighted average period of 3.0 years. We received $1.7 million in proceeds from the exercise of options and recorded $3.5 million in non-cash compensation expense related to options granted that were expected to vest for the six months ended June 30, 2015. There was $15.6 million in unrecognized compensation expense related to options expected to vest as of June 30, 2014. This cost was expected to be recognized on a straight-line basis over a weighted average period of 2.9 years. We recorded $4.6 million in non-cash compensation expense related to options granted that were expected to vest as of June 30, 2014. We received $4.6 million in cash from the exercise of options for the six months ended June 30, 2014. Restricted Stock The following is a summary of non-vested share awards for our time-based restricted shares: Weighted Shares Average Grant Outstanding Date Fair Value (in thousands) (per share) Outstanding, December 31, 2014 $ Granted — — Vested Forfeited Outstanding, June 30, 2015 $ There were no shares of restricted stock granted for the three and six months ended June 30, 2015 and 2014. The total fair value of restricted stock vested was $0.1 million and $0.2 million and $0.4 million and $1.4 million for the three and six months ended June 30, 2015 and 2014, respectively. There was $2.5 million in unrecognized compensation expense related to shares of time based restricted shares expected to vest as of June 30, 2015. This cost is expected to be recognized on a straight-line basis over a weighted average period of 2.8 years. There were 21,7 00 shares of restricted stock that vested and we recorded $0.4 million in non-cash compensation expense related to the restricted stock granted that was expected to vest during the six months ended June 30, 2015. There was $1.4 million in unrecognized compensation expense related to shares of time-based restricted shares expected to vest as of June 30, 2014. This cost was expected to be recognized on a straight-line basis over a weighted average period of 2.6 years. There were 0.2 million shares of time-based restricted shares vested and we recorded $0.8 million in non-cash compensation expense related to the restricted stock granted that was expected to vest for the six months ended June 30, 2014. | 17. SHARE ‑BASED COMPENSATION Equity Incentive Awards In January 2005, we adopted the 2005 Stock Incentive Plan (the “2005 Plan”) to attract and retain the best available personnel, to provide additional incentives to employees, directors and consultants and thus to promote the success of our business. The 2005 Plan is administered by our Compensation Committee. The administrator of the 2005 Plan has the authority to select individuals who are to receive options or other equity incentive awards under the 2005 Plan and to specify the terms and conditions of grants of options or other equity incentive awards, the vesting provisions, the term and the exercise price. In May 2014, we adopted the 2014 Equity Incentive Plan (the “2014 Plan”) to attract and retain the best available personnel, to provide additional incentives to employees, directors and consultants and thus to promote the success of our business. The 2014 Plan is administered by our Compensation Committee. The administrator of the 2014 Plan has the authority to select individuals who are to receive options or other equity incentive awards under the 2014 Plan and to specify the terms and conditions of grants of options or other equity incentive awards, the vesting provisions, the term and the exercise price. Generally, our time based stock options granted under the 2005 Plan (other than those granted to non ‑employee directors) will vest at a rate of 25% of the shares underlying the option after one year and the remaining shares vest in equal portions over the following 36 months , such that all shares are vested after four years . Generally, our time based stock options and restricted stock granted under the 2014 Plan will vest at a rate of 25% per year on each of the first four yearly anniversaries of the option grant dates. Our market-based stock options granted under the 2005 Plan typically vest if our average stock price in any period of 30 consecutive trading days meets certain target prices during a four year period that commenced on the date of grant for these options. If these target prices are not met during such four year period, the unvested shares underlying the options will terminate, except if there is a change in control of the Company as defined in the 2005 Plan, in which case, the unvested shares underlying such options shall become fully vested on the effective date of such change in control. Our cliff vesting time-based stock options granted under the 2005 Plan will vest based on the requisite service periods with a portion to vest after five years and another portion to vest after six years. The vesting provisions of restricted stock under the 2005 Plan are similar to those applicable to time-based stock options under the 2005 Plan. As these restricted shares were issued primarily to our employees when all or a portion of the restricted stock award vests, in most cases, a certain portion of the shares subject to the restricted stock award will be withheld by us to satisfy the statutory withholding requirements applicable to the restricted stock grants. Therefore, as these awards vest the actual number of shares outstanding as a result of the restricted stock awards is reduced. These restricted shares will vest over a period of four years. As part of the Merger Agreement, each option to purchase shares of Multimedia Games common stock granted after September 8, 2014, was converted into a new award covering shares of Holdings common stock using a customary exchange ratio. These options will vest at a rate of 25% per year on each of the first four yearly anniversaries of the option grant dates. A summary of award activity is as follows (in thousands): Stock Options Restricted Stock Granted Granted Outstanding, December 31, 2013 Additional authorized shares — — Granted Merger conversion — Exercised options or vested shares Canceled or forfeited Outstanding, December 31, 2014 The maximum number of shares available for future equity awards under the 2014 Plan is approximately 11.9 million shares of our common stock; and there are no shares available for future equity awards under the 2005 Plan. Stock Options The fair value of options was determined as of the date of grant using the Black ‑Scholes option pricing model with the following weighted ‑average assumptions: Year ended December 31, 2014 2013 2012 Risk-free interest rate % % % Expected life of options (in years) Expected volatility % % % Expected dividend yield % % % The fair value of our cliff vesting time-based options was determined using the Black Scholes option pricing model as of the date of grant. For the five year cliff vesting time-based options, the assumptions were: (a) risk-free interest rate of 2%; (b) expected term of five years; (c) expected volatility of 52%; and (d) no expected dividend yield. For the six year cliff vesting time-based options, the assumptions were: (a) risk-free interest rate of 2%; (b) expected term of six years; (c) expected volatility of 58%; and (d) no expected dividend yield. The fair value of our market-based options was determined using a lattice-based option valuation model as of the date of grant. For the market-based options issued in the first quarter 2014, the assumptions were: (a) risk-free interest rate of 1%; (b) measurement period of four years; (c) expected volatility of 51%; and (d) no expected dividend yield. For the market-based options issued in the second quarter 2014, the assumptions were: (a) risk-free interest rate of 1%; (b) measurement period of four years; (c) expected volatility of 52%; and (d) no expected dividend yield. The fair value of the converted options related to the Merger was recalculated upon consummation of the acquisition and it was determined that the original fair value approximated the value upon conversion and was still applicable and will continue to amortize to stock compensation expense over the remaining life of the award. The following tables present the options activity: Weighted Number of Weighted Average Average Life Aggregate Common Shares Exercise Price Remaining Intrinsic Value (in thousands) (per share) (years) (in thousands) Outstanding, December 31, 2013 $ $ Granted Merger conversion Exercised Canceled or forfeited Outstanding, December 31, 2014 $ $ Vested and expected to vest, December 31, 2014 $ $ Exercisable, December 31, 2014 $ $ Options Outstanding Options Exercisable Weighted Average Weighted Weighted Number Remaining Average Number Average Outstanding Contract Exercise Exercisable Exercise Range of Exercise Prices (000’s) Life (Years) Prices (000’s) Price $ — $ $ $ There were 6.6 million, 1.2 million and 2.4 million options granted for the years ended December 31, 2014, 2013 and 2012, respectively. Of the 6.6 million options granted, 1.1 million options were converted as part of the Merger. The weighted average grant date fair value per share of the options granted was $3.20 , $3.31 and $2.93 for the years ended December 31, 2014, 2013 and 2012, respectively. The total intrinsic value of options exercised was $2.8 million, $4.6 million and $6.3 million for the years ended December 31, 2014, 2013 and 2012, respectively. There was $15.4 million in unrecognized compensation expense related to options expected to vest as of December 31, 2014. This cost was expected to be recognized on a straight ‑line basis over a weighted average period of 3.1 years. We received $5.3 million in proceeds from the exercise of options and recorded $7.6 million in non ‑cash compensation expense related to options granted that were expected to vest for the year ended and as of December 31, 2014. We recorded $4.4 million and $6.2 million in non ‑cash compensation expense related to options granted that were expected to vest as of December 31, 2013 and 2012, respectively. We received $8.4 million and $6.7 million in cash from the exercise of options for the years ended December 31, 2013 and 2012, respectively. Restricted Stock The following is a summary of non ‑vested share awards for our time ‑based restricted shares: Weighted Shares Average Grant Outstanding Date Fair Value (in thousands) (per share) Outstanding, December 31, 2013 $ Granted Vested Forfeited Outstanding, December 31, 2014 $ There were 0.3 million, 0.4 million and 0.1 million shares of restricted stock granted for the years ended December 31, 2014, 2013 and 2012, respectively. The weighted average grant date fair value per share of restricted stock granted was $7.12 , $7.09 and $6.80 for the years ended December 31, 2014, 2013 and 2012. The total fair value of restricted stock vested was $1.4 million, $0.7 million and $1.3 million for the years ended December 31, 2014, 2013 and 2012, respectively. There was $3.0 million in unrecognized compensation expense related to shares of time ‑based restricted shares expected to vest as of December 31, 2014 and is expected to be recognized on a straight ‑line basis over a weighted average period of 3.3 years. There were 0.2 million shares, 0.1 million shares and 0.2 million shares of restricted stock that vested and we recorded $1.2 million, $0.7 million and $0.4 million in non ‑cash compensation expense related to the restricted stock granted that was expected to vest during 2014, 2013 and 2012, respectively. |
INCOME TAXES
INCOME TAXES | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
INCOME TAXES | |||
INCOME TAXES | 17. INCOME TAXES The provision for income tax reflected an effective income tax rate of 81.2% for the three months ended March 31, 2015, which was higher than the statutory federal rate of 35.0% primarily due to non-statutory stock options that expired in the quarter and state income taxes. The provision for income tax reflected an effective income tax rate of 34.7% for the same period in the prior year, which was lower than the statutory federal rate of 35.0% are primarily due to the favorable foreign rate applicable to our foreign source income. We have analyzed filing positions in all of the federal, state and foreign jurisdictions where we are required to file income tax returns, as well as all open tax years in these jurisdictions. As part of the Merger, the Company recorded $0.7 million of unrecognized tax benefits as of December 31, 2014, which is consistent with the balance as of March 31, 2015. Other than the unrecognized tax benefit related to the Merger, we believe that our income tax filing positions and deductions will be sustained upon audit and we do not anticipate any adjustments that will result in a material change to our financial position. We may from time to time be assessed interest or penalties by tax jurisdictions, although any such assessments historically have been minimal and immaterial to our financial results. Our policy for recording interest and penalties associated with audits and unrecognized tax benefits is to record such items as a component of income tax expense. | 17. INCOME TAXES The provision for income tax reflected an effective income tax rate benefit of 41.0% and 35.8% for the three and six months ended June 30, 2015, respectively, which was higher than the statutory federal rate of 35.0% primarily due to state taxes and the lower foreign tax rate applicable to our foreign source income, partially offset by non-statutory stock options that expired in 2015. The provision for income tax reflected an effective income tax rate expense of 37.3% and 35.7% for the same periods in the prior year, which was higher than the statutory federal rate of 35.0% primarily due to state taxes, an increase in our valuation allowance for certain foreign losses and non-cash compensation expenses related to stock options, partially offset by a lower foreign tax rate applicable to our foreign source income. We have analyzed filing positions in all of the federal, state and foreign jurisdictions where we are required to file income tax returns, as well as all open tax years in these jurisdictions. As part of the Merger, the Company recorded $0.7 million of unrecognized tax benefits as of December 31, 2014, which is consistent with the balance as of June 30, 2015. Other than the unrecognized tax benefit related to the Merger, we believe that our income tax filing positions and deductions will be sustained upon audit and we do not anticipate any adjustments that will result in a material change to our financial position. We may from time to time be assessed interest or penalties by tax jurisdictions, although any such assessments historically have been minimal and immaterial to our financial results. Our policy for recording interest and penalties associated with audits and unrecognized tax benefits is to record such items as a component of income tax expense. | 18. INCOME TAXES The following presents consolidated income before tax for domestic and foreign operations (in thousands): Year Ended December 31, 2014 2013 2012 Consolidated income before tax Domestic $ $ $ Foreign Total $ $ $ The income tax provision attributable to income from operations before tax consists of the following components (in thousands): Year Ended December 31, 2014 2013 2012 Income tax provision Domestic $ $ $ Foreign Total income tax provision $ $ $ Income tax provision components Current $ $ $ Deferred Total income tax provision $ $ $ A reconciliation of the federal statutory rate and the effective income tax rate is as follows: Year Ended December 31, 2014 2013 2012 Income tax reconciliation Federal statutory rate % % % Foreign provision % % % State/province income tax % % % Non-deductible compensation cost % % % Non-deductible acquisition cost % % % Change in valuation allowance % % % Adjustment to carrying value % % % Foreign dividends and IRC Sec. 956 inclusions, net of foreign tax deduction % % % Non-deductible expenses and other items % % % Effective tax rate % % % The major tax ‑effected components of the deferred tax assets and liabilities are as follows (in thousands): Year Ended December 31, 2014 2013 2012 Deferred income tax assets related to: Deferred tax asset - current Intangibles $ — $ $ Net operating losses Stock compensation expense Accounts receivable allowances Accrued and prepaid expenses Long-term debt — Other Tax credits — — Property, equipment and leased assets — Valuation allowance Total deferred income tax assets $ $ $ Deferred income tax liabilities related to: Property, equipment and leased assets $ — $ — Intangibles — — Other Total deferred income tax liabilities $ $ Deferred income taxes, net $ $ $ The following is a tabular reconciliation of the total amounts of unrecognized tax benefits (in thousands): Year Ended December 31, 2014 2013 2012 Unrecognized tax benefit at the beginning of the period Gross increases - tax positions in prior period $ — $ — $ — Gross decreases - tax positions in prior period — — — Gross increases - tax positions in current period — — Settlements — — — Unrecognized tax benefit at the end of the period $ $ — $ — For all of our investments in foreign subsidiaries, except for GCA (Macau), deferred taxes have not been provided on unrepatriated foreign earnings. Unrepatriated earnings were approximately $11.7 million as of December 31, 2014. These earnings were considered permanently reinvested, as it was management’s intention to reinvest foreign earnings in foreign operations. We project sufficient cash flow in the U.S. and we do not need to repatriate these foreign earnings to finance U.S. operations. As a result of certain realization requirements under the accounting guidance on share ‑based payments, the table of deferred tax assets and liabilities shown above does not include certain deferred tax assets that arose directly from tax deductions related to equity compensation in excess of compensation recognized for financial reporting at December 31, 2014, 2013 and 2012, respectively. Equity will be increased by $4.4 million if, and when, such deferred tax assets are ultimately realized. We use the accounting guidance on income taxes ordering for purposes of determining when excess tax benefits have been realized. We had $179.9 million, or $63.0 million, tax ‑effected, of accumulated federal net operating losses as of December 31, 2014. The net operating losses can be carried forward and applied to offset taxable income for 20 years and will expire starting in 2025. We had tax ‑effected state net operating loss carry forwards of approximately $5.9 million as of December 31, 2014. The state net operating loss carry forwards will expire between 2015 and 2033. The determination and utilization of these state net operating loss carry forwards are dependent upon apportionment percentages and other respective state laws, which can change from year to year. As of December 31, 2014, $1. 6 million of our valuation allowance related to certain state net operating loss carry forwards which are expected to expire before utilization, due to shorter carry forward periods and decreased apportionment percentages in those states. The remaining valuation allowance of $0.7 million related to foreign net operating losses. We recognized a deferred tax asset upon our conversion from a limited liability company to a corporation on May 14, 2004. Prior to that time, all tax attributes flowed through to the members of the limited liability company. The principal component of the deferred tax asset is a difference between our assets for financial accounting and tax purposes. This difference results from a significant balance of acquired goodwill of approximately $687.4 million that was generated as part of the conversion to a corporation plus approximately $97.6 million in pre-existing goodwill carried over from periods prior to the conversion. Both of these assets are recorded for tax purposes but not for accounting purposes. This asset is amortized over 15 years for tax purposes, resulting in annual pretax income being $52.3 million lower for tax purposes than for financial accounting purposes. At an estimated blended domestic statutory tax rate of 36.3% , this results in tax payments being approximately $19.0 million less than the annual provision for income taxes shown on the income statement for financial accounting purposes, or the amount of the annual provision, if less. There is an expected aggregate of $82.3 million in cash savings over the remaining life of the portion of our deferred tax asset related to the conversion. This deferred tax asset may be subject to certain limitations. We believe that it is more likely than not that we will be able to utilize our deferred tax asset. However, the utilization of this tax asset is subject to many factors including, but not limited to, a change of control of the Company and future earnings. We have analyzed filing positions in all of the federal, state and foreign jurisdictions whe re we are required to file income tax returns, as well as all open tax years in these jurisdictions. As part of the Merger, the Company record ed $0.7 m illion of unrecognized tax benefits. Other than the unrecognized tax benefit related to the Merger, we believe that our income tax filing positions and deductions will be sustained upon audit and we do not anticipate any other adjustments that will result in a material change to our financial position. We may from time to time be assessed interest or penalties by tax jurisdictions, although any such assessments historically have been minimal and immaterial to our financial results. Our policy for recording interest and penalties associated with audits and unrecognized tax benefits is to record such items as a component of income tax expense. We are subject to taxation in the U.S. and various states and foreign jurisdictions. We have a number of federal and state income tax years still open for examination as a result of our net operating loss carry forwards. Accordingly, we are subject to examination for both U.S. federal and a few state tax returns for the years 2005 to present. For the remaining state, local and foreign jurisdictions, with few exceptions, we are no longer subject to examination by tax authorities for years before 2011 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2014 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | 19. RELATED PARTY TRANSACTIONS A member of our Board of Directors served as a member of the board of directors of a gaming company until April 2013 for which we provide various cash access products and services that are insignificant to our net income. Our Board Member received both cash and equity compensation from this gaming company in consideration for serving on its board of directors, however, none of this consideration was tied in any manner to our performance or obligations under our cash access agreements with the gaming company. In addition, our Board member was not involved in the negotiation of our cash access agreements with this gaming company. In October 2012, we entered into a long ‑term lease agreement related to office space for our corporate headquarters that we moved into during the first half of 2013, for which we engaged a brokerage firm. An executive officer of this brokerage firm is the brother of our former Chief Financial Officer. This brokerage firm received approximately $0.4 million as compensation for acting as our broker. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
SEGMENT INFORMATION | |||
SEGMENT INFORMATION | 18. SEGMENT INFORMATION Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-making group, in deciding how to allocate resources and in assessing performance. Our chief operating decision-making group consists of the Chief Executive Officer and the Chief Financial Officer. The operating segments are reviewed separately because each represents products and services that can be sold separately to our customers. Since the most recent filing of our Annual Report on Form 10-K, and in connection with the Merger, our chief operating decision-making group has determined the following to be the operating segments for which we conduct business: (a) Games, and (b) Payments. Each of these segments is monitored by our management for performance against its internal forecast and is consistent with our internal management reporting. Our chief operating decision-making group manages the business, allocates resources and measures profitability based on the Games and Payments operating segments. The Games segment provides solutions directly to gaming establishments to offer their patrons gaming entertainment related experiences including: leased gaming equipment; sales and maintenance related services of gaming equipment; gaming systems; and ancillary products and services. The Payments segment provides solutions directly to gaming establishments to offer their patrons cash access related services and products including: access to cash at gaming facilities via ATM cash withdrawals, credit card cash access transactions and point of sale debit card transactions; check-related services; fully integrated kiosks and maintenance services; compliance, audit and data software; casino credit data and reporting services and other ancillary offerings. Corporate overhead and depreciation and amortization expenses were allocated to the segments either through specific identification or based on a reasonable methodology. Our business is predominantly domestic, with no specific regional concentrations and no significant assets in foreign locations. The accounting policies of the operating segments are generally the same as those described in the summary of significant accounting policies. The following tables present segment information (in thousands): For the Three Months Ended March 31, 2015 2014 Revenues Games $ $ - Payments Total revenues $ $ Operating income Games $ $ - Payments Total operating income $ $ At March 31, At December 31, Total assets 2015 2014 Games $ $ Payments Total assets $ $ Major customers. For the three months ended March 31, 2015 and 2014, no single customer accounted for more than 10% of our revenues. Our five largest customers accounted for approximately 28% and 33% of our total revenue for the three months ended March 31, 2015 and 2014, respectively. | 18. SEGMENT INFORMATION Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-making group, in deciding how to allocate resources and in assessing performance. Our chief operating decision-making group consists of the Chief Executive Officer and the Chief Financial Officer. The operating segments are reviewed separately because each represents products and services that can be sold separately to our customers. Since the most recent filing of our Annual Report on Form 10-K, and in connection with the Merger, our chief operating decision-making group has determined the following to be the operating segments for which we conduct business: (a) Games, and (b) Payments. Each of these segments is monitored by our management for performance against its internal forecast and is consistent with our internal management reporting. Our chief operating decision-making group manages the business, allocates resources and measures profitability based on the Games and Payments operating segments. The Games segment provides solutions directly to gaming establishments to offer their patrons gaming entertainment related experiences including: leased gaming equipment; sales and maintenance related services of gaming equipment; gaming systems; and ancillary products and services. The Payments segment provides solutions directly to gaming establishments to offer their patrons cash access related services and products including: access to cash at gaming facilities via ATM cash withdrawals, credit card cash access transactions and point of sale debit card transactions; check-related services; fully integrated kiosks and maintenance services; compliance, audit and data software; casino credit data and reporting services and other ancillary offerings. Corporate overhead and depreciation and amortization expenses were allocated to the segments either through specific identification or based on a reasonable methodology. Our business is predominantly domestic, with no specific regional concentrations and no significant assets in foreign locations. The accounting policies of the operating segments are generally the same as those described in the summary of significant accounting policies. The following tables present segment information (in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, 2015 2014 2015 2014 Revenues Games $ $ — $ $ — Payments Total revenues $ $ $ $ Operating income Games $ $ — $ $ — Payments Total operating income $ $ $ $ At June 30, 2015 December 31, 2014 Total assets Games $ $ Payments Total assets $ $ Major customers. For the three and six months ended June 30, 2015 and 2014, no single customer accounted for more than 10% of our revenues. Our five largest customers accounted for approximately 28% and 30% of our total revenue for both the three and six months ended June 30, 2015 and 2014, respectively. | 20. SEGMENT INFORMATION Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision ‑making group, in deciding how to allocate resources and in assessing performance. Our chief operating decision ‑making group consists of the Chief Executive Officer and the Chief Financial Officer. The operating segments are reviewed separately because each represents products and services that can be sold separately to our customers. Since the most recent filing of our Annual Report on Form 10-K, and in connection with the Merger, our chief operating decision-making group has determined the following to be the operating segments for which we conduct business: (a) Games, and (b) Payments. Each of these segments is monitored by our management for performance against its internal forecast and is consistent with our internal management reporting. Our chief operating decision-making group manages the business, allocates resources and measures profitability based on the Games and Payments operating segments. The Games segment provides solutions directly to gaming establishments to offer their patrons gaming entertainment related experiences including: leased gaming equipment; sales and maintenance related services of gaming equipment; gaming systems; and ancillary products and services. The Payments segment provides solutions directly to gaming establishments to offer their patrons cash access related services and products including: access to cash at gaming facilities via ATM cash withdrawals, credit card cash access transactions and point of sale debit card transactions; check-related services; fully integrated kiosks and maintenance services; compliance, audit and data software; casino credit data and reporting services and other ancillary offerings. Corporate overhead and depreciation and amortization expenses were allocated to the segments either through specific identification or based on a reasonable methodology. Our business is predominantly domestic, with no specific regional concentrations and no significant assets in foreign locations. The accounting policies of the operating segments are generally the same as those described in the summary of significant accounting policies. T he following tables present segment information (in thousands): For and At the Year Ended December 31, 2014 2013 2012 Revenues Games $ $ — $ — Payments Total revenues $ $ $ Operating income Games $ $ — $ — Payments Total operating income $ $ $ Total assets Games $ $ — Payments Total assets $ $ Major customers. For the years ended December 31, 2014, 2013 and 2012, no single customer accounted for more than 10% of our revenues. Our five largest customers accounted for approximately 28% , 33% and 34% of our total revenue in 2014, 2013 and 2012, respectively. |
QUARTERLY RESULTS OF OPERATIONS
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | 12 Months Ended |
Dec. 31, 2014 | |
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | |
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | 21. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) The unaudited selected quarterly results of operations are as follows (in thousands, except for per share amounts): Quarter First Second Third Fourth(1) Year 2014 Revenues $ $ $ $ $ Operating income Net income (loss) Net income Basic earnings per share $ $ $ $ $ Diluted earnings per share $ $ $ $ $ Weighted average common shares outstanding Basic Diluted 2013 Revenues $ $ $ $ $ Operating income Net income Net income Basic earnings per share $ $ $ $ $ Diluted earnings per share $ $ $ $ $ Weighted average common shares outstanding Basic Diluted (1) Our fourth quarter results of operations include the operating results of Multimedia Games as well as the costs related to the Merger. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
SUBSEQUENT EVENTS | |||
SUBSEQUENT EVENTS | 19. SUBSEQUENT EVENTS Subsequent events were evaluated through the date of this filing. Secured Notes Refinance The terms of the Secured Notes purchase agreement stipulated that GCA must use commercially reasonable efforts to aid the purchasers in the resale of the Secured Notes. Alternatively, GCA had the ability to redeem the Secured Notes without penalty. On April 15, 2015, the Company entered into a note purchase agreement (the “Note Purchase Agreement”), among GCA, CPPIB Credit Investments III Inc. (the “Purchaser”) and Deutsche Bank Trust Company Americas, as collateral agent (the “Collateral Agent”) and issued $335.0 million in aggregate principal amount of its 7.25% Senior Secured Notes due 2021 (the “Refinanced Secured Notes”) in a private offering to the Purchaser. With the proceeds from the issuance of the Refinanced Secured Notes, GCA redeemed, in full, the Company’s outstanding Secured Notes from the note holders thereof in accordance with the terms of the indenture governing the Secured Notes. In connection with this transaction during the second quarter of 2015, we will expense approximately $12.9 million of related debt issuance costs and fees to “Loss on extinguishment of debt” associated with the redeemed Senior Secured Notes that were outstanding prior to the refinance transaction. In connection with the Refinanced Secured Notes and pursuant to the terms of the Note Purchase Agreement, the Company issued to the Purchaser a warrant to purchase 700,000 shares of Holdings’ common stock, with an exercise price equal to $9.88 per share, representing a 30% premium to the volume-weighted average price of Holdings’ common stock for the ten trading days prior to the issuance of the warrant. The warrant expires on the sixth anniversary of the date of issuance. The number of shares issuable pursuant to the warrant and the warrant exercise price are subject to adjustment for stock splits, reverse stock splits, stock dividends, mergers and certain other events. Unsecured Notes Syndication In connection with the terms of the Unsecured Notes purchase agreement for which GCA was required to use commercially reasonable efforts to aid the purchasers in the resale of the Unsecured Notes, the Company prepared an updated offering memorandum and participated in reasonable marketing efforts including road shows, to the extent required therein. The Unsecured Notes were syndicated in the second quarter of 2015. | 19. SUBSEQUENT EVENTS As of August 5, 2015, we had not identified, and were not aware of, any subsequent events for the three and six months ended June 30, 2015. | 22. SUBSEQUENT EVENTS Gain Contingency Settlement On January 14, 2014, we fil ed a complaint against certain d efendants alleging conspiracy in restraint of competition regarding interchange fees, monopolization by defendants in the relevant market, and attempted monopolization of the defendants in the relevant market. We demanded a trial by jury of all issues so triable. The defendants filed a motion to d ismiss on March 13, 2014. A settlement agreement was made as of January 16, 2015 and on January 22, 2015 the settlement agreement was executed and delivered for which we received $14.4 million in cash and recorded the settlement proceeds in the first quarter of 2015. |
FINANCIAL INFORMATION FOR GUARA
FINANCIAL INFORMATION FOR GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
CONDENSED CONSOLIDATING FINANCIAL INFORMATION | |||
FINANCIAL INFORMATION FOR GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES | 20. CONDENSED CONSOLIDATING FINANCIAL INFORMATION We conduct substantially all of our business through our U.S. and foreign subsidiaries. Everi Payments Inc.’s (formerly known as Global Cash Access, Inc.) (“Subsidiary Issuer”) obligations under the Unsecured Notes are fully and unconditionally guaranteed, subject to certain customary release provisions, on a joint and several basis by Everi Holdings Inc. (formerly known as Global Cash Access Holdings, Inc.) (“Parent”) and substantially all of our 100%-owned U.S. subsidiaries other than Subsidiary Issuer (the “Guarantor Subsidiaries” and, together with Parent, the “Guarantors” and each a “Guarantor” ). The guarantees of our Unsecured Notes will be released under the following customary circumstances: (i) the sale or disposition of all or substantially all of the assets of the Guarantor (by way of merger, consolidation, or otherwise) to a person that is not (either before or after giving effect to such transaction) Parent, Subsidiary Issuer or a restricted subsidiary; (ii) the sale or disposition of sufficient capital stock of the Guarantor to a person that is not (either before or after giving effect to such transaction) Parent, Subsidiary Issuer or a restricted subsidiary and the Guarantor ceases to be a restricted subsidiary of Subsidiary Issuer as a result of the sale or other disposition; (iii) the designation of the Guarantor as an unrestricted subsidiary in accordance with the Indenture; or (iv) the legal or covenant defeasance of the Unsecured Notes or the satisfaction and discharge of the Indenture. Presented below is condensed consolidating financial information for (a) Parent, (b) Subsidiary Issuer, (c) the Guarantor Subsidiaries and (d) our U.S. subsidiaries that are not Guarantor Subsidiaries and our foreign subsidiaries (collectively, the “Non-Guarantor Subsidiaries”) as of March 31, 2015 and for the three-month periods ended March 31, 2015 and 2014. The condensed consolidating financial information has been presented to show the nature of assets held and the results of operations and cash flows of Parent, Subsidiary Issuer, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries assuming that the guarantee structure of the Unsecured Notes had been in effect at the beginning of the periods presented. SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Three Months Ended March 31, 2015 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 141,410 $ 62,369 $ 3,830 $ (136 ) $ 207,473 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 110,589 14,371 2,063 — 127,023 Operating expenses — 4,191 11,359 427 (136 ) 15,841 Research and development — — 5,436 — — 5,436 Depreciation — 1,774 8,542 61 — 10,377 Amortization — 2,215 17,771 669 — 20,655 Total costs and expenses — 118,769 57,479 3,220 (136 ) 179,332 Operating income — 22,641 4,890 610 — 28,141 Other (income) expense Interest expense, net of interest income — 2,778 22,787 90 — 25,655 Equity in income of subsidiaries (469 ) (3,047 ) — — 3,516 — Total other (income) expense (469 ) (269 ) 22,787 90 3,516 25,655 Income (loss) from operations before tax 469 22,910 (17,897 ) 520 (3,516 ) 2,486 Income tax expense (benefit) — 8,706 (6,942 ) 253 — 2,017 Net income (loss) 469 14,204 (10,955 ) 267 (3,516 ) 469 Foreign currency translation (873 ) — — (873 ) 873 (873 ) Comprehensive (loss) income $ (404 ) $ 14,204 $ (10,955 ) $ (606 ) $ (2,643 ) $ (404 ) SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Three Months Ended March 31, 2014 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 140,321 $ 6,866 $ 3,553 $ (169 ) $ 150,571 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 111,338 2,043 (143 ) — 113,238 Operating expenses — 18,747 819 642 (169 ) 20,039 Depreciation — 1,883 1 43 — 1,927 Amortization — 2,230 — 124 — 2,354 Total costs and expenses — 134,198 2,863 666 (169 ) 137,558 Operating income — 6,123 4,003 2,887 — 13,013 Other (income) expense Interest expense, net of interest income — 2,034 — (488 ) — 1,546 Equity in income of subsidiaries (7,489 ) (5,082 ) — — 12,571 — Total other (income) expense (7,489 ) (3,048 ) — (488 ) 12,571 1,546 Income from operations before tax 7,489 9,171 4,003 3,375 (12,571 ) 11,467 Income tax expense — 1,682 1,401 895 — 3,978 Net income 7,489 7,489 2,602 2,480 (12,571 ) 7,489 Foreign currency translation 1 — — 1 (1 ) 1 Comprehensive income $ 7,490 $ 7,489 $ 2,602 $ 2,481 $ (12,572 ) $ 7,490 SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands) At March 31, 2015 Parent Subsidiary Guarantor Non- Eliminations Total ASSETS Current assets Cash and cash equivalents $ — $ 120,435 $ 13,315 $ 11,263 $ — $ 145,013 Settlement receivables — 26,950 — 2,837 — 29,787 Trade receivables, net — 6,294 32,925 1 — 39,220 Other receivables — 3,846 24,870 113 (8,437 ) 20,392 Inventory — 9,312 13,738 — — 23,050 Prepaid expenses and other assets — 7,836 2,523 8,530 — 18,889 Deferred tax asset — 2,743 6,847 — — 9,590 Intercompany balances — 32,512 155,182 1,473 (189,167 ) — Total current assets — 209,928 249,400 24,217 (197,604 ) 285,941 Non-current assets Property, equipment and leasehold improvements, net — 17,409 84,865 485 — 102,759 Goodwill — 148,278 708,922 656 — 857,856 Other intangible assets, net — 23,260 388,281 8,562 — 420,103 Other receivables, non-current — 4,411 4,182 — — 8,593 Investment in subsidiaries 233,859 149,599 — 86 (383,544 ) — Deferred tax asset, non-current — 76,460 22,467 — (98,927 ) — Other assets, non-current — 46,090 3,413 509 — 50,012 Intercompany balances — 1,131,876 — — (1,131,876 ) — Total non-current assets 233,859 1,597,383 1,212,130 10,298 (1,614,347 ) 1,439,323 Total assets $ 233,859 $ 1,807,311 $ 1,461,530 $ 34,515 $ (1,811,951 ) $ 1,725,264 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Settlement liabilities $ — $ 136,839 $ 297 $ 4,513 $ — $ 141,649 Accounts payable and accrued expenses — 85,689 35,216 1,075 (8,437 ) 113,543 Current portion of long-term debt — 10,000 — — — 10,000 Intercompany balances — 156,536 22,949 9,682 (189,167 ) — Total current liabilities — 389,064 58,462 15,270 (197,604 ) 265,192 Non-current liabilities Deferred tax liability, non-current — 1,071 156,957 — (98,927 ) 59,101 Long-term debt, less current portion — 1,161,731 — — — 1,161,731 Other accrued expenses and liabilities — 4,924 457 — — 5,381 Intercompany balances — — 1,131,876 — (1,131,876 ) — Total non-current liabilities — 1,167,726 1,289,290 — (1,230,803 ) 1,226,213 Total liabilities — 1,556,790 1,347,752 15,270 (1,428,407 ) 1,491,405 Stockholders’ Equity Common stock 91 — — — — 91 Convertible preferred stock — — — — — — Additional paid-in capital 248,491 87,202 2,269 21,110 (110,581 ) 248,491 Retained earnings (deficit) 160,621 162,623 111,509 (738 ) (273,394 ) 160,621 Accumulated other comprehensive income (loss) 696 696 — (1,127 ) 431 696 Treasury stock, at cost (176,040 ) — — — — (176,040 ) Total stockholders’ equity 233,859 250,521 113,778 19,245 (383,544 ) 233,859 Total liabilities and stockholders’ equity $ 233,859 $ 1,807,311 $ 1,461,530 $ 34,515 $ (1,811,951 ) $ 1,725,264 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Three Months Ended March 31, 2015 Parent Subsidiary Guarantor Non- Eliminations Total Cash flows from operating activities Net income (loss) $ 469 $ 14,204 $ (10,955 ) $ 267 $ (3,516 ) $ 469 Adjustments to reconcile net income (loss) to cash (used in) provided by operating activities: Depreciation and amortization — 3,989 26,313 730 — 31,032 Amortization of financing costs — 2,072 — — — 2,072 Loss on sale or disposal of assets — 2 — — — 2 Accretion of contract rights — — 2,104 — — 2,104 Provision for bad debts — — 2,266 — — 2,266 Equity in income of subsidiaries (469 ) (3,047 ) — — 3,516 — Stock-based compensation — 1,674 — — 119 1,793 Other non-cash items — — 231 — — 231 Changes in operating assets and liabilities: Net settlement receivables and liabilities — 38,671 157 (2,855 ) — 35,973 Other changes in operating assets and liabilities (5 ) 13,617 (3,350 ) (269 ) (119 ) 9,874 Net cash (used in) provided by operating activities (5 ) 71,182 16,766 (2,127 ) — 85,816 Cash flows from investing activities Capital expenditures — (2,434 ) (9,902 ) (280 ) — (12,616 ) Proceeds from sale of fixed assets — 1 — — — 1 Advances under development and placement agreements — — (1,255 ) — — (1,255 ) Repayments under development agreements — — 1,217 — — 1,217 Changes in restricted cash and cash equivalents — 59 — — — 59 Intercompany investing activities (1,023 ) 164 — (48 ) 907 — Net cash used in investing activities (1,023 ) (2,210 ) (9,940 ) (328 ) 907 (12,594 ) Cash flows from financing activities Repayments of credit facility — (17,500 ) — — — (17,500 ) Debt issuance costs — (252 ) — — — (252 ) Proceeds from exercise of stock options 1,048 — — — — 1,048 Purchase of treasury stock (20 ) — — — — (20 ) Intercompany financing activities — 1,072 — (165 ) (907 ) — Net cash provided by (used in) financing activities 1,028 (16,680 ) — (165 ) (907 ) (16,724 ) Effect of exchange rates on cash — — — (580 ) — (580 ) Cash and cash equivalents Net increase (decrease) for the period — 52,292 6,826 (3,200 ) — 55,918 Balance, beginning of the period — 68,143 6,489 14,463 — 89,095 Balance, end of the period $ — $ 120,435 $ 13,315 $ 11,263 $ — $ 145,013 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Three Months Ended March 31, 2014 Parent Subsidiary Guarantor Non- Eliminations Total Cash flows from operating activities Net income $ 7,489 $ 7,489 $ 2,602 $ 2,480 $ (12,571 ) $ 7,489 Adjustments to reconcile net income to cash (used in) provided by operating activities: Depreciation and amortization — 4,113 1 167 — 4,281 Amortization of financing costs — 471 — — — 471 Loss on sale or disposal of assets — 124 — — — 124 Provision for bad debts — — 2,014 — — 2,014 Equity in income of subsidiaries (7,489 ) (5,082 ) — — 12,571 — Stock-based compensation — 2,057 — — — 2,057 Changes in operating assets and liabilities: Net settlement receivables and liabilities — 63,982 218 (1,011 ) — 63,189 Other changes in operating assets and liabilities (51 ) 18,829 (4,360 ) (7,446 ) — 6,972 Net cash (used in) provided by operating activities (51 ) 91,983 475 (5,810 ) — 86,597 Cash flows from investing activities Capital expenditures — (2,707 ) (93 ) (225 ) — (3,025 ) Proceeds from sale of fixed assets — 192 — — — 192 Changes in restricted cash and cash equivalents — (46 ) — — — (46 ) Intercompany investing activities 378 (9,663 ) — (1,590 ) 10,875 — Net cash provided by (used in) investing activities 378 (12,224 ) (93 ) (1,815 ) 10,875 (2,879 ) Cash flows from financing activities Repayments against prior credit facility — (3,000 ) — — — (3,000 ) Proceeds from exercise of stock options 2,440 — — — — 2,440 Purchase of treasury stock (2,767 ) — — — — (2,767 ) Intercompany financing activities — 987 — 9,888 (10,875 ) — Net cash (used in) provided by financing activities (327 ) (2,013 ) — 9,888 (10,875 ) (3,327 ) Effect of exchange rates on cash — — — (79 ) — (79 ) Cash and cash equivalents Net increase for the period 77,746 382 2,184 — 80,312 Balance, beginning of the period — 100,573 2,149 11,532 — 114,254 Balance, end of the period $ — $ 178,319 $ 2,531 $ 13,716 $ — $ 194,566 | 20. CONDENSED CONSOLIDATING FINANCIAL INFORMATION We conduct substantially all of our business through our U.S. and foreign subsidiaries. Everi Payments Inc.’s (formerly known as Global Cash Access, Inc.) (“Subsidiary Issuer”) obligations under the Unsecured Notes are fully and unconditionally guaranteed, subject to certain customary release provisions, on a joint and several basis by Everi Holdings Inc. (formerly known as Global Cash Access Holdings, Inc.) (“Parent”) and substantially all of our 100%-owned U.S. subsidiaries other than Subsidiary Issuer (the “Guarantor Subsidiaries” and, together with Parent, the “Guarantors” and each a “Guarantor” ). The guarantees of our Unsecured Notes will be released under the following customary circumstances: (i) the sale or disposition of all or substantially all of the assets of the Guarantor (by way of merger, consolidation, or otherwise) to a person that is not (either before or after giving effect to such transaction) Parent, Subsidiary Issuer or a restricted subsidiary; (ii) the sale or disposition of sufficient capital stock of the Guarantor to a person that is not (either before or after giving effect to such transaction) Parent, Subsidiary Issuer or a restricted subsidiary and the Guarantor ceases to be a restricted subsidiary of Subsidiary Issuer as a result of the sale or other disposition; (iii) the designation of the Guarantor as an unrestricted subsidiary in accordance with the Indenture; or (iv) the legal or covenant defeasance of the Unsecured Notes or the satisfaction and discharge of the Indenture. Presented below is condensed consolidating financial information for (a) Parent, (b) Subsidiary Issuer, (c) the Guarantor Subsidiaries and (d) our U.S. subsidiaries that are not Guarantor Subsidiaries and our foreign subsidiaries (collectively, the “Non-Guarantor Subsidiaries”) as of June 30, 2015 and for the three- and six-month periods ended June 30, 2015 and 2014. The condensed consolidating financial information has been presented to show the nature of assets held and the results of operations and cash flows of Parent, Subsidiary Issuer, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries assuming that the guarantee structure of the Unsecured Notes had been in effect at the beginning of the periods presented. SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Three Months Ended June 30, 2015 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 139,818 $ 62,440 $ 4,256 $ (150 ) $ 206,364 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 110,659 14,375 2,188 — 127,222 Operating expenses — 18,809 7,736 452 (150 ) 26,847 Research and development — — 4,470 — — 4,470 Depreciation — 1,787 8,880 50 — 10,717 Amortization — 2,193 17,964 615 — 20,772 Total costs and expenses — 133,448 53,425 3,305 (150 ) 190,028 Operating income — 6,370 9,015 951 — 16,336 Other expense (income) Interest expense, net of interest income — 1,834 23,036 88 — 24,958 Equity in loss (income) of subsidiaries 12,741 (3,665 ) — — (9,076 ) — Loss on extinguishment of debt — 12,977 — — — 12,977 Total other expense (income) 12,741 11,146 23,036 88 (9,076 ) 37,935 (Loss) income from operations before tax (12,741 ) (4,776 ) (14,021 ) 863 9,076 (21,599 ) Income tax (benefit) expense — (3,684 ) (5,502 ) 328 — (8,858 ) Net (loss) income (12,741 ) (1,092 ) (8,519 ) 535 9,076 (12,741 ) Foreign currency translation 811 — — 811 (811 ) 811 Comprehensive (loss) income $ (11,930 ) $ (1,092 ) $ (8,519 ) $ 1,346 $ 8,265 $ (11,930 ) SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Three Months Ended June 30, 2014 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 134,198 $ 7,044 $ 3,898 $ (194 ) $ 144,946 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 104,918 2,243 2,214 — 109,375 Operating expenses — 20,000 778 677 (194 ) 21,261 Depreciation — 1,870 1 48 — 1,919 Amortization — 2,644 — 125 — 2,769 Total costs and expenses — 129,432 3,022 3,064 (194 ) 135,324 Operating income — 4,766 4,022 834 — 9,622 Other (income) expense Interest expense, net of interest income — 1,990 — 93 — 2,083 Equity in income of subsidiaries (4,724 ) (3,343 ) — — 8,067 — Total other (income) expense (4,724 ) (1,353 ) — 93 8,067 2,083 Income from operations before tax 4,724 6,119 4,022 741 (8,067 ) 7,539 Income tax expense — 1,187 1,413 215 — 2,815 Net income 4,724 4,932 2,609 526 (8,067 ) 4,724 Foreign currency translation 381 — — 381 (381 ) 381 Comprehensive income $ 5,105 $ 4,932 $ 2,609 $ 907 $ (8,448 ) $ 5,105 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Six Months Ended June 30, 2015 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 281,228 $ 124,809 $ 8,086 $ (286 ) $ 413,837 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 221,248 28,746 4,251 — 254,245 Operating expenses — 23,000 19,095 879 (286 ) 42,688 Research and development — — 9,906 — — 9,906 Depreciation — 3,561 17,422 111 — 21,094 Amortization — 4,408 35,735 1,284 — 41,427 Total costs and expenses — 252,217 110,904 6,525 (286 ) 369,360 Operating income — 29,011 13,905 1,561 — 44,477 Other expense (income) Interest expense, net of interest income — 4,612 45,823 178 — 50,613 Equity in loss (income) of subsidiaries 12,272 (6,712 ) — — (5,560 ) — Loss on extinguishment of debt — 12,977 — — — 12,977 Total other expense (income) 12,272 10,877 45,823 178 (5,560 ) 63,590 (Loss) income from operations before tax (12,272 ) 18,134 (31,918 ) 1,383 5,560 (19,113 ) Income tax expense (benefit) — 5,022 (12,444 ) 581 — (6,841 ) Net (loss) income (12,272 ) 13,112 (19,474 ) 802 5,560 (12,272 ) Foreign currency translation (62 ) — — (62 ) 62 (62 ) Comprehensive (loss) income $ (12,334 ) $ 13,112 $ (19,474 ) $ 740 $ 5,622 $ (12,334 ) SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Six Months Ended June 30, 2014 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 274,519 $ 13,910 $ 7,451 $ (363 ) $ 295,517 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 216,257 4,286 2,071 — 222,614 Operating expenses — 38,746 1,597 1,319 (363 ) 41,299 Depreciation — 3,753 2 91 — 3,846 Amortization — 4,874 — 249 — 5,123 Total costs and expenses — 263,630 5,885 3,730 (363 ) 272,882 Operating income — 10,889 8,025 3,721 — 22,635 Other (income) expense Interest expense, net of interest income — 4,024 — (395 ) — 3,629 Equity in income of subsidiaries (12,213 ) (8,425 ) — — 20,638 — Total other (income) expense (12,213 ) (4,401 ) — (395 ) 20,638 3,629 Income from operations before tax 12,213 15,290 8,025 4,116 (20,638 ) 19,006 Income tax expense — 2,869 2,814 1,110 — 6,793 Net income 12,213 12,421 5,211 3,006 (20,638 ) 12,213 Foreign currency translation 382 — — 382 (382 ) 382 Comprehensive income $ 12,595 $ 12,421 $ 5,211 $ 3,388 $ (21,020 ) $ 12,595 SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands) At June 30, 2015 Parent Subsidiary Guarantor Non- Eliminations Total ASSETS Current assets Cash and cash equivalents $ — $ 136,790 $ 16,523 $ 11,704 $ — $ 165,017 Settlement receivables — 19,721 — 3,995 — 23,716 Trade receivables, net — 5,989 35,845 — — 41,834 Other receivables — 3,183 23,736 145 (15,692 ) 11,372 Inventory — 10,075 13,378 — — 23,453 Prepaid expenses and other assets — 7,752 3,789 9,549 — 21,090 Deferred tax asset — 2,743 6,848 — — 9,591 Intercompany balances — 39,338 160,054 1,539 (200,931 ) — Total current assets — 225,591 260,173 26,932 (216,623 ) 296,073 Non-current assets Property, equipment and leasehold improvements, net — 19,467 84,649 405 — 104,521 Goodwill — 148,076 708,923 671 — 857,670 Other intangible assets, net — 22,589 373,600 7,943 — 404,132 Other receivables, non-current — 3,994 3,814 — — 7,808 Investment in subsidiaries 226,972 153,927 — 85 (380,984 ) — Deferred tax asset, non-current — 85,754 22,467 — (108,221 ) — Other assets, non-current — 32,453 3,923 539 — 36,915 Intercompany balances — 1,133,561 — — (1,133,561 ) — Total non-current assets 226,972 1,599,821 1,197,376 9,643 (1,622,766 ) 1,411,046 Total assets $ 226,972 $ 1,825,412 $ 1,457,549 $ 36,575 $ (1,839,389 ) $ 1,707,119 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Settlement liabilities $ — $ 134,604 $ 231 $ 6,376 $ — $ 141,211 Accounts payable and accrued expenses — 101,269 29,670 1,448 (15,692 ) 116,695 Current portion of long-term debt — 10,000 — — — 10,000 Intercompany balances — 161,593 30,907 8,431 (200,931 ) — Total current liabilities — 407,466 60,808 16,255 (216,623 ) 267,906 Non-current liabilities Deferred tax liability, non-current — 1,072 156,957 — (108,221 ) 49,808 Long-term debt, less current portion — 1,157,506 — — — 1,157,506 Other accrued expenses and liabilities — 4,487 440 — — 4,927 Intercompany balances — — 1,133,561 — (1,133,561 ) — Total non-current liabilities — 1,163,065 1,290,958 — (1,241,782 ) 1,212,241 Total liabilities — 1,570,531 1,351,766 16,255 (1,458,405 ) 1,480,147 Stockholders’ Equity Common stock 91 — — — — 91 Convertible preferred stock — — — — — — Additional paid-in capital 253,555 91,843 2,792 21,107 (115,742 ) 253,555 Retained earnings (deficit) 147,879 161,531 102,991 (205 ) (264,317 ) 147,879 Accumulated other comprehensive income (loss) 1,507 1,507 — (582 ) (925 ) 1,507 Treasury stock, at cost (176,060 ) — — — — (176,060 ) Total stockholders’ equity 226,972 254,881 105,783 20,320 (380,984 ) 226,972 Total liabilities and stockholders’ equity $ 226,972 $ 1,825,412 $ 1,457,549 $ 36,575 $ (1,839,389 ) $ 1,707,119 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Six Months Ended June 30, 2015 Parent Subsidiary Guarantor Non- Eliminations Total Cash flows from operating activities Net (loss) income $ (12,272 ) $ 13,112 $ (19,474 ) $ 802 $ 5,560 $ (12,272 ) Adjustments to reconcile net (loss) income to cash provided by (used in)operating activities: Depreciation and amortization — 7,969 53,157 1,395 — 62,521 Amortization of financing costs — 3,730 — — — 3,730 (Gain) loss on sale or disposal of assets — (13 ) 387 — — 374 Accretion of contract rights — — 4,092 — — 4,092 Provision for bad debts — — 4,370 — — 4,370 Loss on early extinguishment of debt — 12,977 — — — 12,977 Equity in loss (income) of subsidiaries 12,272 (6,712 ) — — (5,560 ) — Stock-based compensation — 3,432 522 — — 3,954 Other non-cash items — 76 (96 ) — — (20 ) Changes in operating assets and liabilities: Net settlement receivables and liabilities — 43,663 91 (1,970 ) — 41,784 Other changes in operating assets and liabilities 28 15,839 (10,159 ) (827 ) — 4,881 Net cash provided by (used in) operating activities 28 94,073 32,890 (600 ) — 126,391 Cash flows from investing activities Acquisitions, net of cash acquired — (2,257 ) — — — (2,257 ) Capital expenditures — (5,387 ) (23,993 ) (280 ) — (29,660 ) Proceeds from sale of fixed assets — 29 — — — 29 Repayments under development agreements — — 2,392 — — 2,392 Advances under development and placement agreements — — (1,255 ) — — (1,255 ) Changes in restricted cash and cash equivalents — 60 — — — 60 Intercompany investing activities (3,907 ) 5,423 — (106 ) (1,410 ) — Net cash used in investing activities (3,907 ) (2,132 ) (22,856 ) (386 ) (1,410 ) (30,691 ) Cash flows from financing activities Repayments of credit facility — (5,000 ) — — — (5,000 ) Repayments of secured notes — (350,000 ) — — — (350,000 ) Proceeds from issuance of secured notes — 335,000 — — — 335,000 Debt issuance costs — (1,154 ) — — — (1,154 ) Issuance of warrants 2,246 (2,246 ) — — — — Proceeds from exercise of stock options 1,673 — — — — 1,673 Purchase of treasury stock (40 ) — — — — (40 ) Intercompany financing activities — 106 — (1,516 ) 1,410 — Net cash provided by (used in) financing activities 3,879 (23,294 ) — (1,516 ) 1,410 (19,521 ) Effect of exchange rates on cash — — — (257 ) — (257 ) Cash and cash equivalents Net increase (decrease) for the period — 68,647 10,034 (2,759 ) — 75,922 Balance, beginning of the period — 68,143 6,489 14,463 — 89,095 Balance, end of the period $ — $ 136,790 $ 16,523 $ 11,704 $ — $ 165,017 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Six Months Ended June 30, 2014 Parent Subsidiary Guarantor Non- Eliminations Total Cash flows from operating activities Net income $ 12,213 $ 12,421 $ 5,211 $ 3,006 $ (20,638 ) $ 12,213 Adjustments to reconcile net income to cash (used in) provided by operating activities: Depreciation and amortization — 8,627 2 340 — 8,969 Amortization of financing costs — 942 — — — 942 Gain on sale or disposal of assets — (21 ) — — — (21 ) Provision for bad debts — — 4,229 — — 4,229 Equity in income of subsidiaries (12,213 ) (8,425 ) — — 20,638 — Stock-based compensation — 5,409 — — — 5,409 Changes in operating assets and liabilities: Net settlement receivables and liabilities — 41,722 192 896 — 42,810 Other changes in operating assets and liabilities (31 ) 17,615 (9,289 ) (7,417 ) — 878 Net cash (used in) provided by operating activities (31 ) 78,290 345 (3,175 ) — 75,429 Cash flows from investing activities Acquisitions, net of cash acquired — (11,845 ) — — — (11,845 ) Capital expenditures — (6,977 ) (203 ) (313 ) — (7,493 ) Proceeds from sale of fixed assets — 213 — — — 213 Changes in restricted cash and cash equivalents — (45 ) — — — (45 ) Intercompany investing activities 2,022 (11,622 ) — (1,594 ) 11,194 — Net cash provided by (used in) investing activities 2,022 (30,276 ) (203 ) (1,907 ) 11,194 (19,170 ) Cash flows from financing activities Repayments of prior credit facility — (7,000 ) — — — (7,000 ) Proceeds from exercise of stock options 4,613 — — — — 4,613 Purchase of treasury stock (6,604 ) — — — — (6,604 ) Intercompany financing activities — 1,188 — 10,006 (11,194 ) — Net cash (used in) provided by financing activities (1,991 ) (5,812 ) — 10,006 (11,194 ) (8,991 ) Effect of exchange rates on cash — — — 476 — 476 Cash and cash equivalents Net increase for the period — 42,202 142 5,400 — 47,744 Balance, beginning of the period — 100,573 2,149 11,532 — 114,254 Balance, end of the period $ — $ 142,775 $ 2,291 $ 16,932 $ — $ 161,998 | 23. CONDENSED We conduct substantially all of our business through our U.S. and foreign subsidiaries. Everi Payments Inc.’s (formerly known as Global Cash Access, Inc.) (“Subsidiary Issuer”) obligations under the Unsecured Notes are fully and unconditionally guaranteed, subject to certain customary release provisions, on a joint and several basis by Everi Holdings Inc. (formerly known as Global Cash Access Holdings, Inc.) (“Parent”) and substantially all of our 100%-owned U.S. subsidiaries other than Subsidiary Issuer (the “Guarantor Subsidiaries” and, together with Parent, the “Guarantors” and each a “Guarantor” ). The guarantees of our Unsecured Notes will be released under the following customary circumstances: (i) the sale or disposition of all or substantially all of the assets of the Guarantor (by way of merger, consolidation, or otherwise) to a person that is not (either before or after giving effect to such transaction) Parent, Subsidiary Issuer or a restricted subsidiary; (ii) the sale or disposition of sufficient capital stock of the Guarantor to a person that is not (either before or after giving effect to such transaction) Parent, Subsidiary Issuer or a restricted subsidiary and the Guarantor ceases to be a restricted subsidiary of Subsidiary Issuer as a result of the sale or other disposition; (iii) the designation of the Guarantor as an unrestricted subsidiary in accordance with the Indenture; or (iv) the legal or covenant defeasance of the Unsecured Notes or the satisfaction and discharge of the Indenture. Presented below is condensed consolidating financial information for (a) Parent, (b) Subsidiary Issuer, (c) the Guarantor Subsidiaries and (d) our U.S. subsidiaries that are not Guarantor Subsidiaries and our foreign subsidiaries (collectively, the “Non-Guarantor Subsidiaries”) as of December 31, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012. The condensed consolidating financial information has been presented to show the nature of assets held and the results of operations and cash flows of Parent, Subsidiary Issuer, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries assuming that the guarantee structure of the Unsecured Notes had been in effect at the beginning of the periods presented. SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Year Ended December 31, 2014 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total Revenues $ — $ 542,206 $ 35,689 $ 15,891 $ (733 ) $ 593,053 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 422,544 10,864 6,663 — 440,071 Operating expenses — 88,087 5,719 2,379 (733 ) 95,452 Research and development — — 804 — — 804 Depreciation — 7,428 1,134 183 — 8,745 Amortization — 11,180 2,454 565 — 14,199 Total costs and expenses — 529,239 20,975 9,790 (733 ) 559,271 Operating income — 12,967 14,714 6,101 — 33,782 Other (income) expense Interest expense, net of interest income — 7,675 3,290 (209 ) — 10,756 Equity in income of subsidiaries (12,140 ) (15,218 ) — — 27,358 — Loss on extinguishment of debt — 2,523 202 — — 2,725 Total other (income) expense (12,140 ) (5,020 ) 3,492 (209 ) 27,358 13,481 Income from operations before tax 12,140 17,987 11,222 6,310 (27,358 ) 20,301 Income tax expense — 2,801 3,784 1,576 — 8,161 Net income 12,140 15,186 7,438 4,734 (27,358 ) 12,140 Foreign currency translation (1,258 ) — — (1,258 ) 1,258 (1,258 ) Comprehensive income $ 10,882 $ 15,186 $ 7,438 $ 3,476 $ (26,100 ) $ 10,882 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Year Ended December 31, 2013 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total Revenues $ — $ 541,002 $ 28,277 $ 13,838 $ (673 ) $ 582,444 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 424,129 7,905 7,760 — 439,794 Operating expenses — 71,623 3,445 2,167 (673 ) 76,562 Depreciation — 7,186 1 163 — 7,350 Amortization — 9,217 — 371 — 9,588 Total costs and expenses — 512,155 11,351 10,461 (673 ) 533,294 Operating income — 28,847 16,926 3,377 — 49,150 Other (income) expense Interest expense, net of interest income — 10,342 — (77 ) — 10,265 Equity in income of subsidiaries (24,398 ) (13,596 ) — — 37,994 — Total other (income) expense (24,398 ) (3,254 ) — (77 ) 37,994 10,265 Income from operations before tax 24,398 32,101 16,926 3,454 (37,994 ) 38,885 Income tax expense — 7,703 5,924 860 — 14,487 Net income 24,398 24,398 11,002 2,594 (37,994 ) 24,398 Foreign currency translation 269 — — 269 (269 ) 269 Comprehensive income $ 24,667 $ 24,398 $ 11,002 $ 2,863 $ (38,263 ) $ 24,667 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Year Ended December 31, 2012 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total Revenues $ — $ 556,376 $ 18,623 $ 10,001 $ (514 ) $ 584,486 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 426,183 3,376 6,500 — 436,059 Operating expenses — 72,551 1,880 1,889 (514 ) 75,806 Depreciation — 6,617 5 221 — 6,843 Amortization — 9,543 — 253 — 9,796 Total costs and expenses — 514,894 5,261 8,863 (514 ) 528,504 Operating income — 41,482 13,362 1,138 — 55,982 Other (income) expense Interest expense, net of interest income — 15,591 — (72 ) — 15,519 Equity in income of subsidiaries (25,689 ) (9,546 ) — — 35,235 — Total other (income) expense (25,689 ) 6,045 — (72 ) 35,235 15,519 Income from operations before tax 25,689 35,437 13,362 1,210 (35,235 ) 40,463 Income tax expense — 9,748 4,677 349 — 14,774 Net income 25,689 25,689 8,685 861 (35,235 ) 25,689 Foreign currency translation 218 — — 218 (218 ) 218 Comprehensive income $ 25,907 $ 25,689 $ 8,685 $ 1,079 $ (35,453 ) $ 25,907 SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands) At December 31, 2014 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total ASSETS Current assets Cash and cash equivalents $ — $ 68,143 $ 6,489 $ 14,463 $ — $ 89,095 Settlement receivables — 40,157 — 3,131 — 43,288 Trade Receivables, net — 6,578 31,116 3 — 37,697 Other receivables — 3,416 16,992 145 — 20,553 Inventory — 10,595 16,568 — — 27,163 Prepaid expenses and other assets — 7,143 2,821 9,024 — 18,988 Deferred tax asset — 2,743 6,848 — — 9,591 Intercompany balances — 18,038 151,179 1,623 (170,840 ) — Total current assets — 156,813 232,013 28,389 (170,840 ) 246,375 Non-current assets Property, equipment and leasehold improvements, net — 17,864 87,898 323 — 106,085 Goodwill — 148,278 708,922 713 — 857,913 Other intangible assets, net — 24,771 402,816 9,198 — 436,785 Other receivables, non-current — 4,411 4,773 — — 9,184 Investment in subsidiaries 231,473 147,195 — 86 (378,754 ) — Deferred tax asset, non-current — 78,229 — — (78,229 ) — Other assets, non-current — 47,508 3,366 69 — 50,943 Intercompany balances — 1,130,380 — — (1,130,380 ) — Total non-current assets 231,473 1,598,636 1,207,775 10,389 (1,587,363 ) 1,460,910 Total assets $ 231,473 $ 1,755,449 $ 1,439,788 $ 38,778 $ (1,758,203 ) $ 1,707,285 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Settlement liabilities $ — $ 111,375 $ 140 $ 7,642 $ — $ 119,157 Accounts payable and accrued expenses — 61,544 41,395 1,729 — 104,668 Current portion of long-term debt — 10,000 — — — 10,000 Intercompany balances — 152,802 8,159 9,879 (170,840 ) — Total current liabilities — 335,721 49,694 19,250 (170,840 ) 233,825 Non-current liabilities Deferred tax liability, non-current — 1,072 134,490 — (78,229 ) 57,333 Long-term debt, less current portion — 1,178,787 — — — 1,178,787 Other accrued expenses and liabilities — 5,377 490 — — 5,867 Intercompany balances — — 1,130,380 — (1,130,380 ) — Total non-current liabilities — 1,185,236 1,265,360 — (1,208,609 ) 1,241,987 Total liabilities — 1,520,957 1,315,054 19,250 (1,379,449 ) 1,475,812 Stockholders’ Equity Common stock 90 — — — — 90 Additional paid-in capital 245,682 69,654 2,269 21,115 (93,038 ) 245,682 Retained earnings (deficit) 160,152 163,269 122,465 (1,006 ) (284,728 ) 160,152 Accumulated other comprehensive income (loss) 1,569 1,569 — (581 ) (988 ) 1,569 Treasury stock, at cost (176,020 ) — — — — (176,020 ) Total stockholders’ equity 231,473 234,492 124,734 19,528 (378,754 ) 231,473 Total liabilities and stockholders’ equity $ 231,473 $ 1,755,449 $ 1,439,788 $ 38,778 $ (1,758,203 ) $ 1,707,285 SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands) At December 31, 2013 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total ASSETS Current assets Cash and cash equivalents $ — $ 100,573 $ 2,149 $ 11,532 $ — $ 114,254 Settlement receivables — 34,458 — 3,807 — 38,265 Trade receivables, net — 9,030 2,622 6 — 11,658 Other receivables — 4,451 — 154 — 4,605 Inventory — 9,413 — — — 9,413 Prepaid expenses and other assets — 10,300 20 6,354 — 16,674 Deferred tax asset — 3,102 — — — 3,102 Intercompany balances — 20,005 135,542 — (155,547 ) — Total current assets — 191,332 140,333 21,853 (155,547 ) 197,971 Non-current assets Property, equipment and leasehold improvements, net — 18,282 56 372 — 18,710 Goodwill — 139,839 39,470 775 — 180,084 Other intangible assets, net — 30,229 499 807 — 31,535 Other receivables, non-current — 699 — — — 699 Investment in subsidiaries 218,604 113,350 — — (331,954 ) — Deferred tax asset, non-current — 88,253 — — (311 ) 87,942 Other assets, non-current — 10,311 — 75 — 10,386 Intercompany balances — 61,936 — 1,572 (63,508 ) — Total non-current assets 218,604 462,899 40,025 3,601 (395,773 ) 329,356 Total assets $ 218,604 $ 654,231 $ 180,358 $ 25,454 $ (551,320 ) $ 527,327 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Settlement liabilities $ — $ 137,089 $ — $ 7,933 $ — $ 145,022 Accounts payable and accrued expenses — 51,324 1,398 879 — 53,601 Current portion of long-term debt — 1,030 — — — 1,030 Intercompany balances — 135,542 — 20,005 (155,547 ) — Total current liabilities — 324,985 1,398 28,817 (155,547 ) 199,653 Non-current liabilities Deferred tax liability, non-current — — — 311 (311 ) — Long-term debt, less current portion — 101,970 — — — 101,970 Other accrued expenses and liabilities — 7,100 — — — 7,100 Intercompany balances — 1,572 61,936 — (63,508 ) — Total non-current liabilities — 110,642 61,936 311 (63,819 ) 109,070 Total liabilities — 435,627 63,334 29,128 (219,366 ) 308,723 Stockholders’ Equity Common stock 89 — — — — 89 Additional paid-in capital 231,516 67,694 2,000 1,808 (71,502 ) 231,516 Retained earnings (deficit) 148,012 148,083 115,024 (5,738 ) (257,369 ) 148,012 Accumulated other comprehensive income 2,827 2,827 — 256 (3,083 ) 2,827 Treasury stock, at cost (163,840 ) — — — — (163,840 ) Total stockholders’ equity (deficit) 218,604 218,604 117,024 (3,674 ) (331,954 ) 218,604 Total liabilities and stockholders’ equity $ 218,604 $ 654,231 $ 180,358 $ 25,454 $ (551,320 ) $ 527,327 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2014 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total Cash flows from operating activities Net income $ 12,140 $ 15,186 $ 7,438 $ 4,734 $ (27,358 ) $ 12,140 Adjustments to reconcile net income to cash (used in) provided by operating activities: Depreciation and amortization — 18,608 3,588 748 — 22,944 Amortization of financing costs — 2,035 — — — 2,035 Provision for bad debts — — 8,991 — — 8,991 Impairment Loss — 3,129 — — — 3,129 Loss on early extinguishment of debt — 2,523 202 — — 2,725 Equity in income of subsidiaries (12,140 ) (15,218 ) — — 27,358 — Stock-based compensation — 8,849 27 — — 8,876 Other non-cash items — 52 284 1 — 337 Changes in operating assets and liabilities: Net settlement receivables and liabilities — (31,414 ) 141 594 — (30,679 ) Other changes in operating assets and liabilities (47 ) 34,774 (20,047 ) (20,647 ) — (5,967 ) Net cash (used in) provided by operating activities (47 ) 38,524 624 (14,570 ) — 24,531 Cash flows from investing activities Acquisitions, net of cash acquired — (11,845 ) (1,056,155 ) — — (1,068,000 ) Capital expenditures — (5,465 ) (3,464 ) (9,092 ) — (18,021 ) Repayments under development agreements — — 276 — — 276 Changes in restricted cash and cash equivalents — (102 ) — — — (102 ) Intercompany investing activities 6,889 (1,085,709 ) — (1,425 ) 1,080,245 — Net cash provided by (used in) investing activities 6,889 (1,103,121 ) (1,059,343 ) (10,517 ) 1,080,245 (1,085,847 ) Cash flows from financing activities Repayments of prior credit facility — (103,000 ) — — — (103,000 ) Proceeds from long-term debt — 1,200,000 — — — 1,200,000 Debt issuance costs — (52,735 ) — — — (52,735 ) Proceeds from exercise of stock options 5,338 — — — — 5,338 Purchase of treasury stock (12,180 ) — — — — (12,180 ) Intercompany financing activities — (12,098 ) 1,063,059 29,284 (1,080,245 ) — Net cash (used in) provided by financing activities (6,842 ) 1,032,167 1,063,059 29,284 (1,080,245 ) 1,037,423 Effect of exchange rates on cash — — — (1,266 ) — (1,266 ) Cash and cash equivalents Net (decrease) increase for the period — (32,430 ) 4,340 2,931 — (25,159 ) Balance, beginning of the period — 100,573 2,149 11,532 — 114,254 Balance, end of the period $ — $ 68,143 $ 6,489 $ 14,463 $ — $ 89,095 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2013 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total Cash flows from operating activities Net income $ 24,398 $ 24,398 $ 11,002 $ 2,594 $ (37,994 ) $ 24,398 Adjustments to reconcile net income to cash provided by (used in) operating activities: Depreciation and amortization — 16,403 1 534 — 16,938 Amortization of financing costs — 1,793 — — — 1,793 Provision for bad debts — — 7,874 — — 7,874 Equity in income of subsidiaries (24,398 ) (13,596 ) — — 37,994 — Stock-based compensation — 5,078 — — — 5,078 Other non-cash items — 180 — (2 ) — 178 Changes in operating assets and liabilities: Net settlement receivables and liabilities — (44,264 ) — (1,729 ) — (45,993 ) Other changes in operating assets and liabilities 19 13,391 (18,880 ) (462 ) — (5,932 ) Net cash provided by (used in) operating activities 19 3,383 (3 ) 935 — 4,334 Cash flows from investing activities Capital expenditures — (13,364 ) (330 ) (206 ) — (13,900 ) Changes in restricted cash and cash equivalents — (90 ) — — — (90 ) Intercompany investing activities 9,900 (4,676 ) — — (5,224 ) — Net cash provided by (used in) investing activities 9,900 (18,130 ) (330 ) (206 ) (5,224 ) (13,990 ) Cash flows from financing activities Repayments of prior credit facility — (18,500 ) — — — (18,500 ) Debt issuance costs — (764 ) — — — (764 ) Proceeds from exercise of stock options 8,431 — — — — 8,431 Purchase of treasury stock (18,350 ) — — — — (18,350 ) Intercompany financing activities — (7,056 ) 2,000 (168 ) 5,224 — Net cash (used in) provided by financing activities (9,919 ) (26,320 ) 2,000 (168 ) 5,224 (29,183 ) Effect of exchange rates on cash — — — 73 — 73 Cash and cash equivalents Net (decrease) increase for the period — (41,067 ) 1,667 634 — (38,766 ) Balance, beginning of the period — 141,640 482 10,898 — 153,020 Balance, end of the period $ — $ 100,573 $ 2,149 $ 11,532 $ — $ 114,254 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2012 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total Cash flows from operating activities Net income $ 25,689 $ 25,689 $ 8,685 $ 861 $ (35,235 ) $ 25,689 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization — 16,160 5 474 — 16,639 Amortization of financing costs — 1,485 — — — 1,485 Provision for bad debts — 2,531 2,651 — — 5,182 Equity (income) loss (25,689 ) (9,546 ) — — 35,235 — Stock-based compensation — 6,655 — — — 6,655 Other non-cash items — 95 — — — 95 Changes in operating assets and liabilities: Net settlement receivables and liabilities — 88,354 — 2,999 — 91,353 Other changes in operating assets and liabilities 29 3,738 (10,705 ) 17,328 — 10,390 Net cash provided by operating activities 29 135,161 636 21,662 — 157,488 Cash flows from investing activities Capital expenditures — (11,546 ) (225 ) (1,015 ) — (12,786 ) Changes in restricted cash and cash equivalents — 255 — — — 255 Intercompany investing activities (6,422 ) 20,336 — — (13,914 ) — Net cash (used in) provided by investing activities (6,422 ) 9,045 (225 ) (1,015 ) (13,914 ) (12,531 ) Cash flows from financing activities Repayments of prior credit facility — (52,500 ) — — — (52,500 ) Debt issuance costs — (676 ) — — — (676 ) Proceeds from exercise of stock options 6,655 — — — — 6,655 Purchase of treasury stock (262 ) — — — — (262 ) Intercompany financing activities — 2,844 — (16,758 ) 13,914 — Net cash provided by (used in) financing activities 6,393 (50,332 ) — (16,758 ) 13,914 (46,783 ) Effect of exchange rates on cash — — — (689 ) — (689 ) Cash and cash equivalents Net increase for the period — 93,874 411 3,200 — 97,485 Balance, beginning of the period — 47,766 71 7,698 — 55,535 Balance, end of the period $ — $ 141,640 $ 482 $ 10,898 $ — $ 153,020 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Six Months Ended June 30, 2015 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 281,228 $ 124,809 $ 8,086 $ (286 ) $ 413,837 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 221,248 28,746 4,251 — 254,245 Operating expenses — 23,000 19,095 879 (286 ) 42,688 Research and development — — 9,906 — — 9,906 Depreciation — 3,561 17,422 111 — 21,094 Amortization — 4,408 35,735 1,284 — 41,427 Total costs and expenses — 252,217 110,904 6,525 (286 ) 369,360 Operating income — 29,011 13,905 1,561 — 44,477 Other expense (income) Interest expense, net of interest income — 4,612 45,823 178 — 50,613 Equity in loss (income) of subsidiaries 12,272 (6,712 ) — — (5,560 ) — Loss on extinguishment of debt — 12,977 — — — 12,977 Total other expense (income) 12,272 10,877 45,823 178 (5,560 ) 63,590 (Loss) income from operations before tax (12,272 ) 18,134 (31,918 ) 1,383 5,560 (19,113 ) Income tax expense (benefit) — 5,022 (12,444 ) 581 — (6,841 ) Net (loss) income (12,272 ) 13,112 (19,474 ) 802 5,560 (12,272 ) Foreign currency translation (62 ) — — (62 ) 62 (62 ) Comprehensive (loss) income $ (12,334 ) $ 13,112 $ (19,474 ) $ 740 $ 5,622 $ (12,334 ) SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Six Months Ended June 30, 2014 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 274,519 $ 13,910 $ 7,451 $ (363 ) $ 295,517 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 216,257 4,286 2,071 — 222,614 Operating expenses — 38,746 1,597 1,319 (363 ) 41,299 Depreciation — 3,753 2 91 — 3,846 Amortization — 4,874 — 249 — 5,123 Total costs and expenses — 263,630 5,885 3,730 (363 ) 272,882 Operating income — 10,889 8,025 3,721 — 22,635 Other (income) expense Interest expense, net of interest income — 4,024 — (395 ) — 3,629 Equity in income of subsidiaries (12,213 ) (8,425 ) — — 20,638 — Total other (income) expense (12,213 ) (4,401 ) — (395 ) 20,638 3,629 Income from operations before tax 12,213 15,290 8,025 4,116 (20,638 ) 19,006 Income tax expense — 2,869 2,814 1,110 — 6,793 Net income 12,213 12,421 5,211 3,006 (20,638 ) 12,213 Foreign currency translation 382 — — 382 (382 ) 382 Comprehensive income $ 12,595 $ 12,421 $ 5,211 $ 3,388 $ (21,020 ) $ 12,595 |
SUMMARY OF SIGNIFICANT ACCOUN30
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Principles of Consolidation | Principles of Consolidation All intercompany transactions and balances have been eliminated in consolidation. | ||
Business Combinations | Business Combinations We apply the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC 805”), “Business Combinations”, in the accounting for acquisitions. It requires us to recognize separately from goodwill the assets acquired and the liabilities assumed, at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. Significant estimates and assumptions are required to value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable. These estimates are preliminary and typically include the calculation of an appropriate discount rate and projection of the cash flows associated with each acquired asset over its estimated useful life. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. In addition, deferred tax assets, deferred tax liabilities, uncertain tax positions and tax related valuation allowances assumed in connection with a business combination are initially estimated as of the acquisition date. We reevaluate these items quarterly based upon facts and circumstances that existed as of the acquisition date and any adjustments to its preliminary estimates are recorded to goodwill if identified within the measurement period. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the consolidated statements of operations. | ||
Acquisition-related Costs | Acquisition-related Costs We recognize a liability for acquisition-related costs when the liability is incurred. Acquisition-related costs include financial advisory, legal and debt fees; accounting, consulting, and professional fees associated with due diligence, valuation and integration; severance; and other related costs and adjustments. | ||
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash and all balances on deposit in banks and financial institutions. We consider all highly liquid investments with maturities of three months or less at the time of purchase to be cash and cash equivalents. Such balances generally exceed the federal insurance limits. However, we periodically evaluate the creditworthiness of thes e institutions to minimize risk. | ||
ATM Funding Agreements | ATM Funding Agreements We obtain all of the cash required to operate our ATMs through various ATM Funding Agreements. Some gaming establishments provide the cash utilized within the ATM (“Site ‑Funded”). The Site ‑Funded receivables generated for the amount of cash dispensed from transactions performed at our ATMs are owned by us and we are liable to the gaming establishment for the face amount of the cash dispensed. In the consolidated balance sheets, the amount of the receivable for transactions processed on these ATM transactions is included within settlement receivables and the amount due to the gaming establishment for the face amount of dispensing transactions is included within settlement liabilities. For the Non ‑Site ‑Funded locations, our Contract Cash Solutions Agreement with Wells Fargo allows us to use funds owned by Wells Fargo to provide the currency needed for normal operating requirements for our ATMs. For the use of these funds, we pay Wells Fargo a cash usage fee on the average daily balance of funds utilized multiplied by a contractually defined cash usage rate. Under this agreement, all currency supplied by Wells Fargo remains the sole property of Wells Fargo at all times until it is dispensed, at which time Wells Fargo obtains an interest in the corresponding settlement receivable. As the cash is never an asset of ours, supplied cash is not reflected on our balance sheet. We are charged a cash usage fee for the cash used in these ATMs, which is included as interest expense in the consolidated statements of income and comprehensive income. We recognize the fees as interest expense due to the similar operational characteristics to a revolving line of credit, the fact that the fees are calculated on a financial index and the fees are paid for access to a capital resource. | ||
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts We maintain an allowance for doubtful accounts related to our trade and other receivables and notes receivable that have been deemed to have a high risk of uncollectibility. Management reviews its accounts and notes receivable on a quarterly basis to determine if any receivables will potentially be uncollectible. Management analyzes historical collection trends and changes in our customer payment patterns, customer concentration, and creditworthiness when evaluating the adequacy of our allowance for doubtful accounts. In our overall allowance for doubtful accounts we include any receivable balances for which uncertainty exists as to whether the account balance has become uncollectible. Based on the information available, management believes the allowance for doubtful accounts is adequate; however, actual write-offs may exceed the recorded allowance. | ||
Settlement Receivables and Settlement Liabilities | Settlement Receivables and Settlement Liabilities In the credit card cash access and POS debit card cash access transactions provided by us, the gaming establishment is reimbursed for the cash disbursed to gaming patrons through the issuance of a negotiable instrument or through electronic settlement. We receive reimbursement from the patron’s credit or debit card issuer for the transaction in an amount equal to the amount owing to the gaming establishment plus the fee charged to the patron. This reimbursement is included within the settlement receivables on the consolidated balance sheets. The amounts owed to gaming establishments are included within settlement liabilities on the consolidated balance sheets. | ||
Warranty Receivables | Warranty Receivables If a gaming establishment chooses to have a check warranted, it sends a request to our third party check warranty service provider, asking whether it would be willing to accept the risk of cashing the check. If the check warranty provider accepts the risk and warrants the check, the gaming establishment negotiates the patron’s check by providing cash for the face amount of the check. If the check is dishonored by the patron’s bank upon presentment, the gaming establishment invokes the warranty, and the check warranty service provider purchases the check from the gaming establishment for the full check amount and then pursues collection activities on its own. In our Central Credit Check Warranty product under our agreement with the third party service provider, we receive all of the check warranty revenue. We are exposed to risk for the losses associated with any warranted items that cannot be collected from patrons issuing the items. Warranty receivables are defined as any amounts paid by the third party check warranty service provider to gaming establishments to purchase dishonored checks. Additionally, we pay a fee to the third party check warranty service provider for its services. The warranty receivables amount is recorded in other receivables, net on our consolidated balance sheets. On a monthly basis, the Company evaluates the collectability of the outstanding balances and establishes a reserve for the face amount of the expected losses on these receivables. The warranty expense associated with this reserve is included within cost of revenues (exclusive of depreciation and amortization) on our consolidated statements of income and comprehensive income. | ||
Inventory | Inventory We currently maintain separate inventories for our Payments and Games products. Our Payments related inventory primarily consists of parts as well as finished goods and work-in-progress and is stated at the lower of cost or market accounted for using the average cost method. Our Games related inventory primarily consists of component parts, completed player terminals and back-office computer equipment and is stated at fair value as a result of the Merger. However, our games segment historically accounted for inventory at lower of cost (first in, first out) or market. The cost of inventory includes cost of materials, labor, overhead and freight. | ||
Property, Equipment and Leased Assets | Property, Equipment and Leased Assets Property, equipment and leased gaming equipment are stated at cost, less accumulated depreciation, computed using the straight-line method over the lesser of the estimated life of the related assets, generally three to five years, or the related lease term. Player terminals and related components and equipment are included in our rental pool. The rental pool can be further delineated as “rental pool – deployed,” which consists of assets deployed at customer sites under participation arrangements, and “rental pool – undeployed,” which consists of assets held by us that are available for customer use. Rental pool – undeployed consists of both new units awaiting deployment to a customer site and previously deployed units currently back with us to be refurbished awaiting re-deployment. Routine maintenance of property, equipment and leased gaming equipment is expensed in the period incurred, while major component upgrades are capitalized and depreciated over the estimated remaining useful life of the component. Sales and retirements of depreciable property are recorded by removing the related cost and accumulated depreciation from the accounts. Gains or losses on sales and retirements of property are reflected in our consolidated statements of income and comprehensive income. Property, equipment and leased gaming equipment are reviewed for impairment whenever events or circumstances indicate that their carrying amounts may not be recoverable. Impairment is indicated when undiscounted future cash flows do not exceed the asset’s carrying value. There was no material impairment for any of our property, equipment, or leasehold improvements for the years ended December 31, 2014, 2013 and 2012. | ||
Development and Placement Fee Agreements | Development and Placement Fee Agreements We enter into development and placement fee agreements to provide financing for new gaming facilities or for the expansion of existing facilities. All or a portion of the funds provided under development agreements are reimbursed to us, while funds provided under placement fee agreements are not reimbursed. In return, the facility dedicates a percentage of its floor space to placement of our player terminals, and we receive a fixed percentage of those player terminals' hold per day over the term of the agreement which is generally for 12 to 83 months. Certain of the agreements contain player terminal performance standards that could allow the facility to reduce a portion of our guaranteed floor space. In addition, certain development agreements allow the facilities to buy out floor space after advances that are subject to repayment have been repaid. The agreements typically provide for a portion of the amounts retained by the gaming facility for their share of the operating profits of the facility to be used to repay some or all of the advances recorded as notes receivable. | ||
Goodwill | Goodwill Goodwill represents the excess of the purchase price over the identifiable tangible and intangible assets acquired plus liabilities assumed arising from business combinations. We test for impairment annually on a reporting unit basis, at the beginning of our fourth fiscal quarter, or more often under certain circumstances. The annual impairment test is completed using either: a qualitative Step 0 assessment based on reviewing relevant events and circumstances; or a quantitative Step 1 assessment, which determines the fair value of the reporting unit, using an income approach that discounts future cash flows based on the estimated future results of our reporting units and a market approach that compares market multiples of comparable companies to determine whether or not any impairment exists. If the fair value of a reporting unit is less than its carrying amount, we use the Step 2 assessment to determine the impairment. Our reporting units are identified as operating segments or one level below an operating segment. Reporting units must: (a) engage in business activities from which they earn revenues and incur expenses; (b) have operating results that are regularly reviewed by our chief operating decision maker to ascertain the resources to be allocated to the segment and assess its performance; and (c) have discrete financial information available. As of December 31, 2014, our reporting units included: Cash Advance, ATM, Check Services, Games, Fully Integrated Kiosk Sales and Services, Central Credit, and Anti-Money Laundering and Tax Compliance Software. Our goodwill was not impaired for the years ended December 31, 2014, 2013 and 2012. | ||
Other Intangible Assets | Other Intangible Assets Other intangible assets consist primarily of: ( a ) customer contracts (rights to provide Payments and Games services to gaming establishment customers), developed technology, trade names and trademarks and contract rights acquired through business combinations; ( b ) capitalized so ftware development costs; and (c ) the acquisition cost of our patent related to the 3-in-1 rollover technology acquired in 2005. Customer contracts require us to make renewal assumptions, which impact the estimated useful lives of such assets. Capitalized software development costs require us to make certain judgments as to the stages of development and costs eligible for capitalization. Capitalized software costs placed in service are amortized over their useful lives, generally not to exceed five years. The acquisition cost of the 3-in-1 Rollover patent is being amortized over the term of the patent, which expires in 2018. We review intangible assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Such events or circumstances include, but are not limited to, a significant decrease in the fair value of the underlying business or market price of the asset, a significant adverse change in legal factors or business climate that could affect the value of an asset, or a current period operating or cash flow loss combined with a history of operating or cash flow losses. We group intangible assets for impairment analysis at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Recoverability of intangible assets is measured by a comparison of the carrying amount of the asset to future, net cash flows expected to be generated by the asset, undiscounted and without interest. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. For the year ended December 31, 2014, we recognized $3.1 million of impairment on our other intangible assets. There was no impairment for any of our other intangible assets for the years ended December 31, 2013 and 2012. | ||
Debt Issuance Costs | Debt Issuance Costs Debt issuance costs incurred in connection with long-term borrowings are capitalized and amortized to interest expense based upon the related debt agreements using the straight-line method, which approximates the effective interest method. Debt issuance costs are included in other assets on the consolidated balance sheets. | ||
Original Issue Discounts | Original Issue Discounts Original issue discounts incurred in connection with long-term borrowings are capitalized and amortized to interest expense based upon the related debt agreements using the straight-line method, which approximates the effective interest method. These amounts are recorded as contra-liabilities and included in long-term debt on the consolidated balance sheets. | ||
Deferred Revenue | Deferred Revenue Deferred revenue represents amounts from the sale of fully integrated kiosks and related service contracts, anti-money laundering and tax compliance software, and gaming equipment and systems that have been billed, or for which notes receivable have been executed, but which transaction has not met our revenue recognition criteria. The cost of the fully integrated kiosks and related service contracts, anti-money laundering and tax compliance software, and gaming equipment and systems is deferred and recorded at the time revenue is recognized. Amounts are classified between current and long-term liabilities, based upon the expected period in which the revenue will be recognized. | ||
Revenue Recognition | Revenue Recognition Overall We recognize revenue when evidence of an arrangement exists, services have been rendered or goods have been delivered , the price is fixed or determinable and collectability is reasonably assured. We evaluate our revenue streams for proper timing of revenue recognition. Payments Revenues Cash advance revenues are comprised of transaction fees assessed to gaming patrons in connection with credit card cash access and POS debit card transactions and are recognized at the time the transactions are authorized. Such fees are based on a combination of a fixed amount plus a percentage of the face amount of the credit card cash access or POS debit card transaction amount. ATM revenues are comprised of transaction fees in the form of cardholder surcharges assessed to gaming patrons in connection with ATM cash withdrawals at the time the transactions are authorized and reverse interchange fees paid to us by the patrons’ issuing banks. Cardholder surcharges are recognized as revenue when a transaction is initiated and reverse interchange is recognized as revenue on a monthly basis based on the total transactions occurring during the month. The cardholder surcharges assessed to gaming patrons in connection with ATM cash withdrawals are currently a fixed dollar amount and not a percentage of the transaction amount. Check services revenues are principally comprised of check warranty revenues and are generally based upon a percentage of the face amount of checks warranted. These fees are paid to us by gaming establishments. Other revenues include amounts derived from the sale of cash access devices, such as the provision of certain professional services, software licensing, and certain other ancillary fees associated with the sale, installation and maintenance of those devices. In addition, other revenues consist of Central Credit revenues that are based upon either a flat monthly unlimited usage fee or a variable fee structure driven by the volume of patron credit histories generated. Also included in other revenues are revenues generated from ancillary marketing, database and Internet gaming activities. Games Revenues Games revenue are primarily generated by our gaming operations under development, placement, and participation arrangements in which we provides our customers with player terminals, player terminal-content licenses and back-office equipment, collectively referred to herein as leased gaming equipment. Under these arrangements, we retain ownership of the leased gaming equipment installed at customer facilities, and we receive revenue based on a percentage of the net win per day generated by the leased gaming equipment or a fixed daily fee based on the number of player terminals installed at the facility. Revenue from lease participation or daily fee arrangements are considered both realizable and earned at the end of each gaming day. Games revenues generated by player terminals deployed at sites under development or placement fee agreements is reduced by the accretion of contract rights acquired as part of those agreements. Contract rights are amounts allocated to intangible assets for dedicated floor space resulting from such agreements, described under “Development and Placement Fee Agreements.” The related amortization expense, or accretion of contract rights, is netted against our respective revenue category in the consolidated statements of operations and other comprehensive income. We also generate games revenues from back-office fees with certain customers. Back-office fees cover the service and maintenance costs for back-office servers installed in each gaming facility to run our gaming equipment, as well as the cost of related software updates. Back-office fees are considered both realizable and earned at the end of each gaming day. Equipment and Systems Revenues We sell gaming equipment, fully integrated kiosks and gaming systems directly to our customers under independent sales contracts through normal credit terms, or may grant extended credit terms under contracts secured by the related equipment. For sales arrangements with multiple deliverables, we apply the guidance from ASU No. 2009-13, “Revenue Recognition (Topic 605), Multiple-Deliverable Revenue Arrangements.” In addition, we apply the guidance from ASU No. 2009-14, “Software (Topic 985), Certain Revenue Arrangements that Include Software Elements,” which affects vendors that sell or lease tangible products in an arrangement that contains software that is more than incidental to the tangible product as a whole and clarifies what guidance should be used in allocating and measuring revenue. The majority of our multiple element sales contracts are for some combination of gaming equipment, player terminals, content, system software, license fees, ancillary equipment and maintenance. Revenue related to systems arrangements that contain both software and non-software deliverables requires allocation of the arrangement fee to the separate deliverables using the relative selling price method. Revenue for software deliverables is recognized under software revenue recognition guidance. Revenue resulting from the sale of non-software deliverables, such as gaming devices and other hardware, are accounted for based on other applicable revenue recognition guidance as the devices are tangible products containing both software and non-software components that function together to deliver the product's essential functionality. In allocating the arrangement fees to separate deliverables, we evaluate whether we have vendor-specific objective evidence (“VSOE”) of selling price, third party evidence (“TPE”) or estimate of selling price (“ESP”) for gaming devices, maintenance and product support fees and other revenue sources. We generally use ESP to determine the selling price used in the allocation of separate deliverables, as VSOE and TPE are generally not available. We determine the ESP on separate deliverables by estimating a margin typically received on such items and applying that margin to the product cost incurred. Generally, player terminal sales include ancillary equipment, such as networking gear, bases, chairs, and occasionally signage, some of which may be necessary for the full functionality of the player terminals in a casino. This ancillary equipment comprises an install kit that is shipped simultaneously with the player terminals. Although our products are analyzed as multiple deliverable arrangements, revenue for the player terminal and ancillary equipment is not recognized until all elements essential for the functionality of the product have been shipped or delivered. This includes game theme software and essential ancillary equipment. If elements that are not essential to the functionality of the player terminals are shipped after the unit, such as signage, chairs, or bases, these items would be classified as deferred revenue until shipped or delivered. | ||
Cost of Revenues (exclusive of depreciation and amortization) | Cost of Revenues (exclusive of depreciation and amortization) The cost of revenues (exclusive of depreciation and amortization) represents the direct costs required to perform revenue generating transactions. The principal costs included within cost of revenues (exclusive of depreciation and amortization) are field service and network operations personnel, those direct costs related to the inventory sold for electronic gaming machines (“EGMs”), fully integrated kiosks and system sales, commissions paid to gaming establishments, interchange fees paid to credit and debit card networks and transaction processing fees to our transaction processor. | Cost of Revenues (exclusive of depreciation and amortization) The cost of revenues (exclusive of depreciation and amortization) represents the direct costs required to perform revenue generating transactions. The principal costs included within cost of revenues (exclusive of depreciation and amortization) are field service and network operations personnel, those direct costs related to the inventory sold for electronic gaming machines (“EGMs”), fully integrated kiosks and system sales, commissions paid to gaming establishments, interchange fees paid to credit and debit card networks and transaction processing fees to our transaction processor. | Cost of Revenues (exclusive of depreciation and amortization) The cost of revenues (exclusive of depreciation and amortization) represents the direct costs required to perform revenue generating transactions. The principal costs included within cost of revenues (exclusive of depreciation and amortization) are commissions paid to gaming establishments, interchange fees paid to credit and debit card networks, transaction processing fees to our transaction processor, inventory and related costs associated with the sale of our fully integrated kiosks, electronic gaming machines and system sales, check cashing warranties, field service and network operations personnel. |
Advertising, Marketing and Promotional Costs | Advertising, Marketing and Promotional Costs We expense advertising, marketing and promotional costs as incurred. Total advertising, marketing and promotional costs, included in operating expenses in the Condensed Consolidated Statements of Income and Comprehensive Income, were $0.3 million and $0.2 million for the three months ended March 31, 2015 and 2014, respectively. | Advertising, Marketing and Promotional Costs We expense advertising, marketing and promotional costs as incurred. Total advertising, marketing and promotional costs, included in operating expenses in the Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income, were $0.5 million and $0.8 million and $0.2 million and $0.4 million for the three and six months ended June 30, 2015 and 2014, respectively. | Advertising, Marketing and Promotional Costs We expense advertising, marketing and promotional costs as incurred. Total advertising, marketing and promotional costs, included in operating expenses in the consolidated statements of income and comprehensive income, were $1.1 million, $0.7 million and $0.7 million for the years ended December 31, 2014, 2013 and 2012, respectively. |
Research and Development Costs | Research and Development Costs We conduct research and development activities primarily to develop and enhance our Games and Payments platforms, as well as game content and features. We believe our ability to deliver differentiated, appealing products and services to the marketplace is based in part on our research and development investments, and we expect to continue to make such investments in the future. These research and development costs consist primarily of salaries and benefits, consulting fees, and game lab testing fees. Once the technological feasibility of a project has been established, it is transferred from research to development, and capitalization of development costs continues until the product is available for general release. | Research and Development Costs We conduct research and development activities primarily to develop and enhance our Games and Payments platforms, as well as game content and features. We believe our ability to deliver differentiated, appealing products and services to the marketplace is based in part on our research and development investments, and we expect to continue to make such investments in the future. These research and development costs consist primarily of salaries and benefits, consulting fees, and game lab testing fees. Once the technological feasibility of a project has been established, it is transferred from research to development, and capitalization of development costs continues until the product is available for general release. | Research and Development Costs We conduct research and development activities primarily to develop new gaming systems, gaming engines, casino data management systems, casino central monitoring systems, video lottery outcome determination systems, gaming platforms, and gaming content and to add enhancements to our existing product lines. We believe our ability to deliver differentiated, appealing products and services to the marketplace is based in our research and development investments, and we expect to continue to make such investments in the future. These research and development costs consist primarily of salaries and benefits, consulting fees, game lab testing fees, and an allocation of corporate facilities costs related to these activities. Once the technological feasibility of a project has been established, it is transferred from research to development, and capitalization of development costs begins until the product is available for general release. Research and development costs were $0.8 million for the year ended December 31, 2014. As research and development costs relate to our Games segment which was acquired in 2014, there were no material research and development costs for the years ended December 31, 2013 and 2012. |
Income Taxes | Income Taxes Income tax expense includes U.S. and international income taxes, plus the provision for U.S. taxes on undistributed earnings of international subsidiaries not deemed to be permanently invested. Since it is management’s practice and intent to reinvest the earnings in the international operations of our foreign subsidiaries, U.S. federal income taxes have not been provided on the undistributed earnings of any foreign subsidiaries except for GCA Macau. Some items of income and expense are not reported in tax returns and the consolidated financial statements in the same year. The tax effect of such temporary differences is reported as deferred income taxes. | ||
Employee Benefits Plan | Employee Benefits Plan We have a retirement savings plan (the “401(k) Plan”) under Section 401(k) of the Internal Revenue Code covering our employees. The 401(k) Plan allows employees to defer up to the lesser of the Internal Revenue Code prescribed maximum amount or 100% of their income on a pre-tax basis through contributions to the plan. As a benefit to employees, we match a percentage of these employee contributions. Expenses related to the matching portion of the contributions to the 401(k) Plan were $0.5 million, $0.5 million and $0.3 million for the years ended December 31, 2014, 2013 and 2012, respectively. | ||
Fair Values of Financial Instruments | Fair Values of Financial Instruments The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Fair value estimates are made at a specific point in time, based upon relevant market information about the financial instrument. In determining fair value, we use a hierarchy that includes three levels which are based on the extent to which inputs used in measuring fair value are observable in the market. Level 1 indicates that the fair value is determined by using quoted prices in active markets for identical investments. Level 2 indicates that the fair value is determined using observable pricing inputs other than quoted prices in active markets such as models or other valuation methodologies. Level 3 indicates that the fair value is determined using pricing inputs that are unobservable for the investment and include situations where there is little, if any, market activity for the investment. Significant management estimates and judgment are used in the determination of the fair value of level 3 pricing inputs. The carrying amount of cash and cash equivalents, settlement receivables, trade receivables, other receivables, settlement liabilities, accounts payable and accrued expenses approximates fair value due to the short-term maturities of these instruments. The fair value of our borrowings are estimated based on various inputs to determine a market price, such as: market demand and supply, size of tranche, maturity and similar instruments trading in more active markets. The following table presents the fair value and carrying value of our long-term debt as of March 31, 2015 (amounts in thousands): Level of Hierarchy Fair Value Carrying Amount Term loan 1 $ $ Senior secured notes 3 $ $ Senior unsecured notes 3 $ $ The senior secured and senior unsecured notes were both fair valued using a Level 3 input by evaluating the trading activities of similar debt instruments as there was no market activity as of March 31, 2015. At December 31, 2014, the fair value of our long-term debt was considered to approximate the carrying amount as our acquisition of Multimedia occurred on December 19, 2014, for which our long-term debt was incurred. | Fair Values of Financial Instruments The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Fair value estimates are made at a specific point in time, based upon relevant market information about the financial instrument. In determining fair value, we use a hierarchy that includes three levels which are based on the extent to which inputs used in measuring fair value are observable in the market. Level 1 indicates that the fair value is determined by using quoted prices in active markets for identical investments. Level 2 indicates that the fair value is determined using observable pricing inputs other than quoted prices in active markets such as models or other valuation methodologies. Level 3 indicates that the fair value is determined using pricing inputs that are unobservable for the investment and include situations where there is little, if any, market activity for the investment. Significant management estimates and judgment are used in the determination of the fair value of level 3 pricing inputs. The carrying amount of cash and cash equivalents, settlement receivables, trade receivables, other receivables, settlement liabilities, accounts payable and accrued expenses approximates fair value due to the short-term maturities of these instruments. The fair value of our borrowings are estimated based on various inputs to determine a market price, such as: market demand and supply, size of tranche, maturity and similar instruments trading in more active markets. The following table presents the fair value and carrying value of our long-term debt as of June 30, 2015 (amounts in thousands): Level of Carrying Hierarchy Fair Value Value Term loan $ $ Senior secured notes $ $ Senior unsecured notes $ $ The senior secured notes were fair valued using a Level 3 input by evaluating the trading activities of similar debt instruments as there was no market activity as of June 30, 2015. The senior unsecured notes were syndicated in April 2015 and transitioned from level 3 to level 1 on the fair value hierarchy as of June 30, 2015. At December 31, 2014, the fair value of our long-term debt was considered to approximate the carrying amount as our acquisition of Multimedia occurred on December 19, 2014, for which our long-term debt was incurred. | Fair Values of Financial Instruments The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Fair value estimates are made at a specific point in time, based upon relevant market information about the financial instrument. In determining fair value, we use a hierarchy that includes three levels which are based on the extent to which inputs used in measuring fair value are observable in the market. Level 1 indicates that the fair value is determined by using quoted prices in the active markets for identical investments. Level 2 indicates that the fair value is determined using pricing inputs other than quoted prices in active markets such as models or other valuation methodologies. Level 3 indicates that the fair value is determined using pricing inputs that are unobservable for the investment and include situations where there is little, if any, market activity for the investment. Significant management estimates and judgment are used in the determination of the fair value of level 3 pricing inputs. The carrying amount of cash and cash equivalents, settlement receivables, trade receivables, other receivables, settlement liabilities, accounts payable and accrued expenses approximates fair value due to the short-term maturities of these instruments. The fair value of our borrowings are estimated based on various inputs to determine a market price, such as: market demand and supply, size of tranche, maturity and similar instruments trading in more active markets. As of December 31, 2014, the fair value of our long-term debt was considered to approximate the carrying amount of each instrument since the Merger occurred on December 19, 2014. As of December 31, 2013, the fair value of our Prior Credit Facility was approximately $104.0 million as compared to a carrying amount of $103.0 million using a Level 2 input. |
Foreign Currency Translation | Foreign Currency Translation Foreign currency denominated assets and liabilities for those foreign entities for which the local currency is the functional currency are translated into U.S. dollars based on exchange rates prevailing at the end of each year. Revenues and expenses are translated at average exchange rates during the year. The effects of foreign exchange gains and losses arising from these translations are included as a component of other comprehensive income on the consolidated statements of income and comprehensive income. Translation adjustments on intercompany balances of a long-term investment nature are recorded as a component of accumulated other comprehensive income on our consolidated balance sheets. | ||
Use of Estimates | Use of Estimates We have made estimates and judgments affecting the amounts reported in these financial statements and the accompanying notes. The actual results may differ from these estimates. These accounting estimates incorporated into the consolidated financial statements include, but are not limited to: · the estimates and assumptions related to the preparation of the unaudited pro forma financial information contained herein; · the estimates and assumptions related to the preliminary purchase price allocation based on the estimated fair values of the assets acquired and liabilities assumed of Multimedia Games as of the date of Merger and the acquisition of NEWave; · the estimated reserve for warranty expense associated with our check warranty receivables; · the val uation and recognition of share- based compensation; · the valuation allowance on our deferred income tax assets; · the estimated cash flows in assessing the recoverability of long - lived assets; · the estimates of future operating performance, weighted average cost of capital (“WACC”) and growth rates as well as other factors used in our annual goodwill and other intangible assets impairment evaluations; · the renewal assumptions used for customer contracts to estimate the useful lives of such assets; and · the judgments used to determine the stages of development and costs eligible for capitalization as internally developed software. | ||
Earnings Applicable to Common Stock | Earnings Applicable to Common Stock Basic earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the effect of potential common stock resulting from assumed stock option exercises and vesting of restricted stock. | ||
Share-Based Compensation | Share ‑Based Compensation Share-based payment awards result in a cost that is measured at fair value on the award’s grant date. Our time-based stock options, including our cliff vesting time-based awards, expected to be exercised currently, and in future periods, were measured at fair value on the grant date using the Black Scholes model. Our restricted stock awards expected to be vested currently, and in future periods, were measured at fair value based on the stock price on the grant date. The compensation expense is recognized on a straight-line basis over the awards’ vesting periods. Our market-based stock options will vest if our average stock price in any period of 30 consecutive trading days meets certain target prices during a four year period that commenced on the grant date of these options. If these target prices are not met during the four year period, the unvested shares underlying the options will terminate except if there is a change in control of the Company as defined in the 2014 Equity Incentive Plan, in which case, the unvested shares underlying such options shall become fully vested on the effective date of such change in control transaction. The options were measured at fair value on the grant date using a lattice-based valuation model based on the median time horizon from the date of grant for these options to the vesting date for those paths that achieved the target threshold(s). The compensation expense is recognized on a straight-line basis over the median vesting periods calculated under such valuation model. Forfeitures are estimated at the grant date for our time-based and market-based awards, with such estimates updated periodically; and with actual forfeitures recognized currently to the extent they differ from the estimates. Unless otherwise provided by the administrator of our equity incentive plans, stock options granted under our plans generally expire ten years from the date of grant. The exercise price of stock options is generally the closing market price of our common stock on the date of the stock option grant. | ||
Reclassification of Prior Year Balances | Reclassification of Prior Year Balances Reclassifications were made to the prior-period financial statements to conform to the current period presentation. We classified our balance sheet for short-term and long-term assets and liabilities as a result of the Merger. | ||
Recent Accounting Guidance | Recent Accounting Guidance Recent Accounting Guidance Not Yet Adopted In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-03, which provides guidance to simplify the presentation of debt issuance costs. These amendments require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. The pronouncement is effective for annual periods ending after December 15, 2015, and interim periods within those fiscal years, and early adoption is permitted for financial statements that have not been previously issued. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In January 2015, the FASB issued ASU No. 2015-01, which requires that an entity separately classify, present and disclose extraordinary events and transactions. The pronouncement is effective for annual periods ending after December 15, 2015. A reporting entity also may apply the amendments retrospectively to all prior periods presented in the financial statements. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In August 2014, the FASB issued ASU No. 2014-15, which provides guidance on determining when and how reporting entities must disclose going-concern uncertainties in their financial statements. The pronouncement is effective for annual periods ending after December 15, 2016, and interim periods thereafter, and early adoption is permitted. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In June 2014, the FASB issued ASU No. 2014-12, which requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. The standard is effective for annual reporting periods beginning after December 15, 2015, with early adoption permitted. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In May 2014, the FASB issued ASU No. 2014-09, which creates FASB Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers” and supersedes ASC Topic 605, “Revenue Recognition”. The guidance replaces industry specific guidance and establishes a single five-step model to identify and recognize revenue. The core principle of the guidance is that an entity should recognize revenue upon transfer of control of promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. Additionally, the guidance requires the entity to disclose further quantitative and qualitative information regarding the nature and amount of revenues arising from contracts with customers, as well as other information about the significant judgments and estimates used in recognizing revenues from contracts with customers. This guidance is effective for interim and annual reporting periods beginning after December 15, 2016. Early application is not permitted. This guidance may be adopted retrospectively or under a modified retrospective method where the cumulative effect is recognized at the date of initial application. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within our Notes to the Condensed Consolidated Financial Statements. | Recent Accounting Guidance Recent Accounting Guidance Not Yet Adopted In July 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2015-11, which provides guidance on the measurement of inventory value. The amendments require an entity to measure in scope inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. The amendments do not apply to inventory that is measured using last-in, first-out (LIFO) or the retail inventory method. The amendments apply to all other inventory, which includes inventory that is measured using first-in, first-out (FIFO) or average cost. The pronouncement is effective for annual periods beginning after December 15, 2016, and interim periods within those fiscal years, and early adoption is permitted. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-03, which provides guidance to simplify the presentation of debt issuance costs. These amendments require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. The pronouncement is effective for annual periods beginning after December 15, 2015, and interim periods within those fiscal years, and early adoption is permitted for financial statements that have not been previously issued. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In January 2015, the FASB issued ASU No. 2015-01, which requires that an entity separately classify, present and disclose extraordinary events and transactions. The pronouncement is effective for annual periods ending after December 15, 2015. A reporting entity also may apply the amendments retrospectively to all prior periods presented in the financial statements. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In August 2014, the FASB issued ASU No. 2014-15, which provides guidance on determining when and how reporting entities must disclose going-concern uncertainties in their financial statements. The pronouncement is effective for annual periods ending after December 15, 2016, and interim periods thereafter, and early adoption is permitted. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In June 2014, the FASB issued ASU No. 2014-12, which requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. The standard is effective for annual reporting periods beginning after December 15, 2015, with early adoption permitted. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In May 2014, the FASB issued ASU No. 2014-09, which creates FASB Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers” and supersedes ASC Topic 605, “Revenue Recognition”. The guidance replaces industry specific guidance and establishes a single five-step model to identify and recognize revenue. The core principle of the guidance is that an entity should recognize revenue upon transfer of control of promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. Additionally, the guidance requires the entity to disclose further quantitative and qualitative information regarding the nature and amount of revenues arising from contracts with customers, as well as other information about the significant judgments and estimates used in recognizing revenues from contracts with customers. This guidance is effective for interim and annual reporting periods beginning after December 15, 2016. Early application is not permitted. This guidance may be adopted retrospectively or under a modified retrospective method where the cumulative effect is recognized at the date of initial application. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within our Notes to the Condensed Consolidated Financial Statements | Recent Accounting Guidance Recently Adopted Accounting Guidance In November 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update (“ASU”) No. 2014-17, which provides guidance on whether and at what threshold an acquired entity that is a business or nonprofit activity can apply pushdown accounting in its separate financial statements. The pronouncement was effective on November 18, 2014. There was no impact of the adoption of ASU No. 2014-17 as we do not apply push-down accounting to our acquired subsidiaries. Recent Accounting Guidance Not Yet Adopted In August 2014, the FASB issued ASU No. 2014-15, which provides guidance on determining when and how reporting entities must disclose going-concern uncertainties in their financial statements. The pronouncement is effective for annual periods ending after December 15, 2016, and interim periods thereafter, and early adoption is permitted. We are currently evaluating the impact of adopting this guidance on our Consolidated Financial Statements and disclosures included within Notes to Consolidated Financial Statements. In June 2014, the FASB issued ASU No. 2014-12, which requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. The standard is effective for annual reporting periods beginning after December 15, 2015, with early adoption permitted. We are currently evaluating the impact of adopting this guidance on our Consolidated Financial Statements and disclosures included within Notes to Consolidated Financial Statements. In May 2014, the FASB issued ASU No. 2014-09, which creates FASB ASC Topic 606, “Revenue from Contracts with Customers” and supersedes ASC Topic 605, “Revenue Recognition”. The guidance replaces industry-specific guidance and establishes a single five-step model to identify and recognize revenue. The core principle of the guidance is that an entity should recognize revenue upon transfer of control of promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. Additionally, the guidance requires the entity to disclose further quantitative and qualitative information regarding the nature and amount of revenues arising from contracts with customers, as well as other information about the significant judgments and estimates used in recognizing revenues from contracts with customers. This guidance is effective for interim and annual reporting periods beginning after December 15, 2016. Early application is not permitted. This guidance may be adopted retrospectively or under a modified retrospective method where the cumulative effect is recognized at the date of initial application. We are currently evaluating the impact of adopting this guidance on our Consolidated Financial Statements and disclosures included within our Notes to Consolidated Financial Statements |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
BUSINESS COMBINATIONS | |||
Schedule of total purchase consideration | The total purchase consideration for Multimedia was as follows (in thousands, except per share amounts): Amount Purchase consideration Total purchase price for Multimedia Games common stock (29,948 shares at $36.50 per share) $ Payment in respect to Multimedia Games outstanding equity awards Total merger consideration Repayments of Multimedia Games debt and other obligations Less: Multimedia Games outstanding cash at acquisition date Total purchase consideration $ | The total purchase consideration for Multimedia was as follows (in thousands, except per share amounts): Amount Purchase consideration Total purchase price for Multimedia Games common stock ( 29,948 shares at $36.50 per share) $ Payment in respect to Multimedia Games outstanding equity awards Total merger consideration Repayments of Multimedia Games debt and other obligations Less: Multimedia Games outstanding cash at acquisition date Total purchase consideration $ | The total purchase consideration for Multimedia Games was as follows (in thousands, except per share amounts): Amount Purchase consideration Total purchase price for Multimedia Games common stock (29,948 shares at $36.50 per share) $ Payment in respect to Multimedia Games outstanding equity awards Total merger consideration Repayments of Multimedia Games debt and other obligations Less: Multimedia Games outstanding cash at acquisition date Total purchase consideration $ |
Summary of estimated fair values of the assets acquired and liabilities assumed at the date of acquisition | The information below reflects the preliminary purchase price allocation (in thousands): Amount Purchase price allocation Current assets $ Property, equipment and leasehold improvements, net Goodwill Other intangible assets, net Other receivables, non-current Other assets, long-term Deferred tax asset, non-current Total assets Current liabilities Deferred tax liability, non-current Other accrued expenses and liabilities Total liabilities Net assets acquired $ | The information below reflects the preliminary purchase price allocation (in thousands): Amount Purchase price allocation Current assets $ Property, equipment and leasehold improvements, net Goodwill Other intangible assets, net Other receivables, non-current Other assets, long-term Deferred tax asset, non-current Total assets Current liabilities Deferred tax liability, non-current Other accrued expenses and liabilities Total liabilities Net assets acquired $ | The information below reflects the preliminary purchase price allocation (in thousands): Amount Purchase price allocation Current assets $ Property, equipment and leasehold improvements, net Goodwill Other intangible assets, net Other receivables, non-current Other assets, long-term Deferred tax asset, non-current Total assets Current liabilities Deferred tax liability, non-current Other accrued expenses and liabilities Total liabilities Net assets acquired $ |
Summarized acquired tangible assets | The following table summarizes acquired tangible assets (in thousands): Useful Life (years) Estimated Fair Value Property, Equipment and Leased Assets Gaming equipment 2 - 4 $ Leasehold and building improvements Lease Term Machinery and equipment 3 - 5 Other 2 - 7 Total property, equipment and leased assets $ | The following table summarizes acquired tangible assets (in thousands): Useful Life Estimated (years) Fair Value Property, equipment and leased assets Gaming equipment - 4 $ Leasehold and building improvements Lease Term Machinery and equipment - 5 Other - 7 Total property, equipment and leased assets $ | The following table summarizes acquired tangible assets (in thousands): Useful Life Estimated (years) Fair Value Property, Equipment and Leased Assets Gaming equipment - 4 $ Leasehold and building improvements Lease Term Machinery and equipment - 5 Other - 7 Total property, equipment and leased assets $ |
Summarized acquired intangible assets | The following table summarizes acquired intangible assets (in thousands): Useful Life (years) Estimated Fair Value Other intangible assets Tradenames and trademarks 3 - 7 $ Computer software 3 - 5 Developed technology 2 - 6 Customer relationships 8 - 12 Contract rights 1 - 7 Total other intangible assets $ | The following table summarizes acquired intangible assets (in thousands): Useful Life Estimated (years) Fair Value Other intangible assets Tradenames and trademarks - 7 $ Computer software - 5 Developed technology - 6 Customer relationships - 12 Contract rights - 7 Total other intangible assets $ | The following table summarizes acquired intangible assets (in thousands): Useful Life Estimated (years) Fair Value Other intangible assets Tradenames and trademarks - 7 $ Computer software - 5 Developed technology - 6 Customer relationships - 12 Contract rights - 7 Total other intangible assets $ |
Schedule of financial data from unaudited pro forma consolidated financial information | Year Ended December 31, 2014 2013 Unaudited pro forma results of operations (in thousands, except per share amounts) Revenues $ $ Net (loss) Basic loss per share Diluted loss per share |
TRADE RECEIVABLES (Tables)
TRADE RECEIVABLES (Tables) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
TRADE RECEIVABLES | |||
Schedule of trade receivables | The balance of trade receivables consisted of the following (in thousands): At March 31, At December 31, 2015 2014 Trade receivables, net Games trade receivables $ $ Kiosk trade receivables Warranty and other trade receivables Total trade receivables, net $ $ | The balance of trade receivables consisted of the following (in thousands): . At June 30, At December 31, 2015 2014 Trade receivables, net Games trade receivables $ $ Kiosk trade receivables Warranty and other trade receivables Total trade receivables, net $ $ | The balance of trade receivables consisted of the following (in thousands): . At December 31, 2014 2013 Trade receivables, net Games trade receivables $ $ — Kiosk trade receivables Warranty and other trade receivables Total trade receivables, net $ $ |
Schedule of the activity for the check warranty reserve | A summary activity of the reserve for warranty losses is as follows (in thousands): Amount Balance, December 31, 2011 $ Warranty expense provision Charge offs against reserve Balance, December 31, 2012 $ Warranty expense provision Charge offs against reserve Balance, December 31, 2013 Warranty expense provision Charge offs against reserve Balance, December 31, 2014 $ |
OTHER RECEIVABLES (Tables)
OTHER RECEIVABLES (Tables) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
OTHER RECEIVABLES. | |||
Schedule of other receivables | Other receivables also include income taxes receivable and other miscellaneous receivables. The balance of other receivables consisted of the following (in thousands): At March 31, At December 31, 2015 2014 Other receivables Notes and loans receivable, net of discount of $814 and $853, respectively $ $ Federal and state income tax receivable Other Total other receivables Less: Notes and loans receivable, non-current Total other receivables, current portion $ $ | The balance of other receivables consisted of the following (in thousands): At June 30, At December 31, 2015 2014 Other receivables Notes and loans receivable, net of discount of $776 and $853 , respectively $ $ Federal and state income tax receivable Other Total other receivables Less: Notes and loans receivable, non-current Total other receivables, current portion $ $ | The balance of other receivables consisted of the following (in thousands): At December 31, 2014 2013 Other receivables Notes and loans receivable, net of discount of $853 and $0 , respectively $ $ Federal and state income tax receivable Other Total other receivables Less: Notes and loans receivable, non-current Total other receivables, current portion $ $ |
PREPAID AND OTHER ASSETS (Table
PREPAID AND OTHER ASSETS (Tables) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
PREPAID AND OTHER ASSETS | |||
Schedule of prepaid and other assets current | The balance of prepaid and other assets consisted of the following (in thousands): At March 31, At December 31, 2015 2014 Prepaid expenses and other assets Prepaid expenses $ $ Deposits Other Total prepaid expenses and other assets $ $ | The balance of prepaid and other assets consisted of the following (in thousands): At June 30, At December 31, 2015 2014 Prepaid expenses and other assets Prepaid expenses $ $ Deposits Other Total prepaid expenses and other assets $ $ | The balance of prepaid and other assets consisted of the following (in thousands): At December 31, 2014 2013 Prepaid expenses and other assets Prepaid expenses $ $ Deposits Other Total prepaid expenses and other assets $ $ |
Schedule of prepaid and other assets non-current | The balance of other assets, non-current consisted of the following (in thousands): At March 31, At December 31, 2015 2014 Other assets, non-current Debt issuance costs $ $ Prepaid expenses and deposits, non-current Other Total other assets non-current $ $ | The balance of other assets, non-current consisted of the following (in thousands): At June 30, At December 31, 2015 2014 Other assets, non-current Debt issuance costs $ $ Prepaid expenses and deposits, non-current Other Total other assets, non-current $ $ | The balance of other assets, non-current consisted of the following (in thousands): At December 31, 2014 2013 Other assets, non-current Debt issuance costs $ $ Prepaid expenses and deposits, non-current Other Total other assets non-current $ $ |
INVENTORY (Tables)
INVENTORY (Tables) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
INVENTORY | |||
Schedule of inventory | Inventory consisted of the following (in thousands): At March 31, At December 31, 2015 2014 Inventory Raw materials and component parts, net of reserves of $82 and $22, respectively $ $ Work in progress Finished goods Total inventory $ $ | Inventory consisted of the following (in thousands): At June 30, At December 31, 2015 2014 Inventory Raw materials and component parts, net of reserves of $142 and $22 , respectively $ $ Work in progress Finished goods Total inventory $ $ | Inventory consisted of the following (in thousands): At December 31, 2014 2013 Inventory Raw materials and component parts, net of reserves of $22 and $50 , respectively $ $ Work in progress Finished goods Total inventory $ $ |
PROPERTY, EQUIPMENT AND LEASE36
PROPERTY, EQUIPMENT AND LEASED ASSETS (Tables) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
PROPERTY, EQUIPMENT AND LEASED ASSETS | |||
