Document_And_Entity_Informatio
Document And Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 05, 2013 | |
Document Information [Line Items] | ' | ' |
Entity Registrant Name | 'INNERWORKINGS INC | ' |
Entity Central Index Key | '0001350381 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Trading Symbol | 'INWK | ' |
Entity Common Stock, Shares Outstanding | ' | 51,266,400 |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-13 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2013 | ' |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Revenue | $232,629,788 | $199,768,676 | $647,821,539 | $589,712,549 |
Cost of goods sold | 179,511,134 | 152,887,337 | 500,533,788 | 453,591,764 |
Gross profit | 53,118,654 | 46,881,339 | 147,287,751 | 136,120,785 |
Operating expenses: | ' | ' | ' | ' |
Selling, general and administrative expenses | 45,832,645 | 36,253,631 | 130,866,672 | 106,514,313 |
Depreciation and amortization | 3,880,431 | 2,696,255 | 8,994,494 | 8,077,332 |
Change in fair value of contingent consideration | -46,793,951 | 330,791 | -47,834,508 | 797,476 |
Goodwill impairment charge | 37,908,000 | 0 | 37,908,000 | 0 |
Restructuring and other charges | 4,321,862 | 0 | 4,321,862 | 0 |
Income from operations | 7,969,667 | 7,600,662 | 13,031,231 | 20,731,664 |
Other income (expense): | ' | ' | ' | ' |
Gain on sale of investment | 0 | 346,836 | 0 | 842,408 |
Interest income | 14,887 | 10,667 | 22,776 | 64,587 |
Interest expense | -820,081 | -633,085 | -1,820,013 | -1,950,803 |
Other, net | 77,147 | 108,667 | -343,506 | 122,606 |
Total other expense | -728,047 | -166,915 | -2,140,743 | -921,202 |
Income before income taxes | 7,241,620 | 7,433,747 | 10,890,488 | 19,810,462 |
Income tax expense (benefit) | -50,301 | 2,457,403 | 800,092 | 6,672,030 |
Net income | 7,291,921 | 4,976,344 | 10,090,396 | 13,138,432 |
Basic earnings per share (in dollars per share) | $0.14 | $0.10 | $0.20 | $0.27 |
Diluted earnings per share (in dollars per share) | $0.14 | $0.10 | $0.19 | $0.26 |
Comprehensive income | $10,663,894 | $5,397,109 | $11,412,903 | $12,979,705 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEET (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Assets | ' | ' |
Cash and cash equivalents | $19,224,801 | $17,218,899 |
Accounts receivable, net of allowance for doubtful accounts of $1,553,926 and $1,782,518, respectively | 167,059,275 | 149,246,568 |
Unbilled revenue | 28,920,833 | 30,798,230 |
Inventories | 29,423,436 | 17,406,863 |
Prepaid expenses | 10,689,569 | 16,210,053 |
Deferred income taxes | 3,059,701 | 1,513,414 |
Other current assets | 23,746,449 | 21,051,907 |
Total current assets | 282,124,064 | 253,445,934 |
Property and equipment, net | 20,763,736 | 17,078,384 |
Intangibles and other assets: | ' | ' |
Goodwill | 252,154,181 | 214,086,880 |
Intangible assets, net of accumulated amortization of $18,195,508 and $22,224,503, respectively | 57,100,375 | 36,396,865 |
Deferred income taxes | 0 | 413,244 |
Other assets | 1,035,867 | 822,275 |
Total Other Assets | 310,290,423 | 251,719,264 |
Total assets | 613,178,223 | 522,243,582 |
Liabilities and stockholders' equity | ' | ' |
Accounts payable-trade | 143,507,594 | 121,132,051 |
Current portion of contingent consideration | 24,876,636 | 7,795,489 |
Due to seller | 1,194,520 | 10,796,850 |
Accrued expenses | 13,859,774 | 17,558,675 |
Other liabilities | 14,683,802 | 8,111,051 |
Total current liabilities | 198,122,326 | 165,394,116 |
Revolving credit facility | 91,500,000 | 65,000,000 |
Deferred income taxes | 17,188,867 | 5,000,740 |
Contingent consideration, net of current portion | 64,212,585 | 63,869,281 |
Total liabilities | 371,023,778 | 299,264,137 |
Stockholders' equity: | ' | ' |
Common stock, par value $0.0001 per share, 200,000,000 and 200,000,000 shares authorized, 60,735,561 and 61,363,632 shares issued, 50,200,098 and 51,250,323 shares outstanding, respectively | 6,136 | 6,074 |
Additional paid-in capital | 201,158,609 | 198,117,936 |
Treasury stock at cost, 10,535,463 and 10,113,309 shares, respectively | -62,312,100 | -67,071,323 |
Accumulated other comprehensive income | 1,527,969 | 205,462 |
Retained earnings | 101,773,831 | 91,721,296 |
Total stockholders' equity | 242,154,445 | 222,979,445 |
Total liabilities and stockholders' equity | $613,178,223 | $522,243,582 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEET [Parenthetical] (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Accounts receivable, allowance for doubtful accounts (in dollars) | $1,782,518 | $1,553,926 |
Intangible assets, accumulated amortization (in dollars) | $22,224,503 | $18,195,508 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 61,363,632 | 60,735,561 |
Common stock, shares outstanding | 51,250,323 | 50,200,098 |
Treasury stock at cost, shares | 10,113,309 | 10,535,463 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Cash flows from operating activities | ' | ' |
Net income | $10,090,396 | $13,138,432 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ' | ' |
Depreciation and amortization | 8,994,494 | 8,077,332 |
Stock-based compensation expense | 3,036,188 | 3,171,073 |
Deferred income taxes | 4,026,444 | 1,908,788 |
Gain on sale of investment | 0 | -842,408 |
Excess tax benefit from exercise of stock awards | 1,768,277 | -8,352,190 |
Change in fair value of contingent consideration liability | -47,834,508 | 797,476 |
Goodwill impairment charge | 37,908,000 | 0 |
Reduction of prepaid commissions | 3,939,974 | 0 |
Other operating activities | 736,222 | 856,098 |
Change in assets, net of acquisitions: | ' | ' |
Accounts receivable and unbilled revenue | -1,017,812 | -29,915,383 |
Inventories | -8,276,976 | 869,220 |
Prepaid expenses and other | 955,618 | -26,189,881 |
Change in liabilities, net of acquisitons: | ' | ' |
Accounts payable | 7,947,457 | 18,615,109 |
Accrued expenses and other | -7,414,905 | 4,765,850 |
Net cash (used in) provided by operating activities | 14,858,869 | -13,100,484 |
Cash flows from investing activities | ' | ' |
Purchases of property and equipment | -8,690,905 | -7,462,169 |
Payments for acquisitions, net of cash acquired | -19,795,603 | -946,060 |
Payments to seller for acquisitions completed prior to 2009 | 0 | -3,000,000 |
Proceeds from sale of marketable securities | 0 | 603,053 |
Other investing activities | 0 | 11,567 |
Net cash used in investing activities | -28,486,508 | -10,793,609 |
Cash flows from financing activities | ' | ' |
Net borrowings from revolving credit facility | 26,500,000 | 14,000,000 |
Payments of contingent consideration | -10,884,392 | -6,140,344 |
Proceeds from exercise of stock options | 1,939,274 | 3,958,789 |
Excess tax benefit from exercise of stock awards | -1,768,277 | 8,352,190 |
Other financing activities | -274,052 | -7,270 |
Net cash provided by financing activites | 15,512,553 | 20,163,365 |
Effect of exchange rate changes on cash and cash equivalents | 120,988 | -332,194 |
(Decrease) increase in cash and cash equivalents | 2,005,902 | -4,062,922 |
Cash and cash equivalents, beginning of period | 17,218,899 | 13,219,385 |
Cash and cash equivalents, end of period | $19,224,801 | $9,156,463 |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||||
Significant Accounting Policies [Text Block] | ' | |||||||||||||
1 | Summary of Significant Accounting Policies | |||||||||||||
Basis of Presentation of Interim Financial Statements | ||||||||||||||
The accompanying unaudited consolidated financial statements of InnerWorkings, Inc. and subsidiaries (the “Company”) included herein have been prepared to conform to the rules and regulations of the Securities and Exchange Commission (“SEC”) and accounting principles generally accepted in the United States (“GAAP”) for interim financial information. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments considered necessary for a fair presentation of the accompanying unaudited financial statements have been included, and all adjustments are of a normal and recurring nature. The operating results for the three and nine months ended September 30, 2013 are not necessarily indicative of the results to be expected for the full year of 2013. These condensed interim consolidated financial statements and notes should be read in conjunction with the Company’s Consolidated Financial Statements and Notes thereto as of December 31, 2012 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 28, 2013. | ||||||||||||||
Foreign Currency Translation | ||||||||||||||
The functional currency for the Company’s foreign operations is the local currency. Assets and liabilities of these operations are translated into U.S. currency at the rates of exchange at the balance sheet date. The resulting translation adjustments are included in accumulated other comprehensive income, a separate component of stockholders’ equity. Income and expense items are translated at average monthly rates of exchange. The net realized (losses) gains on foreign currency transactions were $(0.1) million and $0.1 million during the three months ended September 30, 2012 and 2013, respectively, and $0.1 million and $(0.3) million during the nine months ended September 30, 2012 and 2013, respectively. | ||||||||||||||
Goodwill and Other Intangibles | ||||||||||||||
Goodwill represents the excess of purchase price and related costs over the value assigned to the net tangible and identifiable intangible assets of businesses acquired. In accordance with ASC 350, Intangibles—Goodwill and Other, goodwill is not amortized, but instead is tested for impairment annually, or more frequently if circumstances indicate a possible impairment may exist. Absent any interim indicators of impairment, the Company tests for goodwill impairment as of December 31 of each year. The provisions of ASU 2011-08, “Testing Goodwill for Impairment,” were adopted in the fourth quarter of 2012. ASU 2011-08 permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the quantitative goodwill impairment test. If the quantitative test is required, in the first step, the fair value for each reporting unit is compared to its book value including goodwill. In the case that the fair value is less than the book value, a second step is performed which compares the implied fair value of goodwill to the book value of goodwill. The fair value for the goodwill is determined based on the difference between the fair value of the reporting unit and the net fair values of the identifiable assets and liabilities. If the implied fair value of the goodwill is less than the book value of the goodwill, the difference is recognized as an impairment. | ||||||||||||||
As of the annual impairment test performed as of December 31, 2012, the Company defined its two reporting units as North America and International. Based on the qualitative factors assessed, the Company concluded it was not more likely than not that the fair value of the North America reporting unit was less than its carrying amount primarily because (1) the Company’s overall financial performance has been positive in the face of mixed economic environments and (2) forecasts of operating income and cash flows generated by the North America reporting unit appear sufficient to support the book value of its net assets. However, due to economic factors internationally, it was determined that the quantitative test was necessary for the International reporting unit. No impairment was identified as a result of this test as of December 31, 2012. | ||||||||||||||
In the third quarter of 2013, the Company recorded a non-cash, goodwill impairment charge of $37.9 million. For additional information related to the goodwill impairment, see Note 3. | ||||||||||||||
The following is a summary of the goodwill balance for each operating segment as of September 30, 2013: | ||||||||||||||
North | Latin | EMEA | Total | |||||||||||
America | America | |||||||||||||
Net goodwill as of December 31, 2012 | $ | 120,453,194 | $ | 9,656,417 | $ | 83,977,269 | $ | 214,086,880 | ||||||
Goodwill acquired related to 2013 acquisitions | 49,913,257 | - | 23,578,414 | 73,491,671 | ||||||||||
Finalization of purchase accounting for prior year acquisitions | 176,886 | 218,819 | -40,940 | 354,765 | ||||||||||
Impairment charge | - | - | -37,908,000 | -37,908,000 | ||||||||||
Foreign exchange impact | -28,589 | - | 2,157,454 | 2,128,865 | ||||||||||
Net goodwill as of September 30, 2013 | $ | 170,514,748 | $ | 9,875,236 | $ | 71,764,197 | $ | 252,154,181 | ||||||
In accordance with ASC 350, Intangibles – Goodwill and Other, the Company amortizes its intangible assets with finite lives over their respective estimated useful lives and reviews for impairment whenever impairment indicators exist. The Company’s intangible assets consist of customer lists, noncompete agreements, trade names and patents. The Company’s customer lists, which have an estimated weighted-average useful life of fourteen years, are being amortized using the economic life method. The Company’s noncompete agreements, trade names and patents are being amortized on the straight-line basis over their estimated weighted-average useful lives of approximately four years, twelve years and nine years, respectively. | ||||||||||||||
The following is a summary of the intangible assets: | ||||||||||||||
December 31, | September 30, | Weighted | ||||||||||||
2012 | 2013 | Average Life | ||||||||||||
