Document_And_Entity_Informatio
Document And Entity Information | 3 Months Ended | |
Mar. 31, 2014 | 6-May-14 | |
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 | ' | 51,395,399 |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 31-Mar-14 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Document Fiscal Year Focus | '2014 | ' |
CONSOLIDATED_STATEMENT_OF_COMP
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Revenue | $241,489,664 | $204,577,416 |
Cost of goods sold | 186,905,270 | 158,227,615 |
Gross profit | 54,584,394 | 46,349,801 |
Operating expenses: | ' | ' |
Selling, general and administrative expenses | 49,571,481 | 47,111,617 |
Depreciation and amortization | 4,170,716 | 2,465,667 |
Change in fair value of contingent consideration | -695,177 | 608,832 |
Income (loss) from operations | 1,537,374 | -3,836,315 |
Other expense: | ' | ' |
Interest income | 49,945 | 7,334 |
Interest expense | -1,115,844 | -485,107 |
Other expense, net | -49,774 | -446,163 |
Total other expense | -1,115,673 | -923,936 |
Income (loss) before income taxes | 421,701 | -4,760,251 |
Income tax expense (benefit) | 132,294 | -1,958,977 |
Net income (loss) | 289,407 | -2,801,274 |
Basic earnings (loss) per share (in dollars per share) | $0.01 | ($0.06) |
Diluted earnings (loss) per share (in dollars per share) | $0.01 | ($0.06) |
Comprehensive income (loss) | $605,156 | ($4,718,963) |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEET (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Current assets: | ' | ' |
Cash and cash equivalents | $21,123,319 | $18,606,030 |
Accounts receivable, net of allowance for doubtful accounts of $2,128,790 and $1,758,128, respectively | 183,653,588 | 171,832,907 |
Unbilled revenue | 28,721,863 | 27,483,544 |
Inventories | 25,405,960 | 26,473,732 |
Prepaid expenses | 11,369,450 | 11,746,965 |
Deferred income taxes | 987,707 | 1,119,333 |
Other current assets | 28,815,242 | 22,408,692 |
Total current assets | 300,077,129 | 279,671,203 |
Property and equipment, net | 28,152,834 | 23,724,750 |
Intangibles and other assets: | ' | ' |
Goodwill | 251,310,336 | 251,228,698 |
Intangible assets, net of accumulated amortization of $25,270,793 and $27,111,036, respectively | 54,756,034 | 56,575,534 |
Deferred income taxes | 2,396,216 | 2,319,515 |
Other assets | 1,030,821 | 1,147,078 |
Total Other Assets | 309,493,407 | 311,270,825 |
Total assets | 637,723,370 | 614,666,778 |
Current liabilities: | ' | ' |
Accounts payable-trade | 170,098,143 | 169,243,349 |
Current portion of contingent consideration | 24,334,693 | 16,718,516 |
Due to seller | 4,505,090 | 0 |
Other liabilities | 20,298,994 | 15,818,791 |
Accrued expenses | 17,202,471 | 17,117,878 |
Total current liabilities | 236,439,391 | 218,898,534 |
Revolving credit facility | 85,000,000 | 69,000,000 |
Deferred income taxes | 9,027,466 | 9,061,535 |
Contingent consideration, net of current portion | 57,185,689 | 70,613,945 |
Other long-term liabilities | 2,857,575 | 1,651,190 |
Total liabilities | 390,510,121 | 369,225,204 |
Stockholders' equity: | ' | ' |
Common stock, par value $0.0001 per share, 200,000,000 and 200,000,000 shares authorized, 61,395,494 and 61,486,566 shares issued, 51,282,185 and 51,373,257 shares outstanding, respectively | 6,149 | 6,140 |
Additional paid-in capital | 203,208,806 | 202,042,296 |
Treasury stock at cost, 10,113,309 and 10,113,309 shares, respectively | -62,312,101 | -62,312,101 |
Accumulated other comprehensive income | 3,092,749 | 2,777,000 |
Retained earnings | 103,217,646 | 102,928,239 |
Total stockholders' equity | 247,213,249 | 245,441,574 |
Total liabilities and stockholders' equity | $637,723,370 | $614,666,778 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEET [Parenthetical] (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Accounts receivable, allowance for doubtful accounts (in dollars) | $1,758,128 | $2,128,790 |
Intangible assets, accumulated amortization (in dollars) | $27,111,036 | $25,270,793 |
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 | 61,486,566 | 61,395,494 |
Common stock, shares outstanding | 51,373,257 | 51,282,185 |
Treasury stock at cost, shares | 10,113,309 | 10,113,309 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Cash flows from operating activities | ' | ' |