Schedule of property, equipment and leased assets | Property, equipment and leased assets consist of the following (in thousands): At March 31, 2015 At December 31, 2014 Useful Life (years) Cost Accumulated Depreciation Net Book Value Cost Accumulated Depreciation Net Book Value Property, equipment and leased assets Rental pool - deployed 2 - 4 $ $ $ $ $ $ Rental pool - undeployed 2 - 4 ATM equipment 5 Office, computer and other equipment 3 Leasehold and building improvements Lease Term Machinery and equipment 3 - 5 Cash advance equipment 3 Other 2 - 5 Total $ $ $ $ $ $ | Property, equipment and leased assets consist of the following (in thousands): At June 30, 2015 At December 31, 2014 Useful Life Accumulated Net Book Accumulated Net Book (Years) Cost Depreciation Value Cost Depreciation Value Property, equipment and leased assets Rental pool - deployed - 4 $ $ $ $ $ $ Rental pool - undeployed - 4 ATM equipment 5 Office, computer and other equipment 3 Leasehold and building improvements Lease Term Machinery and equipment - 5 Cash advance equipment 3 Other - 5 Total $ $ $ $ $ $ | Property, equipment and leased assets consist of the following (amounts in thousands): At December 31, 2014 At December 31, 2013 Useful Life Accumulated Net Book Accumulated Net Book (Years) Cost Depreciation Value Cost Depreciation Value Property, equipment and leased assets Rental pool - deployed - 4 $ $ $ $ — $ — $ — Rental pool - undeployed - 4 — — — ATM equipment 5 Office, computer and other equipment 3 Leasehold and building improvements Lease Term Machinery and equipment - 5 — — — Cash advance equipment 3 Other - 5 — — — Total $ $ $ $ $ $ |
GOODWILL AND OTHER INTANGIBLE37
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |||
Schedule of changes in the carrying amount of goodwill | The changes in the carrying amount of goodwill are as follows (in thousands): Cash Advance ATM Check Services Games Other Total Goodwill Balance, December 31, 2012 $ — Foreign translation adjustment — — — — Balance, December 31, 2013 $ $ $ $ — $ $ Goodwill acquired during the year — — — Foreign translation adjustment — — — — Balance, December 31, 2014 $ $ $ $ $ $ | ||
Schedule of other intangible assets | Other intangible assets consist of the following (in thousands): At March 31, 2015 At December 31, 2014 Useful Life (years) Cost Accumulated Amortization Net Book Value Cost Accumulated Amortization Net Book Value Other intangible assets Contract rights under development and placement fee agreements 1 - 7 $ $ $ $ $ $ Customer contracts 7 - 14 Customer relationships 8 - 12 Developed technology and software 1 - 6 Patents, trademarks and other 1 - 17 Total $ $ $ $ $ $ | Other intangible assets consist of the following (in thousands): At June 30, 2015 At December 31, 2014 Useful Life Accumulated Net Book Accumulated Net Book (years) Cost Amortization Value Cost Amortization Value Other intangible assets Contract rights under development and placement fee agreements - 7 $ $ $ $ $ $ Customer contracts - 14 Customer relationships - 12 Developed technology and software - 6 Patents, trademarks and other - 17 Total $ $ $ $ $ $ | Other intangible assets consist of the following (in thousands): At December 31, 2014 At December 31, 2013 Useful Life Accumulated Net Book Accumulated Net Book (years) Cost Amortization Value Cost Amortization Value Intangible assets Contract rights under development and placement fee agreements - 7 $ $ $ $ — $ — $ — Customer contracts - 14 Customer relationships - 12 — — — Developed technology - 6 — — — Computer software - 5 Patents, trademarks and other - 17 Total $ $ $ $ $ $ |
Schedule of anticipated amortization expense related to other intangible assets, assuming no subsequent impairment of the underlying assets | The anticipated amortization expense related to other intangible assets, assuming no subsequent impairment of the underlying assets, is as follows (in thousands): Anticipated amortization expense Amount 2015 $ 2016 2017 2018 2019 Thereafter Total $ |
ACCOUNTS PAYABLE AND ACCRUED 38
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | |||
Schedule of accounts payable and accrued expenses | The following table presents our accounts payable and accrued expenses (in thousands): At March 31, At December 31, 2015 2014 Accounts payable and accrued expenses Trade accounts payable $ $ Accrued interest Payroll and related expenses Deferred and unearned revenues Cash access processing and related expenses Accrued taxes Other Total accounts payable and accrued expenses $ $ | The following table presents our accounts payable and accrued expenses (in thousands): | The following table presents our accounts payable and accrued expenses (amounts in thousands): At December 31, 2014 2013 Accounts payable and accrued expenses Trade accounts payable $ $ Payroll and related expenses Cash access processing and related expenses Deferred and unearned revenues Accrued taxes Accrued interest Other Total accounts payable and accrued expenses $ $ |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
LONG-TERM DEBT. | |||
Schedule of total amounts of borrowings | The following table summarizes our outstanding indebtedness (in thousands): At March 31, At December 31, 2015 2014 Long-term debt Senior secured term loan $ $ Senior secured notes Senior unsecured notes Total debt Less: original issue discount Total debt after discount Less: current portion of long-term debt Long-term debt, less current portion $ $ | The following table summarizes our outstanding indebtedness (in thousands): At June 30, At December 31, 2015 2014 Long-term debt Senior secured term loan $ $ Senior secured notes Senior unsecured notes Total debt Less: original issue and warrant discount Total debt after discount Less: current portion of long-term debt Long-term debt, less current portion $ $ | The following table summarizes our indebtedness at December 31, (in thousands): At December 31, 2014 2013 Long-term debt Senior credit facility $ — $ Senior secured term loan $ $ — Senior secured notes — Senior unsecured notes — Total debt Less: original issue discount — Total debt after discount Less: current portion of long-term debt Long-term debt, less current portion $ $ |
Schedule of maturities of the Company's borrowings at (excluding excess cash flow payments) | The maturities of our borrowings at December 31, 2014 are as follows (in thousands): Amount Maturities of borrowings 2015 $ 2016 2017 2018 2019 Thereafter Total $ |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
COMMITMENTS AND CONTINGENCIES | |
Schedule of minimum aggregate rental commitment under all non-cancelable operating leases | As of December 31, 2014, the minimum aggregate rental commitment under all non ‑cancelable operating leases were as follows (in thousands): Amount Minimum aggregate rental commitments 2015 $ 2016 2017 2018 2019 Thereafter Total $ |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
SHAREHOLDERS' EQUITY | |
Schedule of treasury stock activity | The following table provides the treasury stock activity that occurred in 2014 (number of shares and cost in thousands): Total Number of Average Price Cost of Shares Shares Purchased Purchased or Purchased or or Withheld Withheld Withheld (in thousands) (per share) (in thousands) Outstanding, December 31, 2013 $ $ Shares repurchased under current plan $ Shares withheld from restricted stock vesting $ Outstanding, December 31, 2014 $ $ |
WEIGHTED AVERAGE COMMON SHARES
WEIGHTED AVERAGE COMMON SHARES (Tables) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
WEIGHTED AVERAGE COMMON SHARES | |||
Schedule of weighted average number of common shares outstanding used in the computation of basic and diluted earnings per share | The weighted average number of common shares outstanding used in the computation of basic and diluted earnings per share is as follows (in thousands): At March 31, At March 31, 2015 2014 Weighted average shares Weighted average number of common shares outstanding - basic Potential dilution from equity grants (1) Weighted average number of common shares outstanding - diluted (1) The potential dilution excludes the weighted average effect of equity awards to acquire 8.4 million and 5.1 million of our common stock for the three months ended March 31, 2015 and 2014, respectively, because the application of the treasury stock method, as required, makes them anti-dilutive | The weighted average number of common shares outstanding used in the computation of basic and diluted earnings per share is as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Weighted average shares Weighted average number of common shares outstanding - basic Potential dilution from equity grants (1) — — Weighted average number of common shares outstanding - diluted The Company was in a net loss position for the three and six months ended June 30, 2015, and therefore, no potential dilution from the application of the treasury stock method was applicable. The potential dilution excludes the weighted average effect of equity awards to acquire 7.5 million and 6.5 million of our common stock for the three and six months ended June 30, 2014 as the application of the treasury stock method, as required, makes them anti-dilutive. | The weighted average number of common stock outstanding used in the computation of basic and diluted earnings per share is as follows (in thousands): At December 31, 2014 2013 2012 Weighted average shares Weighted average number of common shares outstanding - basic Potential dilution from equity grants (1) Weighted average number of common shares outstanding - diluted The potential dilution excludes the weighted average effect of stock options to acquire 7.6 million, 5.9 million and 5.1 million shares of our common stock at December 31, 2014, 2013 and 2012, respectively, because the application of the treasury stock method, as required, makes them anti ‑dilutive |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
SHARE-BASED COMPENSATION | |||
Summary of award activity | A summary of award activity is as follows (in thousands): Stock Options Restricted Stock Granted Granted Outstanding, December 31, 2014 Additional authorized shares - - Granted - - Exercised options or vested shares Canceled or forfeited - Outstanding, March 31, 2015 | A summary of award activity is as follows (in thousands): Stock Options Restricted Stock Granted Granted Outstanding, December 31, 2014 Additional authorized shares — — Granted — Exercised options or vested shares Canceled or forfeited Outstanding, June 30, 2015 | A summary of award activity is as follows (in thousands): Stock Options Restricted Stock Granted Granted Outstanding, December 31, 2013 Additional authorized shares — — Granted Merger conversion — Exercised options or vested shares Canceled or forfeited Outstanding, December 31, 2014 |
Schedule of weighted-average assumptions, stock options | Six months ended June 30, 2015 2014 Risk-free interest rate % % Expected life of options (in years) Expected volatility % % Expected dividend yield % % | Year ended December 31, 2014 2013 2012 Risk-free interest rate % % % Expected life of options (in years) Expected volatility % % % Expected dividend yield % % % | |
Summary of option activity | Number of Common Shares (in thousands) Weighted Average Exercise Price (per share) Weighted Average Life Remaining (years) Aggregate Intrinsic Value (in thousands) Outstanding, December 31, 2014 $ $ Granted - - Exercised Canceled or forfeited Outstanding, March 31, 2015 $ $ Vested and expected to vest, March 31, 2015 $ $ Exercisable, March 31, 2015 $ $ | Weighted Number of Weighted Average Average Life Aggregate Common Shares Exercise Price Remaining Intrinsic Value (in thousands) (per share) (years) (in thousands) Outstanding, December 31, 2014 $ $ Granted Exercised Canceled or forfeited Outstanding, June 30, 2015 $ $ Vested and expected to vest, June 30, 2015 $ $ Exercisable, June 30, 2015 $ $ | Weighted Number of Weighted Average Average Life Aggregate Common Shares Exercise Price Remaining Intrinsic Value (in thousands) (per share) (years) (in thousands) Outstanding, December 31, 2013 $ $ Granted Merger conversion Exercised Canceled or forfeited Outstanding, December 31, 2014 $ $ Vested and expected to vest, December 31, 2014 $ $ Exercisable, December 31, 2014 $ $ |
Unused Elements Abstract | |||
Summary of non-vested share awards | Shares Outstanding (in thousands) Weighted Average Grant Date Fair Value (per share) Outstanding, December 31, 2014 $ Granted - - Vested Forfeited - Outstanding, March 31, 2015 $ | Weighted Shares Average Grant Outstanding Date Fair Value (in thousands) (per share) Outstanding, December 31, 2013 $ Granted Vested Forfeited Outstanding, December 31, 2014 $ | |
Schedule of information about stock options outstanding and exercisable | Weighted Number of Weighted Average Average Life Aggregate Common Shares Exercise Price Remaining Intrinsic Value (in thousands) (per share) (years) (in thousands) Outstanding, December 31, 2013 $ $ Granted Merger conversion Exercised Canceled or forfeited Outstanding, December 31, 2014 $ $ Vested and expected to vest, December 31, 2014 $ $ Exercisable, December 31, 2014 $ $ Options Outstanding Options Exercisable Weighted Average Weighted Weighted Number Remaining Average Number Average Outstanding Contract Exercise Exercisable Exercise Range of Exercise Prices (000’s) Life (Years) Prices (000’s) Price $ — $ $ $ |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
INCOME TAXES | |
Schedule of consolidated income before tax for domestic and foreign operations | The following presents consolidated income before tax for domestic and foreign operations (in thousands): Year Ended December 31, 2014 2013 2012 Consolidated income before tax Domestic $ $ $ Foreign Total $ $ $ |
Schedule of the Company's income tax provision attributable to income from operations before tax | Year Ended December 31, 2014 2013 2012 Consolidated income before tax Domestic $ $ $ Foreign Total $ $ $ The income tax provision attributable to income from operations before tax consists of the following components (in thousands): Year Ended December 31, 2014 2013 2012 Income tax provision Domestic $ $ $ Foreign Total income tax provision $ $ $ Income tax provision components Current $ $ $ Deferred Total income tax provision $ $ $ |
Schedule of reconciliation of the federal statutory rate and the Company's effective income tax rate | Year Ended December 31, 2014 2013 2012 Income tax reconciliation Federal statutory rate % % % Foreign provision % % % State/province income tax % % % Non-deductible compensation cost % % % Non-deductible acquisition cost % % % Change in valuation allowance % % % Adjustment to carrying value % % % Foreign dividends and IRC Sec. 956 inclusions, net of foreign tax deduction % % % Non-deductible expenses and other items % % % Effective tax rate % % % |
Schedule of major tax-effected components of deferred tax assets and liabilities | Year Ended December 31, 2014 2013 2012 Income tax reconciliation Federal statutory rate % % % Foreign provision % % % State/province income tax % % % Non-deductible compensation cost % % % Non-deductible acquisition cost % % % Change in valuation allowance % % % Adjustment to carrying value % % % Foreign dividends and IRC Sec. 956 inclusions, net of foreign tax deduction % % % Non-deductible expenses and other items % % % Effective tax rate % % % The major tax ‑effected components of the deferred tax assets and liabilities are as follows (in thousands): Year Ended December 31, 2014 2013 2012 Deferred income tax assets related to: Deferred tax asset - current Intangibles $ — $ $ Net operating losses Stock compensation expense Accounts receivable allowances Accrued and prepaid expenses Long-term debt — Other Tax credits — — Property, equipment and leased assets — Valuation allowance Total deferred income tax assets $ $ $ Deferred income tax liabilities related to: Property, equipment and leased assets $ — $ — Intangibles — — Other Total deferred income tax liabilities $ $ Deferred income taxes, net $ $ $ |
Schedule of unrecognized tax benefits | Year Ended December 31, 2014 2013 2012 Deferred income tax assets related to: Deferred tax asset - current Intangibles $ — $ $ Net operating losses Stock compensation expense Accounts receivable allowances Accrued and prepaid expenses Long-term debt — Other Tax credits — — Property, equipment and leased assets — Valuation allowance Total deferred income tax assets $ $ $ Deferred income tax liabilities related to: Property, equipment and leased assets $ — $ — Intangibles — — Other Total deferred income tax liabilities $ $ Deferred income taxes, net $ $ $ The following is a tabular reconciliation of the total amounts of unrecognized tax benefits (in thousands): Year Ended December 31, 2014 2013 2012 Unrecognized tax benefit at the beginning of the period Gross increases - tax positions in prior period $ — $ — $ — Gross decreases - tax positions in prior period — — — Gross increases - tax positions in current period — — Settlements — — — Unrecognized tax benefit at the end of the period $ $ — $ — |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
SEGMENT INFORMATION | |||
Schedule of results of operations and total assets by operating segment | The following tables present segment information (in thousands): For the Three Months Ended March 31, 2015 2014 Revenues Games $ $ - Payments Total revenues $ $ Operating income Games $ $ - Payments Total operating income $ $ At March 31, At December 31, Total assets 2015 2014 Games $ $ Payments Total assets $ $ | The following tables present segment information (in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, 2015 2014 2015 2014 Revenues Games $ $ — $ $ — Payments Total revenues $ $ $ $ Operating income Games $ $ — $ $ — Payments Total operating income $ $ $ $ At June 30, 2015 December 31, 2014 Total assets Games $ $ Payments Total assets $ $ | The following tables present segment information (in thousands): For and At the Year Ended December 31, 2014 2013 2012 Revenues Games $ $ — $ — Payments Total revenues $ $ $ Operating income Games $ 1,423 $ — $ — Payments Total operating income $ $ $ Total assets Games $ $ — Payments Total assets $ $ |
QUARTERLY RESULTS OF OPERATIO46
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | |
Schedule of quarterly results of operations | The unaudited selected quarterly results of operations are as follows (in thousands, except for per share amounts): Quarter First Second Third Fourth(1) Year 2014 Revenues $ $ $ $ $ Operating income Net income (loss) Net income Basic earnings per share $ $ $ $ $ Diluted earnings per share $ $ $ $ $ Weighted average common shares outstanding Basic Diluted 2013 Revenues $ $ $ $ $ Operating income Net income Net income Basic earnings per share $ $ $ $ $ Diluted earnings per share $ $ $ $ $ Weighted average common shares outstanding Basic Diluted (1) Our fourth quarter results of operations include the operating results of Multimedia Games as well as the costs related to the Merger. |
FINANCIAL INFORMATION FOR GUA47
FINANCIAL INFORMATION FOR GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES (Tables) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
CONDENSED CONSOLIDATING FINANCIAL INFORMATION | |||
Schedule of guarantor condensed consolidating results of operations | SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Three Months Ended March 31, 2015 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 141,410 $ 62,369 $ 3,830 $ (136 ) $ 207,473 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 110,589 14,371 2,063 — 127,023 Operating expenses — 4,191 11,359 427 (136 ) 15,841 Research and development — — 5,436 — — 5,436 Depreciation — 1,774 8,542 61 — 10,377 Amortization — 2,215 17,771 669 — 20,655 Total costs and expenses — 118,769 57,479 3,220 (136 ) 179,332 Operating income — 22,641 4,890 610 — 28,141 Other (income) expense Interest expense, net of interest income — 2,778 22,787 90 — 25,655 Equity in income of subsidiaries (469 ) (3,047 ) — — 3,516 — Total other (income) expense (469 ) (269 ) 22,787 90 3,516 25,655 Income (loss) from operations before tax 469 22,910 (17,897 ) 520 (3,516 ) 2,486 Income tax expense (benefit) — 8,706 (6,942 ) 253 — 2,017 Net income (loss) 469 14,204 (10,955 ) 267 (3,516 ) 469 Foreign currency translation (873 ) — — (873 ) 873 (873 ) Comprehensive (loss) income $ (404 ) $ 14,204 $ (10,955 ) $ (606 ) $ (2,643 ) $ (404 ) SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Three Months Ended March 31, 2014 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 140,321 $ 6,866 $ 3,553 $ (169 ) $ 150,571 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 111,338 2,043 (143 ) — 113,238 Operating expenses — 18,747 819 642 (169 ) 20,039 Depreciation — 1,883 1 43 — 1,927 Amortization — 2,230 — 124 — 2,354 Total costs and expenses — 134,198 2,863 666 (169 ) 137,558 Operating income — 6,123 4,003 2,887 — 13,013 Other (income) expense Interest expense, net of interest income — 2,034 — (488 ) — 1,546 Equity in income of subsidiaries (7,489 ) (5,082 ) — — 12,571 — Total other (income) expense (7,489 ) (3,048 ) — (488 ) 12,571 1,546 Income from operations before tax 7,489 9,171 4,003 3,375 (12,571 ) 11,467 Income tax expense — 1,682 1,401 895 — 3,978 Net income 7,489 7,489 2,602 2,480 (12,571 ) 7,489 Foreign currency translation 1 — — 1 (1 ) 1 Comprehensive income $ 7,490 $ 7,489 $ 2,602 $ 2,481 $ (12,572 ) $ 7,490 | SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Three Months Ended June 30, 2015 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 139,818 $ 62,440 $ 4,256 $ (150 ) $ 206,364 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 110,659 14,375 2,188 — 127,222 Operating expenses — 18,809 7,736 452 (150 ) 26,847 Research and development — — 4,470 — — 4,470 Depreciation — 1,787 8,880 50 — 10,717 Amortization — 2,193 17,964 615 — 20,772 Total costs and expenses — 133,448 53,425 3,305 (150 ) 190,028 Operating income — 6,370 9,015 951 — 16,336 Other expense (income) Interest expense, net of interest income — 1,834 23,036 88 — 24,958 Equity in loss (income) of subsidiaries 12,741 (3,665 ) — — (9,076 ) — Loss on extinguishment of debt — 12,977 — — — 12,977 Total other expense (income) 12,741 11,146 23,036 88 (9,076 ) 37,935 (Loss) income from operations before tax (12,741 ) (4,776 ) (14,021 ) 863 9,076 (21,599 ) Income tax (benefit) expense — (3,684 ) (5,502 ) 328 — (8,858 ) Net (loss) income (12,741 ) (1,092 ) (8,519 ) 535 9,076 (12,741 ) Foreign currency translation 811 — — 811 (811 ) 811 Comprehensive (loss) income $ (11,930 ) $ (1,092 ) $ (8,519 ) $ 1,346 $ 8,265 $ (11,930 ) SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Three Months Ended June 30, 2014 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 134,198 $ 7,044 $ 3,898 $ (194 ) $ 144,946 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 104,918 2,243 2,214 — 109,375 Operating expenses — 20,000 778 677 (194 ) 21,261 Depreciation — 1,870 1 48 — 1,919 Amortization — 2,644 — 125 — 2,769 Total costs and expenses — 129,432 3,022 3,064 (194 ) 135,324 Operating income — 4,766 4,022 834 — 9,622 Other (income) expense Interest expense, net of interest income — 1,990 — 93 — 2,083 Equity in income of subsidiaries (4,724 ) (3,343 ) — — 8,067 — Total other (income) expense (4,724 ) (1,353 ) — 93 8,067 2,083 Income from operations before tax 4,724 6,119 4,022 741 (8,067 ) 7,539 Income tax expense — 1,187 1,413 215 — 2,815 Net income 4,724 4,932 2,609 526 (8,067 ) 4,724 Foreign currency translation 381 — — 381 (381 ) 381 Comprehensive income $ 5,105 $ 4,932 $ 2,609 $ 907 $ (8,448 ) $ 5,105 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Six Months Ended June 30, 2015 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 281,228 $ 124,809 $ 8,086 $ (286 ) $ 413,837 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 221,248 28,746 4,251 — 254,245 Operating expenses — 23,000 19,095 879 (286 ) 42,688 Research and development — — 9,906 — — 9,906 Depreciation — 3,561 17,422 111 — 21,094 Amortization — 4,408 35,735 1,284 — 41,427 Total costs and expenses — 252,217 110,904 6,525 (286 ) 369,360 Operating income — 29,011 13,905 1,561 — 44,477 Other expense (income) Interest expense, net of interest income — 4,612 45,823 178 — 50,613 Equity in loss (income) of subsidiaries 12,272 (6,712 ) — — (5,560 ) — Loss on extinguishment of debt — 12,977 — — — 12,977 Total other expense (income) 12,272 10,877 45,823 178 (5,560 ) 63,590 (Loss) income from operations before tax (12,272 ) 18,134 (31,918 ) 1,383 5,560 (19,113 ) Income tax expense (benefit) — 5,022 (12,444 ) 581 — (6,841 ) Net (loss) income (12,272 ) 13,112 (19,474 ) 802 5,560 (12,272 ) Foreign currency translation (62 ) — — (62 ) 62 (62 ) Comprehensive (loss) income $ (12,334 ) $ 13,112 $ (19,474 ) $ 740 $ 5,622 $ (12,334 ) SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Six Months Ended June 30, 2014 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 274,519 $ 13,910 $ 7,451 $ (363 ) $ 295,517 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 216,257 4,286 2,071 — 222,614 Operating expenses — 38,746 1,597 1,319 (363 ) 41,299 Depreciation — 3,753 2 91 — 3,846 Amortization — 4,874 — 249 — 5,123 Total costs and expenses — 263,630 5,885 3,730 (363 ) 272,882 Operating income — 10,889 8,025 3,721 — 22,635 Other (income) expense Interest expense, net of interest income — 4,024 — (395 ) — 3,629 Equity in income of subsidiaries (12,213 ) (8,425 ) — — 20,638 — Total other (income) expense (12,213 ) (4,401 ) — (395 ) 20,638 3,629 Income from operations before tax 12,213 15,290 8,025 4,116 (20,638 ) 19,006 Income tax expense — 2,869 2,814 1,110 — 6,793 Net income 12,213 12,421 5,211 3,006 (20,638 ) 12,213 Foreign currency translation 382 — — 382 (382 ) 382 Comprehensive income $ 12,595 $ 12,421 $ 5,211 $ 3,388 $ (21,020 ) $ 12,595 | SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Year Ended December 31, 2014 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total Revenues $ — $ 542,206 $ 35,689 $ 15,891 $ (733 ) $ 593,053 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 422,544 10,864 6,663 — 440,071 Operating expenses — 88,087 5,719 2,379 (733 ) 95,452 Research and development — — 804 — — 804 Depreciation — 7,428 1,134 183 — 8,745 Amortization — 11,180 2,454 565 — 14,199 Total costs and expenses — 529,239 20,975 9,790 (733 ) 559,271 Operating income — 12,967 14,714 6,101 — 33,782 Other (income) expense Interest expense, net of interest income — 7,675 3,290 (209 ) — 10,756 Equity in income of subsidiaries (12,140 ) (15,218 ) — — 27,358 — Loss on extinguishment of debt — 2,523 202 — — 2,725 Total other (income) expense (12,140 ) (5,020 ) 3,492 (209 ) 27,358 13,481 Income from operations before tax 12,140 17,987 11,222 6,310 (27,358 ) 20,301 Income tax expense — 2,801 3,784 1,576 — 8,161 Net income 12,140 15,186 7,438 4,734 (27,358 ) 12,140 Foreign currency translation (1,258 ) — — (1,258 ) 1,258 (1,258 ) Comprehensive income $ 10,882 $ 15,186 $ 7,438 $ 3,476 $ (26,100 ) $ 10,882 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Year Ended December 31, 2013 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total Revenues $ — $ 541,002 $ 28,277 $ 13,838 $ (673 ) $ 582,444 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 424,129 7,905 7,760 — 439,794 Operating expenses — 71,623 3,445 2,167 (673 ) 76,562 Depreciation — 7,186 1 163 — 7,350 Amortization — 9,217 — 371 — 9,588 Total costs and expenses — 512,155 11,351 10,461 (673 ) 533,294 Operating income — 28,847 16,926 3,377 — 49,150 Other (income) expense Interest expense, net of interest income — 10,342 — (77 ) — 10,265 Equity in income of subsidiaries (24,398 ) (13,596 ) — — 37,994 — Total other (income) expense (24,398 ) (3,254 ) — (77 ) 37,994 10,265 Income from operations before tax 24,398 32,101 16,926 3,454 (37,994 ) 38,885 Income tax expense — 7,703 5,924 860 — 14,487 Net income 24,398 24,398 11,002 2,594 (37,994 ) 24,398 Foreign currency translation 269 — — 269 (269 ) 269 Comprehensive income $ 24,667 $ 24,398 $ 11,002 $ 2,863 $ (38,263 ) $ 24,667 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Year Ended December 31, 2012 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total Revenues $ — $ 556,376 $ 18,623 $ 10,001 $ (514 ) $ 584,486 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 426,183 3,376 6,500 — 436,059 Operating expenses — 72,551 1,880 1,889 (514 ) 75,806 Depreciation — 6,617 5 221 — 6,843 Amortization — 9,543 — 253 — 9,796 Total costs and expenses — 514,894 5,261 8,863 (514 ) 528,504 Operating income — 41,482 13,362 1,138 — 55,982 Other (income) expense Interest expense, net of interest income — 15,591 — (72 ) — 15,519 Equity in income of subsidiaries (25,689 ) (9,546 ) — — 35,235 — Total other (income) expense (25,689 ) 6,045 — (72 ) 35,235 15,519 Income from operations before tax 25,689 35,437 13,362 1,210 (35,235 ) 40,463 Income tax expense — 9,748 4,677 349 — 14,774 Net income 25,689 25,689 8,685 861 (35,235 ) 25,689 Foreign currency translation 218 — — 218 (218 ) 218 Comprehensive income $ 25,907 $ 25,689 $ 8,685 $ 1,079 $ (35,453 ) $ 25,907 |
Schedule of guarantor condensed consolidating balance sheet | SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands) At March 31, 2015 Parent Subsidiary Guarantor Non- Eliminations Total ASSETS Current assets Cash and cash equivalents $ — $ 120,435 $ 13,315 $ 11,263 $ — $ 145,013 Settlement receivables — 26,950 — 2,837 — 29,787 Trade receivables, net — 6,294 32,925 1 — 39,220 Other receivables — 3,846 24,870 113 (8,437 ) 20,392 Inventory — 9,312 13,738 — — 23,050 Prepaid expenses and other assets — 7,836 2,523 8,530 — 18,889 Deferred tax asset — 2,743 6,847 — — 9,590 Intercompany balances — 32,512 155,182 1,473 (189,167 ) — Total current assets — 209,928 249,400 24,217 (197,604 ) 285,941 Non-current assets Property, equipment and leasehold improvements, net — 17,409 84,865 485 — 102,759 Goodwill — 148,278 708,922 656 — 857,856 Other intangible assets, net — 23,260 388,281 8,562 — 420,103 Other receivables, non-current — 4,411 4,182 — — 8,593 Investment in subsidiaries 233,859 149,599 — 86 (383,544 ) — Deferred tax asset, non-current — 76,460 22,467 — (98,927 ) — Other assets, non-current — 46,090 3,413 509 — 50,012 Intercompany balances — 1,131,876 — — (1,131,876 ) — Total non-current assets 233,859 1,597,383 1,212,130 10,298 (1,614,347 ) 1,439,323 Total assets $ 233,859 $ 1,807,311 $ 1,461,530 $ 34,515 $ (1,811,951 ) $ 1,725,264 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Settlement liabilities $ — $ 136,839 $ 297 $ 4,513 $ — $ 141,649 Accounts payable and accrued expenses — 85,689 35,216 1,075 (8,437 ) 113,543 Current portion of long-term debt — 10,000 — — — 10,000 Intercompany balances — 156,536 22,949 9,682 (189,167 ) — Total current liabilities — 389,064 58,462 15,270 (197,604 ) 265,192 Non-current liabilities Deferred tax liability, non-current — 1,071 156,957 — (98,927 ) 59,101 Long-term debt, less current portion — 1,161,731 — — — 1,161,731 Other accrued expenses and liabilities — 4,924 457 — — 5,381 Intercompany balances — — 1,131,876 — (1,131,876 ) — Total non-current liabilities — 1,167,726 1,289,290 — (1,230,803 ) 1,226,213 Total liabilities — 1,556,790 1,347,752 15,270 (1,428,407 ) 1,491,405 Stockholders’ Equity Common stock 91 — — — — 91 Convertible preferred stock — — — — — — Additional paid-in capital 248,491 87,202 2,269 21,110 (110,581 ) 248,491 Retained earnings (deficit) 160,621 162,623 111,509 (738 ) (273,394 ) 160,621 Accumulated other comprehensive income (loss) 696 696 — (1,127 ) 431 696 Treasury stock, at cost (176,040 ) — — — — (176,040 ) Total stockholders’ equity 233,859 250,521 113,778 19,245 (383,544 ) 233,859 Total liabilities and stockholders’ equity $ 233,859 $ 1,807,311 $ 1,461,530 $ 34,515 $ (1,811,951 ) $ 1,725,264 | SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands) At March 31, 2015 Parent Subsidiary Guarantor Non- Eliminations Total ASSETS Current assets Cash and cash equivalents $ — $ 120,435 $ 13,315 $ 11,263 $ — $ 145,013 Settlement receivables — 26,950 — 2,837 — 29,787 Trade receivables, net — 6,294 32,925 1 — 39,220 Other receivables — 3,846 24,870 113 (8,437 ) 20,392 Inventory — 9,312 13,738 — — 23,050 Prepaid expenses and other assets — 7,836 2,523 8,530 — 18,889 Deferred tax asset — 2,743 6,847 — — 9,590 Intercompany balances — 32,512 155,182 1,473 (189,167 ) — Total current assets — 209,928 249,400 24,217 (197,604 ) 285,941 Non-current assets Property, equipment and leasehold improvements, net — 17,409 84,865 485 — 102,759 Goodwill — 148,278 708,922 656 — 857,856 Other intangible assets, net — 23,260 388,281 8,562 — 420,103 Other receivables, non-current — 4,411 4,182 — — 8,593 Investment in subsidiaries 233,859 149,599 — 86 (383,544 ) — Deferred tax asset, non-current — 76,460 22,467 — (98,927 ) — Other assets, non-current — 46,090 3,413 509 — 50,012 Intercompany balances — 1,131,876 — — (1,131,876 ) — Total non-current assets 233,859 1,597,383 1,212,130 10,298 (1,614,347 ) 1,439,323 Total assets $ 233,859 $ 1,807,311 $ 1,461,530 $ 34,515 $ (1,811,951 ) $ 1,725,264 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Settlement liabilities $ — $ 136,839 $ 297 $ 4,513 $ — $ 141,649 Accounts payable and accrued expenses — 85,689 35,216 1,075 (8,437 ) 113,543 Current portion of long-term debt — 10,000 — — — 10,000 Intercompany balances — 156,536 22,949 9,682 (189,167 ) — Total current liabilities — 389,064 58,462 15,270 (197,604 ) 265,192 Non-current liabilities Deferred tax liability, non-current — 1,071 156,957 — (98,927 ) 59,101 Long-term debt, less current portion — 1,161,731 — — — 1,161,731 Other accrued expenses and liabilities — 4,924 457 — — 5,381 Intercompany balances — — 1,131,876 — (1,131,876 ) — Total non-current liabilities — 1,167,726 1,289,290 — (1,230,803 ) 1,226,213 Total liabilities — 1,556,790 1,347,752 15,270 (1,428,407 ) 1,491,405 Stockholders’ Equity Common stock 91 — — — — 91 Convertible preferred stock — — — — — — Additional paid-in capital 248,491 87,202 2,269 21,110 (110,581 ) 248,491 Retained earnings (deficit) 160,621 162,623 111,509 (738 ) (273,394 ) 160,621 Accumulated other comprehensive income (loss) 696 696 — (1,127 ) 431 696 Treasury stock, at cost (176,040 ) — — — — (176,040 ) Total stockholders’ equity 233,859 250,521 113,778 19,245 (383,544 ) 233,859 Total liabilities and stockholders’ equity $ 233,859 $ 1,807,311 $ 1,461,530 $ 34,515 $ (1,811,951 ) $ 1,725,264 | SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands) At December 31, 2014 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total ASSETS Current assets Cash and cash equivalents $ — $ 68,143 $ 6,489 $ 14,463 $ — $ 89,095 Settlement receivables — 40,157 — 3,131 — 43,288 Trade Receivables, net — 6,578 31,116 3 — 37,697 Other receivables — 3,416 16,992 145 — 20,553 Inventory — 10,595 16,568 — — 27,163 Prepaid expenses and other assets — 7,143 2,821 9,024 — 18,988 Deferred tax asset — 2,743 6,848 — — 9,591 Intercompany balances — 18,038 151,179 1,623 (170,840 ) — Total current assets — 156,813 232,013 28,389 (170,840 ) 246,375 Non-current assets Property, equipment and leasehold improvements, net — 17,864 87,898 323 — 106,085 Goodwill — 148,278 708,922 713 — 857,913 Other intangible assets, net — 24,771 402,816 9,198 — 436,785 Other receivables, non-current — 4,411 4,773 — — 9,184 Investment in subsidiaries 231,473 147,195 — 86 (378,754 ) — Deferred tax asset, non-current — 78,229 — — (78,229 ) — Other assets, non-current — 47,508 3,366 69 — 50,943 Intercompany balances — 1,130,380 — — (1,130,380 ) — Total non-current assets 231,473 1,598,636 1,207,775 10,389 (1,587,363 ) 1,460,910 Total assets $ 231,473 $ 1,755,449 $ 1,439,788 $ 38,778 $ (1,758,203 ) $ 1,707,285 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Settlement liabilities $ — $ 111,375 $ 140 $ 7,642 $ — $ 119,157 Accounts payable and accrued expenses — 61,544 41,395 1,729 — 104,668 Current portion of long-term debt — 10,000 — — — 10,000 Intercompany balances — 152,802 8,159 9,879 (170,840 ) — Total current liabilities — 335,721 49,694 19,250 (170,840 ) 233,825 Non-current liabilities Deferred tax liability, non-current — 1,072 134,490 — (78,229 ) 57,333 Long-term debt, less current portion — 1,178,787 — — — 1,178,787 Other accrued expenses and liabilities — 5,377 490 — — 5,867 Intercompany balances — — 1,130,380 — (1,130,380 ) — Total non-current liabilities — 1,185,236 1,265,360 — (1,208,609 ) 1,241,987 Total liabilities — 1,520,957 1,315,054 19,250 (1,379,449 ) 1,475,812 Stockholders’ Equity Common stock 90 — — — — 90 Additional paid-in capital 245,682 69,654 2,269 21,115 (93,038 ) 245,682 Retained earnings (deficit) 160,152 163,269 122,465 (1,006 ) (284,728 ) 160,152 Accumulated other comprehensive income (loss) 1,569 1,569 — (581 ) (988 ) 1,569 Treasury stock, at cost (176,020 ) — — — — (176,020 ) Total stockholders’ equity 231,473 234,492 124,734 19,528 (378,754 ) 231,473 Total liabilities and stockholders’ equity $ 231,473 $ 1,755,449 $ 1,439,788 $ 38,778 $ (1,758,203 ) $ 1,707,285 SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands) At December 31, 2013 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total ASSETS Current assets Cash and cash equivalents $ — $ 100,573 $ 2,149 $ 11,532 $ — $ 114,254 Settlement receivables — 34,458 — 3,807 — 38,265 Trade receivables, net — 9,030 2,622 6 — 11,658 Other receivables — 4,451 — 154 — 4,605 Inventory — 9,413 — — — 9,413 Prepaid expenses and other assets — 10,300 20 6,354 — 16,674 Deferred tax asset — 3,102 — — — 3,102 Intercompany balances — 20,005 135,542 — (155,547 ) — Total current assets — 191,332 140,333 21,853 (155,547 ) 197,971 Non-current assets Property, equipment and leasehold improvements, net — 18,282 56 372 — 18,710 Goodwill — 139,839 39,470 775 — 180,084 Other intangible assets, net — 30,229 499 807 — 31,535 Other receivables, non-current — 699 — — — 699 Investment in subsidiaries 218,604 113,350 — — (331,954 ) — Deferred tax asset, non-current — 88,253 — — (311 ) 87,942 Other assets, non-current — 10,311 — 75 — 10,386 Intercompany balances — 61,936 — 1,572 (63,508 ) — Total non-current assets 218,604 462,899 40,025 3,601 (395,773 ) 329,356 Total assets $ 218,604 $ 654,231 $ 180,358 $ 25,454 $ (551,320 ) $ 527,327 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Settlement liabilities $ — $ 137,089 $ — $ 7,933 $ — $ 145,022 Accounts payable and accrued expenses — 51,324 1,398 879 — 53,601 Current portion of long-term debt — 1,030 — — — 1,030 Intercompany balances — 135,542 — 20,005 (155,547 ) — Total current liabilities — 324,985 1,398 28,817 (155,547 ) 199,653 Non-current liabilities Deferred tax liability, non-current — — — 311 (311 ) — Long-term debt, less current portion — 101,970 — — — 101,970 Other accrued expenses and liabilities — 7,100 — — — 7,100 Intercompany balances — 1,572 61,936 — (63,508 ) — Total non-current liabilities — 110,642 61,936 311 (63,819 ) 109,070 Total liabilities — 435,627 63,334 29,128 (219,366 ) 308,723 Stockholders’ Equity Common stock 89 — — — — 89 Additional paid-in capital 231,516 67,694 2,000 1,808 (71,502 ) 231,516 Retained earnings (deficit) 148,012 148,083 115,024 (5,738 ) (257,369 ) 148,012 Accumulated other comprehensive income 2,827 2,827 — 256 (3,083 ) 2,827 Treasury stock, at cost (163,840 ) — — — — (163,840 ) Total stockholders’ equity (deficit) 218,604 218,604 117,024 (3,674 ) (331,954 ) 218,604 Total liabilities and stockholders’ equity $ 218,604 $ 654,231 $ 180,358 $ 25,454 $ (551,320 ) $ 527,327 |
Schedule of guarantor condensed consolidating cash flows | SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Three Months Ended March 31, 2015 Parent Subsidiary Guarantor Non- Eliminations Total Cash flows from operating activities Net income (loss) $ 469 $ 14,204 $ (10,955 ) $ 267 $ (3,516 ) $ 469 Adjustments to reconcile net income (loss) to cash (used in) provided by operating activities: Depreciation and amortization — 3,989 26,313 730 — 31,032 Amortization of financing costs — 2,072 — — — 2,072 Loss on sale or disposal of assets — 2 — — — 2 Accretion of contract rights — — 2,104 — — 2,104 Provision for bad debts — — 2,266 — — 2,266 Equity in income of subsidiaries (469 ) (3,047 ) — — 3,516 — Stock-based compensation — 1,674 — — 119 1,793 Other non-cash items — — 231 — — 231 Changes in operating assets and liabilities: Net settlement receivables and liabilities — 38,671 157 (2,855 ) — 35,973 Other changes in operating assets and liabilities (5 ) 13,617 (3,350 ) (269 ) (119 ) 9,874 Net cash (used in) provided by operating activities (5 ) 71,182 16,766 (2,127 ) — 85,816 Cash flows from investing activities Capital expenditures — (2,434 ) (9,902 ) (280 ) — (12,616 ) Proceeds from sale of fixed assets — 1 — — — 1 Advances under development and placement agreements — — (1,255 ) — — (1,255 ) Repayments under development agreements — — 1,217 — — 1,217 Changes in restricted cash and cash equivalents — 59 — — — 59 Intercompany investing activities (1,023 ) 164 — (48 ) 907 — Net cash used in investing activities (1,023 ) (2,210 ) (9,940 ) (328 ) 907 (12,594 ) Cash flows from financing activities Repayments of credit facility — (17,500 ) — — — (17,500 ) Debt issuance costs — (252 ) — — — (252 ) Proceeds from exercise of stock options 1,048 — — — — 1,048 Purchase of treasury stock (20 ) — — — — (20 ) Intercompany financing activities — 1,072 — (165 ) (907 ) — Net cash provided by (used in) financing activities 1,028 (16,680 ) — (165 ) (907 ) (16,724 ) Effect of exchange rates on cash — — — (580 ) — (580 ) Cash and cash equivalents Net increase (decrease) for the period — 52,292 6,826 (3,200 ) — 55,918 Balance, beginning of the period — 68,143 6,489 14,463 — 89,095 Balance, end of the period $ — $ 120,435 $ 13,315 $ 11,263 $ — $ 145,013 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Three Months Ended March 31, 2014 Parent Subsidiary Guarantor Non- Eliminations Total Cash flows from operating activities Net income $ 7,489 $ 7,489 $ 2,602 $ 2,480 $ (12,571 ) $ 7,489 Adjustments to reconcile net income to cash (used in) provided by operating activities: Depreciation and amortization — 4,113 1 167 — 4,281 Amortization of financing costs — 471 — — — 471 Loss on sale or disposal of assets — 124 — — — 124 Provision for bad debts — — 2,014 — — 2,014 Equity in income of subsidiaries (7,489 ) (5,082 ) — — 12,571 — Stock-based compensation — 2,057 — — — 2,057 Changes in operating assets and liabilities: Net settlement receivables and liabilities — 63,982 218 (1,011 ) — 63,189 Other changes in operating assets and liabilities (51 ) 18,829 (4,360 ) (7,446 ) — 6,972 Net cash (used in) provided by operating activities (51 ) 91,983 475 (5,810 ) — 86,597 Cash flows from investing activities Capital expenditures — (2,707 ) (93 ) (225 ) — (3,025 ) Proceeds from sale of fixed assets — 192 — — — 192 Changes in restricted cash and cash equivalents — (46 ) — — — (46 ) Intercompany investing activities 378 (9,663 ) — (1,590 ) 10,875 — Net cash provided by (used in) investing activities 378 (12,224 ) (93 ) (1,815 ) 10,875 (2,879 ) Cash flows from financing activities Repayments against prior credit facility — (3,000 ) — — — (3,000 ) Proceeds from exercise of stock options 2,440 — — — — 2,440 Purchase of treasury stock (2,767 ) — — — — (2,767 ) Intercompany financing activities — 987 — 9,888 (10,875 ) — Net cash (used in) provided by financing activities (327 ) (2,013 ) — 9,888 (10,875 ) (3,327 ) Effect of exchange rates on cash — — — (79 ) — (79 ) Cash and cash equivalents Net increase for the period 77,746 382 2,184 — 80,312 Balance, beginning of the period — 100,573 2,149 11,532 — 114,254 Balance, end of the period $ — $ 178,319 $ 2,531 $ 13,716 $ — $ 194,566 | SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Six Months Ended June 30, 2015 Parent Subsidiary Guarantor Non- Eliminations Total Cash flows from operating activities Net (loss) income $ (12,272 ) $ 13,112 $ (19,474 ) $ 802 $ 5,560 $ (12,272 ) Adjustments to reconcile net (loss) income to cash provided by (used in)operating activities: Depreciation and amortization — 7,969 53,157 1,395 — 62,521 Amortization of financing costs — 3,730 — — — 3,730 (Gain) loss on sale or disposal of assets — (13 ) 387 — — 374 Accretion of contract rights — — 4,092 — — 4,092 Provision for bad debts — — 4,370 — — 4,370 Loss on early extinguishment of debt — 12,977 — — — 12,977 Equity in loss (income) of subsidiaries 12,272 (6,712 ) — — (5,560 ) — Stock-based compensation — 3,432 522 — — 3,954 Other non-cash items — 76 (96 ) — — (20 ) Changes in operating assets and liabilities: Net settlement receivables and liabilities — 43,663 91 (1,970 ) — 41,784 Other changes in operating assets and liabilities 28 15,839 (10,159 ) (827 ) — 4,881 Net cash provided by (used in) operating activities 28 94,073 32,890 (600 ) — 126,391 Cash flows from investing activities Acquisitions, net of cash acquired — (2,257 ) — — — (2,257 ) Capital expenditures — (5,387 ) (23,993 ) (280 ) — (29,660 ) Proceeds from sale of fixed assets — 29 — — — 29 Repayments under development agreements — — 2,392 — — 2,392 Advances under development and placement agreements — — (1,255 ) — — (1,255 ) Changes in restricted cash and cash equivalents — 60 — — — 60 Intercompany investing activities (3,907 ) 5,423 — (106 ) (1,410 ) — Net cash used in investing activities (3,907 ) (2,132 ) (22,856 ) (386 ) (1,410 ) (30,691 ) Cash flows from financing activities Repayments of credit facility — (5,000 ) — — — (5,000 ) Repayments of secured notes — (350,000 ) — — — (350,000 ) Proceeds from issuance of secured notes — 335,000 — — — 335,000 Debt issuance costs — (1,154 ) — — — (1,154 ) Issuance of warrants 2,246 (2,246 ) — — — — Proceeds from exercise of stock options 1,673 — — — — 1,673 Purchase of treasury stock (40 ) — — — — (40 ) Intercompany financing activities — 106 — (1,516 ) 1,410 — Net cash provided by (used in) financing activities 3,879 (23,294 ) — (1,516 ) 1,410 (19,521 ) Effect of exchange rates on cash — — — (257 ) — (257 ) Cash and cash equivalents Net increase (decrease) for the period — 68,647 10,034 (2,759 ) — 75,922 Balance, beginning of the period — 68,143 6,489 14,463 — 89,095 Balance, end of the period $ — $ 136,790 $ 16,523 $ 11,704 $ — $ 165,017 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Six Months Ended June 30, 2014 Parent Subsidiary Guarantor Non- Eliminations Total Cash flows from operating activities Net income $ 12,213 $ 12,421 $ 5,211 $ 3,006 $ (20,638 ) $ 12,213 Adjustments to reconcile net income to cash (used in) provided by operating activities: Depreciation and amortization — 8,627 2 340 — 8,969 Amortization of financing costs — 942 — — — 942 Gain on sale or disposal of assets — (21 ) — — — (21 ) Provision for bad debts — — 4,229 — — 4,229 Equity in income of subsidiaries (12,213 ) (8,425 ) — — 20,638 — Stock-based compensation — 5,409 — — — 5,409 Changes in operating assets and liabilities: Net settlement receivables and liabilities — 41,722 192 896 — 42,810 Other changes in operating assets and liabilities (31 ) 17,615 (9,289 ) (7,417 ) — 878 Net cash (used in) provided by operating activities (31 ) 78,290 345 (3,175 ) — 75,429 Cash flows from investing activities Acquisitions, net of cash acquired — (11,845 ) — — — (11,845 ) Capital expenditures — (6,977 ) (203 ) (313 ) — (7,493 ) Proceeds from sale of fixed assets — 213 — — — 213 Changes in restricted cash and cash equivalents — (45 ) — — — (45 ) Intercompany investing activities 2,022 (11,622 ) — (1,594 ) 11,194 — Net cash provided by (used in) investing activities 2,022 (30,276 ) (203 ) (1,907 ) 11,194 (19,170 ) Cash flows from financing activities Repayments of prior credit facility — (7,000 ) — — — (7,000 ) Proceeds from exercise of stock options 4,613 — — — — 4,613 Purchase of treasury stock (6,604 ) — — — — (6,604 ) Intercompany financing activities — 1,188 — 10,006 (11,194 ) — Net cash (used in) provided by financing activities (1,991 ) (5,812 ) — 10,006 (11,194 ) (8,991 ) Effect of exchange rates on cash — — — 476 — 476 Cash and cash equivalents Net increase for the period — 42,202 142 5,400 — 47,744 Balance, beginning of the period — 100,573 2,149 11,532 — 114,254 Balance, end of the period $ — $ 142,775 $ 2,291 $ 16,932 $ — $ 161,998 | SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2014 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total Cash flows from operating activities Net income $ 12,140 $ 15,186 $ 7,438 $ 4,734 $ (27,358 ) $ 12,140 Adjustments to reconcile net income to cash (used in) provided by operating activities: Depreciation and amortization — 18,608 3,588 748 — 22,944 Amortization of financing costs — 2,035 — — — 2,035 Provision for bad debts — — 8,991 — — 8,991 Impairment Loss — 3,129 — — — 3,129 Loss on early extinguishment of debt — 2,523 202 — — 2,725 Equity in income of subsidiaries (12,140 ) (15,218 ) — — 27,358 — Stock-based compensation — 8,849 27 — — 8,876 Other non-cash items — 52 284 1 — 337 Changes in operating assets and liabilities: Net settlement receivables and liabilities — (31,414 ) 141 594 — (30,679 ) Other changes in operating assets and liabilities (47 ) 34,774 (20,047 ) (20,647 ) — (5,967 ) Net cash (used in) provided by operating activities (47 ) 38,524 624 (14,570 ) — 24,531 Cash flows from investing activities Acquisitions, net of cash acquired — (11,845 ) (1,056,155 ) — — (1,068,000 ) Capital expenditures — (5,465 ) (3,464 ) (9,092 ) — (18,021 ) Repayments under development agreements — — 276 — — 276 Changes in restricted cash and cash equivalents — (102 ) — — — (102 ) Intercompany investing activities 6,889 (1,085,709 ) — (1,425 ) 1,080,245 — Net cash provided by (used in) investing activities 6,889 (1,103,121 ) (1,059,343 ) (10,517 ) 1,080,245 (1,085,847 ) Cash flows from financing activities Repayments of prior credit facility — (103,000 ) — — — (103,000 ) Proceeds from long-term debt — 1,200,000 — — — 1,200,000 Debt issuance costs — (52,735 ) — — — (52,735 ) Proceeds from exercise of stock options 5,338 — — — — 5,338 Purchase of treasury stock (12,180 ) — — — — (12,180 ) Intercompany financing activities — (12,098 ) 1,063,059 29,284 (1,080,245 ) — Net cash (used in) provided by financing activities (6,842 ) 1,032,167 1,063,059 29,284 (1,080,245 ) 1,037,423 Effect of exchange rates on cash — — — (1,266 ) — (1,266 ) Cash and cash equivalents Net (decrease) increase for the period — (32,430 ) 4,340 2,931 — (25,159 ) Balance, beginning of the period — 100,573 2,149 11,532 — 114,254 Balance, end of the period $ — $ 68,143 $ 6,489 $ 14,463 $ — $ 89,095 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2013 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total Cash flows from operating activities Net income $ 24,398 $ 24,398 $ 11,002 $ 2,594 $ (37,994 ) $ 24,398 Adjustments to reconcile net income to cash provided by (used in) operating activities: Depreciation and amortization — 16,403 1 534 — 16,938 Amortization of financing costs — 1,793 — — — 1,793 Provision for bad debts — — 7,874 — — 7,874 Equity in income of subsidiaries (24,398 ) (13,596 ) — — 37,994 — Stock-based compensation — 5,078 — — — 5,078 Other non-cash items — 180 — (2 ) — 178 Changes in operating assets and liabilities: Net settlement receivables and liabilities — (44,264 ) — (1,729 ) — (45,993 ) Other changes in operating assets and liabilities 19 13,391 (18,880 ) (462 ) — (5,932 ) Net cash provided by (used in) operating activities 19 3,383 (3 ) 935 — 4,334 Cash flows from investing activities Capital expenditures — (13,364 ) (330 ) (206 ) — (13,900 ) Changes in restricted cash and cash equivalents — (90 ) — — — (90 ) Intercompany investing activities 9,900 (4,676 ) — — (5,224 ) — Net cash provided by (used in) investing activities 9,900 (18,130 ) (330 ) (206 ) (5,224 ) (13,990 ) Cash flows from financing activities Repayments of prior credit facility — (18,500 ) — — — (18,500 ) Debt issuance costs — (764 ) — — — (764 ) Proceeds from exercise of stock options 8,431 — — — — 8,431 Purchase of treasury stock (18,350 ) — — — — (18,350 ) Intercompany financing activities — (7,056 ) 2,000 (168 ) 5,224 — Net cash (used in) provided by financing activities (9,919 ) (26,320 ) 2,000 (168 ) 5,224 (29,183 ) Effect of exchange rates on cash — — — 73 — 73 Cash and cash equivalents Net (decrease) increase for the period — (41,067 ) 1,667 634 — (38,766 ) Balance, beginning of the period — 141,640 482 10,898 — 153,020 Balance, end of the period $ — $ 100,573 $ 2,149 $ 11,532 $ — $ 114,254 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2012 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total Cash flows from operating activities Net income $ 25,689 $ 25,689 $ 8,685 $ 861 $ (35,235 ) $ 25,689 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization — 16,160 5 474 — 16,639 Amortization of financing costs — 1,485 — — — 1,485 Provision for bad debts — 2,531 2,651 — — 5,182 Equity (income) loss (25,689 ) (9,546 ) — — 35,235 — Stock-based compensation — 6,655 — — — 6,655 Other non-cash items — 95 — — — 95 Changes in operating assets and liabilities: Net settlement receivables and liabilities — 88,354 — 2,999 — 91,353 Other changes in operating assets and liabilities 29 3,738 (10,705 ) 17,328 — 10,390 Net cash provided by operating activities 29 135,161 636 21,662 — 157,488 Cash flows from investing activities Capital expenditures — (11,546 ) (225 ) (1,015 ) — (12,786 ) Changes in restricted cash and cash equivalents — 255 — — — 255 Intercompany investing activities (6,422 ) 20,336 — — (13,914 ) — Net cash (used in) provided by investing activities (6,422 ) 9,045 (225 ) (1,015 ) (13,914 ) (12,531 ) Cash flows from financing activities Repayments of prior credit facility — (52,500 ) — — — (52,500 ) Debt issuance costs — (676 ) — — — (676 ) Proceeds from exercise of stock options 6,655 — — — — 6,655 Purchase of treasury stock (262 ) — — — — (262 ) Intercompany financing activities — 2,844 — (16,758 ) 13,914 — Net cash provided by (used in) financing activities 6,393 (50,332 ) — (16,758 ) 13,914 (46,783 ) Effect of exchange rates on cash — — — (689 ) — (689 ) Cash and cash equivalents Net increase for the period — 93,874 411 3,200 — 97,485 Balance, beginning of the period — 47,766 71 7,698 — 55,535 Balance, end of the period $ — $ 141,640 $ 482 $ 10,898 $ — $ 153,020 |
SUMMARY OF SIGNIFICANT ACCOUN48
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Property, Plant and Equipment [Line Items] | |||||
Impairment of property, equipment or leasehold improvements | $ 0 | $ 0 | $ 0 | ||
Minimum | |||||
Property, Plant and Equipment [Line Items] | |||||
Estimated life | 3 years | ||||
Development And Placement Fee Agreements [Abstract] | |||||
General term of the agreement | 12 months | 12 months | 12 months | ||
Maximum | |||||
Property, Plant and Equipment [Line Items] | |||||
Estimated life | 5 years | ||||
Development And Placement Fee Agreements [Abstract] | |||||
General term of the agreement | 83 months | 83 months | 83 months |
SUMMARY OF SIGNIFICANT ACCOUN49
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Useful life | 3 years | ||||
Impairment of Intangible Asset | $ 3.1 | $ 0 | $ 0 | ||
Maximum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Useful life | 5 years | ||||
Internally-developed software | Maximum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Useful life | 6 years | 6 years | 6 years |
SUMMARY OF SIGNIFICANT ACCOUN50
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Other Accrued Expenses and Liabilities | |||||||||
Other accrued expenses and liabilities | $ 4,927 | $ 5,381 | $ 4,927 | $ 5,867 | $ 7,100 | ||||
Advertising, Marketing and Promotional Costs | |||||||||
Total advertising, marketing and promotional costs | 500 | 300 | $ 800 | $ 200 | 200 | $ 400 | 1,100 | 700 | $ 700 |
Research and development costs | |||||||||
Research and development costs | $ 4,470 | $ 5,436 | $ 9,906 | $ 804 | 0 | 0 | |||
EMPLOYEE BENEFIT PLAN | |||||||||
Maximum contribution by employees of pre-tax earnings (as a percent) | 100.00% | ||||||||
Matching contribution made by the entity | $ 500 | $ 500 | $ 300 |
SUMMARY OF SIGNIFICANT ACCOUN51
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 4) - Fair Value Inputs Level2 [Member] - Senior credit facility $ in Millions | Dec. 31, 2013USD ($) |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Senior credit facility | $ 104 |
Carrying Reported Amount Fair Value Disclosure [Member] | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Senior credit facility | $ 103 |
SUMMARY OF SIGNIFICANT ACCOUN52
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 5) | 12 Months Ended |
Dec. 31, 2014 | |
Market Performance Based Options [Member] | |
Stock-Based Compensation | |
Vesting condition period over which average stock price should meet target prices | 30 days |
Vesting period | 4 years |
Stock Option [Member] | |
Stock-Based Compensation | |
Expiration period | 10 years |
BUSINESS COMBINATIONS (Details)
BUSINESS COMBINATIONS (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 19, 2014 | Jun. 30, 2014 | Dec. 31, 2013 |
Business Combinations | ||||||
Common stock par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||
Accrued and unpaid contingent liability for NEWave acquisition | $ 2,463 | $ 2,463 | ||||
Multimedia Games Holding Company Inc | ||||||
Business Combinations | ||||||
Common stock par value (in dollars per share) | $ 0.01 |
BUSINESS COMBINATIONS (Details
BUSINESS COMBINATIONS (Details 2) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Apr. 30, 2014 | Dec. 31, 2014 | Apr. 30, 2014 | Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2015 | Jun. 30, 2014 |
Newavemember [Member] | |||||||
Total merger consideration | $ 14,900 | $ 14,900 | $ 14,900 | ||||
Multimedia Games Holding Company Inc | |||||||
Total purchase price for Multimedia Games common stock (29,948 shares at $36.50 per share) | $ 1,093,105 | $ 1,093,105 | $ 1,093,105 | ||||
Common stock shares issued (in shares) | (29,948) | (29,948) | 29,948 | ||||
Share price (in dollars per share) | $ 36.50 | $ 36.50 | $ 36.50 | ||||
Total merger consideration | $ 1,149,389 | $ 1,149,389 | $ 1,149,389 | ||||
Repayments of debt and other obligations | 25,065 | ||||||
Outstanding cash at acquisition date | (118,299) | ||||||
Total purchase consideration | 1,056,155 | ||||||
Multimedia Games Holding Company Inc | Equity Award Holders | |||||||
Cash consideration paid | $ 56,284 | $ 56,284 | $ 56,284 |
BUSINESS COMBINATIONS (Detail55
BUSINESS COMBINATIONS (Details 3) - USD ($) $ in Thousands | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Goodwill | $ 857,670 | $ 857,856 | $ 857,913 | $ 180,084 | $ 180,141 |
Receivables acquired | 24,700 | 24,700 | 24,700 | ||
Inventory acquired | 16,500 | 16,500 | 16,500 | ||
Multimedia Games Holding Company Inc | |||||
Current Assets | 68,548 | 68,548 | 68,548 | ||
Property, equipment and leasehold improvements, net | 87,283 | 87,283 | 87,283 | ||
Goodwill | 669,542 | 669,542 | 669,542 | ||
Other intangible assets, net | 403,300 | 403,300 | 403,300 | ||
Other receivables, non-current | 5,030 | 5,030 | 5,030 | ||
Other assets, long-term | 3,392 | 3,392 | 3,392 | ||
Deferred tax asset, non-current | 22,287 | 22,287 | 22,287 | ||
Total assets | 1,259,382 | 1,259,382 | 1,259,382 | ||
Current Liabilities | 44,291 | 44,291 | 44,291 | ||
Deferred tax liability, non-current | 158,418 | 158,418 | 158,418 | ||
Other accrued expenses and liabilities | 518 | 518 | 518 | ||
Total liabilities | 203,227 | 203,227 | 203,227 | ||
Net assets acquired | $ 1,056,155 | $ 1,056,155 | $ 1,056,155 |
BUSINESS COMBINATIONS (Detail56
BUSINESS COMBINATIONS (Details 4) - USD ($) $ / shares in Units, $ in Thousands | Apr. 30, 2014 | Dec. 31, 2014 | Apr. 30, 2014 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Property, Equipment and Leased Assets | ||||||||||||||||||
Estimated Fair Value | $ 87,283 | $ 87,283 | $ 87,283 | |||||||||||||||
Purchased intangible assets | ||||||||||||||||||
Useful Life (years) | 3 years | |||||||||||||||||
Acquisition related costs | $ 27,400 | |||||||||||||||||
Net Income (Loss) Attributable to Parent | $ (12,741) | $ 469 | (5,749) | $ 5,676 | $ 4,724 | $ 7,489 | $ 5,704 | $ 5,782 | $ 6,776 | $ 6,136 | $ (12,272) | $ 12,213 | $ 12,140 | 24,398 | $ 25,689 | |||
Effective tax rate used for adjustments | 35.00% | |||||||||||||||||
Business Acquisition, Pro Forma Information [Abstract] | ||||||||||||||||||
Revenues | $ 800,732 | 771,810 | ||||||||||||||||
Net (loss) | $ (5,083) | $ (7,003) | ||||||||||||||||
Basic loss per share | $ (0.08) | $ (0.11) | ||||||||||||||||
Diluted loss per share | $ (0.08) | $ (0.10) | ||||||||||||||||
Gaming Equipment | ||||||||||||||||||
Property, Equipment and Leased Assets | ||||||||||||||||||
Estimated Fair Value | 78,201 | 78,201 | $ 78,201 | |||||||||||||||
Leasehold and building improvements | ||||||||||||||||||
Property, Equipment and Leased Assets | ||||||||||||||||||
Estimated Fair Value | 2,105 | 2,105 | 2,105 | |||||||||||||||
Machinery and equipment | ||||||||||||||||||
Property, Equipment and Leased Assets | ||||||||||||||||||
Estimated Fair Value | 4,126 | 4,126 | 4,126 | |||||||||||||||
Other | ||||||||||||||||||
Property, Equipment and Leased Assets | ||||||||||||||||||
Estimated Fair Value | 2,851 | 2,851 | $ 2,851 | |||||||||||||||
Newavemember [Member] | ||||||||||||||||||
Purchased intangible assets | ||||||||||||||||||
Discount rate (as a percent) | 15.50% | |||||||||||||||||
Aggregate purchase price | $ 14,900 | $ 14,900 | 14,900 | |||||||||||||||
Aggregate purchase price expected to be paid | $ 2,500 | 2,500 | ||||||||||||||||
Multimedia Games Holding Company Inc | ||||||||||||||||||
Property, Equipment and Leased Assets | ||||||||||||||||||
Estimated Fair Value | 87,283 | 87,283 | 87,283 | |||||||||||||||
Purchased intangible assets | ||||||||||||||||||
Aggregate purchase price | 1,149,389 | 1,149,389 | 1,149,389 | |||||||||||||||
Acquisition related costs | 400 | 1,800 | $ 1,300 | |||||||||||||||
Revenue | 7,400 | |||||||||||||||||
Net Income (Loss) Attributable to Parent | 3,000 | |||||||||||||||||
Financial advisory and legal fees | 10,700 | 1,500 | 10,700 | 10,700 | ||||||||||||||
Multimedia Games Holding Company Inc | Fair Value Inputs Level2 [Member] | ||||||||||||||||||
Purchased intangible assets | ||||||||||||||||||
Estimated Fair Value | 403,300 | 403,300 | 403,300 | 403,300 | 403,300 | 403,300 | ||||||||||||
Multimedia Games Holding Company Inc | Fair Value Inputs Level2 [Member] | Tradenames and trademarks | ||||||||||||||||||
Purchased intangible assets | ||||||||||||||||||
Estimated Fair Value | 14,800 | 14,800 | 14,800 | 14,800 | 14,800 | 14,800 | ||||||||||||
Multimedia Games Holding Company Inc | Fair Value Inputs Level2 [Member] | Computer Software Intangible Asset [Member] | ||||||||||||||||||
Purchased intangible assets | ||||||||||||||||||
Estimated Fair Value | 3,755 | 3,755 | 3,755 | 3,755 | 3,755 | 3,755 | ||||||||||||
Multimedia Games Holding Company Inc | Fair Value Inputs Level2 [Member] | Developed Technology [Member] | ||||||||||||||||||
Purchased intangible assets | ||||||||||||||||||
Estimated Fair Value | 139,645 | 139,645 | 139,645 | 139,645 | 139,645 | 139,645 | ||||||||||||
Multimedia Games Holding Company Inc | Fair Value Inputs Level2 [Member] | Customer relationships | ||||||||||||||||||
Purchased intangible assets | ||||||||||||||||||
Estimated Fair Value | 231,100 | 231,100 | 231,100 | 231,100 | 231,100 | 231,100 | ||||||||||||
Multimedia Games Holding Company Inc | Fair Value Inputs Level2 [Member] | Contract Rights | ||||||||||||||||||
Purchased intangible assets | ||||||||||||||||||
Estimated Fair Value | $ 14,000 | 14,000 | 14,000 | $ 14,000 | 14,000 | $ 14,000 | ||||||||||||
Multimedia Games Holding Company Inc | Gaming Equipment | ||||||||||||||||||
Property, Equipment and Leased Assets | ||||||||||||||||||
Estimated Fair Value | 78,201 | 78,201 | 78,201 | |||||||||||||||
Multimedia Games Holding Company Inc | Leasehold and building improvements | ||||||||||||||||||
Property, Equipment and Leased Assets | ||||||||||||||||||
Estimated Fair Value | 2,105 | 2,105 | 2,105 | |||||||||||||||
Multimedia Games Holding Company Inc | Machinery and equipment | ||||||||||||||||||
Property, Equipment and Leased Assets | ||||||||||||||||||
Estimated Fair Value | 4,126 | 4,126 | 4,126 | |||||||||||||||
Multimedia Games Holding Company Inc | Other | ||||||||||||||||||
Property, Equipment and Leased Assets | ||||||||||||||||||
Estimated Fair Value | $ 2,851 | $ 2,851 | $ 2,851 | |||||||||||||||
Minimum | ||||||||||||||||||
Property, Equipment and Leased Assets | ||||||||||||||||||
Useful Life (years) | 3 years | |||||||||||||||||
Minimum | Computer Software Intangible Asset [Member] | ||||||||||||||||||
Purchased intangible assets | ||||||||||||||||||
Useful Life (years) | 1 year | |||||||||||||||||
Minimum | Customer relationships | ||||||||||||||||||
Purchased intangible assets | ||||||||||||||||||
Useful Life (years) | 8 years | 8 years | 8 years | |||||||||||||||
Minimum | Other intangible asset | ||||||||||||||||||
Purchased intangible assets | ||||||||||||||||||
Discount rate (as a percent) | 10.00% | 10.00% | 10.00% | |||||||||||||||
Minimum | Gaming Equipment | ||||||||||||||||||
Property, Equipment and Leased Assets | ||||||||||||||||||
Useful Life (years) | 2 years | |||||||||||||||||
Minimum | Machinery and equipment | ||||||||||||||||||
Property, Equipment and Leased Assets | ||||||||||||||||||
Useful Life (years) | 3 years | 3 years | 3 years | 3 years | ||||||||||||||
Minimum | Other | ||||||||||||||||||
Property, Equipment and Leased Assets | ||||||||||||||||||
Useful Life (years) | 2 years | 2 years | 2 years | 2 years | ||||||||||||||
Minimum | Multimedia Games Holding Company Inc | Fair Value Inputs Level2 [Member] | Tradenames and trademarks | ||||||||||||||||||
Purchased intangible assets | ||||||||||||||||||
Useful Life (years) | 3 years | 3 years | 3 years | |||||||||||||||
Minimum | Multimedia Games Holding Company Inc | Fair Value Inputs Level2 [Member] | Computer Software Intangible Asset [Member] | ||||||||||||||||||
Purchased intangible assets | ||||||||||||||||||
Useful Life (years) | 3 years | 3 years | 3 years | |||||||||||||||
Minimum | Multimedia Games Holding Company Inc | Fair Value Inputs Level2 [Member] | Developed Technology [Member] | ||||||||||||||||||
Purchased intangible assets | ||||||||||||||||||
Useful Life (years) | 2 years | 2 years | 2 years | |||||||||||||||
Minimum | Multimedia Games Holding Company Inc | Fair Value Inputs Level2 [Member] | Customer relationships | ||||||||||||||||||
Purchased intangible assets | ||||||||||||||||||
Useful Life (years) | 8 years | 8 years | 8 years | |||||||||||||||
Minimum | Multimedia Games Holding Company Inc | Fair Value Inputs Level2 [Member] | Contract Rights | ||||||||||||||||||
Purchased intangible assets | ||||||||||||||||||
Useful Life (years) | 1 year | 1 year | 1 year | |||||||||||||||
Minimum | Multimedia Games Holding Company Inc | Gaming Equipment | ||||||||||||||||||
Property, Equipment and Leased Assets | ||||||||||||||||||
Useful Life (years) | 2 years | 2 years | ||||||||||||||||
Minimum | Multimedia Games Holding Company Inc | Machinery and equipment | ||||||||||||||||||
Property, Equipment and Leased Assets | ||||||||||||||||||
Useful Life (years) | 3 years | 3 years | ||||||||||||||||
Minimum | Multimedia Games Holding Company Inc | Other | ||||||||||||||||||
Property, Equipment and Leased Assets | ||||||||||||||||||
Useful Life (years) | 2 years | 2 years | ||||||||||||||||
Maximum | ||||||||||||||||||
Property, Equipment and Leased Assets | ||||||||||||||||||
Useful Life (years) | 5 years | |||||||||||||||||
Purchased intangible assets | ||||||||||||||||||
Useful Life (years) | 5 years | |||||||||||||||||
Maximum | Computer Software Intangible Asset [Member] | ||||||||||||||||||
Purchased intangible assets | ||||||||||||||||||
Useful Life (years) | 5 years | |||||||||||||||||
Maximum | Customer relationships | ||||||||||||||||||
Purchased intangible assets | ||||||||||||||||||
Useful Life (years) | 12 years | 12 years | 12 years | |||||||||||||||
Maximum | Other intangible asset | ||||||||||||||||||
Purchased intangible assets | ||||||||||||||||||
Discount rate (as a percent) | 11.00% | 11.00% | 11.00% | |||||||||||||||
Maximum | Gaming Equipment | ||||||||||||||||||
Property, Equipment and Leased Assets | ||||||||||||||||||
Useful Life (years) | 4 years | |||||||||||||||||
Maximum | Machinery and equipment | ||||||||||||||||||
Property, Equipment and Leased Assets | ||||||||||||||||||
Useful Life (years) | 5 years | 5 years | 5 years | 5 years | ||||||||||||||
Maximum | Other | ||||||||||||||||||
Property, Equipment and Leased Assets | ||||||||||||||||||
Useful Life (years) | 5 years | 7 years | 5 years | 5 years | ||||||||||||||
Maximum | Multimedia Games Holding Company Inc | Fair Value Inputs Level2 [Member] | Tradenames and trademarks | ||||||||||||||||||
Purchased intangible assets | ||||||||||||||||||
Useful Life (years) | 7 years | 7 years | 7 years | |||||||||||||||
Maximum | Multimedia Games Holding Company Inc | Fair Value Inputs Level2 [Member] | Computer Software Intangible Asset [Member] | ||||||||||||||||||
Purchased intangible assets | ||||||||||||||||||
Useful Life (years) | 5 years | 5 years | 5 years | |||||||||||||||
Maximum | Multimedia Games Holding Company Inc | Fair Value Inputs Level2 [Member] | Developed Technology [Member] | ||||||||||||||||||
Purchased intangible assets | ||||||||||||||||||
Useful Life (years) | 6 years | 6 years | 6 years | |||||||||||||||
Maximum | Multimedia Games Holding Company Inc | Fair Value Inputs Level2 [Member] | Customer relationships | ||||||||||||||||||
Purchased intangible assets | ||||||||||||||||||
Useful Life (years) | 12 years | 12 years | 12 years | |||||||||||||||
Maximum | Multimedia Games Holding Company Inc | Fair Value Inputs Level2 [Member] | Contract Rights | ||||||||||||||||||
Purchased intangible assets | ||||||||||||||||||
Useful Life (years) | 7 years | 7 years | 7 years | |||||||||||||||
Maximum | Multimedia Games Holding Company Inc | Gaming Equipment | ||||||||||||||||||
Property, Equipment and Leased Assets | ||||||||||||||||||
Useful Life (years) | 4 years | 4 years | ||||||||||||||||
Maximum | Multimedia Games Holding Company Inc | Machinery and equipment | ||||||||||||||||||
Property, Equipment and Leased Assets | ||||||||||||||||||
Useful Life (years) | 5 years | 5 years | ||||||||||||||||
Maximum | Multimedia Games Holding Company Inc | Other | ||||||||||||||||||
Property, Equipment and Leased Assets | ||||||||||||||||||
Useful Life (years) | 7 years | 7 years |
ATM FUNDING AGREEMENTS (Details
ATM FUNDING AGREEMENTS (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2012 | |
ATM Funding Agreements | ||||||||||
Site-Funded ATM liability | $ 69.4 | $ 71.5 | $ 69.4 | $ 69.3 | $ 68.9 | |||||
Gains (losses) related to self-insurance | 0 | 0 | $ 0 | $ 0 | 0 | 0 | ||||
Indemnification Guarantee [Member] | Cash [Member] | ||||||||||
ATM Funding Agreements | ||||||||||
Cash usage fees incurred | 0.5 | 0.5 | $ 1 | 0.6 | $ 1.2 | 2.3 | 2.2 | $ 3.1 | ||
Indemnification Guarantee [Member] | Contract Cash Solutions Agreement [Member] | Cash [Member] | ||||||||||
ATM Funding Agreements | ||||||||||
Outstanding balance of ATM cash utilized | 425 | 500 | 425 | 396.3 | $ 427.1 | |||||
Indemnification Guarantee [Member] | Second Amendment Contract Cash Solutions Agreement [Member] | Cash [Member] | ||||||||||
ATM Funding Agreements | ||||||||||
Maximum amount | $ 271.8 | $ 396.3 | $ 271.8 | $ 500 | $ 400 |
TRADE RECEIVABLES (Details)
TRADE RECEIVABLES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2015 | Mar. 31, 2015 | |
TRADE RECEIVABLES | |||||
Balance at the beginning of the period | $ 2,777 | $ 6,908 | $ 6,756 | ||
Warranty expense provision | 9,029 | 7,874 | 5,226 | ||
Charge offs against reserve | (9,022) | (12,005) | (5,074) | ||
Balance at the end of the period | 2,784 | 2,777 | $ 6,908 | ||
Trade receivables, net | 37,697 | 11,658 | $ 41,834 | $ 39,220 | |
Warranty and other trade receivables | 4,180 | 3,396 | 4,311 | 4,742 | |
Kiosk Sales & Services Reporting Units | |||||
TRADE RECEIVABLES | |||||
Trade receivables, net | 5,247 | $ 8,262 | 4,723 | 4,301 | |
Gaming | |||||
TRADE RECEIVABLES | |||||
Trade receivables, net | $ 28,270 | $ 32,800 | $ 30,177 |
OTHER RECEIVABLES (Details)
OTHER RECEIVABLES (Details) - USD ($) $ in Thousands | Jul. 17, 2014 | Jul. 17, 2014 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Financing Receivable | ||||||
Notes and loans receivables, net of discount of $0 and $853, respectively | $ 10,984 | $ 13,261 | $ 13,939 | $ 3,249 | ||
Federal and state income tax receivable | 7,465 | 15,142 | 15,092 | 16 | ||
Other | 731 | 582 | 706 | 2,039 | ||
Total Other receivables | 19,180 | 28,985 | 29,737 | 5,304 | ||
Less: Notes and loans receivable, non-current | 7,808 | 8,593 | 9,184 | 699 | ||
Total other receivables, current portion | 11,372 | 20,392 | 20,553 | 4,605 | ||
Discount of notes receivable other | $ 776 | $ 814 | $ 853 | $ 0 | ||
Bee Caves Games, Inc | ||||||
Financing Receivable | ||||||
Note receivable, Face Amount | $ 4,500 | $ 4,500 | ||||
Note receivable, stated interest rate (as a percent) | 7.00% | 7.00% | ||||
Note receivable, interest only payments term | 24 months | 24 months | ||||
Note receivable, Repayment of principle and interest term | 48 months | 48 months |
PREPAID AND OTHER ASSETS (Detai
PREPAID AND OTHER ASSETS (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Prepaid expenses and other assets | ||||
Prepaid expenses | $ 7,755 | $ 6,935 | $ 7,163 | $ 7,679 |
Deposit | 9,582 | 8,781 | 6,260 | |
Other | 3,753 | 3,741 | 3,044 | 2,735 |
Total prepaid expenses and other assets | 21,090 | 18,889 | 18,988 | 16,674 |
Other assets non-current | ||||
Debt issuance costs | 26,592 | 40,012 | 41,109 | 4,081 |
Prepaid expense And Deposits non-current | 4,430 | 3,998 | 3,956 | 1,320 |
Other | 5,893 | 6,002 | 5,878 | 4,985 |
Total other assets, non-current | $ 36,915 | $ 50,012 | $ 50,943 | $ 10,386 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
INVENTORY | ||||
Raw materials and component parts, net of reserves of $0 and $22, respectively | $ 19,387 | $ 19,997 | $ 21,151 | $ 7,147 |
Work in progress | 1,403 | 1,406 | 803 | 1,504 |
Finished goods | 2,663 | 1,647 | 5,209 | 762 |
Inventory, Net, Total | 23,453 | 23,050 | 27,163 | 9,413 |
Raw materials and component parts, reserves | $ 142 | $ 82 | $ 22 | $ 50 |
DEVELOPMENT AND PLACEMENT FEE62
DEVELOPMENT AND PLACEMENT FEE AGREEMENTS (Details) $ in Millions | Mar. 07, 2013USD ($)item | Nov. 19, 2012USD ($)item | Jan. 31, 2013item | Nov. 30, 2012item | Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 |
Minimum | |||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||
General term of the agreement | 12 months | 12 months | 12 months | ||||
Maximum | |||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||
General term of the agreement | 83 months | 83 months | 83 months | ||||
Chickasaw Nation | Winstar World Casino | |||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||
Payment advances made under development and placement fee agreements | $ | $ 6.5 | ||||||
Unused Elements Abstract | |||||||
Number of unit placements received | 150 | ||||||
Period covered for units placement received | 68 months | ||||||
Number of installments made | 2 | 2 | |||||
Chickasaw Nation | Six casino locations across Oklahoma | |||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||
Payment advances made under development and placement fee agreements | $ | $ 2 | ||||||
Number of unit placement with period coverage extension | 201 | ||||||
Number of casino location with period coverage extension | 6 | ||||||
Additional term | 50 months |
PROPERTY, EQUIPMENT AND LEASE63
PROPERTY, EQUIPMENT AND LEASED ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||
Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Cost | $ 151,020 | $ 140,381 | $ 135,495 | $ 151,020 | $ 135,495 | $ 49,663 | ||||
Accumulated Depreciation | 46,499 | 37,622 | 29,410 | 46,499 | 29,410 | 30,953 | ||||
Net Book Value | 104,521 | 102,759 | 106,085 | 104,521 | 106,085 | 18,710 | ||||
Depreciation expense | 10,717 | 10,377 | $ 1,919 | $ 1,927 | 21,094 | $ 3,846 | $ 8,745 | 7,350 | $ 6,843 | |
Minimum | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Useful Life (years) | 3 years | |||||||||
Maximum | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Useful Life (years) | 5 years | |||||||||
Rental Pool Deployed Member | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Cost | 78,058 | 74,742 | 70,295 | 78,058 | $ 70,295 | |||||
Accumulated Depreciation | 13,992 | 7,429 | 876 | 13,992 | 876 | |||||
Net Book Value | 64,066 | $ 67,313 | 69,419 | $ 64,066 | $ 69,419 | |||||
Rental Pool Deployed Member | Minimum | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Useful Life (years) | 2 years | 2 years | 2 years | |||||||
Rental Pool Deployed Member | Maximum | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Useful Life (years) | 4 years | 4 years | 4 years | |||||||
Represents the Rental pool which is undeployed. | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Cost | 14,831 | $ 11,321 | 10,562 | $ 14,831 | $ 10,562 | |||||
Accumulated Depreciation | 2,699 | 1,318 | 151 | 2,699 | 151 | |||||
Net Book Value | 12,132 | $ 10,003 | 10,411 | $ 12,132 | $ 10,411 | |||||
Represents the Rental pool which is undeployed. | Minimum | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Useful Life (years) | 2 years | 2 years | 2 years | |||||||
Represents the Rental pool which is undeployed. | Maximum | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Useful Life (years) | 4 years | 4 years | 4 years | |||||||
Automated Teller Machine Equipment [Member] | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Cost | 20,818 | $ 22,099 | 23,572 | $ 20,818 | $ 23,572 | 28,394 | ||||
Accumulated Depreciation | 14,692 | 15,416 | 16,543 | 14,692 | 16,543 | 22,011 | ||||
Net Book Value | 6,126 | $ 6,683 | 7,029 | $ 6,126 | $ 7,029 | 6,383 | ||||
Automated Teller Machine Equipment [Member] | Maximum | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Useful Life (years) | 5 years | 5 years | 5 years | |||||||
Office Computer And Other Equipment [Member] | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Cost | 16,745 | $ 15,885 | 15,238 | $ 16,745 | $ 15,238 | 11,729 | ||||
Accumulated Depreciation | 10,543 | 9,736 | 8,848 | 10,543 | 8,848 | 5,408 | ||||
Net Book Value | 6,202 | $ 6,149 | 6,390 | $ 6,202 | $ 6,390 | 6,321 | ||||
Office Computer And Other Equipment [Member] | Maximum | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Useful Life (years) | 3 years | 3 years | 3 years | |||||||
Leasehold And Building Improvements [Member] | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Cost | 6,142 | $ 6,294 | 6,289 | $ 6,142 | $ 6,289 | 6,362 | ||||
Accumulated Depreciation | 1,456 | 1,187 | 895 | 1,456 | 895 | 1,268 | ||||
Net Book Value | 4,686 | 5,107 | 5,394 | 4,686 | 5,394 | 5,094 | ||||
Machinery and equipment | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Cost | 5,282 | 3,469 | 3,395 | 5,282 | 3,395 | |||||
Accumulated Depreciation | 538 | 282 | 34 | 538 | 34 | |||||
Net Book Value | 4,744 | $ 3,187 | $ 3,361 | $ 4,744 | $ 3,361 | |||||
Machinery and equipment | Minimum | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Useful Life (years) | 3 years | 3 years | 3 years | 3 years | ||||||
Machinery and equipment | Maximum | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Useful Life (years) | 5 years | 5 years | 5 years | 5 years | ||||||
Cash Advance Equipment [Member] | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Cost | 6,620 | $ 3,922 | $ 3,372 | $ 6,620 | $ 3,372 | 3,178 | ||||
Accumulated Depreciation | 2,159 | 2,023 | 1,873 | 2,159 | 1,873 | 2,266 | ||||
Net Book Value | 4,461 | $ 1,899 | 1,499 | $ 4,461 | $ 1,499 | $ 912 | ||||
Cash Advance Equipment [Member] | Maximum | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Useful Life (years) | 3 years | 3 years | 3 years | |||||||
Other | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Cost | 2,524 | $ 2,649 | 2,772 | $ 2,524 | $ 2,772 | |||||
Accumulated Depreciation | 420 | 231 | 189 | 420 | 189 | |||||
Net Book Value | $ 2,104 | $ 2,418 | $ 2,583 | $ 2,104 | $ 2,583 | |||||
Other | Minimum | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Useful Life (years) | 2 years | 2 years | 2 years | 2 years | ||||||
Other | Maximum | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Useful Life (years) | 5 years | 7 years | 5 years | 5 years |
GOODWILL AND OTHER INTANGIBLE64
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Changes in the carrying amount of goodwill | ||||||
Balance at the beginning of the period | $ 857,856 | $ 857,913 | $ 857,913 | $ 180,084 | $ 180,141 | |
Foreign translation adjustment | (62) | (57) | ||||
Goodwill, Acquired During Period | 677,891 | |||||
Balance at the end of the period | 857,670 | 857,856 | 857,670 | 857,913 | 180,084 | |
Key assumptions used in estimating fair value under the discounted cash flow approach and under the income approach | ||||||
Goodwill impairment | $ 0 | 0 | $ 0 | $ 0 | ||
Minimum | ||||||
Unused Elements Abstract | ||||||
Projected compound average revenue growth rates (as a percent) | 0.00% | |||||
Terminal value growth rate (as a percent) | 1.00% | |||||
Multiple of revenue | 0 | |||||
Multiple of EBITDA | 6.2 | |||||
Maximum | ||||||
Unused Elements Abstract | ||||||
Projected compound average revenue growth rates (as a percent) | 4.00% | |||||
Terminal value growth rate (as a percent) | 2.50% | |||||
Multiple of revenue | 5.2 | |||||
Multiple of EBITDA | 8.6 | |||||
Newavemember [Member] | ||||||
Key assumptions used in estimating fair value under the discounted cash flow approach and under the income approach | ||||||
Discount rate (as a percent) | 15.50% | |||||
Cash Advance [Member] | ||||||
Changes in the carrying amount of goodwill | ||||||
Balance at the beginning of the period | 100,818 | 100,818 | $ 100,880 | 100,937 | ||
Foreign translation adjustment | (62) | (57) | ||||
Balance at the end of the period | $ 100,818 | 100,880 | ||||
Key assumptions used in estimating fair value under the discounted cash flow approach and under the income approach | ||||||
Discount rate (as a percent) | 11.00% | |||||
Automated Teller Machine [Member] | ||||||
Changes in the carrying amount of goodwill | ||||||
Balance at the beginning of the period | 33,051 | 33,051 | $ 33,051 | 33,051 | ||
Balance at the end of the period | $ 33,051 | 33,051 | ||||
Key assumptions used in estimating fair value under the discounted cash flow approach and under the income approach | ||||||
Discount rate (as a percent) | 11.00% | |||||
Check Services [Member] | ||||||
Changes in the carrying amount of goodwill | ||||||
Balance at the beginning of the period | 23,281 | 23,281 | $ 23,281 | 23,281 | ||
Balance at the end of the period | $ 23,281 | 23,281 | ||||
Key assumptions used in estimating fair value under the discounted cash flow approach and under the income approach | ||||||
Discount rate (as a percent) | 11.00% | |||||
Gaming | ||||||
Changes in the carrying amount of goodwill | ||||||
Balance at the beginning of the period | 669,452 | 669,452 | ||||
Goodwill, Acquired During Period | $ 669,452 | |||||
Balance at the end of the period | 669,452 | |||||
Other Revenues [Member] | ||||||
Changes in the carrying amount of goodwill | ||||||
Balance at the beginning of the period | $ 31,311 | $ 31,311 | 22,872 | 22,872 | ||
Goodwill, Acquired During Period | 8,439 | |||||
Balance at the end of the period | $ 31,311 | $ 22,872 | ||||
Other Revenues [Member] | Central Credit Reporting Units | ||||||
Key assumptions used in estimating fair value under the discounted cash flow approach and under the income approach | ||||||
Discount rate (as a percent) | 11.00% | |||||
Other Revenues [Member] | Kiosk Sales & Services Reporting Units | ||||||
Key assumptions used in estimating fair value under the discounted cash flow approach and under the income approach | ||||||
Discount rate (as a percent) | 11.50% |
GOODWILL AND OTHER INTANGIBLE65
GOODWILL AND OTHER INTANGIBLE ASSETS (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Other Intangible Assets | |||||||||
Useful Life (years) | 3 years | ||||||||
Cost | $ 503,508 | $ 496,796 | $ 503,508 | $ 491,311 | $ 77,951 | ||||
Accumulated Amortization | 99,376 | 76,693 | 99,376 | 54,526 | 46,416 | ||||
Net Book Value | 404,132 | 420,103 | 404,132 | 436,785 | 31,535 | ||||
Impairment of Intangible Asset | 3,100 | 0 | $ 0 | ||||||
Amortization of Intangible Assets | 20,800 | 31,032 | $ 41,400 | $ 4,281 | 2,800 | $ 5,100 | 14,200 | 9,600 | 9,800 |
Anticipated amortization expense related to other intangible assets | |||||||||
2,015 | 91,651 | ||||||||
2,016 | 85,757 | ||||||||
2,017 | 47,522 | ||||||||
2,018 | 36,559 | ||||||||
2,019 | 35,392 | ||||||||
Thereafter | $ 139,904 | ||||||||
Maximum | |||||||||
Other Intangible Assets | |||||||||
Useful Life (years) | 5 years | ||||||||
Contract rights under development and placement fee agreements | |||||||||
Other Intangible Assets | |||||||||
Cost | 16,387 | 14,919 | 16,387 | $ 14,000 | |||||
Accumulated Amortization | 4,092 | 2,104 | 4,092 | 301 | |||||
Net Book Value | 12,295 | $ 12,815 | $ 12,295 | $ 13,699 | |||||
Contract rights under development and placement fee agreements | Minimum | |||||||||
Other Intangible Assets | |||||||||
Useful Life (years) | 1 year | 1 year | 1 year | ||||||
Contract rights under development and placement fee agreements | Maximum | |||||||||
Other Intangible Assets | |||||||||
Useful Life (years) | 7 years | 7 years | 3 years | ||||||
Customer Contracts [Member] | |||||||||
Other Intangible Assets | |||||||||
Cost | 43,938 | $ 43,938 | $ 43,938 | $ 43,938 | 39,142 | ||||
Accumulated Amortization | 32,221 | 31,093 | 32,221 | 29,931 | 25,670 | ||||
Net Book Value | 11,717 | $ 12,845 | $ 11,717 | $ 14,007 | 13,472 | ||||
Customer Contracts [Member] | Minimum | |||||||||
Other Intangible Assets | |||||||||
Useful Life (years) | 7 years | 7 years | 7 years | ||||||
Customer Contracts [Member] | Maximum | |||||||||
Other Intangible Assets | |||||||||
Useful Life (years) | 14 years | 14 years | 14 years | ||||||
Customer relationships | |||||||||
Other Intangible Assets | |||||||||
Cost | 231,100 | $ 231,100 | $ 231,100 | $ 231,100 | |||||
Accumulated Amortization | 11,240 | 5,999 | 11,240 | 733 | |||||
Net Book Value | 219,860 | $ 225,101 | $ 219,860 | $ 230,367 | |||||
Customer relationships | Minimum | |||||||||
Other Intangible Assets | |||||||||
Useful Life (years) | 8 years | 8 years | 8 years | ||||||
Customer relationships | Maximum | |||||||||
Other Intangible Assets | |||||||||
Useful Life (years) | 12 years | 12 years | 12 years | ||||||
Internally-developed software | |||||||||
Other Intangible Assets | |||||||||
Cost | 184,242 | $ 179,139 | $ 184,242 | $ 140,289 | |||||
Accumulated Amortization | 40,679 | 27,492 | 40,679 | 1,571 | |||||
Net Book Value | 143,563 | 151,647 | 143,563 | 138,718 | |||||
Development costs capitalized | 4,700 | $ 1,000 | $ 5,700 | $ 300 | $ 4,500 | $ 4,900 | $ 8,200 | 5,100 | $ 700 |
Internally-developed software | Minimum | |||||||||
Other Intangible Assets | |||||||||
Useful Life (years) | 1 year | 1 year | 2 years | ||||||
Internally-developed software | Maximum | |||||||||
Other Intangible Assets | |||||||||
Useful Life (years) | 6 years | 6 years | 6 years | ||||||
Computer Software Intangible Asset [Member] | |||||||||
Other Intangible Assets | |||||||||
Cost | $ 34,128 | 26,386 | |||||||
Accumulated Amortization | 13,033 | 13,069 | |||||||
Net Book Value | $ 21,095 | 13,317 | |||||||
Computer Software Intangible Asset [Member] | Minimum | |||||||||
Other Intangible Assets | |||||||||
Useful Life (years) | 1 year | ||||||||
Computer Software Intangible Asset [Member] | Maximum | |||||||||
Other Intangible Assets | |||||||||
Useful Life (years) | 5 years | ||||||||
Patents Trademarks and Other Member | |||||||||
Other Intangible Assets | |||||||||
Cost | 27,841 | $ 27,700 | $ 27,841 | $ 27,856 | 12,423 | ||||
Accumulated Amortization | 11,144 | 10,005 | 11,144 | 8,957 | 7,677 | ||||
Net Book Value | $ 16,697 | $ 17,695 | $ 16,697 | $ 18,899 | $ 4,746 | ||||
Patents Trademarks and Other Member | Minimum | |||||||||
Other Intangible Assets | |||||||||
Useful Life (years) | 1 year | 1 year | 1 year | ||||||
Patents Trademarks and Other Member | Maximum | |||||||||
Other Intangible Assets | |||||||||
Useful Life (years) | 17 years | 17 years | 17 years | ||||||
Online payment processing | |||||||||
Other Intangible Assets | |||||||||
Amortization of Intangible Assets | $ 1,600 |
ACCOUNTS PAYABLE AND ACCRUED 66
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Accounts payable and accrued expenses | ||||
Trade accounts payable | $ 52,169 | $ 52,226 | $ 48,962 | $ 35,662 |
Accrued Interest | 26,698 | 2,150 | 3,387 | 208 |
Payroll and related expenses | 7,275 | 14,089 | 10,889 | 4,758 |
Deferred and unearned revenues | 9,308 | 7,497 | 8,016 | 4,270 |
Cash access Processing and related expenses | 3,535 | 8,861 | 4,414 | 4,300 |
Accrued Taxes | 1,999 | 4,436 | 3,195 | 1,024 |
Other | 15,711 | 24,284 | 25,805 | 3,379 |
Total accounts payable and accrued expenses | $ 36,712 | $ 113,543 | $ 104,668 | $ 53,601 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) $ in Thousands | Dec. 19, 2014 | Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
BORROWINGS | ||||||
Total Debt | $ 1,180,000 | $ 1,182,500 | $ 1,180,000 | $ 1,200,000 | $ 103,000 | |
Less: original issue discount | (12,494) | (10,769) | (12,494) | (11,213) | ||
Borrowings | 1,167,506 | 1,171,731 | 1,167,506 | 1,188,787 | 103,000 | |
Less: current portion of long-term debt | (10,000) | (10,000) | (10,000) | (10,000) | (1,030) | |
Long-term debt, less current portion | 1,157,506 | 1,161,731 | 1,157,506 | 1,178,787 | 101,970 | |
Loss on extinguishment of debt | 12,977 | 0 | 12,977 | 2,725 | ||
Total debt after discount | 1,167,506 | 1,171,731 | 1,167,506 | 1,188,787 | 103,000 | |
Unused Elements Abstract | ||||||
Agreed upon time commercially reasonable efforts are to be made to aid purchasers in the resale of Notes | 1 year | |||||
Maturities of the Company's borrowings (excluding excess cash flow payments) | ||||||
2,015 | 10,000 | |||||
2,016 | 10,000 | |||||
2,017 | 10,000 | |||||
2,018 | 10,000 | |||||
2,019 | 10,000 | |||||
Thereafter | 1,150,000 | |||||
Senior credit facility | ||||||
BORROWINGS | ||||||
Total Debt | $ 103,000 | |||||
Credit Facilities | ||||||
BORROWINGS | ||||||
Less: original issue discount | $ 7,500 | |||||
Unused Elements Abstract | ||||||
Holdings ceases to own of equity interests of GCA (as a percent) | 100.00% | |||||
Credit Facilities | Minimum | ||||||
Unused Elements Abstract | ||||||
Percentage Of Acquisition Of Voting Interests Of Holdings Capital Stock By Third Person | 35.00% | |||||
Senior secured term Loan | ||||||
BORROWINGS | ||||||
Total Debt | 495,000 | 497,500 | 495,000 | $ 500,000 | ||
Senior secured notes | ||||||
BORROWINGS | ||||||
Total Debt | 335,000 | 335,000 | 335,000 | 350,000 | ||
Less: original issue discount | $ 3,800 | |||||
Unused Elements Abstract | ||||||
Redemption price (as a percent) | 100.00% | |||||
Aggregate principal amount of Senior Notes | $ 350,000 | |||||
Redemption price from initially outstanding aggregate principal amount (as a percent) | 98.921% | |||||
Principal amount to be paid immediately in event of default (as a percent) | 25.00% | |||||
Proceeds from sale of Notes | $ 680,000 | |||||
Commission | 16,200 | |||||
Additional debt issuance cost | 11,200 | |||||
Senior unsecured notes | ||||||
BORROWINGS | ||||||
Total Debt | $ 350,000 | $ 350,000 | $ 350,000 | 350,000 | ||
Less: original issue discount | 3,800 | |||||
Unused Elements Abstract | ||||||
Aggregate principal amount of Senior Notes | $ 350,000 | |||||
Senior unsecured notes | Registration rights agreement | Maximum | ||||||
Unused Elements Abstract | ||||||
Maximum number of anniversaries from effective date of shelf registration in which to keep shelf registration effective | 1 year | |||||
Number of anniversaries from date of registration rights agreement upon which obligations to complete exchange offer and or shelf registration statement will terminate | 2 years |
LONG-TERM DEBT (Details 2)
LONG-TERM DEBT (Details 2) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2014 | May. 31, 2014 | Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
BORROWINGS | |||||
Less: original issue discount | $ 11,213 | $ 10,769 | $ 12,494 | $ 11,213 | |
Senior secured notes | |||||
BORROWINGS | |||||
Debt issuance costs and fees | 13,600 | ||||
Less: original issue discount | $ (3,800) | $ (3,800) | |||
Debt instrument term | 1 year | ||||
Notes stated interest percentage | 7.75% | 7.75% | |||
Senior unsecured notes | |||||
BORROWINGS | |||||
Debt issuance costs and fees | $ 14,000 | ||||
Less: original issue discount | $ (3,800) | $ (3,800) | |||
Notes stated interest percentage | 10.00% | 10.00% | |||
Term Loan [Member] | |||||
BORROWINGS | |||||
Notes stated interest percentage | 6.25% | 6.25% | 6.25% | 6.25% | |
Term Loan [Member] | London Interbank Offered Rate L I B O R [Member] | |||||
BORROWINGS | |||||
Variable rate basis | LIBOR | LIBOR | LIBOR | ||
Term Loan [Member] | London Interbank Offered Rate L I B O R [Member] | Minimum | |||||
BORROWINGS | |||||
Variable rate of debt (as a percent) | 1.00% | 1.00% | 1.00% | ||
Revolving Credit Facility [Member] | |||||
BORROWINGS | |||||
Maximum borrowing capacity | $ 50,000 | $ 50,000 | |||
Debt instrument term | 6 years | 5 years | |||
Revolving Credit Facility [Member] | London Interbank Offered Rate L I B O R [Member] | |||||
BORROWINGS | |||||
Interest rate margin | 4.75% | 4.75% | 4.75% | 4.75% | |
Revolving Credit Facility [Member] | London Interbank Offered Rate L I B O R [Member] | Minimum | |||||
BORROWINGS | |||||
Variable rate of debt (as a percent) | 0.00% | 0.00% | 0.00% | ||
Credit Facilities | |||||
BORROWINGS | |||||
Debt issuance costs and fees | $ 13,900 | $ 13,900 | |||
Less: original issue discount | $ (7,500) | $ (7,500) | |||
Premium on principal repayment | 1.00% | 1.00% | 1.00% | ||
Credit Facilities | Federal funds effective rate | |||||
BORROWINGS | |||||
Interest rate margin | 0.50% | 0.50% | 0.50% | 0.50% | |
Credit Facilities | LIBOR (after taking account of any applicable floor) applicable for an interest period of one month | |||||
BORROWINGS | |||||
Interest rate margin | 1.00% | 1.00% | 1.00% | 1.00% | |
Credit Facilities | Senior secured term Loan | |||||
BORROWINGS | |||||
Maximum borrowing capacity | $ 500,000 | $ 500,000 | |||
Credit Facilities | Senior secured term Loan | London Interbank Offered Rate L I B O R [Member] | |||||
BORROWINGS | |||||
Interest rate margin | 5.25% | 5.25% | 5.25% | 5.25% | |
Credit Facilities | Senior secured notes | |||||
BORROWINGS | |||||
Debt instrument term | 5 years | 6 years |
LONG-TERM DEBT (Details 3)
LONG-TERM DEBT (Details 3) - USD ($) $ in Thousands | Dec. 19, 2014 | Jun. 30, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Dec. 31, 2013 |
BORROWINGS | |||||
Total Debt | $ 1,180,000 | $ 1,200,000 | $ 1,182,500 | $ 103,000 | |
Less: original issue discount | 12,494 | 11,213 | 10,769 | ||
Senior unsecured notes | |||||
BORROWINGS | |||||
Debt issuance costs and fees | 14,000 | ||||
Total Debt | $ 350,000 | $ 350,000 | $ 350,000 | ||
Notes stated interest percentage | 10.00% | ||||
Less: original issue discount | $ (3,800) | ||||
Senior unsecured notes | Maximum | |||||
BORROWINGS | |||||
Maximum additional interest rate | 1.00% | ||||
Senior credit facility | |||||
BORROWINGS | |||||
Total Debt | $ 103,000 | ||||
Registration rights agreement | Senior unsecured notes | Exchange Offer Not Completed Or Shelf Registration Not Effective By December192015 First90 Day Period | |||||
BORROWINGS | |||||
Maximum additional interest rate | 0.25% | ||||
Registration rights agreement | Senior unsecured notes | Exchange Offer Not Completed Or Shelf Registration Not Effective By December192015 Each Subsequent90 Day Period Member | |||||
BORROWINGS | |||||
Maximum additional interest rate | 0.25% | ||||
Registration rights agreement | Senior unsecured notes | Exchange Offer Not Completed Or Shelf Registration Not Effective By December192015 Each Subsequent90 Day Period Member | Maximum | |||||
BORROWINGS | |||||
Maximum additional rate per annum increase | 1.00% |
COMMITMENTS AND CONTINGENCIES70
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Mar. 31, 2015USD ($)item | Jun. 30, 2015USD ($) | Dec. 31, 2014USD ($)item | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | |
Litigation Settlement Awards | |||||
Total rent expense | $ 1,900 | $ 1,800 | $ 700 | ||
Minimum aggregate rental commitment under all non-cancelable operating leases | |||||
2,015 | 3,392 | ||||
2,016 | 3,125 | ||||
2,017 | 2,626 | ||||
2,018 | 2,440 | ||||
2,019 | 2,452 | ||||
Thereafter | 5,829 | ||||
Total | $ 19,864 | ||||
Alabama Litigation Member | |||||
Minimum aggregate rental commitment under all non-cancelable operating leases | |||||
Number of lawsuits involved | item | 2 | 2 | |||
Period of games played | 6 months | 6 months | |||
United States District Court | Multimedia Games Shareholder Litigation | Maximum | |||||
Litigation Settlement Awards | |||||
Attorneys's fee paid by Holdings | $ 310,000 | $ 310,000 | $ 310,000 |
SHAREHOLDERS' EQUITY (Details)
SHAREHOLDERS' EQUITY (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | 24 Months Ended | ||||||
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | |
Common Stock Repurchase Program | ||||||||||
Preferred stock, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 | 50,000,000 | 50,000,000 | 50,000,000 | ||||
Preferred stock, shares outstanding | 0 | 0 | 0 | 0 | 0 | 0 | ||||
Common stock, votes per share | 1 | 1 | 1 | |||||||
Common stock, shares issued | 90,743,000 | 90,610,000 | 90,743,000 | 90,405,000 | 89,233,000 | 90,405,000 | ||||
Period of share repurchase under new share repurchase program | 2 years | |||||||||
Shares of common stock repurchased | 1,500,000 | |||||||||
Aggregate purchase price of shares repurchased | $ 11,700,000 | $ 18,200,000 | ||||||||
Payment for repurchase of shares | $ 20,000 | $ 2,767,000 | $ 40,000 | $ 6,604,000 | $ 12,180,000 | $ 18,350,000 | $ 262,000 | |||
Total Number of Shares Purchased or Withheld | ||||||||||
Balance outstanding at the beginning of the period (in shares) | 24,819,000 | 24,816,000 | 23,303,000 | 24,816,000 | 23,303,000 | 23,303,000 | ||||
Shares repurchased under the current plan | 1,458,000 | |||||||||
Shares withheld from restricted stock vesting | 2,599 | 2,845 | 31,000 | 55,000 | 14,901 | |||||
Balance outstanding at the end of the period (in shares) | 24,821,000 | 24,819,000 | 24,821,000 | 24,816,000 | 23,303,000 | 24,816,000 | ||||
Cost of Shares Purchased or Withheld | ||||||||||
Balance outstanding at the beginning of the period (in dollars) | $ 176,040,000 | $ 176,020,000 | $ 163,840,000 | $ 176,020,000 | $ 163,840,000 | $ 163,840,000 | ||||
Shares repurchased under the current plan (in dollars) | 2,599 | $ 5,444 | 11,963 | 43,129 | 11,721,000 | $ 18,241,000 | ||||
Shares withheld from restricted stock vesting (in dollars) | 20,167 | 19,743 | $ 39,910 | $ 300,000 | 100,000 | $ 400,000 | 459,000 | 100,000 | ||
Balance outstanding at the end of the period (in dollars) | $ 176,060,000 | $ 176,040,000 | $ 176,060,000 | $ 176,020,000 | $ 163,840,000 | $ 176,020,000 | ||||
Average Price per Share Purchased or Withheld (Per Share) | ||||||||||
Balance outstanding at the beginning of the period (in dollars per share) | $ 7.09 | $ 7.03 | $ 7.09 | $ 7.03 | $ 7.03 | |||||
Shares repurchased under the current plan (in dollars per share) | 8.04 | |||||||||
Shares withheld from restricted stock vesting (in dollars per share) | 8.35 | |||||||||
Balance outstanding at the end of the period (in dollars per share) | $ 7.09 | $ 7.03 | $ 7.09 | |||||||
Maximum | ||||||||||
Common Stock Repurchase Program | ||||||||||
Authorized repurchase amount | $ 40,000,000 | $ 40,000,000 |
WEIGHTED AVERAGE COMMON SHARE72
WEIGHTED AVERAGE COMMON SHARES (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||
Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Weighted-average number of common shares outstanding used in the computation of basic and diluted earnings per share | |||||||||||||||
Weighted average number of common shares outstanding - basic | 65,844 | 65,623 | 65,608 | 65,589 | 65,970 | 65,910 | 65,730 | 65,525 | 66,116 | 66,697 | 65,734 | 65,940 | 65,780 | 66,014 | 65,933 |
Potential dilution from equity awards(1) | 869 | 1,117 | 1,460 | 1,266 | 1,083 | 1,191 | 1,404 | ||||||||
Weighted average number of common shares outstanding - diluted | 65,844 | 66,492 | 66,397 | 66,747 | 67,087 | 67,370 | 67,394 | 66,630 | 66,993 | 67,882 | 65,734 | 67,206 | 66,863 | 67,205 | 67,337 |
Anti-dilutive equity awards excluded from computation of earnings per share (in shares) | 8,400 | 5,100 | 7,500 | 6,500 | |||||||||||
Stock Option [Member] | |||||||||||||||
Weighted-average number of common shares outstanding used in the computation of basic and diluted earnings per share | |||||||||||||||
Anti-dilutive equity awards excluded from computation of earnings per share (in shares) | 7,600 | 5,900 | 5,100 |
SHARE-BASED COMPENSATION - Awar
SHARE-BASED COMPENSATION - Award Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
2005 Plan | |||||||||
Equity Awards Available for Grant | |||||||||
Shares of reserved common stock increased annually | 0 | 0 | 0 | 0 | |||||
2014 Plan | |||||||||
Equity Awards Available for Grant | |||||||||
Shares of reserved common stock increased annually | 12,100,000 | 6,600,000 | 11,900,000 | 11,900,000 | |||||
Stock Option [Member] | |||||||||
Equity Incentive Awards | |||||||||
Expiration period | 10 years | ||||||||
Stock Options Granted | |||||||||
Balance outstanding at the beginning of the period (in shares) | 12,006,000 | 13,626,000 | 8,872,000 | 13,626,000 | 8,872,000 | 8,872,000 | |||
Granted (in shares) | 6,100,000 | 0 | 3,000,000 | 2,000,000 | 6,097,000 | 5,000,000 | 5,523,000 | 1,200,000 | 2,400,000 |
Exercised options (in shares) | (194,000) | (315,000) | (971,000) | ||||||
Canceled or forfeited (in shares) | (1,426,000) | (1,694,000) | (893,000) | ||||||
Balance outstanding at the end of the period (in shares) | 17,714,000 | 12,006,000 | 17,714,000 | 13,626,000 | 8,872,000 | ||||
Equity Awards Available for Grant | |||||||||
Merger conversion (in shares) | $ 1,095 | ||||||||
Granted (in shares) | 0 | 6,600,000 | |||||||
Weighted-average assumptions used in estimating fair value | |||||||||
Risk-free interest rate (as a percent) | 0.00% | 1.00% | 1.00% | 1.00% | 1.00% | ||||
Expected life of options | 4 years | 4 years | 4 years | 6 years | |||||
Expected volatility (as a percent) | 0.00% | 53.00% | 54.00% | 61.00% | 62.00% | ||||
Expected dividend yield (as a percent) | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | ||||
Time Based Options [Member] | |||||||||
Weighted-average assumptions used in estimating fair value | |||||||||
Risk-free interest rate (as a percent) | 1.00% | 1.00% | |||||||
Expected life of options | 4 years | 4 years | |||||||
Expected volatility (as a percent) | 43.00% | 54.00% | |||||||
Expected dividend yield (as a percent) | 0.00% | 0.00% | |||||||
Time Based Options [Member] | 2005 Plan | |||||||||
Equity Incentive Awards | |||||||||
Vesting rate (as a percent) | 25.00% | ||||||||
Vesting period for 25% of shares | 1 year | ||||||||
Unused Elements Abstract | |||||||||
Vesting period for remaining shares | 36 months | ||||||||
Vesting period | 4 years | ||||||||
Time Based Options [Member] | 2014 Plan | |||||||||
Equity Incentive Awards | |||||||||
Vesting rate (as a percent) | 25.00% | 25.00% | |||||||
Vesting period for 25% of shares | 4 years | 4 years | |||||||
Expiration period | 10 years | ||||||||
FiveyearCliffVestingTimebasedOptions [Member] | |||||||||
Weighted-average assumptions used in estimating fair value | |||||||||
Risk-free interest rate (as a percent) | 2.00% | ||||||||
Expected life of options | 5 years | ||||||||
Expected volatility (as a percent) | 52.00% | ||||||||
Expected dividend yield (as a percent) | 0.00% | ||||||||
SixyearCliffVestingTimebasedOptions [Member] | |||||||||
Weighted-average assumptions used in estimating fair value | |||||||||
Risk-free interest rate (as a percent) | 2.00% | ||||||||
Expected life of options | 6 years | ||||||||
Expected volatility (as a percent) | 58.00% | ||||||||
Expected dividend yield (as a percent) | 0.00% | ||||||||
Market Performance Based Options [Member] | |||||||||
Weighted-average assumptions used in estimating fair value | |||||||||
Risk-free interest rate (as a percent) | 1.00% | ||||||||
Expected life of options | 4 years | ||||||||
Expected volatility (as a percent) | 47.00% | ||||||||
Expected dividend yield (as a percent) | 0.00% | ||||||||
Unused Elements Abstract | |||||||||
Vesting period | 4 years | ||||||||
Vesting condition period over which average stock price should meet target prices | 30 days | ||||||||
Market Performance Based Options [Member] | Chief Executive Officer [Member] | |||||||||
Weighted-average assumptions used in estimating fair value | |||||||||
Risk-free interest rate (as a percent) | 1.00% | ||||||||
Expected life of options | 4 years | ||||||||
Expected volatility (as a percent) | 51.00% | ||||||||
Expected dividend yield (as a percent) | 0.00% | ||||||||
Market Performance Based Options [Member] | ExecutiveOfficer [Member] | |||||||||
Weighted-average assumptions used in estimating fair value | |||||||||
Risk-free interest rate (as a percent) | 1.00% | ||||||||
Expected life of options | 4 years | ||||||||
Expected volatility (as a percent) | 52.00% | ||||||||
Expected dividend yield (as a percent) | 0.00% | ||||||||
Restricted Stock [Member] | |||||||||
Equity Incentive Awards | |||||||||
Vesting period for 25% of shares | 1 year | ||||||||
Restricted Stock Granted | |||||||||
Balance outstanding at the beginning of the period (in shares) | 429,000 | 440,000 | 404,000 | 440,000 | 404,000 | 404,000 | |||
Granted (in shares) | 0 | 0 | 0 | 0 | 342,000 | 400,000 | |||
Vested (in shares) | (21,700,000) | (11,000) | (200,000) | 100,000 | (22,000) | (201,000) | 100,000 | 200,000 | |
Forfeited (in shares) | 0 | (1,000) | (105,000) | ||||||
Balance outstanding at the end of the period (in shares) | 417,000 | 429,000 | 417,000 | 440,000 | 404,000 | ||||
Unused Elements Abstract | |||||||||
Vesting period for remaining shares | 36 months | ||||||||
Vesting period | 4 years |
SHARE-BASED COMPENSATION - Stoc
SHARE-BASED COMPENSATION - Stock Options, Weighted Average Assumptions (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Mar. 31, 2015 | Mar. 31, 2014 | Jun. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Stock Option [Member] | ||||||
Weighted-average assumptions used in estimating fair value | ||||||
Risk-free interest rate (as a percent) | 0.00% | 1.00% | 1.00% | 1.00% | 1.00% | |
Expected life of options | 4 years | 4 years | 4 years | 6 years | ||
Expected volatility (as a percent) | 0.00% | 53.00% | 54.00% | 61.00% | 62.00% | |
Expected dividend yield (as a percent) | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | |
FiveyearCliffVestingTimebasedOptions [Member] | ||||||
Weighted-average assumptions used in estimating fair value | ||||||
Risk-free interest rate (as a percent) | 2.00% | |||||
Expected life of options | 5 years | |||||
Expected volatility (as a percent) | 52.00% | |||||
Expected dividend yield (as a percent) | 0.00% | |||||
SixyearCliffVestingTimebasedOptions [Member] | ||||||
Weighted-average assumptions used in estimating fair value | ||||||
Risk-free interest rate (as a percent) | 2.00% | |||||
Expected life of options | 6 years | |||||
Expected volatility (as a percent) | 58.00% | |||||
Expected dividend yield (as a percent) | 0.00% | |||||
Market Performance Based Options [Member] | ||||||
Weighted-average assumptions used in estimating fair value | ||||||
Risk-free interest rate (as a percent) | 1.00% | |||||
Expected life of options | 4 years | |||||
Expected volatility (as a percent) | 47.00% | |||||
Expected dividend yield (as a percent) | 0.00% |
SHARE-BASED COMPENSATION - St75
SHARE-BASED COMPENSATION - Stock Options, Activity (Details) - USD ($) $ / shares in Units, shares in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Additional disclosures | ||||||||||
Proceeds from exercise of stock options | $ 1,048,000 | $ 2,440,000 | $ 1,673,000 | $ 4,613,000 | $ 5,338,000 | $ 8,431,000 | $ 6,655,000 | |||
Stock Option [Member] | ||||||||||
Stock Options Granted | ||||||||||
Balance outstanding at the beginning of the period (in shares) | 12,006 | 13,626 | 8,872 | 13,626 | 8,872 | 8,872 | 8,872 | |||
Granted (in shares) | 6,100 | 0 | 3,000 | 2,000 | 6,097 | 5,000 | 5,523 | 1,200 | 2,400 | |
Exercised options (in shares) | (194) | (315) | (971) | |||||||
Canceled or forfeited (in shares) | (1,426) | (1,694) | (893) | |||||||
Balance outstanding at the end of the period (in shares) | 17,714 | 12,006 | 17,714 | 13,626 | 8,872 | |||||
Vested and expected to vest (in shares) | 14,717 | 10,864 | 14,717 | 12,358 | ||||||
Balance exercisable at the end of the period (in shares) | 6,651 | 6,651 | 6,221 | 6,771 | ||||||
Weighted Average Exercise Price | ||||||||||
Balance outstanding at the beginning of the period (in dollars per share) | $ 7.30 | $ 7.64 | $ 7.54 | $ 7.64 | $ 7.54 | $ 7.54 | $ 7.54 | |||
Granted (in dollars per share) | 0 | 7.74 | 7.54 | |||||||
Exercised options (in dollars per share) | 5.39 | 5.39 | 5.43 | |||||||
Canceled or forfeited (in dollars per share) | 10.80 | 10.13 | 6.89 | |||||||
Balance outstanding at the end of the period (in dollars per share) | 7.48 | 7.30 | 7.48 | 7.64 | $ 7.54 | |||||
Vested and expected to vest (in dollars per share) | 7.43 | $ 7.28 | 7.43 | 7.65 | ||||||
Balance exercisable at the end of the period (in dollars per share) | $ 7.30 | $ 7.30 | $ 7.31 | $ 8 | ||||||
Weighted Average Life Remaining | ||||||||||
Balance outstanding at the beginning of the period | 6 years 7 months 6 days | 7 years | 6 years 6 months | 5 years 10 months 24 days | ||||||
Balance outstanding at the end of the period | 6 years 7 months 6 days | 7 years | 6 years 6 months | 5 years 10 months 24 days | ||||||
Vested and expected to vest | 6 years 3 months 18 days | 6 years 9 months 18 days | 6 years 2 months 12 days | |||||||
Balance exercisable at the end of the period | 4 years 4 months 24 days | 4 years 4 months 24 days | 3 years 8 months 12 days | |||||||
Aggregate Intrinsic Value | ||||||||||
Balance outstanding at the beginning of the period (in dollars) | $ 12,095,000 | $ 9,148,000 | $ 27,301,000 | $ 9,148,000 | $ 27,301,000 | $ 27,301,000 | $ 27,301,000 | |||
Balance outstanding at the end of the period (in dollars) | 12,446,000 | 12,095,000 | 12,446,000 | 9,148,000 | $ 27,301,000 | |||||
Vested and expected to vest (in dollars) | 11,780,000 | 11,403,000 | 11,780,000 | 8,689,000 | ||||||
Balance exercisable at the end of the period (in dollars) | 8,785,000 | $ 8,785,000 | $ 7,990,000 | $ 6,246,000 | ||||||
Additional disclosures | ||||||||||
Weighted average grant date fair value (in dollars per share) | $ 2.86 | $ 3.88 | $ 2.49 | $ 3.27 | $ 3.20 | $ 3.31 | $ 2.93 | |||
Total intrinsic value of options exercised | 300,000 | 0.40 | $ 800,000 | $ 1,700,000 | $ 700,000 | $ 2,400,000 | $ 2,800,000 | $ 4,600,000 | $ 6,300,000 | |
Unrecognized compensation expense | $ 21,800,000 | $ 13,600,000 | 15,600,000 | $ 12,000,000 | $ 21,800,000 | $ 15,600,000 | $ 15,400,000 | |||
Weighted-average period for recognition of unrecognized compensation expense | 3 years | 3 years | 3 years 1 month 6 days | 2 years 10 months 24 days | 3 years 1 month 6 days | |||||
Non-cash compensation expense | $ 3,500,000 | $ 1,600,000 | 4,600,000 | $ 1,600,000 | $ 7,600,000 | 4,400,000 | 6,200,000 | |||
Proceeds from exercise of stock options | $ 1,700,000 | $ 1,000,000 | $ 4,600,000 | $ 2,400,000 | 5,300,000 | $ 8,400,000 | $ 6,700,000 | |||
Unused Elements Abstract | ||||||||||
Merger conversion (in shares) | $ 1,095,000 | |||||||||
Merger Conversion (in dollar per share) | $ 6.43 |
SHARE-BASED COMPENSATION - Rest
SHARE-BASED COMPENSATION - Restricted Stock (Details) - Restricted Stock [Member] - $ / shares | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Restricted Stock Granted | ||||||||
Balance outstanding at the beginning of the period (in shares) | 429,000 | 440,000 | 404,000 | 440,000 | 404,000 | |||
Granted (in shares) | 0 | 0 | 0 | 0 | 342,000 | 400,000 | ||
Vested (in shares) | (21,700,000) | (11,000) | (200,000) | 100,000 | (22,000) | (201,000) | 100,000 | 200,000 |
Forfeited (in shares) | 0 | (1,000) | (105,000) | |||||
Balance outstanding at the end of the period (in shares) | 417,000 | 429,000 | 417,000 | 440,000 | 404,000 | |||
Weighted Average Grant Date Fair Value (in dollars per share) | ||||||||
Balance outstanding at the beginning of the period (in dollars per share) | $ 7.11 | $ 7.11 | $ 7.05 | $ 7.11 | $ 7.05 | |||
Granted (in dollars per share) | 0 | 7.12 | $ 7.09 | $ 6.80 | ||||
Vested (in dollars per share) | 7.09 | 7.09 | 7.11 | |||||
Forfeited (in dollars per share) | 7.09 | 7.09 | 6.91 | |||||
Balance outstanding at the end of the period (in dollars per share) | $ 7.11 | $ 7.11 | $ 7.11 | $ 7.11 | $ 7.05 |
SHARE-BASED COMPENSATION - Re77
SHARE-BASED COMPENSATION - Restricted Stock, Additional Details (Details) - Restricted Stock [Member] - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Additional disclosures | |||||||||
Total fair value of shares vested | $ 0.1 | $ 0.1 | $ 0.2 | $ 0.7 | $ 0.4 | $ 1.4 | $ 1.4 | $ 0.7 | $ 1.3 |
Unrecognized compensation expense | $ 2.5 | $ 2.7 | $ 1.4 | $ 1.7 | $ 2.5 | $ 1.4 | $ 3 | ||
Weighted-average period for recognition of unrecognized compensation expense | 2 years 9 months 18 days | 3 years | 2 years 7 months 6 days | 2 years 9 months 18 days | 3 years 3 months 18 days | ||||
Non-cash compensation expense | $ 0.4 | $ 0.2 | $ 0.8 | $ 0.4 | $ 1.2 | $ 0.7 | $ 0.4 | ||
Vested (in shares) | 21,700,000 | 11,000 | 200,000 | (100,000) | 22,000 | 201,000 | (100,000) | (200,000) |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details 6) shares in Thousands | 12 Months Ended |
Dec. 31, 2014$ / sharesshares | |
Options Outstanding | |
Number Outstanding (in shares) | shares | 13,626 |
Options Exercisable | |
Number Exercisable (in shares) | shares | 6,771 |
Exercise Price Range Dollars0.00 To Dollars5.99 [Member] | |
Range of Exercise Prices | |
Exercise prices, high end of range (in dollars per share) | $ 5.99 |
Options Outstanding | |
Number Outstanding (in shares) | shares | 2,418 |
Weighted Average Remaining Contract Life | 6 years |
Weighted Average Exercise Prices (in dollars per share) | $ 4.46 |
Options Exercisable | |
Number Exercisable (in shares) | shares | 2,047 |
Weighted Average Exercise Price (in dollars per share) | $ 4.33 |
Exercise Price Range Dollars6.00 To Dollars8.99 [Member] | |
Range of Exercise Prices | |
Exercise prices, low end of range (in dollars per share) | 6 |
Exercise prices, high end of range (in dollars per share) | $ 8.99 |
Options Outstanding | |
Number Outstanding (in shares) | shares | 9,008 |
Weighted Average Remaining Contract Life | 7 years 9 months 18 days |
Weighted Average Exercise Prices (in dollars per share) | $ 7.34 |
Options Exercisable | |
Number Exercisable (in shares) | shares | 2,531 |
Weighted Average Exercise Price (in dollars per share) | $ 7.17 |
Exercise Price Range Dollars9.00 To Dollars12.99 [Member] | |
Range of Exercise Prices | |
Exercise prices, low end of range (in dollars per share) | 9 |
Exercise prices, high end of range (in dollars per share) | $ 12.99 |
Options Outstanding | |
Number Outstanding (in shares) | shares | 1,007 |
Weighted Average Remaining Contract Life | 2 years 10 months 24 days |
Weighted Average Exercise Prices (in dollars per share) | $ 9.99 |
Options Exercisable | |
Number Exercisable (in shares) | shares | 1,000 |
Weighted Average Exercise Price (in dollars per share) | $ 9.99 |
Exercise Price Range Dollars13.00 To Dollars13.99 [Member] | |
Range of Exercise Prices | |
Exercise prices, low end of range (in dollars per share) | 13 |
Exercise prices, high end of range (in dollars per share) | $ 13.99 |
Options Outstanding | |
Number Outstanding (in shares) | shares | 783 |
Weighted Average Remaining Contract Life | 1 month 6 days |
Weighted Average Exercise Prices (in dollars per share) | $ 13.98 |
Options Exercisable | |
Number Exercisable (in shares) | shares | 783 |
Weighted Average Exercise Price (in dollars per share) | $ 13.98 |
Exercise Price Range Dollars14.00 To Dollars14.99 [Member] | |
Range of Exercise Prices | |
Exercise prices, low end of range (in dollars per share) | 14 |
Exercise prices, high end of range (in dollars per share) | $ 14.99 |
Options Outstanding | |
Number Outstanding (in shares) | shares | 160 |
Weighted Average Remaining Contract Life | 1 year 4 months 24 days |
Weighted Average Exercise Prices (in dollars per share) | $ 14.22 |
Options Exercisable | |
Number Exercisable (in shares) | shares | 160 |
Weighted Average Exercise Price (in dollars per share) | $ 14.22 |
Exercise Price Range Dollars15.00 To Dollars15.99 [Member] | |
Range of Exercise Prices | |
Exercise prices, low end of range (in dollars per share) | 15 |
Exercise prices, high end of range (in dollars per share) | $ 15.99 |
Options Outstanding | |
Number Outstanding (in shares) | shares | 125 |
Weighted Average Remaining Contract Life | 1 year 4 months 24 days |
Weighted Average Exercise Prices (in dollars per share) | $ 15.16 |
Options Exercisable | |
Number Exercisable (in shares) | shares | 125 |
Weighted Average Exercise Price (in dollars per share) | $ 15.16 |
Exercise Price Range Dollars16.00 To Dollars18.99 [Member] | |
Range of Exercise Prices | |
Exercise prices, low end of range (in dollars per share) | 16 |
Exercise prices, high end of range (in dollars per share) | $ 18.99 |
Options Outstanding | |
Number Outstanding (in shares) | shares | 125 |
Weighted Average Remaining Contract Life | 1 year 6 months |
Weighted Average Exercise Prices (in dollars per share) | $ 16.63 |
Options Exercisable | |
Number Exercisable (in shares) | shares | 125 |
Weighted Average Exercise Price (in dollars per share) | $ 16.63 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Consolidated income before tax | |||||||||
Domestic | $ 13,870 | $ 35,473 | $ 39,280 | ||||||
Foreign | 6,431 | 3,412 | 1,183 | ||||||
(Loss) income from operations before tax | $ (21,599) | $ 2,486 | $ 7,539 | $ 11,467 | $ (19,113) | $ 19,006 | 20,301 | 38,885 | 40,463 |
Income tax provision | |||||||||
Domestic | 6,637 | 13,626 | 14,358 | ||||||
Foreign | 1,524 | 861 | 416 | ||||||
Total income tax provision | (8,858) | 2,017 | 2,815 | 3,978 | (6,841) | 6,793 | 8,161 | 14,487 | 14,774 |
Income tax provision components | |||||||||
Current | 1,598 | 844 | 430 | ||||||
Deferred | 6,563 | 13,643 | 14,344 | ||||||
Total income tax provision | $ (8,858) | $ 2,017 | $ 2,815 | $ 3,978 | $ (6,841) | $ 6,793 | $ 8,161 | $ 14,487 | $ 14,774 |
Reconciliation of the federal statutory rate and the Company's effective income tax rate | |||||||||
Statutory federal rate (as a percent) | 35.00% | 35.00% | 35.00% | 35.00% | 35.00% | 35.00% | |||
Foreign provision (as a percent) | (3.60%) | (1.00%) | (0.40%) | ||||||
State/province income tax (as a percent) | 0.90% | 1.30% | 1.70% | ||||||
Non-deductible compensation cost (as a percent) | 0.70% | 1.10% | 0.20% | ||||||
Non-deductible acquistion cost (as a percent) | 5.90% | 0.00% | 0.00% | ||||||
Change in valuation allowance (as a percent) | (0.90%) | 0.20% | 1.00% | ||||||
Adjustment to carrying value (as a percent) | 1.90% | 0.30% | (2.20%) | ||||||
Foreign dividends and IRC Sec. 956 inclusions, net of foreign tax deduction (as a percent) | (0.10%) | 0.10% | 1.10% | ||||||
Non-deductible expenses and other items (as a percent) | 0.40% | 0.30% | 0.10% | ||||||
Effective Income Tax Rate Reconciliation, Percent, Total | 41.00% | 81.20% | 37.30% | 34.70% | 35.80% | 35.70% | 40.20% | 37.30% | 36.50% |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Deferred income tax assets related to: | |||
Intangibles | $ 44,845 | $ 63,899 | |
Net operating losses | $ 64,357 | 37,333 | 32,171 |
Stock compensation expense | 8,841 | 7,066 | 6,775 |
Accounts receivable allowances | 1,613 | 1,703 | 1,968 |
Accrued and prepaid expenses | 7,917 | 1,331 | 1,279 |
Long-term debt | 290 | 348 | |
Other | 373 | 406 | 367 |
Tax credits | 5,146 | ||
Property, equipment and leasehold improvements | 333 | 312 | |
Valuation allowance | (2,319) | (1,379) | (1,307) |
Total deferred income tax assets | 86,218 | 91,986 | 105,464 |
Property, equipment and leased assets | 23,785 | ||
Intangibles | 109,103 | ||
Other | 1,072 | 942 | 800 |
Total deferred income tax liabilities | 133,960 | 942 | 800 |
Deferred income taxes, net | (47,742) | $ 91,044 | $ 104,664 |
Gross increases - tax positions in current period | 729 | ||
Unrecognized tax benefit at the end of the period | 729 | ||
Other disclosures | |||
Unrepatriated earnings | 11,700 | ||
Increase in equity when deferred tax assets will be realized | $ 4,400 |
INCOME TAXES (Details 3)
INCOME TAXES (Details 3) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Operating Loss Carryforwards [Line Items] | |||
Accumulated net operating losses, tax effect | $ 64,357 | $ 37,333 | $ 32,171 |
Foreign valuation allowance related to net operating loss carry forwards | 700 | ||
Internal Revenue Service I R S [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Accumulated net operating losses | 179,900 | ||
Accumulated net operating losses, tax effect | $ 63,000 | ||
Operating loss carryforward period | 20 years | ||
State And Local Jurisdiction [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Accumulated net operating losses | $ 5,900 | ||
Valuation allowance related to net operating loss carry forwards | $ 1,600 |
INCOME TAXES (Details 4)
INCOME TAXES (Details 4) - USD ($) $ in Thousands | May. 14, 2004 | Dec. 31, 2014 |
INCOME TAXES | ||
Difference between assets for financial accounting and tax purposes from a significant balance of acquired goodwill | $ 687,400 | |
Difference between assets for financial accounting and tax purposes from pre-existing goodwill prior to the conversion | $ 97,600 | |
Goodwill amortization period for tax purposes | 15 years | |
Difference in annual pretax income between tax purposes and financial accounting purposes due to amortization of goodwill for tax purposes | $ 52,300 | |
Estimated blended domestic effective tax rate (as a percent) | 36.30% | |
Difference in tax payments between tax purposes and annual provision for financial accounting purposes at an estimated blended domestic effective tax rate (as a percent) | $ 19,000 | |
Expected aggregate cash savings over the remaining life of the portion of deferred tax asset related to the conversion | 82,300 | |
Unrecognized Tax Benefits | $ 700 | $ 729 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) $ in Millions | 1 Months Ended |
Oct. 31, 2012USD ($) | |
Brokerage Firm [Member] | |
RELATED PARTY TRANSACTIONS | |
Amount received by brokerage firm as compensation for acting as the entity's broker | $ 0.4 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | 15 Months Ended | |||||
Jun. 30, 2015item | Mar. 31, 2015item | Jun. 30, 2014item | Mar. 31, 2014 | Dec. 31, 2014USD ($)item | Dec. 31, 2013item | Dec. 31, 2012item | Mar. 31, 2015item | |
Major Customers | ||||||||
Number of customers individually exceeding 10% of consolidated revenue | 0 | 0 | 0 | 0 | 0 | 0 | ||
Number of major customers | 5 | 5 | 5 | |||||
Amount of significant assets in foreign locations | $ | $ 0 | |||||||
Five Largest Customers [Member] | ||||||||
Major Customers | ||||||||
Concentration risk (as a percent) | 28.00% | 28.00% | 30.00% | 33.00% | 28.00% | 33.00% | 34.00% |
SEGMENT INFORMATION (Details 2)
SEGMENT INFORMATION (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||
Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Results of operations by operating segment | |||||||||||||||
Revenues | $ 206,364 | $ 207,473 | $ 152,055 | $ 145,481 | $ 144,946 | $ 150,571 | $ 140,456 | $ 146,101 | $ 149,065 | $ 146,822 | $ 413,837 | $ 295,517 | $ 593,053 | $ 582,444 | $ 584,486 |
Operating income | 16,336 | 28,141 | $ 376 | $ 10,771 | 9,622 | 13,013 | $ 11,196 | $ 11,420 | $ 13,633 | $ 12,901 | 44,477 | 22,635 | 33,782 | 49,150 | 55,982 |
Payments | |||||||||||||||
Results of operations by operating segment | |||||||||||||||
Revenues | 151,496 | 152,428 | 144,946 | 150,571 | 303,924 | 295,517 | 585,647 | 582,444 | 584,486 | ||||||
Operating income | 12,137 | 27,527 | $ 9,622 | $ 13,013 | 39,664 | $ 22,635 | 35,205 | $ 49,150 | $ 55,982 | ||||||
Gaming Operations Member | |||||||||||||||
Results of operations by operating segment | |||||||||||||||
Revenues | 54,868 | 55,045 | 109,913 | 7,406 | |||||||||||
Operating income | $ 4,199 | $ 614 | $ 4,813 | $ 1,423 |
SEGMENT INFORMATION (Details 3)
SEGMENT INFORMATION (Details 3) - USD ($) $ in Thousands | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Assets by operating segment | ||||
Total Assets | $ 1,707,119 | $ 1,725,264 | $ 1,707,285 | $ 527,327 |
Payments | ||||
Assets by operating segment | ||||
Total Assets | 478,065 | 495,646 | 464,463 | $ 527,327 |
Gaming Operations Member | ||||
Assets by operating segment | ||||
Total Assets | $ 1,229,054 | $ 1,229,618 | $ 1,242,822 |
QUARTERLY RESULTS OF OPERATIO87
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||
Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Revenues | $ 206,364 | $ 207,473 | $ 152,055 | $ 145,481 | $ 144,946 | $ 150,571 | $ 140,456 | $ 146,101 | $ 149,065 | $ 146,822 | $ 413,837 | $ 295,517 | $ 593,053 | $ 582,444 | $ 584,486 |
Operating income | 16,336 | 28,141 | 376 | 10,771 | 9,622 | 13,013 | 11,196 | 11,420 | 13,633 | 12,901 | 44,477 | 22,635 | 33,782 | 49,150 | 55,982 |
Net (loss) income | $ (12,741) | $ 469 | $ (5,749) | $ 5,676 | $ 4,724 | $ 7,489 | $ 5,704 | $ 5,782 | $ 6,776 | $ 6,136 | $ (12,272) | $ 12,213 | $ 12,140 | $ 24,398 | $ 25,689 |
Earnings per share | |||||||||||||||
Basic (in dollars per share) | $ (0.19) | $ 0.01 | $ (0.09) | $ 0.09 | $ 0.07 | $ 0.11 | $ 0.09 | $ 0.09 | $ 0.10 | $ 0.09 | $ (0.19) | $ 0.19 | $ 0.18 | $ 0.37 | $ 0.39 |
Diluted (in dollars per share) | $ (0.19) | $ 0.01 | $ (0.09) | $ 0.09 | $ 0.07 | $ 0.11 | $ 0.08 | $ 0.09 | $ 0.10 | $ 0.09 | $ (0.19) | $ 0.18 | $ 0.18 | $ 0.36 | $ 0.38 |
Weighted average common shares outstanding | |||||||||||||||
Basic (in shares) | 65,844 | 65,623 | 65,608 | 65,589 | 65,970 | 65,910 | 65,730 | 65,525 | 66,116 | 66,697 | 65,734 | 65,940 | 65,780 | 66,014 | 65,933 |
Diluted (in shares) | 65,844 | 66,492 | 66,397 | 66,747 | 67,087 | 67,370 | 67,394 | 66,630 | 66,993 | 67,882 | 65,734 | 67,206 | 66,863 | 67,205 | 67,337 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) $ in Millions | Jan. 22, 2015USD ($) |
Subsequent Event [Member] | Visa/MasterCard Litigation | |
SUBSEQUENT EVENTS | |
Settlement amount received | $ 14.4 |
CONDENSED CONSOLIDATING FINANCI
CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Ops) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||
Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Condensed Income Statements, Captions [Line Items] | |||||||||||||||
Revenues | $ 206,364,000 | $ 207,473,000 | $ 152,055,000 | $ 145,481,000 | $ 144,946,000 | $ 150,571,000 | $ 140,456,000 | $ 146,101,000 | $ 149,065,000 | $ 146,822,000 | $ 413,837,000 | $ 295,517,000 | $ 593,053,000 | $ 582,444,000 | $ 584,486,000 |
Costs and expenses | |||||||||||||||
Cost of revenues (exclusive of depreciation and amortization) | 127,222,000 | 127,023,000 | 109,375,000 | 113,238,000 | 254,245,000 | 222,614,000 | 440,071,000 | 439,794,000 | 436,059,000 | ||||||
Operating expenses | 26,847,000 | 15,841,000 | 21,261,000 | 20,039,000 | 42,688,000 | 41,299,000 | 95,452,000 | 76,562,000 | 75,806,000 | ||||||
Research and Development | 4,470,000 | 5,436,000 | 9,906,000 | 804,000 | 0 | 0 | |||||||||
Depreciation | 10,717,000 | 10,377,000 | 1,919,000 | 1,927,000 | 21,094,000 | 3,846,000 | 8,745,000 | 7,350,000 | 6,843,000 | ||||||
Amortization | 20,772,000 | 20,655,000 | 2,769,000 | 2,354,000 | 41,427,000 | 5,123,000 | 14,199,000 | 9,588,000 | 9,796,000 | ||||||
Total costs and expenses | 190,028,000 | 179,332,000 | 135,324,000 | 137,558,000 | 369,360,000 | 272,882,000 | 559,271,000 | 533,294,000 | 528,504,000 | ||||||
Operating income | 16,336,000 | 28,141,000 | 376,000 | 10,771,000 | 9,622,000 | 13,013,000 | 11,196,000 | 11,420,000 | 13,633,000 | 12,901,000 | 44,477,000 | 22,635,000 | 33,782,000 | 49,150,000 | 55,982,000 |
Other expenses | |||||||||||||||
Interest expense, net of interest income | 24,958,000 | 25,655,000 | 2,083,000 | 1,546,000 | 50,613,000 | 3,629,000 | 10,756,000 | 10,265,000 | 15,519,000 | ||||||
Loss on extinguishment of debt | 12,977,000 | 0 | 12,977,000 | 2,725,000 | |||||||||||
Total other expenses | 37,935,000 | 25,655,000 | 2,083,000 | 1,546,000 | 63,590,000 | 3,629,000 | 13,481,000 | 10,265,000 | 15,519,000 | ||||||
(Loss) income from operations before tax | (21,599,000) | 2,486,000 | 7,539,000 | 11,467,000 | (19,113,000) | 19,006,000 | 20,301,000 | 38,885,000 | 40,463,000 | ||||||
Income tax (benefit) expense | (8,858,000) | 2,017,000 | 2,815,000 | 3,978,000 | (6,841,000) | 6,793,000 | 8,161,000 | 14,487,000 | 14,774,000 | ||||||
Net (loss) income | (12,741,000) | 469,000 | $ (5,749,000) | $ 5,676,000 | 4,724,000 | 7,489,000 | $ 5,704,000 | $ 5,782,000 | $ 6,776,000 | $ 6,136,000 | (12,272,000) | 12,213,000 | 12,140,000 | 24,398,000 | 25,689,000 |
Foreign currency translation | 811,000 | (873,000) | 381,000 | 1,000 | (62,000) | 382,000 | (1,258,000) | 269,000 | 218,000 | ||||||
Comprehensive (loss) income | (11,930,000) | (404,000) | 5,105,000 | 7,490,000 | (12,334,000) | 12,595,000 | 10,882,000 | 24,667,000 | 25,907,000 | ||||||
Reportable Legal Entities | Parent | |||||||||||||||
Other expenses | |||||||||||||||
Equity in income of subsidiaries | 12,741,000 | (469,000) | (4,724,000) | (7,489,000) | 12,272,000 | (12,213,000) | (12,140,000) | (24,398,000) | (25,689,000) | ||||||
Total other expenses | 12,741,000 | (469,000) | (4,724,000) | (7,489,000) | 12,272,000 | (12,213,000) | (12,140,000) | (24,398,000) | (25,689,000) | ||||||
(Loss) income from operations before tax | (12,741,000) | 469,000 | 4,724,000 | 7,489,000 | (12,272,000) | 12,213,000 | 12,140,000 | 24,398,000 | 25,689,000 | ||||||
Net (loss) income | (12,741,000) | 469,000 | 4,724,000 | 7,489,000 | (12,272,000) | 12,213,000 | 12,140,000 | 24,398,000 | 25,689,000 | ||||||
Foreign currency translation | 811,000 | (873,000) | 381,000 | 1,000 | (62,000) | 382,000 | (1,258,000) | 269,000 | 218,000 | ||||||
Comprehensive (loss) income | (11,930,000) | 404,000 | 5,105,000 | 7,490,000 | (12,334,000) | 12,595,000 | 12,140,000 | 24,667,000 | 25,907,000 | ||||||
Reportable Legal Entities | Subsidiary Issuer | |||||||||||||||
Condensed Income Statements, Captions [Line Items] | |||||||||||||||
Revenues | 139,818,000 | 141,410,000 | 134,198,000 | 140,321,000 | 281,228,000 | 274,519,000 | 542,206,000 | 541,002,000 | 556,376,000 | ||||||
Costs and expenses | |||||||||||||||
Cost of revenues (exclusive of depreciation and amortization) | 110,659,000 | 110,589,000 | 104,918,000 | 111,338,000 | 221,248,000 | 216,257,000 | 422,544,000 | 424,129,000 | 426,183,000 | ||||||
Operating expenses | 18,809,000 | 4,191,000 | 20,000,000 | 18,747,000 | 23,000,000 | 38,746,000 | 88,087,000 | 71,623,000 | 72,551,000 | ||||||
Depreciation | 1,787,000 | 1,774,000 | 1,870,000 | 1,883,000 | 3,561,000 | 3,753,000 | 7,428,000 | 7,186,000 | 6,617,000 | ||||||
Amortization | 2,193,000 | 2,215,000 | 2,644,000 | 2,230,000 | 4,408,000 | 4,874,000 | 11,180,000 | 9,217,000 | 9,543,000 | ||||||
Total costs and expenses | 133,448,000 | 118,769,000 | 129,432,000 | 134,198,000 | 252,217,000 | 263,630,000 | 529,239,000 | 512,155,000 | 514,894,000 | ||||||
Operating income | 6,370,000 | 22,641,000 | 4,766,000 | 6,123,000 | 29,011,000 | 10,889,000 | 12,967,000 | 28,847,000 | 41,482,000 | ||||||
Other expenses | |||||||||||||||
Interest expense, net of interest income | 1,834,000 | 2,778,000 | 1,990,000 | 2,034,000 | 4,612,000 | 4,024,000 | 7,675,000 | 10,342,000 | 15,591,000 | ||||||
Equity in income of subsidiaries | (3,665,000) | (3,047,000) | (3,343,000) | (5,082,000) | (6,712,000) | (8,425,000) | (15,218,000) | (13,596,000) | (9,546,000) | ||||||
Loss on extinguishment of debt | 12,977,000 | 12,977,000 | 2,523,000 | ||||||||||||
Total other expenses | 11,146,000 | (269,000) | (1,353,000) | (3,048,000) | 10,877,000 | (4,401,000) | (5,020,000) | (3,254,000) | 6,045,000 | ||||||
(Loss) income from operations before tax | (4,776,000) | 22,910,000 | 6,119,000 | 9,171,000 | 18,134,000 | 15,290,000 | 17,987,000 | 32,101,000 | 35,437,000 | ||||||
Income tax (benefit) expense | (3,684,000) | 8,706,000 | 1,187,000 | 1,682,000 | 5,022,000 | 2,869,000 | 2,801,000 | 7,703,000 | 9,748,000 | ||||||
Net (loss) income | 1,092,000 | 14,204,000 | 4,932,000 | 7,489,000 | 13,112,000 | 12,421,000 | 15,186,000 | 24,398,000 | 25,689,000 | ||||||
Comprehensive (loss) income | 1,092,000 | 14,204,000 | 4,932,000 | 7,489,000 | 19,112,000 | 12,421,000 | 15,186,000 | 24,398,000 | 25,689,000 | ||||||
Reportable Legal Entities | Guarantor Subsidiaries | |||||||||||||||
Condensed Income Statements, Captions [Line Items] | |||||||||||||||
Revenues | 62,440,000 | 62,369,000 | 7,044,000 | 6,866,000 | 124,809,000 | 13,910,000 | 35,689,000 | 28,277,000 | 18,623,000 | ||||||
Costs and expenses | |||||||||||||||
Cost of revenues (exclusive of depreciation and amortization) | 14,375,000 | 14,371,000 | 2,243,000 | 2,043,000 | 28,746,000 | 4,286,000 | 10,864,000 | 7,905,000 | 3,376,000 | ||||||
Operating expenses | 7,736,000 | 11,359,000 | 778,000 | 819,000 | 19,095,000 | 1,597,000 | 5,719,000 | 3,445,000 | 1,880,000 | ||||||
Research and Development | 4,470,000 | 5,436,000 | 9,906,000 | 804,000 | |||||||||||
Depreciation | 8,880,000 | 8,542,000 | 1,000 | 1,000 | 17,422,000 | 2,000 | 1,134,000 | 1,000 | 5,000 | ||||||
Amortization | 17,964,000 | 17,771,000 | 35,735,000 | 2,454,000 | |||||||||||
Total costs and expenses | 53,425,000 | 57,479,000 | 3,022,000 | 2,863,000 | 110,904,000 | 5,885,000 | 20,975,000 | 11,351,000 | 5,261,000 | ||||||
Operating income | 9,015,000 | 4,890,000 | 4,022,000 | 2,602,000 | 13,905,000 | 8,025,000 | 14,714,000 | 16,926,000 | 13,362,000 | ||||||
Other expenses | |||||||||||||||
Interest expense, net of interest income | 23,036,000 | 22,787,000 | 45,823,000 | 3,290,000 | |||||||||||
Loss on extinguishment of debt | 202,000 | ||||||||||||||
Total other expenses | 23,036,000 | 22,787,000 | 45,823,000 | 3,492,000 | |||||||||||
(Loss) income from operations before tax | (14,021,000) | (17,897,000) | 4,022,000 | 2,602,000 | (31,918,000) | 8,025,000 | 11,222,000 | 16,926,000 | 13,362,000 | ||||||
Income tax (benefit) expense | (5,502,000) | (6,942,000) | 1,413,000 | 1,401,000 | (12,444,000) | 2,814,000 | 3,784,000 | 5,924,000 | 4,677,000 | ||||||
Net (loss) income | (8,519,000) | (10,955,000) | 2,609,000 | 2,602,000 | (19,474,000) | 5,211,000 | 7,438,000 | 11,002,000 | 8,685,000 | ||||||
Comprehensive (loss) income | (8,519,000) | (10,955,000) | 2,609,000 | 4,003,000 | (19,474,000) | 5,211,000 | 7,438,000 | 11,002,000 | 8,685,000 | ||||||
Reportable Legal Entities | Non-Guarantor Subsidiaries | |||||||||||||||
Condensed Income Statements, Captions [Line Items] | |||||||||||||||
Revenues | 4,256,000 | 3,830,000 | 3,898,000 | 3,553,000 | 8,086,000 | 7,451,000 | 15,891,000 | 13,838,000 | 10,001,000 | ||||||
Costs and expenses | |||||||||||||||
Cost of revenues (exclusive of depreciation and amortization) | 2,188,000 | 2,063,000 | 2,214,000 | (143,000) | 4,251,000 | 2,071,000 | 6,663,000 | 7,760,000 | 6,500,000 | ||||||
Operating expenses | 452,000 | 427,000 | 677,000 | 642,000 | 879,000 | 1,319,000 | 5,560,000 | 2,167,000 | 1,889,000 | ||||||
Depreciation | 50,000 | 61,000 | 48,000 | 43,000 | 111,000 | 91,000 | 183,000 | 163,000 | 221,000 | ||||||
Amortization | 615,000 | 669,000 | 125,000 | 124,000 | 1,284,000 | 249,000 | 565,000 | 371,000 | 253,000 | ||||||
Total costs and expenses | 3,305,000 | 3,220,000 | 3,064,000 | 666,000 | 6,525,000 | 3,730,000 | 9,790,000 | 10,461,000 | 8,863,000 | ||||||
Operating income | 951,000 | 610,000 | 834,000 | 2,887,000 | 1,561,000 | 3,721,000 | 6,101,000 | 3,377,000 | 1,138,000 | ||||||
Other expenses | |||||||||||||||
Interest expense, net of interest income | 88,000 | 90,000 | 93,000 | (488,000) | 178,000 | (395,000) | (209,000) | (77,000) | (72,000) | ||||||
Total other expenses | 88,000 | 90,000 | 93,000 | (488,000) | 178,000 | (395,000) | (209,000) | (77,000) | (72,000) | ||||||
(Loss) income from operations before tax | 863,000 | 520,000 | 741,000 | 3,375,000 | 1,383,000 | 4,116,000 | 6,310,000 | 3,454,000 | 1,210,000 | ||||||
Income tax (benefit) expense | 328,000 | 253,000 | 215,000 | 895,000 | 581,000 | 1,110,000 | 1,576,000 | 860,000 | 349,000 | ||||||
Net (loss) income | 535,000 | 267,000 | 526,000 | 2,480,000 | 802,000 | 3,006,000 | 4,734,000 | 2,594,000 | 861,000 | ||||||
Foreign currency translation | 811,000 | (873,000) | 381,000 | 1,000 | (62,000) | 382,000 | (1,258,000) | 269,000 | 218,000 | ||||||
Comprehensive (loss) income | 1,346,000 | (606,000) | 907,000 | 2,481,000 | 740,000 | 3,388,000 | 3,476,000 | 2,863,000 | 1,079,000 | ||||||
Eliminations | |||||||||||||||
Condensed Income Statements, Captions [Line Items] | |||||||||||||||
Revenues | (150,000) | (136,000) | (194,000) | (169,000) | (286,000) | (363,000) | (733,000) | (673,000) | (514,000) | ||||||
Costs and expenses | |||||||||||||||
Operating expenses | (150,000) | (136,000) | (194,000) | (169,000) | (286,000) | (363,000) | (733,000) | (673,000) | (514,000) | ||||||
Total costs and expenses | (150,000) | (136,000) | (194,000) | (169,000) | (286,000) | (363,000) | (733,000) | (673,000) | (514,000) | ||||||
Other expenses | |||||||||||||||
Equity in income of subsidiaries | (9,076,000) | 3,516,000 | 8,067,000 | 12,571,000 | (5,560,000) | 20,638,000 | 27,358,000 | 37,994,000 | 35,235,000 | ||||||
Total other expenses | (9,076,000) | 3,516,000 | 8,067,000 | 12,571,000 | (5,560,000) | 20,638,000 | 27,358,000 | 37,994,000 | 35,235,000 | ||||||
(Loss) income from operations before tax | 9,076,000 | (3,516,000) | (8,067,000) | (12,571,000) | 5,560,000 | (20,638,000) | (27,358,000) | (37,994,000) | (35,235,000) | ||||||
Net (loss) income | 9,076,000 | (3,516,000) | (8,067,000) | (12,571,000) | 5,560,000 | (20,638,000) | (27,358,000) | (37,994,000) | (35,235,000) | ||||||
Foreign currency translation | (811,000) | 873,000 | (381,000) | (1,000) | 62,000 | (382,000) | 1,258,000 | (269,000) | (218,000) | ||||||
Comprehensive (loss) income | $ 8,265,000 | $ (2,643,000) | $ (8,448,000) | $ (12,572,000) | $ 5,622,000 | $ (21,020,000) | $ (26,100,000) | $ (38,263,000) | $ (35,453,000) |
CONDENSED CONSOLIDATING FINAN90
CONDENSED CONSOLIDATING FINANCIAL INFORMATION (BalSh) (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
Current assets | |||||||||
Cash and cash equivalents | $ 165,017 | $ 145,013 | $ 89,095 | $ 161,998 | $ 194,566 | $ 114,254 | $ 153,020 | $ 55,535 | $ 55,535 |
Settlement receivables | 23,716 | 29,787 | 43,288 | 38,265 | |||||
Trade receivables, net | 41,834 | 39,220 | 37,697 | 11,658 | |||||
Other receivables | 11,372 | 20,392 | 20,553 | 4,605 | |||||
Inventory | 23,453 | 23,050 | 27,163 | 9,413 | |||||
Prepaid expenses and other assets | 21,090 | 18,889 | 18,988 | 16,674 | |||||
Deferred tax asset | 9,591 | 9,590 | 9,591 | 3,102 | |||||
Total current assets | 296,073 | 285,941 | 246,375 | 197,971 | |||||
Non-current assets | |||||||||
Property, equipment and leasehold improvements, net | 104,521 | 102,759 | 106,085 | 18,710 | |||||
Goodwill | 857,670 | 857,856 | 857,913 | 180,084 | 180,141 | ||||
Other intangible assets, net | 404,132 | 420,103 | 436,785 | 31,535 | |||||
Other receivables, non-current | 7,808 | 8,593 | 9,184 | 699 | |||||
Deferred tax asset, non-current | 87,942 | ||||||||
Other assets, non-current | 36,915 | 50,012 | 50,943 | 10,386 | |||||
Total non-current assets | 1,411,046 | 1,439,323 | 1,460,910 | 329,356 | |||||
Total assets | 1,707,119 | 1,725,264 | 1,707,285 | 527,327 | |||||
Current Liabilities | |||||||||
Settlement liabilities | 141,211 | 141,649 | 119,157 | 145,022 | |||||
Accounts payable and accrued expenses | 36,712 | 113,543 | 104,668 | 53,601 | |||||
Current portion of long-term debt | 10,000 | 10,000 | 10,000 | 1,030 | |||||
Total current liabilities | 267,906 | 265,192 | 233,825 | 199,653 | |||||
Non-current liabilities | |||||||||
Deferred tax liability, non-current | 49,808 | 59,101 | 57,333 | ||||||
Long-term debt, less current portion | 1,157,506 | 1,161,731 | 1,178,787 | 101,970 | |||||
Other accrued expenses and liabilities | 4,927 | 5,381 | 5,867 | 7,100 | |||||
Total non-current liabilities | 1,212,241 | 1,226,213 | 1,241,987 | 109,070 | |||||
Total liabilities | 1,480,147 | 1,491,405 | 1,475,812 | 308,723 | |||||
Stockholders' Equity | |||||||||
Common stock | 91 | $ 91 | $ 90 | $ 89 | |||||
Convertible preferred stock | |||||||||
Additional paid-in capital | 253,555 | $ 248,491 | $ 245,682 | $ 231,516 | |||||
Retained earnings (deficit) | 147,879 | 160,621 | 160,152 | 148,012 | |||||
Accumulated other comprehensive income (loss) | 1,507 | 696 | 1,569 | 2,827 | |||||
Treasury stock, at cost | (176,060) | (176,040) | (176,020) | (163,840) | |||||
Total stockholders' equity (deficit) | 226,972 | 233,859 | 231,473 | 218,604 | |||||
Total liabilities and stockholders' equity | 1,707,119 | 1,725,264 | 1,707,285 | 527,327 | |||||
Reportable Legal Entities | Parent | |||||||||
Non-current assets | |||||||||
Investment in Subsidiaries | 226,972 | 233,859 | 231,473 | 218,604 | |||||
Total non-current assets | 226,972 | 233,859 | 231,473 | 218,604 | |||||
Total assets | 226,972 | 233,859 | 231,473 | 218,604 | |||||