Customer lists | $ | 50,008,913 | $ | 74,722,978 | 14.7 years | |||||||||
Noncompete agreements | 1,077,349 | 1,077,349 | 3.9 years | |||||||||||
Trade names | 3,467,655 | 3,467,655 | 12.4 years | |||||||||||
Patents | 38,456 | 56,896 | 9.0 years | |||||||||||
54,592,373 | 79,324,878 | |||||||||||||
Less accumulated amortization | -18,195,508 | -22,224,503 | ||||||||||||
Intangible assets, net | $ | 36,396,865 | $ | 57,100,375 | ||||||||||
Amortization expense related to these intangible assets was $1.1 million and $2.2 million during the three month periods ended September 30, 2012 and 2013, respectively, and $3.3 million and $4.0 million during the nine month periods ended September 30, 2012 and 2013, respectively. | ||||||||||||||
The estimated amortization expense for the next five years is as follows: | ||||||||||||||
Remainder of 2013 | $ | 2,304,326 | ||||||||||||
2014 | 5,843,736 | |||||||||||||
2015 | 5,243,546 | |||||||||||||
2016 | 5,026,472 | |||||||||||||
2017 | 4,761,401 | |||||||||||||
Thereafter | 33,920,894 | |||||||||||||
$ | 57,100,375 | |||||||||||||
Stock-Based Compensation | ||||||||||||||
The Company accounts for stock-based compensation awards to employees and directors in accordance with ASC 718, Compensation-Stock Compensation. Compensation expense for stock options is measured by determining the fair value using the Black-Scholes option valuation model and is then recognized over the requisite service period of the awards, which is generally the vesting period, on a straight-line basis for the entire award. | ||||||||||||||
Stock-based compensation cost recognized during the period is based on the portion of the share-based payment awards that are ultimately expected to vest. Accordingly, stock-based compensation cost recognized has been reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. | ||||||||||||||
During the nine month periods ended September 30, 2012 and 2013, the Company granted 537,226 and 222,679 options, respectively. In addition, during the nine month periods ended September 30, 2012 and 2013, the Company granted 297,253 and 400,962 restricted common shares, respectively. During the nine month periods ended September 30, 2012 and 2013, 2,561,725 and 659,148 options were exercised and restricted common shares vested, respectively. The Company recorded stock-based compensation expense of $0.7 million and $1.0 million for the three months ended September 30, 2012 and 2013, respectively, and $3.2 million and $3.0 million for the nine months ended September 30, 2012 and 2013, respectively. | ||||||||||||||
Acquisitions
Acquisitions | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Business Combinations [Abstract] | ' | ||||||||||
Business Combination Disclosure [Text Block] | ' | ||||||||||
2 | Acquisitions | ||||||||||
On July 25, 2013, the Company purchased all of the outstanding shares of capital stock or other equity interests of the U.S. and international businesses of EYELEVEL, a leading global provider of permanent retail displays and store fixtures. EYELEVEL operates from their European headquarters in Prague, Czech Republic and their U.S. base in Portland, Oregon, with additional operations in Australia, Brazil, China, Russia, and the United Kingdom. | |||||||||||
EYELEVEL contributed revenue and gross profit which represent approximately 7% and 9%, respectively, of the Company’s consolidated results for the three months ended September 30, 2013. The following unaudited pro forma summary presents consolidated financial information of the Company as if the business combination had occurred on January 1, 2012. | |||||||||||
Year Ended | Nine Months Ended | ||||||||||
December 31, 2012 | September 30, 2013 | ||||||||||
Revenue | $ | 839,048,404 | $ | 674,184,058 | |||||||
Gross profit | 195,130,468 | 156,194,244 | |||||||||
Net income | 22,983,192 | 13,538,435 | |||||||||
Additionally, during July 2013, the Company acquired 100% of the voting equity interests of another international company. This acquisition was individually immaterial. The acquisition contributed revenue and gross profit which represent approximately 2% and 3%, respectively, of the Company’s consolidated results for the three months ended September 30, 2013. Pro forma results of this acquisition are not disclosed as they would not have, individually or in the aggregate, a material impact on the Company’s financial statements. | |||||||||||
The following table summarizes the total consideration paid for acquisitions occurring during the three months ended September 30, 2013 and the amount of identified assets acquired and liabilities assumed at the acquisition date. At September 30, 2013, the purchase price allocations are preliminary and subject to change as more detailed analyses are completed and additional information about the fair value of assets and liabilities becomes available. Specifically, the Company is finalizing the determination of the fair values of the intangible assets acquired and the contingent consideration liabilities. Changes to these fair values will also impact the amount of goodwill recorded in connection with the acquisitions. | |||||||||||
EYELEVEL | Other | Total | |||||||||
Cash | $ | 13,505,356 | $ | - | $ | 13,505,356 | |||||
Common stock | - | 2,488,842 | 2,488,842 | ||||||||
Contingent consideration | 21,700,000 | 4,341,509 | 26,041,509 | ||||||||
Total consideration transferred | $ | 35,205,356 | $ | 6,830,351 | $ | 42,035,707 | |||||
Cash and cash equivalents | $ | 4,817,536 | $ | 447,129 | $ | 5,264,665 | |||||
Accounts receivable | 6,624,904 | 3,587,337 | 10,212,241 | ||||||||
Inventory | 2,512,014 | 1,045,564 | 3,557,578 | ||||||||
Other assets | 1,693,387 | 110,614 | 1,804,001 | ||||||||
Customer list | 19,300,000 | - | 19,300,000 | ||||||||
Goodwill | 17,962,992 | 6,436,382 | 24,399,374 | ||||||||
Accounts payable | -7,470,390 | -3,291,426 | -10,761,816 | ||||||||
Other current liabilities | -4,931,094 | -1,505,249 | -6,436,343 | ||||||||
Deferred income taxes | -5,303,993 | - | -5,303,993 | ||||||||
Total identifiable net assets and goodwill | $ | 35,205,356 | $ | 6,830,351 | $ | 42,035,707 | |||||
Goodwill for these acquisitions generally consists of expected synergies from combining operations of these acquisitions with the Company’s existing operations. Acquisition related costs were included in selling, general and administrative expenses and were immaterial. None of the goodwill is expected to be deductible for tax purposes. | |||||||||||
Contingent Consideration | |||||||||||
In connection with certain of the Company’s acquisitions, contingent consideration is payable in cash or common stock upon the achievement of certain performance measures over future periods. For the acquisitions occurring subsequent to January 1, 2009, the Company has recorded the acquisition date fair value of the contingent consideration liability as additional purchase price. The Company has recorded $89.1 million in contingent consideration at September 30, 2013 related to these arrangements. Any adjustments made to the fair value of the contingent consideration liability subsequent to the acquisition date will be recorded in the Company’s results of operations. | |||||||||||
For the three months ended September 30, 2013, the Company’s fair value adjustment to the contingent consideration liability includes a $44.5 million adjustment to reduce the liability relating to the Productions Graphics acquisition in 2011. Declining financial performance in recent periods resulted in revised forecasts for the acquired business and a decreased likelihood that the remaining performance targets which extend through December 31, 2015 will be reached. As of September 30, 2013, the fair value of the potential remaining €55.0 million contingent consideration payments was decreased to €5.9 million. See Note 10 for more information on Productions Graphics. | |||||||||||
As of September 30, 2013, the potential maximum contingent payments are payable as follows: | |||||||||||
Cash | Common Stock | Total | |||||||||
2013 | $ | 160,000 | $ | - | $ | 160,000 | |||||
2014 | 5,808,050 | 56,830,938 | 62,638,988 | ||||||||
2015 | 13,249,600 | 21,751,635 | 35,001,235 | ||||||||
2016 | 32,650,800 | 30,502,550 | 63,153,350 | ||||||||
2017 | - | 21,942,800 | 21,942,800 | ||||||||
$ | 51,868,450 | $ | 131,027,923 | $ | 182,896,373 | ||||||
Goodwill_Impairment_Charge
Goodwill Impairment Charge | 9 Months Ended | |
Sep. 30, 2013 | ||
Goodwill and Intangible Asset Impairment [Abstract] | ' | |
Asset Impairment Charges [Text Block] | ' | |
3 | Goodwill Impairment Charge | |
As discussed in Note 1, goodwill is tested for impairment annually, or more frequently if circumstances indicate a possible impairment may exist. Absent any interim indicators of impairment, the Company tests for goodwill impairment as of December 31 of each year. Effective as of the third quarter of 2013, the Company changed its reportable operating segments to North America, Latin America and EMEA. See Note 12 for further information on this change. Concurrent with the operating segment change, the Company now defines its reporting units as the same three units. This change in the reporting units along with a decline in forecasted financial performance in 2013 compelled management to perform an interim goodwill impairment test for these reporting units as of September 30, 2013. In the first step of the impairment test, the Company concluded that the carrying amount of the EMEA reporting unit exceeded its fair value, requiring the Company to perform the second step of the impairment test to measure the amount of impairment loss, if any. The fair values of the North America and Latin America reporting units exceeded their carrying values, and the second step was not necessary. | ||
Based upon fair value estimates of long-lived assets and discounted cash flows of the EMEA reporting unit, the Company compared the implied fair value of the goodwill in this reporting unit with the carrying value. The test resulted in a $37.9 million non-cash, goodwill impairment charge which was recognized in the third quarter of 2013. No tax benefit is recognized on the goodwill impairment. After the recognition of the impairment charge, the remaining goodwill in the EMEA reporting unit is $71.8 million. This charge had no impact on the Company’s cash flows or compliance with debt covenants. | ||
The fair value estimates used in the goodwill impairment analysis required significant judgment. The Company's fair value estimates for purposes of determining the goodwill impairment charge are considered Level 3 fair value measurements. The fair value estimates were based on assumptions that management believes to be reasonable, but that are inherently uncertain, including estimates of future revenues and operating margins and assumptions about the overall economic climate and the competitive environment for the business. | ||
Restructuring_Activities_and_O
Restructuring Activities and Other Charges | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Restructuring and Related Activities [Abstract] | ' | ||||||||||
Restructuring, Impairment, and Other Activities Disclosure [Text Block] | ' | ||||||||||
4 | Restructuring Activities and Other Charges | ||||||||||
During the third quarter of 2013, the Company commenced various restructuring actions which resulted in charges of $3.0 million during the quarter. These actions consisted of terminating 49 employees and providing them with severance benefits in accordance with benefit plans previously communicated to the affected employee group or local employment laws. | |||||||||||
The following table summarizes the restructuring charges by reportable segment. The accrued amounts remaining as of September 30, 2013 represent those cash expenditures necessary to satisfy remaining obligations. The majority of the cash payments to satisfy the accrued costs are expected to be paid in the next year. | |||||||||||
North America | EMEA | Total | |||||||||
Employee terminations and other benefits | $ | 2,745,373 | $ | 260,407 | $ | 3,005,780 | |||||
Cash payments | -121,482 | - | -121,482 | ||||||||
Write-off of prepaid commissions balance (1) | -2,623,891 | - | -2,623,891 | ||||||||
Accrued restructuring costs as of September 30, 2013 | $ | - | $ | 260,407 | $ | 260,407 | |||||
-1 | Prepaid commission balances represent cash paid to our account executives in advance of commissions earned and is recorded in prepaid expenses on the balance sheet. For employees who had a balance and were affected by the restructuring actions, which primarily includes Small and Medium Business (“SMB”) account executives, the Company included these balances as part of the severance paid to these individuals. | ||||||||||
The Company’s SMB division was one of the principal groups affected by the restructuring actions noted above. In addition to these restructuring charges, the Company changed its compensation structure during the third quarter so that remaining employees of SMB are paid a fixed salary. This change in compensation structure resulted in the recording of an additional charge of $1.3 million for these employees. | |||||||||||
Income_Taxes
Income Taxes | 9 Months Ended | |
Sep. 30, 2013 | ||
Income Tax Disclosure [Abstract] | ' | |
Income Tax Disclosure [Text Block] | ' | |