Net income (loss) | $289,407 | ($2,801,274) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ' | ' |
Depreciation and amortization | 4,170,716 | 2,465,667 |
Stock-based compensation expense | 1,396,274 | 973,193 |
Deferred income taxes | 52,774 | 585,098 |
Bad debt provision | 68,932 | 13,844 |
Excess tax benefit from exercise of stock awards | 0 | -951,066 |
Change in fair value of contingent consideration liability | -695,177 | 608,832 |
Other operating activities | 104,415 | 55,629 |
Change in assets, net of acquisitions: | ' | ' |
Accounts receivable and unbilled revenue | -13,127,932 | -1,304,702 |
Inventories | 1,121,698 | 2,920,270 |
Prepaid expenses and other | -6,017,193 | -3,098,782 |
Change in liabilities, net of acquisitons: | ' | ' |
Accounts payable | 854,794 | 3,710,942 |
Accrued expenses and other | 3,372,949 | -4,020,290 |
Net cash used in operating activities | -8,408,343 | -842,639 |
Cash flows from investing activities | ' | ' |
Purchases of property and equipment | -4,483,271 | -2,886,245 |
Payments for acquisitions, net of cash acquired | 0 | -6,261,942 |
Net cash used in investing activities | -4,483,271 | -9,148,187 |
Cash flows from financing activities | ' | ' |
Net borrowings from revolving credit facility and short-term debt | 16,000,000 | 5,500,000 |
Payments of contingent consideration | -612,500 | -3,720,821 |
Proceeds from exercise of stock options | 43,852 | 846,541 |
Excess tax benefit from exercise of stock awards | 0 | 951,066 |
Other financing activities | 0 | -36,642 |
Net cash provided by financing activites | 15,431,352 | 3,540,144 |
Effect of exchange rate changes on cash and cash equivalents | -22,449 | -159,046 |
Increase (decrease) in cash and cash equivalents | 2,517,289 | -6,609,728 |
Cash and cash equivalents, beginning of period | 18,606,030 | 17,218,899 |
Cash and cash equivalents, end of period | $21,123,319 | $10,609,171 |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended | |
Mar. 31, 2014 | ||
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 months ended March 31, 2014 are not necessarily indicative of the results to be expected for the full year of 2014. 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 and for the year ended December 31, 2013 included in the Company’s Annual Report on Form 10-K/A filed with the SEC on April 21, 2014. | ||
Reclassifications | ||
Certain prior year amounts have been reclassified to conform to the current presentation. These reclassifications have not been material and have not affected net income. | ||
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. Realized losses on foreign currency transactions were $0.4 million and less than $0.1 million during the three months ended March 31, 2013 and 2014, respectively. | ||
Revenue Recognition | ||
The Company recognizes revenue upon meeting all of the following revenue recognition criteria, which are typically met upon shipment or delivery of our products to customers: (i) persuasive evidence of an arrangement exists through customer contracts and orders, (ii) the customer takes title and assumes the risks and rewards of ownership, (iii) the sales price charged is fixed or determinable as evidenced by customer contracts and orders, and (iv) collectability is reasonably assured. Unbilled revenue relates to shipments that have been made to customers for which the related account receivable has not yet been billed. | ||
In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 605-45, Revenue Recognition – Principal Agent Considerations, the Company generally reports revenue on a gross basis because the Company is the primary obligor in its arrangements to procure printed materials and other products for its customers. Under these arrangements, the Company is responsible for the fulfillment, including the acceptability, of the printed materials and other products. In addition, the Company (i) determines which suppliers are included in its network, (ii) has discretion to select from among the suppliers within its network, (iii) is obligated to pay its suppliers regardless of whether it is paid by its customers, and (iv) has reasonable latitude to establish exchange price. In some transactions, the Company also has general inventory risk and is involved in the determination of the nature or characteristics of the printed materials and products. When the Company is not the primary obligor, revenues are reported net. | ||