Stockholders' Equity | |||||||||
Common stock | 91 | 91 | 90 | 89 | |||||
Additional paid-in capital | 253,555 | 248,491 | 245,682 | 231,516 | |||||
Retained earnings (deficit) | 147,879 | 160,621 | 160,152 | 148,012 | |||||
Accumulated other comprehensive income (loss) | 1,507 | 696 | 1,569 | 2,827 | |||||
Treasury stock, at cost | (176,060) | (176,040) | (176,020) | (163,840) | |||||
Total stockholders' equity (deficit) | 226,972 | 233,859 | 231,473 | 218,604 | |||||
Total liabilities and stockholders' equity | 226,972 | 233,859 | 231,473 | 218,604 | |||||
Reportable Legal Entities | Subsidiary Issuer | |||||||||
Current assets | |||||||||
Cash and cash equivalents | 136,790 | 120,435 | 68,143 | 142,775 | 178,319 | 100,573 | 141,640 | 47,766 | |
Settlement receivables | 19,721 | 26,950 | 40,157 | 34,458 | |||||
Trade receivables, net | 5,989 | 6,294 | 6,578 | 9,030 | |||||
Other receivables | 3,183 | 3,846 | 3,416 | 4,451 | |||||
Inventory | 10,075 | 9,312 | 10,595 | 9,413 | |||||
Prepaid expenses and other assets | 7,752 | 7,836 | 7,143 | 10,300 | |||||
Deferred tax asset | 2,743 | 2,743 | 2,743 | 3,102 | |||||
Intercompany balances | 39,338 | 32,512 | 18,038 | 20,005 | |||||
Total current assets | 225,591 | 209,928 | 156,813 | 191,332 | |||||
Non-current assets | |||||||||
Property, equipment and leasehold improvements, net | 19,467 | 17,409 | 17,864 | 18,282 | |||||
Goodwill | 148,076 | 148,278 | 148,278 | 139,839 | |||||
Other intangible assets, net | 22,589 | 23,260 | 24,771 | 30,229 | |||||
Other receivables, non-current | 3,994 | 4,411 | 4,411 | 699 | |||||
Investment in Subsidiaries | 153,927 | 149,599 | 147,195 | 113,350 | |||||
Deferred tax asset, non-current | 85,754 | 76,460 | 78,229 | 88,253 | |||||
Other assets, non-current | 32,453 | 46,090 | 47,508 | 10,311 | |||||
Intercompany balances | 1,130,380 | 1,130,380 | 1,130,380 | 61,936 | |||||
Total non-current assets | 1,599,821 | 1,597,383 | 1,598,636 | 462,899 | |||||
Total assets | 1,825,412 | 1,807,311 | 1,755,449 | 654,231 | |||||
Current Liabilities | |||||||||
Settlement liabilities | 134,604 | 136,839 | 111,375 | 137,089 | |||||
Accounts payable and accrued expenses | 101,269 | 85,689 | 61,544 | 51,324 | |||||
Current portion of long-term debt | 10,000 | 10,000 | 10,000 | 1,030 | |||||
Intercompany balances | 161,593 | 156,536 | 152,802 | 135,542 | |||||
Total current liabilities | 407,466 | 389,064 | 335,721 | 324,985 | |||||
Non-current liabilities | |||||||||
Deferred tax liability, non-current | 1,072 | 1,071 | 1,072 | ||||||
Long-term debt, less current portion | 1,157,506 | 1,161,731 | 1,178,787 | 101,970 | |||||
Other accrued expenses and liabilities | 4,487 | 4,924 | 5,377 | 7,100 | |||||
Intercompany balances | 1,572 | ||||||||
Total non-current liabilities | 1,163,065 | 1,167,726 | 1,185,236 | 110,642 | |||||
Total liabilities | 1,567,350 | 1,556,790 | 429,703 | ||||||
Stockholders' Equity | |||||||||
Additional paid-in capital | 91,843 | 87,202 | 69,654 | 67,694 | |||||
Retained earnings (deficit) | 161,531 | 162,623 | 163,269 | 148,083 | |||||
Accumulated other comprehensive income (loss) | 1,507 | 696 | 1,569 | 2,827 | |||||
Total stockholders' equity (deficit) | 254,881 | 250,521 | 234,492 | 218,604 | |||||
Total liabilities and stockholders' equity | 1,825,412 | 1,807,311 | 1,755,449 | 654,231 | |||||
Reportable Legal Entities | Guarantor Subsidiaries | |||||||||
Current assets | |||||||||
Cash and cash equivalents | 16,523 | 13,315 | 6,489 | 2,291 | 2,531 | 2,149 | 482 | 71 | |
Trade receivables, net | 35,845 | 32,925 | 31,116 | 2,622 | |||||
Other receivables | 23,736 | 29,870 | 16,992 | ||||||
Inventory | 13,378 | 13,738 | 16,568 | ||||||
Prepaid expenses and other assets | 3,789 | 2,523 | 2,821 | 20 | |||||
Deferred tax asset | 6,848 | 6,847 | 6,848 | ||||||
Intercompany balances | 160,054 | 155,182 | 151,179 | 135,542 | |||||
Total current assets | 260,173 | 249,400 | 232,013 | 140,333 | |||||
Non-current assets | |||||||||
Property, equipment and leasehold improvements, net | 84,649 | 84,865 | 87,898 | 56 | |||||
Goodwill | 708,923 | 708,922 | 708,922 | 39,470 | |||||
Other intangible assets, net | 373,600 | 388,281 | 402,816 | 499 | |||||
Other receivables, non-current | 3,814 | 4,182 | 4,773 | ||||||
Deferred tax asset, non-current | 22,467 | 22,467 | |||||||
Other assets, non-current | 3,923 | 3,413 | 3,366 | ||||||
Intercompany balances | 61,936 | ||||||||
Total non-current assets | 1,197,376 | 1,212,130 | 1,207,775 | 40,025 | |||||
Total assets | 1,457,549 | 1,461,530 | 1,439,788 | 180,358 | |||||
Current Liabilities | |||||||||
Settlement liabilities | 231 | 297 | 140 | ||||||
Accounts payable and accrued expenses | 29,670 | 35,216 | 41,395 | 1,398 | |||||
Intercompany balances | 30,907 | 22,949 | 8,159 | ||||||
Total current liabilities | 60,808 | 58,462 | 49,694 | 1,398 | |||||
Non-current liabilities | |||||||||
Deferred tax liability, non-current | 156,957 | 156,957 | 134,490 | ||||||
Other accrued expenses and liabilities | 440 | 457 | 490 | ||||||
Intercompany balances | 1,130,380 | 1,130,380 | 1,130,380 | ||||||
Total non-current liabilities | 1,290,958 | 1,220,205 | 1,265,360 | ||||||
Total liabilities | 1,351,766 | 1,289,163 | 1,315,054 | 1,398 | |||||
Stockholders' Equity | |||||||||
Additional paid-in capital | 2,792 | 2,269 | 2,269 | 2,000 | |||||
Retained earnings (deficit) | 102,991 | 179,088 | 122,465 | 115,024 | |||||
Total stockholders' equity (deficit) | 105,783 | 113,778 | 124,734 | 117,024 | |||||
Total liabilities and stockholders' equity | 1,457,549 | 1,461,530 | 1,439,788 | 180,358 | |||||
Reportable Legal Entities | Non-Guarantor Subsidiaries | |||||||||
Current assets | |||||||||
Cash and cash equivalents | 11,704 | 11,263 | 14,463 | $ 16,932 | $ 13,716 | 11,532 | $ 10,898 | $ 7,698 | |
Settlement receivables | 3,995 | 2,837 | 3,131 | 3,807 | |||||
Trade receivables, net | 1 | 3 | 6 | ||||||
Other receivables | 145 | 113 | 145 | 154 | |||||
Prepaid expenses and other assets | 9,549 | 8,530 | 9,024 | 6,354 | |||||
Intercompany balances | 1,539 | 1,473 | 1,623 | ||||||
Total current assets | 26,932 | 24,217 | 28,389 | 21,853 | |||||
Non-current assets | |||||||||
Property, equipment and leasehold improvements, net | 405 | 485 | 323 | 372 | |||||
Goodwill | 671 | 656 | 713 | 775 | |||||
Other intangible assets, net | 7,943 | 8,562 | 9,198 | 807 | |||||
Investment in Subsidiaries | 85 | 86 | 86 | ||||||
Other assets, non-current | 539 | 509 | 69 | 75 | |||||
Intercompany balances | 1,572 | ||||||||
Total non-current assets | 9,643 | 10,298 | 10,389 | 3,601 | |||||
Total assets | 36,575 | 34,515 | 38,778 | 25,454 | |||||
Current Liabilities | |||||||||
Settlement liabilities | 6,376 | 4,513 | 7,642 | 7,933 | |||||
Accounts payable and accrued expenses | 1,448 | 1,075 | 1,729 | 879 | |||||
Intercompany balances | 8,431 | 9,682 | 9,879 | 20,005 | |||||
Total current liabilities | 15,897 | 15,270 | 19,250 | 28,817 | |||||
Non-current liabilities | |||||||||
Deferred tax liability, non-current | 311 | ||||||||
Total non-current liabilities | 311 | ||||||||
Total liabilities | 16,255 | 15,870 | 19,250 | 29,128 | |||||
Stockholders' Equity | |||||||||
Additional paid-in capital | 21,107 | 21,110 | 21,115 | 1,808 | |||||
Retained earnings (deficit) | (205) | (738) | (1,006) | (5,738) | |||||
Accumulated other comprehensive income (loss) | (582) | (1,127) | (581) | 256 | |||||
Total stockholders' equity (deficit) | 20,320 | 19,245 | 19,528 | (3,674) | |||||
Total liabilities and stockholders' equity | 36,575 | 34,515 | 38,778 | 25,454 | |||||
Eliminations | |||||||||
Current assets | |||||||||
Other receivables | 63,508 | (8,437) | |||||||
Intercompany balances | (200,931) | (189,167) | (170,840) | (155,547) | |||||
Total current assets | (216,623) | (197,604) | (170,840) | (155,547) | |||||
Non-current assets | |||||||||
Investment in Subsidiaries | (380,784) | (383,544) | (378,754) | (331,954) | |||||
Deferred tax asset, non-current | (108,221) | (98,927) | (78,229) | (311) | |||||
Intercompany balances | (1,130,380) | (1,130,380) | (1,130,380) | (63,508) | |||||
Total non-current assets | 1,622,766 | (1,614,347) | (1,587,363) | (395,773) | |||||
Total assets | 1,839,389 | (1,811,951) | (1,758,203) | (551,320) | |||||
Current Liabilities | |||||||||
Accounts payable and accrued expenses | (15,692) | (8,437) | |||||||
Intercompany balances | (200,931) | 189,167 | (170,840) | (155,547) | |||||
Total current liabilities | (216,623) | (197,604) | 319,061 | (155,547) | |||||
Non-current liabilities | |||||||||
Deferred tax liability, non-current | (108,221) | (98,927) | (78,229) | (311) | |||||
Intercompany balances | (1,130,380) | 1,130,380 | (1,130,380) | (1,572) | |||||
Total non-current liabilities | 1,241,782 | (2,217,873) | (1,208,609) | (63,819) | |||||
Total liabilities | 1,458,405 | (1,428,407) | (1,379,449) | (219,366) | |||||
Stockholders' Equity | |||||||||
Additional paid-in capital | (115,742) | (110,581) | (93,038) | (71,502) | |||||
Retained earnings (deficit) | (264,317) | (273,394) | (284,728) | (257,369) | |||||
Accumulated other comprehensive income (loss) | (925) | 431 | (988) | (3,083) | |||||
Total stockholders' equity (deficit) | (380,984) | (383,544) | (278,754) | (331,954) | |||||
Total liabilities and stockholders' equity | $ (1,839,388) | $ (1,811,951) | $ (1,758,203) | $ (551,320) |
CONDENSED CONSOLIDATING FINAN91
CONDENSED CONSOLIDATING FINANCIAL INFORMATION (CFS) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||
Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Cash flows from operating activities | |||||||||||||||
Net (loss) income | $ (12,741) | $ 469 | $ (5,749) | $ 5,676 | $ 4,724 | $ 7,489 | $ 5,704 | $ 5,782 | $ 6,776 | $ 6,136 | $ (12,272) | $ 12,213 | $ 12,140 | $ 24,398 | $ 25,689 |
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||||||||
Depreciation and Amortization | 31,032 | 4,281 | 62,521 | 8,969 | 22,944 | 16,938 | 16,639 | ||||||||
Amortization of financing costs | 2,072 | 471 | 3,730 | 942 | 2,035 | 1,793 | 1,485 | ||||||||
Provision for bad debts | 2,266 | 2,014 | 4,370 | 4,229 | 8,991 | 7,874 | 5,182 | ||||||||
Impairment Loss | 3,129 | ||||||||||||||
Loss on early extinguishment of debt | 12,977 | 0 | 12,977 | 2,725 | |||||||||||
Stock-based compensation | 1,793 | 2,057 | 3,954 | 5,409 | 8,876 | 5,078 | 6,655 | ||||||||
Other non-cash items | 231 | 20 | 337 | 178 | 95 | ||||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Net settlement receivables and liabilities | 35,973 | 63,189 | 41,784 | 42,810 | (30,679) | (45,993) | 91,353 | ||||||||
Other changes in operating assets and liabilities | 9,874 | 6,972 | 4,881 | 878 | (5,967) | (5,932) | 10,390 | ||||||||
Net cash provided by operating activities | 85,816 | 86,597 | 126,391 | 75,429 | 24,531 | 4,334 | 157,488 | ||||||||
Cash flows from investing activities | |||||||||||||||
Acquisitions, net of cash acquired | (2,257) | (11,845) | (1,068,000) | ||||||||||||
Capital expenditures | (12,616) | (3,025) | (29,660) | (7,493) | (18,021) | (13,900) | (12,786) | ||||||||
Repayments under development agreements | 1,217 | 2,392 | 276 | ||||||||||||
Changes in restricted cash and cash equivalents | 59 | (46) | 60 | (45) | (102) | (90) | 255 | ||||||||
Net cash provided by (used in) investing activities | (12,594) | (2,879) | (30,691) | (19,170) | (1,085,847) | (13,990) | (12,531) | ||||||||
Cash flows from financing activities | |||||||||||||||
Repayments of prior credit facility | (3,000) | (7,000) | (103,000) | (18,500) | (52,500) | ||||||||||
Proceeds from long-term debt | 335,000 | 1,200,000 | |||||||||||||
Debt issuance costs | (252) | (1,154) | (52,735) | (764) | (676) | ||||||||||
Proceeds from exercise of stock options | 1,048 | 2,440 | 1,673 | 4,613 | 5,338 | 8,431 | 6,655 | ||||||||
Purchase of treasury stock | (20) | (2,767) | (40) | (6,604) | (12,180) | (18,350) | (262) | ||||||||
Net cash used in financing activities | (16,724) | (3,327) | (19,521) | (8,991) | 1,037,423 | (29,183) | (46,783) | ||||||||
Effect of exchange rates on cash | (580) | (79) | (257) | 476 | (1,266) | 73 | (689) | ||||||||
Cash and cash equivalents | |||||||||||||||
Net increase for the period | 55,918 | 80,312 | 75,922 | 47,744 | (25,159) | (38,766) | 97,485 | ||||||||
Balance, beginning of the period | 145,013 | 89,095 | 161,998 | 194,566 | 114,254 | 153,020 | 89,095 | 114,254 | 114,254 | 153,020 | 55,535 | ||||
Balance, end of the period | 165,017 | 145,013 | 89,095 | 161,998 | 194,566 | 114,254 | 165,017 | 161,998 | 89,095 | 114,254 | 153,020 | ||||
Reportable Legal Entities | Parent | |||||||||||||||
Cash flows from operating activities | |||||||||||||||
Net (loss) income | (12,741) | 469 | 4,724 | 7,489 | (12,272) | 12,213 | 12,140 | 24,398 | 25,689 | ||||||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||||||||
Equity in loss (income) of subsidiaries | (469) | (7,489) | 12,272 | (12,213) | (12,140) | (24,398) | (25,689) | ||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Other changes in operating assets and liabilities | (5) | (51) | 28 | (31) | (47) | 19 | 29 | ||||||||
Net cash provided by operating activities | (5) | (51) | 28 | (31) | (47) | 19 | 29 | ||||||||
Cash flows from investing activities | |||||||||||||||
Intercompany investing activities | (1,023) | 378 | (3,907) | 2,022 | 6,889 | 9,900 | (6,422) | ||||||||
Net cash provided by (used in) investing activities | (1,023) | 378 | (3,907) | 2,022 | 6,889 | 9,900 | (6,422) | ||||||||
Cash flows from financing activities | |||||||||||||||
Proceeds from exercise of stock options | 1,048 | 2,440 | 1,673 | 4,613 | 5,338 | 8,431 | 6,655 | ||||||||
Purchase of treasury stock | (20) | (2,767) | (40) | (6,604) | (12,180) | (18,350) | (262) | ||||||||
Intercompany financing activities | 1,056,155 | ||||||||||||||
Net cash used in financing activities | 1,028 | (327) | 3,879 | (1,991) | 6,842 | (9,919) | 6,393 | ||||||||
Reportable Legal Entities | Subsidiary Issuer | |||||||||||||||
Cash flows from operating activities | |||||||||||||||
Net (loss) income | 1,092 | 14,204 | 4,932 | 7,489 | 13,112 | 12,421 | 15,186 | 24,398 | 25,689 | ||||||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||||||||
Depreciation and Amortization | 3,989 | 4,113 | 7,969 | 8,627 | 18,608 | 16,403 | 16,160 | ||||||||
Amortization of financing costs | 2,072 | 471 | 3,730 | 942 | 2,035 | 1,793 | 1,485 | ||||||||
Provision for bad debts | 2,531 | ||||||||||||||
Impairment Loss | 3,129 | ||||||||||||||
Loss on early extinguishment of debt | 12,977 | 12,977 | 2,523 | ||||||||||||
Equity in loss (income) of subsidiaries | (3,047) | (5,082) | (6,712) | (8,425) | (15,218) | (13,596) | (19,546) | ||||||||
Stock-based compensation | 1,674 | 2,057 | 3,432 | 5,409 | 8,849 | 5,078 | 6,655 | ||||||||
Other non-cash items | (76) | 52 | 180 | 95 | |||||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Net settlement receivables and liabilities | 38,671 | 63,982 | 43,663 | 41,722 | (31,414) | (44,264) | 88,354 | ||||||||
Other changes in operating assets and liabilities | 13,617 | 18,829 | 15,839 | 17,615 | 34,774 | 13,391 | 3,738 | ||||||||
Net cash provided by operating activities | 71,182 | 91,983 | 94,073 | 78,290 | 38,524 | 3,383 | 135,161 | ||||||||
Cash flows from investing activities | |||||||||||||||
Acquisitions, net of cash acquired | (2,257) | (11,845) | (11,845) | ||||||||||||
Capital expenditures | (2,434) | (2,707) | (5,387) | (6,977) | (5,465) | (13,364) | (11,546) | ||||||||
Changes in restricted cash and cash equivalents | 59 | (46) | 60 | (45) | (102) | (90) | 255 | ||||||||
Intercompany investing activities | 164 | (9,663) | 5,423 | (11,622) | (1,085,709) | (4,676) | 20,336 | ||||||||
Net cash provided by (used in) investing activities | (2,210) | (12,224) | (2,132) | (30,276) | (1,103,121) | (18,130) | 9,045 | ||||||||
Cash flows from financing activities | |||||||||||||||
Repayments of prior credit facility | (3,000) | (7,000) | (103,000) | (18,500) | (52,500) | ||||||||||
Proceeds from long-term debt | 335,000 | 1,200,000 | |||||||||||||
Debt issuance costs | (252) | (1,154) | (52,735) | (764) | (676) | ||||||||||
Intercompany financing activities | 1,072 | 987 | 106 | 1,188 | (12,098) | (7,056) | 2,844 | ||||||||
Net cash used in financing activities | (16,680) | (2,013) | (23,294) | (5,812) | 1,032,167 | (26,320) | (50,332) | ||||||||
Cash and cash equivalents | |||||||||||||||
Net increase for the period | 52,292 | 77,746 | 68,647 | 42,202 | (32,430) | (41,067) | 93,874 | ||||||||
Balance, beginning of the period | 120,435 | 68,143 | 142,775 | 178,319 | 100,573 | 141,640 | 68,143 | 100,573 | 100,573 | 141,640 | 47,766 | ||||
Balance, end of the period | 136,790 | 120,435 | 68,143 | 142,775 | 178,319 | 100,573 | 136,790 | 142,775 | 68,143 | 100,573 | 141,640 | ||||
Reportable Legal Entities | Guarantor Subsidiaries | |||||||||||||||
Cash flows from operating activities | |||||||||||||||
Net (loss) income | (8,519) | (10,955) | 2,609 | 2,602 | (19,474) | 5,211 | 7,438 | 11,002 | 8,685 | ||||||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||||||||
Depreciation and Amortization | 26,313 | 1 | 53,157 | 2 | 3,588 | 1 | 5 | ||||||||
Provision for bad debts | 2,266 | 2,014 | 4,370 | 4,229 | 8,991 | 7,874 | 2,651 | ||||||||
Loss on early extinguishment of debt | 202 | ||||||||||||||
Stock-based compensation | 522 | 27 | |||||||||||||
Other non-cash items | 231 | 96 | 284 | ||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Net settlement receivables and liabilities | 157 | 218 | 91 | 192 | 141 | ||||||||||
Other changes in operating assets and liabilities | (3,350) | (4,360) | (10,159) | (9,289) | (20,047) | (18,880) | (10,705) | ||||||||
Net cash provided by operating activities | 16,766 | 475 | 32,890 | 345 | 624 | (3) | 636 | ||||||||
Cash flows from investing activities | |||||||||||||||
Acquisitions, net of cash acquired | (1,056,155) | ||||||||||||||
Capital expenditures | (9,902) | (93) | (23,993) | (203) | (3,464) | (330) | (225) | ||||||||
Repayments under development agreements | 1,217 | 2,392 | 276 | ||||||||||||
Net cash provided by (used in) investing activities | (9,940) | (93) | (22,856) | (203) | (1,059,343) | (330) | (225) | ||||||||
Cash flows from financing activities | |||||||||||||||
Intercompany financing activities | 1,063,059 | 2,000 | |||||||||||||
Net cash used in financing activities | 1,063,059 | 2,000 | |||||||||||||
Cash and cash equivalents | |||||||||||||||
Net increase for the period | 6,826 | 382 | 10,034 | 142 | 4,340 | 1,667 | 411 | ||||||||
Balance, beginning of the period | 13,315 | 6,489 | 2,291 | 2,531 | 2,149 | 482 | 6,489 | 2,149 | 2,149 | 482 | 71 | ||||
Balance, end of the period | 16,523 | 13,315 | 6,489 | 2,291 | 2,531 | 2,149 | 16,523 | 2,291 | 6,489 | 2,149 | 482 | ||||
Reportable Legal Entities | Non-Guarantor Subsidiaries | |||||||||||||||
Cash flows from operating activities | |||||||||||||||
Net (loss) income | 535 | 267 | 526 | 2,480 | 802 | 3,006 | 4,734 | 2,594 | 861 | ||||||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||||||||
Depreciation and Amortization | 730 | 167 | 1,395 | 340 | 748 | 534 | 474 | ||||||||
Other non-cash items | 1 | (2) | |||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Net settlement receivables and liabilities | (2,855) | (1,011) | (1,970) | 896 | 594 | (1,729) | 2,999 | ||||||||
Other changes in operating assets and liabilities | (269) | (7,446) | (827) | (7,417) | (20,647) | (462) | 17,328 | ||||||||
Net cash provided by operating activities | (2,127) | (5,810) | (600) | (3,175) | (14,570) | 935 | 21,662 | ||||||||
Cash flows from investing activities | |||||||||||||||
Capital expenditures | (280) | (225) | (280) | (313) | (9,092) | (206) | (1,015) | ||||||||
Intercompany investing activities | (48) | (1,590) | (106) | (1,594) | (1,425) | ||||||||||
Net cash provided by (used in) investing activities | (328) | (1,815) | (386) | (1,907) | (10,517) | (206) | (1,015) | ||||||||
Cash flows from financing activities | |||||||||||||||
Intercompany financing activities | (165) | 9,888 | (1,516) | 10,006 | 29,284 | (168) | (16,758) | ||||||||
Net cash used in financing activities | (165) | 9,888 | (1,516) | 10,006 | 29,284 | (168) | (16,758) | ||||||||
Effect of exchange rates on cash | (580) | (79) | (257) | 476 | (1,266) | 73 | (689) | ||||||||
Cash and cash equivalents | |||||||||||||||
Net increase for the period | (3,200) | 2,184 | (2,759) | 5,400 | 2,931 | 634 | 3,200 | ||||||||
Balance, beginning of the period | 11,263 | 14,463 | $ 16,932 | 13,716 | 11,532 | $ 10,898 | 14,463 | 11,532 | 11,532 | 10,898 | 7,698 | ||||
Balance, end of the period | 11,704 | 11,263 | $ 14,463 | 16,932 | 13,716 | $ 11,532 | 11,704 | 16,932 | 14,463 | 11,532 | 10,898 | ||||
Eliminations | |||||||||||||||
Cash flows from operating activities | |||||||||||||||
Net (loss) income | $ 9,076 | (3,516) | $ (8,067) | (12,571) | 5,560 | (20,638) | (27,358) | (37,994) | (35,235) | ||||||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||||||||
Equity in loss (income) of subsidiaries | 3,516 | 12,571 | (5,560) | 20,638 | 27,358 | 37,994 | 35,235 | ||||||||
Stock-based compensation | 119 | ||||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Other changes in operating assets and liabilities | (119) | ||||||||||||||
Cash flows from investing activities | |||||||||||||||
Intercompany investing activities | 907 | 10,875 | (1,410) | 11,194 | 1,080,245 | (5,224) | (13,914) | ||||||||
Net cash provided by (used in) investing activities | 907 | 10,875 | (1,410) | 11,194 | 1,080,245 | (5,224) | (13,914) | ||||||||
Cash flows from financing activities | |||||||||||||||
Intercompany financing activities | (907) | (10,875) | 1,410 | (11,194) | (1,080,245) | 5,224 | 13,914 | ||||||||
Net cash used in financing activities | $ (907) | $ (10,875) | $ 1,410 | $ (11,194) | $ (1,080,245) | $ 5,224 | $ 13,914 |
CONDENSED CONSOLIDATED STATEM92
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME | ||
Revenues | $ 207,473 | $ 150,571 |
Costs and expenses | ||
Cost of revenues (exclusive of depreciation and amortization) | 127,023 | 113,238 |
Operating expenses | 15,841 | 20,039 |
Research and Development | 5,436 | |
Depreciation | 10,377 | 1,927 |
Amortization | 20,655 | 2,354 |
Total costs and expenses | 179,332 | 137,558 |
Operating income | 28,141 | 13,013 |
Other expenses | ||
Interest expense, net of interest income | 25,655 | 1,546 |
Loss on extinguishment of debt | 0 | |
Total other expenses | 25,655 | 1,546 |
(Loss) income from operations before tax | 2,486 | 11,467 |
Income tax provision | 2,017 | 3,978 |
Net (loss) income | 469 | 7,489 |
Foreign currency translation | (873) | 1 |
Comprehensive (loss) income | $ (404) | $ 7,490 |
Earnings per share | ||
Basic (in dollars per share) | $ 0.01 | $ 0.11 |
Diluted (in dollars per share) | $ 0.01 | $ 0.11 |
Weighted average common shares outstanding | ||
Basic (in shares) | 65,623 | 65,910 |
Diluted (in shares) | 66,492 | 67,370 |
CONDENSED CONSOLIDATED BALANC93
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
Current assets | |||||||||
Cash and cash equivalents | $ 165,017 | $ 145,013 | $ 89,095 | $ 161,998 | $ 194,566 | $ 114,254 | $ 153,020 | $ 55,535 | $ 55,535 |
Settlement receivables | 23,716 | 29,787 | 43,288 | 38,265 | |||||
Trade receivables, net of allowances for doubtful accounts of $2.9 million and $2.8 million at June 30, 2015 and December 31, 2014, respectively | 41,834 | 39,220 | 37,697 | 11,658 | |||||
Other receivables | 11,372 | 20,392 | 20,553 | 4,605 | |||||
Inventory | 23,453 | 23,050 | 27,163 | 9,413 | |||||
Prepaid expenses and other assets | 21,090 | 18,889 | 18,988 | 16,674 | |||||
Deferred tax asset | 9,591 | 9,590 | 9,591 | 3,102 | |||||
Total current assets | 296,073 | 285,941 | 246,375 | 197,971 | |||||
Non-current assets | |||||||||
Property, equipment and leasehold improvements, net | 104,521 | 102,759 | 106,085 | 18,710 | |||||
Goodwill | 857,670 | 857,856 | 857,913 | 180,084 | $ 180,141 | ||||
Other intangible assets, net | 404,132 | 420,103 | 436,785 | 31,535 | |||||
Other receivables, non-current | 7,808 | 8,593 | 9,184 | 699 | |||||
Deferred tax asset, non-current | 87,942 | ||||||||
Other assets, non-current | 36,915 | 50,012 | 50,943 | 10,386 | |||||
Total non-current assets | 1,411,046 | 1,439,323 | 1,460,910 | 329,356 | |||||
Total assets | 1,707,119 | 1,725,264 | 1,707,285 | 527,327 | |||||
Current Liabilities | |||||||||
Settlement liabilities | 141,211 | 141,649 | 119,157 | 145,022 | |||||
Accounts payable and accrued expenses | 36,712 | 113,543 | 104,668 | 53,601 | |||||
Current portion of long-term debt | 10,000 | 10,000 | 10,000 | 1,030 | |||||
Total current liabilities | 267,906 | 265,192 | 233,825 | 199,653 | |||||
Non-current liabilities | |||||||||
Deferred tax liability, non-current | 49,808 | 59,101 | 57,333 | ||||||
Long-term debt, less current portion | 1,157,506 | 1,161,731 | 1,178,787 | 101,970 | |||||
Other accrued expenses and liabilities | 4,927 | 5,381 | 5,867 | 7,100 | |||||
Total non-current liabilities | 1,212,241 | 1,226,213 | 1,241,987 | 109,070 | |||||
Total liabilities | $ 1,480,147 | $ 1,491,405 | $ 1,475,812 | $ 308,723 | |||||
Commitments and Contingencies (Note 13) | |||||||||
Stockholders' Equity | |||||||||
Common stock, $0.001 par value, 500,000 shares authorized and 90,743 and 90,405 shares issued at June 30, 2015 and December 31, 2014, respectively | $ 91 | $ 91 | $ 90 | $ 89 | |||||
Convertible preferred stock, $0.001 par value, 50,000 shares authorized and 0 shares outstanding at June 30, 2015 and December 31, 2014, respectively | |||||||||
Additional paid-in capital | 253,555 | $ 248,491 | $ 245,682 | $ 231,516 | |||||
Retained earnings (deficit) | 147,879 | 160,621 | 160,152 | 148,012 | |||||
Accumulated other comprehensive income (loss) | 1,507 | 696 | 1,569 | 2,827 | |||||
Treasury stock, at cost, 24,821 and 24,816 shares at June 30, 2015 and December 31, 2014, respectively | (176,060) | (176,040) | (176,020) | (163,840) | |||||
Total stockholders' equity (deficit) | 226,972 | 233,859 | 231,473 | 218,604 | |||||
Total liabilities and stockholders' equity | $ 1,707,119 | $ 1,725,264 | $ 1,707,285 | $ 527,327 |
CONDENSED CONSOLIDATED BALANC94
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
Allowances for doubtful accounts | $ 2,900 | $ 2,700 | $ 2,784 | $ 2,777 | $ 6,908 | $ 6,756 |
Common stock par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||
Common stock, shares authorized | 500,000,000 | 500,000,000 | 500,000,000 | 500,000,000 | ||
Common stock, shares issued | 90,743,000 | 90,610,000 | 90,405,000 | 89,233,000 | ||
Convertible preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||
Convertible preferred stock, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 | 50,000,000 | ||
Convertible preferred stock, shares outstanding | 0 | 0 | 0 | 0 | ||
Treasury stock, shares | 24,821,000 | 24,819,000 | 24,816,000 | 23,303,000 |
CONDENSED CONSOLIDATED STATEM95
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS $ in Thousands | 3 Months Ended |
Mar. 31, 2015USD ($) | |
Cash flows from operating activities | |
Net income | $ 469 |
Adjustments to reconcile net income to cash provided by operating activities: | |
Depreciation | 10,377 |
Amortization of intangibles | 31,032 |
Amortization of financing costs | 2,072 |
Loss/(gain) on sale or disposal of assets | 2 |
Accretion of contract rights | 2,104 |
Provision for bad debts | 2,266 |
Loss on early extinguishment of debt | 0 |
Stock-based compensation | 1,793 |
Other non-cash items | 231 |
Amortization & depreciation | 31,032 |
Changes in operating assets and liabilities: | |
Trade and other receivables | (4,716) |
Settlement receivables | 13,208 |
Inventory | 4,155 |
Prepaid and other assets | (547) |
Deferred income taxes | 1,769 |
Settlement liabilities | 22,765 |
Other current liabilities | 9,213 |
Net cash provided by operating activities | 85,816 |
Cash flows from investing activities | |
Capital expenditures | (12,616) |
Proceeds from sale of fixed assets | 1 |
Advances under development agreements | (1,255) |
Repayments under development agreements | 1,217 |
Changes in restricted cash and cash equivalents | 59 |
Net cash provided by (used in) investing activities | (12,594) |
Cash flows from financing activities | |
Repayments of credit facility | (17,500) |
Debt issuance costs | (252) |
Proceeds from exercise of stock options | 1,048 |
Purchase of treasury stock | (20) |
Net cash used in financing activities | (16,724) |
Effect of exchange rates on cash | (580) |
Cash and cash equivalents | |
Net increase for the period | 55,918 |
Balance, beginning of the period | 89,095 |
Balance, end of the period | 145,013 |
Supplemental cash disclosures | |
Cash paid for interest | 13,162 |
Cash paid for income tax, net of refunds | 712 |
Supplemental non-cash disclosures | |
Accrued and unpaid capital expenditures | 1,173 |
Non-cash activities | |
Transfer of leased gaming equipment to inventory | $ 1,395 |
BUSINESS
BUSINESS | 3 Months Ended | 6 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | |
BUSINESS | ||
BUSINESS | 1. BUSINESS Overview Global Cash Access Holdings, Inc. (“Holdings”) is a holding company, the assets of which are the issued and outstanding capital stock of each of Global Cash Access, Inc. (“GCA”) and Multimedia Games Holding Company, Inc. (“Multimedia”). Unless otherwise indicated, the terms the “Company,” “we,” “us” and “our” refer to Holdings together with its consolidated subsidiaries. GCA is dedicated to providing video and mechanical reel gaming content and technology solutions, integrated gaming payments solutions and compliance and efficiency software. The Company’s Games business provides: (a) comprehensive content, electronic gaming units and systems for Native American and commercial casinos, including the award winning TournEvent® slot tournament solution; and (b) the central determinant system for the video lottery terminals (“VLTs”) installed at racetracks in the State of New York. The Company’s Payments business provides: (a) access to cash at gaming facilities via Automated Teller Machine (“ATM”) cash withdrawals, credit card cash access transactions, point of sale (“POS”) debit card transactions, and check verification and warranty services; (b) fully integrated gaming industry kiosks that provide cash access and related services; (c) products and services that improve credit decision making, automate cashier operations and enhance patron marketing activities for gaming establishments; (d) compliance, audit and data solutions; and (e) online payment processing solutions for gaming operators in States that offer intra state, Internet-based gaming and lottery activities. | 1. BUSINESS Overview Global Cash Access Holdings, Inc. (“Holdings”) is a holding company, the assets of which are the issued and outstanding capital stock of each of Global Cash Access, Inc. (“GCA”) and Multimedia Games Holding Company, Inc. (“Multimedia”). Unless otherwise indicated, the terms the “Company,” “we,” “us” and “our” refer to Holdings together with its consolidated subsidiaries. GCA is dedicated to providing video and mechanical reel gaming content and technology solutions, integrated gaming payments solutions and compliance and efficiency software. The Company’s Games business provides: (a) comprehensive content, electronic gaming units and systems for Native American and commercial casinos, including the award winning TournEvent® slot tournament solution; and (b) the central determinant system for the video lottery terminals (“VLTs”) installed at racetracks in the State of New York. The Company’s Payments business provides: (a) access to cash at gaming facilities via Automated Teller Machine (“ATM”) cash withdrawals, credit card cash access transactions, point of sale (“POS”) debit card transactions, and check verification and warranty services; (b) fully integrated gaming industry kiosks that provide cash access and related services; (c) products and services that improve credit decision making, automate cashier operations and enhance patron marketing activities for gaming establishments; (d) compliance, audit and data solutions; and (e) online payment processing solutions for gaming operators in states that offer intrastate, Internet-based gaming and lottery activities. |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended | 6 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation Our unaudited condensed consolidated financial statements included herein have been prepared by us pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Some of the information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States have been condensed or omitted pursuant to such rules and regulations, although we believe the disclosures are adequate to make the information presented not misleading. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary for a fair presentation of results for the interim periods have been made. The results for the three months ended March 31, 2015 are not necessarily indicative of results to be expected for the full fiscal year. The condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. There have been no changes to our basis of presentation and significant accounting policies since the most recent filing of our Annual Report on Form 10-K, except for the following: Cost of Revenues (exclusive of depreciation and amortization) The cost of revenues (exclusive of depreciation and amortization) represents the direct costs required to perform revenue generating transactions. The principal costs included within cost of revenues (exclusive of depreciation and amortization) are field service and network operations personnel, those direct costs related to the inventory sold for electronic gaming machines (“EGMs”), fully integrated kiosks and system sales, commissions paid to gaming establishments, interchange fees paid to credit and debit card networks and transaction processing fees to our transaction processor. Research and Development Costs We conduct research and development activities primarily to develop and enhance our Games and Payments platforms, as well as game content and features. We believe our ability to deliver differentiated, appealing products and services to the marketplace is based in part on our research and development investments, and we expect to continue to make such investments in the future. These research and development costs consist primarily of salaries and benefits, consulting fees, and game lab testing fees. Once the technological feasibility of a project has been established, it is transferred from research to development, and capitalization of development costs continues until the product is available for general release. Advertising, Marketing and Promotional Costs We expense advertising, marketing and promotional costs as incurred. Total advertising, marketing and promotional costs, included in operating expenses in the Condensed Consolidated Statements of Income and Comprehensive Income, were $0.3 million and $0.2 million for the three months ended March 31, 2015 and 2014, respectively. Fair Values of Financial Instruments The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Fair value estimates are made at a specific point in time, based upon relevant market information about the financial instrument. In determining fair value, we use a hierarchy that includes three levels which are based on the extent to which inputs used in measuring fair value are observable in the market. Level 1 indicates that the fair value is determined by using quoted prices in active markets for identical investments. Level 2 indicates that the fair value is determined using observable pricing inputs other than quoted prices in active markets such as models or other valuation methodologies. Level 3 indicates that the fair value is determined using pricing inputs that are unobservable for the investment and include situations where there is little, if any, market activity for the investment. Significant management estimates and judgment are used in the determination of the fair value of level 3 pricing inputs. The carrying amount of cash and cash equivalents, settlement receivables, trade receivables, other receivables, settlement liabilities, accounts payable and accrued expenses approximates fair value due to the short-term maturities of these instruments. The fair value of our borrowings are estimated based on various inputs to determine a market price, such as: market demand and supply, size of tranche, maturity and similar instruments trading in more active markets. The following table presents the fair value and carrying value of our long-term debt as of March 31, 2015 (amounts in thousands): Level of Hierarchy Fair Value Carrying Amount Term loan 1 $ $ Senior secured notes 3 $ $ Senior unsecured notes 3 $ $ The senior secured and senior unsecured notes were both fair valued using a Level 3 input by evaluating the trading activities of similar debt instruments as there was no market activity as of March 31, 2015. At December 31, 2014, the fair value of our long-term debt was considered to approximate the carrying amount as our acquisition of Multimedia occurred on December 19, 2014, for which our long-term debt was incurred. Business Segments During the first quarter of 2015, we changed our organizational structure as part of our transformation to a Games and Payments company providing solutions to the gaming industry. As a result, information that our chief operating decision-making group regularly reviews for purposes of allocating resources and assessing performance changed. Therefore, beginning in the first quarter of 2015, we are reporting our financial performance based on our new segments described in “Note 18 – Segment Information”. We have presented prior period amounts to conform to the way we now internally manage and monitor segment performance beginning in 2015. This change had no impact on our condensed consolidated financial statements. Recent Accounting Guidance Recent Accounting Guidance Not Yet Adopted In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-03, which provides guidance to simplify the presentation of debt issuance costs. These amendments require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. The pronouncement is effective for annual periods ending after December 15, 2015, and interim periods within those fiscal years, and early adoption is permitted for financial statements that have not been previously issued. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In January 2015, the FASB issued ASU No. 2015-01, which requires that an entity separately classify, present and disclose extraordinary events and transactions. The pronouncement is effective for annual periods ending after December 15, 2015. A reporting entity also may apply the amendments retrospectively to all prior periods presented in the financial statements. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In August 2014, the FASB issued ASU No. 2014-15, which provides guidance on determining when and how reporting entities must disclose going-concern uncertainties in their financial statements. The pronouncement is effective for annual periods ending after December 15, 2016, and interim periods thereafter, and early adoption is permitted. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In June 2014, the FASB issued ASU No. 2014-12, which requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. The standard is effective for annual reporting periods beginning after December 15, 2015, with early adoption permitted. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In May 2014, the FASB issued ASU No. 2014-09, which creates FASB Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers” and supersedes ASC Topic 605, “Revenue Recognition”. The guidance replaces industry specific guidance and establishes a single five-step model to identify and recognize revenue. The core principle of the guidance is that an entity should recognize revenue upon transfer of control of promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. Additionally, the guidance requires the entity to disclose further quantitative and qualitative information regarding the nature and amount of revenues arising from contracts with customers, as well as other information about the significant judgments and estimates used in recognizing revenues from contracts with customers. This guidance is effective for interim and annual reporting periods beginning after December 15, 2016. Early application is not permitted. This guidance may be adopted retrospectively or under a modified retrospective method where the cumulative effect is recognized at the date of initial application. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within our Notes to the Condensed Consolidated Financial Statements. | 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation Our unaudited condensed consolidated financial statements included herein have been prepared by us pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Some of the information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States have been condensed or omitted pursuant to such rules and regulations, although we believe the disclosures are adequate to make the information presented not misleading. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary for a fair presentation of results for the interim periods have been made. The results for the three and six months ended June 30, 2015 are not necessarily indicative of results to be expected for the full fiscal year. The condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. There have been no changes to our basis of presentation and significant accounting policies since the most recent filing of our Annual Report on Form 10-K, except for the following: Cost of Revenues (exclusive of depreciation and amortization) The cost of revenues (exclusive of depreciation and amortization) represents the direct costs required to perform revenue generating transactions. The principal costs included within cost of revenues (exclusive of depreciation and amortization) are field service and network operations personnel, those direct costs related to the inventory sold for electronic gaming machines (“EGMs”), fully integrated kiosks and system sales, commissions paid to gaming establishments, interchange fees paid to credit and debit card networks and transaction processing fees to our transaction processor. Research and Development Costs We conduct research and development activities primarily to develop and enhance our Games and Payments platforms, as well as game content and features. We believe our ability to deliver differentiated, appealing products and services to the marketplace is based in part on our research and development investments, and we expect to continue to make such investments in the future. These research and development costs consist primarily of salaries and benefits, consulting fees, and game lab testing fees. Once the technological feasibility of a project has been established, it is transferred from research to development, and capitalization of development costs continues until the product is available for general release. Advertising, Marketing and Promotional Costs We expense advertising, marketing and promotional costs as incurred. Total advertising, marketing and promotional costs, included in operating expenses in the Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income, were $0.5 million and $0.8 million and $0.2 million and $0.4 million for the three and six months ended June 30, 2015 and 2014, respectively. Fair Values of Financial Instruments The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Fair value estimates are made at a specific point in time, based upon relevant market information about the financial instrument. In determining fair value, we use a hierarchy that includes three levels which are based on the extent to which inputs used in measuring fair value are observable in the market. Level 1 indicates that the fair value is determined by using quoted prices in active markets for identical investments. Level 2 indicates that the fair value is determined using observable pricing inputs other than quoted prices in active markets such as models or other valuation methodologies. Level 3 indicates that the fair value is determined using pricing inputs that are unobservable for the investment and include situations where there is little, if any, market activity for the investment. Significant management estimates and judgment are used in the determination of the fair value of level 3 pricing inputs. The carrying amount of cash and cash equivalents, settlement receivables, trade receivables, other receivables, settlement liabilities, accounts payable and accrued expenses approximates fair value due to the short-term maturities of these instruments. The fair value of our borrowings are estimated based on various inputs to determine a market price, such as: market demand and supply, size of tranche, maturity and similar instruments trading in more active markets. The following table presents the fair value and carrying value of our long-term debt as of June 30, 2015 (amounts in thousands): Level of Carrying Hierarchy Fair Value Value Term loan $ $ Senior secured notes $ $ Senior unsecured notes $ $ The senior secured notes were fair valued using a Level 3 input by evaluating the trading activities of similar debt instruments as there was no market activity as of June 30, 2015. The senior unsecured notes were syndicated in April 2015 and transitioned from level 3 to level 1 on the fair value hierarchy as of June 30, 2015. At December 31, 2014, the fair value of our long-term debt was considered to approximate the carrying amount as our acquisition of Multimedia occurred on December 19, 2014, for which our long-term debt was incurred. Business Segments During the first quarter of 2015, we changed our organizational structure as part of our transformation to a Games and Payments company providing solutions to the gaming industry. As a result, information that our chief operating decision-making group regularly reviews for purposes of allocating resources and assessing performance changed. Therefore, beginning in the first quarter of 2015, we are reporting our financial performance based on our new segments described in “Note 18. Segment Information”. We have presented prior period amounts to conform to the way we now internally manage and monitor segment performance beginning in 2015. This change had no impact on our condensed consolidated financial statements. Recent Accounting Guidance Recent Accounting Guidance Not Yet Adopted In July 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2015-11, which provides guidance on the measurement of inventory value. The amendments require an entity to measure in scope inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. The amendments do not apply to inventory that is measured using last-in, first-out (LIFO) or the retail inventory method. The amendments apply to all other inventory, which includes inventory that is measured using first-in, first-out (FIFO) or average cost. The pronouncement is effective for annual periods beginning after December 15, 2016, and interim periods within those fiscal years, and early adoption is permitted. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-03, which provides guidance to simplify the presentation of debt issuance costs. These amendments require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. The pronouncement is effective for annual periods beginning after December 15, 2015, and interim periods within those fiscal years, and early adoption is permitted for financial statements that have not been previously issued. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In January 2015, the FASB issued ASU No. 2015-01, which requires that an entity separately classify, present and disclose extraordinary events and transactions. The pronouncement is effective for annual periods ending after December 15, 2015. A reporting entity also may apply the amendments retrospectively to all prior periods presented in the financial statements. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In August 2014, the FASB issued ASU No. 2014-15, which provides guidance on determining when and how reporting entities must disclose going-concern uncertainties in their financial statements. The pronouncement is effective for annual periods ending after December 15, 2016, and interim periods thereafter, and early adoption is permitted. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In June 2014, the FASB issued ASU No. 2014-12, which requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. The standard is effective for annual reporting periods beginning after December 15, 2015, with early adoption permitted. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In May 2014, the FASB issued ASU No. 2014-09, which creates FASB Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers” and supersedes ASC Topic 605, “Revenue Recognition”. The guidance replaces industry specific guidance and establishes a single five-step model to identify and recognize revenue. The core principle of the guidance is that an entity should recognize revenue upon transfer of control of promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. Additionally, the guidance requires the entity to disclose further quantitative and qualitative information regarding the nature and amount of revenues arising from contracts with customers, as well as other information about the significant judgments and estimates used in recognizing revenues from contracts with customers. This guidance is effective for interim and annual reporting periods beginning after December 15, 2016. Early application is not permitted. This guidance may be adopted retrospectively or under a modified retrospective method where the cumulative effect is recognized at the date of initial application. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within our Notes to the Condensed Consolidated Financial Statements . |
BUSINESS COMBINATIONS98
BUSINESS COMBINATIONS | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
BUSINESS COMBINATIONS | |||
BUSINESS COMBINATIONS | 3. BUSINESS COMBINATIONS Multimedia Games Holding Company, Inc. On December 19, 2014, Holdings completed its acquisition of Multimedia. Pursuant to the terms of the Agreement and Plan of Merger, dated as of September 8, 2014 (the “Merger Agreement”), by and among Holdings, Movie Merger Sub, Inc., a wholly owned subsidiary of Holdings (“Merger Sub”), and Multimedia, Merger Sub merged with and into Multimedia, with Multimedia continuing as the surviving corporation (the “Merger”). In the Merger, Multimedia became a wholly owned subsidiary of Holdings. Also, as a result of the Merger, each outstanding share of common stock, par value $0.01 per share, of Multimedia, other than shares held by Holdings, Multimedia, Merger Sub or their respective subsidiaries, was cancelled and converted into the right to receive $36.50 in cash, without interest (the “Merger Consideration”), together with the consideration paid in connection with the acceleration and full vesting of Multimedia equity awards, (collectively, the “Total Merger Consideration”). Multimedia designs, manufactures and supplies gaming machines and systems to commercial and Native American casino operators as well as select lottery operators and commercial bingo facility operators. Multimedia’s revenues are generated from the operation of gaming machines in revenue sharing or lease arrangements and from the sale of gaming machines and systems that feature proprietary game themes. The total purchase consideration for Multimedia was as follows (in thousands, except per share amounts): Amount Purchase consideration Total purchase price for Multimedia Games common stock (29,948 shares at $36.50 per share) $ Payment in respect to Multimedia Games outstanding equity awards Total merger consideration Repayments of Multimedia Games debt and other obligations Less: Multimedia Games outstanding cash at acquisition date Total purchase consideration $ The Merger was accounted for using the acquisition method of accounting, which requires, among other things, the assets acquired and liabilities assumed be recognized at their respective fair values as of the acquisition date. The excess of the purchase price over those fair values was recorded as goodwill, none of which is deductible for tax purposes. The goodwill recognized is attributable primarily to the income potential from Multimedia penetrating into the Class III commercial casino market, the assembled workforce of Multimedia and expected synergies. The estimates and assumptions used include the projected timing and amount of future cash flows and discount rates reflecting risk inherent in the future cash flows. The estimated fair values of Multimedia’s assets acquired and liabilities assumed and resulting goodwill are subject to adjustment as we finalize our fair value analysis. The significant items for which a final fair value has not been determined include, but not limited to: accrued liabilities, the valuation and estimated useful lives of tangible and intangible assets and deferred income taxes. We expect to complete our fair value determinations no later than the fourth quarter of 2015. We do not expect our fair value determinations to materially change; however, there may be differences compared to those amounts originally recorded as we complete our fair value analysis. The information below reflects the preliminary purchase price allocation (in thousands): Amount Purchase price allocation Current assets $ Property, equipment and leasehold improvements, net Goodwill Other intangible assets, net Other receivables, non-current Other assets, long-term Deferred tax asset, non-current Total assets Current liabilities Deferred tax liability, non-current Other accrued expenses and liabilities Total liabilities Net assets acquired $ Trade receivables acquired of $24.7 million were considered to be collectible and therefore the carrying amounts were considered to approximate fair value. Inventory acquired of $16.5 million was fair valued based on model-based valuations for which inputs and value drivers were observable. The following table summarizes acquired tangible assets (in thousands): Useful Life (years) Estimated Fair Value Property, Equipment and Leased Assets Gaming equipment 2 - 4 $ Leasehold and building improvements Lease Term Machinery and equipment 3 - 5 Other 2 - 7 Total property, equipment and leased assets $ The fair value of property, equipment and leased assets was determined using the cost approach as the primary approach for valuing the majority of the personal property. The market approach was used to estimate the value of vehicles. The income approach was used to quantify any economic obsolescence that may be present in the personal property. No economic obsolescence adjustments were made to the personal property, as the business enterprise valuation indicated sufficient cash flows to support the values established through the cost and market approaches. The following table summarizes acquired intangible assets (in thousands): Useful Life (years) Estimated Fair Value Other intangible assets Tradenames and trademarks 3 - 7 $ Computer software 3 - 5 Developed technology 2 - 6 Customer relationships 8 - 12 Contract rights 1 - 7 Total other intangible assets $ The fair values of trade names and trademarks and developed technology were determined by applying the income approach utilizing the relief from royalty methodology. The fair value of customer relationships was determined by applying the income approach utilizing the excess earnings methodology. The fair value of contract rights was considered to approximate the carrying amount based on contractual obligations associated with these other intangible assets. The discount rates utilized to estimate the fair value of these other intangible assets ranged from 10.0% to 11.0%. We expensed approximately $1.5 million of costs incurred related to the acquisition of Multimedia for financial advisory services, financing related fees, accounting and legal fees and other transaction-related expenses during the three months ended March 31, 2015. These expenses are included in the Condensed Consolidated Statements of Income and Comprehensive Income within operating expenses. These costs do not include any costs related to additional site consolidation or rationalization that we might consider in the future. NEWave, Inc. In April 2014, we acquired all of the outstanding capital stock of NEWave, Inc. (“NEWave”) for an aggregate purchase price of approximately $14.9 million, of which approximately $2.5 million is expected to be paid in the second quarter of 2015. NEWave is a supplier of anti-money laundering compliance, audit and data efficiency software to the gaming industry. We have not provided the supplemental pro forma impact of the NEWave acquisition on the revenue and earnings of the combined entity as if the acquisition date had been January 1, 2013, and the amount of revenue and earnings derived from NEWave have not been presented on a supplemental basis as such amounts are not material for the three months ended March 31, 2015 and 2014, respectively. | 3. BUSINESS COMBINATIONS Multimedia Games Holding Company, Inc. On December 19, 2014, Holdings completed its acquisition of Multimedia. Pursuant to the terms of the Agreement and Plan of Merger, dated as of September 8, 2014 (the “Merger Agreement”), by and among Holdings, Movie Merger Sub, Inc., a wholly owned subsidiary of Holdings (“Merger Sub”), and Multimedia, Merger Sub merged with and into Multimedia, with Multimedia continuing as the surviving corporation (the “Merger”). In the Merger, Multimedia became a wholly owned subsidiary of Holdings. Also, as a result of the Merger, each outstanding share of common stock, par value $0.01 per share, of Multimedia, other than shares held by Holdings, Multimedia, Merger Sub or their respective subsidiaries, was cancelled and converted into the right to receive $36.50 in cash, without interest (the “Merger Consideration”), together with the consideration paid in connection with the acceleration and full vesting of certain Multimedia equity awards, (collectively, the “Total Merger Consideration”). Multimedia designs, manufactures and supplies gaming machines and systems to commercial and Native American casino operators as well as select lottery operators and commercial bingo facility operators. Multimedia’s revenues are generated from the operation of gaming machines in revenue sharing or lease arrangements and from the sale of gaming machines and systems that feature proprietary game themes. The total purchase consideration for Multimedia was as follows (in thousands, except per share amounts): Amount Purchase consideration Total purchase price for Multimedia Games common stock ( 29,948 shares at $36.50 per share) $ Payment in respect to Multimedia Games outstanding equity awards Total merger consideration Repayments of Multimedia Games debt and other obligations Less: Multimedia Games outstanding cash at acquisition date Total purchase consideration $ The Merger was accounted for using the acquisition method of accounting, which requires, among other things, the assets acquired and liabilities assumed be recognized at their respective fair values as of the acquisition date. The excess of the purchase price over those fair values was recorded as goodwill, none of which is deductible for tax purposes. The goodwill recognized is attributable primarily to the income potential from Multimedia penetrating into the Class III commercial casino market, the assembled workforce of Multimedia and expected synergies. The estimates and assumptions used include the projected timing and amount of future cash flows and discount rates reflecting risk inherent in the future cash flows. The estimated fair values of Multimedia’s assets acquired and liabilities assumed and resulting goodwill are subject to adjustment as we finalize our fair value analysis. The significant items for which a final fair value has not been determined include, but not limited to: accrued liabilities, the valuation and estimated useful lives of tangible and intangible assets and deferred income taxes. We expect to complete our fair value determinations no later than the fourth quarter of 2015. We do not expect our fair value determinations to materially change; however, there may be differences compared to those amounts originally recorded as we complete our fair value analysis. The information below reflects the preliminary purchase price allocation (in thousands): Amount Purchase price allocation Current assets $ Property, equipment and leasehold improvements, net Goodwill Other intangible assets, net Other receivables, non-current Other assets, long-term Deferred tax asset, non-current Total assets Current liabilities Deferred tax liability, non-current Other accrued expenses and liabilities Total liabilities Net assets acquired $ Trade receivables acquired of $24.7 million were considered to be collectible and therefore the carrying amounts were considered to approximate fair value. Inventory acquired of $16.5 million was fair valued based on model-based valuations for which inputs and value drivers were observable. The following table summarizes acquired tangible assets (in thousands): Useful Life Estimated (years) Fair Value Property, equipment and leased assets Gaming equipment - 4 $ Leasehold and building improvements Lease Term Machinery and equipment - 5 Other - 7 Total property, equipment and leased assets $ The fair value of property, equipment and leased assets was determined using the cost approach as the primary approach for valuing the majority of the personal property. The market approach was used to estimate the value of vehicles. The income approach was used to quantify any economic obsolescence that may be present in the personal property. No economic obsolescence adjustments were made to the personal property, as the business enterprise valuation indicated sufficient cash flows to support the values established through the cost and market approaches. The following table summarizes acquired intangible assets (in thousands): Useful Life Estimated (years) Fair Value Other intangible assets Tradenames and trademarks - 7 $ Computer software - 5 Developed technology - 6 Customer relationships - 12 Contract rights - 7 Total other intangible assets $ The fair values of trade names and trademarks and developed technology were determined by applying the income approach utilizing the relief from royalty methodology. The fair value of customer relationships was determined by applying the income approach utilizing the excess earnings methodology. The fair value of contract rights was considered to approximate the carrying amount based on contractual obligations associated with these other intangible assets. The discount rates utilized to estimate the fair value of these other intangible assets ranged from 10.0% to 11.0% . We expensed approximately $0.4 million and $1.8 million of costs incurred related to the acquisition of Multimedia for financial advisory services, financing related fees, accounting and legal fees and other transaction-related expenses during the three and six months ended June 30, 2015, respectively. These expenses are included in the Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income within operating expenses. These costs do not include any costs related to additional site consolidation or rationalization that we might consider in the future. NEWave, Inc . In April 2014, we acquired all of the outstanding capital stock of NEWave, Inc. (“NEWave”) for an aggregate purchase price of approximately $14. 9 million, of which we estimated that approximately $2. 5 million would be paid in the second quarter of 2015. As of June 30, 2015, a final payment of $2. 3 million was remitted. NEWave is a supplier of anti-money laundering compliance, audit and data efficiency software to the gaming industry. The assets acquired, liabilities assumed and goodwill recorded were not material to the financial statements. We have not provided the supplemental pro forma impact of the NEWave acquisition on the revenue and earnings of the combined entity as if the acquisition date had been January 1, 2013, and the amount of revenue and earnings derived from NEWave have not been presented on a supplemental basis as such amounts are not material for the three and six months ended June 30, 2015 and 2014, respectively. | 3. BUSINESS COMBINATIONS We account for business combinations in accordance with the accounting standards, which require that the assets acquired and liabilities assumed be recorded at their estimated fair values. NEWave, Inc. In April 2014, we acquired all of the outstanding capital stock of NEWave, Inc., (“NEWave”) for an aggregate purchase price of approximately $14.9 million, of which approximately $2.5 million is expected to be paid in April 2015. NEWave is a supplier of compliance, audit and data efficiency software to the gaming industry. We have not provided the supplemental pro forma impact of the NEWave acquisition on the revenue and earnings of the combined entity as if the acquisition date had been January 1, 2013, and the amount of revenue and earnings derived from NEWave have not been presented on a supplemental basis as such amounts are not material for the twelve months ended December 31, 2014 and 2013, respectively. Multimedia Games Holding Company, Inc. On December 19, 2014, Holdings completed its acquisition of Multimedia Games. Pursuant to the terms of the Agreement and Plan of Merger, dated as of September 8, 2014 (the “Merger Agreement”), by and among Holdings, Movie Merger Sub, Inc., a wholly owned subsidiary of Holdings (“Merger Sub”), and Multimedia Games, Merger Sub merged with and into Multimedia Games, with Multimedia Games continuing as the surviving corporation (the “Merger”). In the Merger, Multimedia Games became a wholly owned subsidiary of Holdings. Also, as a result of the Merger, each outstanding share of common stock, par value $0.01 per share, of Multimedia Games, other than shares held by Holdings, Multimedia Games, Merger Sub or their respective subsidiaries, was cancelled and converted into the right to receive $36.50 in cash, without interest (“Merger Consideration”), together with the acceleration and full vesting of Multimedia equity awards, (collectively, the “Total Merger Consideration”). Multimedia Games designs, manufactures and supplies gaming machines and systems to commercial and Native American casino operators as well as select lottery operators and commercial bingo facility operators. Multimedia Games’ revenue is generated from the operation of gaming machines in revenue sharing or lease arrangements and from the sale of gaming machines and systems that feature proprietary game themes. Our combination with Multimedia Games creates a provider of Payments and Games solutions for our gaming establishment customers. The business combination provides us with: ( a) growth opportunities, (b ) enhanced scale, diversification and margins, and ( c ) the ability to increase profitability through cost synergies. The total purchase consideration for Multimedia Games was as follows (in thousands, except per share amounts): Amount Purchase consideration Total purchase price for Multimedia Games common stock (29,948 shares at $36.50 per share) $ Payment in respect to Multimedia Games outstanding equity awards Total merger consideration Repayments of Multimedia Games debt and other obligations Less: Multimedia Games outstanding cash at acquisition date Total purchase consideration $ The Merger was accounted for using the acquisition method of accounting, which requires, among other things, the assets acquired and liabilities assumed be recognized at their respective fair values as of the acquisition date. The excess of the purchase price over those fair values was recorded as goodwill, none of which is deductible for tax purposes. The goodwill recognized is attributable primarily to the income potential from Multimedia Games penetrating into the Class III commercial casino market, the assembled workforce of Multimedia Games and expected synergies. The estimates and assumptions used include the projected timing and amount of future cash flows and discount rates reflecting risk inherent in the future cash flows. The estimated fair values of Multimedia’s assets acquired and liabilities assumed and resulting goodwill are subject to adjustment as the Company finalizes its fair value analysis. The significant items for which a final fair value has not been determined as of the filing of this Annual Report on Form 10-K include accrued liabilities, the valuation and estimated useful lives of tangible and intangible assets and deferred income taxes. We expect to complete our fair value determinations no later than the fourth quarter of 2015. We do not expect our fair value determinations to materially change; however, there may be differences compared to those at December 31, 2014 as we finalize our fair value analysis. The information below reflects the preliminary purchase price allocation (in thousands): Amount Purchase price allocation Current assets $ Property, equipment and leasehold improvements, net Goodwill Other intangible assets, net Other receivables, non-current Other assets, long-term Deferred tax asset, non-current Total assets Current liabilities Deferred tax liability, non-current Other accrued expenses and liabilities Total liabilities Net assets acquired $ Trade receivables acquired of $24.7 million were considered to be collectible and therefore the carrying amounts were considered to approximate fair value. Inventory acquired of $16.5 million was fair valued based on model-based valuations for which inputs and value drivers were observable. The following table summarizes acquired tangible assets (in thousands): Useful Life Estimated (years) Fair Value Property, Equipment and Leased Assets Gaming equipment - 4 $ Leasehold and building improvements Lease Term Machinery and equipment - 5 Other - 7 Total property, equipment and leased assets $ The fair value of property, equipment and leased assets was determined using the cost approach as the primary approach for valuing the majority of the personal property. The market approach was used to estimate the value of vehicles. The income approach was used to quantify any economic obsolescence that may be present in the personal property. No economic obsolescence adjustments were made to the personal property, as the business enterprise valuation indicated sufficient cash flows to support the values established through the cost and market approaches. The following table summarizes acquired intangible assets (in thousands): Useful Life Estimated (years) Fair Value Other intangible assets Tradenames and trademarks - 7 $ Computer software - 5 Developed technology - 6 Customer relationships - 12 Contract rights - 7 Total other intangible assets $ The fair values of trade names and trademarks and developed technology were determined by applying the income approach utilizing the relief from royalty methodology. The fair value of customer relationships was determined by applying the income approach utilizing the excess earnings methodology. The fair value of contract rights was considered to approximate the carrying amount based on contractual obligations associated with these other intangible assets. The discount rates utilized to estimate the fair value of these other intangible assets ranged from 10.0% to 11.0% . GCA and Multimedia Games had different fiscal year ends. Accordingly, the unaudited pro forma condensed combined statements of income for the year ended December 31, 2014 combined historical GCA consolidated statement of income for its year ended December 31, 2014 with historical Multimedia Games consolidated statement of operations for its year ended September 30, 2014, giving effect to the Merger as if it had occurred on January 1, 2013. The unaudited pro forma condensed combined statements of income for the year ended December 31, 2013 combined historical GCA consolidated statement of income for its year ended December 31, 2013 with historical Multimedia Games consolidated statement of operations for its year ended September 30, 2013, giving effect to the Merger as if it had occurred on January 1, 2013. The unaudited pro forma condensed combined financial information does not purport to represent the results of operations of GCA that would have actually resulted had the Merger been completed as of the dates indicated, nor should the information be taken as indicative of the future results of operations or financial position of the combined company. The unaudited pro forma condensed combined financial statements do not reflect the impacts of any potential operational efficiencies, cost savings or economies of scale that GCA may achieve with respect to the combined operations of GCA and Multimedia Games. The unaudited pro forma amounts include the historical operating results of the Company and Multimedia Games prior to the Merger, with adjustments directly attributable to the Merger. The unaudited pro forma results include increases to depreciation and amortization expense based on the purchased intangible assets and the step-up in basis associated with tangible assets acquired and increases to interest expense, related to debt issued to fund the Merger. Also reflected in the year ended December 31, 2014 are adjustments for the impact of acquisition-related costs and other cost s as a result of the Merger of $27.4 million. There were no acquisition-related costs incurred for the year ended December 31, 2013. All adjustments utilized an effective federal statutory tax rate of 35.0% . The following table reflects selected financial data from the unaudited pro forma consolidated financial information assuming the Merger occurred as of January 1, 2013 (in thousands): Year Ended December 31, 2014 2013 Unaudited pro forma results of operations (in thousands, except per share amounts) Revenues $ $ Net (loss) Basic loss per share Diluted loss per share The financial results for Multimedia Games included in the consolidated statements of operations since the acquisition date of December 19, 2014 reflected revenues of approximately $7.4 million and net loss of approximately $3.0 million, including acquisition-related costs of $1.3 million. Through December 31, 2014, we expensed approximately $10.7 million of costs related to the acquisition of Multimedia Games for financial advisory services, financing related fees, accounting and legal fees and other transaction-related expenses and are included in the consolidated statements of income and comprehensive income within operating expenses. These costs do not include any costs related to additional site consolidation or rationalization that we might consider following the closing of the Merger. |
ATM FUNDING AGREEMENTS99
ATM FUNDING AGREEMENTS | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
ATM FUNDING AGREEMENTS | |||
ATM FUNDING AGREEMENTS | 4. ATM FUNDING AGREEMENTS Contract Cash Solutions Agreement Our Contract Cash Solutions Agreement with Wells Fargo Bank, N.A. (“Wells Fargo”) allows us to use funds owned by Wells Fargo to provide the currency needed for normal operating requirements for our ATMs. For the use of these funds, we pay Wells Fargo a cash usage fee on the average daily balance of funds utilized multiplied by a contractually defined cash usage rate. These cash usage fees, reflected as interest expense within the Condensed Consolidated Statements of Income and Comprehensive Income, were $0.5 million and $0.6 million for the three months ended March 31, 2015 and 2014, respectively. We are exposed to interest rate risk to the extent that the applicable LIBOR increases. Under this agreement, all currency supplied by Wells Fargo remains the sole property of Wells Fargo at all times until it is dispensed, at which time Wells Fargo obtains an interest in the corresponding settlement receivable which is recorded on a net basis. As these funds are not our assets, supplied cash is not reflected on the Condensed Consolidated Balance Sheets. The outstanding balances of ATM cash utilized by us from Wells Fargo were $255.6 million and $396.3 million as of March 31, 2015 and December 31, 2014, respectively. In June 2012, we amended the Contract Cash Solutions Agreement to increase the maximum amount of cash to be provided to us from $400.0 million to $500.0 million, and to extend the initial term from November 30, 2013 to November 30, 2014. In November 2014, we amended the Contract Cash Solutions Agreement to extend the term one year until November 30, 2015. We are responsible for any losses of cash in the ATMs under this agreement and we self-insure for this risk. We incurred no material losses related to this self-insurance for the three months ended March 31, 2015 and 2014. Site-Funded ATMs We operate ATMs at certain customer gaming establishments where the gaming establishment provides the cash required for the ATM operational needs. We are required to reimburse the customer for the amount of cash dispensed from these Site-Funded ATMs. The Site-Funded ATM liability is included within “Settlement liabilities” in the accompanying Condensed Consolidated Balance Sheets and was $71.5 million and $69.3 million as of March 31, 2015 and December 31, 2014, respectively. | 4. ATM FUNDING AGREEMENTS Contract Cash Solutions Agreement Our Contract Cash Solutions Agreement with Wells Fargo Bank, N.A. (“Wells Fargo”) allows us to use funds owned by Wells Fargo to provide the currency needed for normal operating requirements for our ATMs. For the use of these funds, we pay Wells Fargo a cash usage fee on the average daily balance of funds utilized multiplied by a contractually defined cash usage rate. These cash usage fees, reflected as interest expense within the Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income, were $0.5 million and $1.0 million and $0.6 million and $1.2 million for the three and six months ended June 30, 2015 and 2014, respectively. We are exposed to interest rate risk to the extent that the applicable LIBOR increases. Under this agreement, all currency supplied by Wells Fargo remains the sole property of Wells Fargo at all times until it is dispensed, at which time Wells Fargo obtains an interest in the corresponding settlement receivable which is recorded on a net basis. As these funds are not our assets, supplied cash is not reflected on the Condensed Consolidated Balance Sheets. The outstanding balances of ATM cash utilized by us from Wells Fargo were $271.8 million and $396.3 million as of June 30, 2015 and December 31, 2014, respectively. In November 2014, we amended the Contract Cash Solutions Agreement to extend the term one year until November 30, 2015. In June 2015, we amended the Contract Cash Solutions Agreement to decrease the maximum amount of cash to be provided to us from $500.0 million to $425.0 million and to extend the term of the agreement from November 30, 2015 to June 30, 2018. We are responsible for any losses of cash in the ATMs under this agreement and we self ‑insure for this risk. We incurred no material losses related to this self ‑insurance for the three and six months ended June 30, 2015 and 2014. Site-Funded ATMs We operate ATMs at certain customer gaming establishments where the gaming establishment provides the cash required for the ATM operational needs. We are required to reimburse the customer for the amount of cash dispensed from these Site-Funded ATMs. The Site-Funded ATM liability is included within “Settlement liabilities” in the accompanying Condensed Consolidated Balance Sheets and was $69.4 million and $69.3 million as of June 30, 2015 and December 31, 2014, respectively. | 4. ATM FUNDING AGREEMENTS Wells Fargo Contract Cash Solutions Agreement Our Contract Cash Solutions Agreement with Wells Fargo allows us to use funds owned by Wells Fargo to provide the currency needed for normal operating requirements for our ATMs. For the use of these funds, we pay Wells Fargo a cash usage fee on the average daily balance of funds utilized multiplied by a contractually defined cash usage rate. Under this agreement, all currency supplied by Wells Fargo remains the sole property of Wells Fargo at all times until it is dispensed, at which time Wells Fargo obtains an interest in the corresponding settlement receivable. As the cash is never an asset of ours, supplied cash is not reflected on our balance sheet. In June 2012, we amended the Contract Cash Solutions Agreement with Wells Fargo to increase the maximum amount of cash to be provided to us from $400.0 million to $500.0 million, and the initial term of the Contract Cash Solutions Agreement has been extended from November 30, 2013 until November 30, 2015. The outstanding balances of ATM cash utilized by us from Wells Fargo were $396.3 million and $427.1 million as of December 31, 2014 and 2013, respectively. Under the terms of the Contract Cash Solutions Agreement, we pay a monthly cash usage fee based upon the product of the average daily dollars outstanding in all ATMs multiplied by a contractually defined cash usage rate. This cash usage rate is determined by an applicable LIBOR plus a mutually agreed upon margin. We are exposed to interest rate risk to the extent that the applicable LIBOR increases. Cash usage fees, reflected as interest expense within the consolidated statements of income and comprehensive income, were $2.3 million, $2.2 million and $3.1 million for the years ended December 31, 2014, 2013 and 2012, respectively. We are responsible for any losses of cash in the ATMs under our agreement with Wells Fargo and we self ‑insure for this risk. We incurred no material losses related to this self ‑insurance for the years ended December 31, 2014 and 2013. Site ‑Funded ATMs We operate ATMs at certain customer gaming establishments where the gaming establishment provides the cash required for the ATM operational needs. We are required to reimburse the customer for the amount of cash dispensed from these Site ‑Funded ATMs. The Site ‑Funded ATM liability is included within settlement liabilities in the accompanying consolidated balance sheets and was $69.3 million and $68.9 million as of December 31, 2014 and 2013, respectively. |
TRADE RCEIVABLES
TRADE RCEIVABLES | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
TRADE RECEIVABLES | |||
TRADE RECEIVABLES | 5. TRADE RECEIVABLES Trade receivables represent short-term credit granted to customers for which collateral is generally not required. The balance of trade receivables consists of outstanding balances owed to us by gaming establishments and casino patrons. The balance of trade receivables consisted of the following (in thousands): At March 31, At December 31, 2015 2014 Trade receivables, net Games trade receivables $ $ Kiosk trade receivables Warranty and other trade receivables Total trade receivables, net $ $ The material balance of the allowance for doubtful accounts for trade receivables is from warranty receivables. On a monthly basis, we evaluate the collectability of the outstanding balances and establish a reserve for the face amount of the expected losses on these receivables. The warranty expense associated with this reserve is included within cost of revenues (exclusive of depreciation and amortization) in the Condensed Consolidated Statements of Income and Comprehensive Income. The outstanding balance of the warranty reserve was $2.7 and $2.8 million as of March 31, 2015 and December 31, 2014, respectively. | 5. TRADE RECEIVABLES Trade receivables represent short-term credit granted to customers for which collateral is generally not required. The balance of trade receivables consists of outstanding balances owed to us by gaming establishments and casino patrons. The balance of trade receivables consisted of the following (in thousands): . At June 30, At December 31, 2015 2014 Trade receivables, net Games trade receivables $ $ Kiosk trade receivables Warranty and other trade receivables Total trade receivables, net $ $ The material balance of the allowance for doubtful accounts for trade receivables is from warranty receivables. On a monthly basis, we evaluate the collectability of the outstanding balances and establish a reserve for the face amount of the expected losses on these receivables. The warranty expense associated with this reserve is included within cost of revenues (exclusive of depreciation and amortization) in the Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income. The outstanding balance of the warranty reserve was $2.9 and $2.8 million as of June 30, 2015 and December 31, 2014, respectively. | 5. TRADE RECEIVABLES Trade receivables represent short-term credit granted to customers for which collateral is generally not required. The balance of trade receivables consists of outstanding balances owed to us by gaming establishments. The balance of trade receivables consisted of the following (in thousands): . At December 31, 2014 2013 Trade receivables, net Games trade receivables $ $ — Kiosk trade receivables Warranty and other trade receivables Total trade receivables, net $ $ The material balance of the allowance for doubtful accounts for trade receivables is from warranty receivables. On a monthly basis, we evaluate the collectability of the outstanding balances and establish a reserve for the face amount of the expected losses on these receivables. The warranty expense associated with this reserve is included within cost of revenues (exclusive of depreciation and amortization) in the consolidated statements of income and comprehensive income. A summary activity of the reserve for warranty losses is as follows (in thousands): Amount Balance, December 31, 2011 $ Warranty expense provision Charge offs against reserve Balance, December 31, 2012 $ Warranty expense provision Charge offs against reserve Balance, December 31, 2013 Warranty expense provision Charge offs against reserve Balance, December 31, 2014 $ |
OTHER RECEIVABLES101
OTHER RECEIVABLES | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
OTHER RECEIVABLES. | |||
OTHER RECEIVABLES | 6. OTHER RECEIVABLES Other receivables include the balance of notes and loans receivable on our games and fully integrated kiosk products, development agreements, which are generated from reimbursable amounts advanced to tribal customers generally used by the customer to build, expand or renovate its facility, and an agreement with Bee Caves Games, Inc. (“Bee Caves Games”) in July 2014, under which the Company agreed to make a loan pursuant to a secured promissory note in the amount of $4.5 million. In association with the promissory note, the Company received warrants to purchase Bee Caves Games common stock, and recorded a discount to the note for the fair value of the warrants received. The warrants are included in the balance of other assets, non-current. The note, which bears interest at 7%, requires interest only payments for the first 24 months followed by repayments of principal and interest in 48 equal monthly installments. Other receivables also include income taxes receivable and other miscellaneous receivables. The balance of other receivables consisted of the following (in thousands): At March 31, At December 31, 2015 2014 Other receivables Notes and loans receivable, net of discount of $814 and $853, respectively $ $ Federal and state income tax receivable Other Total other receivables Less: Notes and loans receivable, non-current Total other receivables, current portion $ $ | 6. OTHER RECEIVABLES Other receivables include the balance of notes and loans receivable on our games and fully integrated kiosk products, development agreements, which are generated from reimbursable amounts advanced to tribal customers generally used by the customer to build, expand or renovate its facility, and an agreement with Bee Caves Games, Inc. (“Bee Caves Games”) in July 2014, under which the Company agreed to make a loan pursuant to a secured promissory note in the amount of $4.5 million. In association with the promissory note, the Company received warrants to purchase Bee Caves Games common stock, and recorded a discount to the note for the fair value of the warrants received. The warrants are included in the balance of other assets, non-current. The note, which bears interest at 7% , requires interest only payments for the first 24 months followed by repayments of principal and interest in 48 equal monthly installments. Other receivables also include income taxes receivable and other miscellaneous receivables. The balance of other receivables consisted of the following (in thousands): At June 30, At December 31, 2015 2014 Other receivables Notes and loans receivable, net of discount of $776 and $853 , respectively $ $ Federal and state income tax receivable Other Total other receivables Less: Notes and loans receivable, non-current Total other receivables, current portion $ $ | 6. OTHER RECEIVABLES Other receivables includes the balance of notes and loans receivable on our gaming and fully integrated kiosk products as well as income taxes receivable and other miscellaneous receivables. The balance of other receivables consisted of the following (in thousands): At December 31, 2014 2013 Other receivables Notes and loans receivable, net of discount of $853 and $0 , respectively $ $ Federal and state income tax receivable Other Total other receivables Less: Notes and loans receivable, non-current Total other receivables, current portion $ $ Notes receivable from development agreements are generated from reimbursable amounts advanced under development agreements. The notes receivable from development agreements balance includes a development agreement with the Chickasaw Nation for the Winstar Casino expansion entered into on November 19, 2012. On July 17, 2014, Multimedia Games entered into an agreement with Bee Caves Games, Inc. (“Bee Caves Games”) under which Multimedia Games agreed to make a loan pursuant to a secured promissory note in the amount of $4.5 million. In association with the promissory note, Multimedia Games received warrants to purchase Bee Caves Games common stock, and recorded a discount to the note for the fair value of the warrants received. The note, which bears interest at 7% , requires interest only payments for the first 24 months followed by repayments of principal and interest in 48 equal monthly installments. |
PREPAID AND OTHER ASSETS102
PREPAID AND OTHER ASSETS | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
PREPAID AND OTHER ASSETS | |||
PREPAID AND OTHER ASSETS | 7. PREPAID AND OTHER ASSETS Prepaid and other assets include the balance of prepaid expenses, deposits, debt issuance costs and other assets. The short-term portion of these assets is included in prepaid and other assets and the long-term portion is included in other assets, non-current. The balance of prepaid and other assets consisted of the following (in thousands): At March 31, At December 31, 2015 2014 Prepaid expenses and other assets Prepaid expenses $ $ Deposits Other Total prepaid expenses and other assets $ $ The balance of other assets, non-current consisted of the following (in thousands): At March 31, At December 31, 2015 2014 Other assets, non-current Debt issuance costs $ $ Prepaid expenses and deposits, non-current Other Total other assets non-current $ $ | 7. PREPAID AND OTHER ASSETS Prepaid and other assets include the balance of prepaid expenses, deposits, debt issuance costs and other assets. The short-term portion of these assets is included in prepaid and other assets and the long-term portion is included in other assets, non-current. The balance of prepaid and other assets consisted of the following (in thousands): At June 30, At December 31, 2015 2014 Prepaid expenses and other assets Prepaid expenses $ $ Deposits Other Total prepaid expenses and other assets $ $ The balance of other assets, non-current consisted of the following (in thousands): At June 30, At December 31, 2015 2014 Other assets, non-current Debt issuance costs $ $ Prepaid expenses and deposits, non-current Other Total other assets, non-current $ $ | 7. PREPAID AND OTHER ASSETS Prepaid and other assets include the balance of prepaid expenses, deposits, debt issuance costs and other assets. The short-term portion of these assets is included in prepaid and other assets and the long-term portion is included in other assets, non-current. The balance of prepaid and other assets consisted of the following (in thousands): At December 31, 2014 2013 Prepaid expenses and other assets Prepaid expenses $ $ Deposits Other Total prepaid expenses and other assets $ $ The balance of other assets, non-current consisted of the following (in thousands): At December 31, 2014 2013 Other assets, non-current Debt issuance costs $ $ Prepaid expenses and deposits, non-current Other Total other assets non-current $ $ |
INVENTORY103
INVENTORY | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
INVENTORY | |||
INVENTORY | 8. INVENTORY We currently maintain separate inventories for our Games and Payments businesses. Our Games inventory primarily consists of component parts, completed player terminals and back office computer equipment. This inventory was stated at the lower of cost or market and accounted for using the first in, first out method during the current reporting period; whereas the inventory that existed at the time of the Merger was stated at fair value. The cost of inventory includes cost of materials, labor, overhead and freight. Our Payments inventory primarily consists of parts as well as finished goods and work-in-progress. This inventory was stated at the lower of cost or market accounted for using the average cost method. Inventory consisted of the following (in thousands): At March 31, At December 31, 2015 2014 Inventory Raw materials and component parts, net of reserves of $82 and $22, respectively $ $ Work in progress Finished goods Total inventory $ $ | 8. INVENTORY We currently maintain separate inventories for our Games and Payments businesses. Our Games inventory primarily consists of component parts, completed player terminals and back office computer equipment. This inventory was stated at the lower of cost or market and accounted for using the first in, first out method during the current reporting period; whereas the inventory that existed at the time of the Merger was stated at fair value. The cost of inventory includes cost of materials, labor, overhead and freight. Our Payments inventory primarily consists of parts as well as finished goods and work-in-progress. This inventory was stated at the lower of cost or market accounted for using the average cost method. Inventory consisted of the following (in thousands): At June 30, At December 31, 2015 2014 Inventory Raw materials and component parts, net of reserves of $142 and $22 , respectively $ $ Work in progress Finished goods Total inventory $ $ | 8. INVENTORY We currently maintain separate inventories for our Payments and Games products. Our Payments related inventory primarily consists of parts as well as finished goods and work-in-progress and is stated at the lower of cost or market accounted for using the average cost method. Our Games related inventory primarily consists of component parts, completed player terminals and back-office computer equipment and is stated at fair value based as a result of the Merger. However, our Games segment historically accounted for inventory at lower of cost (first in, first out) or market. The cost of inventory includes cost of materials, labor, overhead and freight. Inventory consisted of the following (in thousands): At December 31, 2014 2013 Inventory Raw materials and component parts, net of reserves of $22 and $50 , respectively $ $ Work in progress Finished goods Total inventory $ $ |
PROPERTY, EQUIPMENT AND LEAS104
PROPERTY, EQUIPMENT AND LEASED ASSETS | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
PROPERTY, EQUIPMENT AND LEASED ASSETS | |||
PROPERTY, EQUIPMENT AND LEASED ASSETS | 9. PROPERTY, EQUIPMENT AND LEASED ASSETS Property, equipment and leased assets consist of the following (in thousands): At March 31, 2015 At December 31, 2014 Useful Life (years) Cost Accumulated Depreciation Net Book Value Cost Accumulated Depreciation Net Book Value Property, equipment and leased assets Rental pool - deployed 2 - 4 $ $ $ $ $ $ Rental pool - undeployed 2 - 4 ATM equipment 5 Office, computer and other equipment 3 Leasehold and building improvements Lease Term Machinery and equipment 3 - 5 Cash advance equipment 3 Other 2 - 5 Total $ $ $ $ $ $ Depreciation expense related to other property, equipment and leased assets totaled approximately $10.4 million and $1.9 million for the three months ended March 31, 2015 and 2014, respectively. Our property, equipment and leased assets were not impaired for the three months ended March 31, 2015 and 2014. | 9. PROPERTY, EQUIPMENT AND LEASED ASSETS Property, equipment and leased assets consist of the following (in thousands): At June 30, 2015 At December 31, 2014 Useful Life Accumulated Net Book Accumulated Net Book (Years) Cost Depreciation Value Cost Depreciation Value Property, equipment and leased assets Rental pool - deployed - 4 $ $ $ $ $ $ Rental pool - undeployed - 4 ATM equipment 5 Office, computer and other equipment 3 Leasehold and building improvements Lease Term Machinery and equipment - 5 Cash advance equipment 3 Other - 5 Total $ $ $ $ $ $ Depreciation expense related to other property, equipment and leased assets totaled approximately $10.7 million and $21.1 million and $1.9 million and $3.8 million for the three and six months ended June 30, 2015 and 2014, respectively. Our property, equipment and leased assets were not impaired for the three and six months ended June 30, 2015 and 2014. | 10. PROPERTY, EQUIPMENT AND LEASED ASSETS Property, equipment and leased assets consist of the following (amounts in thousands): At December 31, 2014 At December 31, 2013 Useful Life Accumulated Net Book Accumulated Net Book (Years) Cost Depreciation Value Cost Depreciation Value Property, equipment and leased assets Rental pool - deployed - 4 $ $ $ $ — $ — $ — Rental pool - undeployed - 4 — — — ATM equipment 5 Office, computer and other equipment 3 Leasehold and building improvements Lease Term Machinery and equipment - 5 — — — Cash advance equipment 3 Other - 5 — — — Total $ $ $ $ $ $ |
GOODWILL AND OTHER INTANGIBL105
GOODWILL AND OTHER INTANGIBLE ASSETS | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |||
GOODWILL AND OTHER INTANGIBLE ASSETS | 10. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill Goodwill represents the excess of the purchase price over the identifiable tangible and intangible assets acquired plus liabilities assumed arising from business combinations. The balance of goodwill was $857.9 million at both March 31, 2015 and December 31, 2014. Our goodwill was not impaired for the three months ended March 31, 2015 and 2014. Additionally, no impairment was identified during our annual impairment testing as of October 1, 2014. In accordance with ASC 350, we test goodwill at the reporting unit level, which in certain cases may be a component of an operating segment, for impairment on an annual basis and between annual tests if events and circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The estimate of fair value requires significant judgment. We based our fair value estimates on assumptions that we believe to be reasonable but that are unpredictable and inherently uncertain, including estimates of future growth rates and operating margins and assumptions about the overall economic climate and the competitive environment for our reporting units. There can be no assurance that our estimates and assumptions made for purposes of our goodwill and identifiable intangible asset testing as of the time of testing will prove to be accurate predictions of the future. If our assumptions regarding business plans, competitive environments or anticipated growth rates are not correct, we may be required to record goodwill and/or intangible asset impairment charges in future periods, whether in connection with our next annual impairment testing or earlier, if an indicator of an impairment is present before our next annual evaluation. Other Intangible Assets Other intangible assets consist of the following (in thousands): At March 31, 2015 At December 31, 2014 Useful Life (years) Cost Accumulated Amortization Net Book Value Cost Accumulated Amortization Net Book Value Other intangible assets Contract rights under development and placement fee agreements 1 - 7 $ $ $ $ $ $ Customer contracts 7 - 14 Customer relationships 8 - 12 Developed technology and software 1 - 6 Patents, trademarks and other 1 - 17 Total $ $ $ $ $ $ Amortization expense related to other intangible assets totaled approximately $20.7 million and $2.4 million for the three months ended March 31, 2015 and 2014, respectively. We capitalized and placed into service $1.0 million and $0.3 million of software development costs for the three months ended March 31, 2015 and 2014, respectively. On a quarterly basis, we evaluate our other intangible assets for potential impairment as part of our quarterly review process. No impairment was identified for our other intangible assets during our assessment for the three months ended March 31, 2015 and 2014. We enter into development and placement fee agreements to provide financing for new gaming facilities or for the expansion or improvement of existing facilities. All or a portion of the funds provided under development agreements are reimbursed to us, while funding under placement fee agreements is not reimbursed. In return for the fees under these agreements, each facility dedicates a percentage of its floor space, or an agreed upon unit count, for the placement of our EGMs over the term of the agreement, generally 12 to 83 months, and we receive a fixed percentage or flat fee of those machines’ hold per day. Certain of the agreements contain EGM performance standards that could allow the respective facility to reduce a portion of our guaranteed floor space. In addition, certain development agreements allow the facilities to buy out floor space after advances that are subject to repayment have been repaid. The development agreements typically provide for a portion of the amounts retained by each facility for its share of the operating profits of the facility to be used to repay some or all of the advances recorded as notes receivable. Placement fees and amounts advanced in excess of those to be reimbursed by the customer for real property and land improvements are allocated to intangible assets and are generally amortized over the term of the contract, which is recorded as a reduction of revenue generated from the facility. In the past we have, and in the future, we may, by mutual agreement, amend these agreements to reduce our floor space at the facilities. Any proceeds received for the reduction of floor space is first applied against the intangible asset for that particular development or placement fee agreement, if any, and the remaining net book value of the intangible asset is prospectively amortized on a straight-line method over the remaining estimated useful life. On January 15, 2015, Multimedia paid a placement fee of approximately $1.2 million to the Chickasaw Nation to extend the placement of 118 units in one of its location in Oklahoma for an additional term of 60 months. | 10. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill Goodwill represents the excess of the purchase price over the identifiable tangible and intangible assets acquired plus liabilities assumed arising from business combinations. The balance of goodwill was $857.9 million and $857.9 million at June 30, 2015 and December 31, 2014, respectively. Our goodwill was not impaired for the three and six months ended June 30, 2015 and 2014. Additionally, no impairment was identified during our annual impairment testing as of October 1, 2014. In accordance with ASC 350, we test goodwill at the reporting unit level, which in certain cases may be a component of an operating segment, for impairment on an annual basis and between annual tests if events and circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The estimate of fair value requires significant judgment. We based our fair value estimates on assumptions that we believe to be reasonable but that are unpredictable and inherently uncertain, including estimates of future growth rates and operating margins and assumptions about the overall economic climate and the competitive environment for our reporting units. There can be no assurance that our estimates and assumptions made for purposes of our goodwill and identifiable intangible asset testing as of the time of testing will prove to be accurate predictions of the future. If our assumptions regarding business plans, competitive environments or anticipated growth rates are not correct, we may be required to record goodwill and/or intangible asset impairment charges in future periods, whether in connection with our next annual impairment testing or earlier, if an indicator of an impairment is present before our next annual evaluation. Other Intangible Assets Other intangible assets consist of the following (in thousands): At June 30, 2015 At December 31, 2014 Useful Life Accumulated Net Book Accumulated Net Book (years) Cost Amortization Value Cost Amortization Value Other intangible assets Contract rights under development and placement fee agreements - 7 $ $ $ $ $ $ Customer contracts - 14 Customer relationships - 12 Developed technology and software - 6 Patents, trademarks and other - 17 Total $ $ $ $ $ $ Amortization expense related to other intangible assets totaled approximately $20.8 million and $41.4 million and $2.8 million and $5.1 million for the three and six months ended June 30, 2015 and 2014, respectively. We capitalized and placed into service $4.7 million and $5.7 million and $4.5 million and $4.9 million of software development costs for the three and six months ended June 30, 2015 and 2014, respectively. On a quarterly basis, we evaluate our other intangible assets for potential impairment as part of our quarterly review process. No impairment was identified for our other intangible assets during our assessment for the three and six months ended June 30, 2015 and 2014. We enter into development and placement fee agreements to provide financing for new gaming facilities or for the expansion or improvement of existing facilities. All or a portion of the funds provided under development agreements are reimbursed to us, while funding under placement fee agreements is not reimbursed. In return for the fees under these agreements, each facility dedicates a percentage of its floor space, or an agreed upon unit count, for the placement of our EGMs over the term of the agreement, generally 12 to 83 months, and we receive a fixed percentage or flat fee of those machines’ hold per day. Certain of the agreements contain EGM performance standards that could allow the respective facility to reduce a portion of our guaranteed floor space. In addition, certain development agreements allow the facilities to buy out floor space after advances that are subject to repayment have been repaid. The development agreements typically provide for a portion of the amounts retained by each facility for its share of the operating profits of the facility to be used to repay some or all of the advances recorded as notes receivable. Placement fees and amounts advanced in excess of those to be reimbursed by the customer for real property and land improvements are allocated to intangible assets and are generally amortized over the term of the contract, which is recorded as a reduction of revenue generated from the facility. In the past we have, and in the future, we may, by mutual agreement, amend these agreements to reduce our floor space at the facilities. Any proceeds received for the reduction of floor space is first applied against the intangible asset for that particular development or placement fee agreement, if any, and the remaining net book value of the intangible asset is prospectively amortized on a straight-line method over the remaining estimated useful life. On January 15, 2015, Multimedia paid a placement fee of approximately $1.2 million to the Chickasaw Nation to extend the placement of 118 units in one of its location in Oklahoma for an additional term of 60 months. | 11. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill The changes in the carrying amount of goodwill are as follows (in thousands): Cash Advance ATM Check Services Games Other Total Goodwill Balance, December 31, 2012 $ — Foreign translation adjustment — — — — Balance, December 31, 2013 $ $ $ $ — $ $ Goodwill acquired during the year — — — Foreign translation adjustment — — — — Balance, December 31, 2014 $ $ $ $ $ $ In accordance with ASC 350, we test goodwill at the reporting unit level, which in certain cases may be a component of an operating segment, for impairment on an annual basis and between annual tests if events and circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Our goodwill was not impaired as of December 31, 2014 and December 31, 2013 based upon the results of our testing. Goodwill Testing In performing the 2014 annual impairment test, we utilized the two-step approach prescribed under ASC 350. The first step required a comparison of the carrying value of each reporting unit to its estimated fair value. To estimate the fair value of our reporting units for Step 1, we used a combination of the income approach and the market approach. The income approach is based on a discounted cash flow analysis, or DCF method. This method involves estimating the after-tax cash flows attributable to a reporting unit and then discounting the after-tax cash flows to a present value (“DCF”), using a risk-adjusted discount rate. Assumptions used in the DCF require the exercise of significant judgment, including judgment about appropriate discount rates and terminal values, growth rates and the amount and timing of expected future cash flows. The forecasted cash flows are based on our most recent budget and for years beyond the budget. Our budgets are based on estimated future growth rates. We believe our assumptions are consistent with the plans and estimates used to manage the underlying businesses. The discount rates, which are intended to reflect the risks inherent in future cash flow projections, used in the DCF are based on estimates of the weighted average cost of capital, or WACC, of market participants relative to each respective reporting unit. The market approach considers comparable market data based on multiples of revenue or earnings before taxes, depreciation and amortization (“EBITDA”). If the carrying value of a reporting unit exceeds its estimated fair value, we are required to perform the second step of the goodwill impairment test to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of a reporting unit’s goodwill to its carrying value. The implied fair value of goodwill is derived by performing a hypothetical purchase price allocation for the reporting unit as of the measurement date, allocating the reporting unit’s estimated fair value to its assets and liabilities. The residual amount from performing this allocation represents the implied fair value of goodwill. To the extent this amount is below the carrying amount of goodwill, an impairment charge is recorded. Key assumptions used in estimating fair value under the discounted cash flow approach included a discount rate of: (a) 11.0% for the Cash Advance, ATM , Check Services and Central Credit reporting units ; (b) 11.5% for the Fully Integrated Kiosk Sales and Services reporting unit; and (c) 15.5% , for the Anti-Money Laundering and Tax Compliance Software reporting unit. In addition, projected compound average revenue growth rates of 0.0% to 4.0% and terminal value growth rates of 1.0% to 2.5% were used in the analyses. The discounted cash flow analyses for our reporting units included estimated future cash inflows from operations and estimated future cash outflows for capital expenditures. Key assumptions used in estimating fair value under the market approach were based on observed market multiples of enterprise value to revenue and EBITDA for both comparable publicly traded companies and recent merger and acquisition transactions involving similar companies to estimate appropriate controlling basis multiples to apply to each of the reporting units. Based on the multiples implied by this market data, we selected multiples of revenue of 0.0 to 5.2 times and multiples of EBITDA of 6.2 to 8.6 times. The estimate of fair value requires significant judgment. We based our fair value estimates on assumptions that we believe to be reasonable but that are unpredictable and inherently uncertain, including estimates of future growth rates and operating margins and assumptions about the overall economic climate and the competitive environment for our business units. There can be no assurance that our estimates and assumptions made for purposes of our goodwill and identifiable intangible asset testing as of the time of testing will prove to be accurate predictions of the future. If our assumptions regarding business plans, competitive environments or anticipated growth rates are not correct, we may be required to record goodwill and/or intangible asset impairment charges in future periods, whether in connection with our next annual impairment testing or earlier, if an indicator of an impairment is present before our next annual evaluation. We conducted our annual impairment test for our reporting units during the fourth quarter of 2014 and 2013 and no impairment was identified. Other Intangible Assets Other intangible assets consist of the following (in thousands): At December 31, 2014 At December 31, 2013 Useful Life Accumulated Net Book Accumulated Net Book (years) Cost Amortization Value Cost Amortization Value Intangible assets Contract rights under development and placement fee agreements - 7 $ $ $ $ — $ — $ — Customer contracts - 14 Customer relationships - 12 — — — Developed technology - 6 — — — Computer software - 5 Patents, trademarks and other - 17 Total $ $ $ $ $ $ In the fourth quarter 2014, we evaluated our other intangible assets for potential impairment as part of our review process. Our online payment processing intangible assets were identified for further testing. We determined that these definite-lived intangible assets were potentially impaired primarily due to a combination of the following factors: (a) legislative constraints at the state and federal level; (b) significant changes in management; and (c) lower than anticipated operating results. These definite-lived intangible assets were evaluated using an undiscounted cash flow approach to determine if an impairment existed. As impairment was indicated based on the undiscounted cash flow approach, we discounted the cash flows and applied probability factors to calculate the resulting fair values and compared to the existing carrying value to determine the amount of impairment. The amount of impairment was approximately $3.1 million. The revised cost basis of $1.6 million for our online payment processing intangible asset will be amortized over an estimated remaining useful life of three years. These assets have been valued using level 3 fair value inputs. Amortization expense related to other intangible assets totaled approximately $14.2 million, $9.6 million and $9.8 million for the years ended December 31, 2014, 2013 and 2012, respectively. We capitalized and placed into service $8.2 million, $ 5.1 million and $0. 7 million of software development costs for the years ended December 31, 2014, 2013 and 2012, respectively. The total net book value of amortizable intangible assets was approximately $436.8 million at December 31, 2014. The total net book value of amortizable intangible assets was approximately $ 31.5 million at December 31, 2013. The anticipated amortization expense related to other intangible assets, assuming no subsequent impairment of the underlying assets, is as follows (in thousands): Anticipated amortization expense Amount 2015 $ 2016 2017 2018 2019 Thereafter Total $ |
ACCOUNTS PAYABLE AND ACCRUED106
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | |||
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 11. ACCOUNTS PAYABLE AND ACCRUED EXPENSES The following table presents our accounts payable and accrued expenses (in thousands): At March 31, At December 31, 2015 2014 Accounts payable and accrued expenses Trade accounts payable $ $ Accrued interest Payroll and related expenses Deferred and unearned revenues Cash access processing and related expenses Accrued taxes Other Total accounts payable and accrued expenses $ $ | 11. ACCOUNTS PAYABLE AND ACCRUED EXPENSES The following table presents our accounts payable and accrued expenses (in thousands): At June 30, At December 31, 2015 2014 Accounts payable and accrued expenses Trade accounts payable $ $ Accrued interest Payroll and related expenses Deferred and unearned revenues Cash access processing and related expenses Accrued taxes Other Total accounts payable and accrued expenses $ $ | 12. ACCOUNTS PAYABLE AND ACCRUED EXPENSES The following table presents our accounts payable and accrued expenses (amounts in thousands): At December 31, 2014 2013 Accounts payable and accrued expenses Trade accounts payable $ $ Payroll and related expenses Cash access processing and related expenses Deferred and unearned revenues Accrued taxes Accrued interest Other Total accounts payable and accrued expenses $ $ |
LONG-TERM DEBT107
LONG-TERM DEBT | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
LONG-TERM DEBT. | |||
LONG-TERM DEBT | 12. LONG-TERM DEBT The following table summarizes our outstanding indebtedness (in thousands): At March 31, At December 31, 2015 2014 Long-term debt Senior secured term loan $ $ Senior secured notes Senior unsecured notes Total debt Less: original issue discount Total debt after discount Less: current portion of long-term debt Long-term debt, less current portion $ $ Credit Facilities In December 2014, we entered into a credit agreement that provided for a $500.0 million six-year senior secured term loan that matures in 2020 (the “Term Loan”) and a $50.0 million five-year revolver that matures in 2019 (the “Revolving Credit Facility”, and together with the Term Loan, the “Credit Facilities”). The fees associated with the Credit Facilities included original issue discounts of approximately $7.5 million and debt issuance costs of approximately $13.9 million. We are required to repay the Term Loan in an amount equal to 0.50% per quarter of the initial aggregate principal with the final principal repayment installment on the maturity date. Interest is due quarterly in arrears each March, June, September and December and the maturity date. The Revolving Credit Facility remained undrawn as of March 31, 2015. The interest rate per annum applicable to the Revolving Credit Facility is, at GCA’s option, the base rate or LIBOR plus, in each case, an applicable margin. The interest rate per annum applicable to the Term Loan is also, at GCA’s option, the base rate or LIBOR plus, in each case, an applicable margin. LIBOR will be reset at the beginning of each selected interest period based on the LIBOR rate then in effect; provided that, with respect to the Revolving Credit Facility, if LIBOR is below zero, then such rate will be equal to zero plus the applicable margin, and, with respect to the Term Loan, if LIBOR is below 1.0%, then such rate will be equal to 1.0% plus the applicable margin. The base rate is a fluctuating interest rate equal to the highest of (a) the prime lending rate announced by the administrative agent, (b) the federal funds effective rate from time to time plus 0.50%, and (c) LIBOR (after taking account of any applicable floor) applicable for an interest period of one month plus 1.00%. The applicable margins of 4.75% and 5.25% for the Revolving Credit Facility and Term Loan, respectively, are subject to adjustment based on our consolidated secured leverage ratio. Voluntary prepayments of the Term Loan and the Revolving Credit Facility and voluntary reductions in the unused commitments are permitted in whole or in part, in minimum amounts as set forth in the credit agreement governing the Credit Facilities, with prior notice but without premium or penalty, except that certain refinancing transactions of the Term Loan within twelve months after the closing of the Credit Facilities will be subject to a prepayment premium of 1.00% of the principal amount repaid. Subject to certain exceptions, the obligations under the Credit Facilities are secured by substantially all of the present and after acquired assets of each of GCA, Holdings and the subsidiary guarantors (the “Collateral”) including: (a) a perfected first priority pledge of all the capital stock of GCA and each domestic direct, wholly owned material restricted subsidiary held by Holdings, GCA or any such subsidiary guarantor; and (b) a perfected first priority security interest in substantially all other tangible and intangible assets of Holdings, GCA, and such subsidiary guarantors (including, but not limited to, accounts receivable, inventory, equipment, general intangibles, investment property, real property, intellectual property and the proceeds of the foregoing). Subject to certain exceptions, the Credit Facilities are unconditionally guaranteed by Holdings and such subsidiary guarantors and Multimedia Games and its material domestic subsidiaries. The Term Loan had an applicable interest rate of 6.25% as of March 31, 2015 and December 31, 2014. We were in compliance with the terms of the Credit Facilities as of March 31, 2015 and December 31, 2014. Senior Secured Notes In December 2014, we issued $350.0 million in aggregate principal amount of 7.75% Senior Secured Notes due 2021 (“the “Secured Notes”). The fees associated with the Secured Notes included debt issuance costs of approximately $13.6 million. Interest is due semi-annually in arrears each March and September. The Secured Notes were acquired by the initial purchasers pursuant to the terms of a purchase agreement. Under the terms of the purchase agreement, during a one year period following the closing and upon prior notice from the initial purchasers, the Company must use commercially reasonable efforts to aid the purchasers in the resale of the Secured Notes, including by preparing an updated offering memorandum and participating in reasonable marketing efforts including road shows, to the extent required therein. We were in compliance with the terms of the Secured Notes as of March 31, 2015 and December 31, 2014. Senior Unsecured Notes In December 2014, we issued $350 million in aggregate principal amount of 10.0% Senior Unsecured Notes due 2022 (the “Unsecured Notes”). The fees associated with the Unsecured Notes included original issue discounts of approximately $3.8 million and debt issuance costs of approximately $14.0 million. Interest is due semi-annually in arrears each January and July. The Unsecured Notes were acquired by the initial purchasers pursuant to the terms of a purchase agreement. Under the terms of the purchase agreement, during a one-year period following the closing and upon prior notice from the initial purchasers, the Company must use commercially reasonable efforts to aid the purchasers in the resale of the Unsecured Notes, including by preparing an updated offering memorandum and participating in reasonable marketing efforts including road shows, to the extent required therein. In connection with the issuance of the Unsecured Notes, the Company entered into a registration rights agreement pursuant to which the Company agreed, for the benefit of the holders of the Unsecured Notes, to file with the SEC, and use its commercially reasonable efforts to cause to become effective, a registration statement relating to an offer to exchange the Unsecured Notes for an issue of SEC-registered notes (the “Exchange Notes”) with terms identical to the Unsecured Notes (except that the Exchange Notes will not be subject to restrictions on transfer or to any increase in annual interest rate as described below). Under certain circumstances, including if applicable interpretations of the staff of the SEC do not permit the Company to effect the exchange offer, the Company and the guarantors must use their commercially reasonable efforts to cause to become effective a shelf registration statement relating to resales of the Unsecured Notes and to keep that shelf registration statement effective until the first anniversary of the date such shelf registration statement becomes effective, or such shorter period that will terminate when all Unsecured Notes covered by the shelf registration statement have been sold. The obligation to complete the exchange offer and/or file a shelf registration statement will terminate on the second anniversary of the date of the Registration Rights Agreement. If the exchange offer is not completed (or, if required, the shelf registration statement is not declared effective) on or before December 19, 2015, the annual interest rate borne by the Unsecured Notes will be increased by 0.25% per annum for the first 90-day period immediately following such date and by an additional 0.25% per annum with respect to each subsequent 90-day period, up to a maximum additional rate of 1.00% per annum thereafter until the exchange offer is completed or the shelf registration statement is declared effective, at which time the interest rate will revert to the original interest rate on the date the Unsecured Notes were originally issued. We were in compliance with the terms of the Unsecured Notes as of March 31, 2015 and December 31, 2014. | 12. LONG-TERM DEBT The following table summarizes our outstanding indebtedness (in thousands): At June 30, At December 31, 2015 2014 Long-term debt Senior secured term loan $ $ Senior secured notes Senior unsecured notes Total debt Less: original issue and warrant discount Total debt after discount Less: current portion of long-term debt Long-term debt, less current portion $ $ Credit Facilities In December 2014, we entered into a credit agreement that provided for a $500.0 million six -year senior secured term loan that matures in 2020 (the “Term Loan”) and a $50.0 million five -year revolver that matures in 2019 (the “Revolving Credit Facility”, and together with the Term Loan, the “Credit Facilities”). The fees associated with the Credit Facilities included original issue discounts of approximately $7.5 million and debt issuance costs of approximately $13.9 million. We are required to repay the Term Loan in an amount equal to 0.50% per quarter of the initial aggregate principal with the final principal repayment installment on the maturity date. Interest is due in arrears each March, June, September and December and at the maturity date; however, interest may be remitted within one to three months of such dates. The Revolving Credit Facility remained undrawn as of June 30, 2015. The interest rate per annum applicable to the Revolving Credit Facility is, at GCA’s option, the base rate or LIBOR plus, in each case, an applicable margin. The interest rate per annum applicable to the Term Loan is also, at GCA’s option, the base rate or LIBOR plus, in each case, an applicable margin. LIBOR will be reset at the beginning of each selected interest period based on the LIBOR rate then in effect; provided that, with respect to the Revolving Credit Facility, if LIBOR is below zero, then such rate will be equal to zero plus the applicable margin, and, with respect to the Term Loan, if LIBOR is below 1.0% , then such rate will be equal to 1.0% plus the applicable margin. The base rate is a fluctuating interest rate equal to the highest of (a) the prime lending rate announced by the administrative agent, (b) the federal funds effective rate from time to time plus 0.50% , and (c) LIBOR (after taking account of any applicable floor) applicable for an interest period of one month plus 1.00% . The applicable margins of 4.75% and 5.25% for the Revolving Credit Facility and Term Loan, respectively, are subject to adjustment based on our consolidated secured leverage ratio. Voluntary prepayments of the Term Loan and the Revolving Credit Facility and voluntary reductions in the unused commitments are permitted in whole or in part, in minimum amounts as set forth in the credit agreement governing the Credit Facilities, with prior notice but without premium or penalty, except that certain refinancing transactions of the Term Loan within twelve months after the closing of the Credit Facilities will be subject to a prepayment premium of 1.00% of the principal amount repaid. Subject to certain exceptions, the obligations under the Credit Facilities are secured by substantially all of the present and after acquired assets of each of GCA, Holdings and the subsidiary guarantors (the “Collateral”) including: (a) a perfected first priority pledge of all the capital stock of GCA and each domestic direct, wholly owned material restricted subsidiary held by Holdings, GCA or any such subsidiary guarantor; and (b) a perfected first priority security interest in substantially all other tangible and intangible assets of Holdings, GCA, and such subsidiary guarantors (including, but not limited to, accounts receivable, inventory, equipment, general intangibles, investment property, real property, intellectual property and the proceeds of the foregoing). Subject to certain exceptions, the Credit Facilities are unconditionally guaranteed by Holdings and such subsidiary guarantors and Multimedia Games and its material domestic subsidiaries. The Term Loan had an applicable interest rate of 6.25% as of June 30, 2015 and December 31, 2014. We were in compliance with the terms of the Credit Facilities as of June 30, 2015 and December 31, 2014. Senior Secured Notes and Refinance of Senior Secured Notes In December 2014, we issued $350.0 million in aggregate principal amount of 7.75% Senior Secured Notes due 2021 (the “Secured Notes”). The fees associated with the Secured Notes included debt issuance costs of approximately $13.6 million. Interest is due quarterly in arrears each January, April, July and October. The Secured Notes were acquired by the initial purchasers pursuant to the terms of a purchase agreement. Under the terms of the purchase agreement, during a one year period following the closing and upon prior notice from the initial purchasers, the Company was required to use commercially reasonable efforts to aid the initial purchasers in the resale of the Secured Notes, including by preparing an updated offering memorandum and participating in reasonable marketing efforts including road shows, to the extent required therein. Alternatively, GCA had the ability to redeem the Secured Notes from the initial purchasers without penalty. On April 15, 2015, the Company entered into a note purchase agreement (the “Note Purchase Agreement”) among GCA, CPPIB Credit Investments III Inc. (the “Purchaser”), and Deutsche Bank Trust Company Americas, as collateral agent (the “Collateral Agent”), and issued $335.0 million in aggregate principal amount of its 7.25% Senior Secured Notes due 2021 (the “Refinanced Secured Notes”) in a private offering to the Purchaser. With the proceeds from the issuance of the Refinanced Secured Notes, GCA redeemed, in full, the Company’s then outstanding Secured Notes from the initial purchasers in accordance with the terms of the indenture governing the Secured Notes. In connection with the issuance of the Refinanced Secured Notes during the second quarter of 2015, we expensed $13.0 million of related debt issuance costs and fees to “Loss on extinguishment of debt” associated with the redeemed Senior Secured Notes that were outstanding prior to the refinance transaction. In connection with the issuance of the Refinanced Secured Notes and pursuant to the terms of the Note Purchase Agreement, the Company issued to the Purchaser a warrant to purchase 700,000 shares of Holdings’ common stock, with an exercise price equal to $9.88 per share, representing a 30% premium to the volume-weighted average price of Holdings’ common stock for the ten trading days prior to the issuance of the warrant. The warrant expires on the sixth anniversary of the date of issuance. The number of shares issuable pursuant to the warrant and the warrant exercise price are subject to adjustment for stock splits, reverse stock splits, stock dividends, mergers and certain other events. The warrants were valued at $2.2 million using a modified Black-Scholes model and were accounted for as a debt discount. We were in compliance with the terms of the Secured Notes as of June 30, 2015 and December 31, 2014. Senior Unsecured Notes In December 2014, we issued $350 million in aggregate principal amount of 10.0% Senior Unsecured Notes due 2022 (the “Unsecured Notes”). The fees associated with the Unsecured Notes included original issue discounts of approximately $3.8 million and debt issuance costs of approximately $14.0 million. Interest is due semi-annually in arrears each January and July. The Unsecured Notes were acquired by the initial purchasers pursuant to the terms of a purchase agreement. Under the terms of the purchase agreement, during a one-year period following the closing and upon prior notice from the initial purchasers, the Company was required to use commercially reasonable efforts to aid the initial purchasers in the resale of the Unsecured Notes, including by preparing an updated offering memorandum and participating in reasonable marketing efforts including road shows, to the extent required therein. The Unsecured Notes were resold by the initial purchasers to third parties in the second quarter of 2015. In connection with the issuance of the Unsecured Notes, the Company entered into a registration rights agreement pursuant to which the Company agreed, for the benefit of the initial holders of the Unsecured Notes, to file with the SEC, and use its commercially reasonable efforts to cause to become effective, a registration statement relating to an offer to exchange the Unsecured Notes for an issue of SEC-registered notes (the “Exchange Notes”) with terms identical to the Unsecured Notes (except that the Exchange Notes will not be subject to restrictions on transfer or to any increase in annual interest rate as described below). Under certain circumstances, including if applicable interpretations of the staff of the SEC do not permit the Company to effect the exchange offer, the Company and the guarantors must use their commercially reasonable efforts to cause to become effective a shelf registration statement relating to resales of the Unsecured Notes and to keep that shelf registration statement effective until the first anniversary of the date such shelf registration statement becomes effective, or such shorter period that will terminate when all Unsecured Notes covered by the shelf registration statement have been sold. The obligation to complete the exchange offer and/or file a shelf registration statement will terminate on the second anniversary of the date of the Registration Rights Agreement. If the exchange offer is not completed (or, if required, the shelf registration statement is not declared effective) on or before December 19, 2015, the annual interest rate borne by the Unsecured Notes will be increased by 0.25% per annum for the first 90-day period immediately following such date and by an additional 0.25% per annum with respect to each subsequent 90-day period, up to a maximum additional rate of 1.00% per annum thereafter until the exchange offer is completed or the shelf registration statement is declared effective, at which time the interest rate will revert to the original interest rate on the date the Unsecured Notes were originally issued. We were in compliance with the terms of the Unsecured Notes as of June 30, 2015 and December 31, 2014. | 13. LONG-TERM DEBT The following table summarizes our indebtedness at December 31, (in thousands): At December 31, 2014 2013 Long-term debt Senior credit facility $ — $ Senior secured term loan $ $ — Senior secured notes — Senior unsecured notes — Total debt Less: original issue discount — Total debt after discount Less: current portion of long-term debt Long-term debt, less current portion $ $ On December 19, 2014 and in connection with the Merger, we refinanced all of our indebtedness outstanding under the Prior Credit Facilities with proceeds from the Credit Facilities and the Notes. Credit Facilities On December 19, 2014, GCA, as borrower, and Holdings entered into a credit agreement among GCA, Holdings, Bank of America, N.A. as administrative agent, collateral agent, swing line lender and letter of credit issuer; Deutsche Bank Securities Inc., as syndication agent; and Merrill Lynch, Pierce, Fenner & Smith Incorporated and Deutsche Bank Securities, Inc. as joint lead arrangers and joint book managers (the “Credit Agreement”). The Credit Agreement provides for a $50.0 million five -year Revolving Credit Facility that matures in 2019 and a $500.0 million six -year Term Loan that matures in 2020. The fees associated with the Credit Facilities included discounts of approximately $7.5 million and debt issuance costs of approximately $13.9 million. All borrowings under the Credit Facilities are subject to the satisfaction of customary conditions, including the absence of a default and compliance with representations and warranties. The interest rate per annum applicable to the Revolving Credit Facility is, at GCA’s option, the base rate or LIBOR plus , in each case, an applicable margin . The interest rate per annum applicable to the Term Loan is also, at GCA’s option, the base rate or LIBOR plus, in each case, an applicable margin. LIBOR will be reset at the beginning of each selected interest period based on the LIBOR rate then in effect; provided that, with respect to the Revolving Credit Facility, if LIBOR is below zero, then such rate will be equal to zero plus the applicable margin, and, with respect to the Term Loan, if LIBOR is below 1.0% then such rate will be equal to 1.0% plus the applicable margin. The base rate is a fluctuating interest rate equal to the highest of ( a ) the prime lending rate announced by the administrative agent, (b ) the federal funds effective rate from time to time plus 0.50% , and ( c ) LIBOR (after taking account of any applicable floor) applicable for an interest period of one month plus 1.00% . The applicable margins of 4.75% and 5.25% for the Revolving Credit Facility and Term Loan, respectively, are subject to adjustment based on our consolidated secured leverage ratio. Voluntary prepayments of the term loan and the revolving loans and voluntary reductions in the unused commitments are permitted in whole or in part, in minimum amounts as set forth in the Credit Agreement governing the Credit Facilities, with prior notice but without premium or penalty, except that certain refinancing transactions of the Term Loan within twelve months after the closing of the Credit Facilities will be subject to a prepayment premium of 1.00% of the principal amount repaid. Subject to certain exceptions, the obligations under the Credit Facilities are secured by substantially all of the present and after acquired assets of each of GCA, Holdings and the subsidiary guarantors (the “Collateral”) including: (a) a perfected first priority pledge of all the capital stock of GCA and each domestic direct, wholly owned material restricted subsidiary held by Holdings, GCA or any such subsidiary guarantor; and (b) a perfected first priority security interest in substantially all other tangible and intangible assets of Holdings, GCA, and such subsidiary guarantors (including, but not limited to, accounts receivable, inventory, equipment, general intangibles, investment property, real property, intellectual property and the proceeds of the foregoing). Subject to certain exceptions, the Credit Facilities are unconditionally guaranteed by Holdings and such subsidiary guarantors and Multimedia Games and its material domestic subsidiaries. The Credit Agreement governing the Credit Facilities contains certain covenants that, among other things, limit Holdings’ ability, and the ability of certain of its subsidiaries, to incur additional indebtedness; sell assets or consolidate or merge with or into other companies; pay dividends or repurchase or redeem capital stock; make certain investments; issue capital stock of subsidiaries; incur liens; prepay, redeem or repurchase subordinated debt; and enter into certain types of transactions with our affiliates. The Credit Agreement governing the Credit Facilities also requires Holdings, together with its subsidiaries, to comply with a consolidated secured leverage ratio as well as an annual excess cash flow requirement. Events of default under the Credit Agreement governing the Credit Facilities include customary events such as a cross-default provision with respect to other material debt (which includes the Notes). In addition, an event of default will occur if Holdings undergoes a change of control. This is defined to include the case where Holdings ceases to own 100% of the equity interests of GCA, or where any person or group acquires a percentage of the economic or voting interests of Holdings’ capital stock of 35% or more (determined on a fully diluted basis), or where a majority of the board of directors of Holdings ceases to consist of persons who are directors of Holdings on the closing date of the Credit Facilities or other directors whose nomination for election to the board of directors of GCA was recommended by a majority of the then continuing directors. At December 31, 2014, we had appro ximately $500.0 million of borrowings outstanding under the Term Loan and $50.0 million of additional borrowing availability under the Revolving Credit Facility, based upo n borrowing base calculations as of such date. We were in compliance with the terms of the Credit Facilities as of December 31, 2014. Senior Notes At December 31, 2014, we had two series of outstanding notes: ( a ) $350.0 million aggregate principal amount of 7.75% Senior Secured Notes due 2021 (the “Secured Notes”) and ( b ) $350.0 million aggregate principal amount of 10.00% Senior Unsecured Notes due 2022 (the “Unsecured Notes”). On December 19, 2014, we issued the Secured Notes at an initial offering price of 100% and the Unsecured Notes at an initial offering price of 98.921% . Our net proceeds from the sale of the Notes were approximately $680.0 million after deducting discounts of approximately $3.8 million and commissions of approximately $16.2 million and before deducting any other fees and expenses related to the Notes offering. Other fees and expenses included additional debt issuance costs associated with the Notes of approximately $11.2 million. The Secured Notes are senior secured obligations of the Company, equally and ratably secured with the Company’s obligations under the Credit Facilities. The Secured Notes rank equally with the Company’s existing and future senior debt and senior to the Company’s existing and future senior subordinated debt. The Unsecured Notes are senior unsecured obligations of the Company, and rank equally with the Company’s existing and future senior debt and senior to the Company’s existing and future senior subordinated debt. The Secured Notes are guaranteed on a senior secured basis by Holdings and all of its material domestic subsidiaries (other than GCA) and the Unsecured Notes are guaranteed on a senior unsecured basis by Holdings and all of its material domestic subsidiaries (other than GCA). The indentures governing the Notes contain certain covenants that, among other things, limit our ability, and the ability of certain of our subsidiaries, to incur additional indebtedness, pay dividends or make distributions or certain other restricted payments, purchase or redeem capital stock, make investments or extend credit, engage in certain transactions with affiliates, consummate certain asset sales, effect a consolidation or merger, or sell, transfer, lease or otherwise dispose of all or substantially all of our assets, or create certain liens and other encumbrances on our assets. The indentures governing the Notes contain events of default customary for agreements of their type (with customary grace periods, as applicable) and provide that, upon the occurrence of an event of default arising from certain events of bankruptcy or insolvency with respect to Holdings or GCA, all outstanding notes will become due and payable immediately without further action or notice. If any other type of event of default occurs and is continuing, then the trustee or the holders of at least 25% in principal amount of the then outstanding Secured Notes or Unsecured Notes, as applicable, may declare all such notes to be due and payable immediately. At the closing of the offering of the Notes, the Notes were acquired by the initial purchasers pursuant to the terms of a purchase agreement. Under the terms of the purchase agreement, during a one year period following the closing and upon prior notice from the initial purchasers, the Company must use commercially reasonable efforts to aid the purchasers in the resale of the Notes, including by preparing an updated offering memorandum and participating in reasonable marketing efforts including road shows, to the extent required therein. In connection with the issuance of the Unsecured Notes, the Company entered into a registration rights agreement pursuant to which the Company agreed, for the benefit of the holders of the Unsecured Notes, to file with the Securities and Exchange Commission (the “SEC”), and use its commercially reasonable efforts to cause to become effective, a registration statement relating to an offer to exchange the Unsecured Notes for an issue of SEC-registered notes (the “Exchange Notes”) with terms identical to the Unsecured Notes (except that the Exchange Notes will not be subject to restrictions on transfer or to any increase in annual interest rate as described below). Under certain circumstances, including if applicable interpretations of the staff of the SEC do not permit the Company to effect the exchange offer, the Company and the guarantors must use their commercially reasonable efforts to cause to become effective a shelf registration statement relating to resales of the Unsecured Notes and to keep that shelf registration statement effective until the first anniversary of the date such shelf registration statement becomes effective, or such shorter period that will terminate when all Unsecured Notes covered by the shelf registration statement have been sold. The obligation to complete the exchange offer and/or file a shelf registration statement will terminate on the second anniversary of the date of the Registration Rights Agreement. If the exchange offer is not completed (or, if required, the shelf registration statement is not declared effective) on or before December 19, 2015, the annual interest rate borne by the Unsecured Notes will be increased by 0.25% per annum for the first 90 -day period immediately following such date and by an additional 0.25% per annum with respect to each subsequent 90 -day period, up to a maximum additional rate of 1.00% per annum thereafter until the exchange offer is completed or the shelf registration statement is declared effective, at which time the interest rate will revert to the original interest rate on the date the Unsecured Notes were originally issued. We were in compliance with the covenants of the Notes as of December 31, 2014. Principal Repayments The maturities of our borrowings at December 31, 2014 are as follows (in thousands): Amount Maturities of borrowings 2015 $ 2016 2017 2018 2019 Thereafter Total $ |