5 | Income Taxes | |
The Company’s effective income tax rate was 33.1% and (0.7%) in the three months ended September 30, 2012 and 2013, respectively, and 33.7% and 7.3% in the nine months ended September 30, 2012 and 2013, respectively. The Company’s effective income tax rate differs from the U.S. federal statutory rate each year due to certain operations that are subject to tax incentives, state and local taxes, and foreign taxes that are different than the U.S. federal statutory rate. In addition, the effective tax rate can be impacted each period by discrete factors and events. | ||
The effective tax rates for the three and nine months ended September 30, 2013 were affected by the fair value changes to contingent consideration and the goodwill impairment charge disclosed in Note 3. Portions of the total gain recognized from fair value changes to contingent consideration relate to non-taxable acquisitions for which deferred taxes are not recognized, consistent with the treatment of goodwill and intangible assets for those acquisitions under U.S. GAAP. For the three and nine months ended September 30, 2013, $44.2 million and $44.4 million, respectively, was recognized as income from fair value changes to contingent consideration which did not result in recognition of a deferred tax liability, therefore, reducing the effective tax rate for these periods. Additionally, as discussed in Note 3, there was no tax benefit on the $37.9 million goodwill impairment charge; therefore, this charge increased the effective tax rate for these periods. | ||
The effective tax rate for the nine months ended September 30, 2013 was also reduced by recognition of the 2012 research and development (“R&D”) tax credit in the first quarter of 2013. On January 2, 2013, the President signed the American Taxpayer Relief Act of 2012. The legislation retroactively extended the R&D tax credit for two years, from January 1, 2012 through December 31, 2013. The company’s effective income tax rate for the nine months ended September 30, 2013 reflected the 2012 R&D tax credit of $0.3 million. | ||
Excluding the impact of the items described above, the effective tax rate for the three and nine months ended September 30, 2013 was (5.5%) and 25.3%, respectively, compared to 33.1% and 33.7% for the three and nine months ended September 30, 2012, respectively. The decrease in these rates is due to international expansion into countries with lower statutory tax rates, the 2013 R&D tax credit and lower income before taxes which results in permanent differences between book and tax having a more significant impact on the effective tax rate. The rate for the three months ended September 30, 2013 is also reduced because of revised forecasts for the year ended December 31, 2013 which resulted in a reduction to expected income tax expense for the annual period compared to the estimates from prior quarters. | ||
As a result of certain realization requirements of ASC 718, Stock-Based Compensation, the Company has not recorded certain deferred tax assets that arose directly from tax deductions related to equity compensation that are greater than the compensation recognized for financial reporting. As of December 31, 2012, the Company estimated $5.4 million in tax deductions related to these stock option exercises which had not been recorded but were available to reduce taxable income in future periods. These deductions will be recorded to additional paid in capital in the period in which they are realized. Upon completion of the Company’s federal income tax return in the third quarter of 2013, the actual excess tax deductions for the year ended December 31, 2012 were $10.3 million. The difference of $4.9 million, which was primarily related to changes in the Company’s estimates of tax deductions for fixed assets and internally developed software, resulted in a decrease to additional paid in capital and a decrease to deferred tax assets of $1.9 million. | ||
Earnings_Per_Share
Earnings Per Share | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||
Earnings Per Share [Text Block] | ' | |||||||||||||
6 | Earnings Per Share | |||||||||||||
Basic earnings per common share is calculated by dividing net income by the weighted average number of common shares outstanding. Diluted earnings per share is calculated by dividing net income by the weighted average shares outstanding plus share equivalents that would arise from the exercise of stock options and vesting of restricted common shares. Shares which would have an antidilutive effect on diluted earnings per share are excluded from the calculation. There were 1,097,897 and 1,310,586 antidilutive shares excluded for the three month periods ended September 30, 2012 and 2013, respectively, and 1,147,897 and 1,260,586 antidilutive shares excluded for the nine month periods ended September 30 2012 and 2013, respectively. The computations of basic and diluted earnings per common share for the three and nine months ended September 30, 2012 and 2013 are as follows: | ||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2012 | 2013 | 2012 | 2013 | |||||||||||
Numerator: | ||||||||||||||
Net Income | $ | 4,976,344 | $ | 7,291,921 | $ | 13,138,432 | $ | 10,090,396 | ||||||
Denominator: | ||||||||||||||
Denominator for basic earnings per share—weighted-average shares | 49,406,180 | 51,157,933 | 48,408,532 | 50,743,576 | ||||||||||
Effect of dilutive securities: | ||||||||||||||
Employee stock options and restricted common shares | 1,838,729 | 1,059,133 | 2,630,041 | 1,378,977 | ||||||||||
Denominator for dilutive earnings per share | 51,244,909 | 52,217,066 | 51,038,573 | 52,122,553 | ||||||||||
Basic earnings per share | $ | 0.1 | $ | 0.14 | $ | 0.27 | $ | 0.2 | ||||||
Diluted earnings per share | $ | 0.1 | $ | 0.14 | $ | 0.26 | $ | 0.19 | ||||||
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net Of Tax [Abstract] | ' | |||||||||||||||||||
Comprehensive Income (Loss) Note [Text Block] | ' | |||||||||||||||||||
7 | Accumulated Other Comprehensive Income | |||||||||||||||||||
The table below presents changes in the components of accumulated other comprehensive income “AOCI” for the three and nine months ended September 30, 2012 and 2013:” | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
2012 | 2013 | |||||||||||||||||||
Foreign currency | Unrealized holding | Total | Foreign currency | Unrealized holding | Total | |||||||||||||||
gains on available- | gains on available- | |||||||||||||||||||
for-sale securities | for-sale securities | |||||||||||||||||||
Balance, beginning of period | $ | 471,503 | $ | -782,663 | $ | -311,160 | $ | -1,844,004 | $ | - | $ | -1,844,004 | ||||||||
Other comprehensive income before reclassifications | 682,183 | -50,542 | 631,641 | 3,371,973 | - | 3,371,973 | ||||||||||||||
Amounts reclassified from AOCI | - | -210,876 | -210,876 | - | - | - | ||||||||||||||
Net current-period other comprehensive income | 682,183 | -261,418 | 420,765 | 3,371,973 | - | 3,371,973 | ||||||||||||||
Balance, end of period | $ | 1,153,686 | $ | -1,044,081 | $ | 109,605 | $ | 1,527,969 | $ | - | $ | 1,527,969 | ||||||||
Nine Months Ended | ||||||||||||||||||||
2012 | 2013 | |||||||||||||||||||
Foreign currency | Unrealized holding | Total | Foreign currency | Unrealized holding | Total | |||||||||||||||
gains on available- | gains on available- | |||||||||||||||||||
for-sale securities | for-sale securities | |||||||||||||||||||
Balance, beginning of period | $ | -404,689 | $ | 673,020 | $ | 268,331 | $ | 204,124 | $ | 1,338 | $ | 205,462 | ||||||||
Other comprehensive income before reclassifications | 304,209 | 49,248 | 353,457 | 1,323,845 | - | 1,323,845 | ||||||||||||||
Amounts reclassified from AOCI | - | -512,184 | -512,184 | - | -1,338 | -1,338 | ||||||||||||||
Net current-period other comprehensive income | 304,209 | -462,936 | -158,727 | 1,323,845 | -1,338 | 1,322,507 | ||||||||||||||
Balance, end of period | $ | -100,480 | $ | 210,084 | $ | 109,604 | $ | 1,527,969 | $ | - | $ | 1,527,969 | ||||||||
Related_Party_Transactions
Related Party Transactions | 9 Months Ended | |
Sep. 30, 2013 | ||
Related Party Transactions [Abstract] | ' | |
Related Party Transactions Disclosure [Text Block] | ' | |
8 | Related Party Transactions | |
Investment in Echo Global Logistics, Inc. | ||
As previously disclosed, in February 2005 the Company acquired shares of common stock of Echo Global Logistics, Inc. (“Echo”), a technology enabled transportation and logistics business process outsourcing firm. Two former members of our Board of Directors, Eric P. Lefkofsky and Peter J. Barris, were also directors of Echo during 2012. In addition, Jack M. Greenberg and Eric D. Belcher have a direct and/or an indirect ownership interest in Echo. Following Echo’s initial public offering in October 2009, the Company has periodically sold shares of Echo common stock. The Company sold 20,433 and 48,831 of shares of Echo’s common stock for $349,391 and $848,512, respectively, and recorded a gain on sale of investment of $346,836 and $842,408 during the three and nine months ended September 30, 2012, respectively. During the first quarter of 2013, the Company sold the remaining 123 shares of Echo’s common stock, and the proceeds and realized gain were immaterial. The Company classified its shares of Echo’s common stock as “available for sale” in accordance with ASC 320, Investments—Debt and Equity Securities. The investment was stated at fair value based on market prices, with any unrealized gains and losses included as a separate component of stockholders’ equity. Any realized gains and losses and interest and dividends have been determined using the specific identification method and included in other income. At September 30, 2013, the Company no longer owned any shares of Echo’s common stock. | ||
Agreements and Services with Related Parties | ||
The Company provides print procurement services to Echo. The total amount billed for such print procurement services was $17,501 and $144,086 during the three months ended September 30, 2012 and 2013, respectively, and $69,686 and $198,278 during the nine months ended September 30, 2012 and 2013, respectively. In addition, Echo has provided transportation services to the Company. As consideration for these services, Echo billed the Company $1,922,579 and $4,257,132 during the three months ended September 30, 2012 and 2013, respectively, and $7,022,561 and $9,770,293 during the nine months ended September 30, 2012 and 2013, respectively. The net amount payable to Echo at September 30, 2013 was $1,356,316. | ||
The Company provides print procurement services to Arthur J. Gallagher & Co. J. Patrick Gallagher, Jr., a member of the Company’s Board of Directors since August 2011, is the Chairman, President and Chief Executive Officer of Arthur J. Gallagher & Co. and has a direct ownership interest in Arthur J. Gallagher & Co. The total amount billed for such print procurement services was $120,537 and $169,280 during the three months ended September 30, 2012 and 2013, respectively, and $382,756 and $450,213 during the nine months ended September 30, 2012 and 2013, respectively. Additionally, Arthur J. Gallagher & Co. provides insurance brokerage and risk management services to the Company. As consideration of these services, Arthur J. Gallagher & Co. billed the Company $231,294 and $114,341 during the three months ended September 30, 2012 and 2013, respectively, and $283,694 and $391,887 during the nine months ended September 30, 2012 and 2013, respectively. The net amount receivable from Arthur J. Gallagher & Co. at September 30, 2013 was $16,973. | ||
Fair_Value_Measurement
Fair Value Measurement | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||
Fair Value Disclosures [Text Block] | ' | |||||||||||||
9 | Fair Value Measurement | |||||||||||||
ASC 820 includes a fair value hierarchy that is intended to increase consistency and comparability in fair value measurements and related disclosures. The fair value hierarchy is based on observable or unobservable inputs to valuation techniques that are used to measure fair value. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing based upon its own market assumptions. | ||||||||||||||
The fair value hierarchy consists of the following three levels: | ||||||||||||||
• | Level 1: Inputs are quoted prices in active markets for identical assets or liabilities. | |||||||||||||
• | Level 2: Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted prices that are observable and market-corroborated inputs, which are derived principally from or corroborated by observable market data. | |||||||||||||
• | Level 3: Inputs that are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable. | |||||||||||||