The Company recognizes revenue for creative and other services provided to its customers which may be delivered in conjunction with the procurement of printed materials at the time when delivery and customer acceptance occur and all other revenue recognition criteria are met. The Company recognizes revenue for creative and other services provided on a stand-alone basis upon completion of the service. Service revenue has not been material to the Company’s overall revenue to date. | ||
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. | ||
The Company defines its three reporting units as North America, Latin America and EMEA. At December 31, 2013, the Company elected to perform the quantitative impairment test for each of its three reporting units. In performing this test, the Company determined the fair value of the reporting units based on the income approach. Under the income approach, the fair value of a reporting unit is calculated based on the present value of estimated future cash flows. No impairment was identified as of December 31, 2013 as a result of this test. | ||
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. | ||
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. | ||
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 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 three months ended March 31, 2013 and 2014, the Company granted 207,601 and 12,315 options, respectively. In addition, during the three months ended March 31, 2013 and 2014, the Company granted 150,100 and 291,291 restricted common shares, respectively. During the three months ended March 31, 2013 and 2014, 245,178 and 125,060 options were exercised and restricted common shares vested, respectively. The Company recorded $1.0 million and $1.4 million in compensation expense for the three months ended March 31, 2013 and 2014, respectively. | ||
Acquisitions
Acquisitions | 3 Months Ended | ||||||||||
Mar. 31, 2014 | |||||||||||
Business Combinations [Abstract] | ' | ||||||||||
Business Combination Disclosure [Text Block] | ' | ||||||||||
2 | Acquisitions | ||||||||||
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. The Company has recorded the acquisition date fair value of the contingent consideration liability as additional purchase price. The Company has recorded $81.5 million in contingent consideration at March 31, 2014 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. The Company recorded a loss of $0.6 million for three months ended March 31, 2013 and income of $0.7 million for three months ended March 31, 2014 for changes in the fair value of contingent consideration. | |||||||||||
As of March 31, 2014, the potential maximum contingent payments are payable as follows: | |||||||||||
Cash | Common Stock | Total | |||||||||
2014 | $ | 6,141,923 | $ | 9,633,666 | $ | 15,775,589 | |||||
2015 | 13,476,960 | 36,135,694 | 49,612,654 | ||||||||
2016 | 33,211,080 | 36,291,080 | 69,502,160 | ||||||||
2017 | - | 45,975,280 | 45,975,280 | ||||||||
$ | 52,829,963 | $ | 128,035,720 | $ | 180,865,683 | ||||||
If the performance measures required by the purchase agreements are not achieved, the Company may pay less than the maximum amounts as presented in the table above, depending on the terms of the agreement. | |||||||||||
Goodwill
Goodwill | 3 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||||
Goodwill Disclosure [Text Block] | ' | |||||||||||||
3 | Goodwill | |||||||||||||
The following is a summary of the goodwill balance for each operating segment as of March 31, 2014: | ||||||||||||||
North America | Latin America | EMEA | Total | |||||||||||
Net goodwill as of December 31, 2013 | $ | 171,094,576 | $ | 9,875,236 | $ | 70,258,886 | $ | 251,228,698 | ||||||
Finalization of purchase accounting for prior year acquisitions | 29,341 | - | - | 29,341 | ||||||||||
Foreign exchange impact | -27,789 | - | 80,086 | 52,297 | ||||||||||
Net goodwill as of March 31, 2014 | $ | 171,096,128 | $ | 9,875,236 | $ | 70,338,972 | $ | 251,310,336 | ||||||