COMMITMENTS AND CONTINGENCIE108
COMMITMENTS AND CONTINGENCIES | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
COMMITMENTS AND CONTINGENCIES | |||
COMMITMENTS AND CONTINGENCIES | 13. COMMITMENTS AND CONTINGENCIES Multimedia Shareholder Litigation In connection with the Merger, certain actions were filed by putative shareholders of Multimedia in the United States District Court for the Western District of Texas (the “Texas Federal Action”) and the District Court of Travis County, Texas (the “Texas State Court Action”). In both the Texas Federal Action and the Texas State Court Action, plaintiffs alleged that Multimedia’s directors breached their fiduciary duties to Multimedia and/or its shareholders because, among other things, the Merger allegedly involved an unfair price, an inadequate sales process, self-dealing and unreasonable deal protection devices. The complaints further alleged that Holdings and its formerly wholly owned merger subsidiary, Merger Sub aided and abetted those purported breaches of fiduciary duty. On November 20, 2014, the defendants in the Texas Federal Action reached an agreement in principle with the plaintiffs in the Texas Federal Action regarding settlement of all claims asserted on behalf of the alleged class of Multimedia shareholders and on behalf of Multimedia, and that agreement is reflected in a memorandum of understanding. In connection with the settlement contemplated by the memorandum of understanding, Multimedia agreed to make certain additional disclosures in its proxy statement related to the Merger, which disclosure Multimedia made in a Current Report on Form 8-K filed on November 21, 2014. In addition, the defendants in the Texas Federal Action agreed not to oppose an application by plaintiffs in the Texas Federal Action for an attorneys’ fee award from the United States District Court for the Western District of Texas (the “District Court”) of up to $310,000. As contemplated in the memorandum of understanding, the parties entered into a Stipulation of Non-Opt Out Class and Derivative Settlement (the “Stipulation”) as of April 7, 2015, which was filed with the District Court on April 16, 2015. The Stipulation is subject to customary conditions, including District Court approval. On April 16, 2015, Plaintiffs filed an unopposed motion for preliminary approval of the Stipulation. On April 22, 2015, the District Court entered an order preliminarily approving the Stipulation, providing for notice of the settlement to be provided to certain Multimedia shareholders and scheduling a hearing for final approval of the Stipulation on August 7, 2015. There can be no assurance that the District Court will finally approve the Stipulation. In such event, the settlement as reflected in the Stipulation may be terminated. The Texas State Court Action remains pending as of May 8, 2015, the date these condensed consolidated financial statements were issued. All of the defendants have filed answers containing general denials in that action. Alabama Litigation The Company is currently involved in two lawsuits, as further described below, related to Multimedia’s former charity bingo operations in the State of Alabama, neither of which it believes are material from a damages perspective. The lawsuits are currently pending in federal court, and include claims related to the alleged illegality of electronic charity bingo in the State of Alabama. Dollie Williams, et al., v. Macon County Greyhound Park, Inc., et al., a civil action, was filed on March 8, 2010, in the United States District Court for the Middle District of Alabama, Eastern Division, against Multimedia and others. The plaintiffs, who claim to have been patrons of VictoryLand, allege that Multimedia participated in gambling operations that violated Alabama state law by supplying to VictoryLand purportedly unlawful electronic bingo machines played by the plaintiffs, and the plaintiffs seek recovery of the monies lost on all electronic bingo games played by the plaintiffs in the six months prior to the filing of the complaint under Ala. Code Sec. 8-1-150(A). The plaintiffs have requested that the court certify the action as a class action. On March 29, 2013, the court entered an order granting the plaintiffs’ motion for class certification. On April 12, 2013, the defendants jointly filed a petition with the Eleventh Circuit Court of Appeals seeking permission to appeal the court’s ruling on class certification. On June 18, 2013, the Eleventh Circuit Court of Appeals entered an order granting the petition to appeal. Following briefing and oral argument, on April 2, 2014, the Eleventh Circuit Court of Appeals entered an order reversing the district court’s ruling on class certification and remanding the case to the district court. The parties have reached a settlement that will become final upon approval of the bankruptcy court overseeing the bankruptcy of one of the plaintiffs. Until the settlement becomes final, the Company will continue to vigorously defend this matter. Given the inherent uncertainties in this litigation, however, the Company is unable to make any prediction as to the ultimate outcome. Ozetta Hardy v. Whitehall Gaming Center, LLC, et al., a civil action, was filed against Whitehall Gaming Center, LLC (an entity that does not exist), Cornerstone Community Outreach, Inc., and Freedom Trail Ventures, Ltd., in the Circuit Court of Lowndes County, Alabama. On June 3, 2010, Multimedia and other manufacturers were added as defendants. The plaintiffs, who claim to have been patrons of White Hall, allege that Multimedia participated in gambling operations that violated Alabama state law by supplying to White Hall purportedly unlawful electronic bingo machines played by the plaintiffs, and the plaintiffs seek recovery of the monies lost on all electronic bingo games played by the plaintiffs in the six months prior to the filing of the complaint under Ala. Code, Sec 8-1-150(A). The plaintiffs requested that the court certify the action as a class action. On July 2, 2010, the defendants removed the case to the United States District Court for the Middle District of Alabama, Northern Division. The court has not ruled on the plaintiffs’ motion for class certification. The Company continues to vigorously defend this matter. Given the inherent uncertainties in this litigation, however, the Company is unable to make any prediction as to the ultimate outcome. Gain Contingency Settlement In January 2014, we filed a complaint against certain third party defendants alleging conspiracy in restraint of competition regarding interchange fees, monopolization by defendants in the relevant market, and attempted monopolization of the defendants in the relevant market. We demanded a trial by jury of all issues so triable. The defendants filed a motion to dismiss on March 13, 2014. A settlement agreement was made as of January 16, 2015 and on January 22, 2015 the settlement agreement was executed and delivered for which we received $14.4 million in cash and recorded the settlement proceeds in the first quarter of 2015. This settlement is included as a reduction of operating expenses in our Condensed Consolidated Statement of Income and Comprehensive Income for the three months ended March 31, 2015. We are subject to other claims and suits that arise from time to time in the ordinary course of business, including those discussed above. We do not believe the liabilities, if any, which may ultimately result from the outcome of such matters, individually or in the aggregate, will have a material adverse impact on our financial position, liquidity or results of operations. | 13. COMMITMENTS AND CONTINGENCIES Multimedia Shareholder Litigation In connection with the Merger, certain actions were filed by putative shareholders of Multimedia in the United States District Court for the Western District of Texas (the “Texas Federal Action”) and the District Court of Travis County, Texas (the “Texas State Court Action”). In both the Texas Federal Action and the Texas State Court Action, plaintiffs alleged that Multimedia’s directors breached their fiduciary duties to Multimedia and/or its shareholders because, among other things, the Merger allegedly involved an unfair price, an inadequate sales process, self-dealing and unreasonable deal protection devices. The complaints further alleged that Holdings and its formerly wholly owned merger subsidiary, Merger Sub, aided and abetted those purported breaches of fiduciary duty. On November 20, 2014, the defendants in the Texas Federal Action reached an agreement in principle with the plaintiffs in the Texas Federal Action regarding settlement of all claims asserted on behalf of the alleged class of Multimedia shareholders and on behalf of Multimedia, and that agreement is reflected in a memorandum of understanding. In connection with the settlement contemplated by the memorandum of understanding, Multimedia agreed to make certain additional disclosures in its proxy statement related to the Merger, which disclosure Multimedia made in a Current Report on Form 8-K filed on November 21, 2014. In addition, the defendants in the Texas Federal Action agreed not to oppose an application by plaintiffs in the Texas Federal Action for an attorneys’ fee award from the United States District Court for the Western District of Texas (the “District Court”) of up to $310,000 . As contemplated in the memorandum of understanding, the parties entered into a Stipulation of Non-Opt Out Class and Derivative Settlement (the “Stipulation”) as of April 7, 2015, which was filed with the District Court on April 16, 2015. The Stipulation is subject to customary conditions, including District Court approval. On April 16, 2015, Plaintiffs filed an unopposed motion for preliminary approval of the Stipulation. On April 22, 2015, the District Court entered an order preliminarily approving the Stipulation, providing for notice of the settlement to be provided to certain Multimedia shareholders and scheduling a hearing for final approval of the Stipulation on August 7, 2015. On July 10, 2015, Plaintiffs filed an unopposed motion for final approval of the Stipulation. The deadline for class members to file objections to the Stipulation passed on July 17, 2015. As of August 3, 2015, no such objections had been filed. There can be no assurance that the District Court will finally approve the Stipulation. In such event, the settlement as reflected in the Stipulation may be terminated. The Texas State Court Action remains pending as of August 3, 2015, the date these condensed consolidated financial statements were issued. All of the defendants have filed answers containing general denials in that action. The Stipulation preliminarily approved in the Texas Federal Action includes a release of the claims asserted in the Texas State Court Action. Alabama Litigation The Company is currently involved in one lawsuit and recently resolved another, as further described below, related to Multimedia’s former charity bingo operations in the State of Alabama, neither of which it believes is material from a damages perspective. The active lawsuit is currently pending in federal court and the resolved lawsuit was pending in federal court, and both include claims related to the alleged illegality of electronic charity bingo in the State of Alabama. Dollie Williams, et al., v. Macon County Greyhound Park, Inc., et al., a civil action, was filed on March 8, 2010, in the United States District Court for the Middle District of Alabama, Eastern Division, against Multimedia and others. The plaintiffs, who claim to have been patrons of VictoryLand, allege that Multimedia participated in gambling operations that violated Alabama state law by supplying to VictoryLand purportedly unlawful electronic bingo machines played by the plaintiffs, and the plaintiffs seek recovery of the monies lost on all electronic bingo games played by the plaintiffs in the six months prior to the filing of the complaint under Ala. Code Sec. 8-1-150(A). The plaintiffs have requested that the court certify the action as a class action. On March 29, 2013, the court entered an order granting the plaintiffs' motion for class certification. On April 12, 2013, the defendants jointly filed a petition with the Eleventh Circuit Court of Appeals seeking permission to appeal the court's ruling on class certification. On June 18, 2013, the Eleventh Circuit Court of Appeals entered an order granting the petition to appeal. Following briefing and oral argument, on April 2, 2014, the Eleventh Circuit Court of Appeals entered an order reversing the district court's ruling on class certification and remanding the case to the district court. The parties reached a settlement that became final upon approval of the bankruptcy court overseeing the bankruptcy of one of the plaintiffs. The lawsuit was dismissed with prejudice by court order dated June 10, 2015. Ozetta Hardy v. Whitehall Gaming Center, LLC, et al., a civil action, was filed against Whitehall Gaming Center, LLC (an entity that does not exist), Cornerstone Community Outreach, Inc., and Freedom Trail Ventures, Ltd., in the Circuit Court of Lowndes County, Alabama. On June 3, 2010, Multimedia and other manufacturers were added as defendants. The plaintiffs, who claim to have been patrons of White Hall, allege that Multimedia participated in gambling operations that violated Alabama state law by supplying to White Hall purportedly unlawful electronic bingo machines played by the plaintiffs, and the plaintiffs seek recovery of the monies lost on all electronic bingo games played by the plaintiffs in the six months prior to the filing of the complaint under Ala. Code, Sec 8-1-150(A). The plaintiffs requested that the court certify the action as a class action. On July 2, 2010, the defendants removed the case to the United States District Court for the Middle District of Alabama, Northern Division. The court has not ruled on the plaintiffs' motion for class certification. The Company continues to vigorously defend this matter. Given the inherent uncertainties in this litigation, however, the Company is unable to make any prediction as to the ultimate outcome. Gain Contingency Settlement In January 2014, we filed a complaint against certain third party defendants alleging conspiracy in restraint of competition regarding interchange fees, monopolization by defendants in the relevant market, and attempted monopolization of the defendants in the relevant market. We demanded a trial by jury of all issues so triable. The defendants filed a motion to dismiss on March 13, 2014. A settlement agreement was made as of January 16, 2015 and on January 22, 2015 the settlement agreement was executed and delivered for which we received $14.4 million in cash and recorded the settlement proceeds in the first quarter of 2015. This settlement is included as a reduction of operating expenses in our Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income for the six months ended June 30, 2015. We are also subject to other claims and suits that arise from time to time in the ordinary course of business. We do not believe the liabilities, if any, which may ultimately result from the outcome of such matters, individually or in the aggregate, will have a material adverse impact on our financial position, liquidity or results of operations. | 14. COMMITMENTS AND CONTINGENCIES Lease Obligations We lease office facilities and operating equipment under cancelable and non ‑cancelable agreements. Total rent expense was approximately $1.9 million, $1.8 million and $0.7 million for the years ended December 31, 2014, 2013 and 2012, respectively. In October 2012, we entered into a long ‑term lease agreement related to office space for our new corporate headquarters located in Las Vegas, Nevada, which we occupied in the first half of 2013. In September 2014, the long-term lease agreement for office space in Austin, Texas, was extended through March 2021. As of December 31, 2014, the minimum aggregate rental commitment under all non ‑cancelable operating leases were as follows (in thousands): Amount Minimum aggregate rental commitments 2015 $ 2016 2017 2018 2019 Thereafter Total $ Litigation Claims and Assessments Multimedia Games Shareholder Litigation In connection with the Merger, certain actions were filed by putative shareholders of Multimedia Games in the United States District Court for the Western District of Texas (the “Texas Federal Action”) and the District Court of Travis County, Texas (the “Texas State Court Action”). In both the Texas Federal Action and the Texas State Court Action, plaintiffs alleged that Multimedia Games’ directors breached their fiduciary duties to Multimedia Games and/or its shareholders because, among other things, the Merger allegedly involved an unfair price, an inadequate sales process, self-dealing and unreasonable deal protection devices. The complaints further alleged that Holdings and its formerly wholly owned merger subsidiary, Movie Merger Sub, Inc., aided and abetted those purported breaches of fiduciary duty. On November 20, 2014, the defendants in the Texas Federal Action reached an agreement in principle with the plaintiffs in the Texas Federal Action regarding settlement of all claims asserted on behalf of the alleged class of Multimedia Games shareholders and on behalf of Multimedia Games, and that agreement is reflected in a memorandum of understanding. In connection with the settlement contemplated by the memorandum of understanding, Multimedia Games agreed to make certain additional disclosures in its proxy statement related to the Merger, which disclosure Multimedia Games made in a Current Report on Form 8-K filed on November 21, 2014. The memorandum of understanding contemplates that the parties will enter into a stipulation of settlement. The stipulation of settlement will be subject to customary conditions, including court approval. In the event that the parties enter into a stipulation of settlement, a hearing will be scheduled at which the United States District Court for the Western District of Texas will consider the fairness, reasonableness, and adequacy of the settlement. If the settlement is approved by the court in the form contemplated by the parties, it will resolve and release all claims in the Texas Federal Action that were or could have been brought challenging any aspect of the Merger, the Merger Agreement, and any disclosure made in connection therewith, including in Multimedia Games’ definitive proxy statement, pursuant to terms that will be disclosed to shareholders prior to final approval of the settlement. In addition, in connection with the settlement, the defendants in the Texas Federal Action agreed not to oppose an application by plaintiffs in the Texas Federal Action for an attorneys’ fee award from the United States District Court for the Western District of Texas of up to $310,000 , which fee has been paid by Holdings. There can be no assurance that the parties will ultimately enter into a stipulation of settlement or that the United States District Court for the Western District of Texas will approve the settlement even if the parties were to enter into such stipulation. In such event, the proposed settlement as contemplated by the memorandum of understanding may be terminated. The Texas State Court Action remains pending as of March 16, 2015, the date these consolidated financial statements were issued. Alabama Litigation The Company is currently involved in two lawsuits, as further described below, related to Multimedia Games’ former charity bingo operations in the State of Alabama, neither of which it believes are material from a damages perspective. The lawsuits are currently pending in federal court, and include claims related to the alleged illegality of electronic charity bingo in the State of Alabama. Dollie Williams, et al., v. Macon County Greyhound Park, Inc., et al., a civil action, was filed on March 8, 2010, in the United States District Court for the Middle District of Alabama, Eastern Division, against Multimedia Games and others. The plaintiffs, who claim to have been patrons of VictoryLand, allege that Multimedia Games participated in gambling operations that violated Alabama state law by supplying to VictoryLand purportedly unlawful electronic bingo machines played by the plaintiffs, and the plaintiffs seek recovery of the monies lost on all electronic bingo games played by the plaintiffs in the six months prior to the filing of the complaint under Ala. Code Sec. 8-1-150(A). The plaintiffs requested that the court certify the action as a class action. On March 29, 2013, the court entered an order granting the plaintiffs' motion for class certification. On April 12, 2013, the defendants jointly filed a petition with the Eleventh Circuit Court of Appeals seeking permission to appeal the court's ruling on class certification. On June 18, 2013, the Eleventh Circuit Court of Appeals entered an order granting the petition to appeal. Following briefing and oral argument, on April 2, 2014, the Eleventh Circuit Court of Appeals entered an order reversing the district court’s ruling on class certification and remanding the case to the district court. The Company continues to vigorously defend this matter. Given the inherent uncertainties in this litigation, however, the Company is unable to make any prediction as to the ultimate outcome. Ozetta Hardy v. Whitehall G aming Center, LLC, et al., a civil actio n, was filed against Whitehall G aming Center, LLC (an entity that does not exist), Cornerstone Community Outreach, Inc., and Freedom Trail Ventures, Ltd., in the Circuit Court of Lowndes County, Alabama. On June 3, 2010, Multimedia Games and other manufacturers were added as defendants. The plaintiffs, who claim to have been patrons of White Hall, allege that Multimedia Games participated in gambling operations that violated Alabama state law by supplying to White Hall purportedly unlawful electronic bingo machines played by the plaintiffs, and the plaintiffs seek recovery of the monies lost on all electronic bingo games played by the plaintiffs in the six months prior to the filing of the complaint under Ala. Code, Sec 8-1-150(A). The plaintiffs requested that the court certify the action as a class action. On July 2, 2010, the defendants removed the case to the United States District Court for the Middle District of Alabama, Northern Division. The court has not ruled on the plaintiffs' motion for class certification. The Company continues to vigorously defend this matter. Given the inherent uncertainties in this litigation, however, the Company is unable to make any prediction as to the ultimate outcome. We are subject to other claims and suits that arise from time to time in the ordinary course of business, including those discussed above. We do not believe the liabilities, if any, which may ultimately result from the outcome of such matters, individually or in the aggregate, will have a material adverse impact on our financial position, liquidity or results of operations. |
SHAREHOLDERS' EQUITY109
SHAREHOLDERS' EQUITY | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
SHAREHOLDERS' EQUITY | |||
SHAREHOLDERS' EQUITY | 14. SHAREHOLDERS’ EQUITY Preferred Stock. Our amended and restated certificate of incorporation, as amended, allows our Board of Directors, without further action by stockholders, to issue up to 50,000,000 shares of preferred stock in one or more series and to fix the designations, powers, preferences, privileges and relative participating, optional, or special rights as well as the qualifications, limitations or restrictions of the preferred stock, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences. As of March 31, 2015 and December 31, 2014, we had no shares outstanding of preferred stock. Common Stock. Subject to the preferences that may apply to shares of preferred stock that may be outstanding at the time, the holders of outstanding shares of common stock are entitled to receive dividends out of assets legally available at the times and in the amounts as our Board of Directors may from time to time determine. All dividends are non-cumulative. In the event of the liquidation, dissolution or winding up of the Company, the holders of common stock are entitled to share ratably in all assets remaining after the payment of liabilities, subject to the prior distribution rights of preferred stock, if any, then outstanding. Each stockholder is entitled to one vote for each share of common stock held on all matters submitted to a vote of stockholders. Cumulative voting for the election of directors is not provided for. The common stock is not entitled to preemptive rights and is not subject to conversion or redemption. There are no sinking fund provisions applicable to the common stock. Each outstanding share of common stock is fully paid and non-assessable. As of March 31, 2015 and December 31, 2014, we had 90,610,087 and 90,405,450 shares of common stock issued. Treasury Stock. Employees may direct us to withhold vested shares of restricted stock to satisfy the minimum statutory withholding requirements applicable to their restricted stock vesting. We repurchased or withheld from restricted stock awards 2,845 and 31,000 shares of common stock at an aggregate purchase price of $19,743 and $0.3 million, for the three months ended March 31, 2015 and 2014, respectively, to satisfy the minimum applicable tax withholding obligations related to the vesting of such restricted stock awards. | 14. SHAREHOLDERS’ EQUITY Preferred Stock. Our amended and restated certificate of incorporation, as amended, allows our Board of Directors, without further action by stockholders, to issue up to 50,000,000 shares of preferred stock in one or more series and to fix the designations, powers, preferences, privileges and relative participating, optional, or special rights as well as the qualifications, limitations or restrictions of the preferred stock, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences. As of June 30, 2015 and December 31, 2014, we had no shares outstanding of preferred stock. Common Stock. Subject to the preferences that may apply to shares of preferred stock that may be outstanding at the time, the holders of outstanding shares of common stock are entitled to receive dividends out of assets legally available at the times and in the amounts as our Board of Directors may from time to time determine. All dividends are non-cumulative. In the event of the liquidation, dissolution or winding up of the Company, the holders of common stock are entitled to share ratably in all assets remaining after the payment of liabilities, subject to the prior distribution rights of preferred stock, if any, then outstanding. Each stockholder is entitled to one vote for each share of common stock held on all matters submitted to a vote of stockholders. Cumulative voting for the election of directors is not provided for. The common stock is not entitled to preemptive rights and is not subject to conversion or redemption. There are no sinking fund provisions applicable to the common stock. Each outstanding share of common stock is fully paid and non-assessable. As of June 30, 2015 and December 31, 2014, we had 90, 743,001 and 90,405,450 shares of common stock issued, respectively. Treasury Stock. Employees may direct us to withhold vested shares of restricted stock to satisfy the minimum statutory withholding requirements applicable to their restricted stock vesting. We repurchased or withheld from restricted stock awards 2,599 and 5,444 , and 11,963 and 43,129 shares of common stock, at an aggregate purchase price of $20,167 and $39,910 , and $0.1 million and $0.4 million, for the three and six months ended June 30, 2015 and 2014, respectively, to satisfy the minimum applicable tax withholding obligations related to the vesting of such restricted stock awards. | 15. SHAREHOLDERS’ EQUITY Preferred Stock. Our amended and restated certificate of incorporation allows our Board of Directors, without further action by stockholders, to issue up to 50,000,000 shares of preferred stock in one or more series and to fix the designations, powers, preferences, privileges and relative participating, optional, or special rights as well as the qualifications, limitations or restrictions of the preferred stock, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences. As of December 31, 2014, we had no shares of preferred stock outstanding. Common Stock. Subject to the preferences that may apply to shares of preferred stock that may be outstanding at the time, the holders of outstanding shares of common stock are entitled to receive dividends out of assets legally available at the times and in the amounts as our Board of Directors may from time to time determine. All dividends are non ‑cumulative. In the event of the liquidation, dissolution or winding up of the Company, the holders of common stock are entitled to share ratably in all assets remaining after the payment of liabilities, subject to the prior distribution rights of preferred stock, if any, then outstanding. Each stockholder is entitled to one vote for each share of common stock held on all matters submitted to a vote of stockholders. Cumulative voting for the election of directors is not provided for. The common stock is not entitled to preemptive rights and is not subject to conversion or redemption. There are no sinking fund provisions applicable to the common stock. Each outstanding share of common stock is fully paid and non ‑assessable. As of December 31, 2014, we had 90,405,450 shares of common stock issued. Common Stock Repurchase Program. Our share repurchase program granted us the authority to repurchase up to $40.0 million of our outstanding common stock over a two -year period, which commenced in the first quarter of 2013 and expired at the end of the fourth quarter of 2014. We repurchased approximately 1.5 million shares of common stock for cash of approx imately $ 11.7 million under t he share repurchase program for the year ended December 31, 2014. We repurchased approximately 2.6 million shares of common stock for cash of approximately $18.2 million under the share repurchase program for the year ended December 31, 2013. We completed the share repurchases with cash on hand. The repurchase program authorized us to buy our common stock from time to time through open market, privately negotiated or other transactions, including pursuant to trading plans established in accordance with Rules 10b5-1 and 10b-18 of the Exchange Act, or by a combination of such methods. Treasury Stock. Employees may direct us to withhold vested shares of restricted stock to satisfy the minimum statutory withholding requirements applicable to their restricted stock vesting. We repurchased or withheld from restricted stock awards 5 5,502 and 14,901 shares of common stock at an aggregate purchase price of $0 .5 million and $0.1 million, for the years ended December 31, 2014 and 2013, respectively, to satisfy the minimum applicable tax withholding obligations related to the vesting of such restricted stock awards. The following table provides the treasury stock activity that occurred in 2014 (number of shares and cost in thousands): Total Number of Average Price Cost of Shares Shares Purchased Purchased or Purchased or or Withheld Withheld Withheld (in thousands) (per share) (in thousands) Outstanding, December 31, 2013 $ $ Shares repurchased under current plan $ Shares withheld from restricted stock vesting $ Outstanding, December 31, 2014 $ $ |
WEIGHTED AVERAGE COMMON SHAR110
WEIGHTED AVERAGE COMMON SHARES | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
WEIGHTED AVERAGE COMMON SHARES | |||
WEIGHTED AVERAGE COMMON SHARES | 15. WEIGHTED AVERAGE COMMON SHARES The weighted average number of common shares outstanding used in the computation of basic and diluted earnings per share is as follows (in thousands): At March 31, At March 31, 2015 2014 Weighted average shares Weighted average number of common shares outstanding - basic Potential dilution from equity grants (1) Weighted average number of common shares outstanding - diluted (1) The potential dilution excludes the weighted average effect of equity awards to acquire 8.4 million and 5.1 million of our common stock for the three months ended March 31, 2015 and 2014, respectively, because the application of the treasury stock method, as required, makes them anti-dilutive. | 15. WEIGHTED AVERAGE COMMON SHARES The weighted average number of common shares outstanding used in the computation of basic and diluted earnings per share is as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Weighted average shares Weighted average number of common shares outstanding - basic Potential dilution from equity grants (1) — — Weighted average number of common shares outstanding - diluted (1) The Company was in a net loss position for the three and six months ended June 30, 2015, and therefore, no potential dilution from the application of the treasury stock method was applicable. The potential dilution excludes the weighted average effect of equity awards to acquire 7.5 million and 6.5 million of our common stock for the three and six months ended June 30, 2014 as the application of the treasury stock method, as required, makes them anti-dilutive. | 16. WEIGHTED AVERAGE SHARES OF COMMON STOCK The weighted average number of common stock outstanding used in the computation of basic and diluted earnings per share is as follows (in thousands): At December 31, 2014 2013 2012 Weighted average shares Weighted average number of common shares outstanding - basic Potential dilution from equity grants (1) Weighted average number of common shares outstanding - diluted (1) The potential dilution excludes the weighted average effect of stock options to acquire 7.6 million, 5.9 million and 5.1 million shares of our common stock at December 31, 2014, 2013 and 2012, respectively, because the application of the treasury stock method, as required, makes them anti ‑dilutive . |
SHARE-BASED COMPENSATION111
SHARE-BASED COMPENSATION | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
SHARE-BASED COMPENSATION | |||
SHARE-BASED COMPENSATION | 16. SHARE-BASED COMPENSATION Equity Incentive Awards Our 2014 Equity Incentive Plan (the “2014 Plan”) is used to attract and retain the best available personnel, to provide additional incentives to employees, directors and consultants and to promote the success of our business. The 2014 Plan superseded the then current 2005 Stock Incentive Plan (the “2005 Plan”). The 2014 Plan is administered by our Compensation Committee, which has the authority to select individuals who are to receive options or other equity incentive awards and to specify the terms and conditions of grants of options or other equity incentive awards, the vesting provisions, the term and the exercise price. Generally, we grant the following award types: (a) time-based options, (b) cliff-vesting time-based options, (c) market-based options and (d) restricted stock. These awards have varying vesting provisions, but generally have 10-year expiration periods. There have been no changes to our equity incentive awards vesting disclosures since the most recent filing of our Annual Report on Form 10-K. A summary of award activity is as follows (in thousands): Stock Options Restricted Stock Granted Granted Outstanding, December 31, 2014 Additional authorized shares - - Granted - - Exercised options or vested shares Canceled or forfeited - Outstanding, March 31, 2015 The maximum number of shares available for future equity awards under the 2014 Plan is approximately 12.1 million shares of our common stock; and there are no shares available for future equity awards under the 2005 Plan. Stock Options The fair value of options was determined as of the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions: Three Months Ended March 31, 2015 2014 Risk-free interest rate - Expected life of options (in years) - Expected volatility - Expected dividend yield - The following tables present the options activity: Number of Common Shares (in thousands) Weighted Average Exercise Price (per share) Weighted Average Life Remaining (years) Aggregate Intrinsic Value (in thousands) Outstanding, December 31, 2014 $ $ Granted - - Exercised Canceled or forfeited Outstanding, March 31, 2015 $ $ Vested and expected to vest, March 31, 2015 $ $ Exercisable, March 31, 2015 $ $ There were no options granted for the three months ended March 31, 2015. There were 2.0 million options granted for the three months ended March 31, 2014. The weighted average grant date fair value per share of the options granted was $3.88 for the three months ended March 31, 2014. The total intrinsic value of options exercised was $0.4 million and $1.7 million for the three months ended March 31, 2015 and 2014, respectively. There was $13.6 million in unrecognized compensation expense related to options expected to vest as of March 31, 2015. This cost was expected to be recognized on a straight-line basis over a weighted average period of 3.0 years. We received $1.0 million in proceeds from the exercise of options and recorded $1.6 million in non-cash compensation expense related to options granted that were expected to vest for the three months ended March 31, 2015. There was $12.0 million in unrecognized compensation expense related to options expected to vest as of March 31, 2014. This cost was expected to be recognized on a straight-line basis over a weighted average period of 3.1 years. We recorded $1.6 million in non-cash compensation expense related to options granted that were expected to vest as of March 31, 2014. We received $2.4 million in cash from the exercise of options for the three months ended March 31, 2014. Restricted Stock The following is a summary of non-vested share awards for our time-based restricted shares: Shares Outstanding (in thousands) Weighted Average Grant Date Fair Value (per share) Outstanding, December 31, 2014 $ Granted - - Vested Forfeited - Outstanding, March 31, 2015 $ There were no shares of restricted stock granted for the three months ended March 31, 2015 and March 31, 2014. The total fair value of restricted stock vested was $0.1 million and $0.7 million for the three months ended March 31, 2015 and 2014, respectively. There was $2.7 million in unrecognized compensation expense related to shares of time-based restricted shares expected to vest as of March 31, 2015. This cost is expected to be recognized on a straight-line basis over a weighted average period of 3.0 years. There was 10.9 thousand shares of restricted stock that vested and we recorded $0.2 million in non-cash compensation expense related to the restricted stock granted that was expected to vest during the three months ended March 31, 2015. There was $1.7 million in unrecognized compensation expense related to shares of time-based restricted shares expected to vest as of March 31, 2014. This cost was expected to be recognized on a straight-line basis over a weighted average period of 2.8 years. There were 0.1 million shares of time-based restricted shares vested and we recorded $0.4 million in non-cash compensation expense related to the restricted stock granted that was expected to vest for the three months ended March 31, 2014. | 16. SHARE-BASED COMPENSATION Equity Incentive Awards Our 2014 Equity Incentive Plan (the “2014 Plan”) is used to attract and retain the best available personnel, to provide additional incentives to employees, directors and consultants and to promote the success of our business. The 2014 Plan superseded the then current 2005 Stock Incentive Plan (the “2005 Plan”). The 2014 Plan is administered by our Compensation Committee of our Board of Directors, which has the authority to select individuals who are to receive options or other equity incentive awards and to specify the terms and conditions of grants of options or other equity incentive awards, the vesting provisions, the term and the exercise price. Generally, we grant the following award types: (a) time-based options, (b) cliff-vesting time-based options, (c) market-based options and (d) restricted stock. These awards have varying vesting provisions and expiration periods. For the three and six months ended June 30, 2015, we granted time-based options and market-based options. Our time-based stock options granted under the 2014 Plan vest at a rate of 25% per year on each of the first four yearly anniversaries of the option grant dates. These options expire after a ten -year period. Our market-based stock options granted under the 2014 Plan vest if our average stock price in any period of 30 consecutive trading days meets certain target prices during a four-year period that commenced on the date of grant for these options. If these target prices are not met during such four-year period, the unvested shares underlying the options will terminate, however, upon the Participant’s termination of Service if the Participant’s Service is terminated by the Participating Company without Cause within ten days prior to, or within eighteen (18) months after, the date a Change in Control is consummated, the unvested options granted would become fully vested. These options expire after a seven-year period. A summary of award activity is as follows (in thousands): Stock Options Restricted Stock Granted Granted Outstanding, December 31, 2014 Additional authorized shares — — Granted — Exercised options or vested shares Canceled or forfeited Outstanding, June 30, 2015 The maximum number of shares available for future equity awards under the 2014 Plan is approximately 6.6 million shares of our common stock; and there are no shares available for future equity awards under the 2005 Plan. Stock Options The fair value of time-based options was determined as of the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions: Six months ended June 30, 2015 2014 Risk-free interest rate % % Expected life of options (in years) Expected volatility % % Expected dividend yield % % The fair value of market-based options was determined as of the date of grant using a lattice-based option valuation model. For the market-based options issued in the second quarter 2015, the assumptions were: (a) risk-free interest rate of 1%; (b) measurement period of four years; (c) expected volatility of 47%; and (d) no expected dividend yield. The following tables present the options activity: Weighted Number of Weighted Average Average Life Aggregate Common Shares Exercise Price Remaining Intrinsic Value (in thousands) (per share) (years) (in thousands) Outstanding, December 31, 2014 $ $ Granted Exercised Canceled or forfeited Outstanding, June 30, 2015 $ $ Vested and expected to vest, June 30, 2015 $ $ Exercisable, June 30, 2015 $ $ There were $6.1 million options granted for the three and six months ended June 30, 2015. There were 3.0 million and 5.0 million options granted for the three and six months ended June 30, 2014, respectively. The weighted average grant date fair value per share of the options granted was $2.49 for the three and six months ended June 30, 2015. The weighted average grant date fair value per share of the options granted was $2.86 and $3. 2 7 for the three and six months ended June 30, 2014, respectively. The total intrinsic value of options exercised was $0.3 million and $0.8 million and $ 0 .7 million and $2.4 million for the three and six months ended June 30, 2015 and 2014, respectively. There was $21.8 million in unrecognized compensation expense related to options expected to vest as of June 30, 2015. This cost was expected to be recognized on a straight-line basis over a weighted average period of 3.0 years. We received $1.7 million in proceeds from the exercise of options and recorded $3.5 million in non-cash compensation expense related to options granted that were expected to vest for the six months ended June 30, 2015. There was $15.6 million in unrecognized compensation expense related to options expected to vest as of June 30, 2014. This cost was expected to be recognized on a straight-line basis over a weighted average period of 2.9 years. We recorded $4.6 million in non-cash compensation expense related to options granted that were expected to vest as of June 30, 2014. We received $4.6 million in cash from the exercise of options for the six months ended June 30, 2014. Restricted Stock The following is a summary of non-vested share awards for our time-based restricted shares: Weighted Shares Average Grant Outstanding Date Fair Value (in thousands) (per share) Outstanding, December 31, 2014 $ Granted — — Vested Forfeited Outstanding, June 30, 2015 $ There were no shares of restricted stock granted for the three and six months ended June 30, 2015 and 2014. The total fair value of restricted stock vested was $0.1 million and $0.2 million and $0.4 million and $1.4 million for the three and six months ended June 30, 2015 and 2014, respectively. There was $2.5 million in unrecognized compensation expense related to shares of time based restricted shares expected to vest as of June 30, 2015. This cost is expected to be recognized on a straight-line basis over a weighted average period of 2.8 years. There were 21,7 00 shares of restricted stock that vested and we recorded $0.4 million in non-cash compensation expense related to the restricted stock granted that was expected to vest during the six months ended June 30, 2015. There was $1.4 million in unrecognized compensation expense related to shares of time-based restricted shares expected to vest as of June 30, 2014. This cost was expected to be recognized on a straight-line basis over a weighted average period of 2.6 years. There were 0.2 million shares of time-based restricted shares vested and we recorded $0.8 million in non-cash compensation expense related to the restricted stock granted that was expected to vest for the six months ended June 30, 2014. | 17. SHARE ‑BASED COMPENSATION Equity Incentive Awards In January 2005, we adopted the 2005 Stock Incentive Plan (the “2005 Plan”) to attract and retain the best available personnel, to provide additional incentives to employees, directors and consultants and thus to promote the success of our business. The 2005 Plan is administered by our Compensation Committee. The administrator of the 2005 Plan has the authority to select individuals who are to receive options or other equity incentive awards under the 2005 Plan and to specify the terms and conditions of grants of options or other equity incentive awards, the vesting provisions, the term and the exercise price. In May 2014, we adopted the 2014 Equity Incentive Plan (the “2014 Plan”) to attract and retain the best available personnel, to provide additional incentives to employees, directors and consultants and thus to promote the success of our business. The 2014 Plan is administered by our Compensation Committee. The administrator of the 2014 Plan has the authority to select individuals who are to receive options or other equity incentive awards under the 2014 Plan and to specify the terms and conditions of grants of options or other equity incentive awards, the vesting provisions, the term and the exercise price. Generally, our time based stock options granted under the 2005 Plan (other than those granted to non ‑employee directors) will vest at a rate of 25% of the shares underlying the option after one year and the remaining shares vest in equal portions over the following 36 months , such that all shares are vested after four years . Generally, our time based stock options and restricted stock granted under the 2014 Plan will vest at a rate of 25% per year on each of the first four yearly anniversaries of the option grant dates. Our market-based stock options granted under the 2005 Plan typically vest if our average stock price in any period of 30 consecutive trading days meets certain target prices during a four year period that commenced on the date of grant for these options. If these target prices are not met during such four year period, the unvested shares underlying the options will terminate, except if there is a change in control of the Company as defined in the 2005 Plan, in which case, the unvested shares underlying such options shall become fully vested on the effective date of such change in control. Our cliff vesting time-based stock options granted under the 2005 Plan will vest based on the requisite service periods with a portion to vest after five years and another portion to vest after six years. The vesting provisions of restricted stock under the 2005 Plan are similar to those applicable to time-based stock options under the 2005 Plan. As these restricted shares were issued primarily to our employees when all or a portion of the restricted stock award vests, in most cases, a certain portion of the shares subject to the restricted stock award will be withheld by us to satisfy the statutory withholding requirements applicable to the restricted stock grants. Therefore, as these awards vest the actual number of shares outstanding as a result of the restricted stock awards is reduced. These restricted shares will vest over a period of four years. As part of the Merger Agreement, each option to purchase shares of Multimedia Games common stock granted after September 8, 2014, was converted into a new award covering shares of Holdings common stock using a customary exchange ratio. These options will vest at a rate of 25% per year on each of the first four yearly anniversaries of the option grant dates. A summary of award activity is as follows (in thousands): Stock Options Restricted Stock Granted Granted Outstanding, December 31, 2013 Additional authorized shares — — Granted Merger conversion — Exercised options or vested shares Canceled or forfeited Outstanding, December 31, 2014 The maximum number of shares available for future equity awards under the 2014 Plan is approximately 11.9 million shares of our common stock; and there are no shares available for future equity awards under the 2005 Plan. Stock Options The fair value of options was determined as of the date of grant using the Black ‑Scholes option pricing model with the following weighted ‑average assumptions: Year ended December 31, 2014 2013 2012 Risk-free interest rate % % % Expected life of options (in years) Expected volatility % % % Expected dividend yield % % % The fair value of our cliff vesting time-based options was determined using the Black Scholes option pricing model as of the date of grant. For the five year cliff vesting time-based options, the assumptions were: (a) risk-free interest rate of 2%; (b) expected term of five years; (c) expected volatility of 52%; and (d) no expected dividend yield. For the six year cliff vesting time-based options, the assumptions were: (a) risk-free interest rate of 2%; (b) expected term of six years; (c) expected volatility of 58%; and (d) no expected dividend yield. The fair value of our market-based options was determined using a lattice-based option valuation model as of the date of grant. For the market-based options issued in the first quarter 2014, the assumptions were: (a) risk-free interest rate of 1%; (b) measurement period of four years; (c) expected volatility of 51%; and (d) no expected dividend yield. For the market-based options issued in the second quarter 2014, the assumptions were: (a) risk-free interest rate of 1%; (b) measurement period of four years; (c) expected volatility of 52%; and (d) no expected dividend yield. The fair value of the converted options related to the Merger was recalculated upon consummation of the acquisition and it was determined that the original fair value approximated the value upon conversion and was still applicable and will continue to amortize to stock compensation expense over the remaining life of the award. The following tables present the options activity: Weighted Number of Weighted Average Average Life Aggregate Common Shares Exercise Price Remaining Intrinsic Value (in thousands) (per share) (years) (in thousands) Outstanding, December 31, 2013 $ $ Granted Merger conversion Exercised Canceled or forfeited Outstanding, December 31, 2014 $ $ Vested and expected to vest, December 31, 2014 $ $ Exercisable, December 31, 2014 $ $ Options Outstanding Options Exercisable Weighted Average Weighted Weighted Number Remaining Average Number Average Outstanding Contract Exercise Exercisable Exercise Range of Exercise Prices (000’s) Life (Years) Prices (000’s) Price $ — $ $ $ There were 6.6 million, 1.2 million and 2.4 million options granted for the years ended December 31, 2014, 2013 and 2012, respectively. Of the 6.6 million options granted, 1.1 million options were converted as part of the Merger. The weighted average grant date fair value per share of the options granted was $3.20 , $3.31 and $2.93 for the years ended December 31, 2014, 2013 and 2012, respectively. The total intrinsic value of options exercised was $2.8 million, $4.6 million and $6.3 million for the years ended December 31, 2014, 2013 and 2012, respectively. There was $15.4 million in unrecognized compensation expense related to options expected to vest as of December 31, 2014. This cost was expected to be recognized on a straight ‑line basis over a weighted average period of 3.1 years. We received $5.3 million in proceeds from the exercise of options and recorded $7.6 million in non ‑cash compensation expense related to options granted that were expected to vest for the year ended and as of December 31, 2014. We recorded $4.4 million and $6.2 million in non ‑cash compensation expense related to options granted that were expected to vest as of December 31, 2013 and 2012, respectively. We received $8.4 million and $6.7 million in cash from the exercise of options for the years ended December 31, 2013 and 2012, respectively. Restricted Stock The following is a summary of non ‑vested share awards for our time ‑based restricted shares: Weighted Shares Average Grant Outstanding Date Fair Value (in thousands) (per share) Outstanding, December 31, 2013 $ Granted Vested Forfeited Outstanding, December 31, 2014 $ There were 0.3 million, 0.4 million and 0.1 million shares of restricted stock granted for the years ended December 31, 2014, 2013 and 2012, respectively. The weighted average grant date fair value per share of restricted stock granted was $7.12 , $7.09 and $6.80 for the years ended December 31, 2014, 2013 and 2012. The total fair value of restricted stock vested was $1.4 million, $0.7 million and $1.3 million for the years ended December 31, 2014, 2013 and 2012, respectively. There was $3.0 million in unrecognized compensation expense related to shares of time ‑based restricted shares expected to vest as of December 31, 2014 and is expected to be recognized on a straight ‑line basis over a weighted average period of 3.3 years. There were 0.2 million shares, 0.1 million shares and 0.2 million shares of restricted stock that vested and we recorded $1.2 million, $0.7 million and $0.4 million in non ‑cash compensation expense related to the restricted stock granted that was expected to vest during 2014, 2013 and 2012, respectively. |
INCOME TAXES112
INCOME TAXES | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
INCOME TAXES | |||
INCOME TAXES | 17. INCOME TAXES The provision for income tax reflected an effective income tax rate of 81.2% for the three months ended March 31, 2015, which was higher than the statutory federal rate of 35.0% primarily due to non-statutory stock options that expired in the quarter and state income taxes. The provision for income tax reflected an effective income tax rate of 34.7% for the same period in the prior year, which was lower than the statutory federal rate of 35.0% are primarily due to the favorable foreign rate applicable to our foreign source income. We have analyzed filing positions in all of the federal, state and foreign jurisdictions where we are required to file income tax returns, as well as all open tax years in these jurisdictions. As part of the Merger, the Company recorded $0.7 million of unrecognized tax benefits as of December 31, 2014, which is consistent with the balance as of March 31, 2015. Other than the unrecognized tax benefit related to the Merger, we believe that our income tax filing positions and deductions will be sustained upon audit and we do not anticipate any adjustments that will result in a material change to our financial position. We may from time to time be assessed interest or penalties by tax jurisdictions, although any such assessments historically have been minimal and immaterial to our financial results. Our policy for recording interest and penalties associated with audits and unrecognized tax benefits is to record such items as a component of income tax expense. | 17. INCOME TAXES The provision for income tax reflected an effective income tax rate benefit of 41.0% and 35.8% for the three and six months ended June 30, 2015, respectively, which was higher than the statutory federal rate of 35.0% primarily due to state taxes and the lower foreign tax rate applicable to our foreign source income, partially offset by non-statutory stock options that expired in 2015. The provision for income tax reflected an effective income tax rate expense of 37.3% and 35.7% for the same periods in the prior year, which was higher than the statutory federal rate of 35.0% primarily due to state taxes, an increase in our valuation allowance for certain foreign losses and non-cash compensation expenses related to stock options, partially offset by a lower foreign tax rate applicable to our foreign source income. We have analyzed filing positions in all of the federal, state and foreign jurisdictions where we are required to file income tax returns, as well as all open tax years in these jurisdictions. As part of the Merger, the Company recorded $0.7 million of unrecognized tax benefits as of December 31, 2014, which is consistent with the balance as of June 30, 2015. Other than the unrecognized tax benefit related to the Merger, we believe that our income tax filing positions and deductions will be sustained upon audit and we do not anticipate any adjustments that will result in a material change to our financial position. We may from time to time be assessed interest or penalties by tax jurisdictions, although any such assessments historically have been minimal and immaterial to our financial results. Our policy for recording interest and penalties associated with audits and unrecognized tax benefits is to record such items as a component of income tax expense. | 18. INCOME TAXES The following presents consolidated income before tax for domestic and foreign operations (in thousands): Year Ended December 31, 2014 2013 2012 Consolidated income before tax Domestic $ $ $ Foreign Total $ $ $ The income tax provision attributable to income from operations before tax consists of the following components (in thousands): Year Ended December 31, 2014 2013 2012 Income tax provision Domestic $ $ $ Foreign Total income tax provision $ $ $ Income tax provision components Current $ $ $ Deferred Total income tax provision $ $ $ A reconciliation of the federal statutory rate and the effective income tax rate is as follows: Year Ended December 31, 2014 2013 2012 Income tax reconciliation Federal statutory rate % % % Foreign provision % % % State/province income tax % % % Non-deductible compensation cost % % % Non-deductible acquisition cost % % % Change in valuation allowance % % % Adjustment to carrying value % % % Foreign dividends and IRC Sec. 956 inclusions, net of foreign tax deduction % % % Non-deductible expenses and other items % % % Effective tax rate % % % The major tax ‑effected components of the deferred tax assets and liabilities are as follows (in thousands): Year Ended December 31, 2014 2013 2012 Deferred income tax assets related to: Deferred tax asset - current Intangibles $ — $ $ Net operating losses Stock compensation expense Accounts receivable allowances Accrued and prepaid expenses Long-term debt — Other Tax credits — — Property, equipment and leased assets — Valuation allowance Total deferred income tax assets $ $ $ Deferred income tax liabilities related to: Property, equipment and leased assets $ — $ — Intangibles — — Other Total deferred income tax liabilities $ $ Deferred income taxes, net $ $ $ The following is a tabular reconciliation of the total amounts of unrecognized tax benefits (in thousands): Year Ended December 31, 2014 2013 2012 Unrecognized tax benefit at the beginning of the period Gross increases - tax positions in prior period $ — $ — $ — Gross decreases - tax positions in prior period — — — Gross increases - tax positions in current period — — Settlements — — — Unrecognized tax benefit at the end of the period $ $ — $ — For all of our investments in foreign subsidiaries, except for GCA (Macau), deferred taxes have not been provided on unrepatriated foreign earnings. Unrepatriated earnings were approximately $11.7 million as of December 31, 2014. These earnings were considered permanently reinvested, as it was management’s intention to reinvest foreign earnings in foreign operations. We project sufficient cash flow in the U.S. and we do not need to repatriate these foreign earnings to finance U.S. operations. As a result of certain realization requirements under the accounting guidance on share ‑based payments, the table of deferred tax assets and liabilities shown above does not include certain deferred tax assets that arose directly from tax deductions related to equity compensation in excess of compensation recognized for financial reporting at December 31, 2014, 2013 and 2012, respectively. Equity will be increased by $4.4 million if, and when, such deferred tax assets are ultimately realized. We use the accounting guidance on income taxes ordering for purposes of determining when excess tax benefits have been realized. We had $179.9 million, or $63.0 million, tax ‑effected, of accumulated federal net operating losses as of December 31, 2014. The net operating losses can be carried forward and applied to offset taxable income for 20 years and will expire starting in 2025. We had tax ‑effected state net operating loss carry forwards of approximately $5.9 million as of December 31, 2014. The state net operating loss carry forwards will expire between 2015 and 2033. The determination and utilization of these state net operating loss carry forwards are dependent upon apportionment percentages and other respective state laws, which can change from year to year. As of December 31, 2014, $1. 6 million of our valuation allowance related to certain state net operating loss carry forwards which are expected to expire before utilization, due to shorter carry forward periods and decreased apportionment percentages in those states. The remaining valuation allowance of $0.7 million related to foreign net operating losses. We recognized a deferred tax asset upon our conversion from a limited liability company to a corporation on May 14, 2004. Prior to that time, all tax attributes flowed through to the members of the limited liability company. The principal component of the deferred tax asset is a difference between our assets for financial accounting and tax purposes. This difference results from a significant balance of acquired goodwill of approximately $687.4 million that was generated as part of the conversion to a corporation plus approximately $97.6 million in pre-existing goodwill carried over from periods prior to the conversion. Both of these assets are recorded for tax purposes but not for accounting purposes. This asset is amortized over 15 years for tax purposes, resulting in annual pretax income being $52.3 million lower for tax purposes than for financial accounting purposes. At an estimated blended domestic statutory tax rate of 36.3% , this results in tax payments being approximately $19.0 million less than the annual provision for income taxes shown on the income statement for financial accounting purposes, or the amount of the annual provision, if less. There is an expected aggregate of $82.3 million in cash savings over the remaining life of the portion of our deferred tax asset related to the conversion. This deferred tax asset may be subject to certain limitations. We believe that it is more likely than not that we will be able to utilize our deferred tax asset. However, the utilization of this tax asset is subject to many factors including, but not limited to, a change of control of the Company and future earnings. We have analyzed filing positions in all of the federal, state and foreign jurisdictions whe re we are required to file income tax returns, as well as all open tax years in these jurisdictions. As part of the Merger, the Company record ed $0.7 m illion of unrecognized tax benefits. Other than the unrecognized tax benefit related to the Merger, we believe that our income tax filing positions and deductions will be sustained upon audit and we do not anticipate any other adjustments that will result in a material change to our financial position. We may from time to time be assessed interest or penalties by tax jurisdictions, although any such assessments historically have been minimal and immaterial to our financial results. Our policy for recording interest and penalties associated with audits and unrecognized tax benefits is to record such items as a component of income tax expense. We are subject to taxation in the U.S. and various states and foreign jurisdictions. We have a number of federal and state income tax years still open for examination as a result of our net operating loss carry forwards. Accordingly, we are subject to examination for both U.S. federal and a few state tax returns for the years 2005 to present. For the remaining state, local and foreign jurisdictions, with few exceptions, we are no longer subject to examination by tax authorities for years before 2011 |
SEGMENT INFORMATION113
SEGMENT INFORMATION | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
SEGMENT INFORMATION | |||
SEGMENT INFORMATION | 18. SEGMENT INFORMATION Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-making group, in deciding how to allocate resources and in assessing performance. Our chief operating decision-making group consists of the Chief Executive Officer and the Chief Financial Officer. The operating segments are reviewed separately because each represents products and services that can be sold separately to our customers. Since the most recent filing of our Annual Report on Form 10-K, and in connection with the Merger, our chief operating decision-making group has determined the following to be the operating segments for which we conduct business: (a) Games, and (b) Payments. Each of these segments is monitored by our management for performance against its internal forecast and is consistent with our internal management reporting. Our chief operating decision-making group manages the business, allocates resources and measures profitability based on the Games and Payments operating segments. The Games segment provides solutions directly to gaming establishments to offer their patrons gaming entertainment related experiences including: leased gaming equipment; sales and maintenance related services of gaming equipment; gaming systems; and ancillary products and services. The Payments segment provides solutions directly to gaming establishments to offer their patrons cash access related services and products including: access to cash at gaming facilities via ATM cash withdrawals, credit card cash access transactions and point of sale debit card transactions; check-related services; fully integrated kiosks and maintenance services; compliance, audit and data software; casino credit data and reporting services and other ancillary offerings. Corporate overhead and depreciation and amortization expenses were allocated to the segments either through specific identification or based on a reasonable methodology. Our business is predominantly domestic, with no specific regional concentrations and no significant assets in foreign locations. The accounting policies of the operating segments are generally the same as those described in the summary of significant accounting policies. The following tables present segment information (in thousands): For the Three Months Ended March 31, 2015 2014 Revenues Games $ $ - Payments Total revenues $ $ Operating income Games $ $ - Payments Total operating income $ $ At March 31, At December 31, Total assets 2015 2014 Games $ $ Payments Total assets $ $ Major customers. For the three months ended March 31, 2015 and 2014, no single customer accounted for more than 10% of our revenues. Our five largest customers accounted for approximately 28% and 33% of our total revenue for the three months ended March 31, 2015 and 2014, respectively. | 18. SEGMENT INFORMATION Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-making group, in deciding how to allocate resources and in assessing performance. Our chief operating decision-making group consists of the Chief Executive Officer and the Chief Financial Officer. The operating segments are reviewed separately because each represents products and services that can be sold separately to our customers. Since the most recent filing of our Annual Report on Form 10-K, and in connection with the Merger, our chief operating decision-making group has determined the following to be the operating segments for which we conduct business: (a) Games, and (b) Payments. Each of these segments is monitored by our management for performance against its internal forecast and is consistent with our internal management reporting. Our chief operating decision-making group manages the business, allocates resources and measures profitability based on the Games and Payments operating segments. The Games segment provides solutions directly to gaming establishments to offer their patrons gaming entertainment related experiences including: leased gaming equipment; sales and maintenance related services of gaming equipment; gaming systems; and ancillary products and services. The Payments segment provides solutions directly to gaming establishments to offer their patrons cash access related services and products including: access to cash at gaming facilities via ATM cash withdrawals, credit card cash access transactions and point of sale debit card transactions; check-related services; fully integrated kiosks and maintenance services; compliance, audit and data software; casino credit data and reporting services and other ancillary offerings. Corporate overhead and depreciation and amortization expenses were allocated to the segments either through specific identification or based on a reasonable methodology. Our business is predominantly domestic, with no specific regional concentrations and no significant assets in foreign locations. The accounting policies of the operating segments are generally the same as those described in the summary of significant accounting policies. The following tables present segment information (in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, 2015 2014 2015 2014 Revenues Games $ $ — $ $ — Payments Total revenues $ $ $ $ Operating income Games $ $ — $ $ — Payments Total operating income $ $ $ $ At June 30, 2015 December 31, 2014 Total assets Games $ $ Payments Total assets $ $ Major customers. For the three and six months ended June 30, 2015 and 2014, no single customer accounted for more than 10% of our revenues. Our five largest customers accounted for approximately 28% and 30% of our total revenue for both the three and six months ended June 30, 2015 and 2014, respectively. | 20. SEGMENT INFORMATION Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision ‑making group, in deciding how to allocate resources and in assessing performance. Our chief operating decision ‑making group consists of the Chief Executive Officer and the Chief Financial Officer. The operating segments are reviewed separately because each represents products and services that can be sold separately to our customers. Since the most recent filing of our Annual Report on Form 10-K, and in connection with the Merger, our chief operating decision-making group has determined the following to be the operating segments for which we conduct business: (a) Games, and (b) Payments. Each of these segments is monitored by our management for performance against its internal forecast and is consistent with our internal management reporting. Our chief operating decision-making group manages the business, allocates resources and measures profitability based on the Games and Payments operating segments. The Games segment provides solutions directly to gaming establishments to offer their patrons gaming entertainment related experiences including: leased gaming equipment; sales and maintenance related services of gaming equipment; gaming systems; and ancillary products and services. The Payments segment provides solutions directly to gaming establishments to offer their patrons cash access related services and products including: access to cash at gaming facilities via ATM cash withdrawals, credit card cash access transactions and point of sale debit card transactions; check-related services; fully integrated kiosks and maintenance services; compliance, audit and data software; casino credit data and reporting services and other ancillary offerings. Corporate overhead and depreciation and amortization expenses were allocated to the segments either through specific identification or based on a reasonable methodology. Our business is predominantly domestic, with no specific regional concentrations and no significant assets in foreign locations. The accounting policies of the operating segments are generally the same as those described in the summary of significant accounting policies. T he following tables present segment information (in thousands): For and At the Year Ended December 31, 2014 2013 2012 Revenues Games $ $ — $ — Payments Total revenues $ $ $ Operating income Games $ $ — $ — Payments Total operating income $ $ $ Total assets Games $ $ — Payments Total assets $ $ Major customers. For the years ended December 31, 2014, 2013 and 2012, no single customer accounted for more than 10% of our revenues. Our five largest customers accounted for approximately 28% , 33% and 34% of our total revenue in 2014, 2013 and 2012, respectively. |
SUBSEQUENT EVENTS114
SUBSEQUENT EVENTS | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
SUBSEQUENT EVENTS | |||
SUBSEQUENT EVENTS | 19. SUBSEQUENT EVENTS Subsequent events were evaluated through the date of this filing. Secured Notes Refinance The terms of the Secured Notes purchase agreement stipulated that GCA must use commercially reasonable efforts to aid the purchasers in the resale of the Secured Notes. Alternatively, GCA had the ability to redeem the Secured Notes without penalty. On April 15, 2015, the Company entered into a note purchase agreement (the “Note Purchase Agreement”), among GCA, CPPIB Credit Investments III Inc. (the “Purchaser”) and Deutsche Bank Trust Company Americas, as collateral agent (the “Collateral Agent”) and issued $335.0 million in aggregate principal amount of its 7.25% Senior Secured Notes due 2021 (the “Refinanced Secured Notes”) in a private offering to the Purchaser. With the proceeds from the issuance of the Refinanced Secured Notes, GCA redeemed, in full, the Company’s outstanding Secured Notes from the note holders thereof in accordance with the terms of the indenture governing the Secured Notes. In connection with this transaction during the second quarter of 2015, we will expense approximately $12.9 million of related debt issuance costs and fees to “Loss on extinguishment of debt” associated with the redeemed Senior Secured Notes that were outstanding prior to the refinance transaction. In connection with the Refinanced Secured Notes and pursuant to the terms of the Note Purchase Agreement, the Company issued to the Purchaser a warrant to purchase 700,000 shares of Holdings’ common stock, with an exercise price equal to $9.88 per share, representing a 30% premium to the volume-weighted average price of Holdings’ common stock for the ten trading days prior to the issuance of the warrant. The warrant expires on the sixth anniversary of the date of issuance. The number of shares issuable pursuant to the warrant and the warrant exercise price are subject to adjustment for stock splits, reverse stock splits, stock dividends, mergers and certain other events. Unsecured Notes Syndication In connection with the terms of the Unsecured Notes purchase agreement for which GCA was required to use commercially reasonable efforts to aid the purchasers in the resale of the Unsecured Notes, the Company prepared an updated offering memorandum and participated in reasonable marketing efforts including road shows, to the extent required therein. The Unsecured Notes were syndicated in the second quarter of 2015. | 19. SUBSEQUENT EVENTS As of August 5, 2015, we had not identified, and were not aware of, any subsequent events for the three and six months ended June 30, 2015. | 22. SUBSEQUENT EVENTS Gain Contingency Settlement On January 14, 2014, we fil ed a complaint against certain d efendants alleging conspiracy in restraint of competition regarding interchange fees, monopolization by defendants in the relevant market, and attempted monopolization of the defendants in the relevant market. We demanded a trial by jury of all issues so triable. The defendants filed a motion to d ismiss on March 13, 2014. A settlement agreement was made as of January 16, 2015 and on January 22, 2015 the settlement agreement was executed and delivered for which we received $14.4 million in cash and recorded the settlement proceeds in the first quarter of 2015. |
GUARANTOR INFORMATION
GUARANTOR INFORMATION | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
CONDENSED CONSOLIDATING FINANCIAL INFORMATION | |||
GUARANTOR INFORMATION | 20. CONDENSED CONSOLIDATING FINANCIAL INFORMATION We conduct substantially all of our business through our U.S. and foreign subsidiaries. Everi Payments Inc.’s (formerly known as Global Cash Access, Inc.) (“Subsidiary Issuer”) obligations under the Unsecured Notes are fully and unconditionally guaranteed, subject to certain customary release provisions, on a joint and several basis by Everi Holdings Inc. (formerly known as Global Cash Access Holdings, Inc.) (“Parent”) and substantially all of our 100%-owned U.S. subsidiaries other than Subsidiary Issuer (the “Guarantor Subsidiaries” and, together with Parent, the “Guarantors” and each a “Guarantor” ). The guarantees of our Unsecured Notes will be released under the following customary circumstances: (i) the sale or disposition of all or substantially all of the assets of the Guarantor (by way of merger, consolidation, or otherwise) to a person that is not (either before or after giving effect to such transaction) Parent, Subsidiary Issuer or a restricted subsidiary; (ii) the sale or disposition of sufficient capital stock of the Guarantor to a person that is not (either before or after giving effect to such transaction) Parent, Subsidiary Issuer or a restricted subsidiary and the Guarantor ceases to be a restricted subsidiary of Subsidiary Issuer as a result of the sale or other disposition; (iii) the designation of the Guarantor as an unrestricted subsidiary in accordance with the Indenture; or (iv) the legal or covenant defeasance of the Unsecured Notes or the satisfaction and discharge of the Indenture. Presented below is condensed consolidating financial information for (a) Parent, (b) Subsidiary Issuer, (c) the Guarantor Subsidiaries and (d) our U.S. subsidiaries that are not Guarantor Subsidiaries and our foreign subsidiaries (collectively, the “Non-Guarantor Subsidiaries”) as of March 31, 2015 and for the three-month periods ended March 31, 2015 and 2014. The condensed consolidating financial information has been presented to show the nature of assets held and the results of operations and cash flows of Parent, Subsidiary Issuer, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries assuming that the guarantee structure of the Unsecured Notes had been in effect at the beginning of the periods presented. SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Three Months Ended March 31, 2015 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 141,410 $ 62,369 $ 3,830 $ (136 ) $ 207,473 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 110,589 14,371 2,063 — 127,023 Operating expenses — 4,191 11,359 427 (136 ) 15,841 Research and development — — 5,436 — — 5,436 Depreciation — 1,774 8,542 61 — 10,377 Amortization — 2,215 17,771 669 — 20,655 Total costs and expenses — 118,769 57,479 3,220 (136 ) 179,332 Operating income — 22,641 4,890 610 — 28,141 Other (income) expense Interest expense, net of interest income — 2,778 22,787 90 — 25,655 Equity in income of subsidiaries (469 ) (3,047 ) — — 3,516 — Total other (income) expense (469 ) (269 ) 22,787 90 3,516 25,655 Income (loss) from operations before tax 469 22,910 (17,897 ) 520 (3,516 ) 2,486 Income tax expense (benefit) — 8,706 (6,942 ) 253 — 2,017 Net income (loss) 469 14,204 (10,955 ) 267 (3,516 ) 469 Foreign currency translation (873 ) — — (873 ) 873 (873 ) Comprehensive (loss) income $ (404 ) $ 14,204 $ (10,955 ) $ (606 ) $ (2,643 ) $ (404 ) SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Three Months Ended March 31, 2014 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 140,321 $ 6,866 $ 3,553 $ (169 ) $ 150,571 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 111,338 2,043 (143 ) — 113,238 Operating expenses — 18,747 819 642 (169 ) 20,039 Depreciation — 1,883 1 43 — 1,927 Amortization — 2,230 — 124 — 2,354 Total costs and expenses — 134,198 2,863 666 (169 ) 137,558 Operating income — 6,123 4,003 2,887 — 13,013 Other (income) expense Interest expense, net of interest income — 2,034 — (488 ) — 1,546 Equity in income of subsidiaries (7,489 ) (5,082 ) — — 12,571 — Total other (income) expense (7,489 ) (3,048 ) — (488 ) 12,571 1,546 Income from operations before tax 7,489 9,171 4,003 3,375 (12,571 ) 11,467 Income tax expense — 1,682 1,401 895 — 3,978 Net income 7,489 7,489 2,602 2,480 (12,571 ) 7,489 Foreign currency translation 1 — — 1 (1 ) 1 Comprehensive income $ 7,490 $ 7,489 $ 2,602 $ 2,481 $ (12,572 ) $ 7,490 SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands) At March 31, 2015 Parent Subsidiary Guarantor Non- Eliminations Total ASSETS Current assets Cash and cash equivalents $ — $ 120,435 $ 13,315 $ 11,263 $ — $ 145,013 Settlement receivables — 26,950 — 2,837 — 29,787 Trade receivables, net — 6,294 32,925 1 — 39,220 Other receivables — 3,846 24,870 113 (8,437 ) 20,392 Inventory — 9,312 13,738 — — 23,050 Prepaid expenses and other assets — 7,836 2,523 8,530 — 18,889 Deferred tax asset — 2,743 6,847 — — 9,590 Intercompany balances — 32,512 155,182 1,473 (189,167 ) — Total current assets — 209,928 249,400 24,217 (197,604 ) 285,941 Non-current assets Property, equipment and leasehold improvements, net — 17,409 84,865 485 — 102,759 Goodwill — 148,278 708,922 656 — 857,856 Other intangible assets, net — 23,260 388,281 8,562 — 420,103 Other receivables, non-current — 4,411 4,182 — — 8,593 Investment in subsidiaries 233,859 149,599 — 86 (383,544 ) — Deferred tax asset, non-current — 76,460 22,467 — (98,927 ) — Other assets, non-current — 46,090 3,413 509 — 50,012 Intercompany balances — 1,131,876 — — (1,131,876 ) — Total non-current assets 233,859 1,597,383 1,212,130 10,298 (1,614,347 ) 1,439,323 Total assets $ 233,859 $ 1,807,311 $ 1,461,530 $ 34,515 $ (1,811,951 ) $ 1,725,264 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Settlement liabilities $ — $ 136,839 $ 297 $ 4,513 $ — $ 141,649 Accounts payable and accrued expenses — 85,689 35,216 1,075 (8,437 ) 113,543 Current portion of long-term debt — 10,000 — — — 10,000 Intercompany balances — 156,536 22,949 9,682 (189,167 ) — Total current liabilities — 389,064 58,462 15,270 (197,604 ) 265,192 Non-current liabilities Deferred tax liability, non-current — 1,071 156,957 — (98,927 ) 59,101 Long-term debt, less current portion — 1,161,731 — — — 1,161,731 Other accrued expenses and liabilities — 4,924 457 — — 5,381 Intercompany balances — — 1,131,876 — (1,131,876 ) — Total non-current liabilities — 1,167,726 1,289,290 — (1,230,803 ) 1,226,213 Total liabilities — 1,556,790 1,347,752 15,270 (1,428,407 ) 1,491,405 Stockholders’ Equity Common stock 91 — — — — 91 Convertible preferred stock — — — — — — Additional paid-in capital 248,491 87,202 2,269 21,110 (110,581 ) 248,491 Retained earnings (deficit) 160,621 162,623 111,509 (738 ) (273,394 ) 160,621 Accumulated other comprehensive income (loss) 696 696 — (1,127 ) 431 696 Treasury stock, at cost (176,040 ) — — — — (176,040 ) Total stockholders’ equity 233,859 250,521 113,778 19,245 (383,544 ) 233,859 Total liabilities and stockholders’ equity $ 233,859 $ 1,807,311 $ 1,461,530 $ 34,515 $ (1,811,951 ) $ 1,725,264 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Three Months Ended March 31, 2015 Parent Subsidiary Guarantor Non- Eliminations Total Cash flows from operating activities Net income (loss) $ 469 $ 14,204 $ (10,955 ) $ 267 $ (3,516 ) $ 469 Adjustments to reconcile net income (loss) to cash (used in) provided by operating activities: Depreciation and amortization — 3,989 26,313 730 — 31,032 Amortization of financing costs — 2,072 — — — 2,072 Loss on sale or disposal of assets — 2 — — — 2 Accretion of contract rights — — 2,104 — — 2,104 Provision for bad debts — — 2,266 — — 2,266 Equity in income of subsidiaries (469 ) (3,047 ) — — 3,516 — Stock-based compensation — 1,674 — — 119 1,793 Other non-cash items — — 231 — — 231 Changes in operating assets and liabilities: Net settlement receivables and liabilities — 38,671 157 (2,855 ) — 35,973 Other changes in operating assets and liabilities (5 ) 13,617 (3,350 ) (269 ) (119 ) 9,874 Net cash (used in) provided by operating activities (5 ) 71,182 16,766 (2,127 ) — 85,816 Cash flows from investing activities Capital expenditures — (2,434 ) (9,902 ) (280 ) — (12,616 ) Proceeds from sale of fixed assets — 1 — — — 1 Advances under development and placement agreements — — (1,255 ) — — (1,255 ) Repayments under development agreements — — 1,217 — — 1,217 Changes in restricted cash and cash equivalents — 59 — — — 59 Intercompany investing activities (1,023 ) 164 — (48 ) 907 — Net cash used in investing activities (1,023 ) (2,210 ) (9,940 ) (328 ) 907 (12,594 ) Cash flows from financing activities Repayments of credit facility — (17,500 ) — — — (17,500 ) Debt issuance costs — (252 ) — — — (252 ) Proceeds from exercise of stock options 1,048 — — — — 1,048 Purchase of treasury stock (20 ) — — — — (20 ) Intercompany financing activities — 1,072 — (165 ) (907 ) — Net cash provided by (used in) financing activities 1,028 (16,680 ) — (165 ) (907 ) (16,724 ) Effect of exchange rates on cash — — — (580 ) — (580 ) Cash and cash equivalents Net increase (decrease) for the period — 52,292 6,826 (3,200 ) — 55,918 Balance, beginning of the period — 68,143 6,489 14,463 — 89,095 Balance, end of the period $ — $ 120,435 $ 13,315 $ 11,263 $ — $ 145,013 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Three Months Ended March 31, 2014 Parent Subsidiary Guarantor Non- Eliminations Total Cash flows from operating activities Net income $ 7,489 $ 7,489 $ 2,602 $ 2,480 $ (12,571 ) $ 7,489 Adjustments to reconcile net income to cash (used in) provided by operating activities: Depreciation and amortization — 4,113 1 167 — 4,281 Amortization of financing costs — 471 — — — 471 Loss on sale or disposal of assets — 124 — — — 124 Provision for bad debts — — 2,014 — — 2,014 Equity in income of subsidiaries (7,489 ) (5,082 ) — — 12,571 — Stock-based compensation — 2,057 — — — 2,057 Changes in operating assets and liabilities: Net settlement receivables and liabilities — 63,982 218 (1,011 ) — 63,189 Other changes in operating assets and liabilities (51 ) 18,829 (4,360 ) (7,446 ) — 6,972 Net cash (used in) provided by operating activities (51 ) 91,983 475 (5,810 ) — 86,597 Cash flows from investing activities Capital expenditures — (2,707 ) (93 ) (225 ) — (3,025 ) Proceeds from sale of fixed assets — 192 — — — 192 Changes in restricted cash and cash equivalents — (46 ) — — — (46 ) Intercompany investing activities 378 (9,663 ) — (1,590 ) 10,875 — Net cash provided by (used in) investing activities 378 (12,224 ) (93 ) (1,815 ) 10,875 (2,879 ) Cash flows from financing activities Repayments against prior credit facility — (3,000 ) — — — (3,000 ) Proceeds from exercise of stock options 2,440 — — — — 2,440 Purchase of treasury stock (2,767 ) — — — — (2,767 ) Intercompany financing activities — 987 — 9,888 (10,875 ) — Net cash (used in) provided by financing activities (327 ) (2,013 ) — 9,888 (10,875 ) (3,327 ) Effect of exchange rates on cash — — — (79 ) — (79 ) Cash and cash equivalents Net increase for the period 77,746 382 2,184 — 80,312 Balance, beginning of the period — 100,573 2,149 11,532 — 114,254 Balance, end of the period $ — $ 178,319 $ 2,531 $ 13,716 $ — $ 194,566 | 20. CONDENSED CONSOLIDATING FINANCIAL INFORMATION We conduct substantially all of our business through our U.S. and foreign subsidiaries. Everi Payments Inc.’s (formerly known as Global Cash Access, Inc.) (“Subsidiary Issuer”) obligations under the Unsecured Notes are fully and unconditionally guaranteed, subject to certain customary release provisions, on a joint and several basis by Everi Holdings Inc. (formerly known as Global Cash Access Holdings, Inc.) (“Parent”) and substantially all of our 100%-owned U.S. subsidiaries other than Subsidiary Issuer (the “Guarantor Subsidiaries” and, together with Parent, the “Guarantors” and each a “Guarantor” ). The guarantees of our Unsecured Notes will be released under the following customary circumstances: (i) the sale or disposition of all or substantially all of the assets of the Guarantor (by way of merger, consolidation, or otherwise) to a person that is not (either before or after giving effect to such transaction) Parent, Subsidiary Issuer or a restricted subsidiary; (ii) the sale or disposition of sufficient capital stock of the Guarantor to a person that is not (either before or after giving effect to such transaction) Parent, Subsidiary Issuer or a restricted subsidiary and the Guarantor ceases to be a restricted subsidiary of Subsidiary Issuer as a result of the sale or other disposition; (iii) the designation of the Guarantor as an unrestricted subsidiary in accordance with the Indenture; or (iv) the legal or covenant defeasance of the Unsecured Notes or the satisfaction and discharge of the Indenture. Presented below is condensed consolidating financial information for (a) Parent, (b) Subsidiary Issuer, (c) the Guarantor Subsidiaries and (d) our U.S. subsidiaries that are not Guarantor Subsidiaries and our foreign subsidiaries (collectively, the “Non-Guarantor Subsidiaries”) as of June 30, 2015 and for the three- and six-month periods ended June 30, 2015 and 2014. The condensed consolidating financial information has been presented to show the nature of assets held and the results of operations and cash flows of Parent, Subsidiary Issuer, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries assuming that the guarantee structure of the Unsecured Notes had been in effect at the beginning of the periods presented. SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Three Months Ended June 30, 2015 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 139,818 $ 62,440 $ 4,256 $ (150 ) $ 206,364 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 110,659 14,375 2,188 — 127,222 Operating expenses — 18,809 7,736 452 (150 ) 26,847 Research and development — — 4,470 — — 4,470 Depreciation — 1,787 8,880 50 — 10,717 Amortization — 2,193 17,964 615 — 20,772 Total costs and expenses — 133,448 53,425 3,305 (150 ) 190,028 Operating income — 6,370 9,015 951 — 16,336 Other expense (income) Interest expense, net of interest income — 1,834 23,036 88 — 24,958 Equity in loss (income) of subsidiaries 12,741 (3,665 ) — — (9,076 ) — Loss on extinguishment of debt — 12,977 — — — 12,977 Total other expense (income) 12,741 11,146 23,036 88 (9,076 ) 37,935 (Loss) income from operations before tax (12,741 ) (4,776 ) (14,021 ) 863 9,076 (21,599 ) Income tax (benefit) expense — (3,684 ) (5,502 ) 328 — (8,858 ) Net (loss) income (12,741 ) (1,092 ) (8,519 ) 535 9,076 (12,741 ) Foreign currency translation 811 — — 811 (811 ) 811 Comprehensive (loss) income $ (11,930 ) $ (1,092 ) $ (8,519 ) $ 1,346 $ 8,265 $ (11,930 ) SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Three Months Ended June 30, 2014 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 134,198 $ 7,044 $ 3,898 $ (194 ) $ 144,946 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 104,918 2,243 2,214 — 109,375 Operating expenses — 20,000 778 677 (194 ) 21,261 Depreciation — 1,870 1 48 — 1,919 Amortization — 2,644 — 125 — 2,769 Total costs and expenses — 129,432 3,022 3,064 (194 ) 135,324 Operating income — 4,766 4,022 834 — 9,622 Other (income) expense Interest expense, net of interest income — 1,990 — 93 — 2,083 Equity in income of subsidiaries (4,724 ) (3,343 ) — — 8,067 — Total other (income) expense (4,724 ) (1,353 ) — 93 8,067 2,083 Income from operations before tax 4,724 6,119 4,022 741 (8,067 ) 7,539 Income tax expense — 1,187 1,413 215 — 2,815 Net income 4,724 4,932 2,609 526 (8,067 ) 4,724 Foreign currency translation 381 — — 381 (381 ) 381 Comprehensive income $ 5,105 $ 4,932 $ 2,609 $ 907 $ (8,448 ) $ 5,105 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Six Months Ended June 30, 2015 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 281,228 $ 124,809 $ 8,086 $ (286 ) $ 413,837 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 221,248 28,746 4,251 — 254,245 Operating expenses — 23,000 19,095 879 (286 ) 42,688 Research and development — — 9,906 — — 9,906 Depreciation — 3,561 17,422 111 — 21,094 Amortization — 4,408 35,735 1,284 — 41,427 Total costs and expenses — 252,217 110,904 6,525 (286 ) 369,360 Operating income — 29,011 13,905 1,561 — 44,477 Other expense (income) Interest expense, net of interest income — 4,612 45,823 178 — 50,613 Equity in loss (income) of subsidiaries 12,272 (6,712 ) — — (5,560 ) — Loss on extinguishment of debt — 12,977 — — — 12,977 Total other expense (income) 12,272 10,877 45,823 178 (5,560 ) 63,590 (Loss) income from operations before tax (12,272 ) 18,134 (31,918 ) 1,383 5,560 (19,113 ) Income tax expense (benefit) — 5,022 (12,444 ) 581 — (6,841 ) Net (loss) income (12,272 ) 13,112 (19,474 ) 802 5,560 (12,272 ) Foreign currency translation (62 ) — — (62 ) 62 (62 ) Comprehensive (loss) income $ (12,334 ) $ 13,112 $ (19,474 ) $ 740 $ 5,622 $ (12,334 ) SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Six Months Ended June 30, 2014 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 274,519 $ 13,910 $ 7,451 $ (363 ) $ 295,517 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 216,257 4,286 2,071 — 222,614 Operating expenses — 38,746 1,597 1,319 (363 ) 41,299 Depreciation — 3,753 2 91 — 3,846 Amortization — 4,874 — 249 — 5,123 Total costs and expenses — 263,630 5,885 3,730 (363 ) 272,882 Operating income — 10,889 8,025 3,721 — 22,635 Other (income) expense Interest expense, net of interest income — 4,024 — (395 ) — 3,629 Equity in income of subsidiaries (12,213 ) (8,425 ) — — 20,638 — Total other (income) expense (12,213 ) (4,401 ) — (395 ) 20,638 3,629 Income from operations before tax 12,213 15,290 8,025 4,116 (20,638 ) 19,006 Income tax expense — 2,869 2,814 1,110 — 6,793 Net income 12,213 12,421 5,211 3,006 (20,638 ) 12,213 Foreign currency translation 382 — — 382 (382 ) 382 Comprehensive income $ 12,595 $ 12,421 $ 5,211 $ 3,388 $ (21,020 ) $ 12,595 SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands) At June 30, 2015 Parent Subsidiary Guarantor Non- Eliminations Total ASSETS Current assets Cash and cash equivalents $ — $ 136,790 $ 16,523 $ 11,704 $ — $ 165,017 Settlement receivables — 19,721 — 3,995 — 23,716 Trade receivables, net — 5,989 35,845 — — 41,834 Other receivables — 3,183 23,736 145 (15,692 ) 11,372 Inventory — 10,075 13,378 — — 23,453 Prepaid expenses and other assets — 7,752 3,789 9,549 — 21,090 Deferred tax asset — 2,743 6,848 — — 9,591 Intercompany balances — 39,338 160,054 1,539 (200,931 ) — Total current assets — 225,591 260,173 26,932 (216,623 ) 296,073 Non-current assets Property, equipment and leasehold improvements, net — 19,467 84,649 405 — 104,521 Goodwill — 148,076 708,923 671 — 857,670 Other intangible assets, net — 22,589 373,600 7,943 — 404,132 Other receivables, non-current — 3,994 3,814 — — 7,808 Investment in subsidiaries 226,972 153,927 — 85 (380,984 ) — Deferred tax asset, non-current — 85,754 22,467 — (108,221 ) — Other assets, non-current — 32,453 3,923 539 — 36,915 Intercompany balances — 1,133,561 — — (1,133,561 ) — Total non-current assets 226,972 1,599,821 1,197,376 9,643 (1,622,766 ) 1,411,046 Total assets $ 226,972 $ 1,825,412 $ 1,457,549 $ 36,575 $ (1,839,389 ) $ 1,707,119 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Settlement liabilities $ — $ 134,604 $ 231 $ 6,376 $ — $ 141,211 Accounts payable and accrued expenses — 101,269 29,670 1,448 (15,692 ) 116,695 Current portion of long-term debt — 10,000 — — — 10,000 Intercompany balances — 161,593 30,907 8,431 (200,931 ) — Total current liabilities — 407,466 60,808 16,255 (216,623 ) 267,906 Non-current liabilities Deferred tax liability, non-current — 1,072 156,957 — (108,221 ) 49,808 Long-term debt, less current portion — 1,157,506 — — — 1,157,506 Other accrued expenses and liabilities — 4,487 440 — — 4,927 Intercompany balances — — 1,133,561 — (1,133,561 ) — Total non-current liabilities — 1,163,065 1,290,958 — (1,241,782 ) 1,212,241 Total liabilities — 1,570,531 1,351,766 16,255 (1,458,405 ) 1,480,147 Stockholders’ Equity Common stock 91 — — — — 91 Convertible preferred stock — — — — — — Additional paid-in capital 253,555 91,843 2,792 21,107 (115,742 ) 253,555 Retained earnings (deficit) 147,879 161,531 102,991 (205 ) (264,317 ) 147,879 Accumulated other comprehensive income (loss) 1,507 1,507 — (582 ) (925 ) 1,507 Treasury stock, at cost (176,060 ) — — — — (176,060 ) Total stockholders’ equity 226,972 254,881 105,783 20,320 (380,984 ) 226,972 Total liabilities and stockholders’ equity $ 226,972 $ 1,825,412 $ 1,457,549 $ 36,575 $ (1,839,389 ) $ 1,707,119 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Six Months Ended June 30, 2015 Parent Subsidiary Guarantor Non- Eliminations Total Cash flows from operating activities Net (loss) income $ (12,272 ) $ 13,112 $ (19,474 ) $ 802 $ 5,560 $ (12,272 ) Adjustments to reconcile net (loss) income to cash provided by (used in)operating activities: Depreciation and amortization — 7,969 53,157 1,395 — 62,521 Amortization of financing costs — 3,730 — — — 3,730 (Gain) loss on sale or disposal of assets — (13 ) 387 — — 374 Accretion of contract rights — — 4,092 — — 4,092 Provision for bad debts — — 4,370 — — 4,370 Loss on early extinguishment of debt — 12,977 — — — 12,977 Equity in loss (income) of subsidiaries 12,272 (6,712 ) — — (5,560 ) — Stock-based compensation — 3,432 522 — — 3,954 Other non-cash items — 76 (96 ) — — (20 ) Changes in operating assets and liabilities: Net settlement receivables and liabilities — 43,663 91 (1,970 ) — 41,784 Other changes in operating assets and liabilities 28 15,839 (10,159 ) (827 ) — 4,881 Net cash provided by (used in) operating activities 28 94,073 32,890 (600 ) — 126,391 Cash flows from investing activities Acquisitions, net of cash acquired — (2,257 ) — — — (2,257 ) Capital expenditures — (5,387 ) (23,993 ) (280 ) — (29,660 ) Proceeds from sale of fixed assets — 29 — — — 29 Repayments under development agreements — — 2,392 — — 2,392 Advances under development and placement agreements — — (1,255 ) — — (1,255 ) Changes in restricted cash and cash equivalents — 60 — — — 60 Intercompany investing activities (3,907 ) 5,423 — (106 ) (1,410 ) — Net cash used in investing activities (3,907 ) (2,132 ) (22,856 ) (386 ) (1,410 ) (30,691 ) Cash flows from financing activities Repayments of credit facility — (5,000 ) — — — (5,000 ) Repayments of secured notes — (350,000 ) — — — (350,000 ) Proceeds from issuance of secured notes — 335,000 — — — 335,000 Debt issuance costs — (1,154 ) — — — (1,154 ) Issuance of warrants 2,246 (2,246 ) — — — — Proceeds from exercise of stock options 1,673 — — — — 1,673 Purchase of treasury stock (40 ) — — — — (40 ) Intercompany financing activities — 106 — (1,516 ) 1,410 — Net cash provided by (used in) financing activities 3,879 (23,294 ) — (1,516 ) 1,410 (19,521 ) Effect of exchange rates on cash — — — (257 ) — (257 ) Cash and cash equivalents Net increase (decrease) for the period — 68,647 10,034 (2,759 ) — 75,922 Balance, beginning of the period — 68,143 6,489 14,463 — 89,095 Balance, end of the period $ — $ 136,790 $ 16,523 $ 11,704 $ — $ 165,017 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Six Months Ended June 30, 2014 Parent Subsidiary Guarantor Non- Eliminations Total Cash flows from operating activities Net income $ 12,213 $ 12,421 $ 5,211 $ 3,006 $ (20,638 ) $ 12,213 Adjustments to reconcile net income to cash (used in) provided by operating activities: Depreciation and amortization — 8,627 2 340 — 8,969 Amortization of financing costs — 942 — — — 942 Gain on sale or disposal of assets — (21 ) — — — (21 ) Provision for bad debts — — 4,229 — — 4,229 Equity in income of subsidiaries (12,213 ) (8,425 ) — — 20,638 — Stock-based compensation — 5,409 — — — 5,409 Changes in operating assets and liabilities: Net settlement receivables and liabilities — 41,722 192 896 — 42,810 Other changes in operating assets and liabilities (31 ) 17,615 (9,289 ) (7,417 ) — 878 Net cash (used in) provided by operating activities (31 ) 78,290 345 (3,175 ) — 75,429 Cash flows from investing activities Acquisitions, net of cash acquired — (11,845 ) — — — (11,845 ) Capital expenditures — (6,977 ) (203 ) (313 ) — (7,493 ) Proceeds from sale of fixed assets — 213 — — — 213 Changes in restricted cash and cash equivalents — (45 ) — — — (45 ) Intercompany investing activities 2,022 (11,622 ) — (1,594 ) 11,194 — Net cash provided by (used in) investing activities 2,022 (30,276 ) (203 ) (1,907 ) 11,194 (19,170 ) Cash flows from financing activities Repayments of prior credit facility — (7,000 ) — — — (7,000 ) Proceeds from exercise of stock options 4,613 — — — — 4,613 Purchase of treasury stock (6,604 ) — — — — (6,604 ) Intercompany financing activities — 1,188 — 10,006 (11,194 ) — Net cash (used in) provided by financing activities (1,991 ) (5,812 ) — 10,006 (11,194 ) (8,991 ) Effect of exchange rates on cash — — — 476 — 476 Cash and cash equivalents Net increase for the period — 42,202 142 5,400 — 47,744 Balance, beginning of the period — 100,573 2,149 11,532 — 114,254 Balance, end of the period $ — $ 142,775 $ 2,291 $ 16,932 $ — $ 161,998 | 23. CONDENSED We conduct substantially all of our business through our U.S. and foreign subsidiaries. Everi Payments Inc.’s (formerly known as Global Cash Access, Inc.) (“Subsidiary Issuer”) obligations under the Unsecured Notes are fully and unconditionally guaranteed, subject to certain customary release provisions, on a joint and several basis by Everi Holdings Inc. (formerly known as Global Cash Access Holdings, Inc.) (“Parent”) and substantially all of our 100%-owned U.S. subsidiaries other than Subsidiary Issuer (the “Guarantor Subsidiaries” and, together with Parent, the “Guarantors” and each a “Guarantor” ). The guarantees of our Unsecured Notes will be released under the following customary circumstances: (i) the sale or disposition of all or substantially all of the assets of the Guarantor (by way of merger, consolidation, or otherwise) to a person that is not (either before or after giving effect to such transaction) Parent, Subsidiary Issuer or a restricted subsidiary; (ii) the sale or disposition of sufficient capital stock of the Guarantor to a person that is not (either before or after giving effect to such transaction) Parent, Subsidiary Issuer or a restricted subsidiary and the Guarantor ceases to be a restricted subsidiary of Subsidiary Issuer as a result of the sale or other disposition; (iii) the designation of the Guarantor as an unrestricted subsidiary in accordance with the Indenture; or (iv) the legal or covenant defeasance of the Unsecured Notes or the satisfaction and discharge of the Indenture. Presented below is condensed consolidating financial information for (a) Parent, (b) Subsidiary Issuer, (c) the Guarantor Subsidiaries and (d) our U.S. subsidiaries that are not Guarantor Subsidiaries and our foreign subsidiaries (collectively, the “Non-Guarantor Subsidiaries”) as of December 31, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012. The condensed consolidating financial information has been presented to show the nature of assets held and the results of operations and cash flows of Parent, Subsidiary Issuer, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries assuming that the guarantee structure of the Unsecured Notes had been in effect at the beginning of the periods presented. SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Year Ended December 31, 2014 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total Revenues $ — $ 542,206 $ 35,689 $ 15,891 $ (733 ) $ 593,053 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 422,544 10,864 6,663 — 440,071 Operating expenses — 88,087 5,719 2,379 (733 ) 95,452 Research and development — — 804 — — 804 Depreciation — 7,428 1,134 183 — 8,745 Amortization — 11,180 2,454 565 — 14,199 Total costs and expenses — 529,239 20,975 9,790 (733 ) 559,271 Operating income — 12,967 14,714 6,101 — 33,782 Other (income) expense Interest expense, net of interest income — 7,675 3,290 (209 ) — 10,756 Equity in income of subsidiaries (12,140 ) (15,218 ) — — 27,358 — Loss on extinguishment of debt — 2,523 202 — — 2,725 Total other (income) expense (12,140 ) (5,020 ) 3,492 (209 ) 27,358 13,481 Income from operations before tax 12,140 17,987 11,222 6,310 (27,358 ) 20,301 Income tax expense — 2,801 3,784 1,576 — 8,161 Net income 12,140 15,186 7,438 4,734 (27,358 ) 12,140 Foreign currency translation (1,258 ) — — (1,258 ) 1,258 (1,258 ) Comprehensive income $ 10,882 $ 15,186 $ 7,438 $ 3,476 $ (26,100 ) $ 10,882 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Year Ended December 31, 2013 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total Revenues $ — $ 541,002 $ 28,277 $ 13,838 $ (673 ) $ 582,444 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 424,129 7,905 7,760 — 439,794 Operating expenses — 71,623 3,445 2,167 (673 ) 76,562 Depreciation — 7,186 1 163 — 7,350 Amortization — 9,217 — 371 — 9,588 Total costs and expenses — 512,155 11,351 10,461 (673 ) 533,294 Operating income — 28,847 16,926 3,377 — 49,150 Other (income) expense Interest expense, net of interest income — 10,342 — (77 ) — 10,265 Equity in income of subsidiaries (24,398 ) (13,596 ) — — 37,994 — Total other (income) expense (24,398 ) (3,254 ) — (77 ) 37,994 10,265 Income from operations before tax 24,398 32,101 16,926 3,454 (37,994 ) 38,885 Income tax expense — 7,703 5,924 860 — 14,487 Net income 24,398 24,398 11,002 2,594 (37,994 ) 24,398 Foreign currency translation 269 — — 269 (269 ) 269 Comprehensive income $ 24,667 $ 24,398 $ 11,002 $ 2,863 $ (38,263 ) $ 24,667 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Year Ended December 31, 2012 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total Revenues $ — $ 556,376 $ 18,623 $ 10,001 $ (514 ) $ 584,486 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 426,183 3,376 6,500 — 436,059 Operating expenses — 72,551 1,880 1,889 (514 ) 75,806 Depreciation — 6,617 5 221 — 6,843 Amortization — 9,543 — 253 — 9,796 Total costs and expenses — 514,894 5,261 8,863 (514 ) 528,504 Operating income — 41,482 13,362 1,138 — 55,982 Other (income) expense Interest expense, net of interest income — 15,591 — (72 ) — 15,519 Equity in income of subsidiaries (25,689 ) (9,546 ) — — 35,235 — Total other (income) expense (25,689 ) 6,045 — (72 ) 35,235 15,519 Income from operations before tax 25,689 35,437 13,362 1,210 (35,235 ) 40,463 Income tax expense — 9,748 4,677 349 — 14,774 Net income 25,689 25,689 8,685 861 (35,235 ) 25,689 Foreign currency translation 218 — — 218 (218 ) 218 Comprehensive income $ 25,907 $ 25,689 $ 8,685 $ 1,079 $ (35,453 ) $ 25,907 SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands) At December 31, 2014 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total ASSETS Current assets Cash and cash equivalents $ — $ 68,143 $ 6,489 $ 14,463 $ — $ 89,095 Settlement receivables — 40,157 — 3,131 — 43,288 Trade Receivables, net — 6,578 31,116 3 — 37,697 Other receivables — 3,416 16,992 145 — 20,553 Inventory — 10,595 16,568 — — 27,163 Prepaid expenses and other assets — 7,143 2,821 9,024 — 18,988 Deferred tax asset — 2,743 6,848 — — 9,591 Intercompany balances — 18,038 151,179 1,623 (170,840 ) — Total current assets — 156,813 232,013 28,389 (170,840 ) 246,375 Non-current assets Property, equipment and leasehold improvements, net — 17,864 87,898 323 — 106,085 Goodwill — 148,278 708,922 713 — 857,913 Other intangible assets, net — 24,771 402,816 9,198 — 436,785 Other receivables, non-current — 4,411 4,773 — — 9,184 Investment in subsidiaries 231,473 147,195 — 86 (378,754 ) — Deferred tax asset, non-current — 78,229 — — (78,229 ) — Other assets, non-current — 47,508 3,366 69 — 50,943 Intercompany balances — 1,130,380 — — (1,130,380 ) — Total non-current assets 231,473 1,598,636 1,207,775 10,389 (1,587,363 ) 1,460,910 Total assets $ 231,473 $ 1,755,449 $ 1,439,788 $ 38,778 $ (1,758,203 ) $ 1,707,285 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Settlement liabilities $ — $ 111,375 $ 140 $ 7,642 $ — $ 119,157 Accounts payable and accrued expenses — 61,544 41,395 1,729 — 104,668 Current portion of long-term debt — 10,000 — — — 10,000 Intercompany balances — 152,802 8,159 9,879 (170,840 ) — Total current liabilities — 335,721 49,694 19,250 (170,840 ) 233,825 Non-current liabilities Deferred tax liability, non-current — 1,072 134,490 — (78,229 ) 57,333 Long-term debt, less current portion — 1,178,787 — — — 1,178,787 Other accrued expenses and liabilities — 5,377 490 — — 5,867 Intercompany balances — — 1,130,380 — (1,130,380 ) — Total non-current liabilities — 1,185,236 1,265,360 — (1,208,609 ) 1,241,987 Total liabilities — 1,520,957 1,315,054 19,250 (1,379,449 ) 1,475,812 Stockholders’ Equity Common stock 90 — — — — 90 Additional paid-in capital 245,682 69,654 2,269 21,115 (93,038 ) 245,682 Retained earnings (deficit) 160,152 163,269 122,465 (1,006 ) (284,728 ) 160,152 Accumulated other comprehensive income (loss) 1,569 1,569 — (581 ) (988 ) 1,569 Treasury stock, at cost (176,020 ) — — — — (176,020 ) Total stockholders’ equity 231,473 234,492 124,734 19,528 (378,754 ) 231,473 Total liabilities and stockholders’ equity $ 231,473 $ 1,755,449 $ 1,439,788 $ 38,778 $ (1,758,203 ) $ 1,707,285 SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands) At December 31, 2013 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total ASSETS Current assets Cash and cash equivalents $ — $ 100,573 $ 2,149 $ 11,532 $ — $ 114,254 Settlement receivables — 34,458 — 3,807 — 38,265 Trade receivables, net — 9,030 2,622 6 — 11,658 Other receivables — 4,451 — 154 — 4,605 Inventory — 9,413 — — — 9,413 Prepaid expenses and other assets — 10,300 20 6,354 — 16,674 Deferred tax asset — 3,102 — — — 3,102 Intercompany balances — 20,005 135,542 — (155,547 ) — Total current assets — 191,332 140,333 21,853 (155,547 ) 197,971 Non-current assets Property, equipment and leasehold improvements, net — 18,282 56 372 — 18,710 Goodwill — 139,839 39,470 775 — 180,084 Other intangible assets, net — 30,229 499 807 — 31,535 Other receivables, non-current — 699 — — — 699 Investment in subsidiaries 218,604 113,350 — — (331,954 ) — Deferred tax asset, non-current — 88,253 — — (311 ) 87,942 Other assets, non-current — 10,311 — 75 — 10,386 Intercompany balances — 61,936 — 1,572 (63,508 ) — Total non-current assets 218,604 462,899 40,025 3,601 (395,773 ) 329,356 Total assets $ 218,604 $ 654,231 $ 180,358 $ 25,454 $ (551,320 ) $ 527,327 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Settlement liabilities $ — $ 137,089 $ — $ 7,933 $ — $ 145,022 Accounts payable and accrued expenses — 51,324 1,398 879 — 53,601 Current portion of long-term debt — 1,030 — — — 1,030 Intercompany balances — 135,542 — 20,005 (155,547 ) — Total current liabilities — 324,985 1,398 28,817 (155,547 ) 199,653 Non-current liabilities Deferred tax liability, non-current — — — 311 (311 ) — Long-term debt, less current portion — 101,970 — — — 101,970 Other accrued expenses and liabilities — 7,100 — — — 7,100 Intercompany balances — 1,572 61,936 — (63,508 ) — Total non-current liabilities — 110,642 61,936 311 (63,819 ) 109,070 Total liabilities — 435,627 63,334 29,128 (219,366 ) 308,723 Stockholders’ Equity Common stock 89 — — — — 89 Additional paid-in capital 231,516 67,694 2,000 1,808 (71,502 ) 231,516 Retained earnings (deficit) 148,012 148,083 115,024 (5,738 ) (257,369 ) 148,012 Accumulated other comprehensive income 2,827 2,827 — 256 (3,083 ) 2,827 Treasury stock, at cost (163,840 ) — — — — (163,840 ) Total stockholders’ equity (deficit) 218,604 218,604 117,024 (3,674 ) (331,954 ) 218,604 Total liabilities and stockholders’ equity $ 218,604 $ 654,231 $ 180,358 $ 25,454 $ (551,320 ) $ 527,327 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2014 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total Cash flows from operating activities Net income $ 12,140 $ 15,186 $ 7,438 $ 4,734 $ (27,358 ) $ 12,140 Adjustments to reconcile net income to cash (used in) provided by operating activities: Depreciation and amortization — 18,608 3,588 748 — 22,944 Amortization of financing costs — 2,035 — — — 2,035 Provision for bad debts — — 8,991 — — 8,991 Impairment Loss — 3,129 — — — 3,129 Loss on early extinguishment of debt — 2,523 202 — — 2,725 Equity in income of subsidiaries (12,140 ) (15,218 ) — — 27,358 — Stock-based compensation — 8,849 27 — — 8,876 Other non-cash items — 52 284 1 — 337 Changes in operating assets and liabilities: Net settlement receivables and liabilities — (31,414 ) 141 594 — (30,679 ) Other changes in operating assets and liabilities (47 ) 34,774 (20,047 ) (20,647 ) — (5,967 ) Net cash (used in) provided by operating activities (47 ) 38,524 624 (14,570 ) — 24,531 Cash flows from investing activities Acquisitions, net of cash acquired — (11,845 ) (1,056,155 ) — — (1,068,000 ) Capital expenditures — (5,465 ) (3,464 ) (9,092 ) — (18,021 ) Repayments under development agreements — — 276 — — 276 Changes in restricted cash and cash equivalents — (102 ) — — — (102 ) Intercompany investing activities 6,889 (1,085,709 ) — (1,425 ) 1,080,245 — Net cash provided by (used in) investing activities 6,889 (1,103,121 ) (1,059,343 ) (10,517 ) 1,080,245 (1,085,847 ) Cash flows from financing activities Repayments of prior credit facility — (103,000 ) — — — (103,000 ) Proceeds from long-term debt — 1,200,000 — — — 1,200,000 Debt issuance costs — (52,735 ) — — — (52,735 ) Proceeds from exercise of stock options 5,338 — — — — 5,338 Purchase of treasury stock (12,180 ) — — — — (12,180 ) Intercompany financing activities — (12,098 ) 1,063,059 29,284 (1,080,245 ) — Net cash (used in) provided by financing activities (6,842 ) 1,032,167 1,063,059 29,284 (1,080,245 ) 1,037,423 Effect of exchange rates on cash — — — (1,266 ) — (1,266 ) Cash and cash equivalents Net (decrease) increase for the period — (32,430 ) 4,340 2,931 — (25,159 ) Balance, beginning of the period — 100,573 2,149 11,532 — 114,254 Balance, end of the period $ — $ 68,143 $ 6,489 $ 14,463 $ — $ 89,095 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2013 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total Cash flows from operating activities Net income $ 24,398 $ 24,398 $ 11,002 $ 2,594 $ (37,994 ) $ 24,398 Adjustments to reconcile net income to cash provided by (used in) operating activities: Depreciation and amortization — 16,403 1 534 — 16,938 Amortization of financing costs — 1,793 — — — 1,793 Provision for bad debts — — 7,874 — — 7,874 Equity in income of subsidiaries (24,398 ) (13,596 ) — — 37,994 — Stock-based compensation — 5,078 — — — 5,078 Other non-cash items — 180 — (2 ) — 178 Changes in operating assets and liabilities: Net settlement receivables and liabilities — (44,264 ) — (1,729 ) — (45,993 ) Other changes in operating assets and liabilities 19 13,391 (18,880 ) (462 ) — (5,932 ) Net cash provided by (used in) operating activities 19 3,383 (3 ) 935 — 4,334 Cash flows from investing activities Capital expenditures — (13,364 ) (330 ) (206 ) — (13,900 ) Changes in restricted cash and cash equivalents — (90 ) — — — (90 ) Intercompany investing activities 9,900 (4,676 ) — — (5,224 ) — Net cash provided by (used in) investing activities 9,900 (18,130 ) (330 ) (206 ) (5,224 ) (13,990 ) Cash flows from financing activities Repayments of prior credit facility — (18,500 ) — — — (18,500 ) Debt issuance costs — (764 ) — — — (764 ) Proceeds from exercise of stock options 8,431 — — — — 8,431 Purchase of treasury stock (18,350 ) — — — — (18,350 ) Intercompany financing activities — (7,056 ) 2,000 (168 ) 5,224 — Net cash (used in) provided by financing activities (9,919 ) (26,320 ) 2,000 (168 ) 5,224 (29,183 ) Effect of exchange rates on cash — — — 73 — 73 Cash and cash equivalents Net (decrease) increase for the period — (41,067 ) 1,667 634 — (38,766 ) Balance, beginning of the period — 141,640 482 10,898 — 153,020 Balance, end of the period $ — $ 100,573 $ 2,149 $ 11,532 $ — $ 114,254 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2012 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total Cash flows from operating activities Net income $ 25,689 $ 25,689 $ 8,685 $ 861 $ (35,235 ) $ 25,689 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization — 16,160 5 474 — 16,639 Amortization of financing costs — 1,485 — — — 1,485 Provision for bad debts — 2,531 2,651 — — 5,182 Equity (income) loss (25,689 ) (9,546 ) — — 35,235 — Stock-based compensation — 6,655 — — — 6,655 Other non-cash items — 95 — — — 95 Changes in operating assets and liabilities: Net settlement receivables and liabilities — 88,354 — 2,999 — 91,353 Other changes in operating assets and liabilities 29 3,738 (10,705 ) 17,328 — 10,390 Net cash provided by operating activities 29 135,161 636 21,662 — 157,488 Cash flows from investing activities Capital expenditures — (11,546 ) (225 ) (1,015 ) — (12,786 ) Changes in restricted cash and cash equivalents — 255 — — — 255 Intercompany investing activities (6,422 ) 20,336 — — (13,914 ) — Net cash (used in) provided by investing activities (6,422 ) 9,045 (225 ) (1,015 ) (13,914 ) (12,531 ) Cash flows from financing activities Repayments of prior credit facility — (52,500 ) — — — (52,500 ) Debt issuance costs — (676 ) — — — (676 ) Proceeds from exercise of stock options 6,655 — — — — 6,655 Purchase of treasury stock (262 ) — — — — (262 ) Intercompany financing activities — 2,844 — (16,758 ) 13,914 — Net cash provided by (used in) financing activities 6,393 (50,332 ) — (16,758 ) 13,914 (46,783 ) Effect of exchange rates on cash — — — (689 ) — (689 ) Cash and cash equivalents Net increase for the period — 93,874 411 3,200 — 97,485 Balance, beginning of the period — 47,766 71 7,698 — 55,535 Balance, end of the period $ — $ 141,640 $ 482 $ 10,898 $ — $ 153,020 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Six Months Ended June 30, 2015 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 281,228 $ 124,809 $ 8,086 $ (286 ) $ 413,837 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 221,248 28,746 4,251 — 254,245 Operating expenses — 23,000 19,095 879 (286 ) 42,688 Research and development — — 9,906 — — 9,906 Depreciation — 3,561 17,422 111 — 21,094 Amortization — 4,408 35,735 1,284 — 41,427 Total costs and expenses — 252,217 110,904 6,525 (286 ) 369,360 Operating income — 29,011 13,905 1,561 — 44,477 Other expense (income) Interest expense, net of interest income — 4,612 45,823 178 — 50,613 Equity in loss (income) of subsidiaries 12,272 (6,712 ) — — (5,560 ) — Loss on extinguishment of debt — 12,977 — — — 12,977 Total other expense (income) 12,272 10,877 45,823 178 (5,560 ) 63,590 (Loss) income from operations before tax (12,272 ) 18,134 (31,918 ) 1,383 5,560 (19,113 ) Income tax expense (benefit) — 5,022 (12,444 ) 581 — (6,841 ) Net (loss) income (12,272 ) 13,112 (19,474 ) 802 5,560 (12,272 ) Foreign currency translation (62 ) — — (62 ) 62 (62 ) Comprehensive (loss) income $ (12,334 ) $ 13,112 $ (19,474 ) $ 740 $ 5,622 $ (12,334 ) SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Six Months Ended June 30, 2014 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 274,519 $ 13,910 $ 7,451 $ (363 ) $ 295,517 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 216,257 4,286 2,071 — 222,614 Operating expenses — 38,746 1,597 1,319 (363 ) 41,299 Depreciation — 3,753 2 91 — 3,846 Amortization — 4,874 — 249 — 5,123 Total costs and expenses — 263,630 5,885 3,730 (363 ) 272,882 Operating income — 10,889 8,025 3,721 — 22,635 Other (income) expense Interest expense, net of interest income — 4,024 — (395 ) — 3,629 Equity in income of subsidiaries (12,213 ) (8,425 ) — — 20,638 — Total other (income) expense (12,213 ) (4,401 ) — (395 ) 20,638 3,629 Income from operations before tax 12,213 15,290 8,025 4,116 (20,638 ) 19,006 Income tax expense — 2,869 2,814 1,110 — 6,793 Net income 12,213 12,421 5,211 3,006 (20,638 ) 12,213 Foreign currency translation 382 — — 382 (382 ) 382 Comprehensive income $ 12,595 $ 12,421 $ 5,211 $ 3,388 $ (21,020 ) $ 12,595 |
BASIS OF PRESENTATION AND SU116
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Basis of Presentation | Basis of Presentation Our unaudited condensed consolidated financial statements included herein have been prepared by us pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Some of the information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States have been condensed or omitted pursuant to such rules and regulations, although we believe the disclosures are adequate to make the information presented not misleading. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary for a fair presentation of results for the interim periods have been made. The results for the three months ended March 31, 2015 are not necessarily indicative of results to be expected for the full fiscal year. The condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. There have been no changes to our basis of presentation and significant accounting policies since the most recent filing of our Annual Report on Form 10-K, except for the following: | Basis of Presentation Our unaudited condensed consolidated financial statements included herein have been prepared by us pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Some of the information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States have been condensed or omitted pursuant to such rules and regulations, although we believe the disclosures are adequate to make the information presented not misleading. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary for a fair presentation of results for the interim periods have been made. The results for the three and six months ended June 30, 2015 are not necessarily indicative of results to be expected for the full fiscal year. The condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. There have been no changes to our basis of presentation and significant accounting policies since the most recent filing of our Annual Report on Form 10-K, except for the following: | |
Cost of Revenues (exclusive of depreciation and amortization) | Cost of Revenues (exclusive of depreciation and amortization) The cost of revenues (exclusive of depreciation and amortization) represents the direct costs required to perform revenue generating transactions. The principal costs included within cost of revenues (exclusive of depreciation and amortization) are field service and network operations personnel, those direct costs related to the inventory sold for electronic gaming machines (“EGMs”), fully integrated kiosks and system sales, commissions paid to gaming establishments, interchange fees paid to credit and debit card networks and transaction processing fees to our transaction processor. | Cost of Revenues (exclusive of depreciation and amortization) The cost of revenues (exclusive of depreciation and amortization) represents the direct costs required to perform revenue generating transactions. The principal costs included within cost of revenues (exclusive of depreciation and amortization) are field service and network operations personnel, those direct costs related to the inventory sold for electronic gaming machines (“EGMs”), fully integrated kiosks and system sales, commissions paid to gaming establishments, interchange fees paid to credit and debit card networks and transaction processing fees to our transaction processor. | Cost of Revenues (exclusive of depreciation and amortization) The cost of revenues (exclusive of depreciation and amortization) represents the direct costs required to perform revenue generating transactions. The principal costs included within cost of revenues (exclusive of depreciation and amortization) are commissions paid to gaming establishments, interchange fees paid to credit and debit card networks, transaction processing fees to our transaction processor, inventory and related costs associated with the sale of our fully integrated kiosks, electronic gaming machines and system sales, check cashing warranties, field service and network operations personnel. |
Research and Development Costs | Research and Development Costs We conduct research and development activities primarily to develop and enhance our Games and Payments platforms, as well as game content and features. We believe our ability to deliver differentiated, appealing products and services to the marketplace is based in part on our research and development investments, and we expect to continue to make such investments in the future. These research and development costs consist primarily of salaries and benefits, consulting fees, and game lab testing fees. Once the technological feasibility of a project has been established, it is transferred from research to development, and capitalization of development costs continues until the product is available for general release. | Research and Development Costs We conduct research and development activities primarily to develop and enhance our Games and Payments platforms, as well as game content and features. We believe our ability to deliver differentiated, appealing products and services to the marketplace is based in part on our research and development investments, and we expect to continue to make such investments in the future. These research and development costs consist primarily of salaries and benefits, consulting fees, and game lab testing fees. Once the technological feasibility of a project has been established, it is transferred from research to development, and capitalization of development costs continues until the product is available for general release. | Research and Development Costs We conduct research and development activities primarily to develop new gaming systems, gaming engines, casino data management systems, casino central monitoring systems, video lottery outcome determination systems, gaming platforms, and gaming content and to add enhancements to our existing product lines. We believe our ability to deliver differentiated, appealing products and services to the marketplace is based in our research and development investments, and we expect to continue to make such investments in the future. These research and development costs consist primarily of salaries and benefits, consulting fees, game lab testing fees, and an allocation of corporate facilities costs related to these activities. Once the technological feasibility of a project has been established, it is transferred from research to development, and capitalization of development costs begins until the product is available for general release. Research and development costs were $0.8 million for the year ended December 31, 2014. As research and development costs relate to our Games segment which was acquired in 2014, there were no material research and development costs for the years ended December 31, 2013 and 2012. |
Advertising, Marketing and Promotional Costs | Advertising, Marketing and Promotional Costs We expense advertising, marketing and promotional costs as incurred. Total advertising, marketing and promotional costs, included in operating expenses in the Condensed Consolidated Statements of Income and Comprehensive Income, were $0.3 million and $0.2 million for the three months ended March 31, 2015 and 2014, respectively. | Advertising, Marketing and Promotional Costs We expense advertising, marketing and promotional costs as incurred. Total advertising, marketing and promotional costs, included in operating expenses in the Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income, were $0.5 million and $0.8 million and $0.2 million and $0.4 million for the three and six months ended June 30, 2015 and 2014, respectively. | Advertising, Marketing and Promotional Costs We expense advertising, marketing and promotional costs as incurred. Total advertising, marketing and promotional costs, included in operating expenses in the consolidated statements of income and comprehensive income, were $1.1 million, $0.7 million and $0.7 million for the years ended December 31, 2014, 2013 and 2012, respectively. |
Fair Values of Financial Instruments | Fair Values of Financial Instruments The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Fair value estimates are made at a specific point in time, based upon relevant market information about the financial instrument. In determining fair value, we use a hierarchy that includes three levels which are based on the extent to which inputs used in measuring fair value are observable in the market. Level 1 indicates that the fair value is determined by using quoted prices in active markets for identical investments. Level 2 indicates that the fair value is determined using observable pricing inputs other than quoted prices in active markets such as models or other valuation methodologies. Level 3 indicates that the fair value is determined using pricing inputs that are unobservable for the investment and include situations where there is little, if any, market activity for the investment. Significant management estimates and judgment are used in the determination of the fair value of level 3 pricing inputs. The carrying amount of cash and cash equivalents, settlement receivables, trade receivables, other receivables, settlement liabilities, accounts payable and accrued expenses approximates fair value due to the short-term maturities of these instruments. The fair value of our borrowings are estimated based on various inputs to determine a market price, such as: market demand and supply, size of tranche, maturity and similar instruments trading in more active markets. The following table presents the fair value and carrying value of our long-term debt as of March 31, 2015 (amounts in thousands): Level of Hierarchy Fair Value Carrying Amount Term loan 1 $ $ Senior secured notes 3 $ $ Senior unsecured notes 3 $ $ The senior secured and senior unsecured notes were both fair valued using a Level 3 input by evaluating the trading activities of similar debt instruments as there was no market activity as of March 31, 2015. At December 31, 2014, the fair value of our long-term debt was considered to approximate the carrying amount as our acquisition of Multimedia occurred on December 19, 2014, for which our long-term debt was incurred. | Fair Values of Financial Instruments The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Fair value estimates are made at a specific point in time, based upon relevant market information about the financial instrument. In determining fair value, we use a hierarchy that includes three levels which are based on the extent to which inputs used in measuring fair value are observable in the market. Level 1 indicates that the fair value is determined by using quoted prices in active markets for identical investments. Level 2 indicates that the fair value is determined using observable pricing inputs other than quoted prices in active markets such as models or other valuation methodologies. Level 3 indicates that the fair value is determined using pricing inputs that are unobservable for the investment and include situations where there is little, if any, market activity for the investment. Significant management estimates and judgment are used in the determination of the fair value of level 3 pricing inputs. The carrying amount of cash and cash equivalents, settlement receivables, trade receivables, other receivables, settlement liabilities, accounts payable and accrued expenses approximates fair value due to the short-term maturities of these instruments. The fair value of our borrowings are estimated based on various inputs to determine a market price, such as: market demand and supply, size of tranche, maturity and similar instruments trading in more active markets. The following table presents the fair value and carrying value of our long-term debt as of June 30, 2015 (amounts in thousands): Level of Carrying Hierarchy Fair Value Value Term loan $ $ Senior secured notes $ $ Senior unsecured notes $ $ The senior secured notes were fair valued using a Level 3 input by evaluating the trading activities of similar debt instruments as there was no market activity as of June 30, 2015. The senior unsecured notes were syndicated in April 2015 and transitioned from level 3 to level 1 on the fair value hierarchy as of June 30, 2015. At December 31, 2014, the fair value of our long-term debt was considered to approximate the carrying amount as our acquisition of Multimedia occurred on December 19, 2014, for which our long-term debt was incurred. | Fair Values of Financial Instruments The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Fair value estimates are made at a specific point in time, based upon relevant market information about the financial instrument. In determining fair value, we use a hierarchy that includes three levels which are based on the extent to which inputs used in measuring fair value are observable in the market. Level 1 indicates that the fair value is determined by using quoted prices in the active markets for identical investments. Level 2 indicates that the fair value is determined using pricing inputs other than quoted prices in active markets such as models or other valuation methodologies. Level 3 indicates that the fair value is determined using pricing inputs that are unobservable for the investment and include situations where there is little, if any, market activity for the investment. Significant management estimates and judgment are used in the determination of the fair value of level 3 pricing inputs. The carrying amount of cash and cash equivalents, settlement receivables, trade receivables, other receivables, settlement liabilities, accounts payable and accrued expenses approximates fair value due to the short-term maturities of these instruments. The fair value of our borrowings are estimated based on various inputs to determine a market price, such as: market demand and supply, size of tranche, maturity and similar instruments trading in more active markets. As of December 31, 2014, the fair value of our long-term debt was considered to approximate the carrying amount of each instrument since the Merger occurred on December 19, 2014. As of December 31, 2013, the fair value of our Prior Credit Facility was approximately $104.0 million as compared to a carrying amount of $103.0 million using a Level 2 input. |