The Company's potential contingent consideration payments relating to acquisitions occurring subsequent to January 1, 2009 are its only Level 3 liabilities as of December 31, 2012 and September 30, 2013. The fair value of the liabilities determined by this analysis is primarily driven by the probability of reaching the performance measures required by the purchase agreements and the associated discount rate. Probabilities are estimated by reviewing financial forecasts and assessing the likelihood of reaching the required performance measures based on factors specific to each acquisition as well as the Company’s historical experience with similar arrangements. If an acquisition reaches the required performance measure, the estimated probability would be increased to 100%, and if the measure is not reached, the probability would be reduced to reflect the amount earned, if any, depending on the terms of the agreement. Discount rates are estimated by using the local government bond yields plus the Company’s credit spread. A one percentage point increase in the discount rate across all contingent consideration liabilities would result in a decrease to the fair value of approximately $2.4 million. | ||||||||||||||
The following table sets forth the Company’s financial assets and financial liabilities measured at fair value on a recurring basis and the basis of measurement at December 31, 2012 and September 30, 2013, respectively: | ||||||||||||||
At September 30, 2013 | Total Fair Value | Quoted Prices in | Significant Other | Significant | ||||||||||
Measurement | Active Markets for | Observable Inputs | Unobservable Inputs | |||||||||||
Identical Assets | (Level 2) | (Level 3) | ||||||||||||
(Level 1) | ||||||||||||||
Assets: | ||||||||||||||
Money market funds(1) | $ | 667,219 | $ | 667,219 | $ | - | $ | - | ||||||
Liabilities: | ||||||||||||||
Contingent consideration | $ | -89,089,221 | $ | - | $ | - | $ | -89,089,221 | ||||||
At December 31, 2012 | Total Fair Value | Quoted Prices in | Significant Other | Significant | ||||||||||
Measurement | Active Markets for | Observable Inputs | Unobservable Inputs | |||||||||||
Identical Assets | (Level 2) | (Level 3) | ||||||||||||
(Level 1) | ||||||||||||||
Assets: | ||||||||||||||
Money market funds(1) | $ | 667,045 | $ | 667,045 | $ | - | $ | - | ||||||
Liabilities: | ||||||||||||||
Contingent consideration | $ | -71,664,770 | $ | - | $ | - | $ | -71,664,770 | ||||||
-1 | Included in cash and cash equivalents on the balance sheet. | |||||||||||||
The following table provides a reconciliation of the beginning and ending balances for the liabilities measured at fair value using significant unobservable inputs (Level 3): | ||||||||||||||
Fair Value Measurements at | ||||||||||||||
Reporting Date Using | ||||||||||||||
Significant Unobservable Inputs | ||||||||||||||
(Level 3) | ||||||||||||||
Contingent Consideration | ||||||||||||||
Balance as of December 31, 2012 | $ | -71,664,770 | ||||||||||||
Contingent consideration from 2013 acquisitions | -68,965,673 | |||||||||||||
Contingent consideration payments paid in cash | 860,821 | |||||||||||||
Contingent consideration payments paid in common stock | 614,216 | |||||||||||||
Reclassified to Due to seller | 1,628,552 | |||||||||||||
Change in fair value (1) | 47,834,508 | |||||||||||||
Foreign exchange impact (2) | 603,125 | |||||||||||||
Balance as of September 30, 2013 | $ | -89,089,221 | ||||||||||||
-1 | Adjustments to original contingent consideration obligations recorded were the result of using revised financial forecasts and updated fair value measurements. These changes are included in income from continuing operations on the consolidated statement of comprehensive income. | |||||||||||||
-2 | Changes in the contingent consideration liability caused by foreign exchange rate fluctuations are recognized in other comprehensive income. | |||||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended | |
Sep. 30, 2013 | ||
Commitments and Contingencies Disclosure [Abstract] | ' | |
Commitments and Contingencies Disclosure [Text Block] | ' | |
10 | Commitments and Contingencies | |
In November 2010, in connection with the Circuit City Stores, Inc. (“Circuit City”) bankruptcy proceedings, the Trustee of the Circuit City Liquidating Trust (the “Trust”) filed a lawsuit against the Company in United States Bankruptcy Court in the Eastern District of Virginia for the avoidance of payments as allegedly preferential transfers of $3.2 million paid to the Company during the 90 days preceding the filing of the bankruptcy petition of Circuit City on November 10, 2008. In January 2013, the Company and the Trust entered into a settlement agreement resolving this preference claim as well the Company’s administrative and general unsecured claims against the Trust for a net payment to the Trust of $900,000. | ||
In May 2011, Her Majesty’s Revenue and Customs (“HMRC”) contacted the Company’s United Kingdom subsidiary, InnerWorkings Europe Limited (formerly Etrinsic), to request information relating to its position that certain printed matter and direct mail products are zero-rated under the U.K.’s VAT law. Although Etrinsic has voluntarily exchanged information with the HMRC as to its position that the products at issue are zero-rated for VAT pursuant to UK law and HMRC’s guidance, HMRC has stated that it disagrees with Etrinsic’s position and in March 2012, HMRC issued Etrinsic a VAT assessment of £2,316,008 for VAT periods covering the 2008, 2009, 2010 and 2011 calendar years. Etrinsic sought independent review of the assessment with HMRC, and HMRC upheld the assessment. Etrinsic appealed the HMRC’s assessment at the UK Tax Tribunal. In order to appeal the claim, the Company paid £2,316,008 to the HMRC on July 6, 2012. This payment was included in other current assets. In the fourth quarter of 2012, the Company accrued a loss reserve reflecting an anticipated settlement of £925,000, inclusive of all VAT periods for the 2008 through 2012 calendar years. In July 2013, the Company finalized settlement with the HMRC and received a refund of the amounts paid to HMRC in July 2012 less the settlement amount which was not materially different than the estimated reserve of £925,000. | ||
In December 2010, e-Lynxx Corporation filed a complaint against the Company and numerous other defendants for patent infringement in the United States District Court for the Middle District of Pennsylvania. As to the Company, the complaint alleges, among other things, that certain aspects of the Company’s PPM4 TM technology infringe on two patents owned by e-Lynxx purporting to cover a system and method for competitive pricing and procurement of customized goods and services, and seeks monetary damages, interest, costs, attorneys’ fees, punitive damages and a permanent injunction. In May 2013, e-Lynxx asserted that the monetary damages it seeks from the Company are in the range of $35 million to $88 million for the period from May 2009 through December 2012; e-Lynxx has not yet specified damages sought for 2013 and future periods. The Company disputes the allegations contained in e-Lynxx’s complaint and intends to vigorously defend this matter. Specifically, the Company contends that the patents at issue are invalid and not infringed, and, therefore, e-Lynxx is not entitled to any relief and the complaint should be dismissed. Further, even if e-Lynxx could establish liability, the Company contends that e-Lynxx is not entitled to the excessive monetary relief it seeks. On July 25, 2013, the Court granted the Company’s motion for summary judgment, finding that the Company did not infringe the patents-in-suit. e-Lynxx filed a motion for reconsideration, which is currently pending; therefore, the time for filing an appeal of this judgment has not yet expired. The Company believes that an unfavorable outcome is reasonably possible or remote but not probable, and therefore, no reserve has been recorded for a potential loss. The loss that is reasonably possible or remote cannot be estimated. | ||
In October 2012, a former sales employee of the Company filed an arbitration claim against the Company arising from the Company’s termination of his employment in November 2011. He alleges disability discrimination, defamation, breach of employment agreement, invasion of privacy, and wage payment claims, and seeks monetary damages of $2.75 million, interest, punitive damages, injunctive relief, declaratory relief, and attorneys’ fees and costs. The Company disputes these allegations and intends to vigorously defend itself in the matter. Specifically, the Company contends that it lawfully terminated his employment for cause, and, therefore, that he is not entitled to any relief and his claims should be dismissed. The matter is currently in the discovery phase, and an arbitration hearing is scheduled to commence on November 13, 2013. | ||
In October 2013, the Company removed Christophe Delaune from his role as President of the Company’s French subsidiary. Mr. Delaune had been in that role since the Company’s 2011 acquisition of Production Graphics, a European business then principally owned by Mr. Delaune. Mr. Delaune has asserted that he is entitled to severance and related compensation of approximately €2.1 million; the Company disputes that Mr. Delaune is owed any additional compensation. In addition to this matter, there are potential disputes between the Company and Mr. Delaune relating to the acquisition agreement, including claims the Company may assert against Mr. Delaune. Because neither Mr. Delaune nor the Company has initiated formal litigation against the other at this time, the nature of the potential claims either party may bring against the other and the potential ranges of damages sought cannot be described or quantified in more detail at this time. As of September 30, 2013, the Company had paid €5.8 million in fixed consideration and €7.1 million in contingent consideration to Mr. Delaune and the other former owner of the European business; the remaining maximum contingent consideration for the earn-out periods ending in 2013, 2014 and 2015 is €55.0 million. | ||
Recently_Issued_Accounting_Pro
Recently Issued Accounting Pronouncements | 9 Months Ended | |
Sep. 30, 2013 | ||
Accounting Changes and Error Corrections [Abstract] | ' | |
New Accounting Pronouncements and Changes in Accounting Principles [Text Block] | ' | |
11 | Recently Issued Accounting Pronouncements | |
In February 2012, the FASB issued ASU 2013-02, which requires an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required under GAAP to be reclassified in its entirety to net income. For other amounts that are not required under GAAP to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference other disclosures required under GAAP that provide additional detail about those amounts. These requirements are effective for public companies for reporting periods beginning after December 15, 2012. We adopted ASU 2013-02 in the first quarter of 2013 and included the required disclosures in Note 7 in the Notes to Condensed Consolidated Financial Statements. | ||
Business_Segments
Business Segments | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||
Segment Reporting Disclosure [Text Block] | ' | ||||||||||||||||
12 | Business Segments | ||||||||||||||||
Segment information is prepared on the same basis that our CEO, who is our chief operating decision maker (“CODM”), manages the segments, evaluates financial results, and makes key operating decisions. Effective as of the third quarter of 2013, the Company changed the organization of its business segments to divide the International segment into two segments, Latin America and EMEA. This change was the result of the varying financial performance and economic conditions in recent periods which necessitated financial information to be reviewed by the CODM and for segment management to be organized under the CODM at this level. The Company is now organized and managed as three business segments: North America, Latin America, and EMEA. The North America segment includes operations in the United States and Canada; the Latin America segment includes operations in South America and Central America; and the EMEA segment includes operations in the United Kingdom, continental Europe, the Middle East, Africa and Asia. “Other” consists of intersegment eliminations, shared service activities and unallocated corporate expenses. All transactions between segments are presented at their gross amounts and eliminated through “Other” | |||||||||||||||||
Management evaluates the performance of its operating segments based on net revenues and Adjusted EBITDA, which is a non-GAAP financial measure. The accounting policies of each of the operating segments are the same as those described in the summary of significant accounting policies in Note 1. Adjusted EBITDA represents income from operations excluding depreciation and amortization, stock-based compensation expense, income/expense related to changes in the fair value of contingent consideration liabilities and other items as described below. Management does not evaluate the performance of its operating segments using asset measures. The identifiable assets by segment disclosed in this note are those assets specifically identifiable within each segment and include cash, accounts receivable, inventory, goodwill and intangible assets. Shared service assets are primarily comprised of short-term investments, capitalized internal-use software and net property and equipment of the corporate headquarters. | |||||||||||||||||
The table below presents financial information for the Company’s reportable operating segments and Other for the three and nine month periods noted (in thousands): | |||||||||||||||||
North | Latin | EMEA | Other | Total | |||||||||||||
America | America | ||||||||||||||||
Three Months Ended September 30, 2013: | |||||||||||||||||