Business segment | Business Segments During the first quarter of 2015, we changed our organizational structure as part of our transformation to a Games and Payments company providing solutions to the gaming industry. As a result, information that our chief operating decision-making group regularly reviews for purposes of allocating resources and assessing performance changed. Therefore, beginning in the first quarter of 2015, we are reporting our financial performance based on our new segments described in “Note 18 – Segment Information”. We have presented prior period amounts to conform to the way we now internally manage and monitor segment performance beginning in 2015. This change had no impact on our condensed consolidated financial statements. | Business Segments During the first quarter of 2015, we changed our organizational structure as part of our transformation to a Games and Payments company providing solutions to the gaming industry. As a result, information that our chief operating decision-making group regularly reviews for purposes of allocating resources and assessing performance changed. Therefore, beginning in the first quarter of 2015, we are reporting our financial performance based on our new segments described in “Note 18. Segment Information”. We have presented prior period amounts to conform to the way we now internally manage and monitor segment performance beginning in 2015. This change had no impact on our condensed consolidated financial statements. | |
Recent Accounting Guidance | Recent Accounting Guidance Recent Accounting Guidance Not Yet Adopted In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-03, which provides guidance to simplify the presentation of debt issuance costs. These amendments require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. The pronouncement is effective for annual periods ending after December 15, 2015, and interim periods within those fiscal years, and early adoption is permitted for financial statements that have not been previously issued. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In January 2015, the FASB issued ASU No. 2015-01, which requires that an entity separately classify, present and disclose extraordinary events and transactions. The pronouncement is effective for annual periods ending after December 15, 2015. A reporting entity also may apply the amendments retrospectively to all prior periods presented in the financial statements. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In August 2014, the FASB issued ASU No. 2014-15, which provides guidance on determining when and how reporting entities must disclose going-concern uncertainties in their financial statements. The pronouncement is effective for annual periods ending after December 15, 2016, and interim periods thereafter, and early adoption is permitted. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In June 2014, the FASB issued ASU No. 2014-12, which requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. The standard is effective for annual reporting periods beginning after December 15, 2015, with early adoption permitted. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In May 2014, the FASB issued ASU No. 2014-09, which creates FASB Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers” and supersedes ASC Topic 605, “Revenue Recognition”. The guidance replaces industry specific guidance and establishes a single five-step model to identify and recognize revenue. The core principle of the guidance is that an entity should recognize revenue upon transfer of control of promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. Additionally, the guidance requires the entity to disclose further quantitative and qualitative information regarding the nature and amount of revenues arising from contracts with customers, as well as other information about the significant judgments and estimates used in recognizing revenues from contracts with customers. This guidance is effective for interim and annual reporting periods beginning after December 15, 2016. Early application is not permitted. This guidance may be adopted retrospectively or under a modified retrospective method where the cumulative effect is recognized at the date of initial application. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within our Notes to the Condensed Consolidated Financial Statements. | Recent Accounting Guidance Recent Accounting Guidance Not Yet Adopted In July 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2015-11, which provides guidance on the measurement of inventory value. The amendments require an entity to measure in scope inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. The amendments do not apply to inventory that is measured using last-in, first-out (LIFO) or the retail inventory method. The amendments apply to all other inventory, which includes inventory that is measured using first-in, first-out (FIFO) or average cost. The pronouncement is effective for annual periods beginning after December 15, 2016, and interim periods within those fiscal years, and early adoption is permitted. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-03, which provides guidance to simplify the presentation of debt issuance costs. These amendments require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. The pronouncement is effective for annual periods beginning after December 15, 2015, and interim periods within those fiscal years, and early adoption is permitted for financial statements that have not been previously issued. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In January 2015, the FASB issued ASU No. 2015-01, which requires that an entity separately classify, present and disclose extraordinary events and transactions. The pronouncement is effective for annual periods ending after December 15, 2015. A reporting entity also may apply the amendments retrospectively to all prior periods presented in the financial statements. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In August 2014, the FASB issued ASU No. 2014-15, which provides guidance on determining when and how reporting entities must disclose going-concern uncertainties in their financial statements. The pronouncement is effective for annual periods ending after December 15, 2016, and interim periods thereafter, and early adoption is permitted. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In June 2014, the FASB issued ASU No. 2014-12, which requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. The standard is effective for annual reporting periods beginning after December 15, 2015, with early adoption permitted. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In May 2014, the FASB issued ASU No. 2014-09, which creates FASB Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers” and supersedes ASC Topic 605, “Revenue Recognition”. The guidance replaces industry specific guidance and establishes a single five-step model to identify and recognize revenue. The core principle of the guidance is that an entity should recognize revenue upon transfer of control of promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. Additionally, the guidance requires the entity to disclose further quantitative and qualitative information regarding the nature and amount of revenues arising from contracts with customers, as well as other information about the significant judgments and estimates used in recognizing revenues from contracts with customers. This guidance is effective for interim and annual reporting periods beginning after December 15, 2016. Early application is not permitted. This guidance may be adopted retrospectively or under a modified retrospective method where the cumulative effect is recognized at the date of initial application. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within our Notes to the Condensed Consolidated Financial Statements | Recent Accounting Guidance Recently Adopted Accounting Guidance In November 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update (“ASU”) No. 2014-17, which provides guidance on whether and at what threshold an acquired entity that is a business or nonprofit activity can apply pushdown accounting in its separate financial statements. The pronouncement was effective on November 18, 2014. There was no impact of the adoption of ASU No. 2014-17 as we do not apply push-down accounting to our acquired subsidiaries. Recent Accounting Guidance Not Yet Adopted In August 2014, the FASB issued ASU No. 2014-15, which provides guidance on determining when and how reporting entities must disclose going-concern uncertainties in their financial statements. The pronouncement is effective for annual periods ending after December 15, 2016, and interim periods thereafter, and early adoption is permitted. We are currently evaluating the impact of adopting this guidance on our Consolidated Financial Statements and disclosures included within Notes to Consolidated Financial Statements. In June 2014, the FASB issued ASU No. 2014-12, which requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. The standard is effective for annual reporting periods beginning after December 15, 2015, with early adoption permitted. We are currently evaluating the impact of adopting this guidance on our Consolidated Financial Statements and disclosures included within Notes to Consolidated Financial Statements. In May 2014, the FASB issued ASU No. 2014-09, which creates FASB ASC Topic 606, “Revenue from Contracts with Customers” and supersedes ASC Topic 605, “Revenue Recognition”. The guidance replaces industry-specific guidance and establishes a single five-step model to identify and recognize revenue. The core principle of the guidance is that an entity should recognize revenue upon transfer of control of promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. Additionally, the guidance requires the entity to disclose further quantitative and qualitative information regarding the nature and amount of revenues arising from contracts with customers, as well as other information about the significant judgments and estimates used in recognizing revenues from contracts with customers. This guidance is effective for interim and annual reporting periods beginning after December 15, 2016. Early application is not permitted. This guidance may be adopted retrospectively or under a modified retrospective method where the cumulative effect is recognized at the date of initial application. We are currently evaluating the impact of adopting this guidance on our Consolidated Financial Statements and disclosures included within our Notes to Consolidated Financial Statements |
BASIS OF PRESENTATION AND SU117
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended | 6 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Schedule of fair value and carrying value of our borrowings | The following table presents the fair value and carrying value of our long-term debt as of March 31, 2015 (amounts in thousands): Level of Hierarchy Fair Value Carrying Amount Term loan 1 $ $ Senior secured notes 3 $ $ Senior unsecured notes 3 $ $ | The following table presents the fair value and carrying value of our long-term debt as of June 30, 2015 (amounts in thousands): Level of Carrying Hierarchy Fair Value Value Term loan $ $ Senior secured notes $ $ Senior unsecured notes $ $ |
BUSINESS COMBINATIONS (Table118
BUSINESS COMBINATIONS (Tables) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
BUSINESS COMBINATIONS | |||
Schedule of total purchase consideration | The total purchase consideration for Multimedia was as follows (in thousands, except per share amounts): Amount Purchase consideration Total purchase price for Multimedia Games common stock (29,948 shares at $36.50 per share) $ Payment in respect to Multimedia Games outstanding equity awards Total merger consideration Repayments of Multimedia Games debt and other obligations Less: Multimedia Games outstanding cash at acquisition date Total purchase consideration $ | The total purchase consideration for Multimedia was as follows (in thousands, except per share amounts): Amount Purchase consideration Total purchase price for Multimedia Games common stock ( 29,948 shares at $36.50 per share) $ Payment in respect to Multimedia Games outstanding equity awards Total merger consideration Repayments of Multimedia Games debt and other obligations Less: Multimedia Games outstanding cash at acquisition date Total purchase consideration $ | The total purchase consideration for Multimedia Games was as follows (in thousands, except per share amounts): Amount Purchase consideration Total purchase price for Multimedia Games common stock (29,948 shares at $36.50 per share) $ Payment in respect to Multimedia Games outstanding equity awards Total merger consideration Repayments of Multimedia Games debt and other obligations Less: Multimedia Games outstanding cash at acquisition date Total purchase consideration $ |
Summary of estimated fair values of the assets acquired and liabilities assumed at the date of acquisition | The information below reflects the preliminary purchase price allocation (in thousands): Amount Purchase price allocation Current assets $ Property, equipment and leasehold improvements, net Goodwill Other intangible assets, net Other receivables, non-current Other assets, long-term Deferred tax asset, non-current Total assets Current liabilities Deferred tax liability, non-current Other accrued expenses and liabilities Total liabilities Net assets acquired $ | The information below reflects the preliminary purchase price allocation (in thousands): Amount Purchase price allocation Current assets $ Property, equipment and leasehold improvements, net Goodwill Other intangible assets, net Other receivables, non-current Other assets, long-term Deferred tax asset, non-current Total assets Current liabilities Deferred tax liability, non-current Other accrued expenses and liabilities Total liabilities Net assets acquired $ | The information below reflects the preliminary purchase price allocation (in thousands): Amount Purchase price allocation Current assets $ Property, equipment and leasehold improvements, net Goodwill Other intangible assets, net Other receivables, non-current Other assets, long-term Deferred tax asset, non-current Total assets Current liabilities Deferred tax liability, non-current Other accrued expenses and liabilities Total liabilities Net assets acquired $ |
Summarized acquired tangible assets | The following table summarizes acquired tangible assets (in thousands): Useful Life (years) Estimated Fair Value Property, Equipment and Leased Assets Gaming equipment 2 - 4 $ Leasehold and building improvements Lease Term Machinery and equipment 3 - 5 Other 2 - 7 Total property, equipment and leased assets $ | The following table summarizes acquired tangible assets (in thousands): Useful Life Estimated (years) Fair Value Property, equipment and leased assets Gaming equipment - 4 $ Leasehold and building improvements Lease Term Machinery and equipment - 5 Other - 7 Total property, equipment and leased assets $ | The following table summarizes acquired tangible assets (in thousands): Useful Life Estimated (years) Fair Value Property, Equipment and Leased Assets Gaming equipment - 4 $ Leasehold and building improvements Lease Term Machinery and equipment - 5 Other - 7 Total property, equipment and leased assets $ |
Summarized acquired intangible assets | The following table summarizes acquired intangible assets (in thousands): Useful Life (years) Estimated Fair Value Other intangible assets Tradenames and trademarks 3 - 7 $ Computer software 3 - 5 Developed technology 2 - 6 Customer relationships 8 - 12 Contract rights 1 - 7 Total other intangible assets $ | The following table summarizes acquired intangible assets (in thousands): Useful Life Estimated (years) Fair Value Other intangible assets Tradenames and trademarks - 7 $ Computer software - 5 Developed technology - 6 Customer relationships - 12 Contract rights - 7 Total other intangible assets $ | The following table summarizes acquired intangible assets (in thousands): Useful Life Estimated (years) Fair Value Other intangible assets Tradenames and trademarks - 7 $ Computer software - 5 Developed technology - 6 Customer relationships - 12 Contract rights - 7 Total other intangible assets $ |
TRADE RECEIVABLES (Tables)119
TRADE RECEIVABLES (Tables) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
TRADE RECEIVABLES | |||
Schedule of trade receivables | The balance of trade receivables consisted of the following (in thousands): At March 31, At December 31, 2015 2014 Trade receivables, net Games trade receivables $ $ Kiosk trade receivables Warranty and other trade receivables Total trade receivables, net $ $ | The balance of trade receivables consisted of the following (in thousands): . At June 30, At December 31, 2015 2014 Trade receivables, net Games trade receivables $ $ Kiosk trade receivables Warranty and other trade receivables Total trade receivables, net $ $ | The balance of trade receivables consisted of the following (in thousands): . At December 31, 2014 2013 Trade receivables, net Games trade receivables $ $ — Kiosk trade receivables Warranty and other trade receivables Total trade receivables, net $ $ |
OTHER RECEIVABLES (Tables)120
OTHER RECEIVABLES (Tables) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
OTHER RECEIVABLES. | |||
Schedule of other receivables | Other receivables also include income taxes receivable and other miscellaneous receivables. The balance of other receivables consisted of the following (in thousands): At March 31, At December 31, 2015 2014 Other receivables Notes and loans receivable, net of discount of $814 and $853, respectively $ $ Federal and state income tax receivable Other Total other receivables Less: Notes and loans receivable, non-current Total other receivables, current portion $ $ | The balance of other receivables consisted of the following (in thousands): At June 30, At December 31, 2015 2014 Other receivables Notes and loans receivable, net of discount of $776 and $853 , respectively $ $ Federal and state income tax receivable Other Total other receivables Less: Notes and loans receivable, non-current Total other receivables, current portion $ $ | The balance of other receivables consisted of the following (in thousands): At December 31, 2014 2013 Other receivables Notes and loans receivable, net of discount of $853 and $0 , respectively $ $ Federal and state income tax receivable Other Total other receivables Less: Notes and loans receivable, non-current Total other receivables, current portion $ $ |
PREPAID AND OTHER ASSETS (Ta121
PREPAID AND OTHER ASSETS (Tables) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
PREPAID AND OTHER ASSETS | |||
Schedule of prepaid and other assets current | The balance of prepaid and other assets consisted of the following (in thousands): At March 31, At December 31, 2015 2014 Prepaid expenses and other assets Prepaid expenses $ $ Deposits Other Total prepaid expenses and other assets $ $ | The balance of prepaid and other assets consisted of the following (in thousands): At June 30, At December 31, 2015 2014 Prepaid expenses and other assets Prepaid expenses $ $ Deposits Other Total prepaid expenses and other assets $ $ | The balance of prepaid and other assets consisted of the following (in thousands): At December 31, 2014 2013 Prepaid expenses and other assets Prepaid expenses $ $ Deposits Other Total prepaid expenses and other assets $ $ |
Schedule of prepaid and other assets non-current | The balance of other assets, non-current consisted of the following (in thousands): At March 31, At December 31, 2015 2014 Other assets, non-current Debt issuance costs $ $ Prepaid expenses and deposits, non-current Other Total other assets non-current $ $ | The balance of other assets, non-current consisted of the following (in thousands): At June 30, At December 31, 2015 2014 Other assets, non-current Debt issuance costs $ $ Prepaid expenses and deposits, non-current Other Total other assets, non-current $ $ | The balance of other assets, non-current consisted of the following (in thousands): At December 31, 2014 2013 Other assets, non-current Debt issuance costs $ $ Prepaid expenses and deposits, non-current Other Total other assets non-current $ $ |
INVENTORY (Tables)122
INVENTORY (Tables) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
INVENTORY | |||
Schedule of inventory | Inventory consisted of the following (in thousands): At March 31, At December 31, 2015 2014 Inventory Raw materials and component parts, net of reserves of $82 and $22, respectively $ $ Work in progress Finished goods Total inventory $ $ | Inventory consisted of the following (in thousands): At June 30, At December 31, 2015 2014 Inventory Raw materials and component parts, net of reserves of $142 and $22 , respectively $ $ Work in progress Finished goods Total inventory $ $ | Inventory consisted of the following (in thousands): At December 31, 2014 2013 Inventory Raw materials and component parts, net of reserves of $22 and $50 , respectively $ $ Work in progress Finished goods Total inventory $ $ |
PROPERTY, EQUIPMENT AND LEAS123
PROPERTY, EQUIPMENT AND LEASED ASSETS (Tables) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
PROPERTY, EQUIPMENT AND LEASED ASSETS | |||
Schedule of property, equipment and leased assets | Property, equipment and leased assets consist of the following (in thousands): At March 31, 2015 At December 31, 2014 Useful Life (years) Cost Accumulated Depreciation Net Book Value Cost Accumulated Depreciation Net Book Value Property, equipment and leased assets Rental pool - deployed 2 - 4 $ $ $ $ $ $ Rental pool - undeployed 2 - 4 ATM equipment 5 Office, computer and other equipment 3 Leasehold and building improvements Lease Term Machinery and equipment 3 - 5 Cash advance equipment 3 Other 2 - 5 Total $ $ $ $ $ $ | Property, equipment and leased assets consist of the following (in thousands): At June 30, 2015 At December 31, 2014 Useful Life Accumulated Net Book Accumulated Net Book (Years) Cost Depreciation Value Cost Depreciation Value Property, equipment and leased assets Rental pool - deployed - 4 $ $ $ $ $ $ Rental pool - undeployed - 4 ATM equipment 5 Office, computer and other equipment 3 Leasehold and building improvements Lease Term Machinery and equipment - 5 Cash advance equipment 3 Other - 5 Total $ $ $ $ $ $ | Property, equipment and leased assets consist of the following (amounts in thousands): At December 31, 2014 At December 31, 2013 Useful Life Accumulated Net Book Accumulated Net Book (Years) Cost Depreciation Value Cost Depreciation Value Property, equipment and leased assets Rental pool - deployed - 4 $ $ $ $ — $ — $ — Rental pool - undeployed - 4 — — — ATM equipment 5 Office, computer and other equipment 3 Leasehold and building improvements Lease Term Machinery and equipment - 5 — — — Cash advance equipment 3 Other - 5 — — — Total $ $ $ $ $ $ |
GOODWILL AND OTHER INTANGIBL124
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |||
Schedule of other intangible assets | Other intangible assets consist of the following (in thousands): At March 31, 2015 At December 31, 2014 Useful Life (years) Cost Accumulated Amortization Net Book Value Cost Accumulated Amortization Net Book Value Other intangible assets Contract rights under development and placement fee agreements 1 - 7 $ $ $ $ $ $ Customer contracts 7 - 14 Customer relationships 8 - 12 Developed technology and software 1 - 6 Patents, trademarks and other 1 - 17 Total $ $ $ $ $ $ | Other intangible assets consist of the following (in thousands): At June 30, 2015 At December 31, 2014 Useful Life Accumulated Net Book Accumulated Net Book (years) Cost Amortization Value Cost Amortization Value Other intangible assets Contract rights under development and placement fee agreements - 7 $ $ $ $ $ $ Customer contracts - 14 Customer relationships - 12 Developed technology and software - 6 Patents, trademarks and other - 17 Total $ $ $ $ $ $ | Other intangible assets consist of the following (in thousands): At December 31, 2014 At December 31, 2013 Useful Life Accumulated Net Book Accumulated Net Book (years) Cost Amortization Value Cost Amortization Value Intangible assets Contract rights under development and placement fee agreements - 7 $ $ $ $ — $ — $ — Customer contracts - 14 Customer relationships - 12 — — — Developed technology - 6 — — — Computer software - 5 Patents, trademarks and other - 17 Total $ $ $ $ $ $ |
ACCOUNTS PAYABLE AND ACCRUED125
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | |||
Schedule of accounts payable and accrued expenses | The following table presents our accounts payable and accrued expenses (in thousands): At March 31, At December 31, 2015 2014 Accounts payable and accrued expenses Trade accounts payable $ $ Accrued interest Payroll and related expenses Deferred and unearned revenues Cash access processing and related expenses Accrued taxes Other Total accounts payable and accrued expenses $ $ | The following table presents our accounts payable and accrued expenses (in thousands): | The following table presents our accounts payable and accrued expenses (amounts in thousands): At December 31, 2014 2013 Accounts payable and accrued expenses Trade accounts payable $ $ Payroll and related expenses Cash access processing and related expenses Deferred and unearned revenues Accrued taxes Accrued interest Other Total accounts payable and accrued expenses $ $ |
LONG-TERM DEBT (Tables)126
LONG-TERM DEBT (Tables) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
LONG-TERM DEBT. | |||
Schedule of total amounts of borrowings | The following table summarizes our outstanding indebtedness (in thousands): At March 31, At December 31, 2015 2014 Long-term debt Senior secured term loan $ $ Senior secured notes Senior unsecured notes Total debt Less: original issue discount Total debt after discount Less: current portion of long-term debt Long-term debt, less current portion $ $ | The following table summarizes our outstanding indebtedness (in thousands): At June 30, At December 31, 2015 2014 Long-term debt Senior secured term loan $ $ Senior secured notes Senior unsecured notes Total debt Less: original issue and warrant discount Total debt after discount Less: current portion of long-term debt Long-term debt, less current portion $ $ | The following table summarizes our indebtedness at December 31, (in thousands): At December 31, 2014 2013 Long-term debt Senior credit facility $ — $ Senior secured term loan $ $ — Senior secured notes — Senior unsecured notes — Total debt Less: original issue discount — Total debt after discount Less: current portion of long-term debt Long-term debt, less current portion $ $ |
WEIGHTED AVERAGE COMMON SHAR127
WEIGHTED AVERAGE COMMON SHARES (Tables) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
WEIGHTED AVERAGE COMMON SHARES | |||
Schedule of weighted average number of common shares outstanding used in the computation of basic and diluted earnings per share | The weighted average number of common shares outstanding used in the computation of basic and diluted earnings per share is as follows (in thousands): At March 31, At March 31, 2015 2014 Weighted average shares Weighted average number of common shares outstanding - basic Potential dilution from equity grants (1) Weighted average number of common shares outstanding - diluted (1) The potential dilution excludes the weighted average effect of equity awards to acquire 8.4 million and 5.1 million of our common stock for the three months ended March 31, 2015 and 2014, respectively, because the application of the treasury stock method, as required, makes them anti-dilutive | The weighted average number of common shares outstanding used in the computation of basic and diluted earnings per share is as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Weighted average shares Weighted average number of common shares outstanding - basic Potential dilution from equity grants (1) — — Weighted average number of common shares outstanding - diluted The Company was in a net loss position for the three and six months ended June 30, 2015, and therefore, no potential dilution from the application of the treasury stock method was applicable. The potential dilution excludes the weighted average effect of equity awards to acquire 7.5 million and 6.5 million of our common stock for the three and six months ended June 30, 2014 as the application of the treasury stock method, as required, makes them anti-dilutive. | The weighted average number of common stock outstanding used in the computation of basic and diluted earnings per share is as follows (in thousands): At December 31, 2014 2013 2012 Weighted average shares Weighted average number of common shares outstanding - basic Potential dilution from equity grants (1) Weighted average number of common shares outstanding - diluted The potential dilution excludes the weighted average effect of stock options to acquire 7.6 million, 5.9 million and 5.1 million shares of our common stock at December 31, 2014, 2013 and 2012, respectively, because the application of the treasury stock method, as required, makes them anti ‑dilutive |
SHARE-BASED COMPENSATION (Ta128
SHARE-BASED COMPENSATION (Tables) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
Equity Incentive Awards | |||
Summary of equity incentive award activity | A summary of award activity is as follows (in thousands): Stock Options Restricted Stock Granted Granted Outstanding, December 31, 2014 Additional authorized shares - - Granted - - Exercised options or vested shares Canceled or forfeited - Outstanding, March 31, 2015 | A summary of award activity is as follows (in thousands): Stock Options Restricted Stock Granted Granted Outstanding, December 31, 2014 Additional authorized shares — — Granted — Exercised options or vested shares Canceled or forfeited Outstanding, June 30, 2015 | A summary of award activity is as follows (in thousands): Stock Options Restricted Stock Granted Granted Outstanding, December 31, 2013 Additional authorized shares — — Granted Merger conversion — Exercised options or vested shares Canceled or forfeited Outstanding, December 31, 2014 |
Schedule of weighted-average assumptions used in determining the fair value of options granted at the date of grant using the valuation model | Six months ended June 30, 2015 2014 Risk-free interest rate % % Expected life of options (in years) Expected volatility % % Expected dividend yield % % | Year ended December 31, 2014 2013 2012 Risk-free interest rate % % % Expected life of options (in years) Expected volatility % % % Expected dividend yield % % % | |
Summary of additional information regarding options granted | Number of Common Shares (in thousands) Weighted Average Exercise Price (per share) Weighted Average Life Remaining (years) Aggregate Intrinsic Value (in thousands) Outstanding, December 31, 2014 $ $ Granted - - Exercised Canceled or forfeited Outstanding, March 31, 2015 $ $ Vested and expected to vest, March 31, 2015 $ $ Exercisable, March 31, 2015 $ $ | Weighted Number of Weighted Average Average Life Aggregate Common Shares Exercise Price Remaining Intrinsic Value (in thousands) (per share) (years) (in thousands) Outstanding, December 31, 2014 $ $ Granted Exercised Canceled or forfeited Outstanding, June 30, 2015 $ $ Vested and expected to vest, June 30, 2015 $ $ Exercisable, June 30, 2015 $ $ | Weighted Number of Weighted Average Average Life Aggregate Common Shares Exercise Price Remaining Intrinsic Value (in thousands) (per share) (years) (in thousands) Outstanding, December 31, 2013 $ $ Granted Merger conversion Exercised Canceled or forfeited Outstanding, December 31, 2014 $ $ Vested and expected to vest, December 31, 2014 $ $ Exercisable, December 31, 2014 $ $ |
Summary of non-vested share awards for time-based restricted shares | Shares Outstanding (in thousands) Weighted Average Grant Date Fair Value (per share) Outstanding, December 31, 2014 $ Granted - - Vested Forfeited - Outstanding, March 31, 2015 $ | Weighted Shares Average Grant Outstanding Date Fair Value (in thousands) (per share) Outstanding, December 31, 2013 $ Granted Vested Forfeited Outstanding, December 31, 2014 $ | |
Time Based Options [Member] | |||
Equity Incentive Awards | |||
Schedule of weighted-average assumptions used in determining the fair value of options granted at the date of grant using the valuation model | Three Months Ended March 31, 2015 2014 Risk-free interest rate - Expected life of options (in years) - Expected volatility - Expected dividend yield - |
SEGMENT INFORMATION (Tables)129
SEGMENT INFORMATION (Tables) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
SEGMENT INFORMATION | |||
Schedule of results of operations and total assets by operating segment | The following tables present segment information (in thousands): For the Three Months Ended March 31, 2015 2014 Revenues Games $ $ - Payments Total revenues $ $ Operating income Games $ $ - Payments Total operating income $ $ At March 31, At December 31, Total assets 2015 2014 Games $ $ Payments Total assets $ $ | The following tables present segment information (in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, 2015 2014 2015 2014 Revenues Games $ $ — $ $ — Payments Total revenues $ $ $ $ Operating income Games $ $ — $ $ — Payments Total operating income $ $ $ $ At June 30, 2015 December 31, 2014 Total assets Games $ $ Payments Total assets $ $ | The following tables present segment information (in thousands): For and At the Year Ended December 31, 2014 2013 2012 Revenues Games $ $ — $ — Payments Total revenues $ $ $ Operating income Games $ 1,423 $ — $ — Payments Total operating income $ $ $ Total assets Games $ $ — Payments Total assets $ $ |
FINANCIAL INFORMATION FOR GU130
FINANCIAL INFORMATION FOR GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES (Tables) (Imported) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
CONDENSED CONSOLIDATING FINANCIAL INFORMATION | |||
Schedule of guarantor condensed consolidating results of operations | SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Three Months Ended March 31, 2015 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 141,410 $ 62,369 $ 3,830 $ (136 ) $ 207,473 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 110,589 14,371 2,063 — 127,023 Operating expenses — 4,191 11,359 427 (136 ) 15,841 Research and development — — 5,436 — — 5,436 Depreciation — 1,774 8,542 61 — 10,377 Amortization — 2,215 17,771 669 — 20,655 Total costs and expenses — 118,769 57,479 3,220 (136 ) 179,332 Operating income — 22,641 4,890 610 — 28,141 Other (income) expense Interest expense, net of interest income — 2,778 22,787 90 — 25,655 Equity in income of subsidiaries (469 ) (3,047 ) — — 3,516 — Total other (income) expense (469 ) (269 ) 22,787 90 3,516 25,655 Income (loss) from operations before tax 469 22,910 (17,897 ) 520 (3,516 ) 2,486 Income tax expense (benefit) — 8,706 (6,942 ) 253 — 2,017 Net income (loss) 469 14,204 (10,955 ) 267 (3,516 ) 469 Foreign currency translation (873 ) — — (873 ) 873 (873 ) Comprehensive (loss) income $ (404 ) $ 14,204 $ (10,955 ) $ (606 ) $ (2,643 ) $ (404 ) SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Three Months Ended March 31, 2014 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 140,321 $ 6,866 $ 3,553 $ (169 ) $ 150,571 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 111,338 2,043 (143 ) — 113,238 Operating expenses — 18,747 819 642 (169 ) 20,039 Depreciation — 1,883 1 43 — 1,927 Amortization — 2,230 — 124 — 2,354 Total costs and expenses — 134,198 2,863 666 (169 ) 137,558 Operating income — 6,123 4,003 2,887 — 13,013 Other (income) expense Interest expense, net of interest income — 2,034 — (488 ) — 1,546 Equity in income of subsidiaries (7,489 ) (5,082 ) — — 12,571 — Total other (income) expense (7,489 ) (3,048 ) — (488 ) 12,571 1,546 Income from operations before tax 7,489 9,171 4,003 3,375 (12,571 ) 11,467 Income tax expense — 1,682 1,401 895 — 3,978 Net income 7,489 7,489 2,602 2,480 (12,571 ) 7,489 Foreign currency translation 1 — — 1 (1 ) 1 Comprehensive income $ 7,490 $ 7,489 $ 2,602 $ 2,481 $ (12,572 ) $ 7,490 | SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Three Months Ended June 30, 2015 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 139,818 $ 62,440 $ 4,256 $ (150 ) $ 206,364 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 110,659 14,375 2,188 — 127,222 Operating expenses — 18,809 7,736 452 (150 ) 26,847 Research and development — — 4,470 — — 4,470 Depreciation — 1,787 8,880 50 — 10,717 Amortization — 2,193 17,964 615 — 20,772 Total costs and expenses — 133,448 53,425 3,305 (150 ) 190,028 Operating income — 6,370 9,015 951 — 16,336 Other expense (income) Interest expense, net of interest income — 1,834 23,036 88 — 24,958 Equity in loss (income) of subsidiaries 12,741 (3,665 ) — — (9,076 ) — Loss on extinguishment of debt — 12,977 — — — 12,977 Total other expense (income) 12,741 11,146 23,036 88 (9,076 ) 37,935 (Loss) income from operations before tax (12,741 ) (4,776 ) (14,021 ) 863 9,076 (21,599 ) Income tax (benefit) expense — (3,684 ) (5,502 ) 328 — (8,858 ) Net (loss) income (12,741 ) (1,092 ) (8,519 ) 535 9,076 (12,741 ) Foreign currency translation 811 — — 811 (811 ) 811 Comprehensive (loss) income $ (11,930 ) $ (1,092 ) $ (8,519 ) $ 1,346 $ 8,265 $ (11,930 ) SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Three Months Ended June 30, 2014 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 134,198 $ 7,044 $ 3,898 $ (194 ) $ 144,946 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 104,918 2,243 2,214 — 109,375 Operating expenses — 20,000 778 677 (194 ) 21,261 Depreciation — 1,870 1 48 — 1,919 Amortization — 2,644 — 125 — 2,769 Total costs and expenses — 129,432 3,022 3,064 (194 ) 135,324 Operating income — 4,766 4,022 834 — 9,622 Other (income) expense Interest expense, net of interest income — 1,990 — 93 — 2,083 Equity in income of subsidiaries (4,724 ) (3,343 ) — — 8,067 — Total other (income) expense (4,724 ) (1,353 ) — 93 8,067 2,083 Income from operations before tax 4,724 6,119 4,022 741 (8,067 ) 7,539 Income tax expense — 1,187 1,413 215 — 2,815 Net income 4,724 4,932 2,609 526 (8,067 ) 4,724 Foreign currency translation 381 — — 381 (381 ) 381 Comprehensive income $ 5,105 $ 4,932 $ 2,609 $ 907 $ (8,448 ) $ 5,105 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Six Months Ended June 30, 2015 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 281,228 $ 124,809 $ 8,086 $ (286 ) $ 413,837 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 221,248 28,746 4,251 — 254,245 Operating expenses — 23,000 19,095 879 (286 ) 42,688 Research and development — — 9,906 — — 9,906 Depreciation — 3,561 17,422 111 — 21,094 Amortization — 4,408 35,735 1,284 — 41,427 Total costs and expenses — 252,217 110,904 6,525 (286 ) 369,360 Operating income — 29,011 13,905 1,561 — 44,477 Other expense (income) Interest expense, net of interest income — 4,612 45,823 178 — 50,613 Equity in loss (income) of subsidiaries 12,272 (6,712 ) — — (5,560 ) — Loss on extinguishment of debt — 12,977 — — — 12,977 Total other expense (income) 12,272 10,877 45,823 178 (5,560 ) 63,590 (Loss) income from operations before tax (12,272 ) 18,134 (31,918 ) 1,383 5,560 (19,113 ) Income tax expense (benefit) — 5,022 (12,444 ) 581 — (6,841 ) Net (loss) income (12,272 ) 13,112 (19,474 ) 802 5,560 (12,272 ) Foreign currency translation (62 ) — — (62 ) 62 (62 ) Comprehensive (loss) income $ (12,334 ) $ 13,112 $ (19,474 ) $ 740 $ 5,622 $ (12,334 ) SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Six Months Ended June 30, 2014 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 274,519 $ 13,910 $ 7,451 $ (363 ) $ 295,517 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 216,257 4,286 2,071 — 222,614 Operating expenses — 38,746 1,597 1,319 (363 ) 41,299 Depreciation — 3,753 2 91 — 3,846 Amortization — 4,874 — 249 — 5,123 Total costs and expenses — 263,630 5,885 3,730 (363 ) 272,882 Operating income — 10,889 8,025 3,721 — 22,635 Other (income) expense Interest expense, net of interest income — 4,024 — (395 ) — 3,629 Equity in income of subsidiaries (12,213 ) (8,425 ) — — 20,638 — Total other (income) expense (12,213 ) (4,401 ) — (395 ) 20,638 3,629 Income from operations before tax 12,213 15,290 8,025 4,116 (20,638 ) 19,006 Income tax expense — 2,869 2,814 1,110 — 6,793 Net income 12,213 12,421 5,211 3,006 (20,638 ) 12,213 Foreign currency translation 382 — — 382 (382 ) 382 Comprehensive income $ 12,595 $ 12,421 $ 5,211 $ 3,388 $ (21,020 ) $ 12,595 | SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Year Ended December 31, 2014 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total Revenues $ — $ 542,206 $ 35,689 $ 15,891 $ (733 ) $ 593,053 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 422,544 10,864 6,663 — 440,071 Operating expenses — 88,087 5,719 2,379 (733 ) 95,452 Research and development — — 804 — — 804 Depreciation — 7,428 1,134 183 — 8,745 Amortization — 11,180 2,454 565 — 14,199 Total costs and expenses — 529,239 20,975 9,790 (733 ) 559,271 Operating income — 12,967 14,714 6,101 — 33,782 Other (income) expense Interest expense, net of interest income — 7,675 3,290 (209 ) — 10,756 Equity in income of subsidiaries (12,140 ) (15,218 ) — — 27,358 — Loss on extinguishment of debt — 2,523 202 — — 2,725 Total other (income) expense (12,140 ) (5,020 ) 3,492 (209 ) 27,358 13,481 Income from operations before tax 12,140 17,987 11,222 6,310 (27,358 ) 20,301 Income tax expense — 2,801 3,784 1,576 — 8,161 Net income 12,140 15,186 7,438 4,734 (27,358 ) 12,140 Foreign currency translation (1,258 ) — — (1,258 ) 1,258 (1,258 ) Comprehensive income $ 10,882 $ 15,186 $ 7,438 $ 3,476 $ (26,100 ) $ 10,882 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Year Ended December 31, 2013 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total Revenues $ — $ 541,002 $ 28,277 $ 13,838 $ (673 ) $ 582,444 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 424,129 7,905 7,760 — 439,794 Operating expenses — 71,623 3,445 2,167 (673 ) 76,562 Depreciation — 7,186 1 163 — 7,350 Amortization — 9,217 — 371 — 9,588 Total costs and expenses — 512,155 11,351 10,461 (673 ) 533,294 Operating income — 28,847 16,926 3,377 — 49,150 Other (income) expense Interest expense, net of interest income — 10,342 — (77 ) — 10,265 Equity in income of subsidiaries (24,398 ) (13,596 ) — — 37,994 — Total other (income) expense (24,398 ) (3,254 ) — (77 ) 37,994 10,265 Income from operations before tax 24,398 32,101 16,926 3,454 (37,994 ) 38,885 Income tax expense — 7,703 5,924 860 — 14,487 Net income 24,398 24,398 11,002 2,594 (37,994 ) 24,398 Foreign currency translation 269 — — 269 (269 ) 269 Comprehensive income $ 24,667 $ 24,398 $ 11,002 $ 2,863 $ (38,263 ) $ 24,667 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Year Ended December 31, 2012 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total Revenues $ — $ 556,376 $ 18,623 $ 10,001 $ (514 ) $ 584,486 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 426,183 3,376 6,500 — 436,059 Operating expenses — 72,551 1,880 1,889 (514 ) 75,806 Depreciation — 6,617 5 221 — 6,843 Amortization — 9,543 — 253 — 9,796 Total costs and expenses — 514,894 5,261 8,863 (514 ) 528,504 Operating income — 41,482 13,362 1,138 — 55,982 Other (income) expense Interest expense, net of interest income — 15,591 — (72 ) — 15,519 Equity in income of subsidiaries (25,689 ) (9,546 ) — — 35,235 — Total other (income) expense (25,689 ) 6,045 — (72 ) 35,235 15,519 Income from operations before tax 25,689 35,437 13,362 1,210 (35,235 ) 40,463 Income tax expense — 9,748 4,677 349 — 14,774 Net income 25,689 25,689 8,685 861 (35,235 ) 25,689 Foreign currency translation 218 — — 218 (218 ) 218 Comprehensive income $ 25,907 $ 25,689 $ 8,685 $ 1,079 $ (35,453 ) $ 25,907 |
Schedule of guarantor condensed consolidating balance sheet | SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands) At March 31, 2015 Parent Subsidiary Guarantor Non- Eliminations Total ASSETS Current assets Cash and cash equivalents $ — $ 120,435 $ 13,315 $ 11,263 $ — $ 145,013 Settlement receivables — 26,950 — 2,837 — 29,787 Trade receivables, net — 6,294 32,925 1 — 39,220 Other receivables — 3,846 24,870 113 (8,437 ) 20,392 Inventory — 9,312 13,738 — — 23,050 Prepaid expenses and other assets — 7,836 2,523 8,530 — 18,889 Deferred tax asset — 2,743 6,847 — — 9,590 Intercompany balances — 32,512 155,182 1,473 (189,167 ) — Total current assets — 209,928 249,400 24,217 (197,604 ) 285,941 Non-current assets Property, equipment and leasehold improvements, net — 17,409 84,865 485 — 102,759 Goodwill — 148,278 708,922 656 — 857,856 Other intangible assets, net — 23,260 388,281 8,562 — 420,103 Other receivables, non-current — 4,411 4,182 — — 8,593 Investment in subsidiaries 233,859 149,599 — 86 (383,544 ) — Deferred tax asset, non-current — 76,460 22,467 — (98,927 ) — Other assets, non-current — 46,090 3,413 509 — 50,012 Intercompany balances — 1,131,876 — — (1,131,876 ) — Total non-current assets 233,859 1,597,383 1,212,130 10,298 (1,614,347 ) 1,439,323 Total assets $ 233,859 $ 1,807,311 $ 1,461,530 $ 34,515 $ (1,811,951 ) $ 1,725,264 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Settlement liabilities $ — $ 136,839 $ 297 $ 4,513 $ — $ 141,649 Accounts payable and accrued expenses — 85,689 35,216 1,075 (8,437 ) 113,543 Current portion of long-term debt — 10,000 — — — 10,000 Intercompany balances — 156,536 22,949 9,682 (189,167 ) — Total current liabilities — 389,064 58,462 15,270 (197,604 ) 265,192 Non-current liabilities Deferred tax liability, non-current — 1,071 156,957 — (98,927 ) 59,101 Long-term debt, less current portion — 1,161,731 — — — 1,161,731 Other accrued expenses and liabilities — 4,924 457 — — 5,381 Intercompany balances — — 1,131,876 — (1,131,876 ) — Total non-current liabilities — 1,167,726 1,289,290 — (1,230,803 ) 1,226,213 Total liabilities — 1,556,790 1,347,752 15,270 (1,428,407 ) 1,491,405 Stockholders’ Equity Common stock 91 — — — — 91 Convertible preferred stock — — — — — — Additional paid-in capital 248,491 87,202 2,269 21,110 (110,581 ) 248,491 Retained earnings (deficit) 160,621 162,623 111,509 (738 ) (273,394 ) 160,621 Accumulated other comprehensive income (loss) 696 696 — (1,127 ) 431 696 Treasury stock, at cost (176,040 ) — — — — (176,040 ) Total stockholders’ equity 233,859 250,521 113,778 19,245 (383,544 ) 233,859 Total liabilities and stockholders’ equity $ 233,859 $ 1,807,311 $ 1,461,530 $ 34,515 $ (1,811,951 ) $ 1,725,264 | SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands) At March 31, 2015 Parent Subsidiary Guarantor Non- Eliminations Total ASSETS Current assets Cash and cash equivalents $ — $ 120,435 $ 13,315 $ 11,263 $ — $ 145,013 Settlement receivables — 26,950 — 2,837 — 29,787 Trade receivables, net — 6,294 32,925 1 — 39,220 Other receivables — 3,846 24,870 113 (8,437 ) 20,392 Inventory — 9,312 13,738 — — 23,050 Prepaid expenses and other assets — 7,836 2,523 8,530 — 18,889 Deferred tax asset — 2,743 6,847 — — 9,590 Intercompany balances — 32,512 155,182 1,473 (189,167 ) — Total current assets — 209,928 249,400 24,217 (197,604 ) 285,941 Non-current assets Property, equipment and leasehold improvements, net — 17,409 84,865 485 — 102,759 Goodwill — 148,278 708,922 656 — 857,856 Other intangible assets, net — 23,260 388,281 8,562 — 420,103 Other receivables, non-current — 4,411 4,182 — — 8,593 Investment in subsidiaries 233,859 149,599 — 86 (383,544 ) — Deferred tax asset, non-current — 76,460 22,467 — (98,927 ) — Other assets, non-current — 46,090 3,413 509 — 50,012 Intercompany balances — 1,131,876 — — (1,131,876 ) — Total non-current assets 233,859 1,597,383 1,212,130 10,298 (1,614,347 ) 1,439,323 Total assets $ 233,859 $ 1,807,311 $ 1,461,530 $ 34,515 $ (1,811,951 ) $ 1,725,264 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Settlement liabilities $ — $ 136,839 $ 297 $ 4,513 $ — $ 141,649 Accounts payable and accrued expenses — 85,689 35,216 1,075 (8,437 ) 113,543 Current portion of long-term debt — 10,000 — — — 10,000 Intercompany balances — 156,536 22,949 9,682 (189,167 ) — Total current liabilities — 389,064 58,462 15,270 (197,604 ) 265,192 Non-current liabilities Deferred tax liability, non-current — 1,071 156,957 — (98,927 ) 59,101 Long-term debt, less current portion — 1,161,731 — — — 1,161,731 Other accrued expenses and liabilities — 4,924 457 — — 5,381 Intercompany balances — — 1,131,876 — (1,131,876 ) — Total non-current liabilities — 1,167,726 1,289,290 — (1,230,803 ) 1,226,213 Total liabilities — 1,556,790 1,347,752 15,270 (1,428,407 ) 1,491,405 Stockholders’ Equity Common stock 91 — — — — 91 Convertible preferred stock — — — — — — Additional paid-in capital 248,491 87,202 2,269 21,110 (110,581 ) 248,491 Retained earnings (deficit) 160,621 162,623 111,509 (738 ) (273,394 ) 160,621 Accumulated other comprehensive income (loss) 696 696 — (1,127 ) 431 696 Treasury stock, at cost (176,040 ) — — — — (176,040 ) Total stockholders’ equity 233,859 250,521 113,778 19,245 (383,544 ) 233,859 Total liabilities and stockholders’ equity $ 233,859 $ 1,807,311 $ 1,461,530 $ 34,515 $ (1,811,951 ) $ 1,725,264 | SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands) At December 31, 2014 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total ASSETS Current assets Cash and cash equivalents $ — $ 68,143 $ 6,489 $ 14,463 $ — $ 89,095 Settlement receivables — 40,157 — 3,131 — 43,288 Trade Receivables, net — 6,578 31,116 3 — 37,697 Other receivables — 3,416 16,992 145 — 20,553 Inventory — 10,595 16,568 — — 27,163 Prepaid expenses and other assets — 7,143 2,821 9,024 — 18,988 Deferred tax asset — 2,743 6,848 — — 9,591 Intercompany balances — 18,038 151,179 1,623 (170,840 ) — Total current assets — 156,813 232,013 28,389 (170,840 ) 246,375 Non-current assets Property, equipment and leasehold improvements, net — 17,864 87,898 323 — 106,085 Goodwill — 148,278 708,922 713 — 857,913 Other intangible assets, net — 24,771 402,816 9,198 — 436,785 Other receivables, non-current — 4,411 4,773 — — 9,184 Investment in subsidiaries 231,473 147,195 — 86 (378,754 ) — Deferred tax asset, non-current — 78,229 — — (78,229 ) — Other assets, non-current — 47,508 3,366 69 — 50,943 Intercompany balances — 1,130,380 — — (1,130,380 ) — Total non-current assets 231,473 1,598,636 1,207,775 10,389 (1,587,363 ) 1,460,910 Total assets $ 231,473 $ 1,755,449 $ 1,439,788 $ 38,778 $ (1,758,203 ) $ 1,707,285 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Settlement liabilities $ — $ 111,375 $ 140 $ 7,642 $ — $ 119,157 Accounts payable and accrued expenses — 61,544 41,395 1,729 — 104,668 Current portion of long-term debt — 10,000 — — — 10,000 Intercompany balances — 152,802 8,159 9,879 (170,840 ) — Total current liabilities — 335,721 49,694 19,250 (170,840 ) 233,825 Non-current liabilities Deferred tax liability, non-current — 1,072 134,490 — (78,229 ) 57,333 Long-term debt, less current portion — 1,178,787 — — — 1,178,787 Other accrued expenses and liabilities — 5,377 490 — — 5,867 Intercompany balances — — 1,130,380 — (1,130,380 ) — Total non-current liabilities — 1,185,236 1,265,360 — (1,208,609 ) 1,241,987 Total liabilities — 1,520,957 1,315,054 19,250 (1,379,449 ) 1,475,812 Stockholders’ Equity Common stock 90 — — — — 90 Additional paid-in capital 245,682 69,654 2,269 21,115 (93,038 ) 245,682 Retained earnings (deficit) 160,152 163,269 122,465 (1,006 ) (284,728 ) 160,152 Accumulated other comprehensive income (loss) 1,569 1,569 — (581 ) (988 ) 1,569 Treasury stock, at cost (176,020 ) — — — — (176,020 ) Total stockholders’ equity 231,473 234,492 124,734 19,528 (378,754 ) 231,473 Total liabilities and stockholders’ equity $ 231,473 $ 1,755,449 $ 1,439,788 $ 38,778 $ (1,758,203 ) $ 1,707,285 SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands) At December 31, 2013 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total ASSETS Current assets Cash and cash equivalents $ — $ 100,573 $ 2,149 $ 11,532 $ — $ 114,254 Settlement receivables — 34,458 — 3,807 — 38,265 Trade receivables, net — 9,030 2,622 6 — 11,658 Other receivables — 4,451 — 154 — 4,605 Inventory — 9,413 — — — 9,413 Prepaid expenses and other assets — 10,300 20 6,354 — 16,674 Deferred tax asset — 3,102 — — — 3,102 Intercompany balances — 20,005 135,542 — (155,547 ) — Total current assets — 191,332 140,333 21,853 (155,547 ) 197,971 Non-current assets Property, equipment and leasehold improvements, net — 18,282 56 372 — 18,710 Goodwill — 139,839 39,470 775 — 180,084 Other intangible assets, net — 30,229 499 807 — 31,535 Other receivables, non-current — 699 — — — 699 Investment in subsidiaries 218,604 113,350 — — (331,954 ) — Deferred tax asset, non-current — 88,253 — — (311 ) 87,942 Other assets, non-current — 10,311 — 75 — 10,386 Intercompany balances — 61,936 — 1,572 (63,508 ) — Total non-current assets 218,604 462,899 40,025 3,601 (395,773 ) 329,356 Total assets $ 218,604 $ 654,231 $ 180,358 $ 25,454 $ (551,320 ) $ 527,327 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Settlement liabilities $ — $ 137,089 $ — $ 7,933 $ — $ 145,022 Accounts payable and accrued expenses — 51,324 1,398 879 — 53,601 Current portion of long-term debt — 1,030 — — — 1,030 Intercompany balances — 135,542 — 20,005 (155,547 ) — Total current liabilities — 324,985 1,398 28,817 (155,547 ) 199,653 Non-current liabilities Deferred tax liability, non-current — — — 311 (311 ) — Long-term debt, less current portion — 101,970 — — — 101,970 Other accrued expenses and liabilities — 7,100 — — — 7,100 Intercompany balances — 1,572 61,936 — (63,508 ) — Total non-current liabilities — 110,642 61,936 311 (63,819 ) 109,070 Total liabilities — 435,627 63,334 29,128 (219,366 ) 308,723 Stockholders’ Equity Common stock 89 — — — — 89 Additional paid-in capital 231,516 67,694 2,000 1,808 (71,502 ) 231,516 Retained earnings (deficit) 148,012 148,083 115,024 (5,738 ) (257,369 ) 148,012 Accumulated other comprehensive income 2,827 2,827 — 256 (3,083 ) 2,827 Treasury stock, at cost (163,840 ) — — — — (163,840 ) Total stockholders’ equity (deficit) 218,604 218,604 117,024 (3,674 ) (331,954 ) 218,604 Total liabilities and stockholders’ equity $ 218,604 $ 654,231 $ 180,358 $ 25,454 $ (551,320 ) $ 527,327 |
Schedule of guarantor condensed consolidating cash flows | SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Three Months Ended March 31, 2015 Parent Subsidiary Guarantor Non- Eliminations Total Cash flows from operating activities Net income (loss) $ 469 $ 14,204 $ (10,955 ) $ 267 $ (3,516 ) $ 469 Adjustments to reconcile net income (loss) to cash (used in) provided by operating activities: Depreciation and amortization — 3,989 26,313 730 — 31,032 Amortization of financing costs — 2,072 — — — 2,072 Loss on sale or disposal of assets — 2 — — — 2 Accretion of contract rights — — 2,104 — — 2,104 Provision for bad debts — — 2,266 — — 2,266 Equity in income of subsidiaries (469 ) (3,047 ) — — 3,516 — Stock-based compensation — 1,674 — — 119 1,793 Other non-cash items — — 231 — — 231 Changes in operating assets and liabilities: Net settlement receivables and liabilities — 38,671 157 (2,855 ) — 35,973 Other changes in operating assets and liabilities (5 ) 13,617 (3,350 ) (269 ) (119 ) 9,874 Net cash (used in) provided by operating activities (5 ) 71,182 16,766 (2,127 ) — 85,816 Cash flows from investing activities Capital expenditures — (2,434 ) (9,902 ) (280 ) — (12,616 ) Proceeds from sale of fixed assets — 1 — — — 1 Advances under development and placement agreements — — (1,255 ) — — (1,255 ) Repayments under development agreements — — 1,217 — — 1,217 Changes in restricted cash and cash equivalents — 59 — — — 59 Intercompany investing activities (1,023 ) 164 — (48 ) 907 — Net cash used in investing activities (1,023 ) (2,210 ) (9,940 ) (328 ) 907 (12,594 ) Cash flows from financing activities Repayments of credit facility — (17,500 ) — — — (17,500 ) Debt issuance costs — (252 ) — — — (252 ) Proceeds from exercise of stock options 1,048 — — — — 1,048 Purchase of treasury stock (20 ) — — — — (20 ) Intercompany financing activities — 1,072 — (165 ) (907 ) — Net cash provided by (used in) financing activities 1,028 (16,680 ) — (165 ) (907 ) (16,724 ) Effect of exchange rates on cash — — — (580 ) — (580 ) Cash and cash equivalents Net increase (decrease) for the period — 52,292 6,826 (3,200 ) — 55,918 Balance, beginning of the period — 68,143 6,489 14,463 — 89,095 Balance, end of the period $ — $ 120,435 $ 13,315 $ 11,263 $ — $ 145,013 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Three Months Ended March 31, 2014 Parent Subsidiary Guarantor Non- Eliminations Total Cash flows from operating activities Net income $ 7,489 $ 7,489 $ 2,602 $ 2,480 $ (12,571 ) $ 7,489 Adjustments to reconcile net income to cash (used in) provided by operating activities: Depreciation and amortization — 4,113 1 167 — 4,281 Amortization of financing costs — 471 — — — 471 Loss on sale or disposal of assets — 124 — — — 124 Provision for bad debts — — 2,014 — — 2,014 Equity in income of subsidiaries (7,489 ) (5,082 ) — — 12,571 — Stock-based compensation — 2,057 — — — 2,057 Changes in operating assets and liabilities: Net settlement receivables and liabilities — 63,982 218 (1,011 ) — 63,189 Other changes in operating assets and liabilities (51 ) 18,829 (4,360 ) (7,446 ) — 6,972 Net cash (used in) provided by operating activities (51 ) 91,983 475 (5,810 ) — 86,597 Cash flows from investing activities Capital expenditures — (2,707 ) (93 ) (225 ) — (3,025 ) Proceeds from sale of fixed assets — 192 — — — 192 Changes in restricted cash and cash equivalents — (46 ) — — — (46 ) Intercompany investing activities 378 (9,663 ) — (1,590 ) 10,875 — Net cash provided by (used in) investing activities 378 (12,224 ) (93 ) (1,815 ) 10,875 (2,879 ) Cash flows from financing activities Repayments against prior credit facility — (3,000 ) — — — (3,000 ) Proceeds from exercise of stock options 2,440 — — — — 2,440 Purchase of treasury stock (2,767 ) — — — — (2,767 ) Intercompany financing activities — 987 — 9,888 (10,875 ) — Net cash (used in) provided by financing activities (327 ) (2,013 ) — 9,888 (10,875 ) (3,327 ) Effect of exchange rates on cash — — — (79 ) — (79 ) Cash and cash equivalents Net increase for the period 77,746 382 2,184 — 80,312 Balance, beginning of the period — 100,573 2,149 11,532 — 114,254 Balance, end of the period $ — $ 178,319 $ 2,531 $ 13,716 $ — $ 194,566 | SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Six Months Ended June 30, 2015 Parent Subsidiary Guarantor Non- Eliminations Total Cash flows from operating activities Net (loss) income $ (12,272 ) $ 13,112 $ (19,474 ) $ 802 $ 5,560 $ (12,272 ) Adjustments to reconcile net (loss) income to cash provided by (used in)operating activities: Depreciation and amortization — 7,969 53,157 1,395 — 62,521 Amortization of financing costs — 3,730 — — — 3,730 (Gain) loss on sale or disposal of assets — (13 ) 387 — — 374 Accretion of contract rights — — 4,092 — — 4,092 Provision for bad debts — — 4,370 — — 4,370 Loss on early extinguishment of debt — 12,977 — — — 12,977 Equity in loss (income) of subsidiaries 12,272 (6,712 ) — — (5,560 ) — Stock-based compensation — 3,432 522 — — 3,954 Other non-cash items — 76 (96 ) — — (20 ) Changes in operating assets and liabilities: Net settlement receivables and liabilities — 43,663 91 (1,970 ) — 41,784 Other changes in operating assets and liabilities 28 15,839 (10,159 ) (827 ) — 4,881 Net cash provided by (used in) operating activities 28 94,073 32,890 (600 ) — 126,391 Cash flows from investing activities Acquisitions, net of cash acquired — (2,257 ) — — — (2,257 ) Capital expenditures — (5,387 ) (23,993 ) (280 ) — (29,660 ) Proceeds from sale of fixed assets — 29 — — — 29 Repayments under development agreements — — 2,392 — — 2,392 Advances under development and placement agreements — — (1,255 ) — — (1,255 ) Changes in restricted cash and cash equivalents — 60 — — — 60 Intercompany investing activities (3,907 ) 5,423 — (106 ) (1,410 ) — Net cash used in investing activities (3,907 ) (2,132 ) (22,856 ) (386 ) (1,410 ) (30,691 ) Cash flows from financing activities Repayments of credit facility — (5,000 ) — — — (5,000 ) Repayments of secured notes — (350,000 ) — — — (350,000 ) Proceeds from issuance of secured notes — 335,000 — — — 335,000 Debt issuance costs — (1,154 ) — — — (1,154 ) Issuance of warrants 2,246 (2,246 ) — — — — Proceeds from exercise of stock options 1,673 — — — — 1,673 Purchase of treasury stock (40 ) — — — — (40 ) Intercompany financing activities — 106 — (1,516 ) 1,410 — Net cash provided by (used in) financing activities 3,879 (23,294 ) — (1,516 ) 1,410 (19,521 ) Effect of exchange rates on cash — — — (257 ) — (257 ) Cash and cash equivalents Net increase (decrease) for the period — 68,647 10,034 (2,759 ) — 75,922 Balance, beginning of the period — 68,143 6,489 14,463 — 89,095 Balance, end of the period $ — $ 136,790 $ 16,523 $ 11,704 $ — $ 165,017 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Six Months Ended June 30, 2014 Parent Subsidiary Guarantor Non- Eliminations Total Cash flows from operating activities Net income $ 12,213 $ 12,421 $ 5,211 $ 3,006 $ (20,638 ) $ 12,213 Adjustments to reconcile net income to cash (used in) provided by operating activities: Depreciation and amortization — 8,627 2 340 — 8,969 Amortization of financing costs — 942 — — — 942 Gain on sale or disposal of assets — (21 ) — — — (21 ) Provision for bad debts — — 4,229 — — 4,229 Equity in income of subsidiaries (12,213 ) (8,425 ) — — 20,638 — Stock-based compensation — 5,409 — — — 5,409 Changes in operating assets and liabilities: Net settlement receivables and liabilities — 41,722 192 896 — 42,810 Other changes in operating assets and liabilities (31 ) 17,615 (9,289 ) (7,417 ) — 878 Net cash (used in) provided by operating activities (31 ) 78,290 345 (3,175 ) — 75,429 Cash flows from investing activities Acquisitions, net of cash acquired — (11,845 ) — — — (11,845 ) Capital expenditures — (6,977 ) (203 ) (313 ) — (7,493 ) Proceeds from sale of fixed assets — 213 — — — 213 Changes in restricted cash and cash equivalents — (45 ) — — — (45 ) Intercompany investing activities 2,022 (11,622 ) — (1,594 ) 11,194 — Net cash provided by (used in) investing activities 2,022 (30,276 ) (203 ) (1,907 ) 11,194 (19,170 ) Cash flows from financing activities Repayments of prior credit facility — (7,000 ) — — — (7,000 ) Proceeds from exercise of stock options 4,613 — — — — 4,613 Purchase of treasury stock (6,604 ) — — — — (6,604 ) Intercompany financing activities — 1,188 — 10,006 (11,194 ) — Net cash (used in) provided by financing activities (1,991 ) (5,812 ) — 10,006 (11,194 ) (8,991 ) Effect of exchange rates on cash — — — 476 — 476 Cash and cash equivalents Net increase for the period — 42,202 142 5,400 — 47,744 Balance, beginning of the period — 100,573 2,149 11,532 — 114,254 Balance, end of the period $ — $ 142,775 $ 2,291 $ 16,932 $ — $ 161,998 | SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2014 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total Cash flows from operating activities Net income $ 12,140 $ 15,186 $ 7,438 $ 4,734 $ (27,358 ) $ 12,140 Adjustments to reconcile net income to cash (used in) provided by operating activities: Depreciation and amortization — 18,608 3,588 748 — 22,944 Amortization of financing costs — 2,035 — — — 2,035 Provision for bad debts — — 8,991 — — 8,991 Impairment Loss — 3,129 — — — 3,129 Loss on early extinguishment of debt — 2,523 202 — — 2,725 Equity in income of subsidiaries (12,140 ) (15,218 ) — — 27,358 — Stock-based compensation — 8,849 27 — — 8,876 Other non-cash items — 52 284 1 — 337 Changes in operating assets and liabilities: Net settlement receivables and liabilities — (31,414 ) 141 594 — (30,679 ) Other changes in operating assets and liabilities (47 ) 34,774 (20,047 ) (20,647 ) — (5,967 ) Net cash (used in) provided by operating activities (47 ) 38,524 624 (14,570 ) — 24,531 Cash flows from investing activities Acquisitions, net of cash acquired — (11,845 ) (1,056,155 ) — — (1,068,000 ) Capital expenditures — (5,465 ) (3,464 ) (9,092 ) — (18,021 ) Repayments under development agreements — — 276 — — 276 Changes in restricted cash and cash equivalents — (102 ) — — — (102 ) Intercompany investing activities 6,889 (1,085,709 ) — (1,425 ) 1,080,245 — Net cash provided by (used in) investing activities 6,889 (1,103,121 ) (1,059,343 ) (10,517 ) 1,080,245 (1,085,847 ) Cash flows from financing activities Repayments of prior credit facility — (103,000 ) — — — (103,000 ) Proceeds from long-term debt — 1,200,000 — — — 1,200,000 Debt issuance costs — (52,735 ) — — — (52,735 ) Proceeds from exercise of stock options 5,338 — — — — 5,338 Purchase of treasury stock (12,180 ) — — — — (12,180 ) Intercompany financing activities — (12,098 ) 1,063,059 29,284 (1,080,245 ) — Net cash (used in) provided by financing activities (6,842 ) 1,032,167 1,063,059 29,284 (1,080,245 ) 1,037,423 Effect of exchange rates on cash — — — (1,266 ) — (1,266 ) Cash and cash equivalents Net (decrease) increase for the period — (32,430 ) 4,340 2,931 — (25,159 ) Balance, beginning of the period — 100,573 2,149 11,532 — 114,254 Balance, end of the period $ — $ 68,143 $ 6,489 $ 14,463 $ — $ 89,095 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2013 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total Cash flows from operating activities Net income $ 24,398 $ 24,398 $ 11,002 $ 2,594 $ (37,994 ) $ 24,398 Adjustments to reconcile net income to cash provided by (used in) operating activities: Depreciation and amortization — 16,403 1 534 — 16,938 Amortization of financing costs — 1,793 — — — 1,793 Provision for bad debts — — 7,874 — — 7,874 Equity in income of subsidiaries (24,398 ) (13,596 ) — — 37,994 — Stock-based compensation — 5,078 — — — 5,078 Other non-cash items — 180 — (2 ) — 178 Changes in operating assets and liabilities: Net settlement receivables and liabilities — (44,264 ) — (1,729 ) — (45,993 ) Other changes in operating assets and liabilities 19 13,391 (18,880 ) (462 ) — (5,932 ) Net cash provided by (used in) operating activities 19 3,383 (3 ) 935 — 4,334 Cash flows from investing activities Capital expenditures — (13,364 ) (330 ) (206 ) — (13,900 ) Changes in restricted cash and cash equivalents — (90 ) — — — (90 ) Intercompany investing activities 9,900 (4,676 ) — — (5,224 ) — Net cash provided by (used in) investing activities 9,900 (18,130 ) (330 ) (206 ) (5,224 ) (13,990 ) Cash flows from financing activities Repayments of prior credit facility — (18,500 ) — — — (18,500 ) Debt issuance costs — (764 ) — — — (764 ) Proceeds from exercise of stock options 8,431 — — — — 8,431 Purchase of treasury stock (18,350 ) — — — — (18,350 ) Intercompany financing activities — (7,056 ) 2,000 (168 ) 5,224 — Net cash (used in) provided by financing activities (9,919 ) (26,320 ) 2,000 (168 ) 5,224 (29,183 ) Effect of exchange rates on cash — — — 73 — 73 Cash and cash equivalents Net (decrease) increase for the period — (41,067 ) 1,667 634 — (38,766 ) Balance, beginning of the period — 141,640 482 10,898 — 153,020 Balance, end of the period $ — $ 100,573 $ 2,149 $ 11,532 $ — $ 114,254 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2012 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total Cash flows from operating activities Net income $ 25,689 $ 25,689 $ 8,685 $ 861 $ (35,235 ) $ 25,689 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization — 16,160 5 474 — 16,639 Amortization of financing costs — 1,485 — — — 1,485 Provision for bad debts — 2,531 2,651 — — 5,182 Equity (income) loss (25,689 ) (9,546 ) — — 35,235 — Stock-based compensation — 6,655 — — — 6,655 Other non-cash items — 95 — — — 95 Changes in operating assets and liabilities: Net settlement receivables and liabilities — 88,354 — 2,999 — 91,353 Other changes in operating assets and liabilities 29 3,738 (10,705 ) 17,328 — 10,390 Net cash provided by operating activities 29 135,161 636 21,662 — 157,488 Cash flows from investing activities Capital expenditures — (11,546 ) (225 ) (1,015 ) — (12,786 ) Changes in restricted cash and cash equivalents — 255 — — — 255 Intercompany investing activities (6,422 ) 20,336 — — (13,914 ) — Net cash (used in) provided by investing activities (6,422 ) 9,045 (225 ) (1,015 ) (13,914 ) (12,531 ) Cash flows from financing activities Repayments of prior credit facility — (52,500 ) — — — (52,500 ) Debt issuance costs — (676 ) — — — (676 ) Proceeds from exercise of stock options 6,655 — — — — 6,655 Purchase of treasury stock (262 ) — — — — (262 ) Intercompany financing activities — 2,844 — (16,758 ) 13,914 — Net cash provided by (used in) financing activities 6,393 (50,332 ) — (16,758 ) 13,914 (46,783 ) Effect of exchange rates on cash — — — (689 ) — (689 ) Cash and cash equivalents Net increase for the period — 93,874 411 3,200 — 97,485 Balance, beginning of the period — 47,766 71 7,698 — 55,535 Balance, end of the period $ — $ 141,640 $ 482 $ 10,898 $ — $ 153,020 |
BASIS OF PRESENTATION AND SU131
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Advertising, Marketing and Promotional Costs | |||||||||
Total advertising, marketing and promotional costs | $ 0.5 | $ 0.3 | $ 0.8 | $ 0.2 | $ 0.2 | $ 0.4 | $ 1.1 | $ 0.7 | $ 0.7 |
BASIS OF PRESENTATION AND SU132
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($) $ in Thousands | Jun. 30, 2015 | Mar. 31, 2015 |
Level 1 | Fair Value | Term Loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | $ 498,713 | $ 497,500 |
Level 1 | Carrying Amount | Term Loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 495,000 | 497,500 |
Level 3 | Fair Value | Senior secured notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 345,888 | 340,025 |
Level 3 | Fair Value | Senior unsecured notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 336,000 | 326,375 |
Level 3 | Carrying Amount | Senior secured notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 335,000 | 335,000 |
Level 3 | Carrying Amount | Senior unsecured notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | $ 350,000 | $ 350,000 |
BUSINESS COMBINATIONS (Detai133
BUSINESS COMBINATIONS (Details) - $ / shares | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 19, 2014 | Dec. 31, 2013 |
Business Combinations | |||||
Common stock par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |
Multimedia Games Holding Company Inc | |||||
Business Combinations | |||||
Common stock par value (in dollars per share) | $ 0.01 |
BUSINESS COMBINATIONS (Detai134
BUSINESS COMBINATIONS (Details 2) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Apr. 30, 2014 | Dec. 31, 2014 | Apr. 30, 2014 | Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2015 | Jun. 30, 2014 |
NEWave Inc | |||||||
Total merger consideration | $ 14,900 | $ 14,900 | $ 14,900 | ||||
Multimedia Games Holding Company Inc | |||||||
Total purchase price for Multimedia Games common stock (29,948 shares at $36.50 per share) | $ 1,093,105 | $ 1,093,105 | $ 1,093,105 | ||||
Common stock shares issued (in shares) | (29,948) | (29,948) | 29,948 | ||||
Share price (in dollars per share) | $ 36.50 | $ 36.50 | $ 36.50 | ||||
Total merger consideration | $ 1,149,389 | $ 1,149,389 | $ 1,149,389 | ||||
Multimedia Games Holding Company Inc | Equity Award Holders | |||||||
Cash consideration paid | $ 56,284 | $ 56,284 | $ 56,284 |
BUSINESS COMBINATIONS (Detai135
BUSINESS COMBINATIONS (Details 3) - USD ($) $ in Thousands | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Goodwill | $ 857,670 | $ 857,856 | $ 857,913 | $ 180,084 | $ 180,141 |
Receivables acquired | 24,700 | 24,700 | 24,700 | ||
Inventory acquired | 16,500 | 16,500 | 16,500 | ||
Multimedia Games Holding Company Inc | |||||
Current Assets | 68,548 | 68,548 | 68,548 | ||
Property, equipment and leasehold improvements, net | 87,283 | 87,283 | 87,283 | ||
Goodwill | 669,542 | 669,542 | 669,542 | ||
Other intangible assets, net | 403,300 | 403,300 | 403,300 | ||
Other receivables, non-current | 5,030 | 5,030 | 5,030 | ||
Other assets, long-term | 3,392 | 3,392 | 3,392 | ||
Deferred tax asset, non-current | 22,287 | 22,287 | 22,287 | ||
Total assets | 1,259,382 | 1,259,382 | 1,259,382 | ||
Current Liabilities | 44,291 | 44,291 | 44,291 | ||
Deferred tax liability, non-current | 158,418 | 158,418 | 158,418 | ||
Other accrued expenses and liabilities | 518 | 518 | 518 | ||
Total liabilities | 203,227 | 203,227 | 203,227 | ||
Net assets acquired | $ 1,056,155 | $ 1,056,155 | $ 1,056,155 |
BUSINESS COMBINATIONS (Detai136
BUSINESS COMBINATIONS (Details 4) - USD ($) $ in Thousands | Apr. 30, 2014 | Dec. 31, 2014 | Apr. 30, 2014 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2015 | Dec. 31, 2014 |
Property, Equipment and Leased Assets | ||||||||
Estimated Fair Value | $ 87,283 | $ 87,283 | $ 87,283 | |||||
Purchased intangible assets | ||||||||
Useful Life (years) | 3 years | |||||||
Gaming Equipment | ||||||||
Property, Equipment and Leased Assets | ||||||||
Estimated Fair Value | 78,201 | 78,201 | $ 78,201 | |||||
Leasehold and building improvements | ||||||||
Property, Equipment and Leased Assets | ||||||||
Estimated Fair Value | 2,105 | 2,105 | 2,105 | |||||
Machinery and equipment | ||||||||
Property, Equipment and Leased Assets | ||||||||
Estimated Fair Value | 4,126 | 4,126 | 4,126 | |||||
Other | ||||||||
Property, Equipment and Leased Assets | ||||||||
Estimated Fair Value | 2,851 | 2,851 | $ 2,851 | |||||
NEWave Inc | ||||||||
Purchased intangible assets | ||||||||
Discount rate (as a percent) | 15.50% | |||||||
Aggregate purchase price | $ 14,900 | $ 14,900 | $ 14,900 | |||||
Aggregate purchase price expected to be paid | $ 2,500 | 2,500 | ||||||
Multimedia Games Holding Company Inc | ||||||||
Property, Equipment and Leased Assets | ||||||||
Estimated Fair Value | 87,283 | $ 87,283 | $ 87,283 | |||||
Purchased intangible assets | ||||||||
Financial advisory and legal fees | 10,700 | 1,500 | 10,700 | $ 10,700 | ||||
Aggregate purchase price | 1,149,389 | 1,149,389 | 1,149,389 | |||||
Multimedia Games Holding Company Inc | Level 2 | ||||||||
Purchased intangible assets | ||||||||
Estimated Fair Value | 403,300 | 403,300 | 403,300 | 403,300 | 403,300 | 403,300 | ||
Multimedia Games Holding Company Inc | Level 2 | Tradenames and trademarks | ||||||||
Purchased intangible assets | ||||||||
Estimated Fair Value | 14,800 | 14,800 | 14,800 | 14,800 | 14,800 | 14,800 | ||
Multimedia Games Holding Company Inc | Level 2 | Computer software | ||||||||
Purchased intangible assets | ||||||||
Estimated Fair Value | 3,755 | 3,755 | 3,755 | 3,755 | 3,755 | 3,755 | ||
Multimedia Games Holding Company Inc | Level 2 | Developed Technology | ||||||||
Purchased intangible assets | ||||||||
Estimated Fair Value | 139,645 | 139,645 | 139,645 | 139,645 | 139,645 | 139,645 | ||
Multimedia Games Holding Company Inc | Level 2 | Customer relationships | ||||||||
Purchased intangible assets | ||||||||
Estimated Fair Value | 231,100 | 231,100 | 231,100 | 231,100 | 231,100 | 231,100 | ||
Multimedia Games Holding Company Inc | Level 2 | Contract Rights | ||||||||
Purchased intangible assets | ||||||||
Estimated Fair Value | $ 14,000 | 14,000 | 14,000 | $ 14,000 | 14,000 | $ 14,000 | ||
Multimedia Games Holding Company Inc | Gaming Equipment | ||||||||
Property, Equipment and Leased Assets | ||||||||
Estimated Fair Value | 78,201 | 78,201 | 78,201 | |||||
Multimedia Games Holding Company Inc | Leasehold and building improvements | ||||||||
Property, Equipment and Leased Assets | ||||||||
Estimated Fair Value | 2,105 | 2,105 | 2,105 | |||||
Multimedia Games Holding Company Inc | Machinery and equipment | ||||||||
Property, Equipment and Leased Assets | ||||||||
Estimated Fair Value | 4,126 | 4,126 | 4,126 | |||||
Multimedia Games Holding Company Inc | Other | ||||||||
Property, Equipment and Leased Assets | ||||||||
Estimated Fair Value | $ 2,851 | $ 2,851 | $ 2,851 | |||||
Minimum | ||||||||
Property, Equipment and Leased Assets | ||||||||
Useful Life (years) | 3 years | |||||||
Minimum | Computer software | ||||||||
Purchased intangible assets | ||||||||
Useful Life (years) | 1 year | |||||||
Minimum | Customer relationships | ||||||||
Purchased intangible assets | ||||||||
Useful Life (years) | 8 years | 8 years | 8 years | |||||
Minimum | Other intangible asset | ||||||||
Purchased intangible assets | ||||||||
Discount rate (as a percent) | 10.00% | 10.00% | 10.00% | |||||
Minimum | Gaming Equipment | ||||||||
Property, Equipment and Leased Assets | ||||||||
Useful Life (years) | 2 years | |||||||
Minimum | Machinery and equipment | ||||||||
Property, Equipment and Leased Assets | ||||||||
Useful Life (years) | 3 years | 3 years | 3 years | 3 years | ||||
Minimum | Other | ||||||||
Property, Equipment and Leased Assets | ||||||||
Useful Life (years) | 2 years | 2 years | 2 years | 2 years | ||||
Minimum | Multimedia Games Holding Company Inc | Level 2 | Tradenames and trademarks | ||||||||
Purchased intangible assets | ||||||||
Useful Life (years) | 3 years | 3 years | 3 years | |||||
Minimum | Multimedia Games Holding Company Inc | Level 2 | Computer software | ||||||||
Purchased intangible assets | ||||||||
Useful Life (years) | 3 years | 3 years | 3 years | |||||
Minimum | Multimedia Games Holding Company Inc | Level 2 | Developed Technology | ||||||||
Purchased intangible assets | ||||||||
Useful Life (years) | 2 years | 2 years | 2 years | |||||
Minimum | Multimedia Games Holding Company Inc | Level 2 | Customer relationships | ||||||||
Purchased intangible assets | ||||||||
Useful Life (years) | 8 years | 8 years | 8 years | |||||
Minimum | Multimedia Games Holding Company Inc | Level 2 | Contract Rights | ||||||||
Purchased intangible assets | ||||||||
Useful Life (years) | 1 year | 1 year | 1 year | |||||
Minimum | Multimedia Games Holding Company Inc | Gaming Equipment | ||||||||
Property, Equipment and Leased Assets | ||||||||
Useful Life (years) | 2 years | 2 years | ||||||
Minimum | Multimedia Games Holding Company Inc | Machinery and equipment | ||||||||
Property, Equipment and Leased Assets | ||||||||
Useful Life (years) | 3 years | 3 years | ||||||
Minimum | Multimedia Games Holding Company Inc | Other | ||||||||
Property, Equipment and Leased Assets | ||||||||
Useful Life (years) | 2 years | 2 years | ||||||
Maximum | ||||||||
Property, Equipment and Leased Assets | ||||||||
Useful Life (years) | 5 years | |||||||
Purchased intangible assets | ||||||||
Useful Life (years) | 5 years | |||||||
Maximum | Computer software | ||||||||
Purchased intangible assets | ||||||||
Useful Life (years) | 5 years | |||||||
Maximum | Customer relationships | ||||||||
Purchased intangible assets | ||||||||
Useful Life (years) | 12 years | 12 years | 12 years | |||||
Maximum | Other intangible asset | ||||||||
Purchased intangible assets | ||||||||
Discount rate (as a percent) | 11.00% | 11.00% | 11.00% | |||||
Maximum | Gaming Equipment | ||||||||
Property, Equipment and Leased Assets | ||||||||
Useful Life (years) | 4 years | |||||||
Maximum | Machinery and equipment | ||||||||
Property, Equipment and Leased Assets | ||||||||
Useful Life (years) | 5 years | 5 years | 5 years | 5 years | ||||
Maximum | Other | ||||||||
Property, Equipment and Leased Assets | ||||||||
Useful Life (years) | 5 years | 7 years | 5 years | 5 years | ||||
Maximum | Multimedia Games Holding Company Inc | Level 2 | Tradenames and trademarks | ||||||||
Purchased intangible assets | ||||||||
Useful Life (years) | 7 years | 7 years | 7 years | |||||
Maximum | Multimedia Games Holding Company Inc | Level 2 | Computer software | ||||||||
Purchased intangible assets | ||||||||
Useful Life (years) | 5 years | 5 years | 5 years | |||||
Maximum | Multimedia Games Holding Company Inc | Level 2 | Developed Technology | ||||||||
Purchased intangible assets | ||||||||
Useful Life (years) | 6 years | 6 years | 6 years | |||||
Maximum | Multimedia Games Holding Company Inc | Level 2 | Customer relationships | ||||||||
Purchased intangible assets | ||||||||
Useful Life (years) | 12 years | 12 years | 12 years | |||||
Maximum | Multimedia Games Holding Company Inc | Level 2 | Contract Rights | ||||||||
Purchased intangible assets | ||||||||
Useful Life (years) | 7 years | 7 years | 7 years | |||||
Maximum | Multimedia Games Holding Company Inc | Gaming Equipment | ||||||||
Property, Equipment and Leased Assets | ||||||||
Useful Life (years) | 4 years | 4 years | ||||||
Maximum | Multimedia Games Holding Company Inc | Machinery and equipment | ||||||||
Property, Equipment and Leased Assets | ||||||||
Useful Life (years) | 5 years | 5 years | ||||||
Maximum | Multimedia Games Holding Company Inc | Other | ||||||||
Property, Equipment and Leased Assets | ||||||||
Useful Life (years) | 7 years | 7 years |
ATM FUNDING AGREEMENTS (Deta137
ATM FUNDING AGREEMENTS (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2012 | |
ATM Funding Agreements | ||||||||||
Gains (losses) related to self-insurance | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | ||||
Site-Funded ATM liability | 69.4 | 71.5 | $ 69.4 | 69.3 | 68.9 | |||||
Indemnification Guarantee [Member] | Cash [Member] | ||||||||||
ATM Funding Agreements | ||||||||||
Cash usage fees incurred | 0.5 | $ 0.5 | $ 1 | $ 0.6 | $ 1.2 | 2.3 | 2.2 | $ 3.1 | ||
Indemnification Guarantee [Member] | Contract Cash Solutions Agreement [Member] | ||||||||||
ATM Funding Agreements | ||||||||||
Extended agreement term | 1 year | 1 year | ||||||||
Indemnification Guarantee [Member] | Contract Cash Solutions Agreement [Member] | Cash [Member] | ||||||||||
ATM Funding Agreements | ||||||||||
Outstanding balance of ATM cash utilized | 425 | $ 500 | $ 425 | 396.3 | $ 427.1 | |||||
Indemnification Guarantee [Member] | Second Amendment Contract Cash Solutions Agreement [Member] | Cash [Member] | ||||||||||
ATM Funding Agreements | ||||||||||
Maximum amount | $ 271.8 | $ 396.3 | $ 271.8 | $ 500 | $ 400 |
TRADE RECEIVABLES (Details)138
TRADE RECEIVABLES (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
TRADE RECEIVABLES | ||||||
Trade receivables, net | $ 41,834 | $ 39,220 | $ 37,697 | $ 11,658 | ||
Warranty and other trade receivables | 4,311 | 4,742 | 4,180 | 3,396 | ||
Outstanding balance of warranty reserve | 2,900 | 2,700 | 2,784 | 2,777 | $ 6,908 | $ 6,756 |
Kiosk Sales & Services Reporting Units | ||||||
TRADE RECEIVABLES | ||||||
Trade receivables, net | 4,723 | 4,301 | 5,247 | $ 8,262 | ||
Gaming | ||||||
TRADE RECEIVABLES | ||||||
Trade receivables, net | $ 32,800 | $ 30,177 | $ 28,270 |
OTHER RECEIVABLES (Details)139
OTHER RECEIVABLES (Details) - USD ($) $ in Thousands | Jul. 17, 2014 | Jul. 17, 2014 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Financing Receivable | ||||||
Notes and loans receivables, net of discount of $814 and $853, respectively | $ 10,984 | $ 13,261 | $ 13,939 | $ 3,249 | ||
Federal and state income tax receivable | 7,465 | 15,142 | 15,092 | 16 | ||
Other | 731 | 582 | 706 | 2,039 | ||
Total Other receivables | 19,180 | 28,985 | 29,737 | 5,304 | ||
Less: Notes and loans receivable, non-current | 7,808 | 8,593 | 9,184 | 699 | ||
Total other receivables, current portion | 11,372 | 20,392 | 20,553 | 4,605 | ||
Discount of notes receivable other | $ 776 | $ 814 | $ 853 | $ 0 | ||
Bee Caves Games, Inc | ||||||
Financing Receivable | ||||||
Note receivable, Face Amount | $ 4,500 | $ 4,500 | ||||
Note receivable, stated interest rate (as a percent) | 7.00% | 7.00% | ||||
Note receivable, interest only payments term | 24 months | 24 months | ||||
Note receivable, Repayment of principle and interest term | 48 months | 48 months |
PREPAID AND OTHER ASSETS (De140
PREPAID AND OTHER ASSETS (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
PREPAID AND OTHER ASSETS | ||||
Prepaid expenses | $ 7,755 | $ 6,935 | $ 7,163 | $ 7,679 |
Deposits | 8,213 | 8,781 | ||
Other | 3,753 | 3,741 | 3,044 | 2,735 |
Total prepaid expenses and other assets | 21,090 | 18,889 | 18,988 | 16,674 |
Other assets non-current | ||||
Debt issuance costs | 26,592 | 40,012 | 41,109 | 4,081 |
Prepaid expense And Deposits non-current | 4,430 | 3,998 | 3,956 | 1,320 |
Other | 5,893 | 6,002 | 5,878 | 4,985 |
Total other assets, non-current | $ 36,915 | $ 50,012 | $ 50,943 | $ 10,386 |
INVENTORY (Details)141
INVENTORY (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
INVENTORY | ||||
Raw materials and component parts, net of reserves of $82 and $22, respectively | $ 19,387 | $ 19,997 | $ 21,151 | $ 7,147 |
Work in progress | 1,403 | 1,406 | 803 | 1,504 |
Finished goods | 2,663 | 1,647 | 5,209 | 762 |
Inventory, Net, Total | 23,453 | 23,050 | 27,163 | 9,413 |
Raw materials and component parts, reserves | $ 142 | $ 82 | $ 22 | $ 50 |
PROPERTY, EQUIPMENT AND LEAS142
PROPERTY, EQUIPMENT AND LEASED ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||
Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Cost | $ 151,020 | $ 140,381 | $ 135,495 | $ 151,020 | $ 135,495 | $ 49,663 | ||||
Accumulated Depreciation | 46,499 | 37,622 | 29,410 | 46,499 | 29,410 | 30,953 | ||||
Net Book Value | 104,521 | 102,759 | 106,085 | 104,521 | 106,085 | 18,710 | ||||
Depreciation expense | 10,717 | 10,377 | $ 1,919 | $ 1,927 | 21,094 | $ 3,846 | $ 8,745 | 7,350 | $ 6,843 | |
Minimum | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Useful Life (years) | 3 years | |||||||||
Maximum | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Useful Life (years) | 5 years | |||||||||
Rental pool - deployed | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Cost | 78,058 | 74,742 | 70,295 | 78,058 | $ 70,295 | |||||
Accumulated Depreciation | 13,992 | 7,429 | 876 | 13,992 | 876 | |||||
Net Book Value | 64,066 | $ 67,313 | 69,419 | $ 64,066 | $ 69,419 | |||||
Rental pool - deployed | Minimum | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Useful Life (years) | 2 years | 2 years | 2 years | |||||||
Rental pool - deployed | Maximum | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Useful Life (years) | 4 years | 4 years | 4 years | |||||||
Rental pool - undeployed | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Cost | 14,831 | $ 11,321 | 10,562 | $ 14,831 | $ 10,562 | |||||
Accumulated Depreciation | 2,699 | 1,318 | 151 | 2,699 | 151 | |||||
Net Book Value | 12,132 | $ 10,003 | 10,411 | $ 12,132 | $ 10,411 | |||||
Rental pool - undeployed | Minimum | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Useful Life (years) | 2 years | 2 years | 2 years | |||||||
Rental pool - undeployed | Maximum | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Useful Life (years) | 4 years | 4 years | 4 years | |||||||
Automated Teller Machine Equipment [Member] | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Cost | 20,818 | $ 22,099 | 23,572 | $ 20,818 | $ 23,572 | 28,394 | ||||
Accumulated Depreciation | 14,692 | 15,416 | 16,543 | 14,692 | 16,543 | 22,011 | ||||
Net Book Value | 6,126 | $ 6,683 | 7,029 | $ 6,126 | $ 7,029 | 6,383 | ||||
Automated Teller Machine Equipment [Member] | Maximum | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Useful Life (years) | 5 years | 5 years | 5 years | |||||||
Office Computer And Other Equipment [Member] | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Cost | 16,745 | $ 15,885 | 15,238 | $ 16,745 | $ 15,238 | 11,729 | ||||
Accumulated Depreciation | 10,543 | 9,736 | 8,848 | 10,543 | 8,848 | 5,408 | ||||
Net Book Value | 6,202 | $ 6,149 | 6,390 | $ 6,202 | $ 6,390 | 6,321 | ||||
Office Computer And Other Equipment [Member] | Maximum | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Useful Life (years) | 3 years | 3 years | 3 years | |||||||
Leasehold And Building Improvements [Member] | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Cost | 6,142 | $ 6,294 | 6,289 | $ 6,142 | $ 6,289 | 6,362 | ||||
Accumulated Depreciation | 1,456 | 1,187 | 895 | 1,456 | 895 | 1,268 | ||||
Net Book Value | 4,686 | 5,107 | 5,394 | 4,686 | 5,394 | 5,094 | ||||
Machinery and equipment | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Cost | 5,282 | 3,469 | 3,395 | 5,282 | 3,395 | |||||
Accumulated Depreciation | 538 | 282 | 34 | 538 | 34 | |||||
Net Book Value | 4,744 | $ 3,187 | $ 3,361 | $ 4,744 | $ 3,361 | |||||
Machinery and equipment | Minimum | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Useful Life (years) | 3 years | 3 years | 3 years | 3 years | ||||||
Machinery and equipment | Maximum | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Useful Life (years) | 5 years | 5 years | 5 years | 5 years | ||||||
Cash Advance Equipment [Member] | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Cost | 6,620 | $ 3,922 | $ 3,372 | $ 6,620 | $ 3,372 | 3,178 | ||||
Accumulated Depreciation | 2,159 | 2,023 | 1,873 | 2,159 | 1,873 | 2,266 | ||||
Net Book Value | 4,461 | $ 1,899 | 1,499 | $ 4,461 | $ 1,499 | $ 912 | ||||
Cash Advance Equipment [Member] | Maximum | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Useful Life (years) | 3 years | 3 years | 3 years | |||||||
Other | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Cost | 2,524 | $ 2,649 | 2,772 | $ 2,524 | $ 2,772 | |||||
Accumulated Depreciation | 420 | 231 | 189 | 420 | 189 | |||||
Net Book Value | $ 2,104 | $ 2,418 | $ 2,583 | $ 2,104 | $ 2,583 | |||||
Other | Minimum | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Useful Life (years) | 2 years | 2 years | 2 years | 2 years | ||||||
Other | Maximum | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Useful Life (years) | 5 years | 7 years | 5 years | 5 years |
GOODWILL AND OTHER INTANGIBL143
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Changes in the carrying amount of goodwill | ||||||
Goodwill | $ 857,670 | $ 857,856 | $ 857,913 | $ 180,084 | $ 180,141 | |
Key assumptions used in estimating fair value under the discounted cash flow approach and under the income approach | ||||||
Goodwill impairment | $ 0 | $ 0 | $ 0 | $ 0 |
GOODWILL AND OTHER INTANGIBL144
GOODWILL AND OTHER INTANGIBLE ASSETS (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Other Intangible Assets | |||||||||
Useful Life (years) | 3 years | ||||||||
Cost | $ 503,508 | $ 496,796 | $ 503,508 | $ 491,311 | $ 77,951 | ||||
Accumulated Amortization | 99,376 | 76,693 | 99,376 | 54,526 | 46,416 | ||||
Net Book Value | 404,132 | 420,103 | 404,132 | $ 436,785 | 31,535 | ||||
Maximum | |||||||||
Other Intangible Assets | |||||||||
Useful Life (years) | 5 years | ||||||||
Contract rights under development and placement fee agreements | |||||||||
Other Intangible Assets | |||||||||
Cost | 16,387 | 14,919 | 16,387 | $ 14,000 | |||||
Accumulated Amortization | 4,092 | 2,104 | 4,092 | 301 | |||||
Net Book Value | 12,295 | $ 12,815 | $ 12,295 | $ 13,699 | |||||
Contract rights under development and placement fee agreements | Minimum | |||||||||
Other Intangible Assets | |||||||||
Useful Life (years) | 1 year | 1 year | 1 year | ||||||
Contract rights under development and placement fee agreements | Maximum | |||||||||
Other Intangible Assets | |||||||||
Useful Life (years) | 7 years | 7 years | 3 years | ||||||
Customer contracts | |||||||||
Other Intangible Assets | |||||||||
Cost | 43,938 | $ 43,938 | $ 43,938 | $ 43,938 | 39,142 | ||||
Accumulated Amortization | 32,221 | 31,093 | 32,221 | 29,931 | 25,670 | ||||
Net Book Value | 11,717 | $ 12,845 | $ 11,717 | $ 14,007 | 13,472 | ||||
Customer contracts | Minimum | |||||||||
Other Intangible Assets | |||||||||
Useful Life (years) | 7 years | 7 years | 7 years | ||||||
Customer contracts | Maximum | |||||||||
Other Intangible Assets | |||||||||
Useful Life (years) | 14 years | 14 years | 14 years | ||||||
Customer relationships | |||||||||
Other Intangible Assets | |||||||||
Cost | 231,100 | $ 231,100 | $ 231,100 | $ 231,100 | |||||
Accumulated Amortization | 11,240 | 5,999 | 11,240 | 733 | |||||
Net Book Value | 219,860 | $ 225,101 | $ 219,860 | $ 230,367 | |||||
Customer relationships | Minimum | |||||||||
Other Intangible Assets | |||||||||
Useful Life (years) | 8 years | 8 years | 8 years | ||||||
Customer relationships | Maximum | |||||||||
Other Intangible Assets | |||||||||
Useful Life (years) | 12 years | 12 years | 12 years | ||||||
Developed technology and software | |||||||||
Other Intangible Assets | |||||||||
Cost | 184,242 | $ 179,139 | $ 184,242 | $ 140,289 | |||||
Accumulated Amortization | 40,679 | 27,492 | 40,679 | 1,571 | |||||
Net Book Value | 143,563 | 151,647 | 143,563 | 138,718 | |||||
Development costs capitalized | 4,700 | $ 1,000 | $ 5,700 | $ 300 | $ 4,500 | $ 4,900 | $ 8,200 | 5,100 | $ 700 |
Developed technology and software | Minimum | |||||||||
Other Intangible Assets | |||||||||
Useful Life (years) | 1 year | 1 year | 2 years | ||||||
Developed technology and software | Maximum | |||||||||
Other Intangible Assets | |||||||||
Useful Life (years) | 6 years | 6 years | 6 years | ||||||
Patents, trademarks and other | |||||||||
Other Intangible Assets | |||||||||
Cost | 27,841 | $ 27,700 | $ 27,841 | $ 27,856 | 12,423 | ||||
Accumulated Amortization | 11,144 | 10,005 | 11,144 | 8,957 | 7,677 | ||||
Net Book Value | $ 16,697 | $ 17,695 | $ 16,697 | $ 18,899 | $ 4,746 | ||||
Patents, trademarks and other | Minimum | |||||||||
Other Intangible Assets | |||||||||
Useful Life (years) | 1 year | 1 year | 1 year | ||||||
Patents, trademarks and other | Maximum | |||||||||
Other Intangible Assets | |||||||||
Useful Life (years) | 17 years | 17 years | 17 years |
GOODWILL AND OTHER INTANGIBL145
GOODWILL AND OTHER INTANGIBLE ASSETS (Details 3) $ in Millions | Jan. 15, 2015USD ($)item | Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 |
Minimum | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
General term of the agreement | 12 months | 12 months | 12 months | |
Maximum | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
General term of the agreement | 83 months | 83 months | 83 months | |
Chickasaw Nation | Units Located Across Oklahoma | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Payment advances made under development and placement fee agreements | $ | $ 1.2 | |||
Number of unit placement with period coverage extension | 118 | |||
Number of casino location with period coverage extension | 1 | |||
Additional term | 60 months |
ACCOUNTS PAYABLE AND ACCRUED146
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Accounts payable and accrued expenses | ||||
Trade accounts payable | $ 52,169 | $ 52,226 | $ 48,962 | $ 35,662 |
Accrued Interest | 26,698 | 2,150 | 3,387 | 208 |
Payroll and related expenses | 7,275 | 14,089 | 10,889 | 4,758 |
Deferred and unearned revenues | 9,308 | 7,497 | 8,016 | 4,270 |
Cash access Processing and related expenses | 3,535 | 8,861 | 4,414 | 4,300 |
Accrued Taxes | 1,999 | 4,436 | 3,195 | 1,024 |
Other | 15,711 | 24,284 | 25,805 | 3,379 |
Total accounts payable and accrued expenses | $ 36,712 | $ 113,543 | $ 104,668 | $ 53,601 |
LONG-TERM DEBT (Details)147
LONG-TERM DEBT (Details) - USD ($) | Dec. 19, 2014 | Dec. 31, 2014 | May. 31, 2014 | Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
BORROWINGS | ||||||||
Total Debt | $ 1,200,000,000 | $ 1,180,000,000 | $ 1,182,500,000 | $ 1,180,000,000 | $ 1,200,000,000 | $ 103,000,000 | ||
Less: original issue discount | (11,213,000) | (12,494,000) | (10,769,000) | (12,494,000) | (11,213,000) | |||
Borrowings | 1,188,787,000 | 1,167,506,000 | 1,171,731,000 | 1,167,506,000 | 1,188,787,000 | 103,000,000 | ||
Less: current portion of long-term debt | (10,000,000) | (10,000,000) | (10,000,000) | (10,000,000) | (10,000,000) | (1,030,000) | ||
Long-term debt, less current portion | 1,178,787,000 | 1,157,506,000 | 1,161,731,000 | 1,157,506,000 | 1,178,787,000 | 101,970,000 | ||
Loss on extinguishment of debt | 12,977,000 | 0 | 12,977,000 | 2,725,000 | ||||
Outstanding indebtedness | 1,188,787,000 | 1,167,506,000 | 1,171,731,000 | 1,167,506,000 | 1,188,787,000 | 103,000,000 | ||
Senior secured term Loan | ||||||||
BORROWINGS | ||||||||
Total Debt | 500,000,000 | 495,000,000 | 497,500,000 | 495,000,000 | 500,000,000 | |||
Senior secured notes | ||||||||
BORROWINGS | ||||||||
Total Debt | 350,000,000 | 335,000,000 | 335,000,000 | 335,000,000 | 350,000,000 | |||
Less: original issue discount | $ 3,800,000 | 3,800,000 | ||||||
Debt issuance costs and fees | $ 13,600,000 | |||||||
Debt instrument term | 1 year | |||||||
Notes stated interest percentage | 7.75% | 7.75% | ||||||
Senior unsecured notes | ||||||||
BORROWINGS | ||||||||
Total Debt | $ 350,000,000 | $ 350,000,000 | $ 350,000,000 | $ 350,000,000 | $ 350,000,000 | |||
Less: original issue discount | $ 3,800,000 | 3,800,000 | ||||||
Debt issuance costs and fees | $ 14,000,000 | |||||||
Notes stated interest percentage | 10.00% | 10.00% | ||||||
Senior unsecured notes | Maximum | ||||||||
BORROWINGS | ||||||||
Additional interest rate increase | 1.00% | |||||||
Term Loan | ||||||||
BORROWINGS | ||||||||
Percentage of initial aggregate principal used to calculate quarterly term loan repayment amount | 0.50% | |||||||
Notes stated interest percentage | 6.25% | 6.25% | 6.25% | 6.25% | 6.25% | |||
Term Loan | LIBOR | ||||||||
BORROWINGS | ||||||||
Variable rate basis | LIBOR | LIBOR | LIBOR | |||||
Term Loan | LIBOR | Minimum | ||||||||
BORROWINGS | ||||||||
Variable rate of debt (as a percent) | 1.00% | 1.00% | 1.00% | |||||
Revolving Credit Loan | ||||||||
BORROWINGS | ||||||||
Maximum borrowing capacity | $ 50,000,000 | $ 50,000,000 | ||||||
Debt instrument term | 6 years | 5 years | ||||||
Revolving Credit Loan | LIBOR | ||||||||
BORROWINGS | ||||||||
Interest rate margin | 4.75% | 4.75% | 4.75% | 4.75% | 4.75% | |||
Revolving Credit Loan | LIBOR | Minimum | ||||||||
BORROWINGS | ||||||||
Variable rate of debt (as a percent) | 0.00% | 0.00% | 0.00% | |||||
Senior credit facility | ||||||||
BORROWINGS | ||||||||
Total Debt | $ 103,000,000 | |||||||
Registration rights agreement | Senior unsecured notes | Exchange offer not completed or shelf registration not effective by December 19, 2015 - First following 90 day period | ||||||||
BORROWINGS | ||||||||
Additional interest rate increase | 0.25% | |||||||
Registration rights agreement | Senior unsecured notes | Exchange offer not completed or shelf registration not effective by December 19, 2015 - each subsequent 90 day period | ||||||||
BORROWINGS | ||||||||
Additional interest rate increase | 0.25% | |||||||
Registration rights agreement | Senior unsecured notes | Maximum | Exchange offer not completed or shelf registration not effective by December 19, 2015 - each subsequent 90 day period | ||||||||
BORROWINGS | ||||||||
Maximum additional rate per annum increase | $ 1 | |||||||
Credit Facilities | ||||||||
BORROWINGS | ||||||||
Less: original issue discount | $ 7,500,000 | $ 7,500,000 | ||||||
Debt issuance costs and fees | $ 13,900,000 | $ 13,900,000 | ||||||
Premium on principal repayment | 1.00% | 1.00% | 1.00% | |||||
Credit Facilities | Federal funds effective rate | ||||||||
BORROWINGS | ||||||||
Interest rate margin | 0.50% | 0.50% | 0.50% | 0.50% | 0.50% | |||
Credit Facilities | LIBOR (after taking account of any applicable floor) applicable for an interest period of one month | ||||||||
BORROWINGS | ||||||||
Interest rate margin | 1.00% | 1.00% | 1.00% | 1.00% | 1.00% | |||
Credit Facilities | Senior secured term Loan | ||||||||
BORROWINGS | ||||||||
Maximum borrowing capacity | $ 500,000,000 | $ 500,000,000 | ||||||
Credit Facilities | Senior secured term Loan | LIBOR | ||||||||
BORROWINGS | ||||||||
Interest rate margin | 5.25% | 5.25% | 5.25% | 5.25% | 5.25% | |||
Credit Facilities | Senior secured notes | ||||||||
BORROWINGS | ||||||||
Debt instrument term | 5 years | 6 years |
COMMITMENTS AND CONTINGENCIE148
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015USD ($)item | Jun. 30, 2015USD ($) | Dec. 31, 2014USD ($)item | |
Gain Contingency | |||
Litigation Settlement Awards | |||
Amount received and recorded from settlement | $ 14,400 | ||
Alabama Litigation | |||
Litigation Settlement Awards | |||
Number of lawsuits involved | item | 2 | 2 | |
Period of games played | 6 months | 6 months | |
United States District Court | Multimedia Games Shareholder Litigation | Maximum | |||
Litigation Settlement Awards | |||
Attorneys's fee paid by Holdings | $ 310,000 | $ 310,000 | $ 310,000 |
SHAREHOLDERS' EQUITY (Detail149
SHAREHOLDERS' EQUITY (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |
SHAREHOLDERS' EQUITY | ||||||||
Preferred stock, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 | 50,000,000 | 50,000,000 | |||
Preferred stock, shares outstanding | 0 | 0 | 0 | 0 | 0 | |||
Common stock, votes per share | 1 | 1 | 1 | |||||
Common stock, shares issued | 90,743,000 | 90,610,000 | 90,743,000 | 90,405,000 | 89,233,000 | |||
Total Number of Shares Purchased or Withheld | ||||||||
Shares withheld from restricted stock vesting | 2,599 | 2,845 | 31,000 | 55,000 | 14,901 | |||
Cost of Shares Purchased or Withheld | ||||||||
Shares withheld from restricted stock vesting (in dollars) | $ 20,167 | $ 19,743 | $ 39,910 | $ 300,000 | $ 100,000 | $ 400,000 | $ 459,000 | $ 100,000 |
WEIGHTED AVERAGE COMMON SHAR150
WEIGHTED AVERAGE COMMON SHARES (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||
Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
WEIGHTED AVERAGE COMMON SHARES | |||||||||||||||
Anti-dilutive equity awards excluded from computation of earnings per share (in shares) | 8,400 | 5,100 | 7,500 | 6,500 | |||||||||||
Weighted-average number of common shares outstanding used in the computation of basic and diluted earnings per share | |||||||||||||||
Weighted average number of common shares outstanding - basic | 65,844 | 65,623 | 65,608 | 65,589 | 65,970 | 65,910 | 65,730 | 65,525 | 66,116 | 66,697 | 65,734 | 65,940 | 65,780 | 66,014 | 65,933 |
Potential dilution from equity awards(1) | 869 | 1,117 | 1,460 | 1,266 | 1,083 | 1,191 | 1,404 | ||||||||
Weighted average number of common shares outstanding - diluted | 65,844 | 66,492 | 66,397 | 66,747 | 67,087 | 67,370 | 67,394 | 66,630 | 66,993 | 67,882 | 65,734 | 67,206 | 66,863 | 67,205 | 67,337 |
SHARE-BASED COMPENSATION (De151
SHARE-BASED COMPENSATION (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Equity Incentive Awards | ||||||||||
Expiration period | 10 years | |||||||||
2005 Plan | ||||||||||
Equity Awards Available for Grant | ||||||||||
Shares of reserved common stock increased annually | 0 | 0 | 0 | 0 | ||||||
2014 Plan | ||||||||||
Equity Awards Available for Grant | ||||||||||
Shares of reserved common stock increased annually | 12,100,000 | 6,600,000 | 11,900,000 | 11,900,000 | ||||||
Stock Option [Member] | ||||||||||
Stock Options Granted | ||||||||||
Balance outstanding at the beginning of the period (in shares) | 12,006,000 | 13,626,000 | 8,872,000 | 13,626,000 | 8,872,000 | 8,872,000 | 8,872,000 | |||
Granted (in shares) | 6,100,000 | 0 | 3,000,000 | 2,000,000 | 6,097,000 | 5,000,000 | 5,523,000 | 1,200,000 | 2,400,000 | |
Exercised options (in shares) | (194,000) | (315,000) | (971,000) | |||||||
Canceled or forfeited (in shares) | (1,426,000) | (1,694,000) | (893,000) | |||||||
Balance outstanding at the end of the period (in shares) | 17,714,000 | 12,006,000 | 17,714,000 | 13,626,000 | 8,872,000 | |||||
Vested and expected to vest (in shares) | 14,717,000 | 10,864,000 | 14,717,000 | 12,358,000 | ||||||
Balance exercisable at the end of the period (in shares) | 6,651,000 | 6,651,000 | 6,221,000 | 6,771,000 | ||||||
Weighted Average Exercise Price | ||||||||||
Balance outstanding at the beginning of the period (in dollars per share) | $ 7.30 | $ 7.64 | $ 7.54 | $ 7.64 | $ 7.54 | $ 7.54 | $ 7.54 | |||
Granted (in dollars per share) | 0 | 7.74 | 7.54 | |||||||
Exercised options (in dollars per share) | 5.39 | 5.39 | 5.43 | |||||||
Canceled or forfeited (in dollars per share) | 10.80 | 10.13 | 6.89 | |||||||
Balance outstanding at the end of the period (in dollars per share) | 7.48 | 7.30 | 7.48 | 7.64 | $ 7.54 | |||||
Vested and expected to vest (in dollars per share) | 7.43 | $ 7.28 | 7.43 | 7.65 | ||||||
Balance exercisable at the end of the period (in dollars per share) | $ 7.30 | $ 7.30 | $ 7.31 | $ 8 | ||||||
Equity Awards Available for Grant | ||||||||||
Granted (in shares) | 0 | 6,600,000 | ||||||||
Weighted-average assumptions used in estimating fair value | ||||||||||
Risk-free interest rate (as a percent) | 0.00% | 1.00% | 1.00% | 1.00% | 1.00% | |||||
Expected life of options | 4 years | 4 years | 4 years | 6 years | ||||||
Expected volatility (as a percent) | 0.00% | 53.00% | 54.00% | 61.00% | 62.00% | |||||
Expected dividend yield (as a percent) | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | |||||
Weighted Average Life Remaining | ||||||||||
Balance outstanding at the beginning of the period | 6 years 7 months 6 days | 7 years | 6 years 6 months | 5 years 10 months 24 days | ||||||
Balance outstanding at the end of the period | 6 years 7 months 6 days | 7 years | 6 years 6 months | 5 years 10 months 24 days | ||||||
Vested and expected to vest | 6 years 3 months 18 days | 6 years 9 months 18 days | 6 years 2 months 12 days | |||||||
Balance exercisable at the end of the period | 4 years 4 months 24 days | 4 years 4 months 24 days | 3 years 8 months 12 days | |||||||
Aggregate Intrinsic Value | ||||||||||
Balance outstanding at the beginning of the period (in dollars) | $ 12,095,000 | $ 9,148,000 | $ 27,301,000 | $ 9,148,000 | $ 27,301,000 | $ 27,301,000 | $ 27,301,000 | |||
Balance outstanding at the end of the period (in dollars) | 12,446,000 | 12,095,000 | 12,446,000 | 9,148,000 | $ 27,301,000 | |||||
Vested and expected to vest (in dollars) | 11,780,000 | 11,403,000 | 11,780,000 | 8,689,000 | ||||||
Balance exercisable at the end of the period (in dollars) | 8,785,000 | 8,785,000 | $ 7,990,000 | 6,246,000 | ||||||
Additional disclosures | ||||||||||
Total intrinsic value of options exercised | $ 300,000 | $ 0.40 | $ 800,000 | $ 1,700,000 | $ 700,000 | $ 2,400,000 | $ 2,800,000 | $ 4,600,000 | $ 6,300,000 | |
Restricted Stock [Member] | ||||||||||
Restricted Stock Granted | ||||||||||
Balance outstanding at the beginning of the period (in shares) | 429,000 | 440,000 | 404,000 | 440,000 | 404,000 | 404,000 | 404,000 | |||
Granted (in shares) | 0 | 0 | 0 | 0 | 342,000 | 400,000 | ||||
Vested (in shares) | (21,700,000) | (11,000) | (200,000) | 100,000 | (22,000) | (201,000) | 100,000 | 200,000 | ||
Forfeited (in shares) | 0 | (1,000) | (105,000) | |||||||
Balance outstanding at the end of the period (in shares) | 417,000 | 429,000 | 417,000 | 440,000 | 404,000 | |||||
Additional disclosures | ||||||||||
Total fair value of shares vested | $ 100,000 | $ 100,000 | $ 200,000 | $ 700,000 | $ 400,000 | $ 1,400,000 | $ 1,400,000 | $ 700,000 | $ 1,300,000 |
SHARE-BASED COMPENSATION (De152
SHARE-BASED COMPENSATION (Details 2) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Equity Incentive Awards | |||||||||
Proceeds from exercise of stock options | $ 1,048 | $ 2,440 | $ 1,673 | $ 4,613 | $ 5,338 | $ 8,431 | $ 6,655 | ||
Stock Option [Member] | |||||||||
Equity Incentive Awards | |||||||||
Weighted average grant date fair value (in dollars per share) | $ 2.86 | $ 3.88 | $ 2.49 | $ 3.27 | $ 3.20 | $ 3.31 | $ 2.93 | ||
Unrecognized compensation expense | $ 21,800 | $ 13,600 | $ 15,600 | $ 12,000 | $ 21,800 | $ 15,600 | $ 15,400 | ||
Weighted-average period for recognition of unrecognized compensation expense | 3 years | 3 years | 3 years 1 month 6 days | 2 years 10 months 24 days | 3 years 1 month 6 days | ||||
Proceeds from exercise of stock options | $ 1,700 | $ 1,000 | 4,600 | $ 2,400 | $ 5,300 | $ 8,400 | $ 6,700 | ||
Non-cash compensation expense | 3,500 | 1,600 | 4,600 | 1,600 | 7,600 | 4,400 | 6,200 | ||
Restricted Stock [Member] | |||||||||
Equity Incentive Awards | |||||||||
Unrecognized compensation expense | $ 2,500 | $ 2,700 | $ 1,400 | $ 1,700 | $ 2,500 | $ 1,400 | $ 3,000 | ||
Weighted-average period for recognition of unrecognized compensation expense | 2 years 9 months 18 days | 3 years | 2 years 7 months 6 days | 2 years 9 months 18 days | 3 years 3 months 18 days | ||||
Non-cash compensation expense | $ 400 | $ 200 | $ 800 | $ 400 | $ 1,200 | $ 700 | $ 400 | ||
Restricted Stock Granted | |||||||||
Balance outstanding at the beginning of the period (in shares) | 429,000 | 440,000 | 404,000 | 440,000 | 404,000 | 404,000 | |||
Granted (in shares) | 0 | 0 | 0 | 0 | 342,000 | 400,000 | |||
Vested (in shares) | (21,700,000) | (11,000) | (200,000) | 100,000 | (22,000) | (201,000) | 100,000 | 200,000 | |
Forfeited (in shares) | 0 | (1,000) | (105,000) | ||||||
Balance outstanding at the end of the period (in shares) | 417,000 | 429,000 | 417,000 | 440,000 | 404,000 | ||||
Weighted Average Grant Date Fair Value (in dollars per share) | |||||||||
Balance outstanding at the beginning of the period (in dollars per share) | $ 7.11 | $ 7.11 | $ 7.05 | $ 7.11 | $ 7.05 | $ 7.05 | |||
Granted (in dollars per share) | 0 | 7.12 | $ 7.09 | $ 6.80 | |||||
Vested (in dollars per share) | 7.09 | 7.09 | 7.11 | ||||||
Forfeited (in dollars per share) | 7.09 | 7.09 | 6.91 | ||||||
Balance outstanding at the end of the period (in dollars per share) | $ 7.11 | $ 7.11 | $ 7.11 | $ 7.11 | $ 7.05 |
INCOME TAXES (Details)153
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | May. 14, 2004 | |
INCOME TAXES | ||||||||||
Effective tax rate (as a percent) | 41.00% | 81.20% | 37.30% | 34.70% | 35.80% | 35.70% | 40.20% | 37.30% | 36.50% | |
Statutory federal rate (as a percent) | 35.00% | 35.00% | 35.00% | 35.00% | 35.00% | 35.00% | ||||
Unrecognized tax benefits | $ 729 | $ 700 |
SEGMENT INFORMATION (Details154
SEGMENT INFORMATION (Details) - item | 3 Months Ended | 12 Months Ended | 15 Months Ended | |||||
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2015 | |
Major Customers | ||||||||
Number of customers individually exceeding 10% of consolidated revenue | 0 | 0 | 0 | 0 | 0 | 0 | ||
Number of major customers | 5 | 5 | 5 | |||||
Five Largest Customers [Member] | ||||||||
Major Customers | ||||||||
Concentration risk (as a percent) | 28.00% | 28.00% | 30.00% | 33.00% | 28.00% | 33.00% | 34.00% |
SEGMENT INFORMATION (Details155
SEGMENT INFORMATION (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||
Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Results of operations by operating segment | |||||||||||||||
Revenues | $ 206,364 | $ 207,473 | $ 152,055 | $ 145,481 | $ 144,946 | $ 150,571 | $ 140,456 | $ 146,101 | $ 149,065 | $ 146,822 | $ 413,837 | $ 295,517 | $ 593,053 | $ 582,444 | $ 584,486 |
Operating income | 16,336 | 28,141 | $ 376 | $ 10,771 | 9,622 | 13,013 | $ 11,196 | $ 11,420 | $ 13,633 | $ 12,901 | 44,477 | 22,635 | 33,782 | 49,150 | 55,982 |
Payments | |||||||||||||||
Results of operations by operating segment | |||||||||||||||
Revenues | 151,496 | 152,428 | 144,946 | 150,571 | 303,924 | 295,517 | 585,647 | 582,444 | 584,486 | ||||||
Operating income | 12,137 | 27,527 | $ 9,622 | $ 13,013 | 39,664 | $ 22,635 | 35,205 | $ 49,150 | $ 55,982 | ||||||
Games | |||||||||||||||
Results of operations by operating segment | |||||||||||||||
Revenues | 54,868 | 55,045 | 109,913 | 7,406 | |||||||||||
Operating income | $ 4,199 | $ 614 | $ 4,813 | $ 1,423 |
SEGMENT INFORMATION (Details156
SEGMENT INFORMATION (Details 3) - USD ($) $ in Thousands | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Assets by operating segment | ||||
Total Assets | $ 1,707,119 | $ 1,725,264 | $ 1,707,285 | $ 527,327 |
Payments | ||||
Assets by operating segment | ||||
Total Assets | 478,065 | 495,646 | 464,463 | $ 527,327 |
Games | ||||
Assets by operating segment | ||||
Total Assets | $ 1,229,054 | $ 1,229,618 | $ 1,242,822 |
SUBSEQUENT EVENTS (Details)157
SUBSEQUENT EVENTS (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($)item$ / sharesshares | Jun. 30, 2015USD ($) | Dec. 31, 2014USD ($) | |
Subsequent Event [Line Items] | ||||
Loss on extinguishment of debt | $ (12,977) | $ 0 | $ (12,977) | $ (2,725) |
Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Warrants issued to purchase common stock | shares | 700,000 | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 9.88 | |||
Percentage of premium | 30.00% | |||
Number of trading days considered for exercise price | item | 10 | |||
Subsequent Event [Member] | Refinanced Secured Notes | ||||
Subsequent Event [Line Items] | ||||
Aggregate principal amount of debt refinanced | $ 335,000 | |||
Notes stated interest percentage | 7.25% | |||
Loss on extinguishment of debt | $ 12,900 |
CONDENSED CONSOLIDATING FINA158
CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Ops) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||
Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Condensed Income Statements, Captions [Line Items] | |||||||||||||||
Revenues | $ 206,364,000 | $ 207,473,000 | $ 152,055,000 | $ 145,481,000 | $ 144,946,000 | $ 150,571,000 | $ 140,456,000 | $ 146,101,000 | $ 149,065,000 | $ 146,822,000 | $ 413,837,000 | $ 295,517,000 | $ 593,053,000 | $ 582,444,000 | $ 584,486,000 |
Costs and expenses | |||||||||||||||
Cost of revenues (exclusive of depreciation and amortization) | 127,222,000 | 127,023,000 | 109,375,000 | 113,238,000 | 254,245,000 | 222,614,000 | 440,071,000 | 439,794,000 | 436,059,000 | ||||||
Operating expenses | 26,847,000 | 15,841,000 | 21,261,000 | 20,039,000 | 42,688,000 | 41,299,000 | 95,452,000 | 76,562,000 | 75,806,000 | ||||||
Research and Development | 4,470,000 | 5,436,000 | 9,906,000 | 804,000 | 0 | 0 | |||||||||
Depreciation | 10,717,000 | 10,377,000 | 1,919,000 | 1,927,000 | 21,094,000 | 3,846,000 | 8,745,000 | 7,350,000 | 6,843,000 | ||||||
Amortization | 20,772,000 | 20,655,000 | 2,769,000 | 2,354,000 | 41,427,000 | 5,123,000 | 14,199,000 | 9,588,000 | 9,796,000 | ||||||
Total costs and expenses | 190,028,000 | 179,332,000 | 135,324,000 | 137,558,000 | 369,360,000 | 272,882,000 | 559,271,000 | 533,294,000 | 528,504,000 | ||||||
Operating income | 16,336,000 | 28,141,000 | 376,000 | 10,771,000 | 9,622,000 | 13,013,000 | 11,196,000 | 11,420,000 | 13,633,000 | 12,901,000 | 44,477,000 | 22,635,000 | 33,782,000 | 49,150,000 | 55,982,000 |
Other expenses | |||||||||||||||
Interest expense, net of interest income | 24,958,000 | 25,655,000 | 2,083,000 | 1,546,000 | 50,613,000 | 3,629,000 | 10,756,000 | 10,265,000 | 15,519,000 | ||||||
Loss on extinguishment of debt | 12,977,000 | 0 | 12,977,000 | 2,725,000 | |||||||||||
Total other expenses | 37,935,000 | 25,655,000 | 2,083,000 | 1,546,000 | 63,590,000 | 3,629,000 | 13,481,000 | 10,265,000 | 15,519,000 | ||||||
(Loss) income from operations before tax | (21,599,000) | 2,486,000 | 7,539,000 | 11,467,000 | (19,113,000) | 19,006,000 | 20,301,000 | 38,885,000 | 40,463,000 | ||||||
Income tax provision | (8,858,000) | 2,017,000 | 2,815,000 | 3,978,000 | (6,841,000) | 6,793,000 | 8,161,000 | 14,487,000 | 14,774,000 | ||||||
Net (loss) income | (12,741,000) | 469,000 | $ (5,749,000) | $ 5,676,000 | 4,724,000 | 7,489,000 | $ 5,704,000 | $ 5,782,000 | $ 6,776,000 | $ 6,136,000 | (12,272,000) | 12,213,000 | 12,140,000 | 24,398,000 | 25,689,000 |
Foreign currency translation | 811,000 | (873,000) | 381,000 | 1,000 | (62,000) | 382,000 | (1,258,000) | 269,000 | 218,000 | ||||||
Comprehensive (loss) income | (11,930,000) | (404,000) | 5,105,000 | 7,490,000 | (12,334,000) | 12,595,000 | 10,882,000 | 24,667,000 | 25,907,000 | ||||||
Reportable Legal Entities | Parent | |||||||||||||||
Other expenses | |||||||||||||||
Equity income from subsidiaries | 12,741,000 | (469,000) | (4,724,000) | (7,489,000) | 12,272,000 | (12,213,000) | (12,140,000) | (24,398,000) | (25,689,000) | ||||||
Total other expenses | 12,741,000 | (469,000) | (4,724,000) | (7,489,000) | 12,272,000 | (12,213,000) | (12,140,000) | (24,398,000) | (25,689,000) | ||||||
(Loss) income from operations before tax | (12,741,000) | 469,000 | 4,724,000 | 7,489,000 | (12,272,000) | 12,213,000 | 12,140,000 | 24,398,000 | 25,689,000 | ||||||
Net (loss) income | (12,741,000) | 469,000 | 4,724,000 | 7,489,000 | (12,272,000) | 12,213,000 | 12,140,000 | 24,398,000 | 25,689,000 | ||||||
Foreign currency translation | 811,000 | (873,000) | 381,000 | 1,000 | (62,000) | 382,000 | (1,258,000) | 269,000 | 218,000 | ||||||
Comprehensive (loss) income | (11,930,000) | 404,000 | 5,105,000 | 7,490,000 | (12,334,000) | 12,595,000 | 12,140,000 | 24,667,000 | 25,907,000 | ||||||
Reportable Legal Entities | Subsidiary Issuer | |||||||||||||||
Condensed Income Statements, Captions [Line Items] | |||||||||||||||
Revenues | 139,818,000 | 141,410,000 | 134,198,000 | 140,321,000 | 281,228,000 | 274,519,000 | 542,206,000 | 541,002,000 | 556,376,000 | ||||||
Costs and expenses | |||||||||||||||
Cost of revenues (exclusive of depreciation and amortization) | 110,659,000 | 110,589,000 | 104,918,000 | 111,338,000 | 221,248,000 | 216,257,000 | 422,544,000 | 424,129,000 | 426,183,000 | ||||||
Operating expenses | 18,809,000 | 4,191,000 | 20,000,000 | 18,747,000 | 23,000,000 | 38,746,000 | 88,087,000 | 71,623,000 | 72,551,000 | ||||||
Depreciation | 1,787,000 | 1,774,000 | 1,870,000 | 1,883,000 | 3,561,000 | 3,753,000 | 7,428,000 | 7,186,000 | 6,617,000 | ||||||
Amortization | 2,193,000 | 2,215,000 | 2,644,000 | 2,230,000 | 4,408,000 | 4,874,000 | 11,180,000 | 9,217,000 | 9,543,000 | ||||||
Total costs and expenses | 133,448,000 | 118,769,000 | 129,432,000 | 134,198,000 | 252,217,000 | 263,630,000 | 529,239,000 | 512,155,000 | 514,894,000 | ||||||
Operating income | 6,370,000 | 22,641,000 | 4,766,000 | 6,123,000 | 29,011,000 | 10,889,000 | 12,967,000 | 28,847,000 | 41,482,000 | ||||||
Other expenses | |||||||||||||||
Interest expense, net of interest income | 1,834,000 | 2,778,000 | 1,990,000 | 2,034,000 | 4,612,000 | 4,024,000 | 7,675,000 | 10,342,000 | 15,591,000 | ||||||
Equity income from subsidiaries | (3,665,000) | (3,047,000) | (3,343,000) | (5,082,000) | (6,712,000) | (8,425,000) | (15,218,000) | (13,596,000) | (9,546,000) | ||||||
Loss on extinguishment of debt | 12,977,000 | 12,977,000 | 2,523,000 | ||||||||||||
Total other expenses | 11,146,000 | (269,000) | (1,353,000) | (3,048,000) | 10,877,000 | (4,401,000) | (5,020,000) | (3,254,000) | 6,045,000 | ||||||
(Loss) income from operations before tax | (4,776,000) | 22,910,000 | 6,119,000 | 9,171,000 | 18,134,000 | 15,290,000 | 17,987,000 | 32,101,000 | 35,437,000 | ||||||
Income tax provision | (3,684,000) | 8,706,000 | 1,187,000 | 1,682,000 | 5,022,000 | 2,869,000 | 2,801,000 | 7,703,000 | 9,748,000 | ||||||
Net (loss) income | 1,092,000 | 14,204,000 | 4,932,000 | 7,489,000 | 13,112,000 | 12,421,000 | 15,186,000 | 24,398,000 | 25,689,000 | ||||||
Comprehensive (loss) income | 1,092,000 | 14,204,000 | 4,932,000 | 7,489,000 | 19,112,000 | 12,421,000 | 15,186,000 | 24,398,000 | 25,689,000 | ||||||
Reportable Legal Entities | Guarantor Subsidiaries | |||||||||||||||
Condensed Income Statements, Captions [Line Items] | |||||||||||||||
Revenues | 62,440,000 | 62,369,000 | 7,044,000 | 6,866,000 | 124,809,000 | 13,910,000 | 35,689,000 | 28,277,000 | 18,623,000 | ||||||
Costs and expenses | |||||||||||||||
Cost of revenues (exclusive of depreciation and amortization) | 14,375,000 | 14,371,000 | 2,243,000 | 2,043,000 | 28,746,000 | 4,286,000 | 10,864,000 | 7,905,000 | 3,376,000 | ||||||
Operating expenses | 7,736,000 | 11,359,000 | 778,000 | 819,000 | 19,095,000 | 1,597,000 | 5,719,000 | 3,445,000 | 1,880,000 | ||||||
Research and Development | 4,470,000 | 5,436,000 | 9,906,000 | 804,000 | |||||||||||
Depreciation | 8,880,000 | 8,542,000 | 1,000 | 1,000 | 17,422,000 | 2,000 | 1,134,000 | 1,000 | 5,000 | ||||||
Amortization | 17,964,000 | 17,771,000 | 35,735,000 | 2,454,000 | |||||||||||
Total costs and expenses | 53,425,000 | 57,479,000 | 3,022,000 | 2,863,000 | 110,904,000 | 5,885,000 | 20,975,000 | 11,351,000 | 5,261,000 | ||||||
Operating income | 9,015,000 | 4,890,000 | 4,022,000 | 2,602,000 | 13,905,000 | 8,025,000 | 14,714,000 | 16,926,000 | 13,362,000 | ||||||
Other expenses | |||||||||||||||
Interest expense, net of interest income | 23,036,000 | 22,787,000 | 45,823,000 | 3,290,000 | |||||||||||
Loss on extinguishment of debt | 202,000 | ||||||||||||||
Total other expenses | 23,036,000 | 22,787,000 | 45,823,000 | 3,492,000 | |||||||||||
(Loss) income from operations before tax | (14,021,000) | (17,897,000) | 4,022,000 | 2,602,000 | (31,918,000) | 8,025,000 | 11,222,000 | 16,926,000 | 13,362,000 | ||||||
Income tax provision | (5,502,000) | (6,942,000) | 1,413,000 | 1,401,000 | (12,444,000) | 2,814,000 | 3,784,000 | 5,924,000 | 4,677,000 | ||||||
Net (loss) income | (8,519,000) | (10,955,000) | 2,609,000 | 2,602,000 | (19,474,000) | 5,211,000 | 7,438,000 | 11,002,000 | 8,685,000 | ||||||
Comprehensive (loss) income | (8,519,000) | (10,955,000) | 2,609,000 | 4,003,000 | (19,474,000) | 5,211,000 | 7,438,000 | 11,002,000 | 8,685,000 | ||||||
Reportable Legal Entities | Non-Guarantor Subsidiaries | |||||||||||||||
Condensed Income Statements, Captions [Line Items] | |||||||||||||||
Revenues | 4,256,000 | 3,830,000 | 3,898,000 | 3,553,000 | 8,086,000 | 7,451,000 | 15,891,000 | 13,838,000 | 10,001,000 | ||||||
Costs and expenses | |||||||||||||||
Cost of revenues (exclusive of depreciation and amortization) | 2,188,000 | 2,063,000 | 2,214,000 | (143,000) | 4,251,000 | 2,071,000 | 6,663,000 | 7,760,000 | 6,500,000 | ||||||
Operating expenses | 452,000 | 427,000 | 677,000 | 642,000 | 879,000 | 1,319,000 | 5,560,000 | 2,167,000 | 1,889,000 | ||||||
Depreciation | 50,000 | 61,000 | 48,000 | 43,000 | 111,000 | 91,000 | 183,000 | 163,000 | 221,000 | ||||||
Amortization | 615,000 | 669,000 | 125,000 | 124,000 | 1,284,000 | 249,000 | 565,000 | 371,000 | 253,000 | ||||||
Total costs and expenses | 3,305,000 | 3,220,000 | 3,064,000 | 666,000 | 6,525,000 | 3,730,000 | 9,790,000 | 10,461,000 | 8,863,000 | ||||||
Operating income | 951,000 | 610,000 | 834,000 | 2,887,000 | 1,561,000 | 3,721,000 | 6,101,000 | 3,377,000 | 1,138,000 | ||||||
Other expenses | |||||||||||||||
Interest expense, net of interest income | 88,000 | 90,000 | 93,000 | (488,000) | 178,000 | (395,000) | (209,000) | (77,000) | (72,000) | ||||||
Total other expenses | 88,000 | 90,000 | 93,000 | (488,000) | 178,000 | (395,000) | (209,000) | (77,000) | (72,000) | ||||||
(Loss) income from operations before tax | 863,000 | 520,000 | 741,000 | 3,375,000 | 1,383,000 | 4,116,000 | 6,310,000 | 3,454,000 | 1,210,000 | ||||||
Income tax provision | 328,000 | 253,000 | 215,000 | 895,000 | 581,000 | 1,110,000 | 1,576,000 | 860,000 | 349,000 | ||||||
Net (loss) income | 535,000 | 267,000 | 526,000 | 2,480,000 | 802,000 | 3,006,000 | 4,734,000 | 2,594,000 | 861,000 | ||||||
Foreign currency translation | 811,000 | (873,000) | 381,000 | 1,000 | (62,000) | 382,000 | (1,258,000) | 269,000 | 218,000 | ||||||
Comprehensive (loss) income | 1,346,000 | (606,000) | 907,000 | 2,481,000 | 740,000 | 3,388,000 | 3,476,000 | 2,863,000 | 1,079,000 | ||||||
Eliminations | |||||||||||||||
Condensed Income Statements, Captions [Line Items] | |||||||||||||||
Revenues | (150,000) | (136,000) | (194,000) | (169,000) | (286,000) | (363,000) | (733,000) | (673,000) | (514,000) | ||||||
Costs and expenses | |||||||||||||||
Operating expenses | (150,000) | (136,000) | (194,000) | (169,000) | (286,000) | (363,000) | (733,000) | (673,000) | (514,000) | ||||||
Total costs and expenses | (150,000) | (136,000) | (194,000) | (169,000) | (286,000) | (363,000) | (733,000) | (673,000) | (514,000) | ||||||
Other expenses | |||||||||||||||
Equity income from subsidiaries | (9,076,000) | 3,516,000 | 8,067,000 | 12,571,000 | (5,560,000) | 20,638,000 | 27,358,000 | 37,994,000 | 35,235,000 | ||||||
Total other expenses | (9,076,000) | 3,516,000 | 8,067,000 | 12,571,000 | (5,560,000) | 20,638,000 | 27,358,000 | 37,994,000 | 35,235,000 | ||||||
(Loss) income from operations before tax | 9,076,000 | (3,516,000) | (8,067,000) | (12,571,000) | 5,560,000 | (20,638,000) | (27,358,000) | (37,994,000) | (35,235,000) | ||||||
Net (loss) income | 9,076,000 | (3,516,000) | (8,067,000) | (12,571,000) | 5,560,000 | (20,638,000) | (27,358,000) | (37,994,000) | (35,235,000) | ||||||
Foreign currency translation | (811,000) | 873,000 | (381,000) | (1,000) | 62,000 | (382,000) | 1,258,000 | (269,000) | (218,000) | ||||||
Comprehensive (loss) income | $ 8,265,000 | $ (2,643,000) | $ (8,448,000) | $ (12,572,000) | $ 5,622,000 | $ (21,020,000) | $ (26,100,000) | $ (38,263,000) | $ (35,453,000) |
FINANCIAL INFORMATION FOR GU159
FINANCIAL INFORMATION FOR GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES (BalSh) (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
Current assets | |||||||||
Cash and cash equivalents | $ 165,017 | $ 145,013 | $ 89,095 | $ 161,998 | $ 194,566 | $ 114,254 | $ 153,020 | $ 55,535 | $ 55,535 |
Settlement receivables | 23,716 | 29,787 | 43,288 | 38,265 | |||||
Trade receivables, net | 41,834 | 39,220 | 37,697 | 11,658 | |||||
Other receivables | 11,372 | 20,392 | 20,553 | 4,605 | |||||
Inventory | 23,453 | 23,050 | 27,163 | 9,413 | |||||
Prepaid expenses and other assets | 21,090 | 18,889 | 18,988 | 16,674 | |||||
Deferred tax asset | 9,591 | 9,590 | 9,591 | 3,102 | |||||
Total current assets | 296,073 | 285,941 | 246,375 | 197,971 | |||||
Non-current assets | |||||||||
Property, equipment and leasehold improvements, net | 104,521 | 102,759 | 106,085 | 18,710 | |||||
Goodwill | 857,670 | 857,856 | 857,913 | 180,084 | 180,141 | ||||
Other intangible assets, net | 404,132 | 420,103 | 436,785 | 31,535 | |||||
Other receivables, non-current | 7,808 | 8,593 | 9,184 | 699 | |||||
Deferred tax asset, non-current | 87,942 | ||||||||
Other assets, non-current | 36,915 | 50,012 | 50,943 | 10,386 | |||||
Total non-current assets | 1,411,046 | 1,439,323 | 1,460,910 | 329,356 | |||||
Total assets | 1,707,119 | 1,725,264 | 1,707,285 | 527,327 | |||||
Current Liabilities | |||||||||
Settlement liabilities | 141,211 | 141,649 | 119,157 | 145,022 | |||||
Accounts payable and accrued expenses | 36,712 | 113,543 | 104,668 | 53,601 | |||||
Current portion of long-term debt | 10,000 | 10,000 | 10,000 | 1,030 | |||||
Total current liabilities | 267,906 | 265,192 | 233,825 | 199,653 | |||||
Non-current liabilities | |||||||||
Deferred tax liability, non-current | 49,808 | 59,101 | 57,333 | ||||||
Long-term debt, less current portion | 1,157,506 | 1,161,731 | 1,178,787 | 101,970 | |||||
Other accrued expenses and liabilities | 4,927 | 5,381 | 5,867 | 7,100 | |||||
Total non-current liabilities | 1,212,241 | 1,226,213 | 1,241,987 | 109,070 | |||||
Total liabilities | 1,480,147 | 1,491,405 | 1,475,812 | 308,723 | |||||
Stockholders' Equity | |||||||||
Common stock | 91 | $ 91 | $ 90 | $ 89 | |||||
Convertible preferred stock | |||||||||
Additional paid-in capital | 253,555 | $ 248,491 | $ 245,682 | $ 231,516 | |||||
Retained earnings (deficit) | 147,879 | 160,621 | 160,152 | 148,012 | |||||
Accumulated other comprehensive income (loss) | 1,507 | 696 | 1,569 | 2,827 | |||||
Treasury stock, at cost | (176,060) | (176,040) | (176,020) | (163,840) | |||||
Total stockholders' equity (deficit) | 226,972 | 233,859 | 231,473 | 218,604 | |||||
Total liabilities and stockholders' equity | 1,707,119 | 1,725,264 | 1,707,285 | 527,327 | |||||
Reportable Legal Entities | Parent | |||||||||
Non-current assets | |||||||||
Investment in Subsidiaries | 226,972 | 233,859 | 231,473 | 218,604 | |||||
Total non-current assets | 226,972 | 233,859 | 231,473 | 218,604 | |||||
Total assets | 226,972 | 233,859 | 231,473 | 218,604 | |||||
Stockholders' Equity | |||||||||
Common stock | 91 | 91 | 90 | 89 | |||||
Additional paid-in capital | 253,555 | 248,491 | 245,682 | 231,516 | |||||
Retained earnings (deficit) | 147,879 | 160,621 | 160,152 | 148,012 | |||||
Accumulated other comprehensive income (loss) | 1,507 | 696 | 1,569 | 2,827 | |||||
Treasury stock, at cost | (176,060) | (176,040) | (176,020) | (163,840) | |||||
Total stockholders' equity (deficit) | 226,972 | 233,859 | 231,473 | 218,604 | |||||
Total liabilities and stockholders' equity | 226,972 | 233,859 | 231,473 | 218,604 | |||||
Reportable Legal Entities | Subsidiary Issuer | |||||||||
Current assets | |||||||||
Cash and cash equivalents | 136,790 | 120,435 | 68,143 | 142,775 | 178,319 | 100,573 | 141,640 | 47,766 | |
Settlement receivables | 19,721 | 26,950 | 40,157 | 34,458 | |||||
Trade receivables, net | 5,989 | 6,294 | 6,578 | 9,030 | |||||
Other receivables | 3,183 | 3,846 | 3,416 | 4,451 | |||||
Inventory | 10,075 | 9,312 | 10,595 | 9,413 | |||||
Prepaid expenses and other assets | 7,752 | 7,836 | 7,143 | 10,300 | |||||
Deferred tax asset | 2,743 | 2,743 | 2,743 | 3,102 | |||||
Intercompany balances | 39,338 | 32,512 | 18,038 | 20,005 | |||||
Total current assets | 225,591 | 209,928 | 156,813 | 191,332 | |||||
Non-current assets | |||||||||
Property, equipment and leasehold improvements, net | 19,467 | 17,409 | 17,864 | 18,282 | |||||
Goodwill | 148,076 | 148,278 | 148,278 | 139,839 | |||||
Other intangible assets, net | 22,589 | 23,260 | 24,771 | 30,229 | |||||
Other receivables, non-current | 3,994 | 4,411 | 4,411 | 699 | |||||
Investment in Subsidiaries | 153,927 | 149,599 | 147,195 | 113,350 | |||||
Deferred tax asset, non-current | 85,754 | 76,460 | 78,229 | 88,253 | |||||
Other assets, non-current | 32,453 | 46,090 | 47,508 | 10,311 | |||||
Intercompany balances | 1,130,380 | 1,130,380 | 1,130,380 | 61,936 | |||||
Total non-current assets | 1,599,821 | 1,597,383 | 1,598,636 | 462,899 | |||||
Total assets | 1,825,412 | 1,807,311 | 1,755,449 | 654,231 | |||||
Current Liabilities | |||||||||
Settlement liabilities | 134,604 | 136,839 | 111,375 | 137,089 | |||||
Accounts payable and accrued expenses | 101,269 | 85,689 | 61,544 | 51,324 | |||||
Current portion of long-term debt | 10,000 | 10,000 | 10,000 | 1,030 | |||||
Intercompany balances | 161,593 | 156,536 | 152,802 | 135,542 | |||||
Total current liabilities | 407,466 | 389,064 | 335,721 | 324,985 | |||||
Non-current liabilities | |||||||||
Deferred tax liability, non-current | 1,072 | 1,071 | 1,072 | ||||||
Long-term debt, less current portion | 1,157,506 | 1,161,731 | 1,178,787 | 101,970 | |||||
Other accrued expenses and liabilities | 4,487 | 4,924 | 5,377 | 7,100 | |||||
Intercompany balances | 1,572 | ||||||||
Total non-current liabilities | 1,163,065 | 1,167,726 | 1,185,236 | 110,642 | |||||
Total liabilities | 1,567,350 | 1,556,790 | 429,703 | ||||||
Stockholders' Equity | |||||||||
Additional paid-in capital | 91,843 | 87,202 | 69,654 | 67,694 | |||||
Retained earnings (deficit) | 161,531 | 162,623 | 163,269 | 148,083 | |||||
Accumulated other comprehensive income (loss) | 1,507 | 696 | 1,569 | 2,827 | |||||
Total stockholders' equity (deficit) | 254,881 | 250,521 | 234,492 | 218,604 | |||||
Total liabilities and stockholders' equity | 1,825,412 | 1,807,311 | 1,755,449 | 654,231 | |||||
Reportable Legal Entities | Guarantor Subsidiaries | |||||||||
Current assets | |||||||||
Cash and cash equivalents | 16,523 | 13,315 | 6,489 | 2,291 | 2,531 | 2,149 | 482 | 71 | |
Trade receivables, net | 35,845 | 32,925 | 31,116 | 2,622 | |||||
Other receivables | 23,736 | 29,870 | 16,992 | ||||||
Inventory | 13,378 | 13,738 | 16,568 | ||||||
Prepaid expenses and other assets | 3,789 | 2,523 | 2,821 | 20 | |||||
Deferred tax asset | 6,848 | 6,847 | 6,848 | ||||||
Intercompany balances | 160,054 | 155,182 | 151,179 | 135,542 | |||||
Total current assets | 260,173 | 249,400 | 232,013 | 140,333 | |||||
Non-current assets | |||||||||
Property, equipment and leasehold improvements, net | 84,649 | 84,865 | 87,898 | 56 | |||||
Goodwill | 708,923 | 708,922 | 708,922 | 39,470 | |||||
Other intangible assets, net | 373,600 | 388,281 | 402,816 | 499 | |||||
Other receivables, non-current | 3,814 | 4,182 | 4,773 | ||||||
Deferred tax asset, non-current | 22,467 | 22,467 | |||||||
Other assets, non-current | 3,923 | 3,413 | 3,366 | ||||||
Intercompany balances | 61,936 | ||||||||
Total non-current assets | 1,197,376 | 1,212,130 | 1,207,775 | 40,025 | |||||
Total assets | 1,457,549 | 1,461,530 | 1,439,788 | 180,358 | |||||
Current Liabilities | |||||||||
Settlement liabilities | 231 | 297 | 140 | ||||||
Accounts payable and accrued expenses | 29,670 | 35,216 | 41,395 | 1,398 | |||||
Intercompany balances | 30,907 | 22,949 | 8,159 | ||||||
Total current liabilities | 60,808 | 58,462 | 49,694 | 1,398 | |||||
Non-current liabilities | |||||||||
Deferred tax liability, non-current | 156,957 | 156,957 | 134,490 | ||||||
Other accrued expenses and liabilities | 440 | 457 | 490 | ||||||
Intercompany balances | 1,130,380 | 1,130,380 | 1,130,380 | ||||||
Total non-current liabilities | 1,290,958 | 1,220,205 | 1,265,360 | ||||||
Total liabilities | 1,351,766 | 1,289,163 | 1,315,054 | 1,398 | |||||
Stockholders' Equity | |||||||||
Additional paid-in capital | 2,792 | 2,269 | 2,269 | 2,000 | |||||
Retained earnings (deficit) | 102,991 | 179,088 | 122,465 | 115,024 | |||||
Total stockholders' equity (deficit) | 105,783 | 113,778 | 124,734 | 117,024 | |||||
Total liabilities and stockholders' equity | 1,457,549 | 1,461,530 | 1,439,788 | 180,358 | |||||
Reportable Legal Entities | Non-Guarantor Subsidiaries | |||||||||
Current assets | |||||||||
Cash and cash equivalents | 11,704 | 11,263 | 14,463 | $ 16,932 | $ 13,716 | 11,532 | $ 10,898 | $ 7,698 | |
Settlement receivables | 3,995 | 2,837 | 3,131 | 3,807 | |||||
Trade receivables, net | 1 | 3 | 6 | ||||||
Other receivables | 145 | 113 | 145 | 154 | |||||
Prepaid expenses and other assets | 9,549 | 8,530 | 9,024 | 6,354 | |||||
Intercompany balances | 1,539 | 1,473 | 1,623 | ||||||
Total current assets | 26,932 | 24,217 | 28,389 | 21,853 | |||||
Non-current assets | |||||||||
Property, equipment and leasehold improvements, net | 405 | 485 | 323 | 372 | |||||
Goodwill | 671 | 656 | 713 | 775 | |||||
Other intangible assets, net | 7,943 | 8,562 | 9,198 | 807 | |||||
Investment in Subsidiaries | 85 | 86 | 86 | ||||||
Other assets, non-current | 539 | 509 | 69 | 75 | |||||
Intercompany balances | 1,572 | ||||||||
Total non-current assets | 9,643 | 10,298 | 10,389 | 3,601 | |||||
Total assets | 36,575 | 34,515 | 38,778 | 25,454 | |||||
Current Liabilities | |||||||||
Settlement liabilities | 6,376 | 4,513 | 7,642 | 7,933 | |||||
Accounts payable and accrued expenses | 1,448 | 1,075 | 1,729 | 879 | |||||
Intercompany balances | 8,431 | 9,682 | 9,879 | 20,005 | |||||
Total current liabilities | 15,897 | 15,270 | 19,250 | 28,817 | |||||
Non-current liabilities | |||||||||
Deferred tax liability, non-current | 311 | ||||||||
Total non-current liabilities | 311 | ||||||||
Total liabilities | 16,255 | 15,870 | 19,250 | 29,128 | |||||
Stockholders' Equity | |||||||||
Additional paid-in capital | 21,107 | 21,110 | 21,115 | 1,808 | |||||
Retained earnings (deficit) | (205) | (738) | (1,006) | (5,738) | |||||
Accumulated other comprehensive income (loss) | (582) | (1,127) | (581) | 256 | |||||
Total stockholders' equity (deficit) | 20,320 | 19,245 | 19,528 | (3,674) | |||||
Total liabilities and stockholders' equity | 36,575 | 34,515 | 38,778 | 25,454 | |||||
Eliminations | |||||||||
Current assets | |||||||||
Other receivables | 63,508 | (8,437) | |||||||
Intercompany balances | (200,931) | (189,167) | (170,840) | (155,547) | |||||
Total current assets | (216,623) | (197,604) | (170,840) | (155,547) | |||||
Non-current assets | |||||||||
Investment in Subsidiaries | (380,784) | (383,544) | (378,754) | (331,954) | |||||
Deferred tax asset, non-current | (108,221) | (98,927) | (78,229) | (311) | |||||
Intercompany balances | (1,130,380) | (1,130,380) | (1,130,380) | (63,508) | |||||
Total non-current assets | 1,622,766 | (1,614,347) | (1,587,363) | (395,773) | |||||
Total assets | 1,839,389 | (1,811,951) | (1,758,203) | (551,320) | |||||
Current Liabilities | |||||||||
Accounts payable and accrued expenses | (15,692) | (8,437) | |||||||
Intercompany balances | (200,931) | 189,167 | (170,840) | (155,547) | |||||
Total current liabilities | (216,623) | (197,604) | 319,061 | (155,547) | |||||
Non-current liabilities | |||||||||
Deferred tax liability, non-current | (108,221) | (98,927) | (78,229) | (311) | |||||
Intercompany balances | (1,130,380) | 1,130,380 | (1,130,380) | (1,572) | |||||
Total non-current liabilities | 1,241,782 | (2,217,873) | (1,208,609) | (63,819) | |||||
Total liabilities | 1,458,405 | (1,428,407) | (1,379,449) | (219,366) | |||||
Stockholders' Equity | |||||||||
Additional paid-in capital | (115,742) | (110,581) | (93,038) | (71,502) | |||||
Retained earnings (deficit) | (264,317) | (273,394) | (284,728) | (257,369) | |||||
Accumulated other comprehensive income (loss) | (925) | 431 | (988) | (3,083) | |||||
Total stockholders' equity (deficit) | (380,984) | (383,544) | (278,754) | (331,954) | |||||
Total liabilities and stockholders' equity | $ (1,839,388) | $ (1,811,951) | $ (1,758,203) | $ (551,320) |
FINANCIAL INFORMATION FOR GU160
FINANCIAL INFORMATION FOR GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES (CFS) (Details) (Imported) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||
Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Cash flows from operating activities | |||||||||||||||
Net income | $ (12,741) | $ 469 | $ (5,749) | $ 5,676 | $ 4,724 | $ 7,489 | $ 5,704 | $ 5,782 | $ 6,776 | $ 6,136 | $ (12,272) | $ 12,213 | $ 12,140 | $ 24,398 | $ 25,689 |
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||||||||
Amortization & depreciation | 31,032 | 4,281 | 62,521 | 8,969 | 22,944 | 16,938 | 16,639 | ||||||||
Amortization of financing costs | 2,072 | 471 | 3,730 | 942 | 2,035 | 1,793 | 1,485 | ||||||||
Loss/(gain) on sale or disposal of assets | 2 | 124 | 374 | (21) | |||||||||||
Accretion of contract rights | 2,104 | 4,092 | |||||||||||||
Provision for bad debts | 2,266 | 2,014 | 4,370 | 4,229 | 8,991 | 7,874 | 5,182 | ||||||||
Loss on early extinguishment of debt | 12,977 | 0 | 12,977 | 2,725 | |||||||||||
Stock-based compensation | 1,793 | 2,057 | 3,954 | 5,409 | 8,876 | 5,078 | 6,655 | ||||||||
Other non-cash items | 231 | 20 | 337 | 178 | 95 | ||||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Net settlement receivables and liabilities | 35,973 | 63,189 | 41,784 | 42,810 | (30,679) | (45,993) | 91,353 | ||||||||
Other changes in operating assets and liabilities | 9,874 | 6,972 | 4,881 | 878 | (5,967) | (5,932) | 10,390 | ||||||||
Net cash provided by operating activities | 85,816 | 86,597 | 126,391 | 75,429 | 24,531 | 4,334 | 157,488 | ||||||||
Cash flows from investing activities | |||||||||||||||
Capital expenditures | (12,616) | (3,025) | (29,660) | (7,493) | (18,021) | (13,900) | (12,786) | ||||||||
Proceeds from sale of fixed assets | 1 | 192 | 29 | 213 | |||||||||||
Repayments under development agreements | 1,217 | 2,392 | 276 | ||||||||||||
Advances under development and placement agreements | (1,255) | (1,255) | |||||||||||||
Changes in restricted cash and cash equivalents | 59 | (46) | 60 | (45) | (102) | (90) | 255 | ||||||||
Net cash provided by (used in) investing activities | (12,594) | (2,879) | (30,691) | (19,170) | (1,085,847) | (13,990) | (12,531) | ||||||||
Cash flows from financing activities | |||||||||||||||
Repayments against prior credit facility | (3,000) | (7,000) | (103,000) | (18,500) | (52,500) | ||||||||||
Repayments of credit facility | (17,500) | (5,000) | |||||||||||||
Debt issuance costs | (252) | (1,154) | (52,735) | (764) | (676) | ||||||||||
Proceeds from exercise of stock options | 1,048 | 2,440 | 1,673 | 4,613 | 5,338 | 8,431 | 6,655 | ||||||||
Purchase of treasury stock | (20) | (2,767) | (40) | (6,604) | (12,180) | (18,350) | (262) | ||||||||
Net cash used in financing activities | (16,724) | (3,327) | (19,521) | (8,991) | 1,037,423 | (29,183) | (46,783) | ||||||||
Effect of exchange rates on cash | (580) | (79) | (257) | 476 | (1,266) | 73 | (689) | ||||||||
Cash and cash equivalents | |||||||||||||||
Net increase for the period | 55,918 | 80,312 | 75,922 | 47,744 | (25,159) | (38,766) | 97,485 | ||||||||
Balance, beginning of the period | 145,013 | 89,095 | 161,998 | 194,566 | 114,254 | 153,020 | 89,095 | 114,254 | 114,254 | 153,020 | 55,535 | ||||
Balance, end of the period | 165,017 | 145,013 | 89,095 | 161,998 | 194,566 | 114,254 | 165,017 | 161,998 | 89,095 | 114,254 | 153,020 | ||||
Reportable Legal Entities | Parent | |||||||||||||||
Cash flows from operating activities | |||||||||||||||
Net income | (12,741) | 469 | 4,724 | 7,489 | (12,272) | 12,213 | 12,140 | 24,398 | 25,689 | ||||||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||||||||
Equity in loss (income) of subsidiaries | (469) | (7,489) | 12,272 | (12,213) | (12,140) | (24,398) | (25,689) | ||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Other changes in operating assets and liabilities | (5) | (51) | 28 | (31) | (47) | 19 | 29 | ||||||||
Net cash provided by operating activities | (5) | (51) | 28 | (31) | (47) | 19 | 29 | ||||||||
Cash flows from investing activities | |||||||||||||||
Intercompany investing activities | (1,023) | 378 | (3,907) | 2,022 | 6,889 | 9,900 | (6,422) | ||||||||
Net cash provided by (used in) investing activities | (1,023) | 378 | (3,907) | 2,022 | 6,889 | 9,900 | (6,422) | ||||||||
Cash flows from financing activities | |||||||||||||||
Proceeds from exercise of stock options | 1,048 | 2,440 | 1,673 | 4,613 | 5,338 | 8,431 | 6,655 | ||||||||
Purchase of treasury stock | (20) | (2,767) | (40) | (6,604) | (12,180) | (18,350) | (262) | ||||||||
Intercompany financing activities | 1,056,155 | ||||||||||||||
Net cash used in financing activities | 1,028 | (327) | 3,879 | (1,991) | 6,842 | (9,919) | 6,393 | ||||||||
Reportable Legal Entities | Subsidiary Issuer | |||||||||||||||
Cash flows from operating activities | |||||||||||||||
Net income | 1,092 | 14,204 | 4,932 | 7,489 | 13,112 | 12,421 | 15,186 | 24,398 | 25,689 | ||||||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||||||||