Net revenue from third parties | $ | 163,220 | $ | 23,586 | $ | 45,824 | $ | - | $ | 232,630 | |||||||
Net revenue from other segments | 6 | 224 | 27 | -257 | - | ||||||||||||
Total net revenues | 163,226 | 23,810 | 45,851 | -257 | 232,630 | ||||||||||||
Adjusted EBITDA (1) | 14,030 | 688 | 443 | -6,684 | 8,477 | ||||||||||||
Three Months Ended September 30, 2012: | |||||||||||||||||
Net revenue from third parties | $ | 163,310 | $ | 14,537 | $ | 21,922 | $ | - | $ | 199,769 | |||||||
Net revenue from other segments | 24 | 554 | 10 | -588 | - | ||||||||||||
Total net revenues | 163,334 | 15,091 | 21,932 | -588 | 199,769 | ||||||||||||
Adjusted EBITDA (1) | 15,410 | 505 | 1,474 | -6,042 | 11,347 | ||||||||||||
North | Latin | EMEA | Other | Total | |||||||||||||
America | America | ||||||||||||||||
Nine Months Ended September 30, 2013: | |||||||||||||||||
Net revenue from third parties | $ | 490,314 | $ | 63,294 | $ | 94,214 | $ | - | $ | 647,822 | |||||||
Net revenue from other segments | 26 | 1,069 | 37 | -1,132 | - | ||||||||||||
Total net revenues | 490,340 | 64,363 | 94,251 | -1,132 | 647,822 | ||||||||||||
Adjusted EBITDA (1) | 39,790 | 2,276 | -670 | -20,978 | 20,418 | ||||||||||||
Nine Months Ended September 30, 2012: | |||||||||||||||||
Net revenue from third parties | $ | 482,688 | $ | 43,310 | $ | 63,715 | $ | - | $ | 589,713 | |||||||
Net revenue from other segments | 90 | 1,159 | 37 | -1,286 | - | ||||||||||||
Total net revenues | 482,778 | 44,469 | 63,752 | -1,286 | 589,713 | ||||||||||||
Adjusted EBITDA (1) | 47,031 | 1,667 | 2,164 | -18,084 | 32,778 | ||||||||||||
North | Latin | EMEA | Other | Total | |||||||||||||
America | America | ||||||||||||||||
Total assets as of September 30, 2013 | $ | 390,048 | $ | 38,903 | $ | 166,777 | $ | 17,450 | $ | 613,178 | |||||||
Total assets as of December 31, 2012 | 337,313 | 23,219 | 139,775 | 21,937 | 522,244 | ||||||||||||
-1 | Adjusted EBITDA, which represents income from operations with the addition of depreciation and amortization, stock-based compensation expense, income/expense related to changes in the fair value of contingent consideration liabilities, goodwill impairment charges, restructuring and other charges and legal fees from patent infringement defense, is considered a non-GAAP financial measure under SEC regulations. Income from operations is the most directly comparable financial measure calculated in accordance with GAAP. The Company presents this measure as supplemental information to help investors better understand trends in its business results over time. The Company's management team uses Adjusted EBITDA to evaluate the performance of the business. Adjusted EBITDA is not equivalent to any measure of performance required to be reported under GAAP, nor should this data be considered an indicator of the Company's overall financial performance and liquidity. Moreover, the Adjusted EBITDA definition the Company uses may not be comparable to similarly titled measures reported by other companies. | ||||||||||||||||
The table below reconciles the total of the reportable segments' Adjusted EBITDA and the Adjusted EBITDA included in Other to income before income taxes (in thousands): | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2012 | 2013 | 2012 | 2013 | ||||||||||||||
Adjusted EBITDA | $ | 11,347 | $ | 8,477 | $ | 32,778 | $ | 20,418 | |||||||||
Depreciation and amortization | -2,696 | -3,880 | -8,078 | -8,994 | |||||||||||||
Stock-based compensation | -720 | -982 | -3,171 | -3,036 | |||||||||||||
Change in fair value of contingent consideration | -330 | 46,794 | -798 | 47,834 | |||||||||||||
Goodwill impairment charge | - | -37,908 | - | -37,908 | |||||||||||||
Restructuring and asset write down charges | - | -4,322 | - | -4,322 | |||||||||||||
Legal fees in connection with patent infringement defense | - | -209 | - | -961 | |||||||||||||
Total other income (expense) | -167 | -728 | -921 | -2,141 | |||||||||||||
Income before income taxes | $ | 7,434 | $ | 7,242 | $ | 19,810 | $ | 10,890 | |||||||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||||
Basis of Accounting, Policy [Policy Text Block] | ' | |||||||||||||
Basis of Presentation of Interim Financial Statements | ||||||||||||||
The accompanying unaudited consolidated financial statements of InnerWorkings, Inc. and subsidiaries (the “Company”) included herein have been prepared to conform to the rules and regulations of the Securities and Exchange Commission (“SEC”) and accounting principles generally accepted in the United States (“GAAP”) for interim financial information. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments considered necessary for a fair presentation of the accompanying unaudited financial statements have been included, and all adjustments are of a normal and recurring nature. The operating results for the three and nine months ended September 30, 2013 are not necessarily indicative of the results to be expected for the full year of 2013. These condensed interim consolidated financial statements and notes should be read in conjunction with the Company’s Consolidated Financial Statements and Notes thereto as of December 31, 2012 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 28, 2013. | ||||||||||||||
Foreign Currency Transactions and Translations Policy [Policy Text Block] | ' | |||||||||||||
Foreign Currency Translation | ||||||||||||||
The functional currency for the Company’s foreign operations is the local currency. Assets and liabilities of these operations are translated into U.S. currency at the rates of exchange at the balance sheet date. The resulting translation adjustments are included in accumulated other comprehensive income, a separate component of stockholders’ equity. Income and expense items are translated at average monthly rates of exchange. The net realized (losses) gains on foreign currency transactions were $(0.1) million and $0.1 million during the three months ended September 30, 2012 and 2013, respectively, and $0.1 million and $(0.3) million during the nine months ended September 30, 2012 and 2013, respectively. | ||||||||||||||
Goodwill and Intangible Assets, Policy [Policy Text Block] | ' | |||||||||||||
Goodwill and Other Intangibles | ||||||||||||||
Goodwill represents the excess of purchase price and related costs over the value assigned to the net tangible and identifiable intangible assets of businesses acquired. In accordance with ASC 350, Intangibles—Goodwill and Other, goodwill is not amortized, but instead is tested for impairment annually, or more frequently if circumstances indicate a possible impairment may exist. Absent any interim indicators of impairment, the Company tests for goodwill impairment as of December 31 of each year. The provisions of ASU 2011-08, “Testing Goodwill for Impairment,” were adopted in the fourth quarter of 2012. ASU 2011-08 permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the quantitative goodwill impairment test. If the quantitative test is required, in the first step, the fair value for each reporting unit is compared to its book value including goodwill. In the case that the fair value is less than the book value, a second step is performed which compares the implied fair value of goodwill to the book value of goodwill. The fair value for the goodwill is determined based on the difference between the fair value of the reporting unit and the net fair values of the identifiable assets and liabilities. If the implied fair value of the goodwill is less than the book value of the goodwill, the difference is recognized as an impairment. | ||||||||||||||
As of the annual impairment test performed as of December 31, 2012, the Company defined its two reporting units as North America and International. Based on the qualitative factors assessed, the Company concluded it was not more likely than not that the fair value of the North America reporting unit was less than its carrying amount primarily because (1) the Company’s overall financial performance has been positive in the face of mixed economic environments and (2) forecasts of operating income and cash flows generated by the North America reporting unit appear sufficient to support the book value of its net assets. However, due to economic factors internationally, it was determined that the quantitative test was necessary for the International reporting unit. No impairment was identified as a result of this test as of December 31, 2012. | ||||||||||||||
In the third quarter of 2013, the Company recorded a non-cash, goodwill impairment charge of $37.9 million. For additional information related to the goodwill impairment, see Note 3. | ||||||||||||||
The following is a summary of the goodwill balance for each operating segment as of September 30, 2013: | ||||||||||||||
North | Latin | EMEA | Total | |||||||||||
America | America | |||||||||||||
Net goodwill as of December 31, 2012 | $ | 120,453,194 | $ | 9,656,417 | $ | 83,977,269 | $ | 214,086,880 | ||||||
Goodwill acquired related to 2013 acquisitions | 49,913,257 | - | 23,578,414 | 73,491,671 | ||||||||||
Finalization of purchase accounting for prior year acquisitions | 176,886 | 218,819 | -40,940 | 354,765 | ||||||||||
Impairment charge | - | - | -37,908,000 | -37,908,000 | ||||||||||
Foreign exchange impact | -28,589 | - | 2,157,454 | 2,128,865 | ||||||||||
Net goodwill as of September 30, 2013 | $ | 170,514,748 | $ | 9,875,236 | $ | 71,764,197 | $ | 252,154,181 | ||||||
In accordance with ASC 350, Intangibles – Goodwill and Other, the Company amortizes its intangible assets with finite lives over their respective estimated useful lives and reviews for impairment whenever impairment indicators exist. The Company’s intangible assets consist of customer lists, noncompete agreements, trade names and patents. The Company’s customer lists, which have an estimated weighted-average useful life of fourteen years, are being amortized using the economic life method. The Company’s noncompete agreements, trade names and patents are being amortized on the straight-line basis over their estimated weighted-average useful lives of approximately four years, twelve years and nine years, respectively. | ||||||||||||||
The following is a summary of the intangible assets: | ||||||||||||||
December 31, | September 30, | Weighted | ||||||||||||
2012 | 2013 | Average Life | ||||||||||||
Customer lists | $ | 50,008,913 | $ | 74,722,978 | 14.7 years | |||||||||
Noncompete agreements | 1,077,349 | 1,077,349 | 3.9 years | |||||||||||
Trade names | 3,467,655 | 3,467,655 | 12.4 years | |||||||||||
Patents | 38,456 | 56,896 | 9.0 years | |||||||||||
54,592,373 | 79,324,878 | |||||||||||||
Less accumulated amortization | -18,195,508 | -22,224,503 | ||||||||||||
Intangible assets, net | $ | 36,396,865 | $ | 57,100,375 | ||||||||||
Amortization expense related to these intangible assets was $1.1 million and $2.2 million during the three month periods ended September 30, 2012 and 2013, respectively, and $3.3 million and $4.0 million during the nine month periods ended September 30, 2012 and 2013, respectively. | ||||||||||||||
The estimated amortization expense for the next five years is as follows: | ||||||||||||||
Remainder of 2013 | $ | 2,304,326 | ||||||||||||
2014 | 5,843,736 | |||||||||||||
2015 | 5,243,546 | |||||||||||||
2016 | 5,026,472 | |||||||||||||
2017 | 4,761,401 | |||||||||||||
Thereafter | 33,920,894 | |||||||||||||
$ | 57,100,375 | |||||||||||||
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | ' | |||||||||||||
Stock-Based Compensation | ||||||||||||||
The Company accounts for stock-based compensation awards to employees and directors in accordance with ASC 718, Compensation-Stock Compensation. Compensation expense for stock options is measured by determining the fair value using the Black-Scholes option valuation model and is then recognized over the requisite service period of the awards, which is generally the vesting period, on a straight-line basis for the entire award. | ||||||||||||||
Stock-based compensation cost recognized during the period is based on the portion of the share-based payment awards that are ultimately expected to vest. Accordingly, stock-based compensation cost recognized has been reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. | ||||||||||||||
During the nine month periods ended September 30, 2012 and 2013, the Company granted 537,226 and 222,679 options, respectively. In addition, during the nine month periods ended September 30, 2012 and 2013, the Company granted 297,253 and 400,962 restricted common shares, respectively. During the nine month periods ended September 30, 2012 and 2013, 2,561,725 and 659,148 options were exercised and restricted common shares vested, respectively. The Company recorded stock-based compensation expense of $0.7 million and $1.0 million for the three months ended September 30, 2012 and 2013, respectively, and $3.2 million and $3.0 million for the nine months ended September 30, 2012 and 2013, respectively. | ||||||||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||||
Schedule of Goodwill [Table Text Block] | ' | |||||||||||||
The following is a summary of the goodwill balance for each operating segment as of September 30, 2013: | ||||||||||||||
North | Latin | EMEA | Total | |||||||||||
America | America | |||||||||||||