Amortization & depreciation | 3,989 | 4,113 | 7,969 | 8,627 | 18,608 | 16,403 | 16,160 | ||||||||
Amortization of financing costs | 2,072 | 471 | 3,730 | 942 | 2,035 | 1,793 | 1,485 | ||||||||
Loss/(gain) on sale or disposal of assets | 2 | 124 | (13) | (21) | |||||||||||
Provision for bad debts | 2,531 | ||||||||||||||
Loss on early extinguishment of debt | 12,977 | 12,977 | 2,523 | ||||||||||||
Equity in loss (income) of subsidiaries | (3,047) | (5,082) | (6,712) | (8,425) | (15,218) | (13,596) | (19,546) | ||||||||
Stock-based compensation | 1,674 | 2,057 | 3,432 | 5,409 | 8,849 | 5,078 | 6,655 | ||||||||
Other non-cash items | (76) | 52 | 180 | 95 | |||||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Net settlement receivables and liabilities | 38,671 | 63,982 | 43,663 | 41,722 | (31,414) | (44,264) | 88,354 | ||||||||
Other changes in operating assets and liabilities | 13,617 | 18,829 | 15,839 | 17,615 | 34,774 | 13,391 | 3,738 | ||||||||
Net cash provided by operating activities | 71,182 | 91,983 | 94,073 | 78,290 | 38,524 | 3,383 | 135,161 | ||||||||
Cash flows from investing activities | |||||||||||||||
Capital expenditures | (2,434) | (2,707) | (5,387) | (6,977) | (5,465) | (13,364) | (11,546) | ||||||||
Proceeds from sale of fixed assets | 1 | 192 | 29 | 213 | |||||||||||
Changes in restricted cash and cash equivalents | 59 | (46) | 60 | (45) | (102) | (90) | 255 | ||||||||
Intercompany investing activities | 164 | (9,663) | 5,423 | (11,622) | (1,085,709) | (4,676) | 20,336 | ||||||||
Net cash provided by (used in) investing activities | (2,210) | (12,224) | (2,132) | (30,276) | (1,103,121) | (18,130) | 9,045 | ||||||||
Cash flows from financing activities | |||||||||||||||
Repayments against prior credit facility | (3,000) | (7,000) | (103,000) | (18,500) | (52,500) | ||||||||||
Repayments of credit facility | (17,500) | (5,000) | |||||||||||||
Debt issuance costs | (252) | (1,154) | (52,735) | (764) | (676) | ||||||||||
Intercompany financing activities | 1,072 | 987 | 106 | 1,188 | (12,098) | (7,056) | 2,844 | ||||||||
Net cash used in financing activities | (16,680) | (2,013) | (23,294) | (5,812) | 1,032,167 | (26,320) | (50,332) | ||||||||
Cash and cash equivalents | |||||||||||||||
Net increase for the period | 52,292 | 77,746 | 68,647 | 42,202 | (32,430) | (41,067) | 93,874 | ||||||||
Balance, beginning of the period | 120,435 | 68,143 | 142,775 | 178,319 | 100,573 | 141,640 | 68,143 | 100,573 | 100,573 | 141,640 | 47,766 | ||||
Balance, end of the period | 136,790 | 120,435 | 68,143 | 142,775 | 178,319 | 100,573 | 136,790 | 142,775 | 68,143 | 100,573 | 141,640 | ||||
Reportable Legal Entities | Guarantor Subsidiaries | |||||||||||||||
Cash flows from operating activities | |||||||||||||||
Net income | (8,519) | (10,955) | 2,609 | 2,602 | (19,474) | 5,211 | 7,438 | 11,002 | 8,685 | ||||||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||||||||
Amortization & depreciation | 26,313 | 1 | 53,157 | 2 | 3,588 | 1 | 5 | ||||||||
Loss/(gain) on sale or disposal of assets | 387 | ||||||||||||||
Accretion of contract rights | 2,104 | 4,092 | |||||||||||||
Provision for bad debts | 2,266 | 2,014 | 4,370 | 4,229 | 8,991 | 7,874 | 2,651 | ||||||||
Loss on early extinguishment of debt | 202 | ||||||||||||||
Stock-based compensation | 522 | 27 | |||||||||||||
Other non-cash items | 231 | 96 | 284 | ||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Net settlement receivables and liabilities | 157 | 218 | 91 | 192 | 141 | ||||||||||
Other changes in operating assets and liabilities | (3,350) | (4,360) | (10,159) | (9,289) | (20,047) | (18,880) | (10,705) | ||||||||
Net cash provided by operating activities | 16,766 | 475 | 32,890 | 345 | 624 | (3) | 636 | ||||||||
Cash flows from investing activities | |||||||||||||||
Capital expenditures | (9,902) | (93) | (23,993) | (203) | (3,464) | (330) | (225) | ||||||||
Repayments under development agreements | 1,217 | 2,392 | 276 | ||||||||||||
Advances under development and placement agreements | (1,255) | (1,255) | |||||||||||||
Net cash provided by (used in) investing activities | (9,940) | (93) | (22,856) | (203) | (1,059,343) | (330) | (225) | ||||||||
Cash flows from financing activities | |||||||||||||||
Intercompany financing activities | 1,063,059 | 2,000 | |||||||||||||
Net cash used in financing activities | 1,063,059 | 2,000 | |||||||||||||
Cash and cash equivalents | |||||||||||||||
Net increase for the period | 6,826 | 382 | 10,034 | 142 | 4,340 | 1,667 | 411 | ||||||||
Balance, beginning of the period | 13,315 | 6,489 | 2,291 | 2,531 | 2,149 | 482 | 6,489 | 2,149 | 2,149 | 482 | 71 | ||||
Balance, end of the period | 16,523 | 13,315 | 6,489 | 2,291 | 2,531 | 2,149 | 16,523 | 2,291 | 6,489 | 2,149 | 482 | ||||
Reportable Legal Entities | Non-Guarantor Subsidiaries | |||||||||||||||
Cash flows from operating activities | |||||||||||||||
Net income | 535 | 267 | 526 | 2,480 | 802 | 3,006 | 4,734 | 2,594 | 861 | ||||||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||||||||
Amortization & depreciation | 730 | 167 | 1,395 | 340 | 748 | 534 | 474 | ||||||||
Other non-cash items | 1 | (2) | |||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Net settlement receivables and liabilities | (2,855) | (1,011) | (1,970) | 896 | 594 | (1,729) | 2,999 | ||||||||
Other changes in operating assets and liabilities | (269) | (7,446) | (827) | (7,417) | (20,647) | (462) | 17,328 | ||||||||
Net cash provided by operating activities | (2,127) | (5,810) | (600) | (3,175) | (14,570) | 935 | 21,662 | ||||||||
Cash flows from investing activities | |||||||||||||||
Capital expenditures | (280) | (225) | (280) | (313) | (9,092) | (206) | (1,015) | ||||||||
Intercompany investing activities | (48) | (1,590) | (106) | (1,594) | (1,425) | ||||||||||
Net cash provided by (used in) investing activities | (328) | (1,815) | (386) | (1,907) | (10,517) | (206) | (1,015) | ||||||||
Cash flows from financing activities | |||||||||||||||
Intercompany financing activities | (165) | 9,888 | (1,516) | 10,006 | 29,284 | (168) | (16,758) | ||||||||
Net cash used in financing activities | (165) | 9,888 | (1,516) | 10,006 | 29,284 | (168) | (16,758) | ||||||||
Effect of exchange rates on cash | (580) | (79) | (257) | 476 | (1,266) | 73 | (689) | ||||||||
Cash and cash equivalents | |||||||||||||||
Net increase for the period | (3,200) | 2,184 | (2,759) | 5,400 | 2,931 | 634 | 3,200 | ||||||||
Balance, beginning of the period | 11,263 | 14,463 | $ 16,932 | 13,716 | 11,532 | $ 10,898 | 14,463 | 11,532 | 11,532 | 10,898 | 7,698 | ||||
Balance, end of the period | 11,704 | 11,263 | $ 14,463 | 16,932 | 13,716 | $ 11,532 | 11,704 | 16,932 | 14,463 | 11,532 | 10,898 | ||||
Eliminations | |||||||||||||||
Cash flows from operating activities | |||||||||||||||
Net income | $ 9,076 | (3,516) | $ (8,067) | (12,571) | 5,560 | (20,638) | (27,358) | (37,994) | (35,235) | ||||||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||||||||
Equity in loss (income) of subsidiaries | 3,516 | 12,571 | (5,560) | 20,638 | 27,358 | 37,994 | 35,235 | ||||||||
Stock-based compensation | 119 | ||||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Other changes in operating assets and liabilities | (119) | ||||||||||||||
Cash flows from investing activities | |||||||||||||||
Intercompany investing activities | 907 | 10,875 | (1,410) | 11,194 | 1,080,245 | (5,224) | (13,914) | ||||||||
Net cash provided by (used in) investing activities | 907 | 10,875 | (1,410) | 11,194 | 1,080,245 | (5,224) | (13,914) | ||||||||
Cash flows from financing activities | |||||||||||||||
Intercompany financing activities | (907) | (10,875) | 1,410 | (11,194) | (1,080,245) | 5,224 | 13,914 | ||||||||
Net cash used in financing activities | $ (907) | $ (10,875) | $ 1,410 | $ (11,194) | $ (1,080,245) | $ 5,224 | $ 13,914 |
CONDENSED CONSOLIDATED STATE161
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||
Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME | |||||||||||||||
Revenues | $ 206,364 | $ 207,473 | $ 152,055 | $ 145,481 | $ 144,946 | $ 150,571 | $ 140,456 | $ 146,101 | $ 149,065 | $ 146,822 | $ 413,837 | $ 295,517 | $ 593,053 | $ 582,444 | $ 584,486 |
Costs and expenses | |||||||||||||||
Cost of revenues (exclusive of depreciation and amortization) | 127,222 | 127,023 | 109,375 | 113,238 | 254,245 | 222,614 | 440,071 | 439,794 | 436,059 | ||||||
Operating expenses | 26,847 | 15,841 | 21,261 | 20,039 | 42,688 | 41,299 | 95,452 | 76,562 | 75,806 | ||||||
Research and Development | 4,470 | 5,436 | 9,906 | 804 | 0 | 0 | |||||||||
Depreciation | 10,717 | 10,377 | 1,919 | 1,927 | 21,094 | 3,846 | 8,745 | 7,350 | 6,843 | ||||||
Amortization | 20,772 | 20,655 | 2,769 | 2,354 | 41,427 | 5,123 | 14,199 | 9,588 | 9,796 | ||||||
Total costs and expenses | 190,028 | 179,332 | 135,324 | 137,558 | 369,360 | 272,882 | 559,271 | 533,294 | 528,504 | ||||||
Operating income | 16,336 | 28,141 | 376 | 10,771 | 9,622 | 13,013 | 11,196 | 11,420 | 13,633 | 12,901 | 44,477 | 22,635 | 33,782 | 49,150 | 55,982 |
Other expenses | |||||||||||||||
Interest expense, net of interest income | 24,958 | 25,655 | 2,083 | 1,546 | 50,613 | 3,629 | 10,756 | 10,265 | 15,519 | ||||||
Loss on extinguishment of debt | 12,977 | 0 | 12,977 | 2,725 | |||||||||||
Total other expenses | 37,935 | 25,655 | 2,083 | 1,546 | 63,590 | 3,629 | 13,481 | 10,265 | 15,519 | ||||||
(Loss) income from operations before tax | (21,599) | 2,486 | 7,539 | 11,467 | (19,113) | 19,006 | 20,301 | 38,885 | 40,463 | ||||||
Income tax (benefit) expense | (8,858) | 2,017 | 2,815 | 3,978 | (6,841) | 6,793 | 8,161 | 14,487 | 14,774 | ||||||
Net (loss) income | (12,741) | 469 | $ (5,749) | $ 5,676 | 4,724 | 7,489 | $ 5,704 | $ 5,782 | $ 6,776 | $ 6,136 | (12,272) | 12,213 | 12,140 | 24,398 | 25,689 |
Foreign currency translation | 811 | (873) | 381 | 1 | (62) | 382 | (1,258) | 269 | 218 | ||||||
Comprehensive (loss) income | $ (11,930) | $ (404) | $ 5,105 | $ 7,490 | $ (12,334) | $ 12,595 | $ 10,882 | $ 24,667 | $ 25,907 | ||||||
(Loss) earnings per share | |||||||||||||||
Basic (in dollars per share) | $ (0.19) | $ 0.01 | $ (0.09) | $ 0.09 | $ 0.07 | $ 0.11 | $ 0.09 | $ 0.09 | $ 0.10 | $ 0.09 | $ (0.19) | $ 0.19 | $ 0.18 | $ 0.37 | $ 0.39 |
Diluted (in dollars per share) | $ (0.19) | $ 0.01 | $ (0.09) | $ 0.09 | $ 0.07 | $ 0.11 | $ 0.08 | $ 0.09 | $ 0.10 | $ 0.09 | $ (0.19) | $ 0.18 | $ 0.18 | $ 0.36 | $ 0.38 |
Weighted average common shares outstanding | |||||||||||||||
Basic (in shares) | 65,844 | 65,623 | 65,608 | 65,589 | 65,970 | 65,910 | 65,730 | 65,525 | 66,116 | 66,697 | 65,734 | 65,940 | 65,780 | 66,014 | 65,933 |
Diluted (in shares) | 65,844 | 66,492 | 66,397 | 66,747 | 67,087 | 67,370 | 67,394 | 66,630 | 66,993 | 67,882 | 65,734 | 67,206 | 66,863 | 67,205 | 67,337 |
CONDENSED CONSOLIDATED BALAN162
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
Current assets | |||||||||
Cash and cash equivalents | $ 165,017 | $ 145,013 | $ 89,095 | $ 161,998 | $ 194,566 | $ 114,254 | $ 153,020 | $ 55,535 | $ 55,535 |
Settlement receivables | 23,716 | 29,787 | 43,288 | 38,265 | |||||
Trade receivables, net of allowances for doubtful accounts of $2.9 million and $2.8 million at June 30, 2015 and December 31, 2014, respectively | 41,834 | 39,220 | 37,697 | 11,658 | |||||
Other receivables | 11,372 | 20,392 | 20,553 | 4,605 | |||||
Inventory | 23,453 | 23,050 | 27,163 | 9,413 | |||||
Prepaid expenses and other assets | 21,090 | 18,889 | 18,988 | 16,674 | |||||
Deferred tax asset | 9,591 | 9,590 | 9,591 | 3,102 | |||||
Total current assets | 296,073 | 285,941 | 246,375 | 197,971 | |||||
Non-current assets | |||||||||
Property, equipment and leasehold improvements, net | 104,521 | 102,759 | 106,085 | 18,710 | |||||
Goodwill | 857,670 | 857,856 | 857,913 | 180,084 | $ 180,141 | ||||
Other intangible assets, net | 404,132 | 420,103 | 436,785 | 31,535 | |||||
Other receivables, non-current | 7,808 | 8,593 | 9,184 | 699 | |||||
Other assets, non-current | 36,915 | 50,012 | 50,943 | 10,386 | |||||
Total non-current assets | 1,411,046 | 1,439,323 | 1,460,910 | 329,356 | |||||
Total assets | 1,707,119 | 1,725,264 | 1,707,285 | 527,327 | |||||
Current Liabilities | |||||||||
Settlement liabilities | 141,211 | 141,649 | 119,157 | 145,022 | |||||
Accounts payable and accrued expenses | 36,712 | 113,543 | 104,668 | 53,601 | |||||
Current portion of long-term debt | 10,000 | 10,000 | 10,000 | 1,030 | |||||
Total current liabilities | 267,906 | 265,192 | 233,825 | 199,653 | |||||
Non-current liabilities | |||||||||
Deferred tax liability, non-current | 49,808 | 59,101 | 57,333 | ||||||
Long-term debt, less current portion | 1,157,506 | 1,161,731 | 1,178,787 | 101,970 | |||||
Other accrued expenses and liabilities | 4,927 | 5,381 | 5,867 | 7,100 | |||||
Total non-current liabilities | 1,212,241 | 1,226,213 | 1,241,987 | 109,070 | |||||
Total liabilities | $ 1,480,147 | $ 1,491,405 | $ 1,475,812 | $ 308,723 | |||||
Commitments and Contingencies (Note 13) | |||||||||
Stockholders' Equity | |||||||||
Common stock, $0.001 par value, 500,000 shares authorized and 90,743 and 90,405 shares issued at June 30, 2015 and December 31, 2014, respectively | $ 91 | $ 91 | $ 90 | $ 89 | |||||
Additional paid-in capital | 253,555 | 248,491 | 245,682 | 231,516 | |||||
Retained earnings (deficit) | 147,879 | 160,621 | 160,152 | 148,012 | |||||
Accumulated other comprehensive income (loss) | 1,507 | 696 | 1,569 | 2,827 | |||||
Treasury stock, at cost, 24,821 and 24,816 shares at June 30, 2015 and December 31, 2014, respectively | (176,060) | (176,040) | (176,020) | (163,840) | |||||
Total stockholders' equity (deficit) | 226,972 | 233,859 | 231,473 | 218,604 | |||||
Total liabilities and stockholders' equity | $ 1,707,119 | $ 1,725,264 | $ 1,707,285 | 527,327 | |||||
Unused Elements Abstract | |||||||||
Deferred tax asset, non-current | $ 87,942 |
CONDENSED CONSOLIDATED BALAN163
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
Allowances for doubtful accounts | $ 2,900 | $ 2,700 | $ 2,784 | $ 2,777 | $ 6,908 | $ 6,756 |
Common stock par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||
Common stock, shares authorized | 500,000,000 | 500,000,000 | 500,000,000 | 500,000,000 | ||
Common stock, shares issued | 90,743,000 | 90,610,000 | 90,405,000 | 89,233,000 | ||
Convertible preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||
Convertible preferred stock, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 | 50,000,000 | ||
Convertible preferred stock, shares outstanding | 0 | 0 | 0 | 0 | ||
Treasury stock, shares | 24,821,000 | 24,819,000 | 24,816,000 | 23,303,000 |
CONDENSED CONSOLIDATED STATE164
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Mar. 31, 2015 | Mar. 31, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Cash flows from operating activities | |||||||
Net (loss) income | $ 469 | $ 7,489 | $ (12,272) | $ 12,213 | $ 12,140 | $ 24,398 | $ 25,689 |
Adjustments to reconcile net income to cash provided by operating activities: | |||||||
Depreciation and Amortization | 31,032 | 4,281 | 62,521 | 8,969 | 22,944 | 16,938 | 16,639 |
Amortization of financing costs | 2,072 | 471 | 3,730 | 942 | 2,035 | 1,793 | 1,485 |
Loss/(gain) on sale or disposal of assets | 2 | 124 | 374 | (21) | |||
Accretion of contract rights | 2,104 | 4,092 | |||||
Provision for bad debts | 2,266 | 2,014 | 4,370 | 4,229 | 8,991 | 7,874 | 5,182 |
Loss on early extinguishment of debt | 0 | 12,977 | 2,725 | ||||
Stock-based compensation | 1,793 | 2,057 | 3,954 | 5,409 | 8,876 | 5,078 | 6,655 |
Other non-cash items | (231) | (20) | (337) | (178) | (95) | ||
Changes in operating assets and liabilities: | |||||||
Trade and other receivables | (4,716) | (1,008) | (75) | (3,772) | |||
Settlement receivables | 13,208 | 8,285 | 19,544 | 13,257 | (5,156) | (8,793) | 50,823 |
Inventory | 4,155 | (1,835) | 3,761 | (2,269) | (850) | (2,286) | 134 |
Prepaid and other assets | (547) | (1,357) | (18,396) | (117) | 904 | (9,482) | (3,425) |
Deferred income taxes | 1,769 | 3,033 | (7,525) | 5,611 | 6,613 | 13,643 | 14,376 |
Settlement liabilities | 22,765 | 54,904 | 22,240 | 29,553 | (25,523) | (37,200) | 40,530 |
Accounts payable and accrued expenses | 27,116 | 1,425 | |||||
Net cash provided by operating activities | 85,816 | 86,597 | 126,391 | 75,429 | 24,531 | 4,334 | 157,488 |
Cash flows from investing activities | |||||||
Acquisitions, net of cash acquired | (2,257) | (11,845) | (1,068,000) | ||||
Capital expenditures | (12,616) | (3,025) | (29,660) | (7,493) | (18,021) | (13,900) | (12,786) |
Proceeds from sale of fixed assets | 1 | 192 | 29 | 213 | |||
Repayments under development agreements | 1,217 | 2,392 | 276 | ||||
Advances under development and placement agreements | (1,255) | (1,255) | |||||
Changes in restricted cash and cash equivalents | 59 | (46) | 60 | (45) | (102) | (90) | 255 |
Net cash provided by (used in) investing activities | (12,594) | (2,879) | (30,691) | (19,170) | (1,085,847) | (13,990) | (12,531) |
Cash flows from financing activities | |||||||
Repayments of prior credit facility | (3,000) | (7,000) | (103,000) | (18,500) | (52,500) | ||
Repayments of credit facility | (17,500) | (5,000) | |||||
Repayments of secured notes | (350,000) | ||||||
Proceeds from issuance of secured notes | 335,000 | 1,200,000 | |||||
Debt issuance costs | (252) | (1,154) | (52,735) | (764) | (676) | ||
Proceeds from exercise of stock options | 1,048 | 2,440 | 1,673 | 4,613 | 5,338 | 8,431 | 6,655 |
Purchase of treasury stock | (20) | (2,767) | (40) | (6,604) | (12,180) | (18,350) | (262) |
Net cash used in financing activities | (16,724) | (3,327) | (19,521) | (8,991) | 1,037,423 | (29,183) | (46,783) |
Effect of exchange rates on cash | (580) | (79) | (257) | 476 | (1,266) | 73 | (689) |
Cash and cash equivalents | |||||||
Net increase for the period | 55,918 | 80,312 | 75,922 | 47,744 | (25,159) | (38,766) | 97,485 |
Balance, beginning of the period | 89,095 | 114,254 | 89,095 | 114,254 | 114,254 | 153,020 | 55,535 |
Balance, end of the period | 145,013 | 194,566 | 165,017 | 161,998 | 89,095 | 114,254 | 153,020 |
Supplemental cash disclosures | |||||||
Cash paid for interest | 13,162 | 1,690 | 25,107 | 3,504 | 59,274 | 8,634 | 15,494 |
Cash (refunded) paid for income tax, net | 712 | 303 | (6,184) | 508 | 962 | 711 | $ 665 |
Supplemental non-cash disclosures | |||||||
Accrued and unpaid capital expenditures | $ 1,173 | $ 2,233 | 5,091 | 1,253 | 731 | $ 1,073 | |
Accrued and unpaid contingent liability for NEWave acquisition | $ 2,463 | $ 2,463 | |||||
Issuance of stock warrants | $ 2,246 |
BUSINESS165
BUSINESS | 3 Months Ended | 6 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | |
BUSINESS | ||
BUSINESS | 1. BUSINESS Overview Global Cash Access Holdings, Inc. (“Holdings”) is a holding company, the assets of which are the issued and outstanding capital stock of each of Global Cash Access, Inc. (“GCA”) and Multimedia Games Holding Company, Inc. (“Multimedia”). Unless otherwise indicated, the terms the “Company,” “we,” “us” and “our” refer to Holdings together with its consolidated subsidiaries. GCA is dedicated to providing video and mechanical reel gaming content and technology solutions, integrated gaming payments solutions and compliance and efficiency software. The Company’s Games business provides: (a) comprehensive content, electronic gaming units and systems for Native American and commercial casinos, including the award winning TournEvent® slot tournament solution; and (b) the central determinant system for the video lottery terminals (“VLTs”) installed at racetracks in the State of New York. The Company’s Payments business provides: (a) access to cash at gaming facilities via Automated Teller Machine (“ATM”) cash withdrawals, credit card cash access transactions, point of sale (“POS”) debit card transactions, and check verification and warranty services; (b) fully integrated gaming industry kiosks that provide cash access and related services; (c) products and services that improve credit decision making, automate cashier operations and enhance patron marketing activities for gaming establishments; (d) compliance, audit and data solutions; and (e) online payment processing solutions for gaming operators in States that offer intra state, Internet-based gaming and lottery activities. | 1. BUSINESS Overview Global Cash Access Holdings, Inc. (“Holdings”) is a holding company, the assets of which are the issued and outstanding capital stock of each of Global Cash Access, Inc. (“GCA”) and Multimedia Games Holding Company, Inc. (“Multimedia”). Unless otherwise indicated, the terms the “Company,” “we,” “us” and “our” refer to Holdings together with its consolidated subsidiaries. GCA is dedicated to providing video and mechanical reel gaming content and technology solutions, integrated gaming payments solutions and compliance and efficiency software. The Company’s Games business provides: (a) comprehensive content, electronic gaming units and systems for Native American and commercial casinos, including the award winning TournEvent® slot tournament solution; and (b) the central determinant system for the video lottery terminals (“VLTs”) installed at racetracks in the State of New York. The Company’s Payments business provides: (a) access to cash at gaming facilities via Automated Teller Machine (“ATM”) cash withdrawals, credit card cash access transactions, point of sale (“POS”) debit card transactions, and check verification and warranty services; (b) fully integrated gaming industry kiosks that provide cash access and related services; (c) products and services that improve credit decision making, automate cashier operations and enhance patron marketing activities for gaming establishments; (d) compliance, audit and data solutions; and (e) online payment processing solutions for gaming operators in states that offer intrastate, Internet-based gaming and lottery activities. |
BASIS OF PRESENTATION AND SU166
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended | 6 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation Our unaudited condensed consolidated financial statements included herein have been prepared by us pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Some of the information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States have been condensed or omitted pursuant to such rules and regulations, although we believe the disclosures are adequate to make the information presented not misleading. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary for a fair presentation of results for the interim periods have been made. The results for the three months ended March 31, 2015 are not necessarily indicative of results to be expected for the full fiscal year. The condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. There have been no changes to our basis of presentation and significant accounting policies since the most recent filing of our Annual Report on Form 10-K, except for the following: Cost of Revenues (exclusive of depreciation and amortization) The cost of revenues (exclusive of depreciation and amortization) represents the direct costs required to perform revenue generating transactions. The principal costs included within cost of revenues (exclusive of depreciation and amortization) are field service and network operations personnel, those direct costs related to the inventory sold for electronic gaming machines (“EGMs”), fully integrated kiosks and system sales, commissions paid to gaming establishments, interchange fees paid to credit and debit card networks and transaction processing fees to our transaction processor. Research and Development Costs We conduct research and development activities primarily to develop and enhance our Games and Payments platforms, as well as game content and features. We believe our ability to deliver differentiated, appealing products and services to the marketplace is based in part on our research and development investments, and we expect to continue to make such investments in the future. These research and development costs consist primarily of salaries and benefits, consulting fees, and game lab testing fees. Once the technological feasibility of a project has been established, it is transferred from research to development, and capitalization of development costs continues until the product is available for general release. Advertising, Marketing and Promotional Costs We expense advertising, marketing and promotional costs as incurred. Total advertising, marketing and promotional costs, included in operating expenses in the Condensed Consolidated Statements of Income and Comprehensive Income, were $0.3 million and $0.2 million for the three months ended March 31, 2015 and 2014, respectively. Fair Values of Financial Instruments The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Fair value estimates are made at a specific point in time, based upon relevant market information about the financial instrument. In determining fair value, we use a hierarchy that includes three levels which are based on the extent to which inputs used in measuring fair value are observable in the market. Level 1 indicates that the fair value is determined by using quoted prices in active markets for identical investments. Level 2 indicates that the fair value is determined using observable pricing inputs other than quoted prices in active markets such as models or other valuation methodologies. Level 3 indicates that the fair value is determined using pricing inputs that are unobservable for the investment and include situations where there is little, if any, market activity for the investment. Significant management estimates and judgment are used in the determination of the fair value of level 3 pricing inputs. The carrying amount of cash and cash equivalents, settlement receivables, trade receivables, other receivables, settlement liabilities, accounts payable and accrued expenses approximates fair value due to the short-term maturities of these instruments. The fair value of our borrowings are estimated based on various inputs to determine a market price, such as: market demand and supply, size of tranche, maturity and similar instruments trading in more active markets. The following table presents the fair value and carrying value of our long-term debt as of March 31, 2015 (amounts in thousands): Level of Hierarchy Fair Value Carrying Amount Term loan 1 $ $ Senior secured notes 3 $ $ Senior unsecured notes 3 $ $ The senior secured and senior unsecured notes were both fair valued using a Level 3 input by evaluating the trading activities of similar debt instruments as there was no market activity as of March 31, 2015. At December 31, 2014, the fair value of our long-term debt was considered to approximate the carrying amount as our acquisition of Multimedia occurred on December 19, 2014, for which our long-term debt was incurred. Business Segments During the first quarter of 2015, we changed our organizational structure as part of our transformation to a Games and Payments company providing solutions to the gaming industry. As a result, information that our chief operating decision-making group regularly reviews for purposes of allocating resources and assessing performance changed. Therefore, beginning in the first quarter of 2015, we are reporting our financial performance based on our new segments described in “Note 18 – Segment Information”. We have presented prior period amounts to conform to the way we now internally manage and monitor segment performance beginning in 2015. This change had no impact on our condensed consolidated financial statements. Recent Accounting Guidance Recent Accounting Guidance Not Yet Adopted In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-03, which provides guidance to simplify the presentation of debt issuance costs. These amendments require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. The pronouncement is effective for annual periods ending after December 15, 2015, and interim periods within those fiscal years, and early adoption is permitted for financial statements that have not been previously issued. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In January 2015, the FASB issued ASU No. 2015-01, which requires that an entity separately classify, present and disclose extraordinary events and transactions. The pronouncement is effective for annual periods ending after December 15, 2015. A reporting entity also may apply the amendments retrospectively to all prior periods presented in the financial statements. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In August 2014, the FASB issued ASU No. 2014-15, which provides guidance on determining when and how reporting entities must disclose going-concern uncertainties in their financial statements. The pronouncement is effective for annual periods ending after December 15, 2016, and interim periods thereafter, and early adoption is permitted. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In June 2014, the FASB issued ASU No. 2014-12, which requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. The standard is effective for annual reporting periods beginning after December 15, 2015, with early adoption permitted. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In May 2014, the FASB issued ASU No. 2014-09, which creates FASB Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers” and supersedes ASC Topic 605, “Revenue Recognition”. The guidance replaces industry specific guidance and establishes a single five-step model to identify and recognize revenue. The core principle of the guidance is that an entity should recognize revenue upon transfer of control of promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. Additionally, the guidance requires the entity to disclose further quantitative and qualitative information regarding the nature and amount of revenues arising from contracts with customers, as well as other information about the significant judgments and estimates used in recognizing revenues from contracts with customers. This guidance is effective for interim and annual reporting periods beginning after December 15, 2016. Early application is not permitted. This guidance may be adopted retrospectively or under a modified retrospective method where the cumulative effect is recognized at the date of initial application. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within our Notes to the Condensed Consolidated Financial Statements. | 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation Our unaudited condensed consolidated financial statements included herein have been prepared by us pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Some of the information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States have been condensed or omitted pursuant to such rules and regulations, although we believe the disclosures are adequate to make the information presented not misleading. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary for a fair presentation of results for the interim periods have been made. The results for the three and six months ended June 30, 2015 are not necessarily indicative of results to be expected for the full fiscal year. The condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. There have been no changes to our basis of presentation and significant accounting policies since the most recent filing of our Annual Report on Form 10-K, except for the following: Cost of Revenues (exclusive of depreciation and amortization) The cost of revenues (exclusive of depreciation and amortization) represents the direct costs required to perform revenue generating transactions. The principal costs included within cost of revenues (exclusive of depreciation and amortization) are field service and network operations personnel, those direct costs related to the inventory sold for electronic gaming machines (“EGMs”), fully integrated kiosks and system sales, commissions paid to gaming establishments, interchange fees paid to credit and debit card networks and transaction processing fees to our transaction processor. Research and Development Costs We conduct research and development activities primarily to develop and enhance our Games and Payments platforms, as well as game content and features. We believe our ability to deliver differentiated, appealing products and services to the marketplace is based in part on our research and development investments, and we expect to continue to make such investments in the future. These research and development costs consist primarily of salaries and benefits, consulting fees, and game lab testing fees. Once the technological feasibility of a project has been established, it is transferred from research to development, and capitalization of development costs continues until the product is available for general release. Advertising, Marketing and Promotional Costs We expense advertising, marketing and promotional costs as incurred. Total advertising, marketing and promotional costs, included in operating expenses in the Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income, were $0.5 million and $0.8 million and $0.2 million and $0.4 million for the three and six months ended June 30, 2015 and 2014, respectively. Fair Values of Financial Instruments The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Fair value estimates are made at a specific point in time, based upon relevant market information about the financial instrument. In determining fair value, we use a hierarchy that includes three levels which are based on the extent to which inputs used in measuring fair value are observable in the market. Level 1 indicates that the fair value is determined by using quoted prices in active markets for identical investments. Level 2 indicates that the fair value is determined using observable pricing inputs other than quoted prices in active markets such as models or other valuation methodologies. Level 3 indicates that the fair value is determined using pricing inputs that are unobservable for the investment and include situations where there is little, if any, market activity for the investment. Significant management estimates and judgment are used in the determination of the fair value of level 3 pricing inputs. The carrying amount of cash and cash equivalents, settlement receivables, trade receivables, other receivables, settlement liabilities, accounts payable and accrued expenses approximates fair value due to the short-term maturities of these instruments. The fair value of our borrowings are estimated based on various inputs to determine a market price, such as: market demand and supply, size of tranche, maturity and similar instruments trading in more active markets. The following table presents the fair value and carrying value of our long-term debt as of June 30, 2015 (amounts in thousands): Level of Carrying Hierarchy Fair Value Value Term loan $ $ Senior secured notes $ $ Senior unsecured notes $ $ The senior secured notes were fair valued using a Level 3 input by evaluating the trading activities of similar debt instruments as there was no market activity as of June 30, 2015. The senior unsecured notes were syndicated in April 2015 and transitioned from level 3 to level 1 on the fair value hierarchy as of June 30, 2015. At December 31, 2014, the fair value of our long-term debt was considered to approximate the carrying amount as our acquisition of Multimedia occurred on December 19, 2014, for which our long-term debt was incurred. Business Segments During the first quarter of 2015, we changed our organizational structure as part of our transformation to a Games and Payments company providing solutions to the gaming industry. As a result, information that our chief operating decision-making group regularly reviews for purposes of allocating resources and assessing performance changed. Therefore, beginning in the first quarter of 2015, we are reporting our financial performance based on our new segments described in “Note 18. Segment Information”. We have presented prior period amounts to conform to the way we now internally manage and monitor segment performance beginning in 2015. This change had no impact on our condensed consolidated financial statements. Recent Accounting Guidance Recent Accounting Guidance Not Yet Adopted In July 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2015-11, which provides guidance on the measurement of inventory value. The amendments require an entity to measure in scope inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. The amendments do not apply to inventory that is measured using last-in, first-out (LIFO) or the retail inventory method. The amendments apply to all other inventory, which includes inventory that is measured using first-in, first-out (FIFO) or average cost. The pronouncement is effective for annual periods beginning after December 15, 2016, and interim periods within those fiscal years, and early adoption is permitted. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-03, which provides guidance to simplify the presentation of debt issuance costs. These amendments require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. The pronouncement is effective for annual periods beginning after December 15, 2015, and interim periods within those fiscal years, and early adoption is permitted for financial statements that have not been previously issued. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In January 2015, the FASB issued ASU No. 2015-01, which requires that an entity separately classify, present and disclose extraordinary events and transactions. The pronouncement is effective for annual periods ending after December 15, 2015. A reporting entity also may apply the amendments retrospectively to all prior periods presented in the financial statements. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In August 2014, the FASB issued ASU No. 2014-15, which provides guidance on determining when and how reporting entities must disclose going-concern uncertainties in their financial statements. The pronouncement is effective for annual periods ending after December 15, 2016, and interim periods thereafter, and early adoption is permitted. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In June 2014, the FASB issued ASU No. 2014-12, which requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. The standard is effective for annual reporting periods beginning after December 15, 2015, with early adoption permitted. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In May 2014, the FASB issued ASU No. 2014-09, which creates FASB Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers” and supersedes ASC Topic 605, “Revenue Recognition”. The guidance replaces industry specific guidance and establishes a single five-step model to identify and recognize revenue. The core principle of the guidance is that an entity should recognize revenue upon transfer of control of promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. Additionally, the guidance requires the entity to disclose further quantitative and qualitative information regarding the nature and amount of revenues arising from contracts with customers, as well as other information about the significant judgments and estimates used in recognizing revenues from contracts with customers. This guidance is effective for interim and annual reporting periods beginning after December 15, 2016. Early application is not permitted. This guidance may be adopted retrospectively or under a modified retrospective method where the cumulative effect is recognized at the date of initial application. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within our Notes to the Condensed Consolidated Financial Statements . |
BUSINESS COMBINATIONS167
BUSINESS COMBINATIONS | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
BUSINESS COMBINATIONS | |||
BUSINESS COMBINATIONS | 3. BUSINESS COMBINATIONS Multimedia Games Holding Company, Inc. On December 19, 2014, Holdings completed its acquisition of Multimedia. Pursuant to the terms of the Agreement and Plan of Merger, dated as of September 8, 2014 (the “Merger Agreement”), by and among Holdings, Movie Merger Sub, Inc., a wholly owned subsidiary of Holdings (“Merger Sub”), and Multimedia, Merger Sub merged with and into Multimedia, with Multimedia continuing as the surviving corporation (the “Merger”). In the Merger, Multimedia became a wholly owned subsidiary of Holdings. Also, as a result of the Merger, each outstanding share of common stock, par value $0.01 per share, of Multimedia, other than shares held by Holdings, Multimedia, Merger Sub or their respective subsidiaries, was cancelled and converted into the right to receive $36.50 in cash, without interest (the “Merger Consideration”), together with the consideration paid in connection with the acceleration and full vesting of Multimedia equity awards, (collectively, the “Total Merger Consideration”). Multimedia designs, manufactures and supplies gaming machines and systems to commercial and Native American casino operators as well as select lottery operators and commercial bingo facility operators. Multimedia’s revenues are generated from the operation of gaming machines in revenue sharing or lease arrangements and from the sale of gaming machines and systems that feature proprietary game themes. The total purchase consideration for Multimedia was as follows (in thousands, except per share amounts): Amount Purchase consideration Total purchase price for Multimedia Games common stock (29,948 shares at $36.50 per share) $ Payment in respect to Multimedia Games outstanding equity awards Total merger consideration Repayments of Multimedia Games debt and other obligations Less: Multimedia Games outstanding cash at acquisition date Total purchase consideration $ The Merger was accounted for using the acquisition method of accounting, which requires, among other things, the assets acquired and liabilities assumed be recognized at their respective fair values as of the acquisition date. The excess of the purchase price over those fair values was recorded as goodwill, none of which is deductible for tax purposes. The goodwill recognized is attributable primarily to the income potential from Multimedia penetrating into the Class III commercial casino market, the assembled workforce of Multimedia and expected synergies. The estimates and assumptions used include the projected timing and amount of future cash flows and discount rates reflecting risk inherent in the future cash flows. The estimated fair values of Multimedia’s assets acquired and liabilities assumed and resulting goodwill are subject to adjustment as we finalize our fair value analysis. The significant items for which a final fair value has not been determined include, but not limited to: accrued liabilities, the valuation and estimated useful lives of tangible and intangible assets and deferred income taxes. We expect to complete our fair value determinations no later than the fourth quarter of 2015. We do not expect our fair value determinations to materially change; however, there may be differences compared to those amounts originally recorded as we complete our fair value analysis. The information below reflects the preliminary purchase price allocation (in thousands): Amount Purchase price allocation Current assets $ Property, equipment and leasehold improvements, net Goodwill Other intangible assets, net Other receivables, non-current Other assets, long-term Deferred tax asset, non-current Total assets Current liabilities Deferred tax liability, non-current Other accrued expenses and liabilities Total liabilities Net assets acquired $ Trade receivables acquired of $24.7 million were considered to be collectible and therefore the carrying amounts were considered to approximate fair value. Inventory acquired of $16.5 million was fair valued based on model-based valuations for which inputs and value drivers were observable. The following table summarizes acquired tangible assets (in thousands): Useful Life (years) Estimated Fair Value Property, Equipment and Leased Assets Gaming equipment 2 - 4 $ Leasehold and building improvements Lease Term Machinery and equipment 3 - 5 Other 2 - 7 Total property, equipment and leased assets $ The fair value of property, equipment and leased assets was determined using the cost approach as the primary approach for valuing the majority of the personal property. The market approach was used to estimate the value of vehicles. The income approach was used to quantify any economic obsolescence that may be present in the personal property. No economic obsolescence adjustments were made to the personal property, as the business enterprise valuation indicated sufficient cash flows to support the values established through the cost and market approaches. The following table summarizes acquired intangible assets (in thousands): Useful Life (years) Estimated Fair Value Other intangible assets Tradenames and trademarks 3 - 7 $ Computer software 3 - 5 Developed technology 2 - 6 Customer relationships 8 - 12 Contract rights 1 - 7 Total other intangible assets $ The fair values of trade names and trademarks and developed technology were determined by applying the income approach utilizing the relief from royalty methodology. The fair value of customer relationships was determined by applying the income approach utilizing the excess earnings methodology. The fair value of contract rights was considered to approximate the carrying amount based on contractual obligations associated with these other intangible assets. The discount rates utilized to estimate the fair value of these other intangible assets ranged from 10.0% to 11.0%. We expensed approximately $1.5 million of costs incurred related to the acquisition of Multimedia for financial advisory services, financing related fees, accounting and legal fees and other transaction-related expenses during the three months ended March 31, 2015. These expenses are included in the Condensed Consolidated Statements of Income and Comprehensive Income within operating expenses. These costs do not include any costs related to additional site consolidation or rationalization that we might consider in the future. NEWave, Inc. In April 2014, we acquired all of the outstanding capital stock of NEWave, Inc. (“NEWave”) for an aggregate purchase price of approximately $14.9 million, of which approximately $2.5 million is expected to be paid in the second quarter of 2015. NEWave is a supplier of anti-money laundering compliance, audit and data efficiency software to the gaming industry. We have not provided the supplemental pro forma impact of the NEWave acquisition on the revenue and earnings of the combined entity as if the acquisition date had been January 1, 2013, and the amount of revenue and earnings derived from NEWave have not been presented on a supplemental basis as such amounts are not material for the three months ended March 31, 2015 and 2014, respectively. | 3. BUSINESS COMBINATIONS Multimedia Games Holding Company, Inc. On December 19, 2014, Holdings completed its acquisition of Multimedia. Pursuant to the terms of the Agreement and Plan of Merger, dated as of September 8, 2014 (the “Merger Agreement”), by and among Holdings, Movie Merger Sub, Inc., a wholly owned subsidiary of Holdings (“Merger Sub”), and Multimedia, Merger Sub merged with and into Multimedia, with Multimedia continuing as the surviving corporation (the “Merger”). In the Merger, Multimedia became a wholly owned subsidiary of Holdings. Also, as a result of the Merger, each outstanding share of common stock, par value $0.01 per share, of Multimedia, other than shares held by Holdings, Multimedia, Merger Sub or their respective subsidiaries, was cancelled and converted into the right to receive $36.50 in cash, without interest (the “Merger Consideration”), together with the consideration paid in connection with the acceleration and full vesting of certain Multimedia equity awards, (collectively, the “Total Merger Consideration”). Multimedia designs, manufactures and supplies gaming machines and systems to commercial and Native American casino operators as well as select lottery operators and commercial bingo facility operators. Multimedia’s revenues are generated from the operation of gaming machines in revenue sharing or lease arrangements and from the sale of gaming machines and systems that feature proprietary game themes. The total purchase consideration for Multimedia was as follows (in thousands, except per share amounts): Amount Purchase consideration Total purchase price for Multimedia Games common stock ( 29,948 shares at $36.50 per share) $ Payment in respect to Multimedia Games outstanding equity awards Total merger consideration Repayments of Multimedia Games debt and other obligations Less: Multimedia Games outstanding cash at acquisition date Total purchase consideration $ The Merger was accounted for using the acquisition method of accounting, which requires, among other things, the assets acquired and liabilities assumed be recognized at their respective fair values as of the acquisition date. The excess of the purchase price over those fair values was recorded as goodwill, none of which is deductible for tax purposes. The goodwill recognized is attributable primarily to the income potential from Multimedia penetrating into the Class III commercial casino market, the assembled workforce of Multimedia and expected synergies. The estimates and assumptions used include the projected timing and amount of future cash flows and discount rates reflecting risk inherent in the future cash flows. The estimated fair values of Multimedia’s assets acquired and liabilities assumed and resulting goodwill are subject to adjustment as we finalize our fair value analysis. The significant items for which a final fair value has not been determined include, but not limited to: accrued liabilities, the valuation and estimated useful lives of tangible and intangible assets and deferred income taxes. We expect to complete our fair value determinations no later than the fourth quarter of 2015. We do not expect our fair value determinations to materially change; however, there may be differences compared to those amounts originally recorded as we complete our fair value analysis. The information below reflects the preliminary purchase price allocation (in thousands): Amount Purchase price allocation Current assets $ Property, equipment and leasehold improvements, net Goodwill Other intangible assets, net Other receivables, non-current Other assets, long-term Deferred tax asset, non-current Total assets Current liabilities Deferred tax liability, non-current Other accrued expenses and liabilities Total liabilities Net assets acquired $ Trade receivables acquired of $24.7 million were considered to be collectible and therefore the carrying amounts were considered to approximate fair value. Inventory acquired of $16.5 million was fair valued based on model-based valuations for which inputs and value drivers were observable. The following table summarizes acquired tangible assets (in thousands): Useful Life Estimated (years) Fair Value Property, equipment and leased assets Gaming equipment - 4 $ Leasehold and building improvements Lease Term Machinery and equipment - 5 Other - 7 Total property, equipment and leased assets $ The fair value of property, equipment and leased assets was determined using the cost approach as the primary approach for valuing the majority of the personal property. The market approach was used to estimate the value of vehicles. The income approach was used to quantify any economic obsolescence that may be present in the personal property. No economic obsolescence adjustments were made to the personal property, as the business enterprise valuation indicated sufficient cash flows to support the values established through the cost and market approaches. The following table summarizes acquired intangible assets (in thousands): Useful Life Estimated (years) Fair Value Other intangible assets Tradenames and trademarks - 7 $ Computer software - 5 Developed technology - 6 Customer relationships - 12 Contract rights - 7 Total other intangible assets $ The fair values of trade names and trademarks and developed technology were determined by applying the income approach utilizing the relief from royalty methodology. The fair value of customer relationships was determined by applying the income approach utilizing the excess earnings methodology. The fair value of contract rights was considered to approximate the carrying amount based on contractual obligations associated with these other intangible assets. The discount rates utilized to estimate the fair value of these other intangible assets ranged from 10.0% to 11.0% . We expensed approximately $0.4 million and $1.8 million of costs incurred related to the acquisition of Multimedia for financial advisory services, financing related fees, accounting and legal fees and other transaction-related expenses during the three and six months ended June 30, 2015, respectively. These expenses are included in the Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income within operating expenses. These costs do not include any costs related to additional site consolidation or rationalization that we might consider in the future. NEWave, Inc . In April 2014, we acquired all of the outstanding capital stock of NEWave, Inc. (“NEWave”) for an aggregate purchase price of approximately $14. 9 million, of which we estimated that approximately $2. 5 million would be paid in the second quarter of 2015. As of June 30, 2015, a final payment of $2. 3 million was remitted. NEWave is a supplier of anti-money laundering compliance, audit and data efficiency software to the gaming industry. The assets acquired, liabilities assumed and goodwill recorded were not material to the financial statements. We have not provided the supplemental pro forma impact of the NEWave acquisition on the revenue and earnings of the combined entity as if the acquisition date had been January 1, 2013, and the amount of revenue and earnings derived from NEWave have not been presented on a supplemental basis as such amounts are not material for the three and six months ended June 30, 2015 and 2014, respectively. | 3. BUSINESS COMBINATIONS We account for business combinations in accordance with the accounting standards, which require that the assets acquired and liabilities assumed be recorded at their estimated fair values. NEWave, Inc. In April 2014, we acquired all of the outstanding capital stock of NEWave, Inc., (“NEWave”) for an aggregate purchase price of approximately $14.9 million, of which approximately $2.5 million is expected to be paid in April 2015. NEWave is a supplier of compliance, audit and data efficiency software to the gaming industry. We have not provided the supplemental pro forma impact of the NEWave acquisition on the revenue and earnings of the combined entity as if the acquisition date had been January 1, 2013, and the amount of revenue and earnings derived from NEWave have not been presented on a supplemental basis as such amounts are not material for the twelve months ended December 31, 2014 and 2013, respectively. Multimedia Games Holding Company, Inc. On December 19, 2014, Holdings completed its acquisition of Multimedia Games. Pursuant to the terms of the Agreement and Plan of Merger, dated as of September 8, 2014 (the “Merger Agreement”), by and among Holdings, Movie Merger Sub, Inc., a wholly owned subsidiary of Holdings (“Merger Sub”), and Multimedia Games, Merger Sub merged with and into Multimedia Games, with Multimedia Games continuing as the surviving corporation (the “Merger”). In the Merger, Multimedia Games became a wholly owned subsidiary of Holdings. Also, as a result of the Merger, each outstanding share of common stock, par value $0.01 per share, of Multimedia Games, other than shares held by Holdings, Multimedia Games, Merger Sub or their respective subsidiaries, was cancelled and converted into the right to receive $36.50 in cash, without interest (“Merger Consideration”), together with the acceleration and full vesting of Multimedia equity awards, (collectively, the “Total Merger Consideration”). Multimedia Games designs, manufactures and supplies gaming machines and systems to commercial and Native American casino operators as well as select lottery operators and commercial bingo facility operators. Multimedia Games’ revenue is generated from the operation of gaming machines in revenue sharing or lease arrangements and from the sale of gaming machines and systems that feature proprietary game themes. Our combination with Multimedia Games creates a provider of Payments and Games solutions for our gaming establishment customers. The business combination provides us with: ( a) growth opportunities, (b ) enhanced scale, diversification and margins, and ( c ) the ability to increase profitability through cost synergies. The total purchase consideration for Multimedia Games was as follows (in thousands, except per share amounts): Amount Purchase consideration Total purchase price for Multimedia Games common stock (29,948 shares at $36.50 per share) $ Payment in respect to Multimedia Games outstanding equity awards Total merger consideration Repayments of Multimedia Games debt and other obligations Less: Multimedia Games outstanding cash at acquisition date Total purchase consideration $ The Merger was accounted for using the acquisition method of accounting, which requires, among other things, the assets acquired and liabilities assumed be recognized at their respective fair values as of the acquisition date. The excess of the purchase price over those fair values was recorded as goodwill, none of which is deductible for tax purposes. The goodwill recognized is attributable primarily to the income potential from Multimedia Games penetrating into the Class III commercial casino market, the assembled workforce of Multimedia Games and expected synergies. The estimates and assumptions used include the projected timing and amount of future cash flows and discount rates reflecting risk inherent in the future cash flows. The estimated fair values of Multimedia’s assets acquired and liabilities assumed and resulting goodwill are subject to adjustment as the Company finalizes its fair value analysis. The significant items for which a final fair value has not been determined as of the filing of this Annual Report on Form 10-K include accrued liabilities, the valuation and estimated useful lives of tangible and intangible assets and deferred income taxes. We expect to complete our fair value determinations no later than the fourth quarter of 2015. We do not expect our fair value determinations to materially change; however, there may be differences compared to those at December 31, 2014 as we finalize our fair value analysis. The information below reflects the preliminary purchase price allocation (in thousands): Amount Purchase price allocation Current assets $ Property, equipment and leasehold improvements, net Goodwill Other intangible assets, net Other receivables, non-current Other assets, long-term Deferred tax asset, non-current Total assets Current liabilities Deferred tax liability, non-current Other accrued expenses and liabilities Total liabilities Net assets acquired $ Trade receivables acquired of $24.7 million were considered to be collectible and therefore the carrying amounts were considered to approximate fair value. Inventory acquired of $16.5 million was fair valued based on model-based valuations for which inputs and value drivers were observable. The following table summarizes acquired tangible assets (in thousands): Useful Life Estimated (years) Fair Value Property, Equipment and Leased Assets Gaming equipment - 4 $ Leasehold and building improvements Lease Term Machinery and equipment - 5 Other - 7 Total property, equipment and leased assets $ The fair value of property, equipment and leased assets was determined using the cost approach as the primary approach for valuing the majority of the personal property. The market approach was used to estimate the value of vehicles. The income approach was used to quantify any economic obsolescence that may be present in the personal property. No economic obsolescence adjustments were made to the personal property, as the business enterprise valuation indicated sufficient cash flows to support the values established through the cost and market approaches. The following table summarizes acquired intangible assets (in thousands): Useful Life Estimated (years) Fair Value Other intangible assets Tradenames and trademarks - 7 $ Computer software - 5 Developed technology - 6 Customer relationships - 12 Contract rights - 7 Total other intangible assets $ The fair values of trade names and trademarks and developed technology were determined by applying the income approach utilizing the relief from royalty methodology. The fair value of customer relationships was determined by applying the income approach utilizing the excess earnings methodology. The fair value of contract rights was considered to approximate the carrying amount based on contractual obligations associated with these other intangible assets. The discount rates utilized to estimate the fair value of these other intangible assets ranged from 10.0% to 11.0% . GCA and Multimedia Games had different fiscal year ends. Accordingly, the unaudited pro forma condensed combined statements of income for the year ended December 31, 2014 combined historical GCA consolidated statement of income for its year ended December 31, 2014 with historical Multimedia Games consolidated statement of operations for its year ended September 30, 2014, giving effect to the Merger as if it had occurred on January 1, 2013. The unaudited pro forma condensed combined statements of income for the year ended December 31, 2013 combined historical GCA consolidated statement of income for its year ended December 31, 2013 with historical Multimedia Games consolidated statement of operations for its year ended September 30, 2013, giving effect to the Merger as if it had occurred on January 1, 2013. The unaudited pro forma condensed combined financial information does not purport to represent the results of operations of GCA that would have actually resulted had the Merger been completed as of the dates indicated, nor should the information be taken as indicative of the future results of operations or financial position of the combined company. The unaudited pro forma condensed combined financial statements do not reflect the impacts of any potential operational efficiencies, cost savings or economies of scale that GCA may achieve with respect to the combined operations of GCA and Multimedia Games. The unaudited pro forma amounts include the historical operating results of the Company and Multimedia Games prior to the Merger, with adjustments directly attributable to the Merger. The unaudited pro forma results include increases to depreciation and amortization expense based on the purchased intangible assets and the step-up in basis associated with tangible assets acquired and increases to interest expense, related to debt issued to fund the Merger. Also reflected in the year ended December 31, 2014 are adjustments for the impact of acquisition-related costs and other cost s as a result of the Merger of $27.4 million. There were no acquisition-related costs incurred for the year ended December 31, 2013. All adjustments utilized an effective federal statutory tax rate of 35.0% . The following table reflects selected financial data from the unaudited pro forma consolidated financial information assuming the Merger occurred as of January 1, 2013 (in thousands): Year Ended December 31, 2014 2013 Unaudited pro forma results of operations (in thousands, except per share amounts) Revenues $ $ Net (loss) Basic loss per share Diluted loss per share The financial results for Multimedia Games included in the consolidated statements of operations since the acquisition date of December 19, 2014 reflected revenues of approximately $7.4 million and net loss of approximately $3.0 million, including acquisition-related costs of $1.3 million. Through December 31, 2014, we expensed approximately $10.7 million of costs related to the acquisition of Multimedia Games for financial advisory services, financing related fees, accounting and legal fees and other transaction-related expenses and are included in the consolidated statements of income and comprehensive income within operating expenses. These costs do not include any costs related to additional site consolidation or rationalization that we might consider following the closing of the Merger. |
ATM FUNDING AGREEMENTS168
ATM FUNDING AGREEMENTS | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
ATM FUNDING AGREEMENTS | |||
ATM FUNDING AGREEMENTS | 4. ATM FUNDING AGREEMENTS Contract Cash Solutions Agreement Our Contract Cash Solutions Agreement with Wells Fargo Bank, N.A. (“Wells Fargo”) allows us to use funds owned by Wells Fargo to provide the currency needed for normal operating requirements for our ATMs. For the use of these funds, we pay Wells Fargo a cash usage fee on the average daily balance of funds utilized multiplied by a contractually defined cash usage rate. These cash usage fees, reflected as interest expense within the Condensed Consolidated Statements of Income and Comprehensive Income, were $0.5 million and $0.6 million for the three months ended March 31, 2015 and 2014, respectively. We are exposed to interest rate risk to the extent that the applicable LIBOR increases. Under this agreement, all currency supplied by Wells Fargo remains the sole property of Wells Fargo at all times until it is dispensed, at which time Wells Fargo obtains an interest in the corresponding settlement receivable which is recorded on a net basis. As these funds are not our assets, supplied cash is not reflected on the Condensed Consolidated Balance Sheets. The outstanding balances of ATM cash utilized by us from Wells Fargo were $255.6 million and $396.3 million as of March 31, 2015 and December 31, 2014, respectively. In June 2012, we amended the Contract Cash Solutions Agreement to increase the maximum amount of cash to be provided to us from $400.0 million to $500.0 million, and to extend the initial term from November 30, 2013 to November 30, 2014. In November 2014, we amended the Contract Cash Solutions Agreement to extend the term one year until November 30, 2015. We are responsible for any losses of cash in the ATMs under this agreement and we self-insure for this risk. We incurred no material losses related to this self-insurance for the three months ended March 31, 2015 and 2014. Site-Funded ATMs We operate ATMs at certain customer gaming establishments where the gaming establishment provides the cash required for the ATM operational needs. We are required to reimburse the customer for the amount of cash dispensed from these Site-Funded ATMs. The Site-Funded ATM liability is included within “Settlement liabilities” in the accompanying Condensed Consolidated Balance Sheets and was $71.5 million and $69.3 million as of March 31, 2015 and December 31, 2014, respectively. | 4. ATM FUNDING AGREEMENTS Contract Cash Solutions Agreement Our Contract Cash Solutions Agreement with Wells Fargo Bank, N.A. (“Wells Fargo”) allows us to use funds owned by Wells Fargo to provide the currency needed for normal operating requirements for our ATMs. For the use of these funds, we pay Wells Fargo a cash usage fee on the average daily balance of funds utilized multiplied by a contractually defined cash usage rate. These cash usage fees, reflected as interest expense within the Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income, were $0.5 million and $1.0 million and $0.6 million and $1.2 million for the three and six months ended June 30, 2015 and 2014, respectively. We are exposed to interest rate risk to the extent that the applicable LIBOR increases. Under this agreement, all currency supplied by Wells Fargo remains the sole property of Wells Fargo at all times until it is dispensed, at which time Wells Fargo obtains an interest in the corresponding settlement receivable which is recorded on a net basis. As these funds are not our assets, supplied cash is not reflected on the Condensed Consolidated Balance Sheets. The outstanding balances of ATM cash utilized by us from Wells Fargo were $271.8 million and $396.3 million as of June 30, 2015 and December 31, 2014, respectively. In November 2014, we amended the Contract Cash Solutions Agreement to extend the term one year until November 30, 2015. In June 2015, we amended the Contract Cash Solutions Agreement to decrease the maximum amount of cash to be provided to us from $500.0 million to $425.0 million and to extend the term of the agreement from November 30, 2015 to June 30, 2018. We are responsible for any losses of cash in the ATMs under this agreement and we self ‑insure for this risk. We incurred no material losses related to this self ‑insurance for the three and six months ended June 30, 2015 and 2014. Site-Funded ATMs We operate ATMs at certain customer gaming establishments where the gaming establishment provides the cash required for the ATM operational needs. We are required to reimburse the customer for the amount of cash dispensed from these Site-Funded ATMs. The Site-Funded ATM liability is included within “Settlement liabilities” in the accompanying Condensed Consolidated Balance Sheets and was $69.4 million and $69.3 million as of June 30, 2015 and December 31, 2014, respectively. | 4. ATM FUNDING AGREEMENTS Wells Fargo Contract Cash Solutions Agreement Our Contract Cash Solutions Agreement with Wells Fargo allows us to use funds owned by Wells Fargo to provide the currency needed for normal operating requirements for our ATMs. For the use of these funds, we pay Wells Fargo a cash usage fee on the average daily balance of funds utilized multiplied by a contractually defined cash usage rate. Under this agreement, all currency supplied by Wells Fargo remains the sole property of Wells Fargo at all times until it is dispensed, at which time Wells Fargo obtains an interest in the corresponding settlement receivable. As the cash is never an asset of ours, supplied cash is not reflected on our balance sheet. In June 2012, we amended the Contract Cash Solutions Agreement with Wells Fargo to increase the maximum amount of cash to be provided to us from $400.0 million to $500.0 million, and the initial term of the Contract Cash Solutions Agreement has been extended from November 30, 2013 until November 30, 2015. The outstanding balances of ATM cash utilized by us from Wells Fargo were $396.3 million and $427.1 million as of December 31, 2014 and 2013, respectively. Under the terms of the Contract Cash Solutions Agreement, we pay a monthly cash usage fee based upon the product of the average daily dollars outstanding in all ATMs multiplied by a contractually defined cash usage rate. This cash usage rate is determined by an applicable LIBOR plus a mutually agreed upon margin. We are exposed to interest rate risk to the extent that the applicable LIBOR increases. Cash usage fees, reflected as interest expense within the consolidated statements of income and comprehensive income, were $2.3 million, $2.2 million and $3.1 million for the years ended December 31, 2014, 2013 and 2012, respectively. We are responsible for any losses of cash in the ATMs under our agreement with Wells Fargo and we self ‑insure for this risk. We incurred no material losses related to this self ‑insurance for the years ended December 31, 2014 and 2013. Site ‑Funded ATMs We operate ATMs at certain customer gaming establishments where the gaming establishment provides the cash required for the ATM operational needs. We are required to reimburse the customer for the amount of cash dispensed from these Site ‑Funded ATMs. The Site ‑Funded ATM liability is included within settlement liabilities in the accompanying consolidated balance sheets and was $69.3 million and $68.9 million as of December 31, 2014 and 2013, respectively. |
TRADE RCEIVABLES169
TRADE RCEIVABLES | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
TRADE RECEIVABLES | |||
TRADE RECEIVABLES | 5. TRADE RECEIVABLES Trade receivables represent short-term credit granted to customers for which collateral is generally not required. The balance of trade receivables consists of outstanding balances owed to us by gaming establishments and casino patrons. The balance of trade receivables consisted of the following (in thousands): At March 31, At December 31, 2015 2014 Trade receivables, net Games trade receivables $ $ Kiosk trade receivables Warranty and other trade receivables Total trade receivables, net $ $ The material balance of the allowance for doubtful accounts for trade receivables is from warranty receivables. On a monthly basis, we evaluate the collectability of the outstanding balances and establish a reserve for the face amount of the expected losses on these receivables. The warranty expense associated with this reserve is included within cost of revenues (exclusive of depreciation and amortization) in the Condensed Consolidated Statements of Income and Comprehensive Income. The outstanding balance of the warranty reserve was $2.7 and $2.8 million as of March 31, 2015 and December 31, 2014, respectively. | 5. TRADE RECEIVABLES Trade receivables represent short-term credit granted to customers for which collateral is generally not required. The balance of trade receivables consists of outstanding balances owed to us by gaming establishments and casino patrons. The balance of trade receivables consisted of the following (in thousands): . At June 30, At December 31, 2015 2014 Trade receivables, net Games trade receivables $ $ Kiosk trade receivables Warranty and other trade receivables Total trade receivables, net $ $ The material balance of the allowance for doubtful accounts for trade receivables is from warranty receivables. On a monthly basis, we evaluate the collectability of the outstanding balances and establish a reserve for the face amount of the expected losses on these receivables. The warranty expense associated with this reserve is included within cost of revenues (exclusive of depreciation and amortization) in the Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income. The outstanding balance of the warranty reserve was $2.9 and $2.8 million as of June 30, 2015 and December 31, 2014, respectively. | 5. TRADE RECEIVABLES Trade receivables represent short-term credit granted to customers for which collateral is generally not required. The balance of trade receivables consists of outstanding balances owed to us by gaming establishments. The balance of trade receivables consisted of the following (in thousands): . At December 31, 2014 2013 Trade receivables, net Games trade receivables $ $ — Kiosk trade receivables Warranty and other trade receivables Total trade receivables, net $ $ The material balance of the allowance for doubtful accounts for trade receivables is from warranty receivables. On a monthly basis, we evaluate the collectability of the outstanding balances and establish a reserve for the face amount of the expected losses on these receivables. The warranty expense associated with this reserve is included within cost of revenues (exclusive of depreciation and amortization) in the consolidated statements of income and comprehensive income. A summary activity of the reserve for warranty losses is as follows (in thousands): Amount Balance, December 31, 2011 $ Warranty expense provision Charge offs against reserve Balance, December 31, 2012 $ Warranty expense provision Charge offs against reserve Balance, December 31, 2013 Warranty expense provision Charge offs against reserve Balance, December 31, 2014 $ |
OTHER RECEIVABLES170
OTHER RECEIVABLES | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
OTHER RECEIVABLES. | |||
OTHER RECEIVABLES | 6. OTHER RECEIVABLES Other receivables include the balance of notes and loans receivable on our games and fully integrated kiosk products, development agreements, which are generated from reimbursable amounts advanced to tribal customers generally used by the customer to build, expand or renovate its facility, and an agreement with Bee Caves Games, Inc. (“Bee Caves Games”) in July 2014, under which the Company agreed to make a loan pursuant to a secured promissory note in the amount of $4.5 million. In association with the promissory note, the Company received warrants to purchase Bee Caves Games common stock, and recorded a discount to the note for the fair value of the warrants received. The warrants are included in the balance of other assets, non-current. The note, which bears interest at 7%, requires interest only payments for the first 24 months followed by repayments of principal and interest in 48 equal monthly installments. Other receivables also include income taxes receivable and other miscellaneous receivables. The balance of other receivables consisted of the following (in thousands): At March 31, At December 31, 2015 2014 Other receivables Notes and loans receivable, net of discount of $814 and $853, respectively $ $ Federal and state income tax receivable Other Total other receivables Less: Notes and loans receivable, non-current Total other receivables, current portion $ $ | 6. OTHER RECEIVABLES Other receivables include the balance of notes and loans receivable on our games and fully integrated kiosk products, development agreements, which are generated from reimbursable amounts advanced to tribal customers generally used by the customer to build, expand or renovate its facility, and an agreement with Bee Caves Games, Inc. (“Bee Caves Games”) in July 2014, under which the Company agreed to make a loan pursuant to a secured promissory note in the amount of $4.5 million. In association with the promissory note, the Company received warrants to purchase Bee Caves Games common stock, and recorded a discount to the note for the fair value of the warrants received. The warrants are included in the balance of other assets, non-current. The note, which bears interest at 7% , requires interest only payments for the first 24 months followed by repayments of principal and interest in 48 equal monthly installments. Other receivables also include income taxes receivable and other miscellaneous receivables. The balance of other receivables consisted of the following (in thousands): At June 30, At December 31, 2015 2014 Other receivables Notes and loans receivable, net of discount of $776 and $853 , respectively $ $ Federal and state income tax receivable Other Total other receivables Less: Notes and loans receivable, non-current Total other receivables, current portion $ $ | 6. OTHER RECEIVABLES Other receivables includes the balance of notes and loans receivable on our gaming and fully integrated kiosk products as well as income taxes receivable and other miscellaneous receivables. The balance of other receivables consisted of the following (in thousands): At December 31, 2014 2013 Other receivables Notes and loans receivable, net of discount of $853 and $0 , respectively $ $ Federal and state income tax receivable Other Total other receivables Less: Notes and loans receivable, non-current Total other receivables, current portion $ $ Notes receivable from development agreements are generated from reimbursable amounts advanced under development agreements. The notes receivable from development agreements balance includes a development agreement with the Chickasaw Nation for the Winstar Casino expansion entered into on November 19, 2012. On July 17, 2014, Multimedia Games entered into an agreement with Bee Caves Games, Inc. (“Bee Caves Games”) under which Multimedia Games agreed to make a loan pursuant to a secured promissory note in the amount of $4.5 million. In association with the promissory note, Multimedia Games received warrants to purchase Bee Caves Games common stock, and recorded a discount to the note for the fair value of the warrants received. The note, which bears interest at 7% , requires interest only payments for the first 24 months followed by repayments of principal and interest in 48 equal monthly installments. |
PREPAID AND OTHER ASSETS171
PREPAID AND OTHER ASSETS | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
PREPAID AND OTHER ASSETS | |||
PREPAID AND OTHER ASSETS | 7. PREPAID AND OTHER ASSETS Prepaid and other assets include the balance of prepaid expenses, deposits, debt issuance costs and other assets. The short-term portion of these assets is included in prepaid and other assets and the long-term portion is included in other assets, non-current. The balance of prepaid and other assets consisted of the following (in thousands): At March 31, At December 31, 2015 2014 Prepaid expenses and other assets Prepaid expenses $ $ Deposits Other Total prepaid expenses and other assets $ $ The balance of other assets, non-current consisted of the following (in thousands): At March 31, At December 31, 2015 2014 Other assets, non-current Debt issuance costs $ $ Prepaid expenses and deposits, non-current Other Total other assets non-current $ $ | 7. PREPAID AND OTHER ASSETS Prepaid and other assets include the balance of prepaid expenses, deposits, debt issuance costs and other assets. The short-term portion of these assets is included in prepaid and other assets and the long-term portion is included in other assets, non-current. The balance of prepaid and other assets consisted of the following (in thousands): At June 30, At December 31, 2015 2014 Prepaid expenses and other assets Prepaid expenses $ $ Deposits Other Total prepaid expenses and other assets $ $ The balance of other assets, non-current consisted of the following (in thousands): At June 30, At December 31, 2015 2014 Other assets, non-current Debt issuance costs $ $ Prepaid expenses and deposits, non-current Other Total other assets, non-current $ $ | 7. PREPAID AND OTHER ASSETS Prepaid and other assets include the balance of prepaid expenses, deposits, debt issuance costs and other assets. The short-term portion of these assets is included in prepaid and other assets and the long-term portion is included in other assets, non-current. The balance of prepaid and other assets consisted of the following (in thousands): At December 31, 2014 2013 Prepaid expenses and other assets Prepaid expenses $ $ Deposits Other Total prepaid expenses and other assets $ $ The balance of other assets, non-current consisted of the following (in thousands): At December 31, 2014 2013 Other assets, non-current Debt issuance costs $ $ Prepaid expenses and deposits, non-current Other Total other assets non-current $ $ |
INVENTORY172
INVENTORY | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
INVENTORY | |||
INVENTORY | 8. INVENTORY We currently maintain separate inventories for our Games and Payments businesses. Our Games inventory primarily consists of component parts, completed player terminals and back office computer equipment. This inventory was stated at the lower of cost or market and accounted for using the first in, first out method during the current reporting period; whereas the inventory that existed at the time of the Merger was stated at fair value. The cost of inventory includes cost of materials, labor, overhead and freight. Our Payments inventory primarily consists of parts as well as finished goods and work-in-progress. This inventory was stated at the lower of cost or market accounted for using the average cost method. Inventory consisted of the following (in thousands): At March 31, At December 31, 2015 2014 Inventory Raw materials and component parts, net of reserves of $82 and $22, respectively $ $ Work in progress Finished goods Total inventory $ $ | 8. INVENTORY We currently maintain separate inventories for our Games and Payments businesses. Our Games inventory primarily consists of component parts, completed player terminals and back office computer equipment. This inventory was stated at the lower of cost or market and accounted for using the first in, first out method during the current reporting period; whereas the inventory that existed at the time of the Merger was stated at fair value. The cost of inventory includes cost of materials, labor, overhead and freight. Our Payments inventory primarily consists of parts as well as finished goods and work-in-progress. This inventory was stated at the lower of cost or market accounted for using the average cost method. Inventory consisted of the following (in thousands): At June 30, At December 31, 2015 2014 Inventory Raw materials and component parts, net of reserves of $142 and $22 , respectively $ $ Work in progress Finished goods Total inventory $ $ | 8. INVENTORY We currently maintain separate inventories for our Payments and Games products. Our Payments related inventory primarily consists of parts as well as finished goods and work-in-progress and is stated at the lower of cost or market accounted for using the average cost method. Our Games related inventory primarily consists of component parts, completed player terminals and back-office computer equipment and is stated at fair value based as a result of the Merger. However, our Games segment historically accounted for inventory at lower of cost (first in, first out) or market. The cost of inventory includes cost of materials, labor, overhead and freight. Inventory consisted of the following (in thousands): At December 31, 2014 2013 Inventory Raw materials and component parts, net of reserves of $22 and $50 , respectively $ $ Work in progress Finished goods Total inventory $ $ |
PROPERTY, EQUIPMENT AND LEAS173
PROPERTY, EQUIPMENT AND LEASED ASSETS | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
PROPERTY, EQUIPMENT AND LEASED ASSETS | |||
PROPERTY, EQUIPMENT AND LEASED ASSETS | 9. PROPERTY, EQUIPMENT AND LEASED ASSETS Property, equipment and leased assets consist of the following (in thousands): At March 31, 2015 At December 31, 2014 Useful Life (years) Cost Accumulated Depreciation Net Book Value Cost Accumulated Depreciation Net Book Value Property, equipment and leased assets Rental pool - deployed 2 - 4 $ $ $ $ $ $ Rental pool - undeployed 2 - 4 ATM equipment 5 Office, computer and other equipment 3 Leasehold and building improvements Lease Term Machinery and equipment 3 - 5 Cash advance equipment 3 Other 2 - 5 Total $ $ $ $ $ $ Depreciation expense related to other property, equipment and leased assets totaled approximately $10.4 million and $1.9 million for the three months ended March 31, 2015 and 2014, respectively. Our property, equipment and leased assets were not impaired for the three months ended March 31, 2015 and 2014. | 9. PROPERTY, EQUIPMENT AND LEASED ASSETS Property, equipment and leased assets consist of the following (in thousands): At June 30, 2015 At December 31, 2014 Useful Life Accumulated Net Book Accumulated Net Book (Years) Cost Depreciation Value Cost Depreciation Value Property, equipment and leased assets Rental pool - deployed - 4 $ $ $ $ $ $ Rental pool - undeployed - 4 ATM equipment 5 Office, computer and other equipment 3 Leasehold and building improvements Lease Term Machinery and equipment - 5 Cash advance equipment 3 Other - 5 Total $ $ $ $ $ $ Depreciation expense related to other property, equipment and leased assets totaled approximately $10.7 million and $21.1 million and $1.9 million and $3.8 million for the three and six months ended June 30, 2015 and 2014, respectively. Our property, equipment and leased assets were not impaired for the three and six months ended June 30, 2015 and 2014. | 10. PROPERTY, EQUIPMENT AND LEASED ASSETS Property, equipment and leased assets consist of the following (amounts in thousands): At December 31, 2014 At December 31, 2013 Useful Life Accumulated Net Book Accumulated Net Book (Years) Cost Depreciation Value Cost Depreciation Value Property, equipment and leased assets Rental pool - deployed - 4 $ $ $ $ — $ — $ — Rental pool - undeployed - 4 — — — ATM equipment 5 Office, computer and other equipment 3 Leasehold and building improvements Lease Term Machinery and equipment - 5 — — — Cash advance equipment 3 Other - 5 — — — Total $ $ $ $ $ $ |
GOODWILL AND OTHER INTANGIBL174
GOODWILL AND OTHER INTANGIBLE ASSETS | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |||
GOODWILL AND OTHER INTANGIBLE ASSETS | 10. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill Goodwill represents the excess of the purchase price over the identifiable tangible and intangible assets acquired plus liabilities assumed arising from business combinations. The balance of goodwill was $857.9 million at both March 31, 2015 and December 31, 2014. Our goodwill was not impaired for the three months ended March 31, 2015 and 2014. Additionally, no impairment was identified during our annual impairment testing as of October 1, 2014. In accordance with ASC 350, we test goodwill at the reporting unit level, which in certain cases may be a component of an operating segment, for impairment on an annual basis and between annual tests if events and circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The estimate of fair value requires significant judgment. We based our fair value estimates on assumptions that we believe to be reasonable but that are unpredictable and inherently uncertain, including estimates of future growth rates and operating margins and assumptions about the overall economic climate and the competitive environment for our reporting units. There can be no assurance that our estimates and assumptions made for purposes of our goodwill and identifiable intangible asset testing as of the time of testing will prove to be accurate predictions of the future. If our assumptions regarding business plans, competitive environments or anticipated growth rates are not correct, we may be required to record goodwill and/or intangible asset impairment charges in future periods, whether in connection with our next annual impairment testing or earlier, if an indicator of an impairment is present before our next annual evaluation. Other Intangible Assets Other intangible assets consist of the following (in thousands): At March 31, 2015 At December 31, 2014 Useful Life (years) Cost Accumulated Amortization Net Book Value Cost Accumulated Amortization Net Book Value Other intangible assets Contract rights under development and placement fee agreements 1 - 7 $ $ $ $ $ $ Customer contracts 7 - 14 Customer relationships 8 - 12 Developed technology and software 1 - 6 Patents, trademarks and other 1 - 17 Total $ $ $ $ $ $ Amortization expense related to other intangible assets totaled approximately $20.7 million and $2.4 million for the three months ended March 31, 2015 and 2014, respectively. We capitalized and placed into service $1.0 million and $0.3 million of software development costs for the three months ended March 31, 2015 and 2014, respectively. On a quarterly basis, we evaluate our other intangible assets for potential impairment as part of our quarterly review process. No impairment was identified for our other intangible assets during our assessment for the three months ended March 31, 2015 and 2014. We enter into development and placement fee agreements to provide financing for new gaming facilities or for the expansion or improvement of existing facilities. All or a portion of the funds provided under development agreements are reimbursed to us, while funding under placement fee agreements is not reimbursed. In return for the fees under these agreements, each facility dedicates a percentage of its floor space, or an agreed upon unit count, for the placement of our EGMs over the term of the agreement, generally 12 to 83 months, and we receive a fixed percentage or flat fee of those machines’ hold per day. Certain of the agreements contain EGM performance standards that could allow the respective facility to reduce a portion of our guaranteed floor space. In addition, certain development agreements allow the facilities to buy out floor space after advances that are subject to repayment have been repaid. The development agreements typically provide for a portion of the amounts retained by each facility for its share of the operating profits of the facility to be used to repay some or all of the advances recorded as notes receivable. Placement fees and amounts advanced in excess of those to be reimbursed by the customer for real property and land improvements are allocated to intangible assets and are generally amortized over the term of the contract, which is recorded as a reduction of revenue generated from the facility. In the past we have, and in the future, we may, by mutual agreement, amend these agreements to reduce our floor space at the facilities. Any proceeds received for the reduction of floor space is first applied against the intangible asset for that particular development or placement fee agreement, if any, and the remaining net book value of the intangible asset is prospectively amortized on a straight-line method over the remaining estimated useful life. On January 15, 2015, Multimedia paid a placement fee of approximately $1.2 million to the Chickasaw Nation to extend the placement of 118 units in one of its location in Oklahoma for an additional term of 60 months. | 10. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill Goodwill represents the excess of the purchase price over the identifiable tangible and intangible assets acquired plus liabilities assumed arising from business combinations. The balance of goodwill was $857.9 million and $857.9 million at June 30, 2015 and December 31, 2014, respectively. Our goodwill was not impaired for the three and six months ended June 30, 2015 and 2014. Additionally, no impairment was identified during our annual impairment testing as of October 1, 2014. In accordance with ASC 350, we test goodwill at the reporting unit level, which in certain cases may be a component of an operating segment, for impairment on an annual basis and between annual tests if events and circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The estimate of fair value requires significant judgment. We based our fair value estimates on assumptions that we believe to be reasonable but that are unpredictable and inherently uncertain, including estimates of future growth rates and operating margins and assumptions about the overall economic climate and the competitive environment for our reporting units. There can be no assurance that our estimates and assumptions made for purposes of our goodwill and identifiable intangible asset testing as of the time of testing will prove to be accurate predictions of the future. If our assumptions regarding business plans, competitive environments or anticipated growth rates are not correct, we may be required to record goodwill and/or intangible asset impairment charges in future periods, whether in connection with our next annual impairment testing or earlier, if an indicator of an impairment is present before our next annual evaluation. Other Intangible Assets Other intangible assets consist of the following (in thousands): At June 30, 2015 At December 31, 2014 Useful Life Accumulated Net Book Accumulated Net Book (years) Cost Amortization Value Cost Amortization Value Other intangible assets Contract rights under development and placement fee agreements - 7 $ $ $ $ $ $ Customer contracts - 14 Customer relationships - 12 Developed technology and software - 6 Patents, trademarks and other - 17 Total $ $ $ $ $ $ Amortization expense related to other intangible assets totaled approximately $20.8 million and $41.4 million and $2.8 million and $5.1 million for the three and six months ended June 30, 2015 and 2014, respectively. We capitalized and placed into service $4.7 million and $5.7 million and $4.5 million and $4.9 million of software development costs for the three and six months ended June 30, 2015 and 2014, respectively. On a quarterly basis, we evaluate our other intangible assets for potential impairment as part of our quarterly review process. No impairment was identified for our other intangible assets during our assessment for the three and six months ended June 30, 2015 and 2014. We enter into development and placement fee agreements to provide financing for new gaming facilities or for the expansion or improvement of existing facilities. All or a portion of the funds provided under development agreements are reimbursed to us, while funding under placement fee agreements is not reimbursed. In return for the fees under these agreements, each facility dedicates a percentage of its floor space, or an agreed upon unit count, for the placement of our EGMs over the term of the agreement, generally 12 to 83 months, and we receive a fixed percentage or flat fee of those machines’ hold per day. Certain of the agreements contain EGM performance standards that could allow the respective facility to reduce a portion of our guaranteed floor space. In addition, certain development agreements allow the facilities to buy out floor space after advances that are subject to repayment have been repaid. The development agreements typically provide for a portion of the amounts retained by each facility for its share of the operating profits of the facility to be used to repay some or all of the advances recorded as notes receivable. Placement fees and amounts advanced in excess of those to be reimbursed by the customer for real property and land improvements are allocated to intangible assets and are generally amortized over the term of the contract, which is recorded as a reduction of revenue generated from the facility. In the past we have, and in the future, we may, by mutual agreement, amend these agreements to reduce our floor space at the facilities. Any proceeds received for the reduction of floor space is first applied against the intangible asset for that particular development or placement fee agreement, if any, and the remaining net book value of the intangible asset is prospectively amortized on a straight-line method over the remaining estimated useful life. On January 15, 2015, Multimedia paid a placement fee of approximately $1.2 million to the Chickasaw Nation to extend the placement of 118 units in one of its location in Oklahoma for an additional term of 60 months. | 11. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill The changes in the carrying amount of goodwill are as follows (in thousands): Cash Advance ATM Check Services Games Other Total Goodwill Balance, December 31, 2012 $ — Foreign translation adjustment — — — — Balance, December 31, 2013 $ $ $ $ — $ $ Goodwill acquired during the year — — — Foreign translation adjustment — — — — Balance, December 31, 2014 $ $ $ $ $ $ In accordance with ASC 350, we test goodwill at the reporting unit level, which in certain cases may be a component of an operating segment, for impairment on an annual basis and between annual tests if events and circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Our goodwill was not impaired as of December 31, 2014 and December 31, 2013 based upon the results of our testing. Goodwill Testing In performing the 2014 annual impairment test, we utilized the two-step approach prescribed under ASC 350. The first step required a comparison of the carrying value of each reporting unit to its estimated fair value. To estimate the fair value of our reporting units for Step 1, we used a combination of the income approach and the market approach. The income approach is based on a discounted cash flow analysis, or DCF method. This method involves estimating the after-tax cash flows attributable to a reporting unit and then discounting the after-tax cash flows to a present value (“DCF”), using a risk-adjusted discount rate. Assumptions used in the DCF require the exercise of significant judgment, including judgment about appropriate discount rates and terminal values, growth rates and the amount and timing of expected future cash flows. The forecasted cash flows are based on our most recent budget and for years beyond the budget. Our budgets are based on estimated future growth rates. We believe our assumptions are consistent with the plans and estimates used to manage the underlying businesses. The discount rates, which are intended to reflect the risks inherent in future cash flow projections, used in the DCF are based on estimates of the weighted average cost of capital, or WACC, of market participants relative to each respective reporting unit. The market approach considers comparable market data based on multiples of revenue or earnings before taxes, depreciation and amortization (“EBITDA”). If the carrying value of a reporting unit exceeds its estimated fair value, we are required to perform the second step of the goodwill impairment test to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of a reporting unit’s goodwill to its carrying value. The implied fair value of goodwill is derived by performing a hypothetical purchase price allocation for the reporting unit as of the measurement date, allocating the reporting unit’s estimated fair value to its assets and liabilities. The residual amount from performing this allocation represents the implied fair value of goodwill. To the extent this amount is below the carrying amount of goodwill, an impairment charge is recorded. Key assumptions used in estimating fair value under the discounted cash flow approach included a discount rate of: (a) 11.0% for the Cash Advance, ATM , Check Services and Central Credit reporting units ; (b) 11.5% for the Fully Integrated Kiosk Sales and Services reporting unit; and (c) 15.5% , for the Anti-Money Laundering and Tax Compliance Software reporting unit. In addition, projected compound average revenue growth rates of 0.0% to 4.0% and terminal value growth rates of 1.0% to 2.5% were used in the analyses. The discounted cash flow analyses for our reporting units included estimated future cash inflows from operations and estimated future cash outflows for capital expenditures. Key assumptions used in estimating fair value under the market approach were based on observed market multiples of enterprise value to revenue and EBITDA for both comparable publicly traded companies and recent merger and acquisition transactions involving similar companies to estimate appropriate controlling basis multiples to apply to each of the reporting units. Based on the multiples implied by this market data, we selected multiples of revenue of 0.0 to 5.2 times and multiples of EBITDA of 6.2 to 8.6 times. The estimate of fair value requires significant judgment. We based our fair value estimates on assumptions that we believe to be reasonable but that are unpredictable and inherently uncertain, including estimates of future growth rates and operating margins and assumptions about the overall economic climate and the competitive environment for our business units. There can be no assurance that our estimates and assumptions made for purposes of our goodwill and identifiable intangible asset testing as of the time of testing will prove to be accurate predictions of the future. If our assumptions regarding business plans, competitive environments or anticipated growth rates are not correct, we may be required to record goodwill and/or intangible asset impairment charges in future periods, whether in connection with our next annual impairment testing or earlier, if an indicator of an impairment is present before our next annual evaluation. We conducted our annual impairment test for our reporting units during the fourth quarter of 2014 and 2013 and no impairment was identified. Other Intangible Assets Other intangible assets consist of the following (in thousands): At December 31, 2014 At December 31, 2013 Useful Life Accumulated Net Book Accumulated Net Book (years) Cost Amortization Value Cost Amortization Value Intangible assets Contract rights under development and placement fee agreements - 7 $ $ $ $ — $ — $ — Customer contracts - 14 Customer relationships - 12 — — — Developed technology - 6 — — — Computer software - 5 Patents, trademarks and other - 17 Total $ $ $ $ $ $ In the fourth quarter 2014, we evaluated our other intangible assets for potential impairment as part of our review process. Our online payment processing intangible assets were identified for further testing. We determined that these definite-lived intangible assets were potentially impaired primarily due to a combination of the following factors: (a) legislative constraints at the state and federal level; (b) significant changes in management; and (c) lower than anticipated operating results. These definite-lived intangible assets were evaluated using an undiscounted cash flow approach to determine if an impairment existed. As impairment was indicated based on the undiscounted cash flow approach, we discounted the cash flows and applied probability factors to calculate the resulting fair values and compared to the existing carrying value to determine the amount of impairment. The amount of impairment was approximately $3.1 million. The revised cost basis of $1.6 million for our online payment processing intangible asset will be amortized over an estimated remaining useful life of three years. These assets have been valued using level 3 fair value inputs. Amortization expense related to other intangible assets totaled approximately $14.2 million, $9.6 million and $9.8 million for the years ended December 31, 2014, 2013 and 2012, respectively. We capitalized and placed into service $8.2 million, $ 5.1 million and $0. 7 million of software development costs for the years ended December 31, 2014, 2013 and 2012, respectively. The total net book value of amortizable intangible assets was approximately $436.8 million at December 31, 2014. The total net book value of amortizable intangible assets was approximately $ 31.5 million at December 31, 2013. The anticipated amortization expense related to other intangible assets, assuming no subsequent impairment of the underlying assets, is as follows (in thousands): Anticipated amortization expense Amount 2015 $ 2016 2017 2018 2019 Thereafter Total $ |
ACCOUNTS PAYABLE AND ACCRUED175
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | |||
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 11. ACCOUNTS PAYABLE AND ACCRUED EXPENSES The following table presents our accounts payable and accrued expenses (in thousands): At March 31, At December 31, 2015 2014 Accounts payable and accrued expenses Trade accounts payable $ $ Accrued interest Payroll and related expenses Deferred and unearned revenues Cash access processing and related expenses Accrued taxes Other Total accounts payable and accrued expenses $ $ | 11. ACCOUNTS PAYABLE AND ACCRUED EXPENSES The following table presents our accounts payable and accrued expenses (in thousands): At June 30, At December 31, 2015 2014 Accounts payable and accrued expenses Trade accounts payable $ $ Accrued interest Payroll and related expenses Deferred and unearned revenues Cash access processing and related expenses Accrued taxes Other Total accounts payable and accrued expenses $ $ | 12. ACCOUNTS PAYABLE AND ACCRUED EXPENSES The following table presents our accounts payable and accrued expenses (amounts in thousands): At December 31, 2014 2013 Accounts payable and accrued expenses Trade accounts payable $ $ Payroll and related expenses Cash access processing and related expenses Deferred and unearned revenues Accrued taxes Accrued interest Other Total accounts payable and accrued expenses $ $ |
LONG-TERM DEBT176
LONG-TERM DEBT | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
LONG-TERM DEBT. | |||
LONG-TERM DEBT | 12. LONG-TERM DEBT The following table summarizes our outstanding indebtedness (in thousands): At March 31, At December 31, 2015 2014 Long-term debt Senior secured term loan $ $ Senior secured notes Senior unsecured notes Total debt Less: original issue discount Total debt after discount Less: current portion of long-term debt Long-term debt, less current portion $ $ Credit Facilities In December 2014, we entered into a credit agreement that provided for a $500.0 million six-year senior secured term loan that matures in 2020 (the “Term Loan”) and a $50.0 million five-year revolver that matures in 2019 (the “Revolving Credit Facility”, and together with the Term Loan, the “Credit Facilities”). The fees associated with the Credit Facilities included original issue discounts of approximately $7.5 million and debt issuance costs of approximately $13.9 million. We are required to repay the Term Loan in an amount equal to 0.50% per quarter of the initial aggregate principal with the final principal repayment installment on the maturity date. Interest is due quarterly in arrears each March, June, September and December and the maturity date. The Revolving Credit Facility remained undrawn as of March 31, 2015. The interest rate per annum applicable to the Revolving Credit Facility is, at GCA’s option, the base rate or LIBOR plus, in each case, an applicable margin. The interest rate per annum applicable to the Term Loan is also, at GCA’s option, the base rate or LIBOR plus, in each case, an applicable margin. LIBOR will be reset at the beginning of each selected interest period based on the LIBOR rate then in effect; provided that, with respect to the Revolving Credit Facility, if LIBOR is below zero, then such rate will be equal to zero plus the applicable margin, and, with respect to the Term Loan, if LIBOR is below 1.0%, then such rate will be equal to 1.0% plus the applicable margin. The base rate is a fluctuating interest rate equal to the highest of (a) the prime lending rate announced by the administrative agent, (b) the federal funds effective rate from time to time plus 0.50%, and (c) LIBOR (after taking account of any applicable floor) applicable for an interest period of one month plus 1.00%. The applicable margins of 4.75% and 5.25% for the Revolving Credit Facility and Term Loan, respectively, are subject to adjustment based on our consolidated secured leverage ratio. Voluntary prepayments of the Term Loan and the Revolving Credit Facility and voluntary reductions in the unused commitments are permitted in whole or in part, in minimum amounts as set forth in the credit agreement governing the Credit Facilities, with prior notice but without premium or penalty, except that certain refinancing transactions of the Term Loan within twelve months after the closing of the Credit Facilities will be subject to a prepayment premium of 1.00% of the principal amount repaid. Subject to certain exceptions, the obligations under the Credit Facilities are secured by substantially all of the present and after acquired assets of each of GCA, Holdings and the subsidiary guarantors (the “Collateral”) including: (a) a perfected first priority pledge of all the capital stock of GCA and each domestic direct, wholly owned material restricted subsidiary held by Holdings, GCA or any such subsidiary guarantor; and (b) a perfected first priority security interest in substantially all other tangible and intangible assets of Holdings, GCA, and such subsidiary guarantors (including, but not limited to, accounts receivable, inventory, equipment, general intangibles, investment property, real property, intellectual property and the proceeds of the foregoing). Subject to certain exceptions, the Credit Facilities are unconditionally guaranteed by Holdings and such subsidiary guarantors and Multimedia Games and its material domestic subsidiaries. The Term Loan had an applicable interest rate of 6.25% as of March 31, 2015 and December 31, 2014. We were in compliance with the terms of the Credit Facilities as of March 31, 2015 and December 31, 2014. Senior Secured Notes In December 2014, we issued $350.0 million in aggregate principal amount of 7.75% Senior Secured Notes due 2021 (“the “Secured Notes”). The fees associated with the Secured Notes included debt issuance costs of approximately $13.6 million. Interest is due semi-annually in arrears each March and September. The Secured Notes were acquired by the initial purchasers pursuant to the terms of a purchase agreement. Under the terms of the purchase agreement, during a one year period following the closing and upon prior notice from the initial purchasers, the Company must use commercially reasonable efforts to aid the purchasers in the resale of the Secured Notes, including by preparing an updated offering memorandum and participating in reasonable marketing efforts including road shows, to the extent required therein. We were in compliance with the terms of the Secured Notes as of March 31, 2015 and December 31, 2014. Senior Unsecured Notes In December 2014, we issued $350 million in aggregate principal amount of 10.0% Senior Unsecured Notes due 2022 (the “Unsecured Notes”). The fees associated with the Unsecured Notes included original issue discounts of approximately $3.8 million and debt issuance costs of approximately $14.0 million. Interest is due semi-annually in arrears each January and July. The Unsecured Notes were acquired by the initial purchasers pursuant to the terms of a purchase agreement. Under the terms of the purchase agreement, during a one-year period following the closing and upon prior notice from the initial purchasers, the Company must use commercially reasonable efforts to aid the purchasers in the resale of the Unsecured Notes, including by preparing an updated offering memorandum and participating in reasonable marketing efforts including road shows, to the extent required therein. In connection with the issuance of the Unsecured Notes, the Company entered into a registration rights agreement pursuant to which the Company agreed, for the benefit of the holders of the Unsecured Notes, to file with the SEC, and use its commercially reasonable efforts to cause to become effective, a registration statement relating to an offer to exchange the Unsecured Notes for an issue of SEC-registered notes (the “Exchange Notes”) with terms identical to the Unsecured Notes (except that the Exchange Notes will not be subject to restrictions on transfer or to any increase in annual interest rate as described below). Under certain circumstances, including if applicable interpretations of the staff of the SEC do not permit the Company to effect the exchange offer, the Company and the guarantors must use their commercially reasonable efforts to cause to become effective a shelf registration statement relating to resales of the Unsecured Notes and to keep that shelf registration statement effective until the first anniversary of the date such shelf registration statement becomes effective, or such shorter period that will terminate when all Unsecured Notes covered by the shelf registration statement have been sold. The obligation to complete the exchange offer and/or file a shelf registration statement will terminate on the second anniversary of the date of the Registration Rights Agreement. If the exchange offer is not completed (or, if required, the shelf registration statement is not declared effective) on or before December 19, 2015, the annual interest rate borne by the Unsecured Notes will be increased by 0.25% per annum for the first 90-day period immediately following such date and by an additional 0.25% per annum with respect to each subsequent 90-day period, up to a maximum additional rate of 1.00% per annum thereafter until the exchange offer is completed or the shelf registration statement is declared effective, at which time the interest rate will revert to the original interest rate on the date the Unsecured Notes were originally issued. We were in compliance with the terms of the Unsecured Notes as of March 31, 2015 and December 31, 2014. | 12. LONG-TERM DEBT The following table summarizes our outstanding indebtedness (in thousands): At June 30, At December 31, 2015 2014 Long-term debt Senior secured term loan $ $ Senior secured notes Senior unsecured notes Total debt Less: original issue and warrant discount Total debt after discount Less: current portion of long-term debt Long-term debt, less current portion $ $ Credit Facilities In December 2014, we entered into a credit agreement that provided for a $500.0 million six -year senior secured term loan that matures in 2020 (the “Term Loan”) and a $50.0 million five -year revolver that matures in 2019 (the “Revolving Credit Facility”, and together with the Term Loan, the “Credit Facilities”). The fees associated with the Credit Facilities included original issue discounts of approximately $7.5 million and debt issuance costs of approximately $13.9 million. We are required to repay the Term Loan in an amount equal to 0.50% per quarter of the initial aggregate principal with the final principal repayment installment on the maturity date. Interest is due in arrears each March, June, September and December and at the maturity date; however, interest may be remitted within one to three months of such dates. The Revolving Credit Facility remained undrawn as of June 30, 2015. The interest rate per annum applicable to the Revolving Credit Facility is, at GCA’s option, the base rate or LIBOR plus, in each case, an applicable margin. The interest rate per annum applicable to the Term Loan is also, at GCA’s option, the base rate or LIBOR plus, in each case, an applicable margin. LIBOR will be reset at the beginning of each selected interest period based on the LIBOR rate then in effect; provided that, with respect to the Revolving Credit Facility, if LIBOR is below zero, then such rate will be equal to zero plus the applicable margin, and, with respect to the Term Loan, if LIBOR is below 1.0% , then such rate will be equal to 1.0% plus the applicable margin. The base rate is a fluctuating interest rate equal to the highest of (a) the prime lending rate announced by the administrative agent, (b) the federal funds effective rate from time to time plus 0.50% , and (c) LIBOR (after taking account of any applicable floor) applicable for an interest period of one month plus 1.00% . The applicable margins of 4.75% and 5.25% for the Revolving Credit Facility and Term Loan, respectively, are subject to adjustment based on our consolidated secured leverage ratio. Voluntary prepayments of the Term Loan and the Revolving Credit Facility and voluntary reductions in the unused commitments are permitted in whole or in part, in minimum amounts as set forth in the credit agreement governing the Credit Facilities, with prior notice but without premium or penalty, except that certain refinancing transactions of the Term Loan within twelve months after the closing of the Credit Facilities will be subject to a prepayment premium of 1.00% of the principal amount repaid. Subject to certain exceptions, the obligations under the Credit Facilities are secured by substantially all of the present and after acquired assets of each of GCA, Holdings and the subsidiary guarantors (the “Collateral”) including: (a) a perfected first priority pledge of all the capital stock of GCA and each domestic direct, wholly owned material restricted subsidiary held by Holdings, GCA or any such subsidiary guarantor; and (b) a perfected first priority security interest in substantially all other tangible and intangible assets of Holdings, GCA, and such subsidiary guarantors (including, but not limited to, accounts receivable, inventory, equipment, general intangibles, investment property, real property, intellectual property and the proceeds of the foregoing). Subject to certain exceptions, the Credit Facilities are unconditionally guaranteed by Holdings and such subsidiary guarantors and Multimedia Games and its material domestic subsidiaries. The Term Loan had an applicable interest rate of 6.25% as of June 30, 2015 and December 31, 2014. We were in compliance with the terms of the Credit Facilities as of June 30, 2015 and December 31, 2014. Senior Secured Notes and Refinance of Senior Secured Notes In December 2014, we issued $350.0 million in aggregate principal amount of 7.75% Senior Secured Notes due 2021 (the “Secured Notes”). The fees associated with the Secured Notes included debt issuance costs of approximately $13.6 million. Interest is due quarterly in arrears each January, April, July and October. The Secured Notes were acquired by the initial purchasers pursuant to the terms of a purchase agreement. Under the terms of the purchase agreement, during a one year period following the closing and upon prior notice from the initial purchasers, the Company was required to use commercially reasonable efforts to aid the initial purchasers in the resale of the Secured Notes, including by preparing an updated offering memorandum and participating in reasonable marketing efforts including road shows, to the extent required therein. Alternatively, GCA had the ability to redeem the Secured Notes from the initial purchasers without penalty. On April 15, 2015, the Company entered into a note purchase agreement (the “Note Purchase Agreement”) among GCA, CPPIB Credit Investments III Inc. (the “Purchaser”), and Deutsche Bank Trust Company Americas, as collateral agent (the “Collateral Agent”), and issued $335.0 million in aggregate principal amount of its 7.25% Senior Secured Notes due 2021 (the “Refinanced Secured Notes”) in a private offering to the Purchaser. With the proceeds from the issuance of the Refinanced Secured Notes, GCA redeemed, in full, the Company’s then outstanding Secured Notes from the initial purchasers in accordance with the terms of the indenture governing the Secured Notes. In connection with the issuance of the Refinanced Secured Notes during the second quarter of 2015, we expensed $13.0 million of related debt issuance costs and fees to “Loss on extinguishment of debt” associated with the redeemed Senior Secured Notes that were outstanding prior to the refinance transaction. In connection with the issuance of the Refinanced Secured Notes and pursuant to the terms of the Note Purchase Agreement, the Company issued to the Purchaser a warrant to purchase 700,000 shares of Holdings’ common stock, with an exercise price equal to $9.88 per share, representing a 30% premium to the volume-weighted average price of Holdings’ common stock for the ten trading days prior to the issuance of the warrant. The warrant expires on the sixth anniversary of the date of issuance. The number of shares issuable pursuant to the warrant and the warrant exercise price are subject to adjustment for stock splits, reverse stock splits, stock dividends, mergers and certain other events. The warrants were valued at $2.2 million using a modified Black-Scholes model and were accounted for as a debt discount. We were in compliance with the terms of the Secured Notes as of June 30, 2015 and December 31, 2014. Senior Unsecured Notes In December 2014, we issued $350 million in aggregate principal amount of 10.0% Senior Unsecured Notes due 2022 (the “Unsecured Notes”). The fees associated with the Unsecured Notes included original issue discounts of approximately $3.8 million and debt issuance costs of approximately $14.0 million. Interest is due semi-annually in arrears each January and July. The Unsecured Notes were acquired by the initial purchasers pursuant to the terms of a purchase agreement. Under the terms of the purchase agreement, during a one-year period following the closing and upon prior notice from the initial purchasers, the Company was required to use commercially reasonable efforts to aid the initial purchasers in the resale of the Unsecured Notes, including by preparing an updated offering memorandum and participating in reasonable marketing efforts including road shows, to the extent required therein. The Unsecured Notes were resold by the initial purchasers to third parties in the second quarter of 2015. In connection with the issuance of the Unsecured Notes, the Company entered into a registration rights agreement pursuant to which the Company agreed, for the benefit of the initial holders of the Unsecured Notes, to file with the SEC, and use its commercially reasonable efforts to cause to become effective, a registration statement relating to an offer to exchange the Unsecured Notes for an issue of SEC-registered notes (the “Exchange Notes”) with terms identical to the Unsecured Notes (except that the Exchange Notes will not be subject to restrictions on transfer or to any increase in annual interest rate as described below). Under certain circumstances, including if applicable interpretations of the staff of the SEC do not permit the Company to effect the exchange offer, the Company and the guarantors must use their commercially reasonable efforts to cause to become effective a shelf registration statement relating to resales of the Unsecured Notes and to keep that shelf registration statement effective until the first anniversary of the date such shelf registration statement becomes effective, or such shorter period that will terminate when all Unsecured Notes covered by the shelf registration statement have been sold. The obligation to complete the exchange offer and/or file a shelf registration statement will terminate on the second anniversary of the date of the Registration Rights Agreement. If the exchange offer is not completed (or, if required, the shelf registration statement is not declared effective) on or before December 19, 2015, the annual interest rate borne by the Unsecured Notes will be increased by 0.25% per annum for the first 90-day period immediately following such date and by an additional 0.25% per annum with respect to each subsequent 90-day period, up to a maximum additional rate of 1.00% per annum thereafter until the exchange offer is completed or the shelf registration statement is declared effective, at which time the interest rate will revert to the original interest rate on the date the Unsecured Notes were originally issued. We were in compliance with the terms of the Unsecured Notes as of June 30, 2015 and December 31, 2014. | 13. LONG-TERM DEBT The following table summarizes our indebtedness at December 31, (in thousands): At December 31, 2014 2013 Long-term debt Senior credit facility $ — $ Senior secured term loan $ $ — Senior secured notes — Senior unsecured notes — Total debt Less: original issue discount — Total debt after discount Less: current portion of long-term debt Long-term debt, less current portion $ $ On December 19, 2014 and in connection with the Merger, we refinanced all of our indebtedness outstanding under the Prior Credit Facilities with proceeds from the Credit Facilities and the Notes. Credit Facilities On December 19, 2014, GCA, as borrower, and Holdings entered into a credit agreement among GCA, Holdings, Bank of America, N.A. as administrative agent, collateral agent, swing line lender and letter of credit issuer; Deutsche Bank Securities Inc., as syndication agent; and Merrill Lynch, Pierce, Fenner & Smith Incorporated and Deutsche Bank Securities, Inc. as joint lead arrangers and joint book managers (the “Credit Agreement”). The Credit Agreement provides for a $50.0 million five -year Revolving Credit Facility that matures in 2019 and a $500.0 million six -year Term Loan that matures in 2020. The fees associated with the Credit Facilities included discounts of approximately $7.5 million and debt issuance costs of approximately $13.9 million. All borrowings under the Credit Facilities are subject to the satisfaction of customary conditions, including the absence of a default and compliance with representations and warranties. The interest rate per annum applicable to the Revolving Credit Facility is, at GCA’s option, the base rate or LIBOR plus , in each case, an applicable margin . The interest rate per annum applicable to the Term Loan is also, at GCA’s option, the base rate or LIBOR plus, in each case, an applicable margin. LIBOR will be reset at the beginning of each selected interest period based on the LIBOR rate then in effect; provided that, with respect to the Revolving Credit Facility, if LIBOR is below zero, then such rate will be equal to zero plus the applicable margin, and, with respect to the Term Loan, if LIBOR is below 1.0% then such rate will be equal to 1.0% plus the applicable margin. The base rate is a fluctuating interest rate equal to the highest of ( a ) the prime lending rate announced by the administrative agent, (b ) the federal funds effective rate from time to time plus 0.50% , and ( c ) LIBOR (after taking account of any applicable floor) applicable for an interest period of one month plus 1.00% . The applicable margins of 4.75% and 5.25% for the Revolving Credit Facility and Term Loan, respectively, are subject to adjustment based on our consolidated secured leverage ratio. Voluntary prepayments of the term loan and the revolving loans and voluntary reductions in the unused commitments are permitted in whole or in part, in minimum amounts as set forth in the Credit Agreement governing the Credit Facilities, with prior notice but without premium or penalty, except that certain refinancing transactions of the Term Loan within twelve months after the closing of the Credit Facilities will be subject to a prepayment premium of 1.00% of the principal amount repaid. Subject to certain exceptions, the obligations under the Credit Facilities are secured by substantially all of the present and after acquired assets of each of GCA, Holdings and the subsidiary guarantors (the “Collateral”) including: (a) a perfected first priority pledge of all the capital stock of GCA and each domestic direct, wholly owned material restricted subsidiary held by Holdings, GCA or any such subsidiary guarantor; and (b) a perfected first priority security interest in substantially all other tangible and intangible assets of Holdings, GCA, and such subsidiary guarantors (including, but not limited to, accounts receivable, inventory, equipment, general intangibles, investment property, real property, intellectual property and the proceeds of the foregoing). Subject to certain exceptions, the Credit Facilities are unconditionally guaranteed by Holdings and such subsidiary guarantors and Multimedia Games and its material domestic subsidiaries. The Credit Agreement governing the Credit Facilities contains certain covenants that, among other things, limit Holdings’ ability, and the ability of certain of its subsidiaries, to incur additional indebtedness; sell assets or consolidate or merge with or into other companies; pay dividends or repurchase or redeem capital stock; make certain investments; issue capital stock of subsidiaries; incur liens; prepay, redeem or repurchase subordinated debt; and enter into certain types of transactions with our affiliates. The Credit Agreement governing the Credit Facilities also requires Holdings, together with its subsidiaries, to comply with a consolidated secured leverage ratio as well as an annual excess cash flow requirement. Events of default under the Credit Agreement governing the Credit Facilities include customary events such as a cross-default provision with respect to other material debt (which includes the Notes). In addition, an event of default will occur if Holdings undergoes a change of control. This is defined to include the case where Holdings ceases to own 100% of the equity interests of GCA, or where any person or group acquires a percentage of the economic or voting interests of Holdings’ capital stock of 35% or more (determined on a fully diluted basis), or where a majority of the board of directors of Holdings ceases to consist of persons who are directors of Holdings on the closing date of the Credit Facilities or other directors whose nomination for election to the board of directors of GCA was recommended by a majority of the then continuing directors. At December 31, 2014, we had appro ximately $500.0 million of borrowings outstanding under the Term Loan and $50.0 million of additional borrowing availability under the Revolving Credit Facility, based upo n borrowing base calculations as of such date. We were in compliance with the terms of the Credit Facilities as of December 31, 2014. Senior Notes At December 31, 2014, we had two series of outstanding notes: ( a ) $350.0 million aggregate principal amount of 7.75% Senior Secured Notes due 2021 (the “Secured Notes”) and ( b ) $350.0 million aggregate principal amount of 10.00% Senior Unsecured Notes due 2022 (the “Unsecured Notes”). On December 19, 2014, we issued the Secured Notes at an initial offering price of 100% and the Unsecured Notes at an initial offering price of 98.921% . Our net proceeds from the sale of the Notes were approximately $680.0 million after deducting discounts of approximately $3.8 million and commissions of approximately $16.2 million and before deducting any other fees and expenses related to the Notes offering. Other fees and expenses included additional debt issuance costs associated with the Notes of approximately $11.2 million. The Secured Notes are senior secured obligations of the Company, equally and ratably secured with the Company’s obligations under the Credit Facilities. The Secured Notes rank equally with the Company’s existing and future senior debt and senior to the Company’s existing and future senior subordinated debt. The Unsecured Notes are senior unsecured obligations of the Company, and rank equally with the Company’s existing and future senior debt and senior to the Company’s existing and future senior subordinated debt. The Secured Notes are guaranteed on a senior secured basis by Holdings and all of its material domestic subsidiaries (other than GCA) and the Unsecured Notes are guaranteed on a senior unsecured basis by Holdings and all of its material domestic subsidiaries (other than GCA). The indentures governing the Notes contain certain covenants that, among other things, limit our ability, and the ability of certain of our subsidiaries, to incur additional indebtedness, pay dividends or make distributions or certain other restricted payments, purchase or redeem capital stock, make investments or extend credit, engage in certain transactions with affiliates, consummate certain asset sales, effect a consolidation or merger, or sell, transfer, lease or otherwise dispose of all or substantially all of our assets, or create certain liens and other encumbrances on our assets. The indentures governing the Notes contain events of default customary for agreements of their type (with customary grace periods, as applicable) and provide that, upon the occurrence of an event of default arising from certain events of bankruptcy or insolvency with respect to Holdings or GCA, all outstanding notes will become due and payable immediately without further action or notice. If any other type of event of default occurs and is continuing, then the trustee or the holders of at least 25% in principal amount of the then outstanding Secured Notes or Unsecured Notes, as applicable, may declare all such notes to be due and payable immediately. At the closing of the offering of the Notes, the Notes were acquired by the initial purchasers pursuant to the terms of a purchase agreement. Under the terms of the purchase agreement, during a one year period following the closing and upon prior notice from the initial purchasers, the Company must use commercially reasonable efforts to aid the purchasers in the resale of the Notes, including by preparing an updated offering memorandum and participating in reasonable marketing efforts including road shows, to the extent required therein. In connection with the issuance of the Unsecured Notes, the Company entered into a registration rights agreement pursuant to which the Company agreed, for the benefit of the holders of the Unsecured Notes, to file with the Securities and Exchange Commission (the “SEC”), and use its commercially reasonable efforts to cause to become effective, a registration statement relating to an offer to exchange the Unsecured Notes for an issue of SEC-registered notes (the “Exchange Notes”) with terms identical to the Unsecured Notes (except that the Exchange Notes will not be subject to restrictions on transfer or to any increase in annual interest rate as described below). Under certain circumstances, including if applicable interpretations of the staff of the SEC do not permit the Company to effect the exchange offer, the Company and the guarantors must use their commercially reasonable efforts to cause to become effective a shelf registration statement relating to resales of the Unsecured Notes and to keep that shelf registration statement effective until the first anniversary of the date such shelf registration statement becomes effective, or such shorter period that will terminate when all Unsecured Notes covered by the shelf registration statement have been sold. The obligation to complete the exchange offer and/or file a shelf registration statement will terminate on the second anniversary of the date of the Registration Rights Agreement. If the exchange offer is not completed (or, if required, the shelf registration statement is not declared effective) on or before December 19, 2015, the annual interest rate borne by the Unsecured Notes will be increased by 0.25% per annum for the first 90 -day period immediately following such date and by an additional 0.25% per annum with respect to each subsequent 90 -day period, up to a maximum additional rate of 1.00% per annum thereafter until the exchange offer is completed or the shelf registration statement is declared effective, at which time the interest rate will revert to the original interest rate on the date the Unsecured Notes were originally issued. We were in compliance with the covenants of the Notes as of December 31, 2014. Principal Repayments The maturities of our borrowings at December 31, 2014 are as follows (in thousands): Amount Maturities of borrowings 2015 $ 2016 2017 2018 2019 Thereafter Total $ |
COMMITMENTS AND CONTINGENCIE177
COMMITMENTS AND CONTINGENCIES | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
COMMITMENTS AND CONTINGENCIES | |||