Net goodwill as of December 31, 2012 | $ | 120,453,194 | $ | 9,656,417 | $ | 83,977,269 | $ | 214,086,880 | ||||||
Goodwill acquired related to 2013 acquisitions | 49,913,257 | - | 23,578,414 | 73,491,671 | ||||||||||
Finalization of purchase accounting for prior year acquisitions | 176,886 | 218,819 | -40,940 | 354,765 | ||||||||||
Impairment charge | - | - | -37,908,000 | -37,908,000 | ||||||||||
Foreign exchange impact | -28,589 | - | 2,157,454 | 2,128,865 | ||||||||||
Net goodwill as of September 30, 2013 | $ | 170,514,748 | $ | 9,875,236 | $ | 71,764,197 | $ | 252,154,181 | ||||||
Schedule of Finite-Lived Intangible Assets [Table Text Block] | ' | |||||||||||||
The following is a summary of the intangible assets: | ||||||||||||||
December 31, | September 30, | Weighted | ||||||||||||
2012 | 2013 | Average Life | ||||||||||||
Customer lists | $ | 50,008,913 | $ | 74,722,978 | 14.7 years | |||||||||
Noncompete agreements | 1,077,349 | 1,077,349 | 3.9 years | |||||||||||
Trade names | 3,467,655 | 3,467,655 | 12.4 years | |||||||||||
Patents | 38,456 | 56,896 | 9.0 years | |||||||||||
54,592,373 | 79,324,878 | |||||||||||||
Less accumulated amortization | -18,195,508 | -22,224,503 | ||||||||||||
Intangible assets, net | $ | 36,396,865 | $ | 57,100,375 | ||||||||||
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | ' | |||||||||||||
The estimated amortization expense for the next five years is as follows: | ||||||||||||||
Remainder of 2013 | $ | 2,304,326 | ||||||||||||
2014 | 5,843,736 | |||||||||||||
2015 | 5,243,546 | |||||||||||||
2016 | 5,026,472 | |||||||||||||
2017 | 4,761,401 | |||||||||||||
Thereafter | 33,920,894 | |||||||||||||
$ | 57,100,375 | |||||||||||||
Acquisitions_Tables
Acquisitions (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Business Combinations [Abstract] | ' | ||||||||||
Business Acquisition, Pro Forma Information [Table Text Block] | ' | ||||||||||
The following unaudited pro forma summary presents consolidated financial information of the Company as if the business combination had occurred on January 1, 2012. | |||||||||||
Year Ended | Nine Months Ended | ||||||||||
December 31, 2012 | September 30, 2013 | ||||||||||
Revenue | $ | 839,048,404 | $ | 674,184,058 | |||||||
Gross profit | 195,130,468 | 156,194,244 | |||||||||
Net income | 22,983,192 | 13,538,435 | |||||||||
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | ' | ||||||||||
The following table summarizes the total consideration paid for acquisitions occurring during the three months ended September 30, 2013 and the amount of identified assets acquired and liabilities assumed at the acquisition date. At September 30, 2013, the purchase price allocations are preliminary and subject to change as more detailed analyses are completed and additional information about the fair value of assets and liabilities becomes available. Specifically, the Company is finalizing the determination of the fair values of the intangible assets acquired and the contingent consideration liabilities. Changes to these fair values will also impact the amount of goodwill recorded in connection with the acquisitions. | |||||||||||
EYELEVEL | Other | Total | |||||||||
Cash | $ | 13,505,356 | $ | - | $ | 13,505,356 | |||||
Common stock | - | 2,488,842 | 2,488,842 | ||||||||
Contingent consideration | 21,700,000 | 4,341,509 | 26,041,509 | ||||||||
Total consideration transferred | $ | 35,205,356 | $ | 6,830,351 | $ | 42,035,707 | |||||
Cash and cash equivalents | $ | 4,817,536 | $ | 447,129 | $ | 5,264,665 | |||||
Accounts receivable | 6,624,904 | 3,587,337 | 10,212,241 | ||||||||
Inventory | 2,512,014 | 1,045,564 | 3,557,578 | ||||||||
Other assets | 1,693,387 | 110,614 | 1,804,001 | ||||||||
Customer list | 19,300,000 | - | 19,300,000 | ||||||||
Goodwill | 17,962,992 | 6,436,382 | 24,399,374 | ||||||||
Accounts payable | -7,470,390 | -3,291,426 | -10,761,816 | ||||||||
Other current liabilities | -4,931,094 | -1,505,249 | -6,436,343 | ||||||||
Deferred income taxes | -5,303,993 | - | -5,303,993 | ||||||||
Total identifiable net assets and goodwill | $ | 35,205,356 | $ | 6,830,351 | $ | 42,035,707 | |||||
Schedule of Business Acquisitions by Acquisition, Contingent Consideration [Table Text Block] | ' | ||||||||||
As of September 30, 2013, the potential maximum contingent payments are payable as follows: | |||||||||||
Cash | Common Stock | Total | |||||||||
2013 | $ | 160,000 | $ | - | $ | 160,000 | |||||
2014 | 5,808,050 | 56,830,938 | 62,638,988 | ||||||||
2015 | 13,249,600 | 21,751,635 | 35,001,235 | ||||||||
2016 | 32,650,800 | 30,502,550 | 63,153,350 | ||||||||
2017 | - | 21,942,800 | 21,942,800 | ||||||||
$ | 51,868,450 | $ | 131,027,923 | $ | 182,896,373 | ||||||
Restructuring_Activities_and_O1
Restructuring Activities and Other Charges (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Restructuring and Related Activities [Abstract] | ' | ||||||||||
Restructuring Charges By Reportable Segment [Table Text Block] | ' | ||||||||||
The following table summarizes the restructuring charges by reportable segment. The accrued amounts remaining as of September 30, 2013 represent those cash expenditures necessary to satisfy remaining obligations. The majority of the cash payments to satisfy the accrued costs are expected to be paid in the next year. | |||||||||||
North America | EMEA | Total | |||||||||
Employee terminations and other benefits | $ | 2,745,373 | $ | 260,407 | $ | 3,005,780 | |||||
Cash payments | -121,482 | - | -121,482 | ||||||||
Write-off of prepaid commissions balance (1) | -2,623,891 | - | -2,623,891 | ||||||||
Accrued restructuring costs as of September 30, 2013 | $ | - | $ | 260,407 | $ | 260,407 | |||||
-1 | Prepaid commission balances represent cash paid to our account executives in advance of commissions earned and is recorded in prepaid expenses on the balance sheet. For employees who had a balance and were affected by the restructuring actions, which primarily includes Small and Medium Business (“SMB”) account executives, the Company included these balances as part of the severance paid to these individuals. | ||||||||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | ' | |||||||||||||
The computations of basic and diluted earnings per common share for the three and nine months ended September 30, 2012 and 2013 are as follows: | ||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2012 | 2013 | 2012 | 2013 | |||||||||||
Numerator: | ||||||||||||||
Net Income | $ | 4,976,344 | $ | 7,291,921 | $ | 13,138,432 | $ | 10,090,396 | ||||||
Denominator: | ||||||||||||||
Denominator for basic earnings per share—weighted-average shares | 49,406,180 | 51,157,933 | 48,408,532 | 50,743,576 | ||||||||||
Effect of dilutive securities: | ||||||||||||||
Employee stock options and restricted common shares | 1,838,729 | 1,059,133 | 2,630,041 | 1,378,977 | ||||||||||
Denominator for dilutive earnings per share | 51,244,909 | 52,217,066 | 51,038,573 | 52,122,553 | ||||||||||
Basic earnings per share | $ | 0.1 | $ | 0.14 | $ | 0.27 | $ | 0.2 | ||||||
Diluted earnings per share | $ | 0.1 | $ | 0.14 | $ | 0.26 | $ | 0.19 | ||||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Tables) | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net Of Tax [Abstract] | ' | |||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | ' | |||||||||||||||||||
The table below presents changes in the components of accumulated other comprehensive income “AOCI” for the three and nine months ended September 30, 2012 and 2013:” | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
2012 | 2013 | |||||||||||||||||||
Foreign currency | Unrealized holding | Total | Foreign currency | Unrealized holding | Total | |||||||||||||||
gains on available- | gains on available- | |||||||||||||||||||
for-sale securities | for-sale securities | |||||||||||||||||||
Balance, beginning of period | $ | 471,503 | $ | -782,663 | $ | -311,160 | $ | -1,844,004 | $ | - | $ | -1,844,004 | ||||||||
Other comprehensive income before reclassifications | 682,183 | -50,542 | 631,641 | 3,371,973 | - | 3,371,973 | ||||||||||||||
Amounts reclassified from AOCI | - | -210,876 | -210,876 | - | - | - | ||||||||||||||
Net current-period other comprehensive income | 682,183 | -261,418 | 420,765 | 3,371,973 | - | 3,371,973 | ||||||||||||||
Balance, end of period | $ | 1,153,686 | $ | -1,044,081 | $ | 109,605 | $ | 1,527,969 | $ | - | $ | 1,527,969 | ||||||||
Nine Months Ended | ||||||||||||||||||||
2012 | 2013 | |||||||||||||||||||
Foreign currency | Unrealized holding | Total | Foreign currency | Unrealized holding | Total | |||||||||||||||
gains on available- | gains on available- | |||||||||||||||||||
for-sale securities | for-sale securities | |||||||||||||||||||
Balance, beginning of period | $ | -404,689 | $ | 673,020 | $ | 268,331 | $ | 204,124 | $ | 1,338 | $ | 205,462 | ||||||||
Other comprehensive income before reclassifications | 304,209 | 49,248 | 353,457 | 1,323,845 | - | 1,323,845 | ||||||||||||||
Amounts reclassified from AOCI | - | -512,184 | -512,184 | - | -1,338 | -1,338 | ||||||||||||||
Net current-period other comprehensive income | 304,209 | -462,936 | -158,727 | 1,323,845 | -1,338 | 1,322,507 | ||||||||||||||
Balance, end of period | $ | -100,480 | $ | 210,084 | $ | 109,604 | $ | 1,527,969 | $ | - | $ | 1,527,969 | ||||||||
Fair_Value_Measurement_Tables
Fair Value Measurement (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Related Party Transactions [Abstract] | ' | |||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | ' | |||||||||||||
The following table sets forth the Company’s financial assets and financial liabilities measured at fair value on a recurring basis and the basis of measurement at December 31, 2012 and September 30, 2013, respectively: | ||||||||||||||
At September 30, 2013 | Total Fair Value | Quoted Prices in | Significant Other | Significant | ||||||||||
Measurement | Active Markets for | Observable Inputs | Unobservable Inputs | |||||||||||
Identical Assets | (Level 2) | (Level 3) | ||||||||||||
(Level 1) | ||||||||||||||
Assets: | ||||||||||||||
Money market funds(1) | $ | 667,219 | $ | 667,219 | $ | - | $ | - | ||||||
Liabilities: | ||||||||||||||
Contingent consideration | $ | -89,089,221 | $ | - | $ | - | $ | -89,089,221 | ||||||
At December 31, 2012 | Total Fair Value | Quoted Prices in | Significant Other | Significant | ||||||||||
Measurement | Active Markets for | Observable Inputs | Unobservable Inputs | |||||||||||
Identical Assets | (Level 2) | (Level 3) | ||||||||||||
(Level 1) | ||||||||||||||
Assets: | ||||||||||||||
Money market funds(1) | $ | 667,045 | $ | 667,045 | $ | - | $ | - | ||||||
Liabilities: | ||||||||||||||
Contingent consideration | $ | -71,664,770 | $ | - | $ | - | $ | -71,664,770 | ||||||
-1 | Included in cash and cash equivalents on the balance sheet. | |||||||||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | ' | |||||||||||||
The following table provides a reconciliation of the beginning and ending balances for the liabilities measured at fair value using significant unobservable inputs (Level 3): | ||||||||||||||
Fair Value Measurements at | ||||||||||||||
Reporting Date Using Significant | ||||||||||||||
Unobservable Inputs | ||||||||||||||
(Level 3) | ||||||||||||||
Contingent Consideration | ||||||||||||||
Balance as of December 31, 2012 | $ | -71,664,770 | ||||||||||||
Contingent consideration from 2013 acquisitions | -68,965,673 | |||||||||||||
Contingent consideration payments paid in cash | 860,821 | |||||||||||||
Contingent consideration payments paid in common stock | 614,216 | |||||||||||||
Reclassified to Due to seller | 1,628,552 | |||||||||||||
Change in fair value (1) | 47,172,274 | |||||||||||||
Foreign exchange impact (2) | 589,194 | |||||||||||||
Balance as of September 30, 2013 | $ | -89,765,386 | ||||||||||||
-1 | Adjustments to original contingent consideration obligations recorded were the result of using revised financial forecasts and updated fair value measurements. These changes are recognized within selling, general and administrative expenses on the consolidated statement of comprehensive income. | |||||||||||||
-2 | Changes in the contingent consideration liability which are caused by foreign exchange rate fluctuations are recognized in other comprehensive income. | |||||||||||||
Business_Segments_Tables
Business Segments (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||
Schedule of Segment Reporting Information, by Segment [Table Text Block] | ' | ||||||||||||||||
The table below presents financial information for the Company’s reportable operating segments and Other for the three and nine month periods noted (in thousands): | |||||||||||||||||
North | Latin | EMEA | Other | Total | |||||||||||||
America | America | ||||||||||||||||
Three Months Ended September 30, 2013: | |||||||||||||||||
Net revenue from third parties | $ | 163,220 | $ | 23,586 | $ | 45,824 | $ | - | $ | 232,630 | |||||||
Net revenue from other segments | 6 | 224 | 27 | -257 | - | ||||||||||||
Total net revenues | 163,226 | 23,810 | 45,851 | -257 | 232,630 | ||||||||||||
Adjusted EBITDA (1) | 14,030 | 688 | 443 | -6,684 | 8,477 | ||||||||||||
Three Months Ended September 30, 2012: | |||||||||||||||||
Net revenue from third parties | $ | 163,310 | $ | 14,537 | $ | 21,922 | $ | - | $ | 199,769 | |||||||
Net revenue from other segments | 24 | 554 | 10 | -588 | - | ||||||||||||
Total net revenues | 163,334 | 15,091 | 21,932 | -588 | 199,769 | ||||||||||||
Adjusted EBITDA (1) | 15,410 | 505 | 1,474 | -6,042 | 11,347 | ||||||||||||
North | Latin | EMEA | Other | Total | |||||||||||||
America | America | ||||||||||||||||
Nine Months Ended September 30, 2013: | |||||||||||||||||
Net revenue from third parties | $ | 490,314 | $ | 63,294 | $ | 94,214 | $ | - | $ | 647,822 | |||||||
Net revenue from other segments | 26 | 1,069 | 37 | -1,132 | - | ||||||||||||
Total net revenues | 490,340 | 64,363 | 94,251 | -1,132 | 647,822 | ||||||||||||
Adjusted EBITDA (1) | 39,790 | 2,276 | -670 | -20,978 | 20,418 | ||||||||||||
Nine Months Ended September 30, 2012: | |||||||||||||||||
Net revenue from third parties | $ | 482,688 | $ | 43,310 | $ | 63,715 | $ | - | $ | 589,713 | |||||||
Net revenue from other segments | 90 | 1,159 | 37 | -1,286 | - | ||||||||||||
Total net revenues | 482,778 | 44,469 | 63,752 | -1,286 | 589,713 | ||||||||||||
Adjusted EBITDA (1) | 47,031 | 1,667 | 2,164 | -18,084 | 32,778 | ||||||||||||
North | Latin | EMEA | Other | Total | |||||||||||||
America | America | ||||||||||||||||
Total assets as of September 30, 2013 | $ | 390,048 | $ | 38,903 | $ | 166,777 | $ | 17,450 | $ | 613,178 | |||||||
Total assets as of December 31, 2012 | 337,313 | 23,219 | 139,775 | 21,937 | 522,244 | ||||||||||||
-1 | Adjusted EBITDA, which represents income from operations with the addition of depreciation and amortization, stock-based compensation expense, income/expense related to changes in the fair value of contingent consideration liabilities, goodwill impairment charges, restructuring and other charges and legal fees from patent infringement defense, is considered a non-GAAP financial measure under SEC regulations. Income from operations is the most directly comparable financial measure calculated in accordance with GAAP. The Company presents this measure as supplemental information to help investors better understand trends in its business results over time. The Company's management team uses Adjusted EBITDA to evaluate the performance of the business. Adjusted EBITDA is not equivalent to any measure of performance required to be reported under GAAP, nor should this data be considered an indicator of the Company's overall financial performance and liquidity. Moreover, the Adjusted EBITDA definition the Company uses may not be comparable to similarly titled measures reported by other companies. | ||||||||||||||||
Schedule Of Earnings Before Interest Tax Depreciation And Amortization Reconciliation [Table Text Block] | ' | ||||||||||||||||
The table below reconciles the total of the reportable segments' Adjusted EBITDA and the Adjusted EBITDA included in Other to income before income taxes (in thousands): | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2012 | 2013 | 2012 | 2013 | ||||||||||||||
Adjusted EBITDA | $ | 11,347 | $ | 8,477 | $ | 32,778 | $ | 20,418 | |||||||||
Depreciation and amortization | -2,696 | -3,880 | -8,078 | -8,994 | |||||||||||||
Stock-based compensation | -720 | -982 | -3,171 | -3,036 | |||||||||||||
Change in fair value of contingent consideration | -330 | 46,794 | -798 | 47,834 | |||||||||||||
Goodwill impairment charge | - | -37,908 | - | -37,908 | |||||||||||||
Restructuring and asset write down charges | - | -4,322 | - | -4,322 | |||||||||||||
Legal fees in connection with patent infringement defense | - | -209 | - | -961 | |||||||||||||
Total other income (expense) | -167 | -728 | -921 | -2,141 | |||||||||||||
Income before income taxes | $ | 7,434 | $ | 7,242 | $ | 19,810 | $ | 10,890 | |||||||||
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2013 | Sep. 30, 2013 | |
Net goodwill | ' | $214,086,880 |
Goodwill acquired related to 2013 acquisitions | ' | 73,491,671 |
Finalization of purchase accounting for prior year acquisitions | ' | 354,765 |
Impairment charge | -37,908,000 | -37,908,000 |
Foreign exchange impact | ' | 2,128,865 |
Net goodwill | 252,154,181 | 252,154,181 |
North America [Member] | ' | ' |
Net goodwill | ' | 120,453,194 |
Goodwill acquired related to 2013 acquisitions | ' | 49,913,257 |
Finalization of purchase accounting for prior year acquisitions | ' | 176,886 |
Impairment charge | ' | 0 |
Foreign exchange impact | ' | -28,589 |
Net goodwill | 170,514,748 | 170,514,748 |
Latin America [Member] | ' | ' |
Net goodwill | ' | 9,656,417 |
Goodwill acquired related to 2013 acquisitions | ' | 0 |
Finalization of purchase accounting for prior year acquisitions | ' | 218,819 |
Impairment charge | ' | 0 |
Foreign exchange impact | ' | 0 |
Net goodwill | 9,875,236 | 9,875,236 |
EMEA [Member] | ' | ' |
Net goodwill | ' | 83,977,269 |
Goodwill acquired related to 2013 acquisitions | ' | 23,578,414 |
Finalization of purchase accounting for prior year acquisitions | ' | -40,940 |
Impairment charge | ' | -37,908,000 |
Foreign exchange impact | ' | 2,157,454 |
Net goodwill | $71,764,197 | $71,764,197 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details 1) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Dec. 31, 2012 | |
Intangible Assets, Gross | $79,324,878 | $54,592,373 |
Less accumulated amortization | -22,224,503 | -18,195,508 |
Intangible assets, net | 57,100,375 | 36,396,865 |
Trade names [Member] | ' | ' |
Intangible Assets, Gross | 3,467,655 | 3,467,655 |
Weighted - Average Life | '12 years 4 months 24 days | ' |
Customer lists [Member] | ' | ' |
Intangible Assets, Gross | 74,722,978 | 50,008,913 |
Weighted - Average Life | '14 years 8 months 12 days | ' |
Noncompete agreements [Member] | ' | ' |
Intangible Assets, Gross | 1,077,349 | 1,077,349 |
Weighted - Average Life | '3 years 10 months 24 days | ' |
Patents [Member] | ' | ' |
Intangible Assets, Gross | $56,896 | $38,456 |
Weighted - Average Life | '9 years | ' |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies (Details 2) (USD $) | Sep. 30, 2013 |
Remainder of 2013 | $2,304,326 |
2014 | 5,843,736 |
2015 | 5,243,546 |
2016 | 5,026,472 |
2017 | 4,761,401 |
Thereafter | 33,920,894 |
Finite-Lived Intangible Assets, Net | $57,100,375 |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Amortization of Intangible Assets | $2,200,000 | $1,100,000 | $4,000,000 | $3,300,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | ' | ' | 222,679 | 537,226 |
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures | ' | ' | 400,962 | 297,253 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Number | 659,148 | 2,561,725 | 659,148 | 2,561,725 |
Stock-based compensation expense | 1,000,000 | 700,000 | 3,036,188 | 3,171,073 |
Foreign Currency Transaction Gain (Loss), Realized | 100,000 | -100,000 | -300,000 | 100,000 |
Goodwill, Impairment Loss | ($37,908,000) | ' | ($37,908,000) | ' |
Acquisitions_Details
Acquisitions (Details) (USD $) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
Revenue | $674,184,058 | $839,048,404 |
Gross profit | 156,194,244 | 195,130,468 |
Net income | $13,538,435 | $22,983,192 |
Acquisitions_Details_1
Acquisitions (Details 1) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Cash | $13,505,356 |
Common stock | 2,488,842 |
Contingent consideration | 26,041,509 |
Total consideration transferred | 42,035,707 |
Cash and cash equivalents | 5,264,665 |
Accounts receivable | 10,212,241 |
Inventory | 3,557,578 |
Other assets | 1,804,001 |
Customer list | 19,300,000 |
Goodwill | 24,399,374 |
Accounts payable | -10,761,816 |
Other current liabilities | -6,436,343 |
Deferred income taxes | -5,303,993 |
Total identifiable net assets and goodwill | 42,035,707 |
Eye Level [Member] | ' |
Cash | 13,505,356 |
Common stock | 0 |
Contingent consideration | 21,700,000 |
Total consideration transferred | 35,205,356 |
Cash and cash equivalents | 4,817,536 |
Accounts receivable | 6,624,904 |
Inventory | 2,512,014 |
Other assets | 1,693,387 |
Customer list | 19,300,000 |
Goodwill | 17,962,992 |
Accounts payable | -7,470,390 |
Other current liabilities | -4,931,094 |
Deferred income taxes | -5,303,993 |
Total identifiable net assets and goodwill | 35,205,356 |
Other [Member] | ' |
Cash | 0 |
Common stock | 2,488,842 |
Contingent consideration | 4,341,509 |
Total consideration transferred | 6,830,351 |
Cash and cash equivalents | 447,129 |
Accounts receivable | 3,587,337 |
Inventory | 1,045,564 |
Other assets | 110,614 |
Customer list | 0 |
Goodwill | 6,436,382 |
Accounts payable | -3,291,426 |
Other current liabilities | -1,505,249 |
Deferred income taxes | 0 |
Total identifiable net assets and goodwill | $6,830,351 |
Acquisitions_Details_2
Acquisitions (Details 2) (USD $) | Sep. 30, 2013 |
Business Acquisitions Contingent Consideration Potential Cash Payment | $182,896,373 |
Common Stock [Member] | ' |
Business Acquisitions Contingent Consideration Potential Cash Payment | 131,027,923 |
Cash [Member] | ' |
Business Acquisitions Contingent Consideration Potential Cash Payment | 51,868,450 |
2013 [Member] | ' |
Business Acquisitions Contingent Consideration Potential Cash Payment | 160,000 |
2013 [Member] | Common Stock [Member] | ' |
Business Acquisitions Contingent Consideration Potential Cash Payment | 0 |
2013 [Member] | Cash [Member] | ' |
Business Acquisitions Contingent Consideration Potential Cash Payment | 160,000 |
2014 [Member] | ' |
Business Acquisitions Contingent Consideration Potential Cash Payment | 62,638,988 |
2014 [Member] | Common Stock [Member] | ' |
Business Acquisitions Contingent Consideration Potential Cash Payment | 56,830,938 |
2014 [Member] | Cash [Member] | ' |
Business Acquisitions Contingent Consideration Potential Cash Payment | 5,808,050 |
2015 [Member] | ' |
Business Acquisitions Contingent Consideration Potential Cash Payment | 35,001,235 |
2015 [Member] | Common Stock [Member] | ' |
Business Acquisitions Contingent Consideration Potential Cash Payment | 21,751,635 |
2015 [Member] | Cash [Member] | ' |
Business Acquisitions Contingent Consideration Potential Cash Payment | 13,249,600 |
2016 [Member] | ' |
Business Acquisitions Contingent Consideration Potential Cash Payment | 63,153,350 |
2016 [Member] | Common Stock [Member] | ' |
Business Acquisitions Contingent Consideration Potential Cash Payment | 30,502,550 |
2016 [Member] | Cash [Member] | ' |
Business Acquisitions Contingent Consideration Potential Cash Payment | 32,650,800 |
2017 [Member] | ' |
Business Acquisitions Contingent Consideration Potential Cash Payment | 21,942,800 |
2017 [Member] | Common Stock [Member] | ' |
Business Acquisitions Contingent Consideration Potential Cash Payment | 21,942,800 |
2017 [Member] | Cash [Member] | ' |
Business Acquisitions Contingent Consideration Potential Cash Payment | $0 |
Acquisitions_Details_Textual
Acquisitions (Details Textual) | 3 Months Ended | 9 Months Ended | 3 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Jul. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | |
USD ($) | EUR (€) | EUR (€) | USD ($) | Eye Level [Member] | ||
Contingent consideration | $89,100,000 | ' | ' | ' | $71,664,770 | ' |
Business Acquisition, Percentage of Voting Interests Acquired | ' | ' | ' | 100.00% | ' | ' |
Business Acquisition Contribution To Revenues Percentage | 2.00% | 2.00% | ' | ' | ' | 7.00% |
Business Acquisition Contribution To Gross Profit Percentage | 3.00% | 3.00% | ' | ' | ' | 9.00% |
Business Combination, Contingent Consideration, Liability | 44,500,000 | 55,000,000 | 55,000,000 | ' | ' | ' |
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability | ' | ' | € 5,900,000 | ' | ' | ' |
Goodwill_Impairment_Charge_Det
Goodwill Impairment Charge (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2013 | Sep. 30, 2013 | |
Goodwill, Impairment Loss | ($37,908,000) | ($37,908,000) |
EMEA [Member] | ' | ' |
Goodwill, Impairment Loss | ' | ($37,908,000) |
Restructuring_Activities_and_O2
Restructuring Activities and Other Charges (Details) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | ||
Employee terminations and other benefits | $3,005,780 | |
Cash payments | -121,482 | |
Write-off of prepaid commissions balance | -2,623,891 | [1] |
Accrued restructuring costs as of September 30, 2013 | 260,407 | |
EMEA [Member] | ' | |
Employee terminations and other benefits | 260,407 | |
Cash payments | 0 | |
Write-off of prepaid commissions balance | 0 | [1] |
Accrued restructuring costs as of September 30, 2013 | 260,407 | |
North America [Member] | ' | |
Employee terminations and other benefits | 2,745,373 | |
Cash payments | -121,482 | |
Write-off of prepaid commissions balance | -2,623,891 | [1] |
Accrued restructuring costs as of September 30, 2013 | $0 | |
[1] | Prepaid commission balances represent cash paid to our account executives in advance of commissions earned and is recorded in prepaid expenses on the balance sheet. For employees affected by the restructuring actions, the balances will not be recovered, and the amounts written off are included in the restructuring charges. |
Restructuring_Activities_and_O3
Restructuring Activities and Other Charges (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Restructuring Charges, Total | $4,321,862 | $0 | $4,321,862 | $0 |
Prepaid Commission Reserves | $1,300,000 | ' | $1,300,000 | ' |
Income_Taxes_Details_Textual
Income Taxes (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Effective Income Tax Rate, Continuing Operations | -0.70% | 33.10% | 7.30% | 33.70% | ' |