COMMITMENTS AND CONTINGENCIES | 13. COMMITMENTS AND CONTINGENCIES Multimedia Shareholder Litigation In connection with the Merger, certain actions were filed by putative shareholders of Multimedia in the United States District Court for the Western District of Texas (the “Texas Federal Action”) and the District Court of Travis County, Texas (the “Texas State Court Action”). In both the Texas Federal Action and the Texas State Court Action, plaintiffs alleged that Multimedia’s directors breached their fiduciary duties to Multimedia and/or its shareholders because, among other things, the Merger allegedly involved an unfair price, an inadequate sales process, self-dealing and unreasonable deal protection devices. The complaints further alleged that Holdings and its formerly wholly owned merger subsidiary, Merger Sub aided and abetted those purported breaches of fiduciary duty. On November 20, 2014, the defendants in the Texas Federal Action reached an agreement in principle with the plaintiffs in the Texas Federal Action regarding settlement of all claims asserted on behalf of the alleged class of Multimedia shareholders and on behalf of Multimedia, and that agreement is reflected in a memorandum of understanding. In connection with the settlement contemplated by the memorandum of understanding, Multimedia agreed to make certain additional disclosures in its proxy statement related to the Merger, which disclosure Multimedia made in a Current Report on Form 8-K filed on November 21, 2014. In addition, the defendants in the Texas Federal Action agreed not to oppose an application by plaintiffs in the Texas Federal Action for an attorneys’ fee award from the United States District Court for the Western District of Texas (the “District Court”) of up to $310,000. As contemplated in the memorandum of understanding, the parties entered into a Stipulation of Non-Opt Out Class and Derivative Settlement (the “Stipulation”) as of April 7, 2015, which was filed with the District Court on April 16, 2015. The Stipulation is subject to customary conditions, including District Court approval. On April 16, 2015, Plaintiffs filed an unopposed motion for preliminary approval of the Stipulation. On April 22, 2015, the District Court entered an order preliminarily approving the Stipulation, providing for notice of the settlement to be provided to certain Multimedia shareholders and scheduling a hearing for final approval of the Stipulation on August 7, 2015. There can be no assurance that the District Court will finally approve the Stipulation. In such event, the settlement as reflected in the Stipulation may be terminated. The Texas State Court Action remains pending as of May 8, 2015, the date these condensed consolidated financial statements were issued. All of the defendants have filed answers containing general denials in that action. Alabama Litigation The Company is currently involved in two lawsuits, as further described below, related to Multimedia’s former charity bingo operations in the State of Alabama, neither of which it believes are material from a damages perspective. The lawsuits are currently pending in federal court, and include claims related to the alleged illegality of electronic charity bingo in the State of Alabama. Dollie Williams, et al., v. Macon County Greyhound Park, Inc., et al., a civil action, was filed on March 8, 2010, in the United States District Court for the Middle District of Alabama, Eastern Division, against Multimedia and others. The plaintiffs, who claim to have been patrons of VictoryLand, allege that Multimedia participated in gambling operations that violated Alabama state law by supplying to VictoryLand purportedly unlawful electronic bingo machines played by the plaintiffs, and the plaintiffs seek recovery of the monies lost on all electronic bingo games played by the plaintiffs in the six months prior to the filing of the complaint under Ala. Code Sec. 8-1-150(A). The plaintiffs have requested that the court certify the action as a class action. On March 29, 2013, the court entered an order granting the plaintiffs’ motion for class certification. On April 12, 2013, the defendants jointly filed a petition with the Eleventh Circuit Court of Appeals seeking permission to appeal the court’s ruling on class certification. On June 18, 2013, the Eleventh Circuit Court of Appeals entered an order granting the petition to appeal. Following briefing and oral argument, on April 2, 2014, the Eleventh Circuit Court of Appeals entered an order reversing the district court’s ruling on class certification and remanding the case to the district court. The parties have reached a settlement that will become final upon approval of the bankruptcy court overseeing the bankruptcy of one of the plaintiffs. Until the settlement becomes final, the Company will continue to vigorously defend this matter. Given the inherent uncertainties in this litigation, however, the Company is unable to make any prediction as to the ultimate outcome. Ozetta Hardy v. Whitehall Gaming Center, LLC, et al., a civil action, was filed against Whitehall Gaming Center, LLC (an entity that does not exist), Cornerstone Community Outreach, Inc., and Freedom Trail Ventures, Ltd., in the Circuit Court of Lowndes County, Alabama. On June 3, 2010, Multimedia and other manufacturers were added as defendants. The plaintiffs, who claim to have been patrons of White Hall, allege that Multimedia participated in gambling operations that violated Alabama state law by supplying to White Hall purportedly unlawful electronic bingo machines played by the plaintiffs, and the plaintiffs seek recovery of the monies lost on all electronic bingo games played by the plaintiffs in the six months prior to the filing of the complaint under Ala. Code, Sec 8-1-150(A). The plaintiffs requested that the court certify the action as a class action. On July 2, 2010, the defendants removed the case to the United States District Court for the Middle District of Alabama, Northern Division. The court has not ruled on the plaintiffs’ motion for class certification. The Company continues to vigorously defend this matter. Given the inherent uncertainties in this litigation, however, the Company is unable to make any prediction as to the ultimate outcome. Gain Contingency Settlement In January 2014, we filed a complaint against certain third party defendants alleging conspiracy in restraint of competition regarding interchange fees, monopolization by defendants in the relevant market, and attempted monopolization of the defendants in the relevant market. We demanded a trial by jury of all issues so triable. The defendants filed a motion to dismiss on March 13, 2014. A settlement agreement was made as of January 16, 2015 and on January 22, 2015 the settlement agreement was executed and delivered for which we received $14.4 million in cash and recorded the settlement proceeds in the first quarter of 2015. This settlement is included as a reduction of operating expenses in our Condensed Consolidated Statement of Income and Comprehensive Income for the three months ended March 31, 2015. We are subject to other claims and suits that arise from time to time in the ordinary course of business, including those discussed above. We do not believe the liabilities, if any, which may ultimately result from the outcome of such matters, individually or in the aggregate, will have a material adverse impact on our financial position, liquidity or results of operations. | 13. COMMITMENTS AND CONTINGENCIES Multimedia Shareholder Litigation In connection with the Merger, certain actions were filed by putative shareholders of Multimedia in the United States District Court for the Western District of Texas (the “Texas Federal Action”) and the District Court of Travis County, Texas (the “Texas State Court Action”). In both the Texas Federal Action and the Texas State Court Action, plaintiffs alleged that Multimedia’s directors breached their fiduciary duties to Multimedia and/or its shareholders because, among other things, the Merger allegedly involved an unfair price, an inadequate sales process, self-dealing and unreasonable deal protection devices. The complaints further alleged that Holdings and its formerly wholly owned merger subsidiary, Merger Sub, aided and abetted those purported breaches of fiduciary duty. On November 20, 2014, the defendants in the Texas Federal Action reached an agreement in principle with the plaintiffs in the Texas Federal Action regarding settlement of all claims asserted on behalf of the alleged class of Multimedia shareholders and on behalf of Multimedia, and that agreement is reflected in a memorandum of understanding. In connection with the settlement contemplated by the memorandum of understanding, Multimedia agreed to make certain additional disclosures in its proxy statement related to the Merger, which disclosure Multimedia made in a Current Report on Form 8-K filed on November 21, 2014. In addition, the defendants in the Texas Federal Action agreed not to oppose an application by plaintiffs in the Texas Federal Action for an attorneys’ fee award from the United States District Court for the Western District of Texas (the “District Court”) of up to $310,000 . As contemplated in the memorandum of understanding, the parties entered into a Stipulation of Non-Opt Out Class and Derivative Settlement (the “Stipulation”) as of April 7, 2015, which was filed with the District Court on April 16, 2015. The Stipulation is subject to customary conditions, including District Court approval. On April 16, 2015, Plaintiffs filed an unopposed motion for preliminary approval of the Stipulation. On April 22, 2015, the District Court entered an order preliminarily approving the Stipulation, providing for notice of the settlement to be provided to certain Multimedia shareholders and scheduling a hearing for final approval of the Stipulation on August 7, 2015. On July 10, 2015, Plaintiffs filed an unopposed motion for final approval of the Stipulation. The deadline for class members to file objections to the Stipulation passed on July 17, 2015. As of August 3, 2015, no such objections had been filed. There can be no assurance that the District Court will finally approve the Stipulation. In such event, the settlement as reflected in the Stipulation may be terminated. The Texas State Court Action remains pending as of August 3, 2015, the date these condensed consolidated financial statements were issued. All of the defendants have filed answers containing general denials in that action. The Stipulation preliminarily approved in the Texas Federal Action includes a release of the claims asserted in the Texas State Court Action. Alabama Litigation The Company is currently involved in one lawsuit and recently resolved another, as further described below, related to Multimedia’s former charity bingo operations in the State of Alabama, neither of which it believes is material from a damages perspective. The active lawsuit is currently pending in federal court and the resolved lawsuit was pending in federal court, and both include claims related to the alleged illegality of electronic charity bingo in the State of Alabama. Dollie Williams, et al., v. Macon County Greyhound Park, Inc., et al., a civil action, was filed on March 8, 2010, in the United States District Court for the Middle District of Alabama, Eastern Division, against Multimedia and others. The plaintiffs, who claim to have been patrons of VictoryLand, allege that Multimedia participated in gambling operations that violated Alabama state law by supplying to VictoryLand purportedly unlawful electronic bingo machines played by the plaintiffs, and the plaintiffs seek recovery of the monies lost on all electronic bingo games played by the plaintiffs in the six months prior to the filing of the complaint under Ala. Code Sec. 8-1-150(A). The plaintiffs have requested that the court certify the action as a class action. On March 29, 2013, the court entered an order granting the plaintiffs' motion for class certification. On April 12, 2013, the defendants jointly filed a petition with the Eleventh Circuit Court of Appeals seeking permission to appeal the court's ruling on class certification. On June 18, 2013, the Eleventh Circuit Court of Appeals entered an order granting the petition to appeal. Following briefing and oral argument, on April 2, 2014, the Eleventh Circuit Court of Appeals entered an order reversing the district court's ruling on class certification and remanding the case to the district court. The parties reached a settlement that became final upon approval of the bankruptcy court overseeing the bankruptcy of one of the plaintiffs. The lawsuit was dismissed with prejudice by court order dated June 10, 2015. Ozetta Hardy v. Whitehall Gaming Center, LLC, et al., a civil action, was filed against Whitehall Gaming Center, LLC (an entity that does not exist), Cornerstone Community Outreach, Inc., and Freedom Trail Ventures, Ltd., in the Circuit Court of Lowndes County, Alabama. On June 3, 2010, Multimedia and other manufacturers were added as defendants. The plaintiffs, who claim to have been patrons of White Hall, allege that Multimedia participated in gambling operations that violated Alabama state law by supplying to White Hall purportedly unlawful electronic bingo machines played by the plaintiffs, and the plaintiffs seek recovery of the monies lost on all electronic bingo games played by the plaintiffs in the six months prior to the filing of the complaint under Ala. Code, Sec 8-1-150(A). The plaintiffs requested that the court certify the action as a class action. On July 2, 2010, the defendants removed the case to the United States District Court for the Middle District of Alabama, Northern Division. The court has not ruled on the plaintiffs' motion for class certification. The Company continues to vigorously defend this matter. Given the inherent uncertainties in this litigation, however, the Company is unable to make any prediction as to the ultimate outcome. Gain Contingency Settlement In January 2014, we filed a complaint against certain third party defendants alleging conspiracy in restraint of competition regarding interchange fees, monopolization by defendants in the relevant market, and attempted monopolization of the defendants in the relevant market. We demanded a trial by jury of all issues so triable. The defendants filed a motion to dismiss on March 13, 2014. A settlement agreement was made as of January 16, 2015 and on January 22, 2015 the settlement agreement was executed and delivered for which we received $14.4 million in cash and recorded the settlement proceeds in the first quarter of 2015. This settlement is included as a reduction of operating expenses in our Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income for the six months ended June 30, 2015. We are also subject to other claims and suits that arise from time to time in the ordinary course of business. We do not believe the liabilities, if any, which may ultimately result from the outcome of such matters, individually or in the aggregate, will have a material adverse impact on our financial position, liquidity or results of operations. | 14. COMMITMENTS AND CONTINGENCIES Lease Obligations We lease office facilities and operating equipment under cancelable and non ‑cancelable agreements. Total rent expense was approximately $1.9 million, $1.8 million and $0.7 million for the years ended December 31, 2014, 2013 and 2012, respectively. In October 2012, we entered into a long ‑term lease agreement related to office space for our new corporate headquarters located in Las Vegas, Nevada, which we occupied in the first half of 2013. In September 2014, the long-term lease agreement for office space in Austin, Texas, was extended through March 2021. As of December 31, 2014, the minimum aggregate rental commitment under all non ‑cancelable operating leases were as follows (in thousands): Amount Minimum aggregate rental commitments 2015 $ 2016 2017 2018 2019 Thereafter Total $ Litigation Claims and Assessments Multimedia Games Shareholder Litigation In connection with the Merger, certain actions were filed by putative shareholders of Multimedia Games in the United States District Court for the Western District of Texas (the “Texas Federal Action”) and the District Court of Travis County, Texas (the “Texas State Court Action”). In both the Texas Federal Action and the Texas State Court Action, plaintiffs alleged that Multimedia Games’ directors breached their fiduciary duties to Multimedia Games and/or its shareholders because, among other things, the Merger allegedly involved an unfair price, an inadequate sales process, self-dealing and unreasonable deal protection devices. The complaints further alleged that Holdings and its formerly wholly owned merger subsidiary, Movie Merger Sub, Inc., aided and abetted those purported breaches of fiduciary duty. On November 20, 2014, the defendants in the Texas Federal Action reached an agreement in principle with the plaintiffs in the Texas Federal Action regarding settlement of all claims asserted on behalf of the alleged class of Multimedia Games shareholders and on behalf of Multimedia Games, and that agreement is reflected in a memorandum of understanding. In connection with the settlement contemplated by the memorandum of understanding, Multimedia Games agreed to make certain additional disclosures in its proxy statement related to the Merger, which disclosure Multimedia Games made in a Current Report on Form 8-K filed on November 21, 2014. The memorandum of understanding contemplates that the parties will enter into a stipulation of settlement. The stipulation of settlement will be subject to customary conditions, including court approval. In the event that the parties enter into a stipulation of settlement, a hearing will be scheduled at which the United States District Court for the Western District of Texas will consider the fairness, reasonableness, and adequacy of the settlement. If the settlement is approved by the court in the form contemplated by the parties, it will resolve and release all claims in the Texas Federal Action that were or could have been brought challenging any aspect of the Merger, the Merger Agreement, and any disclosure made in connection therewith, including in Multimedia Games’ definitive proxy statement, pursuant to terms that will be disclosed to shareholders prior to final approval of the settlement. In addition, in connection with the settlement, the defendants in the Texas Federal Action agreed not to oppose an application by plaintiffs in the Texas Federal Action for an attorneys’ fee award from the United States District Court for the Western District of Texas of up to $310,000 , which fee has been paid by Holdings. There can be no assurance that the parties will ultimately enter into a stipulation of settlement or that the United States District Court for the Western District of Texas will approve the settlement even if the parties were to enter into such stipulation. In such event, the proposed settlement as contemplated by the memorandum of understanding may be terminated. The Texas State Court Action remains pending as of March 16, 2015, the date these consolidated financial statements were issued. Alabama Litigation The Company is currently involved in two lawsuits, as further described below, related to Multimedia Games’ former charity bingo operations in the State of Alabama, neither of which it believes are material from a damages perspective. The lawsuits are currently pending in federal court, and include claims related to the alleged illegality of electronic charity bingo in the State of Alabama. Dollie Williams, et al., v. Macon County Greyhound Park, Inc., et al., a civil action, was filed on March 8, 2010, in the United States District Court for the Middle District of Alabama, Eastern Division, against Multimedia Games and others. The plaintiffs, who claim to have been patrons of VictoryLand, allege that Multimedia Games participated in gambling operations that violated Alabama state law by supplying to VictoryLand purportedly unlawful electronic bingo machines played by the plaintiffs, and the plaintiffs seek recovery of the monies lost on all electronic bingo games played by the plaintiffs in the six months prior to the filing of the complaint under Ala. Code Sec. 8-1-150(A). The plaintiffs requested that the court certify the action as a class action. On March 29, 2013, the court entered an order granting the plaintiffs' motion for class certification. On April 12, 2013, the defendants jointly filed a petition with the Eleventh Circuit Court of Appeals seeking permission to appeal the court's ruling on class certification. On June 18, 2013, the Eleventh Circuit Court of Appeals entered an order granting the petition to appeal. Following briefing and oral argument, on April 2, 2014, the Eleventh Circuit Court of Appeals entered an order reversing the district court’s ruling on class certification and remanding the case to the district court. The Company continues to vigorously defend this matter. Given the inherent uncertainties in this litigation, however, the Company is unable to make any prediction as to the ultimate outcome. Ozetta Hardy v. Whitehall G aming Center, LLC, et al., a civil actio n, was filed against Whitehall G aming Center, LLC (an entity that does not exist), Cornerstone Community Outreach, Inc., and Freedom Trail Ventures, Ltd., in the Circuit Court of Lowndes County, Alabama. On June 3, 2010, Multimedia Games and other manufacturers were added as defendants. The plaintiffs, who claim to have been patrons of White Hall, allege that Multimedia Games participated in gambling operations that violated Alabama state law by supplying to White Hall purportedly unlawful electronic bingo machines played by the plaintiffs, and the plaintiffs seek recovery of the monies lost on all electronic bingo games played by the plaintiffs in the six months prior to the filing of the complaint under Ala. Code, Sec 8-1-150(A). The plaintiffs requested that the court certify the action as a class action. On July 2, 2010, the defendants removed the case to the United States District Court for the Middle District of Alabama, Northern Division. The court has not ruled on the plaintiffs' motion for class certification. The Company continues to vigorously defend this matter. Given the inherent uncertainties in this litigation, however, the Company is unable to make any prediction as to the ultimate outcome. We are subject to other claims and suits that arise from time to time in the ordinary course of business, including those discussed above. We do not believe the liabilities, if any, which may ultimately result from the outcome of such matters, individually or in the aggregate, will have a material adverse impact on our financial position, liquidity or results of operations. |
SHAREHOLDERS' EQUITY178
SHAREHOLDERS' EQUITY | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
SHAREHOLDERS' EQUITY | |||
SHAREHOLDERS' EQUITY | 14. SHAREHOLDERS’ EQUITY Preferred Stock. Our amended and restated certificate of incorporation, as amended, allows our Board of Directors, without further action by stockholders, to issue up to 50,000,000 shares of preferred stock in one or more series and to fix the designations, powers, preferences, privileges and relative participating, optional, or special rights as well as the qualifications, limitations or restrictions of the preferred stock, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences. As of March 31, 2015 and December 31, 2014, we had no shares outstanding of preferred stock. Common Stock. Subject to the preferences that may apply to shares of preferred stock that may be outstanding at the time, the holders of outstanding shares of common stock are entitled to receive dividends out of assets legally available at the times and in the amounts as our Board of Directors may from time to time determine. All dividends are non-cumulative. In the event of the liquidation, dissolution or winding up of the Company, the holders of common stock are entitled to share ratably in all assets remaining after the payment of liabilities, subject to the prior distribution rights of preferred stock, if any, then outstanding. Each stockholder is entitled to one vote for each share of common stock held on all matters submitted to a vote of stockholders. Cumulative voting for the election of directors is not provided for. The common stock is not entitled to preemptive rights and is not subject to conversion or redemption. There are no sinking fund provisions applicable to the common stock. Each outstanding share of common stock is fully paid and non-assessable. As of March 31, 2015 and December 31, 2014, we had 90,610,087 and 90,405,450 shares of common stock issued. Treasury Stock. Employees may direct us to withhold vested shares of restricted stock to satisfy the minimum statutory withholding requirements applicable to their restricted stock vesting. We repurchased or withheld from restricted stock awards 2,845 and 31,000 shares of common stock at an aggregate purchase price of $19,743 and $0.3 million, for the three months ended March 31, 2015 and 2014, respectively, to satisfy the minimum applicable tax withholding obligations related to the vesting of such restricted stock awards. | 14. SHAREHOLDERS’ EQUITY Preferred Stock. Our amended and restated certificate of incorporation, as amended, allows our Board of Directors, without further action by stockholders, to issue up to 50,000,000 shares of preferred stock in one or more series and to fix the designations, powers, preferences, privileges and relative participating, optional, or special rights as well as the qualifications, limitations or restrictions of the preferred stock, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences. As of June 30, 2015 and December 31, 2014, we had no shares outstanding of preferred stock. Common Stock. Subject to the preferences that may apply to shares of preferred stock that may be outstanding at the time, the holders of outstanding shares of common stock are entitled to receive dividends out of assets legally available at the times and in the amounts as our Board of Directors may from time to time determine. All dividends are non-cumulative. In the event of the liquidation, dissolution or winding up of the Company, the holders of common stock are entitled to share ratably in all assets remaining after the payment of liabilities, subject to the prior distribution rights of preferred stock, if any, then outstanding. Each stockholder is entitled to one vote for each share of common stock held on all matters submitted to a vote of stockholders. Cumulative voting for the election of directors is not provided for. The common stock is not entitled to preemptive rights and is not subject to conversion or redemption. There are no sinking fund provisions applicable to the common stock. Each outstanding share of common stock is fully paid and non-assessable. As of June 30, 2015 and December 31, 2014, we had 90, 743,001 and 90,405,450 shares of common stock issued, respectively. Treasury Stock. Employees may direct us to withhold vested shares of restricted stock to satisfy the minimum statutory withholding requirements applicable to their restricted stock vesting. We repurchased or withheld from restricted stock awards 2,599 and 5,444 , and 11,963 and 43,129 shares of common stock, at an aggregate purchase price of $20,167 and $39,910 , and $0.1 million and $0.4 million, for the three and six months ended June 30, 2015 and 2014, respectively, to satisfy the minimum applicable tax withholding obligations related to the vesting of such restricted stock awards. | 15. SHAREHOLDERS’ EQUITY Preferred Stock. Our amended and restated certificate of incorporation allows our Board of Directors, without further action by stockholders, to issue up to 50,000,000 shares of preferred stock in one or more series and to fix the designations, powers, preferences, privileges and relative participating, optional, or special rights as well as the qualifications, limitations or restrictions of the preferred stock, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences. As of December 31, 2014, we had no shares of preferred stock outstanding. Common Stock. Subject to the preferences that may apply to shares of preferred stock that may be outstanding at the time, the holders of outstanding shares of common stock are entitled to receive dividends out of assets legally available at the times and in the amounts as our Board of Directors may from time to time determine. All dividends are non ‑cumulative. In the event of the liquidation, dissolution or winding up of the Company, the holders of common stock are entitled to share ratably in all assets remaining after the payment of liabilities, subject to the prior distribution rights of preferred stock, if any, then outstanding. Each stockholder is entitled to one vote for each share of common stock held on all matters submitted to a vote of stockholders. Cumulative voting for the election of directors is not provided for. The common stock is not entitled to preemptive rights and is not subject to conversion or redemption. There are no sinking fund provisions applicable to the common stock. Each outstanding share of common stock is fully paid and non ‑assessable. As of December 31, 2014, we had 90,405,450 shares of common stock issued. Common Stock Repurchase Program. Our share repurchase program granted us the authority to repurchase up to $40.0 million of our outstanding common stock over a two -year period, which commenced in the first quarter of 2013 and expired at the end of the fourth quarter of 2014. We repurchased approximately 1.5 million shares of common stock for cash of approx imately $ 11.7 million under t he share repurchase program for the year ended December 31, 2014. We repurchased approximately 2.6 million shares of common stock for cash of approximately $18.2 million under the share repurchase program for the year ended December 31, 2013. We completed the share repurchases with cash on hand. The repurchase program authorized us to buy our common stock from time to time through open market, privately negotiated or other transactions, including pursuant to trading plans established in accordance with Rules 10b5-1 and 10b-18 of the Exchange Act, or by a combination of such methods. Treasury Stock. Employees may direct us to withhold vested shares of restricted stock to satisfy the minimum statutory withholding requirements applicable to their restricted stock vesting. We repurchased or withheld from restricted stock awards 5 5,502 and 14,901 shares of common stock at an aggregate purchase price of $0 .5 million and $0.1 million, for the years ended December 31, 2014 and 2013, respectively, to satisfy the minimum applicable tax withholding obligations related to the vesting of such restricted stock awards. The following table provides the treasury stock activity that occurred in 2014 (number of shares and cost in thousands): Total Number of Average Price Cost of Shares Shares Purchased Purchased or Purchased or or Withheld Withheld Withheld (in thousands) (per share) (in thousands) Outstanding, December 31, 2013 $ $ Shares repurchased under current plan $ Shares withheld from restricted stock vesting $ Outstanding, December 31, 2014 $ $ |
WEIGHTED AVERAGE COMMON SHAR179
WEIGHTED AVERAGE COMMON SHARES | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
WEIGHTED AVERAGE COMMON SHARES | |||
WEIGHTED AVERAGE COMMON SHARES | 15. WEIGHTED AVERAGE COMMON SHARES The weighted average number of common shares outstanding used in the computation of basic and diluted earnings per share is as follows (in thousands): At March 31, At March 31, 2015 2014 Weighted average shares Weighted average number of common shares outstanding - basic Potential dilution from equity grants (1) Weighted average number of common shares outstanding - diluted (1) The potential dilution excludes the weighted average effect of equity awards to acquire 8.4 million and 5.1 million of our common stock for the three months ended March 31, 2015 and 2014, respectively, because the application of the treasury stock method, as required, makes them anti-dilutive. | 15. WEIGHTED AVERAGE COMMON SHARES The weighted average number of common shares outstanding used in the computation of basic and diluted earnings per share is as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Weighted average shares Weighted average number of common shares outstanding - basic Potential dilution from equity grants (1) — — Weighted average number of common shares outstanding - diluted (1) The Company was in a net loss position for the three and six months ended June 30, 2015, and therefore, no potential dilution from the application of the treasury stock method was applicable. The potential dilution excludes the weighted average effect of equity awards to acquire 7.5 million and 6.5 million of our common stock for the three and six months ended June 30, 2014 as the application of the treasury stock method, as required, makes them anti-dilutive. | 16. WEIGHTED AVERAGE SHARES OF COMMON STOCK The weighted average number of common stock outstanding used in the computation of basic and diluted earnings per share is as follows (in thousands): At December 31, 2014 2013 2012 Weighted average shares Weighted average number of common shares outstanding - basic Potential dilution from equity grants (1) Weighted average number of common shares outstanding - diluted (1) The potential dilution excludes the weighted average effect of stock options to acquire 7.6 million, 5.9 million and 5.1 million shares of our common stock at December 31, 2014, 2013 and 2012, respectively, because the application of the treasury stock method, as required, makes them anti ‑dilutive . |
SHARE-BASED COMPENSATION180
SHARE-BASED COMPENSATION | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
SHARE-BASED COMPENSATION | |||
SHARE-BASED COMPENSATION | 16. SHARE-BASED COMPENSATION Equity Incentive Awards Our 2014 Equity Incentive Plan (the “2014 Plan”) is used to attract and retain the best available personnel, to provide additional incentives to employees, directors and consultants and to promote the success of our business. The 2014 Plan superseded the then current 2005 Stock Incentive Plan (the “2005 Plan”). The 2014 Plan is administered by our Compensation Committee, which has the authority to select individuals who are to receive options or other equity incentive awards and to specify the terms and conditions of grants of options or other equity incentive awards, the vesting provisions, the term and the exercise price. Generally, we grant the following award types: (a) time-based options, (b) cliff-vesting time-based options, (c) market-based options and (d) restricted stock. These awards have varying vesting provisions, but generally have 10-year expiration periods. There have been no changes to our equity incentive awards vesting disclosures since the most recent filing of our Annual Report on Form 10-K. A summary of award activity is as follows (in thousands): Stock Options Restricted Stock Granted Granted Outstanding, December 31, 2014 Additional authorized shares - - Granted - - Exercised options or vested shares Canceled or forfeited - Outstanding, March 31, 2015 The maximum number of shares available for future equity awards under the 2014 Plan is approximately 12.1 million shares of our common stock; and there are no shares available for future equity awards under the 2005 Plan. Stock Options The fair value of options was determined as of the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions: Three Months Ended March 31, 2015 2014 Risk-free interest rate - Expected life of options (in years) - Expected volatility - Expected dividend yield - The following tables present the options activity: Number of Common Shares (in thousands) Weighted Average Exercise Price (per share) Weighted Average Life Remaining (years) Aggregate Intrinsic Value (in thousands) Outstanding, December 31, 2014 $ $ Granted - - Exercised Canceled or forfeited Outstanding, March 31, 2015 $ $ Vested and expected to vest, March 31, 2015 $ $ Exercisable, March 31, 2015 $ $ There were no options granted for the three months ended March 31, 2015. There were 2.0 million options granted for the three months ended March 31, 2014. The weighted average grant date fair value per share of the options granted was $3.88 for the three months ended March 31, 2014. The total intrinsic value of options exercised was $0.4 million and $1.7 million for the three months ended March 31, 2015 and 2014, respectively. There was $13.6 million in unrecognized compensation expense related to options expected to vest as of March 31, 2015. This cost was expected to be recognized on a straight-line basis over a weighted average period of 3.0 years. We received $1.0 million in proceeds from the exercise of options and recorded $1.6 million in non-cash compensation expense related to options granted that were expected to vest for the three months ended March 31, 2015. There was $12.0 million in unrecognized compensation expense related to options expected to vest as of March 31, 2014. This cost was expected to be recognized on a straight-line basis over a weighted average period of 3.1 years. We recorded $1.6 million in non-cash compensation expense related to options granted that were expected to vest as of March 31, 2014. We received $2.4 million in cash from the exercise of options for the three months ended March 31, 2014. Restricted Stock The following is a summary of non-vested share awards for our time-based restricted shares: Shares Outstanding (in thousands) Weighted Average Grant Date Fair Value (per share) Outstanding, December 31, 2014 $ Granted - - Vested Forfeited - Outstanding, March 31, 2015 $ There were no shares of restricted stock granted for the three months ended March 31, 2015 and March 31, 2014. The total fair value of restricted stock vested was $0.1 million and $0.7 million for the three months ended March 31, 2015 and 2014, respectively. There was $2.7 million in unrecognized compensation expense related to shares of time-based restricted shares expected to vest as of March 31, 2015. This cost is expected to be recognized on a straight-line basis over a weighted average period of 3.0 years. There was 10.9 thousand shares of restricted stock that vested and we recorded $0.2 million in non-cash compensation expense related to the restricted stock granted that was expected to vest during the three months ended March 31, 2015. There was $1.7 million in unrecognized compensation expense related to shares of time-based restricted shares expected to vest as of March 31, 2014. This cost was expected to be recognized on a straight-line basis over a weighted average period of 2.8 years. There were 0.1 million shares of time-based restricted shares vested and we recorded $0.4 million in non-cash compensation expense related to the restricted stock granted that was expected to vest for the three months ended March 31, 2014. | 16. SHARE-BASED COMPENSATION Equity Incentive Awards Our 2014 Equity Incentive Plan (the “2014 Plan”) is used to attract and retain the best available personnel, to provide additional incentives to employees, directors and consultants and to promote the success of our business. The 2014 Plan superseded the then current 2005 Stock Incentive Plan (the “2005 Plan”). The 2014 Plan is administered by our Compensation Committee of our Board of Directors, which has the authority to select individuals who are to receive options or other equity incentive awards and to specify the terms and conditions of grants of options or other equity incentive awards, the vesting provisions, the term and the exercise price. Generally, we grant the following award types: (a) time-based options, (b) cliff-vesting time-based options, (c) market-based options and (d) restricted stock. These awards have varying vesting provisions and expiration periods. For the three and six months ended June 30, 2015, we granted time-based options and market-based options. Our time-based stock options granted under the 2014 Plan vest at a rate of 25% per year on each of the first four yearly anniversaries of the option grant dates. These options expire after a ten -year period. Our market-based stock options granted under the 2014 Plan vest if our average stock price in any period of 30 consecutive trading days meets certain target prices during a four-year period that commenced on the date of grant for these options. If these target prices are not met during such four-year period, the unvested shares underlying the options will terminate, however, upon the Participant’s termination of Service if the Participant’s Service is terminated by the Participating Company without Cause within ten days prior to, or within eighteen (18) months after, the date a Change in Control is consummated, the unvested options granted would become fully vested. These options expire after a seven-year period. A summary of award activity is as follows (in thousands): Stock Options Restricted Stock Granted Granted Outstanding, December 31, 2014 Additional authorized shares — — Granted — Exercised options or vested shares Canceled or forfeited Outstanding, June 30, 2015 The maximum number of shares available for future equity awards under the 2014 Plan is approximately 6.6 million shares of our common stock; and there are no shares available for future equity awards under the 2005 Plan. Stock Options The fair value of time-based options was determined as of the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions: Six months ended June 30, 2015 2014 Risk-free interest rate % % Expected life of options (in years) Expected volatility % % Expected dividend yield % % The fair value of market-based options was determined as of the date of grant using a lattice-based option valuation model. For the market-based options issued in the second quarter 2015, the assumptions were: (a) risk-free interest rate of 1%; (b) measurement period of four years; (c) expected volatility of 47%; and (d) no expected dividend yield. The following tables present the options activity: Weighted Number of Weighted Average Average Life Aggregate Common Shares Exercise Price Remaining Intrinsic Value (in thousands) (per share) (years) (in thousands) Outstanding, December 31, 2014 $ $ Granted Exercised Canceled or forfeited Outstanding, June 30, 2015 $ $ Vested and expected to vest, June 30, 2015 $ $ Exercisable, June 30, 2015 $ $ There were $6.1 million options granted for the three and six months ended June 30, 2015. There were 3.0 million and 5.0 million options granted for the three and six months ended June 30, 2014, respectively. The weighted average grant date fair value per share of the options granted was $2.49 for the three and six months ended June 30, 2015. The weighted average grant date fair value per share of the options granted was $2.86 and $3. 2 7 for the three and six months ended June 30, 2014, respectively. The total intrinsic value of options exercised was $0.3 million and $0.8 million and $ 0 .7 million and $2.4 million for the three and six months ended June 30, 2015 and 2014, respectively. There was $21.8 million in unrecognized compensation expense related to options expected to vest as of June 30, 2015. This cost was expected to be recognized on a straight-line basis over a weighted average period of 3.0 years. We received $1.7 million in proceeds from the exercise of options and recorded $3.5 million in non-cash compensation expense related to options granted that were expected to vest for the six months ended June 30, 2015. There was $15.6 million in unrecognized compensation expense related to options expected to vest as of June 30, 2014. This cost was expected to be recognized on a straight-line basis over a weighted average period of 2.9 years. We recorded $4.6 million in non-cash compensation expense related to options granted that were expected to vest as of June 30, 2014. We received $4.6 million in cash from the exercise of options for the six months ended June 30, 2014. Restricted Stock The following is a summary of non-vested share awards for our time-based restricted shares: Weighted Shares Average Grant Outstanding Date Fair Value (in thousands) (per share) Outstanding, December 31, 2014 $ Granted — — Vested Forfeited Outstanding, June 30, 2015 $ There were no shares of restricted stock granted for the three and six months ended June 30, 2015 and 2014. The total fair value of restricted stock vested was $0.1 million and $0.2 million and $0.4 million and $1.4 million for the three and six months ended June 30, 2015 and 2014, respectively. There was $2.5 million in unrecognized compensation expense related to shares of time based restricted shares expected to vest as of June 30, 2015. This cost is expected to be recognized on a straight-line basis over a weighted average period of 2.8 years. There were 21,7 00 shares of restricted stock that vested and we recorded $0.4 million in non-cash compensation expense related to the restricted stock granted that was expected to vest during the six months ended June 30, 2015. There was $1.4 million in unrecognized compensation expense related to shares of time-based restricted shares expected to vest as of June 30, 2014. This cost was expected to be recognized on a straight-line basis over a weighted average period of 2.6 years. There were 0.2 million shares of time-based restricted shares vested and we recorded $0.8 million in non-cash compensation expense related to the restricted stock granted that was expected to vest for the six months ended June 30, 2014. | 17. SHARE ‑BASED COMPENSATION Equity Incentive Awards In January 2005, we adopted the 2005 Stock Incentive Plan (the “2005 Plan”) to attract and retain the best available personnel, to provide additional incentives to employees, directors and consultants and thus to promote the success of our business. The 2005 Plan is administered by our Compensation Committee. The administrator of the 2005 Plan has the authority to select individuals who are to receive options or other equity incentive awards under the 2005 Plan and to specify the terms and conditions of grants of options or other equity incentive awards, the vesting provisions, the term and the exercise price. In May 2014, we adopted the 2014 Equity Incentive Plan (the “2014 Plan”) to attract and retain the best available personnel, to provide additional incentives to employees, directors and consultants and thus to promote the success of our business. The 2014 Plan is administered by our Compensation Committee. The administrator of the 2014 Plan has the authority to select individuals who are to receive options or other equity incentive awards under the 2014 Plan and to specify the terms and conditions of grants of options or other equity incentive awards, the vesting provisions, the term and the exercise price. Generally, our time based stock options granted under the 2005 Plan (other than those granted to non ‑employee directors) will vest at a rate of 25% of the shares underlying the option after one year and the remaining shares vest in equal portions over the following 36 months , such that all shares are vested after four years . Generally, our time based stock options and restricted stock granted under the 2014 Plan will vest at a rate of 25% per year on each of the first four yearly anniversaries of the option grant dates. Our market-based stock options granted under the 2005 Plan typically vest if our average stock price in any period of 30 consecutive trading days meets certain target prices during a four year period that commenced on the date of grant for these options. If these target prices are not met during such four year period, the unvested shares underlying the options will terminate, except if there is a change in control of the Company as defined in the 2005 Plan, in which case, the unvested shares underlying such options shall become fully vested on the effective date of such change in control. Our cliff vesting time-based stock options granted under the 2005 Plan will vest based on the requisite service periods with a portion to vest after five years and another portion to vest after six years. The vesting provisions of restricted stock under the 2005 Plan are similar to those applicable to time-based stock options under the 2005 Plan. As these restricted shares were issued primarily to our employees when all or a portion of the restricted stock award vests, in most cases, a certain portion of the shares subject to the restricted stock award will be withheld by us to satisfy the statutory withholding requirements applicable to the restricted stock grants. Therefore, as these awards vest the actual number of shares outstanding as a result of the restricted stock awards is reduced. These restricted shares will vest over a period of four years. As part of the Merger Agreement, each option to purchase shares of Multimedia Games common stock granted after September 8, 2014, was converted into a new award covering shares of Holdings common stock using a customary exchange ratio. These options will vest at a rate of 25% per year on each of the first four yearly anniversaries of the option grant dates. A summary of award activity is as follows (in thousands): Stock Options Restricted Stock Granted Granted Outstanding, December 31, 2013 Additional authorized shares — — Granted Merger conversion — Exercised options or vested shares Canceled or forfeited Outstanding, December 31, 2014 The maximum number of shares available for future equity awards under the 2014 Plan is approximately 11.9 million shares of our common stock; and there are no shares available for future equity awards under the 2005 Plan. Stock Options The fair value of options was determined as of the date of grant using the Black ‑Scholes option pricing model with the following weighted ‑average assumptions: Year ended December 31, 2014 2013 2012 Risk-free interest rate % % % Expected life of options (in years) Expected volatility % % % Expected dividend yield % % % The fair value of our cliff vesting time-based options was determined using the Black Scholes option pricing model as of the date of grant. For the five year cliff vesting time-based options, the assumptions were: (a) risk-free interest rate of 2%; (b) expected term of five years; (c) expected volatility of 52%; and (d) no expected dividend yield. For the six year cliff vesting time-based options, the assumptions were: (a) risk-free interest rate of 2%; (b) expected term of six years; (c) expected volatility of 58%; and (d) no expected dividend yield. The fair value of our market-based options was determined using a lattice-based option valuation model as of the date of grant. For the market-based options issued in the first quarter 2014, the assumptions were: (a) risk-free interest rate of 1%; (b) measurement period of four years; (c) expected volatility of 51%; and (d) no expected dividend yield. For the market-based options issued in the second quarter 2014, the assumptions were: (a) risk-free interest rate of 1%; (b) measurement period of four years; (c) expected volatility of 52%; and (d) no expected dividend yield. The fair value of the converted options related to the Merger was recalculated upon consummation of the acquisition and it was determined that the original fair value approximated the value upon conversion and was still applicable and will continue to amortize to stock compensation expense over the remaining life of the award. The following tables present the options activity: Weighted Number of Weighted Average Average Life Aggregate Common Shares Exercise Price Remaining Intrinsic Value (in thousands) (per share) (years) (in thousands) Outstanding, December 31, 2013 $ $ Granted Merger conversion Exercised Canceled or forfeited Outstanding, December 31, 2014 $ $ Vested and expected to vest, December 31, 2014 $ $ Exercisable, December 31, 2014 $ $ Options Outstanding Options Exercisable Weighted Average Weighted Weighted Number Remaining Average Number Average Outstanding Contract Exercise Exercisable Exercise Range of Exercise Prices (000’s) Life (Years) Prices (000’s) Price $ — $ $ $ There were 6.6 million, 1.2 million and 2.4 million options granted for the years ended December 31, 2014, 2013 and 2012, respectively. Of the 6.6 million options granted, 1.1 million options were converted as part of the Merger. The weighted average grant date fair value per share of the options granted was $3.20 , $3.31 and $2.93 for the years ended December 31, 2014, 2013 and 2012, respectively. The total intrinsic value of options exercised was $2.8 million, $4.6 million and $6.3 million for the years ended December 31, 2014, 2013 and 2012, respectively. There was $15.4 million in unrecognized compensation expense related to options expected to vest as of December 31, 2014. This cost was expected to be recognized on a straight ‑line basis over a weighted average period of 3.1 years. We received $5.3 million in proceeds from the exercise of options and recorded $7.6 million in non ‑cash compensation expense related to options granted that were expected to vest for the year ended and as of December 31, 2014. We recorded $4.4 million and $6.2 million in non ‑cash compensation expense related to options granted that were expected to vest as of December 31, 2013 and 2012, respectively. We received $8.4 million and $6.7 million in cash from the exercise of options for the years ended December 31, 2013 and 2012, respectively. Restricted Stock The following is a summary of non ‑vested share awards for our time ‑based restricted shares: Weighted Shares Average Grant Outstanding Date Fair Value (in thousands) (per share) Outstanding, December 31, 2013 $ Granted Vested Forfeited Outstanding, December 31, 2014 $ There were 0.3 million, 0.4 million and 0.1 million shares of restricted stock granted for the years ended December 31, 2014, 2013 and 2012, respectively. The weighted average grant date fair value per share of restricted stock granted was $7.12 , $7.09 and $6.80 for the years ended December 31, 2014, 2013 and 2012. The total fair value of restricted stock vested was $1.4 million, $0.7 million and $1.3 million for the years ended December 31, 2014, 2013 and 2012, respectively. There was $3.0 million in unrecognized compensation expense related to shares of time ‑based restricted shares expected to vest as of December 31, 2014 and is expected to be recognized on a straight ‑line basis over a weighted average period of 3.3 years. There were 0.2 million shares, 0.1 million shares and 0.2 million shares of restricted stock that vested and we recorded $1.2 million, $0.7 million and $0.4 million in non ‑cash compensation expense related to the restricted stock granted that was expected to vest during 2014, 2013 and 2012, respectively. |
INCOME TAXES181
INCOME TAXES | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
INCOME TAXES | |||
INCOME TAXES | 17. INCOME TAXES The provision for income tax reflected an effective income tax rate of 81.2% for the three months ended March 31, 2015, which was higher than the statutory federal rate of 35.0% primarily due to non-statutory stock options that expired in the quarter and state income taxes. The provision for income tax reflected an effective income tax rate of 34.7% for the same period in the prior year, which was lower than the statutory federal rate of 35.0% are primarily due to the favorable foreign rate applicable to our foreign source income. We have analyzed filing positions in all of the federal, state and foreign jurisdictions where we are required to file income tax returns, as well as all open tax years in these jurisdictions. As part of the Merger, the Company recorded $0.7 million of unrecognized tax benefits as of December 31, 2014, which is consistent with the balance as of March 31, 2015. Other than the unrecognized tax benefit related to the Merger, we believe that our income tax filing positions and deductions will be sustained upon audit and we do not anticipate any adjustments that will result in a material change to our financial position. We may from time to time be assessed interest or penalties by tax jurisdictions, although any such assessments historically have been minimal and immaterial to our financial results. Our policy for recording interest and penalties associated with audits and unrecognized tax benefits is to record such items as a component of income tax expense. | 17. INCOME TAXES The provision for income tax reflected an effective income tax rate benefit of 41.0% and 35.8% for the three and six months ended June 30, 2015, respectively, which was higher than the statutory federal rate of 35.0% primarily due to state taxes and the lower foreign tax rate applicable to our foreign source income, partially offset by non-statutory stock options that expired in 2015. The provision for income tax reflected an effective income tax rate expense of 37.3% and 35.7% for the same periods in the prior year, which was higher than the statutory federal rate of 35.0% primarily due to state taxes, an increase in our valuation allowance for certain foreign losses and non-cash compensation expenses related to stock options, partially offset by a lower foreign tax rate applicable to our foreign source income. We have analyzed filing positions in all of the federal, state and foreign jurisdictions where we are required to file income tax returns, as well as all open tax years in these jurisdictions. As part of the Merger, the Company recorded $0.7 million of unrecognized tax benefits as of December 31, 2014, which is consistent with the balance as of June 30, 2015. Other than the unrecognized tax benefit related to the Merger, we believe that our income tax filing positions and deductions will be sustained upon audit and we do not anticipate any adjustments that will result in a material change to our financial position. We may from time to time be assessed interest or penalties by tax jurisdictions, although any such assessments historically have been minimal and immaterial to our financial results. Our policy for recording interest and penalties associated with audits and unrecognized tax benefits is to record such items as a component of income tax expense. | 18. INCOME TAXES The following presents consolidated income before tax for domestic and foreign operations (in thousands): Year Ended December 31, 2014 2013 2012 Consolidated income before tax Domestic $ $ $ Foreign Total $ $ $ The income tax provision attributable to income from operations before tax consists of the following components (in thousands): Year Ended December 31, 2014 2013 2012 Income tax provision Domestic $ $ $ Foreign Total income tax provision $ $ $ Income tax provision components Current $ $ $ Deferred Total income tax provision $ $ $ A reconciliation of the federal statutory rate and the effective income tax rate is as follows: Year Ended December 31, 2014 2013 2012 Income tax reconciliation Federal statutory rate % % % Foreign provision % % % State/province income tax % % % Non-deductible compensation cost % % % Non-deductible acquisition cost % % % Change in valuation allowance % % % Adjustment to carrying value % % % Foreign dividends and IRC Sec. 956 inclusions, net of foreign tax deduction % % % Non-deductible expenses and other items % % % Effective tax rate % % % The major tax ‑effected components of the deferred tax assets and liabilities are as follows (in thousands): Year Ended December 31, 2014 2013 2012 Deferred income tax assets related to: Deferred tax asset - current Intangibles $ — $ $ Net operating losses Stock compensation expense Accounts receivable allowances Accrued and prepaid expenses Long-term debt — Other Tax credits — — Property, equipment and leased assets — Valuation allowance Total deferred income tax assets $ $ $ Deferred income tax liabilities related to: Property, equipment and leased assets $ — $ — Intangibles — — Other Total deferred income tax liabilities $ $ Deferred income taxes, net $ $ $ The following is a tabular reconciliation of the total amounts of unrecognized tax benefits (in thousands): Year Ended December 31, 2014 2013 2012 Unrecognized tax benefit at the beginning of the period Gross increases - tax positions in prior period $ — $ — $ — Gross decreases - tax positions in prior period — — — Gross increases - tax positions in current period — — Settlements — — — Unrecognized tax benefit at the end of the period $ $ — $ — For all of our investments in foreign subsidiaries, except for GCA (Macau), deferred taxes have not been provided on unrepatriated foreign earnings. Unrepatriated earnings were approximately $11.7 million as of December 31, 2014. These earnings were considered permanently reinvested, as it was management’s intention to reinvest foreign earnings in foreign operations. We project sufficient cash flow in the U.S. and we do not need to repatriate these foreign earnings to finance U.S. operations. As a result of certain realization requirements under the accounting guidance on share ‑based payments, the table of deferred tax assets and liabilities shown above does not include certain deferred tax assets that arose directly from tax deductions related to equity compensation in excess of compensation recognized for financial reporting at December 31, 2014, 2013 and 2012, respectively. Equity will be increased by $4.4 million if, and when, such deferred tax assets are ultimately realized. We use the accounting guidance on income taxes ordering for purposes of determining when excess tax benefits have been realized. We had $179.9 million, or $63.0 million, tax ‑effected, of accumulated federal net operating losses as of December 31, 2014. The net operating losses can be carried forward and applied to offset taxable income for 20 years and will expire starting in 2025. We had tax ‑effected state net operating loss carry forwards of approximately $5.9 million as of December 31, 2014. The state net operating loss carry forwards will expire between 2015 and 2033. The determination and utilization of these state net operating loss carry forwards are dependent upon apportionment percentages and other respective state laws, which can change from year to year. As of December 31, 2014, $1. 6 million of our valuation allowance related to certain state net operating loss carry forwards which are expected to expire before utilization, due to shorter carry forward periods and decreased apportionment percentages in those states. The remaining valuation allowance of $0.7 million related to foreign net operating losses. We recognized a deferred tax asset upon our conversion from a limited liability company to a corporation on May 14, 2004. Prior to that time, all tax attributes flowed through to the members of the limited liability company. The principal component of the deferred tax asset is a difference between our assets for financial accounting and tax purposes. This difference results from a significant balance of acquired goodwill of approximately $687.4 million that was generated as part of the conversion to a corporation plus approximately $97.6 million in pre-existing goodwill carried over from periods prior to the conversion. Both of these assets are recorded for tax purposes but not for accounting purposes. This asset is amortized over 15 years for tax purposes, resulting in annual pretax income being $52.3 million lower for tax purposes than for financial accounting purposes. At an estimated blended domestic statutory tax rate of 36.3% , this results in tax payments being approximately $19.0 million less than the annual provision for income taxes shown on the income statement for financial accounting purposes, or the amount of the annual provision, if less. There is an expected aggregate of $82.3 million in cash savings over the remaining life of the portion of our deferred tax asset related to the conversion. This deferred tax asset may be subject to certain limitations. We believe that it is more likely than not that we will be able to utilize our deferred tax asset. However, the utilization of this tax asset is subject to many factors including, but not limited to, a change of control of the Company and future earnings. We have analyzed filing positions in all of the federal, state and foreign jurisdictions whe re we are required to file income tax returns, as well as all open tax years in these jurisdictions. As part of the Merger, the Company record ed $0.7 m illion of unrecognized tax benefits. Other than the unrecognized tax benefit related to the Merger, we believe that our income tax filing positions and deductions will be sustained upon audit and we do not anticipate any other adjustments that will result in a material change to our financial position. We may from time to time be assessed interest or penalties by tax jurisdictions, although any such assessments historically have been minimal and immaterial to our financial results. Our policy for recording interest and penalties associated with audits and unrecognized tax benefits is to record such items as a component of income tax expense. We are subject to taxation in the U.S. and various states and foreign jurisdictions. We have a number of federal and state income tax years still open for examination as a result of our net operating loss carry forwards. Accordingly, we are subject to examination for both U.S. federal and a few state tax returns for the years 2005 to present. For the remaining state, local and foreign jurisdictions, with few exceptions, we are no longer subject to examination by tax authorities for years before 2011 |
SEGMENT INFORMATION182
SEGMENT INFORMATION | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
SEGMENT INFORMATION | |||
SEGMENT INFORMATION | 18. SEGMENT INFORMATION Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-making group, in deciding how to allocate resources and in assessing performance. Our chief operating decision-making group consists of the Chief Executive Officer and the Chief Financial Officer. The operating segments are reviewed separately because each represents products and services that can be sold separately to our customers. Since the most recent filing of our Annual Report on Form 10-K, and in connection with the Merger, our chief operating decision-making group has determined the following to be the operating segments for which we conduct business: (a) Games, and (b) Payments. Each of these segments is monitored by our management for performance against its internal forecast and is consistent with our internal management reporting. Our chief operating decision-making group manages the business, allocates resources and measures profitability based on the Games and Payments operating segments. The Games segment provides solutions directly to gaming establishments to offer their patrons gaming entertainment related experiences including: leased gaming equipment; sales and maintenance related services of gaming equipment; gaming systems; and ancillary products and services. The Payments segment provides solutions directly to gaming establishments to offer their patrons cash access related services and products including: access to cash at gaming facilities via ATM cash withdrawals, credit card cash access transactions and point of sale debit card transactions; check-related services; fully integrated kiosks and maintenance services; compliance, audit and data software; casino credit data and reporting services and other ancillary offerings. Corporate overhead and depreciation and amortization expenses were allocated to the segments either through specific identification or based on a reasonable methodology. Our business is predominantly domestic, with no specific regional concentrations and no significant assets in foreign locations. The accounting policies of the operating segments are generally the same as those described in the summary of significant accounting policies. The following tables present segment information (in thousands): For the Three Months Ended March 31, 2015 2014 Revenues Games $ $ - Payments Total revenues $ $ Operating income Games $ $ - Payments Total operating income $ $ At March 31, At December 31, Total assets 2015 2014 Games $ $ Payments Total assets $ $ Major customers. For the three months ended March 31, 2015 and 2014, no single customer accounted for more than 10% of our revenues. Our five largest customers accounted for approximately 28% and 33% of our total revenue for the three months ended March 31, 2015 and 2014, respectively. | 18. SEGMENT INFORMATION Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-making group, in deciding how to allocate resources and in assessing performance. Our chief operating decision-making group consists of the Chief Executive Officer and the Chief Financial Officer. The operating segments are reviewed separately because each represents products and services that can be sold separately to our customers. Since the most recent filing of our Annual Report on Form 10-K, and in connection with the Merger, our chief operating decision-making group has determined the following to be the operating segments for which we conduct business: (a) Games, and (b) Payments. Each of these segments is monitored by our management for performance against its internal forecast and is consistent with our internal management reporting. Our chief operating decision-making group manages the business, allocates resources and measures profitability based on the Games and Payments operating segments. The Games segment provides solutions directly to gaming establishments to offer their patrons gaming entertainment related experiences including: leased gaming equipment; sales and maintenance related services of gaming equipment; gaming systems; and ancillary products and services. The Payments segment provides solutions directly to gaming establishments to offer their patrons cash access related services and products including: access to cash at gaming facilities via ATM cash withdrawals, credit card cash access transactions and point of sale debit card transactions; check-related services; fully integrated kiosks and maintenance services; compliance, audit and data software; casino credit data and reporting services and other ancillary offerings. Corporate overhead and depreciation and amortization expenses were allocated to the segments either through specific identification or based on a reasonable methodology. Our business is predominantly domestic, with no specific regional concentrations and no significant assets in foreign locations. The accounting policies of the operating segments are generally the same as those described in the summary of significant accounting policies. The following tables present segment information (in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, 2015 2014 2015 2014 Revenues Games $ $ — $ $ — Payments Total revenues $ $ $ $ Operating income Games $ $ — $ $ — Payments Total operating income $ $ $ $ At June 30, 2015 December 31, 2014 Total assets Games $ $ Payments Total assets $ $ Major customers. For the three and six months ended June 30, 2015 and 2014, no single customer accounted for more than 10% of our revenues. Our five largest customers accounted for approximately 28% and 30% of our total revenue for both the three and six months ended June 30, 2015 and 2014, respectively. | 20. SEGMENT INFORMATION Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision ‑making group, in deciding how to allocate resources and in assessing performance. Our chief operating decision ‑making group consists of the Chief Executive Officer and the Chief Financial Officer. The operating segments are reviewed separately because each represents products and services that can be sold separately to our customers. Since the most recent filing of our Annual Report on Form 10-K, and in connection with the Merger, our chief operating decision-making group has determined the following to be the operating segments for which we conduct business: (a) Games, and (b) Payments. Each of these segments is monitored by our management for performance against its internal forecast and is consistent with our internal management reporting. Our chief operating decision-making group manages the business, allocates resources and measures profitability based on the Games and Payments operating segments. The Games segment provides solutions directly to gaming establishments to offer their patrons gaming entertainment related experiences including: leased gaming equipment; sales and maintenance related services of gaming equipment; gaming systems; and ancillary products and services. The Payments segment provides solutions directly to gaming establishments to offer their patrons cash access related services and products including: access to cash at gaming facilities via ATM cash withdrawals, credit card cash access transactions and point of sale debit card transactions; check-related services; fully integrated kiosks and maintenance services; compliance, audit and data software; casino credit data and reporting services and other ancillary offerings. Corporate overhead and depreciation and amortization expenses were allocated to the segments either through specific identification or based on a reasonable methodology. Our business is predominantly domestic, with no specific regional concentrations and no significant assets in foreign locations. The accounting policies of the operating segments are generally the same as those described in the summary of significant accounting policies. T he following tables present segment information (in thousands): For and At the Year Ended December 31, 2014 2013 2012 Revenues Games $ $ — $ — Payments Total revenues $ $ $ Operating income Games $ $ — $ — Payments Total operating income $ $ $ Total assets Games $ $ — Payments Total assets $ $ Major customers. For the years ended December 31, 2014, 2013 and 2012, no single customer accounted for more than 10% of our revenues. Our five largest customers accounted for approximately 28% , 33% and 34% of our total revenue in 2014, 2013 and 2012, respectively. |
SUBSEQUENT EVENTS183
SUBSEQUENT EVENTS | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
SUBSEQUENT EVENTS | |||
SUBSEQUENT EVENTS | 19. SUBSEQUENT EVENTS Subsequent events were evaluated through the date of this filing. Secured Notes Refinance The terms of the Secured Notes purchase agreement stipulated that GCA must use commercially reasonable efforts to aid the purchasers in the resale of the Secured Notes. Alternatively, GCA had the ability to redeem the Secured Notes without penalty. On April 15, 2015, the Company entered into a note purchase agreement (the “Note Purchase Agreement”), among GCA, CPPIB Credit Investments III Inc. (the “Purchaser”) and Deutsche Bank Trust Company Americas, as collateral agent (the “Collateral Agent”) and issued $335.0 million in aggregate principal amount of its 7.25% Senior Secured Notes due 2021 (the “Refinanced Secured Notes”) in a private offering to the Purchaser. With the proceeds from the issuance of the Refinanced Secured Notes, GCA redeemed, in full, the Company’s outstanding Secured Notes from the note holders thereof in accordance with the terms of the indenture governing the Secured Notes. In connection with this transaction during the second quarter of 2015, we will expense approximately $12.9 million of related debt issuance costs and fees to “Loss on extinguishment of debt” associated with the redeemed Senior Secured Notes that were outstanding prior to the refinance transaction. In connection with the Refinanced Secured Notes and pursuant to the terms of the Note Purchase Agreement, the Company issued to the Purchaser a warrant to purchase 700,000 shares of Holdings’ common stock, with an exercise price equal to $9.88 per share, representing a 30% premium to the volume-weighted average price of Holdings’ common stock for the ten trading days prior to the issuance of the warrant. The warrant expires on the sixth anniversary of the date of issuance. The number of shares issuable pursuant to the warrant and the warrant exercise price are subject to adjustment for stock splits, reverse stock splits, stock dividends, mergers and certain other events. Unsecured Notes Syndication In connection with the terms of the Unsecured Notes purchase agreement for which GCA was required to use commercially reasonable efforts to aid the purchasers in the resale of the Unsecured Notes, the Company prepared an updated offering memorandum and participated in reasonable marketing efforts including road shows, to the extent required therein. The Unsecured Notes were syndicated in the second quarter of 2015. | 19. SUBSEQUENT EVENTS As of August 5, 2015, we had not identified, and were not aware of, any subsequent events for the three and six months ended June 30, 2015. | 22. SUBSEQUENT EVENTS Gain Contingency Settlement On January 14, 2014, we fil ed a complaint against certain d efendants alleging conspiracy in restraint of competition regarding interchange fees, monopolization by defendants in the relevant market, and attempted monopolization of the defendants in the relevant market. We demanded a trial by jury of all issues so triable. The defendants filed a motion to d ismiss on March 13, 2014. A settlement agreement was made as of January 16, 2015 and on January 22, 2015 the settlement agreement was executed and delivered for which we received $14.4 million in cash and recorded the settlement proceeds in the first quarter of 2015. |
FINANCIAL INFORMATION FOR GU184
FINANCIAL INFORMATION FOR GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
CONDENSED CONSOLIDATING FINANCIAL INFORMATION | |||
FINANCIAL INFORMATION FOR GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES | 20. CONDENSED CONSOLIDATING FINANCIAL INFORMATION We conduct substantially all of our business through our U.S. and foreign subsidiaries. Everi Payments Inc.’s (formerly known as Global Cash Access, Inc.) (“Subsidiary Issuer”) obligations under the Unsecured Notes are fully and unconditionally guaranteed, subject to certain customary release provisions, on a joint and several basis by Everi Holdings Inc. (formerly known as Global Cash Access Holdings, Inc.) (“Parent”) and substantially all of our 100%-owned U.S. subsidiaries other than Subsidiary Issuer (the “Guarantor Subsidiaries” and, together with Parent, the “Guarantors” and each a “Guarantor” ). The guarantees of our Unsecured Notes will be released under the following customary circumstances: (i) the sale or disposition of all or substantially all of the assets of the Guarantor (by way of merger, consolidation, or otherwise) to a person that is not (either before or after giving effect to such transaction) Parent, Subsidiary Issuer or a restricted subsidiary; (ii) the sale or disposition of sufficient capital stock of the Guarantor to a person that is not (either before or after giving effect to such transaction) Parent, Subsidiary Issuer or a restricted subsidiary and the Guarantor ceases to be a restricted subsidiary of Subsidiary Issuer as a result of the sale or other disposition; (iii) the designation of the Guarantor as an unrestricted subsidiary in accordance with the Indenture; or (iv) the legal or covenant defeasance of the Unsecured Notes or the satisfaction and discharge of the Indenture. Presented below is condensed consolidating financial information for (a) Parent, (b) Subsidiary Issuer, (c) the Guarantor Subsidiaries and (d) our U.S. subsidiaries that are not Guarantor Subsidiaries and our foreign subsidiaries (collectively, the “Non-Guarantor Subsidiaries”) as of March 31, 2015 and for the three-month periods ended March 31, 2015 and 2014. The condensed consolidating financial information has been presented to show the nature of assets held and the results of operations and cash flows of Parent, Subsidiary Issuer, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries assuming that the guarantee structure of the Unsecured Notes had been in effect at the beginning of the periods presented. SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Three Months Ended March 31, 2015 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 141,410 $ 62,369 $ 3,830 $ (136 ) $ 207,473 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 110,589 14,371 2,063 — 127,023 Operating expenses — 4,191 11,359 427 (136 ) 15,841 Research and development — — 5,436 — — 5,436 Depreciation — 1,774 8,542 61 — 10,377 Amortization — 2,215 17,771 669 — 20,655 Total costs and expenses — 118,769 57,479 3,220 (136 ) 179,332 Operating income — 22,641 4,890 610 — 28,141 Other (income) expense Interest expense, net of interest income — 2,778 22,787 90 — 25,655 Equity in income of subsidiaries (469 ) (3,047 ) — — 3,516 — Total other (income) expense (469 ) (269 ) 22,787 90 3,516 25,655 Income (loss) from operations before tax 469 22,910 (17,897 ) 520 (3,516 ) 2,486 Income tax expense (benefit) — 8,706 (6,942 ) 253 — 2,017 Net income (loss) 469 14,204 (10,955 ) 267 (3,516 ) 469 Foreign currency translation (873 ) — — (873 ) 873 (873 ) Comprehensive (loss) income $ (404 ) $ 14,204 $ (10,955 ) $ (606 ) $ (2,643 ) $ (404 ) SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Three Months Ended March 31, 2014 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 140,321 $ 6,866 $ 3,553 $ (169 ) $ 150,571 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 111,338 2,043 (143 ) — 113,238 Operating expenses — 18,747 819 642 (169 ) 20,039 Depreciation — 1,883 1 43 — 1,927 Amortization — 2,230 — 124 — 2,354 Total costs and expenses — 134,198 2,863 666 (169 ) 137,558 Operating income — 6,123 4,003 2,887 — 13,013 Other (income) expense Interest expense, net of interest income — 2,034 — (488 ) — 1,546 Equity in income of subsidiaries (7,489 ) (5,082 ) — — 12,571 — Total other (income) expense (7,489 ) (3,048 ) — (488 ) 12,571 1,546 Income from operations before tax 7,489 9,171 4,003 3,375 (12,571 ) 11,467 Income tax expense — 1,682 1,401 895 — 3,978 Net income 7,489 7,489 2,602 2,480 (12,571 ) 7,489 Foreign currency translation 1 — — 1 (1 ) 1 Comprehensive income $ 7,490 $ 7,489 $ 2,602 $ 2,481 $ (12,572 ) $ 7,490 SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands) At March 31, 2015 Parent Subsidiary Guarantor Non- Eliminations Total ASSETS Current assets Cash and cash equivalents $ — $ 120,435 $ 13,315 $ 11,263 $ — $ 145,013 Settlement receivables — 26,950 — 2,837 — 29,787 Trade receivables, net — 6,294 32,925 1 — 39,220 Other receivables — 3,846 24,870 113 (8,437 ) 20,392 Inventory — 9,312 13,738 — — 23,050 Prepaid expenses and other assets — 7,836 2,523 8,530 — 18,889 Deferred tax asset — 2,743 6,847 — — 9,590 Intercompany balances — 32,512 155,182 1,473 (189,167 ) — Total current assets — 209,928 249,400 24,217 (197,604 ) 285,941 Non-current assets Property, equipment and leasehold improvements, net — 17,409 84,865 485 — 102,759 Goodwill — 148,278 708,922 656 — 857,856 Other intangible assets, net — 23,260 388,281 8,562 — 420,103 Other receivables, non-current — 4,411 4,182 — — 8,593 Investment in subsidiaries 233,859 149,599 — 86 (383,544 ) — Deferred tax asset, non-current — 76,460 22,467 — (98,927 ) — Other assets, non-current — 46,090 3,413 509 — 50,012 Intercompany balances — 1,131,876 — — (1,131,876 ) — Total non-current assets 233,859 1,597,383 1,212,130 10,298 (1,614,347 ) 1,439,323 Total assets $ 233,859 $ 1,807,311 $ 1,461,530 $ 34,515 $ (1,811,951 ) $ 1,725,264 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Settlement liabilities $ — $ 136,839 $ 297 $ 4,513 $ — $ 141,649 Accounts payable and accrued expenses — 85,689 35,216 1,075 (8,437 ) 113,543 Current portion of long-term debt — 10,000 — — — 10,000 Intercompany balances — 156,536 22,949 9,682 (189,167 ) — Total current liabilities — 389,064 58,462 15,270 (197,604 ) 265,192 Non-current liabilities Deferred tax liability, non-current — 1,071 156,957 — (98,927 ) 59,101 Long-term debt, less current portion — 1,161,731 — — — 1,161,731 Other accrued expenses and liabilities — 4,924 457 — — 5,381 Intercompany balances — — 1,131,876 — (1,131,876 ) — Total non-current liabilities — 1,167,726 1,289,290 — (1,230,803 ) 1,226,213 Total liabilities — 1,556,790 1,347,752 15,270 (1,428,407 ) 1,491,405 Stockholders’ Equity Common stock 91 — — — — 91 Convertible preferred stock — — — — — — Additional paid-in capital 248,491 87,202 2,269 21,110 (110,581 ) 248,491 Retained earnings (deficit) 160,621 162,623 111,509 (738 ) (273,394 ) 160,621 Accumulated other comprehensive income (loss) 696 696 — (1,127 ) 431 696 Treasury stock, at cost (176,040 ) — — — — (176,040 ) Total stockholders’ equity 233,859 250,521 113,778 19,245 (383,544 ) 233,859 Total liabilities and stockholders’ equity $ 233,859 $ 1,807,311 $ 1,461,530 $ 34,515 $ (1,811,951 ) $ 1,725,264 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Three Months Ended March 31, 2015 Parent Subsidiary Guarantor Non- Eliminations Total Cash flows from operating activities Net income (loss) $ 469 $ 14,204 $ (10,955 ) $ 267 $ (3,516 ) $ 469 Adjustments to reconcile net income (loss) to cash (used in) provided by operating activities: Depreciation and amortization — 3,989 26,313 730 — 31,032 Amortization of financing costs — 2,072 — — — 2,072 Loss on sale or disposal of assets — 2 — — — 2 Accretion of contract rights — — 2,104 — — 2,104 Provision for bad debts — — 2,266 — — 2,266 Equity in income of subsidiaries (469 ) (3,047 ) — — 3,516 — Stock-based compensation — 1,674 — — 119 1,793 Other non-cash items — — 231 — — 231 Changes in operating assets and liabilities: Net settlement receivables and liabilities — 38,671 157 (2,855 ) — 35,973 Other changes in operating assets and liabilities (5 ) 13,617 (3,350 ) (269 ) (119 ) 9,874 Net cash (used in) provided by operating activities (5 ) 71,182 16,766 (2,127 ) — 85,816 Cash flows from investing activities Capital expenditures — (2,434 ) (9,902 ) (280 ) — (12,616 ) Proceeds from sale of fixed assets — 1 — — — 1 Advances under development and placement agreements — — (1,255 ) — — (1,255 ) Repayments under development agreements — — 1,217 — — 1,217 Changes in restricted cash and cash equivalents — 59 — — — 59 Intercompany investing activities (1,023 ) 164 — (48 ) 907 — Net cash used in investing activities (1,023 ) (2,210 ) (9,940 ) (328 ) 907 (12,594 ) Cash flows from financing activities Repayments of credit facility — (17,500 ) — — — (17,500 ) Debt issuance costs — (252 ) — — — (252 ) Proceeds from exercise of stock options 1,048 — — — — 1,048 Purchase of treasury stock (20 ) — — — — (20 ) Intercompany financing activities — 1,072 — (165 ) (907 ) — Net cash provided by (used in) financing activities 1,028 (16,680 ) — (165 ) (907 ) (16,724 ) Effect of exchange rates on cash — — — (580 ) — (580 ) Cash and cash equivalents Net increase (decrease) for the period — 52,292 6,826 (3,200 ) — 55,918 Balance, beginning of the period — 68,143 6,489 14,463 — 89,095 Balance, end of the period $ — $ 120,435 $ 13,315 $ 11,263 $ — $ 145,013 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Three Months Ended March 31, 2014 Parent Subsidiary Guarantor Non- Eliminations Total Cash flows from operating activities Net income $ 7,489 $ 7,489 $ 2,602 $ 2,480 $ (12,571 ) $ 7,489 Adjustments to reconcile net income to cash (used in) provided by operating activities: Depreciation and amortization — 4,113 1 167 — 4,281 Amortization of financing costs — 471 — — — 471 Loss on sale or disposal of assets — 124 — — — 124 Provision for bad debts — — 2,014 — — 2,014 Equity in income of subsidiaries (7,489 ) (5,082 ) — — 12,571 — Stock-based compensation — 2,057 — — — 2,057 Changes in operating assets and liabilities: Net settlement receivables and liabilities — 63,982 218 (1,011 ) — 63,189 Other changes in operating assets and liabilities (51 ) 18,829 (4,360 ) (7,446 ) — 6,972 Net cash (used in) provided by operating activities (51 ) 91,983 475 (5,810 ) — 86,597 Cash flows from investing activities Capital expenditures — (2,707 ) (93 ) (225 ) — (3,025 ) Proceeds from sale of fixed assets — 192 — — — 192 Changes in restricted cash and cash equivalents — (46 ) — — — (46 ) Intercompany investing activities 378 (9,663 ) — (1,590 ) 10,875 — Net cash provided by (used in) investing activities 378 (12,224 ) (93 ) (1,815 ) 10,875 (2,879 ) Cash flows from financing activities Repayments against prior credit facility — (3,000 ) — — — (3,000 ) Proceeds from exercise of stock options 2,440 — — — — 2,440 Purchase of treasury stock (2,767 ) — — — — (2,767 ) Intercompany financing activities — 987 — 9,888 (10,875 ) — Net cash (used in) provided by financing activities (327 ) (2,013 ) — 9,888 (10,875 ) (3,327 ) Effect of exchange rates on cash — — — (79 ) — (79 ) Cash and cash equivalents Net increase for the period 77,746 382 2,184 — 80,312 Balance, beginning of the period — 100,573 2,149 11,532 — 114,254 Balance, end of the period $ — $ 178,319 $ 2,531 $ 13,716 $ — $ 194,566 | 20. CONDENSED CONSOLIDATING FINANCIAL INFORMATION We conduct substantially all of our business through our U.S. and foreign subsidiaries. Everi Payments Inc.’s (formerly known as Global Cash Access, Inc.) (“Subsidiary Issuer”) obligations under the Unsecured Notes are fully and unconditionally guaranteed, subject to certain customary release provisions, on a joint and several basis by Everi Holdings Inc. (formerly known as Global Cash Access Holdings, Inc.) (“Parent”) and substantially all of our 100%-owned U.S. subsidiaries other than Subsidiary Issuer (the “Guarantor Subsidiaries” and, together with Parent, the “Guarantors” and each a “Guarantor” ). The guarantees of our Unsecured Notes will be released under the following customary circumstances: (i) the sale or disposition of all or substantially all of the assets of the Guarantor (by way of merger, consolidation, or otherwise) to a person that is not (either before or after giving effect to such transaction) Parent, Subsidiary Issuer or a restricted subsidiary; (ii) the sale or disposition of sufficient capital stock of the Guarantor to a person that is not (either before or after giving effect to such transaction) Parent, Subsidiary Issuer or a restricted subsidiary and the Guarantor ceases to be a restricted subsidiary of Subsidiary Issuer as a result of the sale or other disposition; (iii) the designation of the Guarantor as an unrestricted subsidiary in accordance with the Indenture; or (iv) the legal or covenant defeasance of the Unsecured Notes or the satisfaction and discharge of the Indenture. Presented below is condensed consolidating financial information for (a) Parent, (b) Subsidiary Issuer, (c) the Guarantor Subsidiaries and (d) our U.S. subsidiaries that are not Guarantor Subsidiaries and our foreign subsidiaries (collectively, the “Non-Guarantor Subsidiaries”) as of June 30, 2015 and for the three- and six-month periods ended June 30, 2015 and 2014. The condensed consolidating financial information has been presented to show the nature of assets held and the results of operations and cash flows of Parent, Subsidiary Issuer, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries assuming that the guarantee structure of the Unsecured Notes had been in effect at the beginning of the periods presented. SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Three Months Ended June 30, 2015 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 139,818 $ 62,440 $ 4,256 $ (150 ) $ 206,364 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 110,659 14,375 2,188 — 127,222 Operating expenses — 18,809 7,736 452 (150 ) 26,847 Research and development — — 4,470 — — 4,470 Depreciation — 1,787 8,880 50 — 10,717 Amortization — 2,193 17,964 615 — 20,772 Total costs and expenses — 133,448 53,425 3,305 (150 ) 190,028 Operating income — 6,370 9,015 951 — 16,336 Other expense (income) Interest expense, net of interest income — 1,834 23,036 88 — 24,958 Equity in loss (income) of subsidiaries 12,741 (3,665 ) — — (9,076 ) — Loss on extinguishment of debt — 12,977 — — — 12,977 Total other expense (income) 12,741 11,146 23,036 88 (9,076 ) 37,935 (Loss) income from operations before tax (12,741 ) (4,776 ) (14,021 ) 863 9,076 (21,599 ) Income tax (benefit) expense — (3,684 ) (5,502 ) 328 — (8,858 ) Net (loss) income (12,741 ) (1,092 ) (8,519 ) 535 9,076 (12,741 ) Foreign currency translation 811 — — 811 (811 ) 811 Comprehensive (loss) income $ (11,930 ) $ (1,092 ) $ (8,519 ) $ 1,346 $ 8,265 $ (11,930 ) SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Three Months Ended June 30, 2014 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 134,198 $ 7,044 $ 3,898 $ (194 ) $ 144,946 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 104,918 2,243 2,214 — 109,375 Operating expenses — 20,000 778 677 (194 ) 21,261 Depreciation — 1,870 1 48 — 1,919 Amortization — 2,644 — 125 — 2,769 Total costs and expenses — 129,432 3,022 3,064 (194 ) 135,324 Operating income — 4,766 4,022 834 — 9,622 Other (income) expense Interest expense, net of interest income — 1,990 — 93 — 2,083 Equity in income of subsidiaries (4,724 ) (3,343 ) — — 8,067 — Total other (income) expense (4,724 ) (1,353 ) — 93 8,067 2,083 Income from operations before tax 4,724 6,119 4,022 741 (8,067 ) 7,539 Income tax expense — 1,187 1,413 215 — 2,815 Net income 4,724 4,932 2,609 526 (8,067 ) 4,724 Foreign currency translation 381 — — 381 (381 ) 381 Comprehensive income $ 5,105 $ 4,932 $ 2,609 $ 907 $ (8,448 ) $ 5,105 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Six Months Ended June 30, 2015 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 281,228 $ 124,809 $ 8,086 $ (286 ) $ 413,837 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 221,248 28,746 4,251 — 254,245 Operating expenses — 23,000 19,095 879 (286 ) 42,688 Research and development — — 9,906 — — 9,906 Depreciation — 3,561 17,422 111 — 21,094 Amortization — 4,408 35,735 1,284 — 41,427 Total costs and expenses — 252,217 110,904 6,525 (286 ) 369,360 Operating income — 29,011 13,905 1,561 — 44,477 Other expense (income) Interest expense, net of interest income — 4,612 45,823 178 — 50,613 Equity in loss (income) of subsidiaries 12,272 (6,712 ) — — (5,560 ) — Loss on extinguishment of debt — 12,977 — — — 12,977 Total other expense (income) 12,272 10,877 45,823 178 (5,560 ) 63,590 (Loss) income from operations before tax (12,272 ) 18,134 (31,918 ) 1,383 5,560 (19,113 ) Income tax expense (benefit) — 5,022 (12,444 ) 581 — (6,841 ) Net (loss) income (12,272 ) 13,112 (19,474 ) 802 5,560 (12,272 ) Foreign currency translation (62 ) — — (62 ) 62 (62 ) Comprehensive (loss) income $ (12,334 ) $ 13,112 $ (19,474 ) $ 740 $ 5,622 $ (12,334 ) SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Six Months Ended June 30, 2014 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 274,519 $ 13,910 $ 7,451 $ (363 ) $ 295,517 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 216,257 4,286 2,071 — 222,614 Operating expenses — 38,746 1,597 1,319 (363 ) 41,299 Depreciation — 3,753 2 91 — 3,846 Amortization — 4,874 — 249 — 5,123 Total costs and expenses — 263,630 5,885 3,730 (363 ) 272,882 Operating income — 10,889 8,025 3,721 — 22,635 Other (income) expense Interest expense, net of interest income — 4,024 — (395 ) — 3,629 Equity in income of subsidiaries (12,213 ) (8,425 ) — — 20,638 — Total other (income) expense (12,213 ) (4,401 ) — (395 ) 20,638 3,629 Income from operations before tax 12,213 15,290 8,025 4,116 (20,638 ) 19,006 Income tax expense — 2,869 2,814 1,110 — 6,793 Net income 12,213 12,421 5,211 3,006 (20,638 ) 12,213 Foreign currency translation 382 — — 382 (382 ) 382 Comprehensive income $ 12,595 $ 12,421 $ 5,211 $ 3,388 $ (21,020 ) $ 12,595 SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands) At June 30, 2015 Parent Subsidiary Guarantor Non- Eliminations Total ASSETS Current assets Cash and cash equivalents $ — $ 136,790 $ 16,523 $ 11,704 $ — $ 165,017 Settlement receivables — 19,721 — 3,995 — 23,716 Trade receivables, net — 5,989 35,845 — — 41,834 Other receivables — 3,183 23,736 145 (15,692 ) 11,372 Inventory — 10,075 13,378 — — 23,453 Prepaid expenses and other assets — 7,752 3,789 9,549 — 21,090 Deferred tax asset — 2,743 6,848 — — 9,591 Intercompany balances — 39,338 160,054 1,539 (200,931 ) — Total current assets — 225,591 260,173 26,932 (216,623 ) 296,073 Non-current assets Property, equipment and leasehold improvements, net — 19,467 84,649 405 — 104,521 Goodwill — 148,076 708,923 671 — 857,670 Other intangible assets, net — 22,589 373,600 7,943 — 404,132 Other receivables, non-current — 3,994 3,814 — — 7,808 Investment in subsidiaries 226,972 153,927 — 85 (380,984 ) — Deferred tax asset, non-current — 85,754 22,467 — (108,221 ) — Other assets, non-current — 32,453 3,923 539 — 36,915 Intercompany balances — 1,133,561 — — (1,133,561 ) — Total non-current assets 226,972 1,599,821 1,197,376 9,643 (1,622,766 ) 1,411,046 Total assets $ 226,972 $ 1,825,412 $ 1,457,549 $ 36,575 $ (1,839,389 ) $ 1,707,119 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Settlement liabilities $ — $ 134,604 $ 231 $ 6,376 $ — $ 141,211 Accounts payable and accrued expenses — 101,269 29,670 1,448 (15,692 ) 116,695 Current portion of long-term debt — 10,000 — — — 10,000 Intercompany balances — 161,593 30,907 8,431 (200,931 ) — Total current liabilities — 407,466 60,808 16,255 (216,623 ) 267,906 Non-current liabilities Deferred tax liability, non-current — 1,072 156,957 — (108,221 ) 49,808 Long-term debt, less current portion — 1,157,506 — — — 1,157,506 Other accrued expenses and liabilities — 4,487 440 — — 4,927 Intercompany balances — — 1,133,561 — (1,133,561 ) — Total non-current liabilities — 1,163,065 1,290,958 — (1,241,782 ) 1,212,241 Total liabilities — 1,570,531 1,351,766 16,255 (1,458,405 ) 1,480,147 Stockholders’ Equity Common stock 91 — — — — 91 Convertible preferred stock — — — — — — Additional paid-in capital 253,555 91,843 2,792 21,107 (115,742 ) 253,555 Retained earnings (deficit) 147,879 161,531 102,991 (205 ) (264,317 ) 147,879 Accumulated other comprehensive income (loss) 1,507 1,507 — (582 ) (925 ) 1,507 Treasury stock, at cost (176,060 ) — — — — (176,060 ) Total stockholders’ equity 226,972 254,881 105,783 20,320 (380,984 ) 226,972 Total liabilities and stockholders’ equity $ 226,972 $ 1,825,412 $ 1,457,549 $ 36,575 $ (1,839,389 ) $ 1,707,119 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Six Months Ended June 30, 2015 Parent Subsidiary Guarantor Non- Eliminations Total Cash flows from operating activities Net (loss) income $ (12,272 ) $ 13,112 $ (19,474 ) $ 802 $ 5,560 $ (12,272 ) Adjustments to reconcile net (loss) income to cash provided by (used in)operating activities: Depreciation and amortization — 7,969 53,157 1,395 — 62,521 Amortization of financing costs — 3,730 — — — 3,730 (Gain) loss on sale or disposal of assets — (13 ) 387 — — 374 Accretion of contract rights — — 4,092 — — 4,092 Provision for bad debts — — 4,370 — — 4,370 Loss on early extinguishment of debt — 12,977 — — — 12,977 Equity in loss (income) of subsidiaries 12,272 (6,712 ) — — (5,560 ) — Stock-based compensation — 3,432 522 — — 3,954 Other non-cash items — 76 (96 ) — — (20 ) Changes in operating assets and liabilities: Net settlement receivables and liabilities — 43,663 91 (1,970 ) — 41,784 Other changes in operating assets and liabilities 28 15,839 (10,159 ) (827 ) — 4,881 Net cash provided by (used in) operating activities 28 94,073 32,890 (600 ) — 126,391 Cash flows from investing activities Acquisitions, net of cash acquired — (2,257 ) — — — (2,257 ) Capital expenditures — (5,387 ) (23,993 ) (280 ) — (29,660 ) Proceeds from sale of fixed assets — 29 — — — 29 Repayments under development agreements — — 2,392 — — 2,392 Advances under development and placement agreements — — (1,255 ) — — (1,255 ) Changes in restricted cash and cash equivalents — 60 — — — 60 Intercompany investing activities (3,907 ) 5,423 — (106 ) (1,410 ) — Net cash used in investing activities (3,907 ) (2,132 ) (22,856 ) (386 ) (1,410 ) (30,691 ) Cash flows from financing activities Repayments of credit facility — (5,000 ) — — — (5,000 ) Repayments of secured notes — (350,000 ) — — — (350,000 ) Proceeds from issuance of secured notes — 335,000 — — — 335,000 Debt issuance costs — (1,154 ) — — — (1,154 ) Issuance of warrants 2,246 (2,246 ) — — — — Proceeds from exercise of stock options 1,673 — — — — 1,673 Purchase of treasury stock (40 ) — — — — (40 ) Intercompany financing activities — 106 — (1,516 ) 1,410 — Net cash provided by (used in) financing activities 3,879 (23,294 ) — (1,516 ) 1,410 (19,521 ) Effect of exchange rates on cash — — — (257 ) — (257 ) Cash and cash equivalents Net increase (decrease) for the period — 68,647 10,034 (2,759 ) — 75,922 Balance, beginning of the period — 68,143 6,489 14,463 — 89,095 Balance, end of the period $ — $ 136,790 $ 16,523 $ 11,704 $ — $ 165,017 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Six Months Ended June 30, 2014 Parent Subsidiary Guarantor Non- Eliminations Total Cash flows from operating activities Net income $ 12,213 $ 12,421 $ 5,211 $ 3,006 $ (20,638 ) $ 12,213 Adjustments to reconcile net income to cash (used in) provided by operating activities: Depreciation and amortization — 8,627 2 340 — 8,969 Amortization of financing costs — 942 — — — 942 Gain on sale or disposal of assets — (21 ) — — — (21 ) Provision for bad debts — — 4,229 — — 4,229 Equity in income of subsidiaries (12,213 ) (8,425 ) — — 20,638 — Stock-based compensation — 5,409 — — — 5,409 Changes in operating assets and liabilities: Net settlement receivables and liabilities — 41,722 192 896 — 42,810 Other changes in operating assets and liabilities (31 ) 17,615 (9,289 ) (7,417 ) — 878 Net cash (used in) provided by operating activities (31 ) 78,290 345 (3,175 ) — 75,429 Cash flows from investing activities Acquisitions, net of cash acquired — (11,845 ) — — — (11,845 ) Capital expenditures — (6,977 ) (203 ) (313 ) — (7,493 ) Proceeds from sale of fixed assets — 213 — — — 213 Changes in restricted cash and cash equivalents — (45 ) — — — (45 ) Intercompany investing activities 2,022 (11,622 ) — (1,594 ) 11,194 — Net cash provided by (used in) investing activities 2,022 (30,276 ) (203 ) (1,907 ) 11,194 (19,170 ) Cash flows from financing activities Repayments of prior credit facility — (7,000 ) — — — (7,000 ) Proceeds from exercise of stock options 4,613 — — — — 4,613 Purchase of treasury stock (6,604 ) — — — — (6,604 ) Intercompany financing activities — 1,188 — 10,006 (11,194 ) — Net cash (used in) provided by financing activities (1,991 ) (5,812 ) — 10,006 (11,194 ) (8,991 ) Effect of exchange rates on cash — — — 476 — 476 Cash and cash equivalents Net increase for the period — 42,202 142 5,400 — 47,744 Balance, beginning of the period — 100,573 2,149 11,532 — 114,254 Balance, end of the period $ — $ 142,775 $ 2,291 $ 16,932 $ — $ 161,998 | 23. CONDENSED We conduct substantially all of our business through our U.S. and foreign subsidiaries. Everi Payments Inc.’s (formerly known as Global Cash Access, Inc.) (“Subsidiary Issuer”) obligations under the Unsecured Notes are fully and unconditionally guaranteed, subject to certain customary release provisions, on a joint and several basis by Everi Holdings Inc. (formerly known as Global Cash Access Holdings, Inc.) (“Parent”) and substantially all of our 100%-owned U.S. subsidiaries other than Subsidiary Issuer (the “Guarantor Subsidiaries” and, together with Parent, the “Guarantors” and each a “Guarantor” ). The guarantees of our Unsecured Notes will be released under the following customary circumstances: (i) the sale or disposition of all or substantially all of the assets of the Guarantor (by way of merger, consolidation, or otherwise) to a person that is not (either before or after giving effect to such transaction) Parent, Subsidiary Issuer or a restricted subsidiary; (ii) the sale or disposition of sufficient capital stock of the Guarantor to a person that is not (either before or after giving effect to such transaction) Parent, Subsidiary Issuer or a restricted subsidiary and the Guarantor ceases to be a restricted subsidiary of Subsidiary Issuer as a result of the sale or other disposition; (iii) the designation of the Guarantor as an unrestricted subsidiary in accordance with the Indenture; or (iv) the legal or covenant defeasance of the Unsecured Notes or the satisfaction and discharge of the Indenture. Presented below is condensed consolidating financial information for (a) Parent, (b) Subsidiary Issuer, (c) the Guarantor Subsidiaries and (d) our U.S. subsidiaries that are not Guarantor Subsidiaries and our foreign subsidiaries (collectively, the “Non-Guarantor Subsidiaries”) as of December 31, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012. The condensed consolidating financial information has been presented to show the nature of assets held and the results of operations and cash flows of Parent, Subsidiary Issuer, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries assuming that the guarantee structure of the Unsecured Notes had been in effect at the beginning of the periods presented. SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Year Ended December 31, 2014 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total Revenues $ — $ 542,206 $ 35,689 $ 15,891 $ (733 ) $ 593,053 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 422,544 10,864 6,663 — 440,071 Operating expenses — 88,087 5,719 2,379 (733 ) 95,452 Research and development — — 804 — — 804 Depreciation — 7,428 1,134 183 — 8,745 Amortization — 11,180 2,454 565 — 14,199 Total costs and expenses — 529,239 20,975 9,790 (733 ) 559,271 Operating income — 12,967 14,714 6,101 — 33,782 Other (income) expense Interest expense, net of interest income — 7,675 3,290 (209 ) — 10,756 Equity in income of subsidiaries (12,140 ) (15,218 ) — — 27,358 — Loss on extinguishment of debt — 2,523 202 — — 2,725 Total other (income) expense (12,140 ) (5,020 ) 3,492 (209 ) 27,358 13,481 Income from operations before tax 12,140 17,987 11,222 6,310 (27,358 ) 20,301 Income tax expense — 2,801 3,784 1,576 — 8,161 Net income 12,140 15,186 7,438 4,734 (27,358 ) 12,140 Foreign currency translation (1,258 ) — — (1,258 ) 1,258 (1,258 ) Comprehensive income $ 10,882 $ 15,186 $ 7,438 $ 3,476 $ (26,100 ) $ 10,882 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Year Ended December 31, 2013 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total Revenues $ — $ 541,002 $ 28,277 $ 13,838 $ (673 ) $ 582,444 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 424,129 7,905 7,760 — 439,794 Operating expenses — 71,623 3,445 2,167 (673 ) 76,562 Depreciation — 7,186 1 163 — 7,350 Amortization — 9,217 — 371 — 9,588 Total costs and expenses — 512,155 11,351 10,461 (673 ) 533,294 Operating income — 28,847 16,926 3,377 — 49,150 Other (income) expense Interest expense, net of interest income — 10,342 — (77 ) — 10,265 Equity in income of subsidiaries (24,398 ) (13,596 ) — — 37,994 — Total other (income) expense (24,398 ) (3,254 ) — (77 ) 37,994 10,265 Income from operations before tax 24,398 32,101 16,926 3,454 (37,994 ) 38,885 Income tax expense — 7,703 5,924 860 — 14,487 Net income 24,398 24,398 11,002 2,594 (37,994 ) 24,398 Foreign currency translation 269 — — 269 (269 ) 269 Comprehensive income $ 24,667 $ 24,398 $ 11,002 $ 2,863 $ (38,263 ) $ 24,667 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Year Ended December 31, 2012 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total Revenues $ — $ 556,376 $ 18,623 $ 10,001 $ (514 ) $ 584,486 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 426,183 3,376 6,500 — 436,059 Operating expenses — 72,551 1,880 1,889 (514 ) 75,806 Depreciation — 6,617 5 221 — 6,843 Amortization — 9,543 — 253 — 9,796 Total costs and expenses — 514,894 5,261 8,863 (514 ) 528,504 Operating income — 41,482 13,362 1,138 — 55,982 Other (income) expense Interest expense, net of interest income — 15,591 — (72 ) — 15,519 Equity in income of subsidiaries (25,689 ) (9,546 ) — — 35,235 — Total other (income) expense (25,689 ) 6,045 — (72 ) 35,235 15,519 Income from operations before tax 25,689 35,437 13,362 1,210 (35,235 ) 40,463 Income tax expense — 9,748 4,677 349 — 14,774 Net income 25,689 25,689 8,685 861 (35,235 ) 25,689 Foreign currency translation 218 — — 218 (218 ) 218 Comprehensive income $ 25,907 $ 25,689 $ 8,685 $ 1,079 $ (35,453 ) $ 25,907 SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands) At December 31, 2014 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total ASSETS Current assets Cash and cash equivalents $ — $ 68,143 $ 6,489 $ 14,463 $ — $ 89,095 Settlement receivables — 40,157 — 3,131 — 43,288 Trade Receivables, net — 6,578 31,116 3 — 37,697 Other receivables — 3,416 16,992 145 — 20,553 Inventory — 10,595 16,568 — — 27,163 Prepaid expenses and other assets — 7,143 2,821 9,024 — 18,988 Deferred tax asset — 2,743 6,848 — — 9,591 Intercompany balances — 18,038 151,179 1,623 (170,840 ) — Total current assets — 156,813 232,013 28,389 (170,840 ) 246,375 Non-current assets Property, equipment and leasehold improvements, net — 17,864 87,898 323 — 106,085 Goodwill — 148,278 708,922 713 — 857,913 Other intangible assets, net — 24,771 402,816 9,198 — 436,785 Other receivables, non-current — 4,411 4,773 — — 9,184 Investment in subsidiaries 231,473 147,195 — 86 (378,754 ) — Deferred tax asset, non-current — 78,229 — — (78,229 ) — Other assets, non-current — 47,508 3,366 69 — 50,943 Intercompany balances — 1,130,380 — — (1,130,380 ) — Total non-current assets 231,473 1,598,636 1,207,775 10,389 (1,587,363 ) 1,460,910 Total assets $ 231,473 $ 1,755,449 $ 1,439,788 $ 38,778 $ (1,758,203 ) $ 1,707,285 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Settlement liabilities $ — $ 111,375 $ 140 $ 7,642 $ — $ 119,157 Accounts payable and accrued expenses — 61,544 41,395 1,729 — 104,668 Current portion of long-term debt — 10,000 — — — 10,000 Intercompany balances — 152,802 8,159 9,879 (170,840 ) — Total current liabilities — 335,721 49,694 19,250 (170,840 ) 233,825 Non-current liabilities Deferred tax liability, non-current — 1,072 134,490 — (78,229 ) 57,333 Long-term debt, less current portion — 1,178,787 — — — 1,178,787 Other accrued expenses and liabilities — 5,377 490 — — 5,867 Intercompany balances — — 1,130,380 — (1,130,380 ) — Total non-current liabilities — 1,185,236 1,265,360 — (1,208,609 ) 1,241,987 Total liabilities — 1,520,957 1,315,054 19,250 (1,379,449 ) 1,475,812 Stockholders’ Equity Common stock 90 — — — — 90 Additional paid-in capital 245,682 69,654 2,269 21,115 (93,038 ) 245,682 Retained earnings (deficit) 160,152 163,269 122,465 (1,006 ) (284,728 ) 160,152 Accumulated other comprehensive income (loss) 1,569 1,569 — (581 ) (988 ) 1,569 Treasury stock, at cost (176,020 ) — — — — (176,020 ) Total stockholders’ equity 231,473 234,492 124,734 19,528 (378,754 ) 231,473 Total liabilities and stockholders’ equity $ 231,473 $ 1,755,449 $ 1,439,788 $ 38,778 $ (1,758,203 ) $ 1,707,285 SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands) At December 31, 2013 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total ASSETS Current assets Cash and cash equivalents $ — $ 100,573 $ 2,149 $ 11,532 $ — $ 114,254 Settlement receivables — 34,458 — 3,807 — 38,265 Trade receivables, net — 9,030 2,622 6 — 11,658 Other receivables — 4,451 — 154 — 4,605 Inventory — 9,413 — — — 9,413 Prepaid expenses and other assets — 10,300 20 6,354 — 16,674 Deferred tax asset — 3,102 — — — 3,102 Intercompany balances — 20,005 135,542 — (155,547 ) — Total current assets — 191,332 140,333 21,853 (155,547 ) 197,971 Non-current assets Property, equipment and leasehold improvements, net — 18,282 56 372 — 18,710 Goodwill — 139,839 39,470 775 — 180,084 Other intangible assets, net — 30,229 499 807 — 31,535 Other receivables, non-current — 699 — — — 699 Investment in subsidiaries 218,604 113,350 — — (331,954 ) — Deferred tax asset, non-current — 88,253 — — (311 ) 87,942 Other assets, non-current — 10,311 — 75 — 10,386 Intercompany balances — 61,936 — 1,572 (63,508 ) — Total non-current assets 218,604 462,899 40,025 3,601 (395,773 ) 329,356 Total assets $ 218,604 $ 654,231 $ 180,358 $ 25,454 $ (551,320 ) $ 527,327 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Settlement liabilities $ — $ 137,089 $ — $ 7,933 $ — $ 145,022 Accounts payable and accrued expenses — 51,324 1,398 879 — 53,601 Current portion of long-term debt — 1,030 — — — 1,030 Intercompany balances — 135,542 — 20,005 (155,547 ) — Total current liabilities — 324,985 1,398 28,817 (155,547 ) 199,653 Non-current liabilities Deferred tax liability, non-current — — — 311 (311 ) — Long-term debt, less current portion — 101,970 — — — 101,970 Other accrued expenses and liabilities — 7,100 — — — 7,100 Intercompany balances — 1,572 61,936 — (63,508 ) — Total non-current liabilities — 110,642 61,936 311 (63,819 ) 109,070 Total liabilities — 435,627 63,334 29,128 (219,366 ) 308,723 Stockholders’ Equity Common stock 89 — — — — 89 Additional paid-in capital 231,516 67,694 2,000 1,808 (71,502 ) 231,516 Retained earnings (deficit) 148,012 148,083 115,024 (5,738 ) (257,369 ) 148,012 Accumulated other comprehensive income 2,827 2,827 — 256 (3,083 ) 2,827 Treasury stock, at cost (163,840 ) — — — — (163,840 ) Total stockholders’ equity (deficit) 218,604 218,604 117,024 (3,674 ) (331,954 ) 218,604 Total liabilities and stockholders’ equity $ 218,604 $ 654,231 $ 180,358 $ 25,454 $ (551,320 ) $ 527,327 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2014 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total Cash flows from operating activities Net income $ 12,140 $ 15,186 $ 7,438 $ 4,734 $ (27,358 ) $ 12,140 Adjustments to reconcile net income to cash (used in) provided by operating activities: Depreciation and amortization — 18,608 3,588 748 — 22,944 Amortization of financing costs — 2,035 — — — 2,035 Provision for bad debts — — 8,991 — — 8,991 Impairment Loss — 3,129 — — — 3,129 Loss on early extinguishment of debt — 2,523 202 — — 2,725 Equity in income of subsidiaries (12,140 ) (15,218 ) — — 27,358 — Stock-based compensation — 8,849 27 — — 8,876 Other non-cash items — 52 284 1 — 337 Changes in operating assets and liabilities: Net settlement receivables and liabilities — (31,414 ) 141 594 — (30,679 ) Other changes in operating assets and liabilities (47 ) 34,774 (20,047 ) (20,647 ) — (5,967 ) Net cash (used in) provided by operating activities (47 ) 38,524 624 (14,570 ) — 24,531 Cash flows from investing activities Acquisitions, net of cash acquired — (11,845 ) (1,056,155 ) — — (1,068,000 ) Capital expenditures — (5,465 ) (3,464 ) (9,092 ) — (18,021 ) Repayments under development agreements — — 276 — — 276 Changes in restricted cash and cash equivalents — (102 ) — — — (102 ) Intercompany investing activities 6,889 (1,085,709 ) — (1,425 ) 1,080,245 — Net cash provided by (used in) investing activities 6,889 (1,103,121 ) (1,059,343 ) (10,517 ) 1,080,245 (1,085,847 ) Cash flows from financing activities Repayments of prior credit facility — (103,000 ) — — — (103,000 ) Proceeds from long-term debt — 1,200,000 — — — 1,200,000 Debt issuance costs — (52,735 ) — — — (52,735 ) Proceeds from exercise of stock options 5,338 — — — — 5,338 Purchase of treasury stock (12,180 ) — — — — (12,180 ) Intercompany financing activities — (12,098 ) 1,063,059 29,284 (1,080,245 ) — Net cash (used in) provided by financing activities (6,842 ) 1,032,167 1,063,059 29,284 (1,080,245 ) 1,037,423 Effect of exchange rates on cash — — — (1,266 ) — (1,266 ) Cash and cash equivalents Net (decrease) increase for the period — (32,430 ) 4,340 2,931 — (25,159 ) Balance, beginning of the period — 100,573 2,149 11,532 — 114,254 Balance, end of the period $ — $ 68,143 $ 6,489 $ 14,463 $ — $ 89,095 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2013 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total Cash flows from operating activities Net income $ 24,398 $ 24,398 $ 11,002 $ 2,594 $ (37,994 ) $ 24,398 Adjustments to reconcile net income to cash provided by (used in) operating activities: Depreciation and amortization — 16,403 1 534 — 16,938 Amortization of financing costs — 1,793 — — — 1,793 Provision for bad debts — — 7,874 — — 7,874 Equity in income of subsidiaries (24,398 ) (13,596 ) — — 37,994 — Stock-based compensation — 5,078 — — — 5,078 Other non-cash items — 180 — (2 ) — 178 Changes in operating assets and liabilities: Net settlement receivables and liabilities — (44,264 ) — (1,729 ) — (45,993 ) Other changes in operating assets and liabilities 19 13,391 (18,880 ) (462 ) — (5,932 ) Net cash provided by (used in) operating activities 19 3,383 (3 ) 935 — 4,334 Cash flows from investing activities Capital expenditures — (13,364 ) (330 ) (206 ) — (13,900 ) Changes in restricted cash and cash equivalents — (90 ) — — — (90 ) Intercompany investing activities 9,900 (4,676 ) — — (5,224 ) — Net cash provided by (used in) investing activities 9,900 (18,130 ) (330 ) (206 ) (5,224 ) (13,990 ) Cash flows from financing activities Repayments of prior credit facility — (18,500 ) — — — (18,500 ) Debt issuance costs — (764 ) — — — (764 ) Proceeds from exercise of stock options 8,431 — — — — 8,431 Purchase of treasury stock (18,350 ) — — — — (18,350 ) Intercompany financing activities — (7,056 ) 2,000 (168 ) 5,224 — Net cash (used in) provided by financing activities (9,919 ) (26,320 ) 2,000 (168 ) 5,224 (29,183 ) Effect of exchange rates on cash — — — 73 — 73 Cash and cash equivalents Net (decrease) increase for the period — (41,067 ) 1,667 634 — (38,766 ) Balance, beginning of the period — 141,640 482 10,898 — 153,020 Balance, end of the period $ — $ 100,573 $ 2,149 $ 11,532 $ — $ 114,254 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2012 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total Cash flows from operating activities Net income $ 25,689 $ 25,689 $ 8,685 $ 861 $ (35,235 ) $ 25,689 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization — 16,160 5 474 — 16,639 Amortization of financing costs — 1,485 — — — 1,485 Provision for bad debts — 2,531 2,651 — — 5,182 Equity (income) loss (25,689 ) (9,546 ) — — 35,235 — Stock-based compensation — 6,655 — — — 6,655 Other non-cash items — 95 — — — 95 Changes in operating assets and liabilities: Net settlement receivables and liabilities — 88,354 — 2,999 — 91,353 Other changes in operating assets and liabilities 29 3,738 (10,705 ) 17,328 — 10,390 Net cash provided by operating activities 29 135,161 636 21,662 — 157,488 Cash flows from investing activities Capital expenditures — (11,546 ) (225 ) (1,015 ) — (12,786 ) Changes in restricted cash and cash equivalents — 255 — — — 255 Intercompany investing activities (6,422 ) 20,336 — — (13,914 ) — Net cash (used in) provided by investing activities (6,422 ) 9,045 (225 ) (1,015 ) (13,914 ) (12,531 ) Cash flows from financing activities Repayments of prior credit facility — (52,500 ) — — — (52,500 ) Debt issuance costs — (676 ) — — — (676 ) Proceeds from exercise of stock options 6,655 — — — — 6,655 Purchase of treasury stock (262 ) — — — — (262 ) Intercompany financing activities — 2,844 — (16,758 ) 13,914 — Net cash provided by (used in) financing activities 6,393 (50,332 ) — (16,758 ) 13,914 (46,783 ) Effect of exchange rates on cash — — — (689 ) — (689 ) Cash and cash equivalents Net increase for the period — 93,874 411 3,200 — 97,485 Balance, beginning of the period — 47,766 71 7,698 — 55,535 Balance, end of the period $ — $ 141,640 $ 482 $ 10,898 $ — $ 153,020 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Six Months Ended June 30, 2015 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 281,228 $ 124,809 $ 8,086 $ (286 ) $ 413,837 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 221,248 28,746 4,251 — 254,245 Operating expenses — 23,000 19,095 879 (286 ) 42,688 Research and development — — 9,906 — — 9,906 Depreciation — 3,561 17,422 111 — 21,094 Amortization — 4,408 35,735 1,284 — 41,427 Total costs and expenses — 252,217 110,904 6,525 (286 ) 369,360 Operating income — 29,011 13,905 1,561 — 44,477 Other expense (income) Interest expense, net of interest income — 4,612 45,823 178 — 50,613 Equity in loss (income) of subsidiaries 12,272 (6,712 ) — — (5,560 ) — Loss on extinguishment of debt — 12,977 — — — 12,977 Total other expense (income) 12,272 10,877 45,823 178 (5,560 ) 63,590 (Loss) income from operations before tax (12,272 ) 18,134 (31,918 ) 1,383 5,560 (19,113 ) Income tax expense (benefit) — 5,022 (12,444 ) 581 — (6,841 ) Net (loss) income (12,272 ) 13,112 (19,474 ) 802 5,560 (12,272 ) Foreign currency translation (62 ) — — (62 ) 62 (62 ) Comprehensive (loss) income $ (12,334 ) $ 13,112 $ (19,474 ) $ 740 $ 5,622 $ (12,334 ) SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Six Months Ended June 30, 2014 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 274,519 $ 13,910 $ 7,451 $ (363 ) $ 295,517 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 216,257 4,286 2,071 — 222,614 Operating expenses — 38,746 1,597 1,319 (363 ) 41,299 Depreciation — 3,753 2 91 — 3,846 Amortization — 4,874 — 249 — 5,123 Total costs and expenses — 263,630 5,885 3,730 (363 ) 272,882 Operating income — 10,889 8,025 3,721 — 22,635 Other (income) expense Interest expense, net of interest income — 4,024 — (395 ) — 3,629 Equity in income of subsidiaries (12,213 ) (8,425 ) — — 20,638 — Total other (income) expense (12,213 ) (4,401 ) — (395 ) 20,638 3,629 Income from operations before tax 12,213 15,290 8,025 4,116 (20,638 ) 19,006 Income tax expense — 2,869 2,814 1,110 — 6,793 Net income 12,213 12,421 5,211 3,006 (20,638 ) 12,213 Foreign currency translation 382 — — 382 (382 ) 382 Comprehensive income $ 12,595 $ 12,421 $ 5,211 $ 3,388 $ (21,020 ) $ 12,595 |
BASIS OF PRESENTATION AND SU185
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Basis of Presentation | Basis of Presentation Our unaudited condensed consolidated financial statements included herein have been prepared by us pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Some of the information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States have been condensed or omitted pursuant to such rules and regulations, although we believe the disclosures are adequate to make the information presented not misleading. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary for a fair presentation of results for the interim periods have been made. The results for the three months ended March 31, 2015 are not necessarily indicative of results to be expected for the full fiscal year. The condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. There have been no changes to our basis of presentation and significant accounting policies since the most recent filing of our Annual Report on Form 10-K, except for the following: | Basis of Presentation Our unaudited condensed consolidated financial statements included herein have been prepared by us pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Some of the information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States have been condensed or omitted pursuant to such rules and regulations, although we believe the disclosures are adequate to make the information presented not misleading. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary for a fair presentation of results for the interim periods have been made. The results for the three and six months ended June 30, 2015 are not necessarily indicative of results to be expected for the full fiscal year. The condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. There have been no changes to our basis of presentation and significant accounting policies since the most recent filing of our Annual Report on Form 10-K, except for the following: | |
Cost of Revenues (exclusive of depreciation and amortization) | Cost of Revenues (exclusive of depreciation and amortization) The cost of revenues (exclusive of depreciation and amortization) represents the direct costs required to perform revenue generating transactions. The principal costs included within cost of revenues (exclusive of depreciation and amortization) are field service and network operations personnel, those direct costs related to the inventory sold for electronic gaming machines (“EGMs”), fully integrated kiosks and system sales, commissions paid to gaming establishments, interchange fees paid to credit and debit card networks and transaction processing fees to our transaction processor. | Cost of Revenues (exclusive of depreciation and amortization) The cost of revenues (exclusive of depreciation and amortization) represents the direct costs required to perform revenue generating transactions. The principal costs included within cost of revenues (exclusive of depreciation and amortization) are field service and network operations personnel, those direct costs related to the inventory sold for electronic gaming machines (“EGMs”), fully integrated kiosks and system sales, commissions paid to gaming establishments, interchange fees paid to credit and debit card networks and transaction processing fees to our transaction processor. | Cost of Revenues (exclusive of depreciation and amortization) The cost of revenues (exclusive of depreciation and amortization) represents the direct costs required to perform revenue generating transactions. The principal costs included within cost of revenues (exclusive of depreciation and amortization) are commissions paid to gaming establishments, interchange fees paid to credit and debit card networks, transaction processing fees to our transaction processor, inventory and related costs associated with the sale of our fully integrated kiosks, electronic gaming machines and system sales, check cashing warranties, field service and network operations personnel. |
Research and Development Costs | Research and Development Costs We conduct research and development activities primarily to develop and enhance our Games and Payments platforms, as well as game content and features. We believe our ability to deliver differentiated, appealing products and services to the marketplace is based in part on our research and development investments, and we expect to continue to make such investments in the future. These research and development costs consist primarily of salaries and benefits, consulting fees, and game lab testing fees. Once the technological feasibility of a project has been established, it is transferred from research to development, and capitalization of development costs continues until the product is available for general release. | Research and Development Costs We conduct research and development activities primarily to develop and enhance our Games and Payments platforms, as well as game content and features. We believe our ability to deliver differentiated, appealing products and services to the marketplace is based in part on our research and development investments, and we expect to continue to make such investments in the future. These research and development costs consist primarily of salaries and benefits, consulting fees, and game lab testing fees. Once the technological feasibility of a project has been established, it is transferred from research to development, and capitalization of development costs continues until the product is available for general release. | Research and Development Costs We conduct research and development activities primarily to develop new gaming systems, gaming engines, casino data management systems, casino central monitoring systems, video lottery outcome determination systems, gaming platforms, and gaming content and to add enhancements to our existing product lines. We believe our ability to deliver differentiated, appealing products and services to the marketplace is based in our research and development investments, and we expect to continue to make such investments in the future. These research and development costs consist primarily of salaries and benefits, consulting fees, game lab testing fees, and an allocation of corporate facilities costs related to these activities. Once the technological feasibility of a project has been established, it is transferred from research to development, and capitalization of development costs begins until the product is available for general release. Research and development costs were $0.8 million for the year ended December 31, 2014. As research and development costs relate to our Games segment which was acquired in 2014, there were no material research and development costs for the years ended December 31, 2013 and 2012. |
Advertising, Marketing and Promotional Costs | Advertising, Marketing and Promotional Costs We expense advertising, marketing and promotional costs as incurred. Total advertising, marketing and promotional costs, included in operating expenses in the Condensed Consolidated Statements of Income and Comprehensive Income, were $0.3 million and $0.2 million for the three months ended March 31, 2015 and 2014, respectively. | Advertising, Marketing and Promotional Costs We expense advertising, marketing and promotional costs as incurred. Total advertising, marketing and promotional costs, included in operating expenses in the Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income, were $0.5 million and $0.8 million and $0.2 million and $0.4 million for the three and six months ended June 30, 2015 and 2014, respectively. | Advertising, Marketing and Promotional Costs We expense advertising, marketing and promotional costs as incurred. Total advertising, marketing and promotional costs, included in operating expenses in the consolidated statements of income and comprehensive income, were $1.1 million, $0.7 million and $0.7 million for the years ended December 31, 2014, 2013 and 2012, respectively. |
Fair Values of Financial Instruments | Fair Values of Financial Instruments The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Fair value estimates are made at a specific point in time, based upon relevant market information about the financial instrument. In determining fair value, we use a hierarchy that includes three levels which are based on the extent to which inputs used in measuring fair value are observable in the market. Level 1 indicates that the fair value is determined by using quoted prices in active markets for identical investments. Level 2 indicates that the fair value is determined using observable pricing inputs other than quoted prices in active markets such as models or other valuation methodologies. Level 3 indicates that the fair value is determined using pricing inputs that are unobservable for the investment and include situations where there is little, if any, market activity for the investment. Significant management estimates and judgment are used in the determination of the fair value of level 3 pricing inputs. The carrying amount of cash and cash equivalents, settlement receivables, trade receivables, other receivables, settlement liabilities, accounts payable and accrued expenses approximates fair value due to the short-term maturities of these instruments. The fair value of our borrowings are estimated based on various inputs to determine a market price, such as: market demand and supply, size of tranche, maturity and similar instruments trading in more active markets. The following table presents the fair value and carrying value of our long-term debt as of March 31, 2015 (amounts in thousands): Level of Hierarchy Fair Value Carrying Amount Term loan 1 $ $ Senior secured notes 3 $ $ Senior unsecured notes 3 $ $ The senior secured and senior unsecured notes were both fair valued using a Level 3 input by evaluating the trading activities of similar debt instruments as there was no market activity as of March 31, 2015. At December 31, 2014, the fair value of our long-term debt was considered to approximate the carrying amount as our acquisition of Multimedia occurred on December 19, 2014, for which our long-term debt was incurred. | Fair Values of Financial Instruments The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Fair value estimates are made at a specific point in time, based upon relevant market information about the financial instrument. In determining fair value, we use a hierarchy that includes three levels which are based on the extent to which inputs used in measuring fair value are observable in the market. Level 1 indicates that the fair value is determined by using quoted prices in active markets for identical investments. Level 2 indicates that the fair value is determined using observable pricing inputs other than quoted prices in active markets such as models or other valuation methodologies. Level 3 indicates that the fair value is determined using pricing inputs that are unobservable for the investment and include situations where there is little, if any, market activity for the investment. Significant management estimates and judgment are used in the determination of the fair value of level 3 pricing inputs. The carrying amount of cash and cash equivalents, settlement receivables, trade receivables, other receivables, settlement liabilities, accounts payable and accrued expenses approximates fair value due to the short-term maturities of these instruments. The fair value of our borrowings are estimated based on various inputs to determine a market price, such as: market demand and supply, size of tranche, maturity and similar instruments trading in more active markets. The following table presents the fair value and carrying value of our long-term debt as of June 30, 2015 (amounts in thousands): Level of Carrying Hierarchy Fair Value Value Term loan $ $ Senior secured notes $ $ Senior unsecured notes $ $ The senior secured notes were fair valued using a Level 3 input by evaluating the trading activities of similar debt instruments as there was no market activity as of June 30, 2015. The senior unsecured notes were syndicated in April 2015 and transitioned from level 3 to level 1 on the fair value hierarchy as of June 30, 2015. At December 31, 2014, the fair value of our long-term debt was considered to approximate the carrying amount as our acquisition of Multimedia occurred on December 19, 2014, for which our long-term debt was incurred. | Fair Values of Financial Instruments The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Fair value estimates are made at a specific point in time, based upon relevant market information about the financial instrument. In determining fair value, we use a hierarchy that includes three levels which are based on the extent to which inputs used in measuring fair value are observable in the market. Level 1 indicates that the fair value is determined by using quoted prices in the active markets for identical investments. Level 2 indicates that the fair value is determined using pricing inputs other than quoted prices in active markets such as models or other valuation methodologies. Level 3 indicates that the fair value is determined using pricing inputs that are unobservable for the investment and include situations where there is little, if any, market activity for the investment. Significant management estimates and judgment are used in the determination of the fair value of level 3 pricing inputs. The carrying amount of cash and cash equivalents, settlement receivables, trade receivables, other receivables, settlement liabilities, accounts payable and accrued expenses approximates fair value due to the short-term maturities of these instruments. The fair value of our borrowings are estimated based on various inputs to determine a market price, such as: market demand and supply, size of tranche, maturity and similar instruments trading in more active markets. As of December 31, 2014, the fair value of our long-term debt was considered to approximate the carrying amount of each instrument since the Merger occurred on December 19, 2014. As of December 31, 2013, the fair value of our Prior Credit Facility was approximately $104.0 million as compared to a carrying amount of $103.0 million using a Level 2 input. |
Business segment | Business Segments During the first quarter of 2015, we changed our organizational structure as part of our transformation to a Games and Payments company providing solutions to the gaming industry. As a result, information that our chief operating decision-making group regularly reviews for purposes of allocating resources and assessing performance changed. Therefore, beginning in the first quarter of 2015, we are reporting our financial performance based on our new segments described in “Note 18 – Segment Information”. We have presented prior period amounts to conform to the way we now internally manage and monitor segment performance beginning in 2015. This change had no impact on our condensed consolidated financial statements. | Business Segments During the first quarter of 2015, we changed our organizational structure as part of our transformation to a Games and Payments company providing solutions to the gaming industry. As a result, information that our chief operating decision-making group regularly reviews for purposes of allocating resources and assessing performance changed. Therefore, beginning in the first quarter of 2015, we are reporting our financial performance based on our new segments described in “Note 18. Segment Information”. We have presented prior period amounts to conform to the way we now internally manage and monitor segment performance beginning in 2015. This change had no impact on our condensed consolidated financial statements. | |
Recent Accounting Guidance | Recent Accounting Guidance Recent Accounting Guidance Not Yet Adopted In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-03, which provides guidance to simplify the presentation of debt issuance costs. These amendments require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. The pronouncement is effective for annual periods ending after December 15, 2015, and interim periods within those fiscal years, and early adoption is permitted for financial statements that have not been previously issued. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In January 2015, the FASB issued ASU No. 2015-01, which requires that an entity separately classify, present and disclose extraordinary events and transactions. The pronouncement is effective for annual periods ending after December 15, 2015. A reporting entity also may apply the amendments retrospectively to all prior periods presented in the financial statements. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In August 2014, the FASB issued ASU No. 2014-15, which provides guidance on determining when and how reporting entities must disclose going-concern uncertainties in their financial statements. The pronouncement is effective for annual periods ending after December 15, 2016, and interim periods thereafter, and early adoption is permitted. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In June 2014, the FASB issued ASU No. 2014-12, which requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. The standard is effective for annual reporting periods beginning after December 15, 2015, with early adoption permitted. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In May 2014, the FASB issued ASU No. 2014-09, which creates FASB Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers” and supersedes ASC Topic 605, “Revenue Recognition”. The guidance replaces industry specific guidance and establishes a single five-step model to identify and recognize revenue. The core principle of the guidance is that an entity should recognize revenue upon transfer of control of promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. Additionally, the guidance requires the entity to disclose further quantitative and qualitative information regarding the nature and amount of revenues arising from contracts with customers, as well as other information about the significant judgments and estimates used in recognizing revenues from contracts with customers. This guidance is effective for interim and annual reporting periods beginning after December 15, 2016. Early application is not permitted. This guidance may be adopted retrospectively or under a modified retrospective method where the cumulative effect is recognized at the date of initial application. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within our Notes to the Condensed Consolidated Financial Statements. | Recent Accounting Guidance Recent Accounting Guidance Not Yet Adopted In July 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2015-11, which provides guidance on the measurement of inventory value. The amendments require an entity to measure in scope inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. The amendments do not apply to inventory that is measured using last-in, first-out (LIFO) or the retail inventory method. The amendments apply to all other inventory, which includes inventory that is measured using first-in, first-out (FIFO) or average cost. The pronouncement is effective for annual periods beginning after December 15, 2016, and interim periods within those fiscal years, and early adoption is permitted. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-03, which provides guidance to simplify the presentation of debt issuance costs. These amendments require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. The pronouncement is effective for annual periods beginning after December 15, 2015, and interim periods within those fiscal years, and early adoption is permitted for financial statements that have not been previously issued. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In January 2015, the FASB issued ASU No. 2015-01, which requires that an entity separately classify, present and disclose extraordinary events and transactions. The pronouncement is effective for annual periods ending after December 15, 2015. A reporting entity also may apply the amendments retrospectively to all prior periods presented in the financial statements. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In August 2014, the FASB issued ASU No. 2014-15, which provides guidance on determining when and how reporting entities must disclose going-concern uncertainties in their financial statements. The pronouncement is effective for annual periods ending after December 15, 2016, and interim periods thereafter, and early adoption is permitted. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In June 2014, the FASB issued ASU No. 2014-12, which requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. The standard is effective for annual reporting periods beginning after December 15, 2015, with early adoption permitted. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within Notes to the Condensed Consolidated Financial Statements. In May 2014, the FASB issued ASU No. 2014-09, which creates FASB Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers” and supersedes ASC Topic 605, “Revenue Recognition”. The guidance replaces industry specific guidance and establishes a single five-step model to identify and recognize revenue. The core principle of the guidance is that an entity should recognize revenue upon transfer of control of promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. Additionally, the guidance requires the entity to disclose further quantitative and qualitative information regarding the nature and amount of revenues arising from contracts with customers, as well as other information about the significant judgments and estimates used in recognizing revenues from contracts with customers. This guidance is effective for interim and annual reporting periods beginning after December 15, 2016. Early application is not permitted. This guidance may be adopted retrospectively or under a modified retrospective method where the cumulative effect is recognized at the date of initial application. We are currently evaluating the impact of adopting this guidance on our condensed consolidated financial statements and disclosures included within our Notes to the Condensed Consolidated Financial Statements | Recent Accounting Guidance Recently Adopted Accounting Guidance In November 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update (“ASU”) No. 2014-17, which provides guidance on whether and at what threshold an acquired entity that is a business or nonprofit activity can apply pushdown accounting in its separate financial statements. The pronouncement was effective on November 18, 2014. There was no impact of the adoption of ASU No. 2014-17 as we do not apply push-down accounting to our acquired subsidiaries. Recent Accounting Guidance Not Yet Adopted In August 2014, the FASB issued ASU No. 2014-15, which provides guidance on determining when and how reporting entities must disclose going-concern uncertainties in their financial statements. The pronouncement is effective for annual periods ending after December 15, 2016, and interim periods thereafter, and early adoption is permitted. We are currently evaluating the impact of adopting this guidance on our Consolidated Financial Statements and disclosures included within Notes to Consolidated Financial Statements. In June 2014, the FASB issued ASU No. 2014-12, which requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. The standard is effective for annual reporting periods beginning after December 15, 2015, with early adoption permitted. We are currently evaluating the impact of adopting this guidance on our Consolidated Financial Statements and disclosures included within Notes to Consolidated Financial Statements. In May 2014, the FASB issued ASU No. 2014-09, which creates FASB ASC Topic 606, “Revenue from Contracts with Customers” and supersedes ASC Topic 605, “Revenue Recognition”. The guidance replaces industry-specific guidance and establishes a single five-step model to identify and recognize revenue. The core principle of the guidance is that an entity should recognize revenue upon transfer of control of promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. Additionally, the guidance requires the entity to disclose further quantitative and qualitative information regarding the nature and amount of revenues arising from contracts with customers, as well as other information about the significant judgments and estimates used in recognizing revenues from contracts with customers. This guidance is effective for interim and annual reporting periods beginning after December 15, 2016. Early application is not permitted. This guidance may be adopted retrospectively or under a modified retrospective method where the cumulative effect is recognized at the date of initial application. We are currently evaluating the impact of adopting this guidance on our Consolidated Financial Statements and disclosures included within our Notes to Consolidated Financial Statements |