Deferred Tax Assets, Tax Credit Carryforwards, Research | $300,000 | ' | $300,000 | ' | ' |
Effective Income Tax Rate Reconciliation, Tax Credit, Percent, Total | -5.50% | 33.10% | 25.30% | 33.70% | ' |
Goodwill, Impairment Loss | -37,908,000 | ' | -37,908,000 | ' | ' |
Contingent Consideration, Change In Fair Value | 44,200,000 | ' | 44,400,000 | ' | ' |
Deferred Tax Assets Tax Excess Deduction | ' | ' | ' | ' | 10,300,000 |
Deferred Tax Assets Tax Difference Expense | ' | ' | ' | ' | 4,900,000 |
Reduction In Deferred Tax Asset | ' | ' | ' | ' | 1,900,000 |
Tax Credit Carryforward, Deferred Tax Asset | ' | ' | ' | ' | $5,400,000 |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Numerator: | ' | ' | ' | ' |
Net Income | $7,291,921 | $4,976,344 | $10,090,396 | $13,138,432 |
Denominator: | ' | ' | ' | ' |
Denominator for basic earnings per share-weighted-average shares | 51,157,933 | 49,406,180 | 50,743,576 | 48,408,532 |
Effect of dilutive securities: | ' | ' | ' | ' |
Employee stock options and restricted common shares | 1,059,133 | 1,838,729 | 1,378,977 | 2,630,041 |
Denominator for dilutive earnings per share | 52,217,066 | 51,244,909 | 52,122,553 | 51,038,573 |
Basic earnings per share | $0.14 | $0.10 | $0.20 | $0.27 |
Diluted earnings per share | $0.14 | $0.10 | $0.19 | $0.26 |
Earnings_Per_Share_Details_Tex
Earnings Per Share (Details Textual) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,310,586 | 1,097,897 | 1,260,586 | 1,147,897 |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Balance, beginning of period - Foreign currency | ($1,844,004) | $471,503 | $204,124 | ($404,689) |
Other comprehensive income before reclassifications - Foreign currency | 3,371,973 | 682,183 | 1,323,845 | 304,209 |
Amounts reclassified from AOCI - Foreign currency | 0 | 0 | 0 | 0 |
Net current-period other comprehensive income - Foreign currency | 3,371,973 | 682,183 | 1,323,845 | 304,209 |
Balance, end of period - Foreign currency | 1,527,969 | 1,153,686 | 1,527,969 | 1,153,686 |
Balance, beginning of period - Unrealized holding gains on available-for-sale securities | 0 | -782,663 | 1,338 | 673,020 |
Other comprehensive income before reclassifications - Unrealized holding gains on available-for-sale securities | 0 | -50,542 | 0 | 49,248 |
Amounts reclassified from AOCI - Unrealized holding gains on available-for-sale securities | 0 | -210,876 | -1,338 | -512,184 |
Net current-period other comprehensive income - Unrealized holding gains on available-for-sale securities | 0 | -261,418 | -1,338 | -462,936 |
Balance, end of period - Unrealized holding gains on available-for-sale securities | 0 | -1,044,081 | 0 | -1,044,081 |
Balance, beginning of period - Total | -1,844,004 | -311,160 | 205,462 | 268,331 |
Other comprehensive income before reclassifications - Total | 3,371,973 | 631,641 | 1,323,845 | 353,457 |
Amounts reclassified from AOCI - Total | 0 | -210,876 | -1,338 | -512,184 |
Net current-period other comprehensive income - Total | 3,371,973 | 420,765 | 1,322,507 | -158,727 |
Balance, end of period - Total | $1,527,969 | $109,605 | $1,527,969 | $109,605 |
Related_Party_Transactions_Det
Related Party Transactions (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Gain on sale of investment | $0 | $346,836 | $0 | $842,408 |
Echo [Member] | ' | ' | ' | ' |
Investment Shares Sold During Period | ' | 20,433 | ' | 48,831 |
Equity Method Investment, Net Sales Proceeds | ' | 349,391 | ' | 848,512 |
Gain on sale of investment | ' | 346,836 | ' | 842,408 |
Related Party Transaction, Other Revenues from Transactions with Related Party | 4,257,132 | 1,922,579 | 9,770,293 | 7,022,561 |
Print Procurement Services | 144,086 | 17,501 | 198,278 | 69,686 |
Due to Related Parties, Current | 1,356,316 | ' | 1,356,316 | ' |
Arthur J.Gallagher Co [Member] | ' | ' | ' | ' |
Print Procurement Services | 169,280 | 120,537 | 450,213 | 382,756 |
Insurance and Risk Management Services | 114,341 | 231,294 | 391,887 | 283,694 |
Due from Related Parties, Current | $16,973 | ' | $16,973 | ' |
Fair_Value_Measurement_Details
Fair Value Measurement (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | ||
Assets: | ' | ' | ||
Money market funds | $667,219 | [1] | $667,045 | [1] |
Liabilities: | ' | ' | ||
Contingent consideration | -89,100,000 | -71,664,770 | ||
Fair Value, Inputs, Level 1 [Member] | ' | ' | ||
Assets: | ' | ' | ||
Money market funds | 667,219 | [1] | 667,045 | [1] |
Liabilities: | ' | ' | ||
Contingent consideration | 0 | 0 | ||
Fair Value, Inputs, Level 2 [Member] | ' | ' | ||
Assets: | ' | ' | ||
Money market funds | ' | 0 | [1] | |
Liabilities: | ' | ' | ||
Contingent consideration | 0 | 0 | ||
Fair Value, Inputs, Level 3 [Member] | ' | ' | ||
Assets: | ' | ' | ||
Money market funds | ' | 0 | [1] | |
Liabilities: | ' | ' | ||
Contingent consideration | ($89,089,221) | ($71,664,770) | ||
[1] | Included in cash and cash equivalents on the balance sheet. |
Fair_Value_Measurement_Details1
Fair Value Measurement (Details 1) (USD $) | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | ||
Balance - Beginning balance | ($71,664,770) | ' | |
Change in fair value | 47,834,508 | -797,476 | |
Foreign exchange impact | 2,128,865 | ' | |
Balance - Ending balance | -89,100,000 | ' | |
Fair Value, Inputs, Level 3 [Member] | ' | ' | |
Balance - Beginning balance | -71,664,770 | ' | |
Contingent consideration from 2013 acquisitions | -68,965,673 | ' | |
Contingent consideration payments paid in cash | 860,821 | ' | |
Contingent consideration payments paid in common stock | 614,216 | ' | |
Reclassified to Due to seller | 1,628,552 | ' | |
Change in fair value | 47,834,508 | [1] | ' |
Foreign exchange impact | 603,125 | [2] | ' |
Balance - Ending balance | ($89,089,221) | ' | |
[1] | Adjustments to original contingent consideration obligations recorded were the result of using revised financial forecasts and updated fair value measurements. These changes are included in income from continuing operations on the consolidated statement of comprehensive income. | ||
[2] | Changes in the contingent consideration liability which are caused by foreign exchange rate fluctuations are recognized in other comprehensive income. |
Fair_Value_Measurement_Details2
Fair Value Measurement (Details Textual) (USD $) | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2013 |
Fair Value Measurements Valuation Process Probability Percentage | 100.00% |
Effect Of Discount Rate Increase In Fair Value | $2.40 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details Textual) | 1 Months Ended | 9 Months Ended | 44 Months Ended | 0 Months Ended | 9 Months Ended | 60 Months Ended | ||||
Oct. 31, 2013 | Oct. 31, 2012 | Nov. 30, 2008 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Jul. 06, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | |
EUR (€) | USD ($) | USD ($) | USD ($) | EUR (€) | Maximum [Member] | Minimum [Member] | Inner Workings Europe Ltd [Member] | Inner Workings Europe Ltd [Member] | Inner Workings Europe Ltd [Member] | |
USD ($) | USD ($) | GBP (£) | GBP (£) | GBP (£) | ||||||
Litigation Settlement, Amount | ' | ' | ' | ' | ' | ' | ' | £ 2,316,008 | ' | £ 925,000 |
Loss Contingency, Damages Sought, Value | 2,100,000 | 2,750,000 | ' | ' | ' | 88,000,000 | 35,000,000 | ' | ' | ' |
Loss Contingency, Loss in Period | ' | ' | ' | ' | ' | ' | ' | ' | 2,316,008 | ' |
Loss Contingency, Related Receivable Carrying Value, Additions | ' | ' | 3,200,000 | ' | ' | ' | ' | ' | ' | ' |
Loss Contingency, Settlement Agreement, Terms | ' | ' | '90 days | ' | ' | ' | ' | ' | ' | ' |
Loss Contingency Accrual, Carrying Value, Payments | ' | ' | ' | 900,000 | ' | ' | ' | ' | ' | ' |
Loss Contingency Damages Value Fixed Consideration | ' | ' | ' | ' | 5,800,000 | ' | ' | ' | ' | ' |
Loss Contingency Damages Value Contingent Consideration | ' | ' | ' | ' | 7,100,000 | ' | ' | ' | ' | ' |
Loss Contingency Damages Maximum Contingent Consideration | ' | ' | ' | ' | 55,000,000 | ' | ' | ' | ' | ' |
Loss Contingency, Damages Sought, Value | € 2,100,000 | $2,750,000 | ' | ' | ' | $88,000,000 | $35,000,000 | ' | ' | ' |
Business_Segments_Details
Business Segments (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |||||
Net revenue from third parties | $232,630,000 | $199,769,000 | $647,822,000 | $589,713,000 | ' | ||||
Net revenue from other segments | 0 | 0 | 0 | 0 | ' | ||||
Total net revenues | 232,629,788 | 199,768,676 | 647,821,539 | 589,712,549 | ' | ||||
Adjusted EBITDA | 8,477,000 | [1] | 11,347,000 | [1] | 20,418,000 | [1] | 32,778,000 | [1] | ' |
Assets | 613,178,223 | ' | 613,178,223 | ' | 522,243,582 | ||||
North America [Member] | ' | ' | ' | ' | ' | ||||
Net revenue from third parties | 163,220,000 | 163,310,000 | 490,314,000 | 482,688,000 | ' | ||||
Net revenue from other segments | 6,000 | 24,000 | 26,000 | 90,000 | ' | ||||
Total net revenues | 163,226,000 | 163,334,000 | 490,340,000 | 482,778,000 | ' | ||||
Adjusted EBITDA | 14,030,000 | [1] | 15,410,000 | [1] | 39,790,000 | [1] | 47,031,000 | [1] | ' |
Assets | 390,048,000 | ' | 390,048,000 | ' | 337,313,000 | ||||
Other [Member] | ' | ' | ' | ' | ' | ||||
Net revenue from third parties | 0 | 0 | 0 | 0 | ' | ||||
Net revenue from other segments | -257,000 | -588,000 | -1,132,000 | -1,286,000 | ' | ||||
Total net revenues | -257,000 | -588,000 | -1,132,000 | -1,286,000 | ' | ||||
Adjusted EBITDA | -6,684,000 | [1] | -6,042,000 | [1] | -20,978,000 | [1] | -18,084,000 | [1] | ' |
Assets | 17,450,000 | ' | 17,450,000 | ' | 21,937,000 | ||||
Latin America [Member] | ' | ' | ' | ' | ' | ||||
Net revenue from third parties | 23,586,000 | 14,537,000 | 63,294,000 | 43,310,000 | ' | ||||
Net revenue from other segments | 224,000 | 554,000 | 1,069,000 | 1,159,000 | ' | ||||
Total net revenues | 23,810,000 | 15,091,000 | 64,363,000 | 44,469,000 | ' | ||||
Adjusted EBITDA | 688,000 | [1] | 505,000 | [1] | 2,276,000 | [1] | 1,667,000 | [1] | ' |
Assets | 38,903,000 | ' | 38,903,000 | ' | 23,219,000 | ||||
EMEA [Member] | ' | ' | ' | ' | ' | ||||
Net revenue from third parties | 45,824,000 | 21,922,000 | 94,214,000 | 63,715,000 | ' | ||||
Net revenue from other segments | 27,000 | 10,000 | 37,000 | 37,000 | ' | ||||
Total net revenues | 45,851,000 | 21,932,000 | 94,251,000 | 63,752,000 | ' | ||||
Adjusted EBITDA | 443,000 | [1] | 1,474,000 | [1] | -670,000 | [1] | 2,164,000 | [1] | ' |
Assets | $166,777,000 | ' | $166,777,000 | ' | $139,775,000 | ||||
[1] | Adjusted EBITDA, which represents income from operations with the addition of depreciation and amortization, stock-based compensation expense, income/expense related to changes in the fair value of contingent consideration liabilities, goodwill impairment charges and restructuring and other asset write-down charges, is considered a non-GAAP financial measure under SEC regulations. Income from operations is the most directly comparable financial measure calculated in accordance with GAAP. The Company presents this measure as supplemental information to help investors better understand trends in its business results over time. The Company's management team uses Adjusted EBITDA to evaluate the performance of the business. Adjusted EBITDA is not equivalent to any measure of performance required to be reported under GAAP, nor should this data be considered an indicator of the Company's overall financial performance and liquidity. Moreover, the Adjusted EBITDA definition the Company uses may not be comparable to similarly titled measures reported by other companies. |
Business_Segments_Details_1
Business Segments (Details 1) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |||||
Adjusted EBITDA | $8,477,000 | [1] | $11,347,000 | [1] | $20,418,000 | [1] | $32,778,000 | [1] |
Depreciation and amortization | -3,880,000 | -2,696,000 | -8,994,494 | -8,077,332 | ||||
Stock-based compensation | -982,000 | -720,000 | -3,036,000 | -3,171,000 | ||||
Change in fair value of contingent consideration | 46,794,000 | -330,000 | 47,834,000 | -798,000 | ||||
Goodwill impairment charge | -37,908,000 | ' | -37,908,000 | ' | ||||
Restructuring and asset write down charges | 4,321,862 | 0 | 4,321,862 | 0 | ||||
Total other income (expense) | -728,047 | -166,915 | -2,140,743 | -921,202 | ||||
Income before income taxes | $7,241,620 | $7,433,747 | $10,890,488 | $19,810,462 | ||||
[1] | Adjusted EBITDA, which represents income from operations with the addition of depreciation and amortization, stock-based compensation expense, income/expense related to changes in the fair value of contingent consideration liabilities, goodwill impairment charges and restructuring and other asset write-down charges, is considered a non-GAAP financial measure under SEC regulations. Income from operations is the most directly comparable financial measure calculated in accordance with GAAP. The Company presents this measure as supplemental information to help investors better understand trends in its business results over time. The Company's management team uses Adjusted EBITDA to evaluate the performance of the business. Adjusted EBITDA is not equivalent to any measure of performance required to be reported under GAAP, nor should this data be considered an indicator of the Company's overall financial performance and liquidity. Moreover, the Adjusted EBITDA definition the Company uses may not be comparable to similarly titled measures reported by other companies. |