BASIS OF PRESENTATION AND SU186
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended | 6 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Schedule of fair value and carrying value of our borrowings | The following table presents the fair value and carrying value of our long-term debt as of March 31, 2015 (amounts in thousands): Level of Hierarchy Fair Value Carrying Amount Term loan 1 $ $ Senior secured notes 3 $ $ Senior unsecured notes 3 $ $ | The following table presents the fair value and carrying value of our long-term debt as of June 30, 2015 (amounts in thousands): Level of Carrying Hierarchy Fair Value Value Term loan $ $ Senior secured notes $ $ Senior unsecured notes $ $ |
BUSINESS COMBINATIONS (Table187
BUSINESS COMBINATIONS (Tables) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
BUSINESS COMBINATIONS | |||
Schedule of total purchase consideration | The total purchase consideration for Multimedia was as follows (in thousands, except per share amounts): Amount Purchase consideration Total purchase price for Multimedia Games common stock (29,948 shares at $36.50 per share) $ Payment in respect to Multimedia Games outstanding equity awards Total merger consideration Repayments of Multimedia Games debt and other obligations Less: Multimedia Games outstanding cash at acquisition date Total purchase consideration $ | The total purchase consideration for Multimedia was as follows (in thousands, except per share amounts): Amount Purchase consideration Total purchase price for Multimedia Games common stock ( 29,948 shares at $36.50 per share) $ Payment in respect to Multimedia Games outstanding equity awards Total merger consideration Repayments of Multimedia Games debt and other obligations Less: Multimedia Games outstanding cash at acquisition date Total purchase consideration $ | The total purchase consideration for Multimedia Games was as follows (in thousands, except per share amounts): Amount Purchase consideration Total purchase price for Multimedia Games common stock (29,948 shares at $36.50 per share) $ Payment in respect to Multimedia Games outstanding equity awards Total merger consideration Repayments of Multimedia Games debt and other obligations Less: Multimedia Games outstanding cash at acquisition date Total purchase consideration $ |
Summary of estimated fair values of the assets acquired and liabilities assumed at the date of acquisition | The information below reflects the preliminary purchase price allocation (in thousands): Amount Purchase price allocation Current assets $ Property, equipment and leasehold improvements, net Goodwill Other intangible assets, net Other receivables, non-current Other assets, long-term Deferred tax asset, non-current Total assets Current liabilities Deferred tax liability, non-current Other accrued expenses and liabilities Total liabilities Net assets acquired $ | The information below reflects the preliminary purchase price allocation (in thousands): Amount Purchase price allocation Current assets $ Property, equipment and leasehold improvements, net Goodwill Other intangible assets, net Other receivables, non-current Other assets, long-term Deferred tax asset, non-current Total assets Current liabilities Deferred tax liability, non-current Other accrued expenses and liabilities Total liabilities Net assets acquired $ | The information below reflects the preliminary purchase price allocation (in thousands): Amount Purchase price allocation Current assets $ Property, equipment and leasehold improvements, net Goodwill Other intangible assets, net Other receivables, non-current Other assets, long-term Deferred tax asset, non-current Total assets Current liabilities Deferred tax liability, non-current Other accrued expenses and liabilities Total liabilities Net assets acquired $ |
Summarized acquired tangible assets | The following table summarizes acquired tangible assets (in thousands): Useful Life (years) Estimated Fair Value Property, Equipment and Leased Assets Gaming equipment 2 - 4 $ Leasehold and building improvements Lease Term Machinery and equipment 3 - 5 Other 2 - 7 Total property, equipment and leased assets $ | The following table summarizes acquired tangible assets (in thousands): Useful Life Estimated (years) Fair Value Property, equipment and leased assets Gaming equipment - 4 $ Leasehold and building improvements Lease Term Machinery and equipment - 5 Other - 7 Total property, equipment and leased assets $ | The following table summarizes acquired tangible assets (in thousands): Useful Life Estimated (years) Fair Value Property, Equipment and Leased Assets Gaming equipment - 4 $ Leasehold and building improvements Lease Term Machinery and equipment - 5 Other - 7 Total property, equipment and leased assets $ |
Summarized acquired intangible assets | The following table summarizes acquired intangible assets (in thousands): Useful Life (years) Estimated Fair Value Other intangible assets Tradenames and trademarks 3 - 7 $ Computer software 3 - 5 Developed technology 2 - 6 Customer relationships 8 - 12 Contract rights 1 - 7 Total other intangible assets $ | The following table summarizes acquired intangible assets (in thousands): Useful Life Estimated (years) Fair Value Other intangible assets Tradenames and trademarks - 7 $ Computer software - 5 Developed technology - 6 Customer relationships - 12 Contract rights - 7 Total other intangible assets $ | The following table summarizes acquired intangible assets (in thousands): Useful Life Estimated (years) Fair Value Other intangible assets Tradenames and trademarks - 7 $ Computer software - 5 Developed technology - 6 Customer relationships - 12 Contract rights - 7 Total other intangible assets $ |
TRADE RECEIVABLES (Tables)188
TRADE RECEIVABLES (Tables) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
TRADE RECEIVABLES | |||
Schedule of trade receivables | The balance of trade receivables consisted of the following (in thousands): At March 31, At December 31, 2015 2014 Trade receivables, net Games trade receivables $ $ Kiosk trade receivables Warranty and other trade receivables Total trade receivables, net $ $ | The balance of trade receivables consisted of the following (in thousands): . At June 30, At December 31, 2015 2014 Trade receivables, net Games trade receivables $ $ Kiosk trade receivables Warranty and other trade receivables Total trade receivables, net $ $ | The balance of trade receivables consisted of the following (in thousands): . At December 31, 2014 2013 Trade receivables, net Games trade receivables $ $ — Kiosk trade receivables Warranty and other trade receivables Total trade receivables, net $ $ |
OTHER RECEIVABLES (Tables)189
OTHER RECEIVABLES (Tables) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
OTHER RECEIVABLES. | |||
Schedule of other receivables | Other receivables also include income taxes receivable and other miscellaneous receivables. The balance of other receivables consisted of the following (in thousands): At March 31, At December 31, 2015 2014 Other receivables Notes and loans receivable, net of discount of $814 and $853, respectively $ $ Federal and state income tax receivable Other Total other receivables Less: Notes and loans receivable, non-current Total other receivables, current portion $ $ | The balance of other receivables consisted of the following (in thousands): At June 30, At December 31, 2015 2014 Other receivables Notes and loans receivable, net of discount of $776 and $853 , respectively $ $ Federal and state income tax receivable Other Total other receivables Less: Notes and loans receivable, non-current Total other receivables, current portion $ $ | The balance of other receivables consisted of the following (in thousands): At December 31, 2014 2013 Other receivables Notes and loans receivable, net of discount of $853 and $0 , respectively $ $ Federal and state income tax receivable Other Total other receivables Less: Notes and loans receivable, non-current Total other receivables, current portion $ $ |
PREPAID AND OTHER ASSETS (Ta190
PREPAID AND OTHER ASSETS (Tables) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
PREPAID AND OTHER ASSETS | |||
Schedule of prepaid and other assets current | The balance of prepaid and other assets consisted of the following (in thousands): At March 31, At December 31, 2015 2014 Prepaid expenses and other assets Prepaid expenses $ $ Deposits Other Total prepaid expenses and other assets $ $ | The balance of prepaid and other assets consisted of the following (in thousands): At June 30, At December 31, 2015 2014 Prepaid expenses and other assets Prepaid expenses $ $ Deposits Other Total prepaid expenses and other assets $ $ | The balance of prepaid and other assets consisted of the following (in thousands): At December 31, 2014 2013 Prepaid expenses and other assets Prepaid expenses $ $ Deposits Other Total prepaid expenses and other assets $ $ |
Schedule of prepaid and other assets non-current | The balance of other assets, non-current consisted of the following (in thousands): At March 31, At December 31, 2015 2014 Other assets, non-current Debt issuance costs $ $ Prepaid expenses and deposits, non-current Other Total other assets non-current $ $ | The balance of other assets, non-current consisted of the following (in thousands): At June 30, At December 31, 2015 2014 Other assets, non-current Debt issuance costs $ $ Prepaid expenses and deposits, non-current Other Total other assets, non-current $ $ | The balance of other assets, non-current consisted of the following (in thousands): At December 31, 2014 2013 Other assets, non-current Debt issuance costs $ $ Prepaid expenses and deposits, non-current Other Total other assets non-current $ $ |
INVENTORY (Tables)191
INVENTORY (Tables) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
INVENTORY | |||
Schedule of inventory | Inventory consisted of the following (in thousands): At March 31, At December 31, 2015 2014 Inventory Raw materials and component parts, net of reserves of $82 and $22, respectively $ $ Work in progress Finished goods Total inventory $ $ | Inventory consisted of the following (in thousands): At June 30, At December 31, 2015 2014 Inventory Raw materials and component parts, net of reserves of $142 and $22 , respectively $ $ Work in progress Finished goods Total inventory $ $ | Inventory consisted of the following (in thousands): At December 31, 2014 2013 Inventory Raw materials and component parts, net of reserves of $22 and $50 , respectively $ $ Work in progress Finished goods Total inventory $ $ |
PROPERTY, EQUIPMENT AND LEAS192
PROPERTY, EQUIPMENT AND LEASED ASSETS (Tables) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
PROPERTY, EQUIPMENT AND LEASED ASSETS | |||
Schedule of property, equipment and leased assets | Property, equipment and leased assets consist of the following (in thousands): At March 31, 2015 At December 31, 2014 Useful Life (years) Cost Accumulated Depreciation Net Book Value Cost Accumulated Depreciation Net Book Value Property, equipment and leased assets Rental pool - deployed 2 - 4 $ $ $ $ $ $ Rental pool - undeployed 2 - 4 ATM equipment 5 Office, computer and other equipment 3 Leasehold and building improvements Lease Term Machinery and equipment 3 - 5 Cash advance equipment 3 Other 2 - 5 Total $ $ $ $ $ $ | Property, equipment and leased assets consist of the following (in thousands): At June 30, 2015 At December 31, 2014 Useful Life Accumulated Net Book Accumulated Net Book (Years) Cost Depreciation Value Cost Depreciation Value Property, equipment and leased assets Rental pool - deployed - 4 $ $ $ $ $ $ Rental pool - undeployed - 4 ATM equipment 5 Office, computer and other equipment 3 Leasehold and building improvements Lease Term Machinery and equipment - 5 Cash advance equipment 3 Other - 5 Total $ $ $ $ $ $ | Property, equipment and leased assets consist of the following (amounts in thousands): At December 31, 2014 At December 31, 2013 Useful Life Accumulated Net Book Accumulated Net Book (Years) Cost Depreciation Value Cost Depreciation Value Property, equipment and leased assets Rental pool - deployed - 4 $ $ $ $ — $ — $ — Rental pool - undeployed - 4 — — — ATM equipment 5 Office, computer and other equipment 3 Leasehold and building improvements Lease Term Machinery and equipment - 5 — — — Cash advance equipment 3 Other - 5 — — — Total $ $ $ $ $ $ |
GOODWILL AND OTHER INTANGIBL193
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |||
Schedule of other intangible assets | Other intangible assets consist of the following (in thousands): At March 31, 2015 At December 31, 2014 Useful Life (years) Cost Accumulated Amortization Net Book Value Cost Accumulated Amortization Net Book Value Other intangible assets Contract rights under development and placement fee agreements 1 - 7 $ $ $ $ $ $ Customer contracts 7 - 14 Customer relationships 8 - 12 Developed technology and software 1 - 6 Patents, trademarks and other 1 - 17 Total $ $ $ $ $ $ | Other intangible assets consist of the following (in thousands): At June 30, 2015 At December 31, 2014 Useful Life Accumulated Net Book Accumulated Net Book (years) Cost Amortization Value Cost Amortization Value Other intangible assets Contract rights under development and placement fee agreements - 7 $ $ $ $ $ $ Customer contracts - 14 Customer relationships - 12 Developed technology and software - 6 Patents, trademarks and other - 17 Total $ $ $ $ $ $ | Other intangible assets consist of the following (in thousands): At December 31, 2014 At December 31, 2013 Useful Life Accumulated Net Book Accumulated Net Book (years) Cost Amortization Value Cost Amortization Value Intangible assets Contract rights under development and placement fee agreements - 7 $ $ $ $ — $ — $ — Customer contracts - 14 Customer relationships - 12 — — — Developed technology - 6 — — — Computer software - 5 Patents, trademarks and other - 17 Total $ $ $ $ $ $ |
ACCOUNTS PAYABLE AND ACCRUED194
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | |||
Schedule of accounts payable and accrued expenses | The following table presents our accounts payable and accrued expenses (in thousands): At March 31, At December 31, 2015 2014 Accounts payable and accrued expenses Trade accounts payable $ $ Accrued interest Payroll and related expenses Deferred and unearned revenues Cash access processing and related expenses Accrued taxes Other Total accounts payable and accrued expenses $ $ | The following table presents our accounts payable and accrued expenses (in thousands): | The following table presents our accounts payable and accrued expenses (amounts in thousands): At December 31, 2014 2013 Accounts payable and accrued expenses Trade accounts payable $ $ Payroll and related expenses Cash access processing and related expenses Deferred and unearned revenues Accrued taxes Accrued interest Other Total accounts payable and accrued expenses $ $ |
LONG-TERM DEBT (Tables)195
LONG-TERM DEBT (Tables) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
LONG-TERM DEBT. | |||
Schedule of total amounts of borrowings | The following table summarizes our outstanding indebtedness (in thousands): At March 31, At December 31, 2015 2014 Long-term debt Senior secured term loan $ $ Senior secured notes Senior unsecured notes Total debt Less: original issue discount Total debt after discount Less: current portion of long-term debt Long-term debt, less current portion $ $ | The following table summarizes our outstanding indebtedness (in thousands): At June 30, At December 31, 2015 2014 Long-term debt Senior secured term loan $ $ Senior secured notes Senior unsecured notes Total debt Less: original issue and warrant discount Total debt after discount Less: current portion of long-term debt Long-term debt, less current portion $ $ | The following table summarizes our indebtedness at December 31, (in thousands): At December 31, 2014 2013 Long-term debt Senior credit facility $ — $ Senior secured term loan $ $ — Senior secured notes — Senior unsecured notes — Total debt Less: original issue discount — Total debt after discount Less: current portion of long-term debt Long-term debt, less current portion $ $ |
WEIGHTED AVERAGE COMMON SHAR196
WEIGHTED AVERAGE COMMON SHARES (Tables) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
WEIGHTED AVERAGE COMMON SHARES | |||
Schedule of weighted average number of common shares outstanding used in the computation of basic and diluted earnings per share | The weighted average number of common shares outstanding used in the computation of basic and diluted earnings per share is as follows (in thousands): At March 31, At March 31, 2015 2014 Weighted average shares Weighted average number of common shares outstanding - basic Potential dilution from equity grants (1) Weighted average number of common shares outstanding - diluted (1) The potential dilution excludes the weighted average effect of equity awards to acquire 8.4 million and 5.1 million of our common stock for the three months ended March 31, 2015 and 2014, respectively, because the application of the treasury stock method, as required, makes them anti-dilutive | The weighted average number of common shares outstanding used in the computation of basic and diluted earnings per share is as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Weighted average shares Weighted average number of common shares outstanding - basic Potential dilution from equity grants (1) — — Weighted average number of common shares outstanding - diluted The Company was in a net loss position for the three and six months ended June 30, 2015, and therefore, no potential dilution from the application of the treasury stock method was applicable. The potential dilution excludes the weighted average effect of equity awards to acquire 7.5 million and 6.5 million of our common stock for the three and six months ended June 30, 2014 as the application of the treasury stock method, as required, makes them anti-dilutive. | The weighted average number of common stock outstanding used in the computation of basic and diluted earnings per share is as follows (in thousands): At December 31, 2014 2013 2012 Weighted average shares Weighted average number of common shares outstanding - basic Potential dilution from equity grants (1) Weighted average number of common shares outstanding - diluted The potential dilution excludes the weighted average effect of stock options to acquire 7.6 million, 5.9 million and 5.1 million shares of our common stock at December 31, 2014, 2013 and 2012, respectively, because the application of the treasury stock method, as required, makes them anti ‑dilutive |
SHARE-BASED COMPENSATION (Ta197
SHARE-BASED COMPENSATION (Tables) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
SHARE-BASED COMPENSATION | |||
Summary of award activity | A summary of award activity is as follows (in thousands): Stock Options Restricted Stock Granted Granted Outstanding, December 31, 2014 Additional authorized shares - - Granted - - Exercised options or vested shares Canceled or forfeited - Outstanding, March 31, 2015 | A summary of award activity is as follows (in thousands): Stock Options Restricted Stock Granted Granted Outstanding, December 31, 2014 Additional authorized shares — — Granted — Exercised options or vested shares Canceled or forfeited Outstanding, June 30, 2015 | A summary of award activity is as follows (in thousands): Stock Options Restricted Stock Granted Granted Outstanding, December 31, 2013 Additional authorized shares — — Granted Merger conversion — Exercised options or vested shares Canceled or forfeited Outstanding, December 31, 2014 |
Schedule of weighted-average assumptions, stock options | Six months ended June 30, 2015 2014 Risk-free interest rate % % Expected life of options (in years) Expected volatility % % Expected dividend yield % % | Year ended December 31, 2014 2013 2012 Risk-free interest rate % % % Expected life of options (in years) Expected volatility % % % Expected dividend yield % % % | |
Summary of option activity | Number of Common Shares (in thousands) Weighted Average Exercise Price (per share) Weighted Average Life Remaining (years) Aggregate Intrinsic Value (in thousands) Outstanding, December 31, 2014 $ $ Granted - - Exercised Canceled or forfeited Outstanding, March 31, 2015 $ $ Vested and expected to vest, March 31, 2015 $ $ Exercisable, March 31, 2015 $ $ | Weighted Number of Weighted Average Average Life Aggregate Common Shares Exercise Price Remaining Intrinsic Value (in thousands) (per share) (years) (in thousands) Outstanding, December 31, 2014 $ $ Granted Exercised Canceled or forfeited Outstanding, June 30, 2015 $ $ Vested and expected to vest, June 30, 2015 $ $ Exercisable, June 30, 2015 $ $ | Weighted Number of Weighted Average Average Life Aggregate Common Shares Exercise Price Remaining Intrinsic Value (in thousands) (per share) (years) (in thousands) Outstanding, December 31, 2013 $ $ Granted Merger conversion Exercised Canceled or forfeited Outstanding, December 31, 2014 $ $ Vested and expected to vest, December 31, 2014 $ $ Exercisable, December 31, 2014 $ $ |
Summary of non-vested share awards for time-based restricted shares | Weighted Shares Average Grant Outstanding Date Fair Value (in thousands) (per share) Outstanding, December 31, 2014 $ Granted — — Vested Forfeited Outstanding, June 30, 2015 $ |
SEGMENT INFORMATION (Tables)198
SEGMENT INFORMATION (Tables) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
SEGMENT INFORMATION | |||
Schedule of results of operations and total assets by operating segment | The following tables present segment information (in thousands): For the Three Months Ended March 31, 2015 2014 Revenues Games $ $ - Payments Total revenues $ $ Operating income Games $ $ - Payments Total operating income $ $ At March 31, At December 31, Total assets 2015 2014 Games $ $ Payments Total assets $ $ | The following tables present segment information (in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, 2015 2014 2015 2014 Revenues Games $ $ — $ $ — Payments Total revenues $ $ $ $ Operating income Games $ $ — $ $ — Payments Total operating income $ $ $ $ At June 30, 2015 December 31, 2014 Total assets Games $ $ Payments Total assets $ $ | The following tables present segment information (in thousands): For and At the Year Ended December 31, 2014 2013 2012 Revenues Games $ $ — $ — Payments Total revenues $ $ $ Operating income Games $ 1,423 $ — $ — Payments Total operating income $ $ $ Total assets Games $ $ — Payments Total assets $ $ |
FINANCIAL INFORMATION FOR GU199
FINANCIAL INFORMATION FOR GUARANTOR SUBSIDIARIES AND NON-GUARANTOR SUBSIDIARIES (Tables) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
CONDENSED CONSOLIDATING FINANCIAL INFORMATION | |||
Schedule of guarantor condensed consolidating results of operations | SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Three Months Ended March 31, 2015 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 141,410 $ 62,369 $ 3,830 $ (136 ) $ 207,473 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 110,589 14,371 2,063 — 127,023 Operating expenses — 4,191 11,359 427 (136 ) 15,841 Research and development — — 5,436 — — 5,436 Depreciation — 1,774 8,542 61 — 10,377 Amortization — 2,215 17,771 669 — 20,655 Total costs and expenses — 118,769 57,479 3,220 (136 ) 179,332 Operating income — 22,641 4,890 610 — 28,141 Other (income) expense Interest expense, net of interest income — 2,778 22,787 90 — 25,655 Equity in income of subsidiaries (469 ) (3,047 ) — — 3,516 — Total other (income) expense (469 ) (269 ) 22,787 90 3,516 25,655 Income (loss) from operations before tax 469 22,910 (17,897 ) 520 (3,516 ) 2,486 Income tax expense (benefit) — 8,706 (6,942 ) 253 — 2,017 Net income (loss) 469 14,204 (10,955 ) 267 (3,516 ) 469 Foreign currency translation (873 ) — — (873 ) 873 (873 ) Comprehensive (loss) income $ (404 ) $ 14,204 $ (10,955 ) $ (606 ) $ (2,643 ) $ (404 ) SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Three Months Ended March 31, 2014 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 140,321 $ 6,866 $ 3,553 $ (169 ) $ 150,571 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 111,338 2,043 (143 ) — 113,238 Operating expenses — 18,747 819 642 (169 ) 20,039 Depreciation — 1,883 1 43 — 1,927 Amortization — 2,230 — 124 — 2,354 Total costs and expenses — 134,198 2,863 666 (169 ) 137,558 Operating income — 6,123 4,003 2,887 — 13,013 Other (income) expense Interest expense, net of interest income — 2,034 — (488 ) — 1,546 Equity in income of subsidiaries (7,489 ) (5,082 ) — — 12,571 — Total other (income) expense (7,489 ) (3,048 ) — (488 ) 12,571 1,546 Income from operations before tax 7,489 9,171 4,003 3,375 (12,571 ) 11,467 Income tax expense — 1,682 1,401 895 — 3,978 Net income 7,489 7,489 2,602 2,480 (12,571 ) 7,489 Foreign currency translation 1 — — 1 (1 ) 1 Comprehensive income $ 7,490 $ 7,489 $ 2,602 $ 2,481 $ (12,572 ) $ 7,490 | SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Three Months Ended June 30, 2015 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 139,818 $ 62,440 $ 4,256 $ (150 ) $ 206,364 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 110,659 14,375 2,188 — 127,222 Operating expenses — 18,809 7,736 452 (150 ) 26,847 Research and development — — 4,470 — — 4,470 Depreciation — 1,787 8,880 50 — 10,717 Amortization — 2,193 17,964 615 — 20,772 Total costs and expenses — 133,448 53,425 3,305 (150 ) 190,028 Operating income — 6,370 9,015 951 — 16,336 Other expense (income) Interest expense, net of interest income — 1,834 23,036 88 — 24,958 Equity in loss (income) of subsidiaries 12,741 (3,665 ) — — (9,076 ) — Loss on extinguishment of debt — 12,977 — — — 12,977 Total other expense (income) 12,741 11,146 23,036 88 (9,076 ) 37,935 (Loss) income from operations before tax (12,741 ) (4,776 ) (14,021 ) 863 9,076 (21,599 ) Income tax (benefit) expense — (3,684 ) (5,502 ) 328 — (8,858 ) Net (loss) income (12,741 ) (1,092 ) (8,519 ) 535 9,076 (12,741 ) Foreign currency translation 811 — — 811 (811 ) 811 Comprehensive (loss) income $ (11,930 ) $ (1,092 ) $ (8,519 ) $ 1,346 $ 8,265 $ (11,930 ) SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Three Months Ended June 30, 2014 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 134,198 $ 7,044 $ 3,898 $ (194 ) $ 144,946 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 104,918 2,243 2,214 — 109,375 Operating expenses — 20,000 778 677 (194 ) 21,261 Depreciation — 1,870 1 48 — 1,919 Amortization — 2,644 — 125 — 2,769 Total costs and expenses — 129,432 3,022 3,064 (194 ) 135,324 Operating income — 4,766 4,022 834 — 9,622 Other (income) expense Interest expense, net of interest income — 1,990 — 93 — 2,083 Equity in income of subsidiaries (4,724 ) (3,343 ) — — 8,067 — Total other (income) expense (4,724 ) (1,353 ) — 93 8,067 2,083 Income from operations before tax 4,724 6,119 4,022 741 (8,067 ) 7,539 Income tax expense — 1,187 1,413 215 — 2,815 Net income 4,724 4,932 2,609 526 (8,067 ) 4,724 Foreign currency translation 381 — — 381 (381 ) 381 Comprehensive income $ 5,105 $ 4,932 $ 2,609 $ 907 $ (8,448 ) $ 5,105 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Six Months Ended June 30, 2015 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 281,228 $ 124,809 $ 8,086 $ (286 ) $ 413,837 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 221,248 28,746 4,251 — 254,245 Operating expenses — 23,000 19,095 879 (286 ) 42,688 Research and development — — 9,906 — — 9,906 Depreciation — 3,561 17,422 111 — 21,094 Amortization — 4,408 35,735 1,284 — 41,427 Total costs and expenses — 252,217 110,904 6,525 (286 ) 369,360 Operating income — 29,011 13,905 1,561 — 44,477 Other expense (income) Interest expense, net of interest income — 4,612 45,823 178 — 50,613 Equity in loss (income) of subsidiaries 12,272 (6,712 ) — — (5,560 ) — Loss on extinguishment of debt — 12,977 — — — 12,977 Total other expense (income) 12,272 10,877 45,823 178 (5,560 ) 63,590 (Loss) income from operations before tax (12,272 ) 18,134 (31,918 ) 1,383 5,560 (19,113 ) Income tax expense (benefit) — 5,022 (12,444 ) 581 — (6,841 ) Net (loss) income (12,272 ) 13,112 (19,474 ) 802 5,560 (12,272 ) Foreign currency translation (62 ) — — (62 ) 62 (62 ) Comprehensive (loss) income $ (12,334 ) $ 13,112 $ (19,474 ) $ 740 $ 5,622 $ (12,334 ) SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Six Months Ended June 30, 2014 Parent Subsidiary Guarantor Non- Eliminations Total Revenues $ — $ 274,519 $ 13,910 $ 7,451 $ (363 ) $ 295,517 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 216,257 4,286 2,071 — 222,614 Operating expenses — 38,746 1,597 1,319 (363 ) 41,299 Depreciation — 3,753 2 91 — 3,846 Amortization — 4,874 — 249 — 5,123 Total costs and expenses — 263,630 5,885 3,730 (363 ) 272,882 Operating income — 10,889 8,025 3,721 — 22,635 Other (income) expense Interest expense, net of interest income — 4,024 — (395 ) — 3,629 Equity in income of subsidiaries (12,213 ) (8,425 ) — — 20,638 — Total other (income) expense (12,213 ) (4,401 ) — (395 ) 20,638 3,629 Income from operations before tax 12,213 15,290 8,025 4,116 (20,638 ) 19,006 Income tax expense — 2,869 2,814 1,110 — 6,793 Net income 12,213 12,421 5,211 3,006 (20,638 ) 12,213 Foreign currency translation 382 — — 382 (382 ) 382 Comprehensive income $ 12,595 $ 12,421 $ 5,211 $ 3,388 $ (21,020 ) $ 12,595 | SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Year Ended December 31, 2014 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total Revenues $ — $ 542,206 $ 35,689 $ 15,891 $ (733 ) $ 593,053 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 422,544 10,864 6,663 — 440,071 Operating expenses — 88,087 5,719 2,379 (733 ) 95,452 Research and development — — 804 — — 804 Depreciation — 7,428 1,134 183 — 8,745 Amortization — 11,180 2,454 565 — 14,199 Total costs and expenses — 529,239 20,975 9,790 (733 ) 559,271 Operating income — 12,967 14,714 6,101 — 33,782 Other (income) expense Interest expense, net of interest income — 7,675 3,290 (209 ) — 10,756 Equity in income of subsidiaries (12,140 ) (15,218 ) — — 27,358 — Loss on extinguishment of debt — 2,523 202 — — 2,725 Total other (income) expense (12,140 ) (5,020 ) 3,492 (209 ) 27,358 13,481 Income from operations before tax 12,140 17,987 11,222 6,310 (27,358 ) 20,301 Income tax expense — 2,801 3,784 1,576 — 8,161 Net income 12,140 15,186 7,438 4,734 (27,358 ) 12,140 Foreign currency translation (1,258 ) — — (1,258 ) 1,258 (1,258 ) Comprehensive income $ 10,882 $ 15,186 $ 7,438 $ 3,476 $ (26,100 ) $ 10,882 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Year Ended December 31, 2013 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total Revenues $ — $ 541,002 $ 28,277 $ 13,838 $ (673 ) $ 582,444 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 424,129 7,905 7,760 — 439,794 Operating expenses — 71,623 3,445 2,167 (673 ) 76,562 Depreciation — 7,186 1 163 — 7,350 Amortization — 9,217 — 371 — 9,588 Total costs and expenses — 512,155 11,351 10,461 (673 ) 533,294 Operating income — 28,847 16,926 3,377 — 49,150 Other (income) expense Interest expense, net of interest income — 10,342 — (77 ) — 10,265 Equity in income of subsidiaries (24,398 ) (13,596 ) — — 37,994 — Total other (income) expense (24,398 ) (3,254 ) — (77 ) 37,994 10,265 Income from operations before tax 24,398 32,101 16,926 3,454 (37,994 ) 38,885 Income tax expense — 7,703 5,924 860 — 14,487 Net income 24,398 24,398 11,002 2,594 (37,994 ) 24,398 Foreign currency translation 269 — — 269 (269 ) 269 Comprehensive income $ 24,667 $ 24,398 $ 11,002 $ 2,863 $ (38,263 ) $ 24,667 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands) Year Ended December 31, 2012 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total Revenues $ — $ 556,376 $ 18,623 $ 10,001 $ (514 ) $ 584,486 Costs and expenses Cost of revenues (exclusive of depreciation and amortization) — 426,183 3,376 6,500 — 436,059 Operating expenses — 72,551 1,880 1,889 (514 ) 75,806 Depreciation — 6,617 5 221 — 6,843 Amortization — 9,543 — 253 — 9,796 Total costs and expenses — 514,894 5,261 8,863 (514 ) 528,504 Operating income — 41,482 13,362 1,138 — 55,982 Other (income) expense Interest expense, net of interest income — 15,591 — (72 ) — 15,519 Equity in income of subsidiaries (25,689 ) (9,546 ) — — 35,235 — Total other (income) expense (25,689 ) 6,045 — (72 ) 35,235 15,519 Income from operations before tax 25,689 35,437 13,362 1,210 (35,235 ) 40,463 Income tax expense — 9,748 4,677 349 — 14,774 Net income 25,689 25,689 8,685 861 (35,235 ) 25,689 Foreign currency translation 218 — — 218 (218 ) 218 Comprehensive income $ 25,907 $ 25,689 $ 8,685 $ 1,079 $ (35,453 ) $ 25,907 |
Schedule of guarantor condensed consolidating balance sheet | SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands) At March 31, 2015 Parent Subsidiary Guarantor Non- Eliminations Total ASSETS Current assets Cash and cash equivalents $ — $ 120,435 $ 13,315 $ 11,263 $ — $ 145,013 Settlement receivables — 26,950 — 2,837 — 29,787 Trade receivables, net — 6,294 32,925 1 — 39,220 Other receivables — 3,846 24,870 113 (8,437 ) 20,392 Inventory — 9,312 13,738 — — 23,050 Prepaid expenses and other assets — 7,836 2,523 8,530 — 18,889 Deferred tax asset — 2,743 6,847 — — 9,590 Intercompany balances — 32,512 155,182 1,473 (189,167 ) — Total current assets — 209,928 249,400 24,217 (197,604 ) 285,941 Non-current assets Property, equipment and leasehold improvements, net — 17,409 84,865 485 — 102,759 Goodwill — 148,278 708,922 656 — 857,856 Other intangible assets, net — 23,260 388,281 8,562 — 420,103 Other receivables, non-current — 4,411 4,182 — — 8,593 Investment in subsidiaries 233,859 149,599 — 86 (383,544 ) — Deferred tax asset, non-current — 76,460 22,467 — (98,927 ) — Other assets, non-current — 46,090 3,413 509 — 50,012 Intercompany balances — 1,131,876 — — (1,131,876 ) — Total non-current assets 233,859 1,597,383 1,212,130 10,298 (1,614,347 ) 1,439,323 Total assets $ 233,859 $ 1,807,311 $ 1,461,530 $ 34,515 $ (1,811,951 ) $ 1,725,264 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Settlement liabilities $ — $ 136,839 $ 297 $ 4,513 $ — $ 141,649 Accounts payable and accrued expenses — 85,689 35,216 1,075 (8,437 ) 113,543 Current portion of long-term debt — 10,000 — — — 10,000 Intercompany balances — 156,536 22,949 9,682 (189,167 ) — Total current liabilities — 389,064 58,462 15,270 (197,604 ) 265,192 Non-current liabilities Deferred tax liability, non-current — 1,071 156,957 — (98,927 ) 59,101 Long-term debt, less current portion — 1,161,731 — — — 1,161,731 Other accrued expenses and liabilities — 4,924 457 — — 5,381 Intercompany balances — — 1,131,876 — (1,131,876 ) — Total non-current liabilities — 1,167,726 1,289,290 — (1,230,803 ) 1,226,213 Total liabilities — 1,556,790 1,347,752 15,270 (1,428,407 ) 1,491,405 Stockholders’ Equity Common stock 91 — — — — 91 Convertible preferred stock — — — — — — Additional paid-in capital 248,491 87,202 2,269 21,110 (110,581 ) 248,491 Retained earnings (deficit) 160,621 162,623 111,509 (738 ) (273,394 ) 160,621 Accumulated other comprehensive income (loss) 696 696 — (1,127 ) 431 696 Treasury stock, at cost (176,040 ) — — — — (176,040 ) Total stockholders’ equity 233,859 250,521 113,778 19,245 (383,544 ) 233,859 Total liabilities and stockholders’ equity $ 233,859 $ 1,807,311 $ 1,461,530 $ 34,515 $ (1,811,951 ) $ 1,725,264 | SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands) At March 31, 2015 Parent Subsidiary Guarantor Non- Eliminations Total ASSETS Current assets Cash and cash equivalents $ — $ 120,435 $ 13,315 $ 11,263 $ — $ 145,013 Settlement receivables — 26,950 — 2,837 — 29,787 Trade receivables, net — 6,294 32,925 1 — 39,220 Other receivables — 3,846 24,870 113 (8,437 ) 20,392 Inventory — 9,312 13,738 — — 23,050 Prepaid expenses and other assets — 7,836 2,523 8,530 — 18,889 Deferred tax asset — 2,743 6,847 — — 9,590 Intercompany balances — 32,512 155,182 1,473 (189,167 ) — Total current assets — 209,928 249,400 24,217 (197,604 ) 285,941 Non-current assets Property, equipment and leasehold improvements, net — 17,409 84,865 485 — 102,759 Goodwill — 148,278 708,922 656 — 857,856 Other intangible assets, net — 23,260 388,281 8,562 — 420,103 Other receivables, non-current — 4,411 4,182 — — 8,593 Investment in subsidiaries 233,859 149,599 — 86 (383,544 ) — Deferred tax asset, non-current — 76,460 22,467 — (98,927 ) — Other assets, non-current — 46,090 3,413 509 — 50,012 Intercompany balances — 1,131,876 — — (1,131,876 ) — Total non-current assets 233,859 1,597,383 1,212,130 10,298 (1,614,347 ) 1,439,323 Total assets $ 233,859 $ 1,807,311 $ 1,461,530 $ 34,515 $ (1,811,951 ) $ 1,725,264 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Settlement liabilities $ — $ 136,839 $ 297 $ 4,513 $ — $ 141,649 Accounts payable and accrued expenses — 85,689 35,216 1,075 (8,437 ) 113,543 Current portion of long-term debt — 10,000 — — — 10,000 Intercompany balances — 156,536 22,949 9,682 (189,167 ) — Total current liabilities — 389,064 58,462 15,270 (197,604 ) 265,192 Non-current liabilities Deferred tax liability, non-current — 1,071 156,957 — (98,927 ) 59,101 Long-term debt, less current portion — 1,161,731 — — — 1,161,731 Other accrued expenses and liabilities — 4,924 457 — — 5,381 Intercompany balances — — 1,131,876 — (1,131,876 ) — Total non-current liabilities — 1,167,726 1,289,290 — (1,230,803 ) 1,226,213 Total liabilities — 1,556,790 1,347,752 15,270 (1,428,407 ) 1,491,405 Stockholders’ Equity Common stock 91 — — — — 91 Convertible preferred stock — — — — — — Additional paid-in capital 248,491 87,202 2,269 21,110 (110,581 ) 248,491 Retained earnings (deficit) 160,621 162,623 111,509 (738 ) (273,394 ) 160,621 Accumulated other comprehensive income (loss) 696 696 — (1,127 ) 431 696 Treasury stock, at cost (176,040 ) — — — — (176,040 ) Total stockholders’ equity 233,859 250,521 113,778 19,245 (383,544 ) 233,859 Total liabilities and stockholders’ equity $ 233,859 $ 1,807,311 $ 1,461,530 $ 34,515 $ (1,811,951 ) $ 1,725,264 | SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands) At December 31, 2014 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total ASSETS Current assets Cash and cash equivalents $ — $ 68,143 $ 6,489 $ 14,463 $ — $ 89,095 Settlement receivables — 40,157 — 3,131 — 43,288 Trade Receivables, net — 6,578 31,116 3 — 37,697 Other receivables — 3,416 16,992 145 — 20,553 Inventory — 10,595 16,568 — — 27,163 Prepaid expenses and other assets — 7,143 2,821 9,024 — 18,988 Deferred tax asset — 2,743 6,848 — — 9,591 Intercompany balances — 18,038 151,179 1,623 (170,840 ) — Total current assets — 156,813 232,013 28,389 (170,840 ) 246,375 Non-current assets Property, equipment and leasehold improvements, net — 17,864 87,898 323 — 106,085 Goodwill — 148,278 708,922 713 — 857,913 Other intangible assets, net — 24,771 402,816 9,198 — 436,785 Other receivables, non-current — 4,411 4,773 — — 9,184 Investment in subsidiaries 231,473 147,195 — 86 (378,754 ) — Deferred tax asset, non-current — 78,229 — — (78,229 ) — Other assets, non-current — 47,508 3,366 69 — 50,943 Intercompany balances — 1,130,380 — — (1,130,380 ) — Total non-current assets 231,473 1,598,636 1,207,775 10,389 (1,587,363 ) 1,460,910 Total assets $ 231,473 $ 1,755,449 $ 1,439,788 $ 38,778 $ (1,758,203 ) $ 1,707,285 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Settlement liabilities $ — $ 111,375 $ 140 $ 7,642 $ — $ 119,157 Accounts payable and accrued expenses — 61,544 41,395 1,729 — 104,668 Current portion of long-term debt — 10,000 — — — 10,000 Intercompany balances — 152,802 8,159 9,879 (170,840 ) — Total current liabilities — 335,721 49,694 19,250 (170,840 ) 233,825 Non-current liabilities Deferred tax liability, non-current — 1,072 134,490 — (78,229 ) 57,333 Long-term debt, less current portion — 1,178,787 — — — 1,178,787 Other accrued expenses and liabilities — 5,377 490 — — 5,867 Intercompany balances — — 1,130,380 — (1,130,380 ) — Total non-current liabilities — 1,185,236 1,265,360 — (1,208,609 ) 1,241,987 Total liabilities — 1,520,957 1,315,054 19,250 (1,379,449 ) 1,475,812 Stockholders’ Equity Common stock 90 — — — — 90 Additional paid-in capital 245,682 69,654 2,269 21,115 (93,038 ) 245,682 Retained earnings (deficit) 160,152 163,269 122,465 (1,006 ) (284,728 ) 160,152 Accumulated other comprehensive income (loss) 1,569 1,569 — (581 ) (988 ) 1,569 Treasury stock, at cost (176,020 ) — — — — (176,020 ) Total stockholders’ equity 231,473 234,492 124,734 19,528 (378,754 ) 231,473 Total liabilities and stockholders’ equity $ 231,473 $ 1,755,449 $ 1,439,788 $ 38,778 $ (1,758,203 ) $ 1,707,285 SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands) At December 31, 2013 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total ASSETS Current assets Cash and cash equivalents $ — $ 100,573 $ 2,149 $ 11,532 $ — $ 114,254 Settlement receivables — 34,458 — 3,807 — 38,265 Trade receivables, net — 9,030 2,622 6 — 11,658 Other receivables — 4,451 — 154 — 4,605 Inventory — 9,413 — — — 9,413 Prepaid expenses and other assets — 10,300 20 6,354 — 16,674 Deferred tax asset — 3,102 — — — 3,102 Intercompany balances — 20,005 135,542 — (155,547 ) — Total current assets — 191,332 140,333 21,853 (155,547 ) 197,971 Non-current assets Property, equipment and leasehold improvements, net — 18,282 56 372 — 18,710 Goodwill — 139,839 39,470 775 — 180,084 Other intangible assets, net — 30,229 499 807 — 31,535 Other receivables, non-current — 699 — — — 699 Investment in subsidiaries 218,604 113,350 — — (331,954 ) — Deferred tax asset, non-current — 88,253 — — (311 ) 87,942 Other assets, non-current — 10,311 — 75 — 10,386 Intercompany balances — 61,936 — 1,572 (63,508 ) — Total non-current assets 218,604 462,899 40,025 3,601 (395,773 ) 329,356 Total assets $ 218,604 $ 654,231 $ 180,358 $ 25,454 $ (551,320 ) $ 527,327 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Settlement liabilities $ — $ 137,089 $ — $ 7,933 $ — $ 145,022 Accounts payable and accrued expenses — 51,324 1,398 879 — 53,601 Current portion of long-term debt — 1,030 — — — 1,030 Intercompany balances — 135,542 — 20,005 (155,547 ) — Total current liabilities — 324,985 1,398 28,817 (155,547 ) 199,653 Non-current liabilities Deferred tax liability, non-current — — — 311 (311 ) — Long-term debt, less current portion — 101,970 — — — 101,970 Other accrued expenses and liabilities — 7,100 — — — 7,100 Intercompany balances — 1,572 61,936 — (63,508 ) — Total non-current liabilities — 110,642 61,936 311 (63,819 ) 109,070 Total liabilities — 435,627 63,334 29,128 (219,366 ) 308,723 Stockholders’ Equity Common stock 89 — — — — 89 Additional paid-in capital 231,516 67,694 2,000 1,808 (71,502 ) 231,516 Retained earnings (deficit) 148,012 148,083 115,024 (5,738 ) (257,369 ) 148,012 Accumulated other comprehensive income 2,827 2,827 — 256 (3,083 ) 2,827 Treasury stock, at cost (163,840 ) — — — — (163,840 ) Total stockholders’ equity (deficit) 218,604 218,604 117,024 (3,674 ) (331,954 ) 218,604 Total liabilities and stockholders’ equity $ 218,604 $ 654,231 $ 180,358 $ 25,454 $ (551,320 ) $ 527,327 |
Schedule of guarantor condensed consolidating cash flows | SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Three Months Ended March 31, 2015 Parent Subsidiary Guarantor Non- Eliminations Total Cash flows from operating activities Net income (loss) $ 469 $ 14,204 $ (10,955 ) $ 267 $ (3,516 ) $ 469 Adjustments to reconcile net income (loss) to cash (used in) provided by operating activities: Depreciation and amortization — 3,989 26,313 730 — 31,032 Amortization of financing costs — 2,072 — — — 2,072 Loss on sale or disposal of assets — 2 — — — 2 Accretion of contract rights — — 2,104 — — 2,104 Provision for bad debts — — 2,266 — — 2,266 Equity in income of subsidiaries (469 ) (3,047 ) — — 3,516 — Stock-based compensation — 1,674 — — 119 1,793 Other non-cash items — — 231 — — 231 Changes in operating assets and liabilities: Net settlement receivables and liabilities — 38,671 157 (2,855 ) — 35,973 Other changes in operating assets and liabilities (5 ) 13,617 (3,350 ) (269 ) (119 ) 9,874 Net cash (used in) provided by operating activities (5 ) 71,182 16,766 (2,127 ) — 85,816 Cash flows from investing activities Capital expenditures — (2,434 ) (9,902 ) (280 ) — (12,616 ) Proceeds from sale of fixed assets — 1 — — — 1 Advances under development and placement agreements — — (1,255 ) — — (1,255 ) Repayments under development agreements — — 1,217 — — 1,217 Changes in restricted cash and cash equivalents — 59 — — — 59 Intercompany investing activities (1,023 ) 164 — (48 ) 907 — Net cash used in investing activities (1,023 ) (2,210 ) (9,940 ) (328 ) 907 (12,594 ) Cash flows from financing activities Repayments of credit facility — (17,500 ) — — — (17,500 ) Debt issuance costs — (252 ) — — — (252 ) Proceeds from exercise of stock options 1,048 — — — — 1,048 Purchase of treasury stock (20 ) — — — — (20 ) Intercompany financing activities — 1,072 — (165 ) (907 ) — Net cash provided by (used in) financing activities 1,028 (16,680 ) — (165 ) (907 ) (16,724 ) Effect of exchange rates on cash — — — (580 ) — (580 ) Cash and cash equivalents Net increase (decrease) for the period — 52,292 6,826 (3,200 ) — 55,918 Balance, beginning of the period — 68,143 6,489 14,463 — 89,095 Balance, end of the period $ — $ 120,435 $ 13,315 $ 11,263 $ — $ 145,013 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Three Months Ended March 31, 2014 Parent Subsidiary Guarantor Non- Eliminations Total Cash flows from operating activities Net income $ 7,489 $ 7,489 $ 2,602 $ 2,480 $ (12,571 ) $ 7,489 Adjustments to reconcile net income to cash (used in) provided by operating activities: Depreciation and amortization — 4,113 1 167 — 4,281 Amortization of financing costs — 471 — — — 471 Loss on sale or disposal of assets — 124 — — — 124 Provision for bad debts — — 2,014 — — 2,014 Equity in income of subsidiaries (7,489 ) (5,082 ) — — 12,571 — Stock-based compensation — 2,057 — — — 2,057 Changes in operating assets and liabilities: Net settlement receivables and liabilities — 63,982 218 (1,011 ) — 63,189 Other changes in operating assets and liabilities (51 ) 18,829 (4,360 ) (7,446 ) — 6,972 Net cash (used in) provided by operating activities (51 ) 91,983 475 (5,810 ) — 86,597 Cash flows from investing activities Capital expenditures — (2,707 ) (93 ) (225 ) — (3,025 ) Proceeds from sale of fixed assets — 192 — — — 192 Changes in restricted cash and cash equivalents — (46 ) — — — (46 ) Intercompany investing activities 378 (9,663 ) — (1,590 ) 10,875 — Net cash provided by (used in) investing activities 378 (12,224 ) (93 ) (1,815 ) 10,875 (2,879 ) Cash flows from financing activities Repayments against prior credit facility — (3,000 ) — — — (3,000 ) Proceeds from exercise of stock options 2,440 — — — — 2,440 Purchase of treasury stock (2,767 ) — — — — (2,767 ) Intercompany financing activities — 987 — 9,888 (10,875 ) — Net cash (used in) provided by financing activities (327 ) (2,013 ) — 9,888 (10,875 ) (3,327 ) Effect of exchange rates on cash — — — (79 ) — (79 ) Cash and cash equivalents Net increase for the period 77,746 382 2,184 — 80,312 Balance, beginning of the period — 100,573 2,149 11,532 — 114,254 Balance, end of the period $ — $ 178,319 $ 2,531 $ 13,716 $ — $ 194,566 | SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Six Months Ended June 30, 2015 Parent Subsidiary Guarantor Non- Eliminations Total Cash flows from operating activities Net (loss) income $ (12,272 ) $ 13,112 $ (19,474 ) $ 802 $ 5,560 $ (12,272 ) Adjustments to reconcile net (loss) income to cash provided by (used in)operating activities: Depreciation and amortization — 7,969 53,157 1,395 — 62,521 Amortization of financing costs — 3,730 — — — 3,730 (Gain) loss on sale or disposal of assets — (13 ) 387 — — 374 Accretion of contract rights — — 4,092 — — 4,092 Provision for bad debts — — 4,370 — — 4,370 Loss on early extinguishment of debt — 12,977 — — — 12,977 Equity in loss (income) of subsidiaries 12,272 (6,712 ) — — (5,560 ) — Stock-based compensation — 3,432 522 — — 3,954 Other non-cash items — 76 (96 ) — — (20 ) Changes in operating assets and liabilities: Net settlement receivables and liabilities — 43,663 91 (1,970 ) — 41,784 Other changes in operating assets and liabilities 28 15,839 (10,159 ) (827 ) — 4,881 Net cash provided by (used in) operating activities 28 94,073 32,890 (600 ) — 126,391 Cash flows from investing activities Acquisitions, net of cash acquired — (2,257 ) — — — (2,257 ) Capital expenditures — (5,387 ) (23,993 ) (280 ) — (29,660 ) Proceeds from sale of fixed assets — 29 — — — 29 Repayments under development agreements — — 2,392 — — 2,392 Advances under development and placement agreements — — (1,255 ) — — (1,255 ) Changes in restricted cash and cash equivalents — 60 — — — 60 Intercompany investing activities (3,907 ) 5,423 — (106 ) (1,410 ) — Net cash used in investing activities (3,907 ) (2,132 ) (22,856 ) (386 ) (1,410 ) (30,691 ) Cash flows from financing activities Repayments of credit facility — (5,000 ) — — — (5,000 ) Repayments of secured notes — (350,000 ) — — — (350,000 ) Proceeds from issuance of secured notes — 335,000 — — — 335,000 Debt issuance costs — (1,154 ) — — — (1,154 ) Issuance of warrants 2,246 (2,246 ) — — — — Proceeds from exercise of stock options 1,673 — — — — 1,673 Purchase of treasury stock (40 ) — — — — (40 ) Intercompany financing activities — 106 — (1,516 ) 1,410 — Net cash provided by (used in) financing activities 3,879 (23,294 ) — (1,516 ) 1,410 (19,521 ) Effect of exchange rates on cash — — — (257 ) — (257 ) Cash and cash equivalents Net increase (decrease) for the period — 68,647 10,034 (2,759 ) — 75,922 Balance, beginning of the period — 68,143 6,489 14,463 — 89,095 Balance, end of the period $ — $ 136,790 $ 16,523 $ 11,704 $ — $ 165,017 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Six Months Ended June 30, 2014 Parent Subsidiary Guarantor Non- Eliminations Total Cash flows from operating activities Net income $ 12,213 $ 12,421 $ 5,211 $ 3,006 $ (20,638 ) $ 12,213 Adjustments to reconcile net income to cash (used in) provided by operating activities: Depreciation and amortization — 8,627 2 340 — 8,969 Amortization of financing costs — 942 — — — 942 Gain on sale or disposal of assets — (21 ) — — — (21 ) Provision for bad debts — — 4,229 — — 4,229 Equity in income of subsidiaries (12,213 ) (8,425 ) — — 20,638 — Stock-based compensation — 5,409 — — — 5,409 Changes in operating assets and liabilities: Net settlement receivables and liabilities — 41,722 192 896 — 42,810 Other changes in operating assets and liabilities (31 ) 17,615 (9,289 ) (7,417 ) — 878 Net cash (used in) provided by operating activities (31 ) 78,290 345 (3,175 ) — 75,429 Cash flows from investing activities Acquisitions, net of cash acquired — (11,845 ) — — — (11,845 ) Capital expenditures — (6,977 ) (203 ) (313 ) — (7,493 ) Proceeds from sale of fixed assets — 213 — — — 213 Changes in restricted cash and cash equivalents — (45 ) — — — (45 ) Intercompany investing activities 2,022 (11,622 ) — (1,594 ) 11,194 — Net cash provided by (used in) investing activities 2,022 (30,276 ) (203 ) (1,907 ) 11,194 (19,170 ) Cash flows from financing activities Repayments of prior credit facility — (7,000 ) — — — (7,000 ) Proceeds from exercise of stock options 4,613 — — — — 4,613 Purchase of treasury stock (6,604 ) — — — — (6,604 ) Intercompany financing activities — 1,188 — 10,006 (11,194 ) — Net cash (used in) provided by financing activities (1,991 ) (5,812 ) — 10,006 (11,194 ) (8,991 ) Effect of exchange rates on cash — — — 476 — 476 Cash and cash equivalents Net increase for the period — 42,202 142 5,400 — 47,744 Balance, beginning of the period — 100,573 2,149 11,532 — 114,254 Balance, end of the period $ — $ 142,775 $ 2,291 $ 16,932 $ — $ 161,998 | SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2014 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total Cash flows from operating activities Net income $ 12,140 $ 15,186 $ 7,438 $ 4,734 $ (27,358 ) $ 12,140 Adjustments to reconcile net income to cash (used in) provided by operating activities: Depreciation and amortization — 18,608 3,588 748 — 22,944 Amortization of financing costs — 2,035 — — — 2,035 Provision for bad debts — — 8,991 — — 8,991 Impairment Loss — 3,129 — — — 3,129 Loss on early extinguishment of debt — 2,523 202 — — 2,725 Equity in income of subsidiaries (12,140 ) (15,218 ) — — 27,358 — Stock-based compensation — 8,849 27 — — 8,876 Other non-cash items — 52 284 1 — 337 Changes in operating assets and liabilities: Net settlement receivables and liabilities — (31,414 ) 141 594 — (30,679 ) Other changes in operating assets and liabilities (47 ) 34,774 (20,047 ) (20,647 ) — (5,967 ) Net cash (used in) provided by operating activities (47 ) 38,524 624 (14,570 ) — 24,531 Cash flows from investing activities Acquisitions, net of cash acquired — (11,845 ) (1,056,155 ) — — (1,068,000 ) Capital expenditures — (5,465 ) (3,464 ) (9,092 ) — (18,021 ) Repayments under development agreements — — 276 — — 276 Changes in restricted cash and cash equivalents — (102 ) — — — (102 ) Intercompany investing activities 6,889 (1,085,709 ) — (1,425 ) 1,080,245 — Net cash provided by (used in) investing activities 6,889 (1,103,121 ) (1,059,343 ) (10,517 ) 1,080,245 (1,085,847 ) Cash flows from financing activities Repayments of prior credit facility — (103,000 ) — — — (103,000 ) Proceeds from long-term debt — 1,200,000 — — — 1,200,000 Debt issuance costs — (52,735 ) — — — (52,735 ) Proceeds from exercise of stock options 5,338 — — — — 5,338 Purchase of treasury stock (12,180 ) — — — — (12,180 ) Intercompany financing activities — (12,098 ) 1,063,059 29,284 (1,080,245 ) — Net cash (used in) provided by financing activities (6,842 ) 1,032,167 1,063,059 29,284 (1,080,245 ) 1,037,423 Effect of exchange rates on cash — — — (1,266 ) — (1,266 ) Cash and cash equivalents Net (decrease) increase for the period — (32,430 ) 4,340 2,931 — (25,159 ) Balance, beginning of the period — 100,573 2,149 11,532 — 114,254 Balance, end of the period $ — $ 68,143 $ 6,489 $ 14,463 $ — $ 89,095 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2013 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total Cash flows from operating activities Net income $ 24,398 $ 24,398 $ 11,002 $ 2,594 $ (37,994 ) $ 24,398 Adjustments to reconcile net income to cash provided by (used in) operating activities: Depreciation and amortization — 16,403 1 534 — 16,938 Amortization of financing costs — 1,793 — — — 1,793 Provision for bad debts — — 7,874 — — 7,874 Equity in income of subsidiaries (24,398 ) (13,596 ) — — 37,994 — Stock-based compensation — 5,078 — — — 5,078 Other non-cash items — 180 — (2 ) — 178 Changes in operating assets and liabilities: Net settlement receivables and liabilities — (44,264 ) — (1,729 ) — (45,993 ) Other changes in operating assets and liabilities 19 13,391 (18,880 ) (462 ) — (5,932 ) Net cash provided by (used in) operating activities 19 3,383 (3 ) 935 — 4,334 Cash flows from investing activities Capital expenditures — (13,364 ) (330 ) (206 ) — (13,900 ) Changes in restricted cash and cash equivalents — (90 ) — — — (90 ) Intercompany investing activities 9,900 (4,676 ) — — (5,224 ) — Net cash provided by (used in) investing activities 9,900 (18,130 ) (330 ) (206 ) (5,224 ) (13,990 ) Cash flows from financing activities Repayments of prior credit facility — (18,500 ) — — — (18,500 ) Debt issuance costs — (764 ) — — — (764 ) Proceeds from exercise of stock options 8,431 — — — — 8,431 Purchase of treasury stock (18,350 ) — — — — (18,350 ) Intercompany financing activities — (7,056 ) 2,000 (168 ) 5,224 — Net cash (used in) provided by financing activities (9,919 ) (26,320 ) 2,000 (168 ) 5,224 (29,183 ) Effect of exchange rates on cash — — — 73 — 73 Cash and cash equivalents Net (decrease) increase for the period — (41,067 ) 1,667 634 — (38,766 ) Balance, beginning of the period — 141,640 482 10,898 — 153,020 Balance, end of the period $ — $ 100,573 $ 2,149 $ 11,532 $ — $ 114,254 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2012 Parent Subsidiary Guarantor Non-Guarantor Eliminations Total Cash flows from operating activities Net income $ 25,689 $ 25,689 $ 8,685 $ 861 $ (35,235 ) $ 25,689 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization — 16,160 5 474 — 16,639 Amortization of financing costs — 1,485 — — — 1,485 Provision for bad debts — 2,531 2,651 — — 5,182 Equity (income) loss (25,689 ) (9,546 ) — — 35,235 — Stock-based compensation — 6,655 — — — 6,655 Other non-cash items — 95 — — — 95 Changes in operating assets and liabilities: Net settlement receivables and liabilities — 88,354 — 2,999 — 91,353 Other changes in operating assets and liabilities 29 3,738 (10,705 ) 17,328 — 10,390 Net cash provided by operating activities 29 135,161 636 21,662 — 157,488 Cash flows from investing activities Capital expenditures — (11,546 ) (225 ) (1,015 ) — (12,786 ) Changes in restricted cash and cash equivalents — 255 — — — 255 Intercompany investing activities (6,422 ) 20,336 — — (13,914 ) — Net cash (used in) provided by investing activities (6,422 ) 9,045 (225 ) (1,015 ) (13,914 ) (12,531 ) Cash flows from financing activities Repayments of prior credit facility — (52,500 ) — — — (52,500 ) Debt issuance costs — (676 ) — — — (676 ) Proceeds from exercise of stock options 6,655 — — — — 6,655 Purchase of treasury stock (262 ) — — — — (262 ) Intercompany financing activities — 2,844 — (16,758 ) 13,914 — Net cash provided by (used in) financing activities 6,393 (50,332 ) — (16,758 ) 13,914 (46,783 ) Effect of exchange rates on cash — — — (689 ) — (689 ) Cash and cash equivalents Net increase for the period — 93,874 411 3,200 — 97,485 Balance, beginning of the period — 47,766 71 7,698 — 55,535 Balance, end of the period $ — $ 141,640 $ 482 $ 10,898 $ — $ 153,020 |
BASIS OF PRESENTATION AND SU200
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Advertising, Marketing and Promotional Costs | |||||||||
Total advertising, marketing and promotional costs | $ 0.5 | $ 0.3 | $ 0.8 | $ 0.2 | $ 0.2 | $ 0.4 | $ 1.1 | $ 0.7 | $ 0.7 |
BASIS OF PRESENTATION AND SU201
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($) $ in Thousands | Jun. 30, 2015 | Mar. 31, 2015 |
Level 1 | Fair Value | Term Loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | $ 498,713 | $ 497,500 |
Level 1 | Carrying Amount | Term Loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 495,000 | 497,500 |
Level 3 | Fair Value | Senior secured notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 345,888 | 340,025 |
Level 3 | Fair Value | Senior unsecured notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 336,000 | 326,375 |
Level 3 | Carrying Amount | Senior secured notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 335,000 | 335,000 |
Level 3 | Carrying Amount | Senior unsecured notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | $ 350,000 | $ 350,000 |
BUSINESS COMBINATIONS (Detai202
BUSINESS COMBINATIONS (Details) - $ / shares | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 19, 2014 | Dec. 31, 2013 |
Business Combinations | |||||
Common stock par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |
Multimedia Games Holding Company Inc | |||||
Business Combinations | |||||
Common stock par value (in dollars per share) | $ 0.01 |
BUSINESS COMBINATIONS (Detai203
BUSINESS COMBINATIONS (Details 2) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Apr. 30, 2014 | Dec. 31, 2014 | Apr. 30, 2014 | Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2015 | Jun. 30, 2014 |
NEWave Inc | |||||||
Total merger consideration | $ 14,900 | $ 14,900 | $ 14,900 | ||||
Multimedia Games Holding Company Inc | |||||||
Total purchase price for Multimedia Games common stock (29,948 shares at $36.50 per share) | $ 1,093,105 | $ 1,093,105 | $ 1,093,105 | ||||
Common stock shares issued (in shares) | (29,948) | (29,948) | 29,948 | ||||
Share price (in dollars per share) | $ 36.50 | $ 36.50 | $ 36.50 | ||||
Total merger consideration | $ 1,149,389 | $ 1,149,389 | $ 1,149,389 | ||||
Repayments of debt and other obligations | 25,065 | 25,065 | |||||
Outstanding cash at acquisition date | 118,299 | (118,299) | |||||
Total purchase consideration | 1,056,155 | 1,056,155 | |||||
Multimedia Games Holding Company Inc | Equity Award Holders | |||||||
Cash consideration paid | $ 56,284 | $ 56,284 | $ 56,284 |
BUSINESS COMBINATIONS (Detai204
BUSINESS COMBINATIONS (Details 3) - USD ($) $ in Thousands | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Goodwill | $ 857,670 | $ 857,856 | $ 857,913 | $ 180,084 | $ 180,141 |
Receivables acquired | 24,700 | 24,700 | 24,700 | ||
Inventory acquired | 16,500 | 16,500 | 16,500 | ||
Multimedia Games Holding Company Inc | |||||
Current Assets | 68,548 | 68,548 | 68,548 | ||
Property, equipment and leasehold improvements, net | 87,283 | 87,283 | 87,283 | ||
Goodwill | 669,542 | 669,542 | 669,542 | ||
Other intangible assets, net | 403,300 | 403,300 | 403,300 | ||
Other receivables, non-current | 5,030 | 5,030 | 5,030 | ||
Other assets, long-term | 3,392 | 3,392 | 3,392 | ||
Deferred tax asset, non-current | 22,287 | 22,287 | 22,287 | ||
Total assets | 1,259,382 | 1,259,382 | 1,259,382 | ||
Current Liabilities | 44,291 | 44,291 | 44,291 | ||
Deferred tax liability, non-current | 158,418 | 158,418 | 158,418 | ||
Other accrued expenses and liabilities | 518 | 518 | 518 | ||
Total liabilities | 203,227 | 203,227 | 203,227 | ||
Net assets acquired | $ 1,056,155 | $ 1,056,155 | $ 1,056,155 |
BUSINESS COMBINATIONS (Detai205
BUSINESS COMBINATIONS (Details 4) - USD ($) $ in Thousands | Apr. 30, 2014 | Dec. 31, 2014 | Apr. 30, 2014 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Property, Equipment and Leased Assets | |||||||||
Estimated Fair Value | $ 87,283 | $ 87,283 | $ 87,283 | ||||||
Purchased intangible assets | |||||||||
Useful Life (years) | 3 years | ||||||||
Acquisition related costs | $ 27,400 | ||||||||
Gaming Equipment | |||||||||
Property, Equipment and Leased Assets | |||||||||
Estimated Fair Value | 78,201 | 78,201 | $ 78,201 | ||||||
Leasehold and building improvements | |||||||||
Property, Equipment and Leased Assets | |||||||||
Estimated Fair Value | 2,105 | 2,105 | 2,105 | ||||||
Machinery and equipment | |||||||||
Property, Equipment and Leased Assets | |||||||||
Estimated Fair Value | 4,126 | 4,126 | 4,126 | ||||||
Other | |||||||||
Property, Equipment and Leased Assets | |||||||||
Estimated Fair Value | 2,851 | 2,851 | $ 2,851 | ||||||
NEWave Inc | |||||||||
Purchased intangible assets | |||||||||
Discount rate (as a percent) | 15.50% | ||||||||
Aggregate purchase price | $ 14,900 | $ 14,900 | $ 14,900 | ||||||
Aggregate purchase price expected to be paid | $ 2,500 | 2,500 | |||||||
Final Payment | $ 2,300 | ||||||||
Multimedia Games Holding Company Inc | |||||||||
Property, Equipment and Leased Assets | |||||||||
Estimated Fair Value | 87,283 | $ 87,283 | 87,283 | ||||||
Purchased intangible assets | |||||||||
Aggregate purchase price | 1,149,389 | 1,149,389 | 1,149,389 | ||||||
Acquisition related costs | 400 | 1,800 | $ 1,300 | ||||||
Multimedia Games Holding Company Inc | Level 2 | |||||||||
Purchased intangible assets | |||||||||
Estimated Fair Value | 403,300 | 403,300 | 403,300 | 403,300 | 403,300 | 403,300 | |||
Multimedia Games Holding Company Inc | Level 2 | Tradenames and trademarks | |||||||||
Purchased intangible assets | |||||||||
Estimated Fair Value | 14,800 | 14,800 | 14,800 | 14,800 | 14,800 | 14,800 | |||
Multimedia Games Holding Company Inc | Level 2 | Computer software | |||||||||
Purchased intangible assets | |||||||||
Estimated Fair Value | 3,755 | 3,755 | 3,755 | 3,755 | 3,755 | 3,755 | |||
Multimedia Games Holding Company Inc | Level 2 | Developed Technology | |||||||||
Purchased intangible assets | |||||||||
Estimated Fair Value | 139,645 | 139,645 | 139,645 | 139,645 | 139,645 | 139,645 | |||
Multimedia Games Holding Company Inc | Level 2 | Customer relationships | |||||||||
Purchased intangible assets | |||||||||
Estimated Fair Value | 231,100 | 231,100 | 231,100 | 231,100 | 231,100 | 231,100 | |||
Multimedia Games Holding Company Inc | Level 2 | Contract Rights | |||||||||
Purchased intangible assets | |||||||||
Estimated Fair Value | $ 14,000 | 14,000 | 14,000 | $ 14,000 | 14,000 | $ 14,000 | |||
Multimedia Games Holding Company Inc | Gaming Equipment | |||||||||
Property, Equipment and Leased Assets | |||||||||
Estimated Fair Value | 78,201 | 78,201 | 78,201 | ||||||
Multimedia Games Holding Company Inc | Leasehold and building improvements | |||||||||
Property, Equipment and Leased Assets | |||||||||
Estimated Fair Value | 2,105 | 2,105 | 2,105 | ||||||
Multimedia Games Holding Company Inc | Machinery and equipment | |||||||||
Property, Equipment and Leased Assets | |||||||||
Estimated Fair Value | 4,126 | 4,126 | 4,126 | ||||||
Multimedia Games Holding Company Inc | Other | |||||||||
Property, Equipment and Leased Assets | |||||||||
Estimated Fair Value | $ 2,851 | $ 2,851 | $ 2,851 | ||||||
Minimum | |||||||||
Property, Equipment and Leased Assets | |||||||||
Useful Life (years) | 3 years | ||||||||
Minimum | Computer software | |||||||||
Purchased intangible assets | |||||||||
Useful Life (years) | 1 year | ||||||||
Minimum | Customer relationships | |||||||||
Purchased intangible assets | |||||||||
Useful Life (years) | 8 years | 8 years | 8 years | ||||||
Minimum | Other intangible asset | |||||||||
Purchased intangible assets | |||||||||
Discount rate (as a percent) | 10.00% | 10.00% | 10.00% | ||||||
Minimum | Gaming Equipment | |||||||||
Property, Equipment and Leased Assets | |||||||||
Useful Life (years) | 2 years | ||||||||
Minimum | Machinery and equipment | |||||||||
Property, Equipment and Leased Assets | |||||||||
Useful Life (years) | 3 years | 3 years | 3 years | 3 years | |||||
Minimum | Other | |||||||||
Property, Equipment and Leased Assets | |||||||||
Useful Life (years) | 2 years | 2 years | 2 years | 2 years | |||||
Minimum | Multimedia Games Holding Company Inc | Level 2 | Tradenames and trademarks | |||||||||
Purchased intangible assets | |||||||||
Useful Life (years) | 3 years | 3 years | 3 years | ||||||
Minimum | Multimedia Games Holding Company Inc | Level 2 | Computer software | |||||||||
Purchased intangible assets | |||||||||
Useful Life (years) | 3 years | 3 years | 3 years | ||||||
Minimum | Multimedia Games Holding Company Inc | Level 2 | Developed Technology | |||||||||
Purchased intangible assets | |||||||||
Useful Life (years) | 2 years | 2 years | 2 years | ||||||
Minimum | Multimedia Games Holding Company Inc | Level 2 | Customer relationships | |||||||||
Purchased intangible assets | |||||||||
Useful Life (years) | 8 years | 8 years | 8 years | ||||||
Minimum | Multimedia Games Holding Company Inc | Level 2 | Contract Rights | |||||||||
Purchased intangible assets | |||||||||
Useful Life (years) | 1 year | 1 year | 1 year | ||||||
Minimum | Multimedia Games Holding Company Inc | Gaming Equipment | |||||||||
Property, Equipment and Leased Assets | |||||||||
Useful Life (years) | 2 years | 2 years | |||||||
Minimum | Multimedia Games Holding Company Inc | Machinery and equipment | |||||||||
Property, Equipment and Leased Assets | |||||||||
Useful Life (years) | 3 years | 3 years | |||||||
Minimum | Multimedia Games Holding Company Inc | Other | |||||||||
Property, Equipment and Leased Assets | |||||||||
Useful Life (years) | 2 years | 2 years | |||||||
Maximum | |||||||||
Property, Equipment and Leased Assets | |||||||||
Useful Life (years) | 5 years | ||||||||
Purchased intangible assets | |||||||||
Useful Life (years) | 5 years | ||||||||
Maximum | Computer software | |||||||||
Purchased intangible assets | |||||||||
Useful Life (years) | 5 years | ||||||||
Maximum | Customer relationships | |||||||||
Purchased intangible assets | |||||||||
Useful Life (years) | 12 years | 12 years | 12 years | ||||||
Maximum | Other intangible asset | |||||||||
Purchased intangible assets | |||||||||
Discount rate (as a percent) | 11.00% | 11.00% | 11.00% | ||||||
Maximum | Gaming Equipment | |||||||||
Property, Equipment and Leased Assets | |||||||||
Useful Life (years) | 4 years | ||||||||
Maximum | Machinery and equipment | |||||||||
Property, Equipment and Leased Assets | |||||||||
Useful Life (years) | 5 years | 5 years | 5 years | 5 years | |||||
Maximum | Other | |||||||||
Property, Equipment and Leased Assets | |||||||||
Useful Life (years) | 5 years | 7 years | 5 years | 5 years | |||||
Maximum | Multimedia Games Holding Company Inc | Level 2 | Tradenames and trademarks | |||||||||
Purchased intangible assets | |||||||||
Useful Life (years) | 7 years | 7 years | 7 years | ||||||
Maximum | Multimedia Games Holding Company Inc | Level 2 | Computer software | |||||||||
Purchased intangible assets | |||||||||
Useful Life (years) | 5 years | 5 years | 5 years | ||||||
Maximum | Multimedia Games Holding Company Inc | Level 2 | Developed Technology | |||||||||
Purchased intangible assets | |||||||||
Useful Life (years) | 6 years | 6 years | 6 years | ||||||
Maximum | Multimedia Games Holding Company Inc | Level 2 | Customer relationships | |||||||||
Purchased intangible assets | |||||||||
Useful Life (years) | 12 years | 12 years | 12 years | ||||||
Maximum | Multimedia Games Holding Company Inc | Level 2 | Contract Rights | |||||||||
Purchased intangible assets | |||||||||
Useful Life (years) | 7 years | 7 years | 7 years | ||||||
Maximum | Multimedia Games Holding Company Inc | Gaming Equipment | |||||||||
Property, Equipment and Leased Assets | |||||||||
Useful Life (years) | 4 years | 4 years | |||||||
Maximum | Multimedia Games Holding Company Inc | Machinery and equipment | |||||||||
Property, Equipment and Leased Assets | |||||||||
Useful Life (years) | 5 years | 5 years | |||||||
Maximum | Multimedia Games Holding Company Inc | Other | |||||||||
Property, Equipment and Leased Assets | |||||||||
Useful Life (years) | 7 years | 7 years |
ATM FUNDING AGREEMENTS (Deta206
ATM FUNDING AGREEMENTS (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2012 | |
ATM Funding Agreements | ||||||||||
Site-Funded ATM liability | $ 69.4 | $ 71.5 | $ 69.4 | $ 69.3 | $ 68.9 | |||||
Gains (losses) related to self-insurance | 0 | 0 | $ 0 | $ 0 | 0 | 0 | ||||
Indemnification Guarantee [Member] | Cash [Member] | ||||||||||
ATM Funding Agreements | ||||||||||
Cash usage fees incurred | 0.5 | $ 0.5 | $ 1 | $ 0.6 | $ 1.2 | 2.3 | 2.2 | $ 3.1 | ||
Indemnification Guarantee [Member] | Contract Cash Solutions Agreement [Member] | ||||||||||
ATM Funding Agreements | ||||||||||
Extended agreement term | 1 year | 1 year | ||||||||
Indemnification Guarantee [Member] | Contract Cash Solutions Agreement [Member] | Cash [Member] | ||||||||||
ATM Funding Agreements | ||||||||||
Outstanding balance of ATM cash utilized | 425 | $ 500 | $ 425 | 396.3 | $ 427.1 | |||||
Indemnification Guarantee [Member] | Second Amendment Contract Cash Solutions Agreement [Member] | Cash [Member] | ||||||||||
ATM Funding Agreements | ||||||||||
Maximum amount | $ 271.8 | $ 396.3 | $ 271.8 | $ 500 | $ 400 |
TRADE RECEIVABLES (Details)207
TRADE RECEIVABLES (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
TRADE RECEIVABLES | ||||||
Trade receivables, net | $ 41,834 | $ 39,220 | $ 37,697 | $ 11,658 | ||
Warranty and other trade receivables | 4,311 | 4,742 | 4,180 | 3,396 | ||
Outstanding balance of warranty reserve | 2,900 | 2,700 | 2,784 | 2,777 | $ 6,908 | $ 6,756 |
Kiosk Sales & Services Reporting Units | ||||||
TRADE RECEIVABLES | ||||||
Trade receivables, net | 4,723 | 4,301 | 5,247 | $ 8,262 | ||
Gaming | ||||||
TRADE RECEIVABLES | ||||||
Trade receivables, net | $ 32,800 | $ 30,177 | $ 28,270 |
OTHER RECEIVABLES (Details)208
OTHER RECEIVABLES (Details) - USD ($) $ in Thousands | Jul. 17, 2014 | Jul. 17, 2014 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Financing Receivable | ||||||
Notes and loans receivables, net of discount of $0 and $853, respectively | $ 10,984 | $ 13,261 | $ 13,939 | $ 3,249 | ||
Federal and state income tax receivable | 7,465 | 15,142 | 15,092 | 16 | ||
Other | 731 | 582 | 706 | 2,039 | ||
Total Other receivables | 19,180 | 28,985 | 29,737 | 5,304 | ||
Less: Notes and loans receivable, non-current | 7,808 | 8,593 | 9,184 | 699 | ||
Total other receivables, current portion | 11,372 | 20,392 | 20,553 | 4,605 | ||
Discount of notes receivable other | $ 776 | $ 814 | $ 853 | $ 0 | ||
Bee Caves Games, Inc | ||||||
Financing Receivable | ||||||
Note receivable, Face Amount | $ 4,500 | $ 4,500 | ||||
Note receivable, stated interest rate (as a percent) | 7.00% | 7.00% | ||||
Note receivable, interest only payments term | 24 months | 24 months | ||||
Note receivable, Repayment of principle and interest term | 48 months | 48 months |
PREPAID AND OTHER ASSETS (De209
PREPAID AND OTHER ASSETS (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Prepaid expenses and other assets | ||||
Prepaid expenses | $ 7,755 | $ 6,935 | $ 7,163 | $ 7,679 |
Deposits | 9,582 | 8,781 | 6,260 | |
Other | 3,753 | 3,741 | 3,044 | 2,735 |
Total prepaid expenses and other assets | 21,090 | 18,889 | 18,988 | 16,674 |
Other assets non-current | ||||
Debt issuance costs | 26,592 | 40,012 | 41,109 | 4,081 |
Prepaid expense And Deposits non-current | 4,430 | 3,998 | 3,956 | 1,320 |
Other | 5,893 | 6,002 | 5,878 | 4,985 |
Total other assets, non-current | $ 36,915 | $ 50,012 | $ 50,943 | $ 10,386 |
INVENTORY (Details)210
INVENTORY (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
INVENTORY | ||||
Raw materials and component parts, net of reserves of $0 and $22, respectively | $ 19,387 | $ 19,997 | $ 21,151 | $ 7,147 |
Work in progress | 1,403 | 1,406 | 803 | 1,504 |
Finished goods | 2,663 | 1,647 | 5,209 | 762 |
Inventory, Net, Total | 23,453 | 23,050 | 27,163 | 9,413 |
Raw materials and component parts, reserves | $ 142 | $ 82 | $ 22 | $ 50 |
PROPERTY, EQUIPMENT AND LEAS211
PROPERTY, EQUIPMENT AND LEASED ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||
Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Cost | $ 151,020 | $ 140,381 | $ 135,495 | $ 151,020 | $ 135,495 | $ 49,663 | ||||
Accumulated Depreciation | 46,499 | 37,622 | 29,410 | 46,499 | 29,410 | 30,953 | ||||
Net Book Value | 104,521 | 102,759 | 106,085 | 104,521 | 106,085 | 18,710 | ||||
Depreciation expense | 10,717 | 10,377 | $ 1,919 | $ 1,927 | 21,094 | $ 3,846 | $ 8,745 | 7,350 | $ 6,843 | |
Minimum | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Useful Life (years) | 3 years | |||||||||
Maximum | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Useful Life (years) | 5 years | |||||||||
Rental pool - deployed | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Cost | 78,058 | 74,742 | 70,295 | 78,058 | $ 70,295 | |||||
Accumulated Depreciation | 13,992 | 7,429 | 876 | 13,992 | 876 | |||||
Net Book Value | 64,066 | $ 67,313 | 69,419 | $ 64,066 | $ 69,419 | |||||
Rental pool - deployed | Minimum | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Useful Life (years) | 2 years | 2 years | 2 years | |||||||
Rental pool - deployed | Maximum | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Useful Life (years) | 4 years | 4 years | 4 years | |||||||
Rental pool - undeployed | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Cost | 14,831 | $ 11,321 | 10,562 | $ 14,831 | $ 10,562 | |||||
Accumulated Depreciation | 2,699 | 1,318 | 151 | 2,699 | 151 | |||||
Net Book Value | 12,132 | $ 10,003 | 10,411 | $ 12,132 | $ 10,411 | |||||
Rental pool - undeployed | Minimum | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Useful Life (years) | 2 years | 2 years | 2 years | |||||||
Rental pool - undeployed | Maximum | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Useful Life (years) | 4 years | 4 years | 4 years | |||||||
Automated Teller Machine Equipment [Member] | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Cost | 20,818 | $ 22,099 | 23,572 | $ 20,818 | $ 23,572 | 28,394 | ||||
Accumulated Depreciation | 14,692 | 15,416 | 16,543 | 14,692 | 16,543 | 22,011 | ||||
Net Book Value | 6,126 | $ 6,683 | 7,029 | $ 6,126 | $ 7,029 | 6,383 | ||||
Automated Teller Machine Equipment [Member] | Maximum | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Useful Life (years) | 5 years | 5 years | 5 years | |||||||
Office Computer And Other Equipment [Member] | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Cost | 16,745 | $ 15,885 | 15,238 | $ 16,745 | $ 15,238 | 11,729 | ||||
Accumulated Depreciation | 10,543 | 9,736 | 8,848 | 10,543 | 8,848 | 5,408 | ||||
Net Book Value | 6,202 | $ 6,149 | 6,390 | $ 6,202 | $ 6,390 | 6,321 | ||||
Office Computer And Other Equipment [Member] | Maximum | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Useful Life (years) | 3 years | 3 years | 3 years | |||||||
Leasehold And Building Improvements [Member] | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Cost | 6,142 | $ 6,294 | 6,289 | $ 6,142 | $ 6,289 | 6,362 | ||||
Accumulated Depreciation | 1,456 | 1,187 | 895 | 1,456 | 895 | 1,268 | ||||
Net Book Value | 4,686 | 5,107 | 5,394 | 4,686 | 5,394 | 5,094 | ||||
Machinery and equipment | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Cost | 5,282 | 3,469 | 3,395 | 5,282 | 3,395 | |||||
Accumulated Depreciation | 538 | 282 | 34 | 538 | 34 | |||||
Net Book Value | 4,744 | $ 3,187 | $ 3,361 | $ 4,744 | $ 3,361 | |||||
Machinery and equipment | Minimum | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Useful Life (years) | 3 years | 3 years | 3 years | 3 years | ||||||
Machinery and equipment | Maximum | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Useful Life (years) | 5 years | 5 years | 5 years | 5 years | ||||||
Cash Advance Equipment [Member] | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Cost | 6,620 | $ 3,922 | $ 3,372 | $ 6,620 | $ 3,372 | 3,178 | ||||
Accumulated Depreciation | 2,159 | 2,023 | 1,873 | 2,159 | 1,873 | 2,266 | ||||
Net Book Value | 4,461 | $ 1,899 | 1,499 | $ 4,461 | $ 1,499 | $ 912 | ||||
Cash Advance Equipment [Member] | Maximum | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Useful Life (years) | 3 years | 3 years | 3 years | |||||||
Other | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Cost | 2,524 | $ 2,649 | 2,772 | $ 2,524 | $ 2,772 | |||||
Accumulated Depreciation | 420 | 231 | 189 | 420 | 189 | |||||
Net Book Value | $ 2,104 | $ 2,418 | $ 2,583 | $ 2,104 | $ 2,583 | |||||
Other | Minimum | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Useful Life (years) | 2 years | 2 years | 2 years | 2 years | ||||||
Other | Maximum | ||||||||||
PROPERTY, EQUIPMENT AND LEASED ASSETS | ||||||||||
Useful Life (years) | 5 years | 7 years | 5 years | 5 years |
GOODWILL AND OTHER INTANGIBL212
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Changes in the carrying amount of goodwill | ||||||
Goodwill | $ 857,670 | $ 857,856 | $ 857,913 | $ 180,084 | $ 180,141 | |
Key assumptions used in estimating fair value under the discounted cash flow approach and under the income approach | ||||||
Goodwill impairment | $ 0 | $ 0 | $ 0 | $ 0 |
GOODWILL AND OTHER INTANGIBL213
GOODWILL AND OTHER INTANGIBLE ASSETS (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Other Intangible Assets | |||||||||
Useful Life (years) | 3 years | ||||||||
Cost | $ 503,508 | $ 496,796 | $ 503,508 | $ 491,311 | $ 77,951 | ||||
Accumulated Amortization | 99,376 | 76,693 | 99,376 | 54,526 | 46,416 | ||||
Net Book Value | 404,132 | 420,103 | 404,132 | 436,785 | 31,535 | ||||
Amortization of Intangible Assets | 20,800 | 31,032 | $ 41,400 | $ 4,281 | 2,800 | $ 5,100 | $ 14,200 | 9,600 | $ 9,800 |
Maximum | |||||||||
Other Intangible Assets | |||||||||
Useful Life (years) | 5 years | ||||||||
Contract rights under development and placement fee agreements | |||||||||
Other Intangible Assets | |||||||||
Cost | 16,387 | 14,919 | 16,387 | $ 14,000 | |||||
Accumulated Amortization | 4,092 | 2,104 | 4,092 | 301 | |||||
Net Book Value | 12,295 | $ 12,815 | $ 12,295 | $ 13,699 | |||||
Contract rights under development and placement fee agreements | Minimum | |||||||||
Other Intangible Assets | |||||||||
Useful Life (years) | 1 year | 1 year | 1 year | ||||||
Contract rights under development and placement fee agreements | Maximum | |||||||||
Other Intangible Assets | |||||||||
Useful Life (years) | 7 years | 7 years | 3 years | ||||||
Customer contracts | |||||||||
Other Intangible Assets | |||||||||
Cost | 43,938 | $ 43,938 | $ 43,938 | $ 43,938 | 39,142 | ||||
Accumulated Amortization | 32,221 | 31,093 | 32,221 | 29,931 | 25,670 | ||||
Net Book Value | 11,717 | $ 12,845 | $ 11,717 | $ 14,007 | 13,472 | ||||
Customer contracts | Minimum | |||||||||
Other Intangible Assets | |||||||||
Useful Life (years) | 7 years | 7 years | 7 years | ||||||
Customer contracts | Maximum | |||||||||
Other Intangible Assets | |||||||||
Useful Life (years) | 14 years | 14 years | 14 years | ||||||
Customer relationships | |||||||||
Other Intangible Assets | |||||||||
Cost | 231,100 | $ 231,100 | $ 231,100 | $ 231,100 | |||||
Accumulated Amortization | 11,240 | 5,999 | 11,240 | 733 | |||||
Net Book Value | 219,860 | $ 225,101 | $ 219,860 | $ 230,367 | |||||
Customer relationships | Minimum | |||||||||
Other Intangible Assets | |||||||||
Useful Life (years) | 8 years | 8 years | 8 years | ||||||
Customer relationships | Maximum | |||||||||
Other Intangible Assets | |||||||||
Useful Life (years) | 12 years | 12 years | 12 years | ||||||
Developed technology and software | |||||||||
Other Intangible Assets | |||||||||
Cost | 184,242 | $ 179,139 | $ 184,242 | $ 140,289 | |||||
Accumulated Amortization | 40,679 | 27,492 | 40,679 | 1,571 | |||||
Net Book Value | 143,563 | 151,647 | 143,563 | 138,718 | |||||
Development costs capitalized | 4,700 | $ 1,000 | $ 5,700 | $ 300 | $ 4,500 | $ 4,900 | $ 8,200 | 5,100 | $ 700 |
Developed technology and software | Minimum | |||||||||
Other Intangible Assets | |||||||||
Useful Life (years) | 1 year | 1 year | 2 years | ||||||
Developed technology and software | Maximum | |||||||||
Other Intangible Assets | |||||||||
Useful Life (years) | 6 years | 6 years | 6 years | ||||||
Computer software | |||||||||
Other Intangible Assets | |||||||||
Cost | $ 34,128 | 26,386 | |||||||
Accumulated Amortization | 13,033 | 13,069 | |||||||
Net Book Value | $ 21,095 | 13,317 | |||||||
Computer software | Minimum | |||||||||
Other Intangible Assets | |||||||||
Useful Life (years) | 1 year | ||||||||
Computer software | Maximum | |||||||||
Other Intangible Assets | |||||||||
Useful Life (years) | 5 years | ||||||||
Patents, trademarks and other | |||||||||
Other Intangible Assets | |||||||||
Cost | 27,841 | $ 27,700 | $ 27,841 | $ 27,856 | 12,423 | ||||
Accumulated Amortization | 11,144 | 10,005 | 11,144 | 8,957 | 7,677 | ||||
Net Book Value | $ 16,697 | $ 17,695 | $ 16,697 | $ 18,899 | $ 4,746 | ||||
Patents, trademarks and other | Minimum | |||||||||
Other Intangible Assets | |||||||||
Useful Life (years) | 1 year | 1 year | 1 year | ||||||
Patents, trademarks and other | Maximum | |||||||||
Other Intangible Assets | |||||||||
Useful Life (years) | 17 years | 17 years | 17 years |
GOODWILL AND OTHER INTANGIBL214
GOODWILL AND OTHER INTANGIBLE ASSETS (Details 3) $ in Millions | Jan. 15, 2015USD ($)item | Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 |
Minimum | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
General term of the agreement | 12 months | 12 months | 12 months | |
Maximum | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
General term of the agreement | 83 months | 83 months | 83 months | |
Chickasaw Nation | Units Located Across Oklahoma | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Payment advances made under development and placement fee agreements | $ | $ 1.2 | |||
Number of unit placement with period coverage extension | 118 | |||
Number of casino location with period coverage extension | 1 | |||
Additional term | 60 months |
ACCOUNTS PAYABLE AND ACCRUED215
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Accounts payable and accrued expenses | ||||
Trade accounts payable | $ 52,169 | $ 52,226 | $ 48,962 | $ 35,662 |
Accrued Interest | 26,698 | 2,150 | 3,387 | 208 |
Payroll and related expenses | 7,275 | 14,089 | 10,889 | 4,758 |
Deferred and unearned revenues | 9,308 | 7,497 | 8,016 | 4,270 |
Cash access Processing and related expenses | 3,535 | 8,861 | 4,414 | 4,300 |
Accrued Taxes | 1,999 | 4,436 | 3,195 | 1,024 |
Other | 15,711 | 24,284 | 25,805 | 3,379 |
Total accounts payable and accrued expenses | $ 36,712 | $ 113,543 | $ 104,668 | $ 53,601 |
LONG-TERM DEBT (Details)216
LONG-TERM DEBT (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
BORROWINGS | ||||
Total Debt | $ 1,180,000 | $ 1,182,500 | $ 1,200,000 | $ 103,000 |
Less: original issue discount | (12,494) | (10,769) | (11,213) | |
Total debt after discount | 1,167,506 | 1,171,731 | 1,188,787 | 103,000 |
Less: current portion of long-term debt | (10,000) | (10,000) | (10,000) | (1,030) |
Long-term debt, less current portion | 1,157,506 | 1,161,731 | 1,178,787 | $ 101,970 |
Senior secured term Loan | ||||
BORROWINGS | ||||
Total Debt | 495,000 | 497,500 | 500,000 | |
Senior secured notes | ||||
BORROWINGS | ||||
Total Debt | 335,000 | 335,000 | 350,000 | |
Less: original issue discount | 3,800 | |||
Senior unsecured notes | ||||
BORROWINGS | ||||
Total Debt | $ 350,000 | $ 350,000 | 350,000 | |
Less: original issue discount | $ 3,800 |
LONG-TERM DEBT (Details 2)217
LONG-TERM DEBT (Details 2) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2014 | May. 31, 2014 | Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
BORROWINGS | |||||
Less: original issue discount | $ 11,213 | $ 10,769 | $ 12,494 | $ 11,213 | |
Senior secured notes | |||||
BORROWINGS | |||||
Debt issuance costs and fees | 13,600 | ||||
Less: original issue discount | $ (3,800) | $ (3,800) | |||
Debt instrument term | 1 year | ||||
Notes stated interest percentage | 7.75% | 7.75% | |||
Term Loan | |||||
BORROWINGS | |||||
Percentage of initial aggregate principal used to calculate quarterly term loan repayment amount | 0.50% | ||||
Notes stated interest percentage | 6.25% | 6.25% | 6.25% | 6.25% | |
Term Loan | LIBOR | |||||
BORROWINGS | |||||
Variable rate basis | LIBOR | LIBOR | LIBOR | ||
Term Loan | LIBOR | Minimum | |||||
BORROWINGS | |||||
Variable rate of debt (as a percent) | 1.00% | 1.00% | 1.00% | ||
Revolving Credit Loan | |||||
BORROWINGS | |||||
Maximum borrowing capacity | $ 50,000 | $ 50,000 | |||
Debt instrument term | 6 years | 5 years | |||
Revolving Credit Loan | LIBOR | |||||
BORROWINGS | |||||
Interest rate margin | 4.75% | 4.75% | 4.75% | 4.75% | |
Revolving Credit Loan | LIBOR | Minimum | |||||
BORROWINGS | |||||
Variable rate of debt (as a percent) | 0.00% | 0.00% | 0.00% | ||
Credit Facilities | |||||
BORROWINGS | |||||
Debt issuance costs and fees | $ 13,900 | $ 13,900 | |||
Less: original issue discount | $ (7,500) | $ (7,500) | |||
Premium on principal repayment | 1.00% | 1.00% | 1.00% | ||
Credit Facilities | Federal funds effective rate | |||||
BORROWINGS | |||||
Interest rate margin | 0.50% | 0.50% | 0.50% | 0.50% | |
Credit Facilities | LIBOR (after taking account of any applicable floor) applicable for an interest period of one month | |||||
BORROWINGS | |||||
Interest rate margin | 1.00% | 1.00% | 1.00% | 1.00% | |
Credit Facilities | Senior secured term Loan | |||||
BORROWINGS | |||||
Maximum borrowing capacity | $ 500,000 | $ 500,000 | |||
Credit Facilities | Senior secured term Loan | LIBOR | |||||
BORROWINGS | |||||
Interest rate margin | 5.25% | 5.25% | 5.25% | 5.25% | |
Credit Facilities | Senior secured notes | |||||
BORROWINGS | |||||
Debt instrument term | 5 years | 6 years |
LONG-TERM DEBT (Details 3)218
LONG-TERM DEBT (Details 3) $ / shares in Units, $ in Thousands | Apr. 15, 2015USD ($) | Jun. 30, 2015USD ($)item$ / sharesshares | Dec. 31, 2014USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2013USD ($) |
BORROWINGS | |||||
Total Debt | $ 1,180,000 | $ 1,200,000 | $ 1,182,500 | $ 103,000 | |
Senior secured notes | |||||
BORROWINGS | |||||
Debt issuance costs and fees | $ 13,600 | ||||
Debt instrument term | 1 year | ||||
Total Debt | $ 335,000 | $ 350,000 | $ 335,000 | ||
Notes stated interest percentage | 7.75% | ||||
Senior secured notes | 7.75% Senior Secured Notes Due 2021 | |||||
BORROWINGS | |||||
Debt issuance costs and fees | $ 13,600 | ||||
Total Debt | $ 350,000 | ||||
Notes stated interest percentage | 7.75% | ||||
Senior secured notes | 7.25% Senior Secured Notes Due 2021 | |||||
BORROWINGS | |||||
Debt issuance costs and fees | $ 13,000 | ||||
Total Debt | $ 335,000 | ||||
Notes stated interest percentage | 7.25% | ||||
Number of shares exercisable | shares | 700,000 | ||||
Exercise price | $ / shares | $ 9.88 | ||||
Percentage of premium to volume-weighted average price | 30.00% | ||||
Number of trading days | item | 10 |
LONG-TERM DEBT (Details 4)
LONG-TERM DEBT (Details 4) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Dec. 31, 2013 | |
BORROWINGS | ||||
Total Debt | $ 1,180,000 | $ 1,200,000 | $ 1,182,500 | $ 103,000 |
Less: original issue discount | 12,494 | 11,213 | 10,769 | |
Senior unsecured notes | ||||
BORROWINGS | ||||
Debt issuance costs and fees | 14,000 | |||
Total Debt | $ 350,000 | $ 350,000 | $ 350,000 | |
Notes stated interest percentage | 10.00% | |||
Less: original issue discount | $ (3,800) | |||
First 90-day period | 0.25% | |||
Subsequent 90-day period | 0.25% | |||
Senior unsecured notes | Maximum | ||||
BORROWINGS | ||||
Maximum additional interest rate | 1.00% |
COMMITMENTS AND CONTINGENCIE220
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
Gain Contingency | |||
Litigation Settlement Awards | |||
Amount received and recorded from settlement | $ 14,400 | ||
United States District Court | Multimedia Games Shareholder Litigation | Maximum | |||
Litigation Settlement Awards | |||
Attorneys's fee paid by Holdings | $ 310,000 | $ 310,000 | $ 310,000 |
SHAREHOLDERS' EQUITY (Detail221
SHAREHOLDERS' EQUITY (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |
SHAREHOLDERS' EQUITY | ||||||||
Preferred stock, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 | 50,000,000 | 50,000,000 | |||
Preferred stock, shares outstanding | 0 | 0 | 0 | 0 | 0 | |||
Common stock, votes per share | 1 | 1 | 1 | |||||
Common stock, shares issued | 90,743,000 | 90,610,000 | 90,743,000 | 90,405,000 | 89,233,000 | |||
Total Number of Shares Purchased or Withheld | ||||||||
Shares withheld from restricted stock vesting | 2,599 | 2,845 | 31,000 | 55,000 | 14,901 | |||
Cost of Shares Purchased or Withheld | ||||||||
Shares repurchased under the current plan (in dollars) | $ 2,599 | $ 5,444 | $ 11,963 | $ 43,129 | $ 11,721,000 | $ 18,241,000 | ||
Shares withheld from restricted stock vesting (in dollars) | $ 20,167 | $ 19,743 | $ 39,910 | $ 300,000 | $ 100,000 | $ 400,000 | $ 459,000 | $ 100,000 |
WEIGHTED AVERAGE COMMON SHAR222
WEIGHTED AVERAGE COMMON SHARES (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||
Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Weighted-average number of common shares outstanding used in the computation of basic and diluted earnings per share | |||||||||||||||
Weighted average number of common shares outstanding - basic | 65,844 | 65,623 | 65,608 | 65,589 | 65,970 | 65,910 | 65,730 | 65,525 | 66,116 | 66,697 | 65,734 | 65,940 | 65,780 | 66,014 | 65,933 |
Potential dilution from equity awards(1) | 869 | 1,117 | 1,460 | 1,266 | 1,083 | 1,191 | 1,404 | ||||||||
Weighted average number of common shares outstanding - diluted | 65,844 | 66,492 | 66,397 | 66,747 | 67,087 | 67,370 | 67,394 | 66,630 | 66,993 | 67,882 | 65,734 | 67,206 | 66,863 | 67,205 | 67,337 |
Anti-dilutive equity awards excluded from computation of earnings per share (in shares) | 8,400 | 5,100 | 7,500 | 6,500 |
SHARE-BASED COMPENSATION - A223
SHARE-BASED COMPENSATION - Award Activity (Details) - shares | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
2005 Plan | |||||||||
Equity Awards Available for Grant | |||||||||
Shares of reserved common stock increased annually | 0 | 0 | 0 | 0 | |||||
2014 Plan | |||||||||
Equity Awards Available for Grant | |||||||||
Shares of reserved common stock increased annually | 12,100,000 | 6,600,000 | 11,900,000 | 11,900,000 | |||||
Stock Option [Member] | |||||||||
Equity Incentive Awards | |||||||||
Expiration period | 10 years | ||||||||
Stock Options Granted | |||||||||
Balance outstanding at the beginning of the period (in shares) | 12,006,000 | 13,626,000 | 8,872,000 | 13,626,000 | 8,872,000 | 8,872,000 | |||
Granted (in shares) | 6,100,000 | 0 | 3,000,000 | 2,000,000 | 6,097,000 | 5,000,000 | 5,523,000 | 1,200,000 | 2,400,000 |
Exercised options (in shares) | (194,000) | (315,000) | (971,000) | ||||||
Canceled or forfeited (in shares) | (1,426,000) | (1,694,000) | (893,000) | ||||||
Balance outstanding at the end of the period (in shares) | 17,714,000 | 12,006,000 | 17,714,000 | 13,626,000 | 8,872,000 | ||||
Time Based Options [Member] | 2005 Plan | |||||||||
Equity Incentive Awards | |||||||||
Vesting rate (as a percent) | 25.00% | ||||||||
Vesting period for 25% of shares | 1 year | ||||||||
Time Based Options [Member] | 2014 Plan | |||||||||
Equity Incentive Awards | |||||||||
Vesting rate (as a percent) | 25.00% | 25.00% | |||||||
Vesting period for 25% of shares | 4 years | 4 years | |||||||
Expiration period | 10 years | ||||||||
Restricted Stock [Member] | |||||||||
Equity Incentive Awards | |||||||||
Vesting period for 25% of shares | 1 year | ||||||||
Restricted Stock Granted | |||||||||
Balance outstanding at the beginning of the period (in shares) | 429,000 | 440,000 | 404,000 | 440,000 | 404,000 | 404,000 | |||
Granted (in shares) | 0 | 0 | 0 | 0 | 342,000 | 400,000 | |||
Vested (in shares) | (21,700,000) | (11,000) | (200,000) | 100,000 | (22,000) | (201,000) | 100,000 | 200,000 | |
Forfeited (in shares) | 0 | (1,000) | (105,000) | ||||||
Balance outstanding at the end of the period (in shares) | 417,000 | 429,000 | 417,000 | 440,000 | 404,000 |
SHARE-BASED COMPENSATION - S224
SHARE-BASED COMPENSATION - Stock Options, Weighted Average Assumptions (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Mar. 31, 2015 | Mar. 31, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Stock Option [Member] | |||||||
Weighted-average assumptions used in estimating fair value | |||||||
Risk-free interest rate (as a percent) | 0.00% | 1.00% | 1.00% | 1.00% | 1.00% | ||
Expected life of options | 4 years | 4 years | 4 years | 6 years | |||
Expected volatility (as a percent) | 0.00% | 53.00% | 54.00% | 61.00% | 62.00% | ||
Expected dividend yield (as a percent) | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | ||
Time Based Options [Member] | |||||||
Weighted-average assumptions used in estimating fair value | |||||||
Risk-free interest rate (as a percent) | 1.00% | 1.00% | |||||
Expected life of options | 4 years | 4 years | |||||
Expected volatility (as a percent) | 43.00% | 54.00% | |||||
Expected dividend yield (as a percent) | 0.00% | 0.00% | |||||
Market Performance Based Options [Member] | |||||||
Weighted-average assumptions used in estimating fair value | |||||||
Risk-free interest rate (as a percent) | 1.00% | ||||||
Expected life of options | 4 years | ||||||
Expected volatility (as a percent) | 47.00% | ||||||
Expected dividend yield (as a percent) | 0.00% |
SHARE-BASED COMPENSATION - S225
SHARE-BASED COMPENSATION - Stock Options, Activity (Details) - USD ($) $ / shares in Units, shares in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Additional disclosures | ||||||||||
Proceeds from exercise of stock options | $ 1,048,000 | $ 2,440,000 | $ 1,673,000 | $ 4,613,000 | $ 5,338,000 | $ 8,431,000 | $ 6,655,000 | |||
Stock Option [Member] | ||||||||||
Stock Options Granted | ||||||||||
Balance outstanding at the beginning of the period (in shares) | 12,006 | 13,626 | 8,872 | 13,626 | 8,872 | 8,872 | 8,872 | |||
Granted (in shares) | 6,100 | 0 | 3,000 | 2,000 | 6,097 | 5,000 | 5,523 | 1,200 | 2,400 | |
Exercised options (in shares) | (194) | (315) | (971) | |||||||
Canceled or forfeited (in shares) | (1,426) | (1,694) | (893) | |||||||
Balance outstanding at the end of the period (in shares) | 17,714 | 12,006 | 17,714 | 13,626 | 8,872 | |||||
Vested and expected to vest (in shares) | 14,717 | 10,864 | 14,717 | 12,358 | ||||||
Balance exercisable at the end of the period (in shares) | 6,651 | 6,651 | 6,221 | 6,771 | ||||||
Weighted Average Exercise Price | ||||||||||
Balance outstanding at the beginning of the period (in dollars per share) | $ 7.30 | $ 7.64 | $ 7.54 | $ 7.64 | $ 7.54 | $ 7.54 | $ 7.54 | |||
Granted (in dollars per share) | 0 | 7.74 | 7.54 | |||||||
Exercised options (in dollars per share) | 5.39 | 5.39 | 5.43 | |||||||
Canceled or forfeited (in dollars per share) | 10.80 | 10.13 | 6.89 | |||||||
Balance outstanding at the end of the period (in dollars per share) | 7.48 | 7.30 | 7.48 | 7.64 | $ 7.54 | |||||
Vested and expected to vest (in dollars per share) | 7.43 | $ 7.28 | 7.43 | 7.65 | ||||||
Balance exercisable at the end of the period (in dollars per share) | $ 7.30 | $ 7.30 | $ 7.31 | $ 8 | ||||||
Weighted Average Life Remaining | ||||||||||
Balance outstanding at the beginning of the period | 6 years 7 months 6 days | 7 years | 6 years 6 months | 5 years 10 months 24 days | ||||||
Balance outstanding at the end of the period | 6 years 7 months 6 days | 7 years | 6 years 6 months | 5 years 10 months 24 days | ||||||
Vested and expected to vest | 6 years 3 months 18 days | 6 years 9 months 18 days | 6 years 2 months 12 days | |||||||
Balance exercisable at the end of the period | 4 years 4 months 24 days | 4 years 4 months 24 days | 3 years 8 months 12 days | |||||||
Aggregate Intrinsic Value | ||||||||||
Balance outstanding at the beginning of the period (in dollars) | $ 12,095,000 | $ 9,148,000 | $ 27,301,000 | $ 9,148,000 | $ 27,301,000 | $ 27,301,000 | $ 27,301,000 | |||
Balance outstanding at the end of the period (in dollars) | 12,446,000 | 12,095,000 | 12,446,000 | 9,148,000 | $ 27,301,000 | |||||
Vested and expected to vest (in dollars) | 11,780,000 | 11,403,000 | 11,780,000 | 8,689,000 | ||||||
Balance exercisable at the end of the period (in dollars) | 8,785,000 | $ 8,785,000 | $ 7,990,000 | $ 6,246,000 | ||||||
Additional disclosures | ||||||||||
Weighted average grant date fair value (in dollars per share) | $ 2.86 | $ 3.88 | $ 2.49 | $ 3.27 | $ 3.20 | $ 3.31 | $ 2.93 | |||
Total intrinsic value of options exercised | 300,000 | 0.40 | $ 800,000 | $ 1,700,000 | $ 700,000 | $ 2,400,000 | $ 2,800,000 | $ 4,600,000 | $ 6,300,000 | |
Unrecognized compensation expense | $ 21,800,000 | $ 13,600,000 | 15,600,000 | $ 12,000,000 | $ 21,800,000 | $ 15,600,000 | $ 15,400,000 | |||
Weighted-average period for recognition of unrecognized compensation expense | 3 years | 3 years | 3 years 1 month 6 days | 2 years 10 months 24 days | 3 years 1 month 6 days | |||||
Non-cash compensation expense | $ 3,500,000 | $ 1,600,000 | 4,600,000 | $ 1,600,000 | $ 7,600,000 | 4,400,000 | 6,200,000 | |||
Proceeds from exercise of stock options | $ 1,700,000 | $ 1,000,000 | $ 4,600,000 | $ 2,400,000 | $ 5,300,000 | $ 8,400,000 | $ 6,700,000 |
SHARE-BASED COMPENSATION - R226
SHARE-BASED COMPENSATION - Restricted Stock (Details) - Restricted Stock [Member] - $ / shares | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Restricted Stock Granted | ||||||||
Balance outstanding at the beginning of the period (in shares) | 429,000 | 440,000 | 404,000 | 440,000 | 404,000 | |||
Granted (in shares) | 0 | 0 | 0 | 0 | 342,000 | 400,000 | ||
Vested (in shares) | (21,700,000) | (11,000) | (200,000) | 100,000 | (22,000) | (201,000) | 100,000 | 200,000 |
Forfeited (in shares) | 0 | (1,000) | (105,000) | |||||
Balance outstanding at the end of the period (in shares) | 417,000 | 429,000 | 417,000 | 440,000 | 404,000 | |||
Weighted Average Grant Date Fair Value (in dollars per share) | ||||||||
Balance outstanding at the beginning of the period (in dollars per share) | $ 7.11 | $ 7.11 | $ 7.05 | $ 7.11 | $ 7.05 | |||
Vested (in dollars per share) | 7.09 | 7.09 | 7.11 | |||||
Forfeited (in dollars per share) | 7.09 | 7.09 | 6.91 | |||||
Balance outstanding at the end of the period (in dollars per share) | $ 7.11 | $ 7.11 | $ 7.11 | $ 7.11 | $ 7.05 |
SHARE-BASED COMPENSATION - R227
SHARE-BASED COMPENSATION - Restricted Stock, Additional Details (Details) - Restricted Stock [Member] - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Additional disclosures | |||||||||
Total fair value of shares vested | $ 0.1 | $ 0.1 | $ 0.2 | $ 0.7 | $ 0.4 | $ 1.4 | $ 1.4 | $ 0.7 | $ 1.3 |
Unrecognized compensation expense | $ 2.5 | $ 2.7 | $ 1.4 | $ 1.7 | $ 2.5 | $ 1.4 | $ 3 | ||
Weighted-average period for recognition of unrecognized compensation expense | 2 years 9 months 18 days | 3 years | 2 years 7 months 6 days | 2 years 9 months 18 days | 3 years 3 months 18 days | ||||
Non-cash compensation expense | $ 0.4 | $ 0.2 | $ 0.8 | $ 0.4 | $ 1.2 | $ 0.7 | $ 0.4 | ||
Vested (in shares) | 21,700,000 | 11,000 | 200,000 | (100,000) | 22,000 | 201,000 | (100,000) | (200,000) |
INCOME TAXES (Details)228
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | May. 14, 2004 | |
INCOME TAXES | ||||||||||
Effective tax rate (as a percent) | 41.00% | 81.20% | 37.30% | 34.70% | 35.80% | 35.70% | 40.20% | 37.30% | 36.50% | |
Statutory federal rate (as a percent) | 35.00% | 35.00% | 35.00% | 35.00% | 35.00% | 35.00% | ||||
Unrecognized tax benefits | $ 729 | $ 700 |
SEGMENT INFORMATION (Details229
SEGMENT INFORMATION (Details) - item | 3 Months Ended | 12 Months Ended | 15 Months Ended | |||||
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2015 | |
Major Customers | ||||||||
Number of customers individually exceeding 10% of consolidated revenue | 0 | 0 | 0 | 0 | 0 | 0 | ||
Number of major customers | 5 | 5 | 5 | |||||
Five Largest Customers [Member] | ||||||||
Major Customers | ||||||||
Concentration risk (as a percent) | 28.00% | 28.00% | 30.00% | 33.00% | 28.00% | 33.00% | 34.00% |
SEGMENT INFORMATION (Details230
SEGMENT INFORMATION (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||
Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Results of operations by operating segment | |||||||||||||||
Revenues | $ 206,364 | $ 207,473 | $ 152,055 | $ 145,481 | $ 144,946 | $ 150,571 | $ 140,456 | $ 146,101 | $ 149,065 | $ 146,822 | $ 413,837 | $ 295,517 | $ 593,053 | $ 582,444 | $ 584,486 |
Operating income | 16,336 | 28,141 | $ 376 | $ 10,771 | 9,622 | 13,013 | $ 11,196 | $ 11,420 | $ 13,633 | $ 12,901 | 44,477 | 22,635 | 33,782 | 49,150 | 55,982 |
Payments | |||||||||||||||
Results of operations by operating segment | |||||||||||||||
Revenues | 151,496 | 152,428 | 144,946 | 150,571 | 303,924 | 295,517 | 585,647 | 582,444 | 584,486 | ||||||
Operating income | 12,137 | 27,527 | $ 9,622 | $ 13,013 | 39,664 | $ 22,635 | 35,205 | $ 49,150 | $ 55,982 | ||||||
Games | |||||||||||||||
Results of operations by operating segment | |||||||||||||||
Revenues | 54,868 | 55,045 | 109,913 | 7,406 | |||||||||||
Operating income | $ 4,199 | $ 614 | $ 4,813 | $ 1,423 |
SEGMENT INFORMATION (Details231
SEGMENT INFORMATION (Details 3) - USD ($) $ in Thousands | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Assets by operating segment | ||||
Total Assets | $ 1,707,119 | $ 1,725,264 | $ 1,707,285 | $ 527,327 |
Payments | ||||
Assets by operating segment | ||||
Total Assets | 478,065 | 495,646 | 464,463 | $ 527,327 |
Games | ||||
Assets by operating segment | ||||
Total Assets | $ 1,229,054 | $ 1,229,618 | $ 1,242,822 |
CONDENSED CONSOLIDATING FINA232
CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Ops) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||
Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Condensed Income Statements, Captions [Line Items] | |||||||||||||||
Revenues | $ 206,364,000 | $ 207,473,000 | $ 152,055,000 | $ 145,481,000 | $ 144,946,000 | $ 150,571,000 | $ 140,456,000 | $ 146,101,000 | $ 149,065,000 | $ 146,822,000 | $ 413,837,000 | $ 295,517,000 | $ 593,053,000 | $ 582,444,000 | $ 584,486,000 |
Costs and expenses | |||||||||||||||
Cost of revenues (exclusive of depreciation and amortization) | 127,222,000 | 127,023,000 | 109,375,000 | 113,238,000 | 254,245,000 | 222,614,000 | 440,071,000 | 439,794,000 | 436,059,000 | ||||||
Operating expenses | 26,847,000 | 15,841,000 | 21,261,000 | 20,039,000 | 42,688,000 | 41,299,000 | 95,452,000 | 76,562,000 | 75,806,000 | ||||||
Research and Development | 4,470,000 | 5,436,000 | 9,906,000 | 804,000 | 0 | 0 | |||||||||
Depreciation | 10,717,000 | 10,377,000 | 1,919,000 | 1,927,000 | 21,094,000 | 3,846,000 | 8,745,000 | 7,350,000 | 6,843,000 | ||||||
Amortization | 20,772,000 | 20,655,000 | 2,769,000 | 2,354,000 | 41,427,000 | 5,123,000 | 14,199,000 | 9,588,000 | 9,796,000 | ||||||
Total costs and expenses | 190,028,000 | 179,332,000 | 135,324,000 | 137,558,000 | 369,360,000 | 272,882,000 | 559,271,000 | 533,294,000 | 528,504,000 | ||||||
Operating income | 16,336,000 | 28,141,000 | 376,000 | 10,771,000 | 9,622,000 | 13,013,000 | 11,196,000 | 11,420,000 | 13,633,000 | 12,901,000 | 44,477,000 | 22,635,000 | 33,782,000 | 49,150,000 | 55,982,000 |
Other expenses | |||||||||||||||
Interest expense, net of interest income | 24,958,000 | 25,655,000 | 2,083,000 | 1,546,000 | 50,613,000 | 3,629,000 | 10,756,000 | 10,265,000 | 15,519,000 | ||||||
Loss on extinguishment of debt | 12,977,000 | 0 | 12,977,000 | 2,725,000 | |||||||||||
Total other expenses | 37,935,000 | 25,655,000 | 2,083,000 | 1,546,000 | 63,590,000 | 3,629,000 | 13,481,000 | 10,265,000 | 15,519,000 | ||||||
(Loss) income from operations before tax | (21,599,000) | 2,486,000 | 7,539,000 | 11,467,000 | (19,113,000) | 19,006,000 | 20,301,000 | 38,885,000 | 40,463,000 | ||||||
Income tax (benefit) expense | (8,858,000) | 2,017,000 | 2,815,000 | 3,978,000 | (6,841,000) | 6,793,000 | 8,161,000 | 14,487,000 | 14,774,000 | ||||||
Net (loss) income | (12,741,000) | 469,000 | $ (5,749,000) | $ 5,676,000 | 4,724,000 | 7,489,000 | $ 5,704,000 | $ 5,782,000 | $ 6,776,000 | $ 6,136,000 | (12,272,000) | 12,213,000 | 12,140,000 | 24,398,000 | 25,689,000 |
Foreign currency translation | 811,000 | (873,000) | 381,000 | 1,000 | (62,000) | 382,000 | (1,258,000) | 269,000 | 218,000 | ||||||
Comprehensive (loss) income | (11,930,000) | (404,000) | 5,105,000 | 7,490,000 | (12,334,000) | 12,595,000 | 10,882,000 | 24,667,000 | 25,907,000 | ||||||
Reportable Legal Entities | Parent | |||||||||||||||
Other expenses | |||||||||||||||
Equity in income of subsidiaries | 12,741,000 | (469,000) | (4,724,000) | (7,489,000) | 12,272,000 | (12,213,000) | (12,140,000) | (24,398,000) | (25,689,000) | ||||||
Total other expenses | 12,741,000 | (469,000) | (4,724,000) | (7,489,000) | 12,272,000 | (12,213,000) | (12,140,000) | (24,398,000) | (25,689,000) | ||||||
(Loss) income from operations before tax | (12,741,000) | 469,000 | 4,724,000 | 7,489,000 | (12,272,000) | 12,213,000 | 12,140,000 | 24,398,000 | 25,689,000 | ||||||
Net (loss) income | (12,741,000) | 469,000 | 4,724,000 | 7,489,000 | (12,272,000) | 12,213,000 | 12,140,000 | 24,398,000 | 25,689,000 | ||||||
Foreign currency translation | 811,000 | (873,000) | 381,000 | 1,000 | (62,000) | 382,000 | (1,258,000) | 269,000 | 218,000 | ||||||
Comprehensive (loss) income | (11,930,000) | 404,000 | 5,105,000 | 7,490,000 | (12,334,000) | 12,595,000 | 12,140,000 | 24,667,000 | 25,907,000 | ||||||
Reportable Legal Entities | Subsidiary Issuer | |||||||||||||||
Condensed Income Statements, Captions [Line Items] | |||||||||||||||
Revenues | 139,818,000 | 141,410,000 | 134,198,000 | 140,321,000 | 281,228,000 | 274,519,000 | 542,206,000 | 541,002,000 | 556,376,000 | ||||||
Costs and expenses | |||||||||||||||
Cost of revenues (exclusive of depreciation and amortization) | 110,659,000 | 110,589,000 | 104,918,000 | 111,338,000 | 221,248,000 | 216,257,000 | 422,544,000 | 424,129,000 | 426,183,000 | ||||||
Operating expenses | 18,809,000 | 4,191,000 | 20,000,000 | 18,747,000 | 23,000,000 | 38,746,000 | 88,087,000 | 71,623,000 | 72,551,000 | ||||||
Depreciation | 1,787,000 | 1,774,000 | 1,870,000 | 1,883,000 | 3,561,000 | 3,753,000 | 7,428,000 | 7,186,000 | 6,617,000 | ||||||
Amortization | 2,193,000 | 2,215,000 | 2,644,000 | 2,230,000 | 4,408,000 | 4,874,000 | 11,180,000 | 9,217,000 | 9,543,000 | ||||||
Total costs and expenses | 133,448,000 | 118,769,000 | 129,432,000 | 134,198,000 | 252,217,000 | 263,630,000 | 529,239,000 | 512,155,000 | 514,894,000 | ||||||
Operating income | 6,370,000 | 22,641,000 | 4,766,000 | 6,123,000 | 29,011,000 | 10,889,000 | 12,967,000 | 28,847,000 | 41,482,000 | ||||||
Other expenses | |||||||||||||||
Interest expense, net of interest income | 1,834,000 | 2,778,000 | 1,990,000 | 2,034,000 | 4,612,000 | 4,024,000 | 7,675,000 | 10,342,000 | 15,591,000 | ||||||
Equity in income of subsidiaries | (3,665,000) | (3,047,000) | (3,343,000) | (5,082,000) | (6,712,000) | (8,425,000) | (15,218,000) | (13,596,000) | (9,546,000) | ||||||
Loss on extinguishment of debt | 12,977,000 | 12,977,000 | 2,523,000 | ||||||||||||
Total other expenses | 11,146,000 | (269,000) | (1,353,000) | (3,048,000) | 10,877,000 | (4,401,000) | (5,020,000) | (3,254,000) | 6,045,000 | ||||||
(Loss) income from operations before tax | (4,776,000) | 22,910,000 | 6,119,000 | 9,171,000 | 18,134,000 | 15,290,000 | 17,987,000 | 32,101,000 | 35,437,000 | ||||||
Income tax (benefit) expense | (3,684,000) | 8,706,000 | 1,187,000 | 1,682,000 | 5,022,000 | 2,869,000 | 2,801,000 | 7,703,000 | 9,748,000 | ||||||
Net (loss) income | 1,092,000 | 14,204,000 | 4,932,000 | 7,489,000 | 13,112,000 | 12,421,000 | 15,186,000 | 24,398,000 | 25,689,000 | ||||||
Comprehensive (loss) income | 1,092,000 | 14,204,000 | 4,932,000 | 7,489,000 | 19,112,000 | 12,421,000 | 15,186,000 | 24,398,000 | 25,689,000 | ||||||
Reportable Legal Entities | Guarantor Subsidiaries | |||||||||||||||
Condensed Income Statements, Captions [Line Items] | |||||||||||||||
Revenues | 62,440,000 | 62,369,000 | 7,044,000 | 6,866,000 | 124,809,000 | 13,910,000 | 35,689,000 | 28,277,000 | 18,623,000 | ||||||
Costs and expenses | |||||||||||||||
Cost of revenues (exclusive of depreciation and amortization) | 14,375,000 | 14,371,000 | 2,243,000 | 2,043,000 | 28,746,000 | 4,286,000 | 10,864,000 | 7,905,000 | 3,376,000 | ||||||
Operating expenses | 7,736,000 | 11,359,000 | 778,000 | 819,000 | 19,095,000 | 1,597,000 | 5,719,000 | 3,445,000 | 1,880,000 | ||||||
Research and Development | 4,470,000 | 5,436,000 | 9,906,000 | 804,000 | |||||||||||
Depreciation | 8,880,000 | 8,542,000 | 1,000 | 1,000 | 17,422,000 | 2,000 | 1,134,000 | 1,000 | 5,000 | ||||||
Amortization | 17,964,000 | 17,771,000 | 35,735,000 | 2,454,000 | |||||||||||
Total costs and expenses | 53,425,000 | 57,479,000 | 3,022,000 | 2,863,000 | 110,904,000 | 5,885,000 | 20,975,000 | 11,351,000 | 5,261,000 | ||||||
Operating income | 9,015,000 | 4,890,000 | 4,022,000 | 2,602,000 | 13,905,000 | 8,025,000 | 14,714,000 | 16,926,000 | 13,362,000 | ||||||
Other expenses | |||||||||||||||
Interest expense, net of interest income | 23,036,000 | 22,787,000 | 45,823,000 | 3,290,000 | |||||||||||
Loss on extinguishment of debt | 202,000 | ||||||||||||||
Total other expenses | 23,036,000 | 22,787,000 | 45,823,000 | 3,492,000 | |||||||||||
(Loss) income from operations before tax | (14,021,000) | (17,897,000) | 4,022,000 | 2,602,000 | (31,918,000) | 8,025,000 | 11,222,000 | 16,926,000 | 13,362,000 | ||||||
Income tax (benefit) expense | (5,502,000) | (6,942,000) | 1,413,000 | 1,401,000 | (12,444,000) | 2,814,000 | 3,784,000 | 5,924,000 | 4,677,000 | ||||||
Net (loss) income | (8,519,000) | (10,955,000) | 2,609,000 | 2,602,000 | (19,474,000) | 5,211,000 | 7,438,000 | 11,002,000 | 8,685,000 | ||||||
Comprehensive (loss) income | (8,519,000) | (10,955,000) | 2,609,000 | 4,003,000 | (19,474,000) | 5,211,000 | 7,438,000 | 11,002,000 | 8,685,000 | ||||||
Reportable Legal Entities | Non-Guarantor Subsidiaries | |||||||||||||||
Condensed Income Statements, Captions [Line Items] | |||||||||||||||
Revenues | 4,256,000 | 3,830,000 | 3,898,000 | 3,553,000 | 8,086,000 | 7,451,000 | 15,891,000 | 13,838,000 | 10,001,000 | ||||||
Costs and expenses | |||||||||||||||
Cost of revenues (exclusive of depreciation and amortization) | 2,188,000 | 2,063,000 | 2,214,000 | (143,000) | 4,251,000 | 2,071,000 | 6,663,000 | 7,760,000 | 6,500,000 | ||||||
Operating expenses | 452,000 | 427,000 | 677,000 | 642,000 | 879,000 | 1,319,000 | 5,560,000 | 2,167,000 | 1,889,000 | ||||||
Depreciation | 50,000 | 61,000 | 48,000 | 43,000 | 111,000 | 91,000 | 183,000 | 163,000 | 221,000 | ||||||
Amortization | 615,000 | 669,000 | 125,000 | 124,000 | 1,284,000 | 249,000 | 565,000 | 371,000 | 253,000 | ||||||
Total costs and expenses | 3,305,000 | 3,220,000 | 3,064,000 | 666,000 | 6,525,000 | 3,730,000 | 9,790,000 | 10,461,000 | 8,863,000 | ||||||
Operating income | 951,000 | 610,000 | 834,000 | 2,887,000 | 1,561,000 | 3,721,000 | 6,101,000 | 3,377,000 | 1,138,000 | ||||||
Other expenses | |||||||||||||||
Interest expense, net of interest income | 88,000 | 90,000 | 93,000 | (488,000) | 178,000 | (395,000) | (209,000) | (77,000) | (72,000) | ||||||
Total other expenses | 88,000 | 90,000 | 93,000 | (488,000) | 178,000 | (395,000) | (209,000) | (77,000) | (72,000) | ||||||
(Loss) income from operations before tax | 863,000 | 520,000 | 741,000 | 3,375,000 | 1,383,000 | 4,116,000 | 6,310,000 | 3,454,000 | 1,210,000 | ||||||
Income tax (benefit) expense | 328,000 | 253,000 | 215,000 | 895,000 | 581,000 | 1,110,000 | 1,576,000 | 860,000 | 349,000 | ||||||
Net (loss) income | 535,000 | 267,000 | 526,000 | 2,480,000 | 802,000 | 3,006,000 | 4,734,000 | 2,594,000 | 861,000 | ||||||
Foreign currency translation | 811,000 | (873,000) | 381,000 | 1,000 | (62,000) | 382,000 | (1,258,000) | 269,000 | 218,000 | ||||||
Comprehensive (loss) income | 1,346,000 | (606,000) | 907,000 | 2,481,000 | 740,000 | 3,388,000 | 3,476,000 | 2,863,000 | 1,079,000 | ||||||
Eliminations | |||||||||||||||
Condensed Income Statements, Captions [Line Items] | |||||||||||||||
Revenues | (150,000) | (136,000) | (194,000) | (169,000) | (286,000) | (363,000) | (733,000) | (673,000) | (514,000) | ||||||
Costs and expenses | |||||||||||||||
Operating expenses | (150,000) | (136,000) | (194,000) | (169,000) | (286,000) | (363,000) | (733,000) | (673,000) | (514,000) | ||||||
Total costs and expenses | (150,000) | (136,000) | (194,000) | (169,000) | (286,000) | (363,000) | (733,000) | (673,000) | (514,000) | ||||||
Other expenses | |||||||||||||||
Equity in income of subsidiaries | (9,076,000) | 3,516,000 | 8,067,000 | 12,571,000 | (5,560,000) | 20,638,000 | 27,358,000 | 37,994,000 | 35,235,000 | ||||||
Total other expenses | (9,076,000) | 3,516,000 | 8,067,000 | 12,571,000 | (5,560,000) | 20,638,000 | 27,358,000 | 37,994,000 | 35,235,000 | ||||||
(Loss) income from operations before tax | 9,076,000 | (3,516,000) | (8,067,000) | (12,571,000) | 5,560,000 | (20,638,000) | (27,358,000) | (37,994,000) | (35,235,000) | ||||||
Net (loss) income | 9,076,000 | (3,516,000) | (8,067,000) | (12,571,000) | 5,560,000 | (20,638,000) | (27,358,000) | (37,994,000) | (35,235,000) | ||||||
Foreign currency translation | (811,000) | 873,000 | (381,000) | (1,000) | 62,000 | (382,000) | 1,258,000 | (269,000) | (218,000) | ||||||
Comprehensive (loss) income | $ 8,265,000 | $ (2,643,000) | $ (8,448,000) | $ (12,572,000) | $ 5,622,000 | $ (21,020,000) | $ (26,100,000) | $ (38,263,000) | $ (35,453,000) |
CONDENSED CONSOLIDATING FINA233
CONDENSED CONSOLIDATING FINANCIAL INFORMATION (BalSh) (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
Current assets | |||||||||
Cash and cash equivalents | $ 165,017 | $ 145,013 | $ 89,095 | $ 161,998 | $ 194,566 | $ 114,254 | $ 153,020 | $ 55,535 | $ 55,535 |
Settlement receivables | 23,716 | 29,787 | 43,288 | 38,265 | |||||
Trade receivables, net | 41,834 | 39,220 | 37,697 | 11,658 | |||||
Other receivables | 11,372 | 20,392 | 20,553 | 4,605 | |||||
Inventory | 23,453 | 23,050 | 27,163 | 9,413 | |||||
Prepaid expenses and other assets | 21,090 | 18,889 | 18,988 | 16,674 | |||||
Deferred tax asset | 9,591 | 9,590 | 9,591 | 3,102 | |||||
Total current assets | 296,073 | 285,941 | 246,375 | 197,971 | |||||
Non-current assets | |||||||||
Property, equipment and leasehold improvements, net | 104,521 | 102,759 | 106,085 | 18,710 | |||||
Goodwill | 857,670 | 857,856 | 857,913 | 180,084 | 180,141 | ||||
Other intangible assets, net | 404,132 | 420,103 | 436,785 | 31,535 | |||||
Other receivables, non-current | 7,808 | 8,593 | 9,184 | 699 | |||||
Deferred tax asset, non-current | 87,942 | ||||||||
Other assets, non-current | 36,915 | 50,012 | 50,943 | 10,386 | |||||
Total non-current assets | 1,411,046 | 1,439,323 | 1,460,910 | 329,356 | |||||
Total assets | 1,707,119 | 1,725,264 | 1,707,285 | 527,327 | |||||
Current Liabilities | |||||||||
Settlement liabilities | 141,211 | 141,649 | 119,157 | 145,022 | |||||
Accounts payable and accrued expenses | 36,712 | 113,543 | 104,668 | 53,601 | |||||
Current portion of long-term debt | 10,000 | 10,000 | 10,000 | 1,030 | |||||
Total current liabilities | 267,906 | 265,192 | 233,825 | 199,653 | |||||
Non-current liabilities | |||||||||
Deferred tax liability, non-current | 49,808 | 59,101 | 57,333 | ||||||
Long-term debt, less current portion | 1,157,506 | 1,161,731 | 1,178,787 | 101,970 | |||||
Other accrued expenses and liabilities | 4,927 | 5,381 | 5,867 | 7,100 | |||||
Total non-current liabilities | 1,212,241 | 1,226,213 | 1,241,987 | 109,070 | |||||
Total liabilities | 1,480,147 | 1,491,405 | 1,475,812 | 308,723 | |||||
Stockholders' Equity | |||||||||
Common stock | 91 | 91 | 90 | 89 | |||||
Additional paid-in capital | 253,555 | 248,491 | 245,682 | 231,516 | |||||
Retained earnings (deficit) | 147,879 | 160,621 | 160,152 | 148,012 | |||||
Accumulated other comprehensive income (loss) | 1,507 | 696 | 1,569 | 2,827 | |||||
Treasury stock, at cost | (176,060) | (176,040) | (176,020) | (163,840) | |||||
Total stockholders' equity (deficit) | 226,972 | 233,859 | 231,473 | 218,604 | |||||
Total liabilities and stockholders' equity | 1,707,119 | 1,725,264 | 1,707,285 | 527,327 | |||||
Reportable Legal Entities | Parent | |||||||||
Non-current assets | |||||||||
Investment in Subsidiaries | 226,972 | 233,859 | 231,473 | 218,604 | |||||
Total non-current assets | 226,972 | 233,859 | 231,473 | 218,604 | |||||
Total assets | 226,972 | 233,859 | 231,473 | 218,604 | |||||
Stockholders' Equity | |||||||||
Common stock | 91 | 91 | 90 | 89 | |||||
Additional paid-in capital | 253,555 | 248,491 | 245,682 | 231,516 | |||||
Retained earnings (deficit) | 147,879 | 160,621 | 160,152 | 148,012 | |||||
Accumulated other comprehensive income (loss) | 1,507 | 696 | 1,569 | 2,827 | |||||
Treasury stock, at cost | (176,060) | (176,040) | (176,020) | (163,840) | |||||
Total stockholders' equity (deficit) | 226,972 | 233,859 | 231,473 | 218,604 | |||||
Total liabilities and stockholders' equity | 226,972 | 233,859 | 231,473 | 218,604 | |||||
Reportable Legal Entities | Subsidiary Issuer | |||||||||
Current assets | |||||||||
Cash and cash equivalents | 136,790 | 120,435 | 68,143 | 142,775 | 178,319 | 100,573 | 141,640 | 47,766 | |
Settlement receivables | 19,721 | 26,950 | 40,157 | 34,458 | |||||
Trade receivables, net | 5,989 | 6,294 | 6,578 | 9,030 | |||||
Other receivables | 3,183 | 3,846 | 3,416 | 4,451 | |||||
Inventory | 10,075 | 9,312 | 10,595 | 9,413 | |||||
Prepaid expenses and other assets | 7,752 | 7,836 | 7,143 | 10,300 | |||||
Deferred tax asset | 2,743 | 2,743 | 2,743 | 3,102 | |||||
Intercompany balances | 39,338 | 32,512 | 18,038 | 20,005 | |||||
Total current assets | 225,591 | 209,928 | 156,813 | 191,332 | |||||
Non-current assets | |||||||||
Property, equipment and leasehold improvements, net | 19,467 | 17,409 | 17,864 | 18,282 | |||||
Goodwill | 148,076 | 148,278 | 148,278 | 139,839 | |||||
Other intangible assets, net | 22,589 | 23,260 | 24,771 | 30,229 | |||||
Other receivables, non-current | 3,994 | 4,411 | 4,411 | 699 | |||||
Investment in Subsidiaries | 153,927 | 149,599 | 147,195 | 113,350 | |||||
Deferred tax asset, non-current | 85,754 | 76,460 | 78,229 | 88,253 | |||||
Other assets, non-current | 32,453 | 46,090 | 47,508 | 10,311 | |||||
Intercompany balances | 1,130,380 | 1,130,380 | 1,130,380 | 61,936 | |||||
Total non-current assets | 1,599,821 | 1,597,383 | 1,598,636 | 462,899 | |||||
Total assets | 1,825,412 | 1,807,311 | 1,755,449 | 654,231 | |||||
Current Liabilities | |||||||||
Settlement liabilities | 134,604 | 136,839 | 111,375 | 137,089 | |||||
Accounts payable and accrued expenses | 101,269 | 85,689 | 61,544 | 51,324 | |||||
Current portion of long-term debt | 10,000 | 10,000 | 10,000 | 1,030 | |||||
Intercompany balances | 161,593 | 156,536 | 152,802 | 135,542 | |||||
Total current liabilities | 407,466 | 389,064 | 335,721 | 324,985 | |||||
Non-current liabilities | |||||||||
Deferred tax liability, non-current | 1,072 | 1,071 | 1,072 | ||||||
Long-term debt, less current portion | 1,157,506 | 1,161,731 | 1,178,787 | 101,970 | |||||
Other accrued expenses and liabilities | 4,487 | 4,924 | 5,377 | 7,100 | |||||
Intercompany balances | 1,572 | ||||||||
Total non-current liabilities | 1,163,065 | 1,167,726 | 1,185,236 | 110,642 | |||||
Total liabilities | 1,567,350 | 1,556,790 | 429,703 | ||||||
Stockholders' Equity | |||||||||
Additional paid-in capital | 91,843 | 87,202 | 69,654 | 67,694 | |||||
Retained earnings (deficit) | 161,531 | 162,623 | 163,269 | 148,083 | |||||
Accumulated other comprehensive income (loss) | 1,507 | 696 | 1,569 | 2,827 | |||||
Total stockholders' equity (deficit) | 254,881 | 250,521 | 234,492 | 218,604 | |||||
Total liabilities and stockholders' equity | 1,825,412 | 1,807,311 | 1,755,449 | 654,231 | |||||
Reportable Legal Entities | Guarantor Subsidiaries | |||||||||
Current assets | |||||||||
Cash and cash equivalents | 16,523 | 13,315 | 6,489 | 2,291 | 2,531 | 2,149 | 482 | 71 | |
Trade receivables, net | 35,845 | 32,925 | 31,116 | 2,622 | |||||
Other receivables | 23,736 | 29,870 | 16,992 | ||||||
Inventory | 13,378 | 13,738 | 16,568 | ||||||
Prepaid expenses and other assets | 3,789 | 2,523 | 2,821 | 20 | |||||
Deferred tax asset | 6,848 | 6,847 | 6,848 | ||||||
Intercompany balances | 160,054 | 155,182 | 151,179 | 135,542 | |||||
Total current assets | 260,173 | 249,400 | 232,013 | 140,333 | |||||
Non-current assets | |||||||||
Property, equipment and leasehold improvements, net | 84,649 | 84,865 | 87,898 | 56 | |||||
Goodwill | 708,923 | 708,922 | 708,922 | 39,470 | |||||
Other intangible assets, net | 373,600 | 388,281 | 402,816 | 499 | |||||
Other receivables, non-current | 3,814 | 4,182 | 4,773 | ||||||
Deferred tax asset, non-current | 22,467 | 22,467 | |||||||
Other assets, non-current | 3,923 | 3,413 | 3,366 | ||||||
Intercompany balances | 61,936 | ||||||||
Total non-current assets | 1,197,376 | 1,212,130 | 1,207,775 | 40,025 | |||||
Total assets | 1,457,549 | 1,461,530 | 1,439,788 | 180,358 | |||||
Current Liabilities | |||||||||
Settlement liabilities | 231 | 297 | 140 | ||||||
Accounts payable and accrued expenses | 29,670 | 35,216 | 41,395 | 1,398 | |||||
Intercompany balances | 30,907 | 22,949 | 8,159 | ||||||
Total current liabilities | 60,808 | 58,462 | 49,694 | 1,398 | |||||
Non-current liabilities | |||||||||
Deferred tax liability, non-current | 156,957 | 156,957 | 134,490 | ||||||
Other accrued expenses and liabilities | 440 | 457 | 490 | ||||||
Intercompany balances | 1,130,380 | 1,130,380 | 1,130,380 | ||||||
Total non-current liabilities | 1,290,958 | 1,220,205 | 1,265,360 | ||||||
Total liabilities | 1,351,766 | 1,289,163 | 1,315,054 | 1,398 | |||||
Stockholders' Equity | |||||||||
Additional paid-in capital | 2,792 | 2,269 | 2,269 | 2,000 | |||||
Retained earnings (deficit) | 102,991 | 179,088 | 122,465 | 115,024 | |||||
Total stockholders' equity (deficit) | 105,783 | 113,778 | 124,734 | 117,024 | |||||
Total liabilities and stockholders' equity | 1,457,549 | 1,461,530 | 1,439,788 | 180,358 | |||||
Reportable Legal Entities | Non-Guarantor Subsidiaries | |||||||||
Current assets | |||||||||
Cash and cash equivalents | 11,704 | 11,263 | 14,463 | $ 16,932 | $ 13,716 | 11,532 | $ 10,898 | $ 7,698 | |
Settlement receivables | 3,995 | 2,837 | 3,131 | 3,807 | |||||
Trade receivables, net | 1 | 3 | 6 | ||||||
Other receivables | 145 | 113 | 145 | 154 | |||||
Prepaid expenses and other assets | 9,549 | 8,530 | 9,024 | 6,354 | |||||
Intercompany balances | 1,539 | 1,473 | 1,623 | ||||||
Total current assets | 26,932 | 24,217 | 28,389 | 21,853 | |||||
Non-current assets | |||||||||
Property, equipment and leasehold improvements, net | 405 | 485 | 323 | 372 | |||||
Goodwill | 671 | 656 | 713 | 775 | |||||
Other intangible assets, net | 7,943 | 8,562 | 9,198 | 807 | |||||
Investment in Subsidiaries | 85 | 86 | 86 | ||||||
Other assets, non-current | 539 | 509 | 69 | 75 | |||||
Intercompany balances | 1,572 | ||||||||
Total non-current assets | 9,643 | 10,298 | 10,389 | 3,601 | |||||
Total assets | 36,575 | 34,515 | 38,778 | 25,454 | |||||
Current Liabilities | |||||||||
Settlement liabilities | 6,376 | 4,513 | 7,642 | 7,933 | |||||
Accounts payable and accrued expenses | 1,448 | 1,075 | 1,729 | 879 | |||||
Intercompany balances | 8,431 | 9,682 | 9,879 | 20,005 | |||||
Total current liabilities | 15,897 | 15,270 | 19,250 | 28,817 | |||||
Non-current liabilities | |||||||||
Deferred tax liability, non-current | 311 | ||||||||
Total non-current liabilities | 311 | ||||||||
Total liabilities | 16,255 | 15,870 | 19,250 | 29,128 | |||||
Stockholders' Equity | |||||||||
Additional paid-in capital | 21,107 | 21,110 | 21,115 | 1,808 | |||||
Retained earnings (deficit) | (205) | (738) | (1,006) | (5,738) | |||||
Accumulated other comprehensive income (loss) | (582) | (1,127) | (581) | 256 | |||||
Total stockholders' equity (deficit) | 20,320 | 19,245 | 19,528 | (3,674) | |||||
Total liabilities and stockholders' equity | 36,575 | 34,515 | 38,778 | 25,454 | |||||
Eliminations | |||||||||
Current assets | |||||||||
Other receivables | 63,508 | (8,437) | |||||||
Intercompany balances | (200,931) | (189,167) | (170,840) | (155,547) | |||||
Total current assets | (216,623) | (197,604) | (170,840) | (155,547) | |||||
Non-current assets | |||||||||
Investment in Subsidiaries | (380,784) | (383,544) | (378,754) | (331,954) | |||||
Deferred tax asset, non-current | (108,221) | (98,927) | (78,229) | (311) | |||||
Intercompany balances | (1,130,380) | (1,130,380) | (1,130,380) | (63,508) | |||||
Total non-current assets | 1,622,766 | (1,614,347) | (1,587,363) | (395,773) | |||||
Total assets | 1,839,389 | (1,811,951) | (1,758,203) | (551,320) | |||||
Current Liabilities | |||||||||
Accounts payable and accrued expenses | (15,692) | (8,437) | |||||||
Intercompany balances | (200,931) | 189,167 | (170,840) | (155,547) | |||||
Total current liabilities | (216,623) | (197,604) | 319,061 | (155,547) | |||||
Non-current liabilities | |||||||||
Deferred tax liability, non-current | (108,221) | (98,927) | (78,229) | (311) | |||||
Intercompany balances | (1,130,380) | 1,130,380 | (1,130,380) | (1,572) | |||||
Total non-current liabilities | 1,241,782 | (2,217,873) | (1,208,609) | (63,819) | |||||
Total liabilities | 1,458,405 | (1,428,407) | (1,379,449) | (219,366) | |||||
Stockholders' Equity | |||||||||
Additional paid-in capital | (115,742) | (110,581) | (93,038) | (71,502) | |||||
Retained earnings (deficit) | (264,317) | (273,394) | (284,728) | (257,369) | |||||
Accumulated other comprehensive income (loss) | (925) | 431 | (988) | (3,083) | |||||
Total stockholders' equity (deficit) | (380,984) | (383,544) | (278,754) | (331,954) | |||||
Total liabilities and stockholders' equity | $ (1,839,388) | $ (1,811,951) | $ (1,758,203) | $ (551,320) |
CONDENSED CONSOLIDATING FINA234
CONDENSED CONSOLIDATING FINANCIAL INFORMATION (CFS) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||
Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Cash flows from operating activities | |||||||||||||||
Net (loss) income | $ (12,741) | $ 469 | $ (5,749) | $ 5,676 | $ 4,724 | $ 7,489 | $ 5,704 | $ 5,782 | $ 6,776 | $ 6,136 | $ (12,272) | $ 12,213 | $ 12,140 | $ 24,398 | $ 25,689 |
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||||||||
Depreciation and Amortization | 31,032 | 4,281 | 62,521 | 8,969 | 22,944 | 16,938 | 16,639 | ||||||||
Amortization of financing costs | 2,072 | 471 | 3,730 | 942 | 2,035 | 1,793 | 1,485 | ||||||||
Loss/(gain) on sale or disposal of assets | 2 | 124 | 374 | (21) | |||||||||||
Accretion of contract rights | 2,104 | 4,092 | |||||||||||||
Provision for bad debts | 2,266 | 2,014 | 4,370 | 4,229 | 8,991 | 7,874 | 5,182 | ||||||||
Loss on early extinguishment of debt | 12,977 | 0 | 12,977 | 2,725 | |||||||||||
Stock-based compensation | 1,793 | 2,057 | 3,954 | 5,409 | 8,876 | 5,078 | 6,655 | ||||||||
Other non-cash items | 231 | 20 | 337 | 178 | 95 | ||||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Net settlement receivables and liabilities | 35,973 | 63,189 | 41,784 | 42,810 | (30,679) | (45,993) | 91,353 | ||||||||
Other changes in operating assets and liabilities | 9,874 | 6,972 | 4,881 | 878 | (5,967) | (5,932) | 10,390 | ||||||||
Net cash provided by operating activities | 85,816 | 86,597 | 126,391 | 75,429 | 24,531 | 4,334 | 157,488 | ||||||||
Cash flows from investing activities | |||||||||||||||
Acquisitions, net of cash acquired | (2,257) | (11,845) | (1,068,000) | ||||||||||||
Capital expenditures | (12,616) | (3,025) | (29,660) | (7,493) | (18,021) | (13,900) | (12,786) | ||||||||
Proceeds from sale of fixed assets | 1 | 192 | 29 | 213 | |||||||||||
Repayments under development agreements | 1,217 | 2,392 | 276 | ||||||||||||
Advances under development and placement agreements | (1,255) | (1,255) | |||||||||||||
Changes in restricted cash and cash equivalents | 59 | (46) | 60 | (45) | (102) | (90) | 255 | ||||||||
Net cash provided by (used in) investing activities | (12,594) | (2,879) | (30,691) | (19,170) | (1,085,847) | (13,990) | (12,531) | ||||||||
Cash flows from financing activities | |||||||||||||||
Repayments of prior credit facility | (3,000) | (7,000) | (103,000) | (18,500) | (52,500) | ||||||||||
Repayments of credit facility | (17,500) | (5,000) | |||||||||||||
Repayments of secured notes | (350,000) | ||||||||||||||
Proceeds from long-term debt | 335,000 | 1,200,000 | |||||||||||||
Debt issuance costs | (252) | (1,154) | (52,735) | (764) | (676) | ||||||||||
Proceeds from exercise of stock options | 1,048 | 2,440 | 1,673 | 4,613 | 5,338 | 8,431 | 6,655 | ||||||||
Purchase of treasury stock | (20) | (2,767) | (40) | (6,604) | (12,180) | (18,350) | (262) | ||||||||
Net cash used in financing activities | (16,724) | (3,327) | (19,521) | (8,991) | 1,037,423 | (29,183) | (46,783) | ||||||||
Effect of exchange rates on cash | (580) | (79) | (257) | 476 | (1,266) | 73 | (689) | ||||||||
Cash and cash equivalents | |||||||||||||||
Net increase for the period | 55,918 | 80,312 | 75,922 | 47,744 | (25,159) | (38,766) | 97,485 | ||||||||
Balance, beginning of the period | 145,013 | 89,095 | 161,998 | 194,566 | 114,254 | 153,020 | 89,095 | 114,254 | 114,254 | 153,020 | 55,535 | ||||
Balance, end of the period | 165,017 | 145,013 | 89,095 | 161,998 | 194,566 | 114,254 | 165,017 | 161,998 | 89,095 | 114,254 | 153,020 | ||||
Reportable Legal Entities | Parent | |||||||||||||||
Cash flows from operating activities | |||||||||||||||
Net (loss) income | (12,741) | 469 | 4,724 | 7,489 | (12,272) | 12,213 | 12,140 | 24,398 | 25,689 | ||||||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||||||||
Equity in loss (income) of subsidiaries | (469) | (7,489) | 12,272 | (12,213) | (12,140) | (24,398) | (25,689) | ||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Other changes in operating assets and liabilities | (5) | (51) | 28 | (31) | (47) | 19 | 29 | ||||||||
Net cash provided by operating activities | (5) | (51) | 28 | (31) | (47) | 19 | 29 | ||||||||
Cash flows from investing activities | |||||||||||||||
Intercompany investing activities | (1,023) | 378 | (3,907) | 2,022 | 6,889 | 9,900 | (6,422) | ||||||||
Net cash provided by (used in) investing activities | (1,023) | 378 | (3,907) | 2,022 | 6,889 | 9,900 | (6,422) | ||||||||
Cash flows from financing activities | |||||||||||||||
Issuance of warrants | 2,246 | ||||||||||||||
Proceeds from exercise of stock options | 1,048 | 2,440 | 1,673 | 4,613 | 5,338 | 8,431 | 6,655 | ||||||||
Purchase of treasury stock | (20) | (2,767) | (40) | (6,604) | (12,180) | (18,350) | (262) | ||||||||
Intercompany financing activities | 1,056,155 | ||||||||||||||
Net cash used in financing activities | 1,028 | (327) | 3,879 | (1,991) | 6,842 | (9,919) | 6,393 | ||||||||
Reportable Legal Entities | Subsidiary Issuer | |||||||||||||||
Cash flows from operating activities | |||||||||||||||
Net (loss) income | 1,092 | 14,204 | 4,932 | 7,489 | 13,112 | 12,421 | 15,186 | 24,398 | 25,689 | ||||||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||||||||
Depreciation and Amortization | 3,989 | 4,113 | 7,969 | 8,627 | 18,608 | 16,403 | 16,160 | ||||||||
Amortization of financing costs | 2,072 | 471 | 3,730 | 942 | 2,035 | 1,793 | 1,485 | ||||||||
Loss/(gain) on sale or disposal of assets | 2 | 124 | (13) | (21) | |||||||||||
Provision for bad debts | 2,531 | ||||||||||||||
Loss on early extinguishment of debt | 12,977 | 12,977 | 2,523 | ||||||||||||
Equity in loss (income) of subsidiaries | (3,047) | (5,082) | (6,712) | (8,425) | (15,218) | (13,596) | (19,546) | ||||||||
Stock-based compensation | 1,674 | 2,057 | 3,432 | 5,409 | 8,849 | 5,078 | 6,655 | ||||||||
Other non-cash items | (76) | 52 | 180 | 95 | |||||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Net settlement receivables and liabilities | 38,671 | 63,982 | 43,663 | 41,722 | (31,414) | (44,264) | 88,354 | ||||||||
Other changes in operating assets and liabilities | 13,617 | 18,829 | 15,839 | 17,615 | 34,774 | 13,391 | 3,738 | ||||||||
Net cash provided by operating activities | 71,182 | 91,983 | 94,073 | 78,290 | 38,524 | 3,383 | 135,161 | ||||||||
Cash flows from investing activities | |||||||||||||||
Acquisitions, net of cash acquired | (2,257) | (11,845) | (11,845) | ||||||||||||
Capital expenditures | (2,434) | (2,707) | (5,387) | (6,977) | (5,465) | (13,364) | (11,546) | ||||||||
Proceeds from sale of fixed assets | 1 | 192 | 29 | 213 | |||||||||||
Changes in restricted cash and cash equivalents | 59 | (46) | 60 | (45) | (102) | (90) | 255 | ||||||||
Intercompany investing activities | 164 | (9,663) | 5,423 | (11,622) | (1,085,709) | (4,676) | 20,336 | ||||||||
Net cash provided by (used in) investing activities | (2,210) | (12,224) | (2,132) | (30,276) | (1,103,121) | (18,130) | 9,045 | ||||||||
Cash flows from financing activities | |||||||||||||||
Repayments of prior credit facility | (3,000) | (7,000) | (103,000) | (18,500) | (52,500) | ||||||||||
Repayments of credit facility | (17,500) | (5,000) | |||||||||||||
Repayments of secured notes | (350,000) | ||||||||||||||
Proceeds from long-term debt | 335,000 | 1,200,000 | |||||||||||||
Debt issuance costs | (252) | (1,154) | (52,735) | (764) | (676) | ||||||||||
Issuance of warrants | (2,246) | ||||||||||||||
Intercompany financing activities | 1,072 | 987 | 106 | 1,188 | (12,098) | (7,056) | 2,844 | ||||||||
Net cash used in financing activities | (16,680) | (2,013) | (23,294) | (5,812) | 1,032,167 | (26,320) | (50,332) | ||||||||
Cash and cash equivalents | |||||||||||||||
Net increase for the period | 52,292 | 77,746 | 68,647 | 42,202 | (32,430) | (41,067) | 93,874 | ||||||||
Balance, beginning of the period | 120,435 | 68,143 | 142,775 | 178,319 | 100,573 | 141,640 | 68,143 | 100,573 | 100,573 | 141,640 | 47,766 | ||||
Balance, end of the period | 136,790 | 120,435 | 68,143 | 142,775 | 178,319 | 100,573 | 136,790 | 142,775 | 68,143 | 100,573 | 141,640 | ||||
Reportable Legal Entities | Guarantor Subsidiaries | |||||||||||||||
Cash flows from operating activities | |||||||||||||||
Net (loss) income | (8,519) | (10,955) | 2,609 | 2,602 | (19,474) | 5,211 | 7,438 | 11,002 | 8,685 | ||||||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||||||||
Depreciation and Amortization | 26,313 | 1 | 53,157 | 2 | 3,588 | 1 | 5 | ||||||||
Loss/(gain) on sale or disposal of assets | 387 | ||||||||||||||
Accretion of contract rights | 2,104 | 4,092 | |||||||||||||
Provision for bad debts | 2,266 | 2,014 | 4,370 | 4,229 | 8,991 | 7,874 | 2,651 | ||||||||
Loss on early extinguishment of debt | 202 | ||||||||||||||
Stock-based compensation | 522 | 27 | |||||||||||||
Other non-cash items | 231 | 96 | 284 | ||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Net settlement receivables and liabilities | 157 | 218 | 91 | 192 | 141 | ||||||||||
Other changes in operating assets and liabilities | (3,350) | (4,360) | (10,159) | (9,289) | (20,047) | (18,880) | (10,705) | ||||||||
Net cash provided by operating activities | 16,766 | 475 | 32,890 | 345 | 624 | (3) | 636 | ||||||||
Cash flows from investing activities | |||||||||||||||
Acquisitions, net of cash acquired | (1,056,155) | ||||||||||||||
Capital expenditures | (9,902) | (93) | (23,993) | (203) | (3,464) | (330) | (225) | ||||||||
Repayments under development agreements | 1,217 | 2,392 | 276 | ||||||||||||
Advances under development and placement agreements | (1,255) | (1,255) | |||||||||||||
Net cash provided by (used in) investing activities | (9,940) | (93) | (22,856) | (203) | (1,059,343) | (330) | (225) | ||||||||
Cash flows from financing activities | |||||||||||||||
Intercompany financing activities | 1,063,059 | 2,000 | |||||||||||||
Net cash used in financing activities | 1,063,059 | 2,000 | |||||||||||||
Cash and cash equivalents | |||||||||||||||
Net increase for the period | 6,826 | 382 | 10,034 | 142 | 4,340 | 1,667 | 411 | ||||||||
Balance, beginning of the period | 13,315 | 6,489 | 2,291 | 2,531 | 2,149 | 482 | 6,489 | 2,149 | 2,149 | 482 | 71 | ||||
Balance, end of the period | 16,523 | 13,315 | 6,489 | 2,291 | 2,531 | 2,149 | 16,523 | 2,291 | 6,489 | 2,149 | 482 | ||||
Reportable Legal Entities | Non-Guarantor Subsidiaries | |||||||||||||||
Cash flows from operating activities | |||||||||||||||
Net (loss) income | 535 | 267 | 526 | 2,480 | 802 | 3,006 | 4,734 | 2,594 | 861 | ||||||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||||||||
Depreciation and Amortization | 730 | 167 | 1,395 | 340 | 748 | 534 | 474 | ||||||||
Other non-cash items | 1 | (2) | |||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Net settlement receivables and liabilities | (2,855) | (1,011) | (1,970) | 896 | 594 | (1,729) | 2,999 | ||||||||
Other changes in operating assets and liabilities | (269) | (7,446) | (827) | (7,417) | (20,647) | (462) | 17,328 | ||||||||
Net cash provided by operating activities | (2,127) | (5,810) | (600) | (3,175) | (14,570) | 935 | 21,662 | ||||||||
Cash flows from investing activities | |||||||||||||||
Capital expenditures | (280) | (225) | (280) | (313) | (9,092) | (206) | (1,015) | ||||||||
Intercompany investing activities | (48) | (1,590) | (106) | (1,594) | (1,425) | ||||||||||
Net cash provided by (used in) investing activities | (328) | (1,815) | (386) | (1,907) | (10,517) | (206) | (1,015) | ||||||||
Cash flows from financing activities | |||||||||||||||
Intercompany financing activities | (165) | 9,888 | (1,516) | 10,006 | 29,284 | (168) | (16,758) | ||||||||
Net cash used in financing activities | (165) | 9,888 | (1,516) | 10,006 | 29,284 | (168) | (16,758) | ||||||||
Effect of exchange rates on cash | (580) | (79) | (257) | 476 | (1,266) | 73 | (689) | ||||||||
Cash and cash equivalents | |||||||||||||||
Net increase for the period | (3,200) | 2,184 | (2,759) | 5,400 | 2,931 | 634 | 3,200 | ||||||||
Balance, beginning of the period | 11,263 | 14,463 | $ 16,932 | 13,716 | 11,532 | $ 10,898 | 14,463 | 11,532 | 11,532 | 10,898 | 7,698 | ||||
Balance, end of the period | 11,704 | 11,263 | $ 14,463 | 16,932 | 13,716 | $ 11,532 | 11,704 | 16,932 | 14,463 | 11,532 | 10,898 | ||||
Eliminations | |||||||||||||||
Cash flows from operating activities | |||||||||||||||
Net (loss) income | $ 9,076 | (3,516) | $ (8,067) | (12,571) | 5,560 | (20,638) | (27,358) | (37,994) | (35,235) | ||||||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||||||||
Equity in loss (income) of subsidiaries | 3,516 | 12,571 | (5,560) | 20,638 | 27,358 | 37,994 | 35,235 | ||||||||
Stock-based compensation | 119 | ||||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Other changes in operating assets and liabilities | (119) | ||||||||||||||
Cash flows from investing activities | |||||||||||||||
Intercompany investing activities | 907 | 10,875 | (1,410) | 11,194 | 1,080,245 | (5,224) | (13,914) | ||||||||
Net cash provided by (used in) investing activities | 907 | 10,875 | (1,410) | 11,194 | 1,080,245 | (5,224) | (13,914) | ||||||||
Cash flows from financing activities | |||||||||||||||
Intercompany financing activities | (907) | (10,875) | 1,410 | (11,194) | (1,080,245) | 5,224 | 13,914 | ||||||||
Net cash used in financing activities | $ (907) | $ (10,875) | $ 1,410 | $ (11,194) | $ (1,080,245) | $ 5,224 | $ 13,914 |