Other_Intangible_Assets
Other Intangible Assets | 3 Months Ended | |||||||||
Mar. 31, 2014 | ||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||
Intangible Assets Disclosure [Text Block] | ' | |||||||||
4 | Other Intangible Assets | |||||||||
The following is a summary of the Company’s other intangible assets as of December 31, 2013 and March 31, 2014: | ||||||||||
December 31, 2013 | March 31, 2014 | Weighted | ||||||||
Average Life | ||||||||||
Customer lists | $ | 77,244,427 | $ | 77,265,170 | 13.8 years | |||||
Noncompete agreements | 1,077,349 | 1,077,349 | 3.9 years | |||||||
Trade names | 3,467,655 | 3,467,655 | 12.4 years | |||||||
Patents | 56,896 | 56,896 | 9.0 years | |||||||
81,846,327 | 81,867,070 | |||||||||
Less accumulated amortization | -25,270,793 | -27,111,036 | ||||||||
Intangible assets, net | $ | 56,575,534 | $ | 54,756,034 | ||||||
Amortization expense related to these intangible assets was $0.9 million and $1.8 million for the three months ended March 31, 2013 and 2014, respectively. | ||||||||||
The estimated amortization expense for the next five years is as follows: | ||||||||||
Remainder of 2014 | $ | 5,468,160 | ||||||||
2015 | 6,616,292 | |||||||||
2016 | 6,182,423 | |||||||||
2017 | 5,715,438 | |||||||||
2018 | 5,188,233 | |||||||||
Thereafter | 25,585,488 | |||||||||
$ | 54,756,034 | |||||||||
Income_Taxes
Income Taxes | 3 Months Ended | |
Mar. 31, 2014 | ||
Income Tax Disclosure [Abstract] | ' | |
Income Tax Disclosure [Text Block] | ' | |
5 | Income Taxes | |
The company’s effective income tax rate was 41.2% and 31.4% in the three months ended March 31, 2013 and 2014, 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. | ||
Earnings_Loss_Per_Share
Earnings (Loss) Per Share | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Earnings Per Share [Abstract] | ' | |||||||
Earnings Per Share [Text Block] | ' | |||||||
6 | Earnings (Loss) Per Share | |||||||
Basic earnings (loss) per common share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding. Diluted earnings (loss) per share is calculated by dividing net income (loss) by the weighted average shares outstanding plus share equivalents that would arise from the exercise of stock options and vesting of restricted common shares. During the three months ended March 31, 2013 and 2014, an aggregate of 4,575,491 and 1,938,029 options and restricted common shares, respectively, were excluded from the calculation as these options and restricted common shares were anti-dilutive. The computations of basic and diluted earnings (loss) per common share for the three months ended March 31, 2013 and 2014 are as follows: | ||||||||
Three Months Ended March 31, | ||||||||
2013 | 2014 | |||||||
Numerator: | ||||||||
Net income (loss) | $ | -2,801,274 | $ | 289,407 | ||||
Denominator: | ||||||||
Denominator for basic earnings (loss) per share—weighted-average shares | 50,338,994 | 51,312,649 | ||||||
Effect of dilutive securities: | ||||||||
Employee stock options and restricted common shares | - | 785,515 | ||||||
Contingently issuable shares | - | 90,927 | ||||||
Denominator for dilutive earnings (loss) per share | 50,338,994 | 52,189,091 | ||||||
Basic earnings (loss) per share | $ | -0.06 | $ | 0.01 | ||||
Diluted earnings (loss) per share | $ | -0.06 | $ | 0.01 | ||||
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ' | |||||||||||||
Comprehensive Income (Loss) Note [Text Block] | ' | |||||||||||||
7 | Accumulated Other Comprehensive Income (Loss) | |||||||||||||
The table below presents changes in the components of accumulated other comprehensive income (loss) for the three months ended March 31, 2013 and 2014: | ||||||||||||||
Three Months Ended March 31, | ||||||||||||||
2013 | 2014 | |||||||||||||
Foreign currency | Unrealized holding | Total | Foreign currency | |||||||||||
gains on available- | ||||||||||||||
for-sale securities | ||||||||||||||
Balance, beginning of period | $ | 271,583 | $ | 1,338 | $ | 272,921 | $ | 2,777,000 | ||||||
Other comprehensive income before reclassifications | -1,916,351 | - | -1,916,351 | 315,749 | ||||||||||
Amounts reclassified from AOCI | - | -1,338 | -1,338 | - | ||||||||||
Net current-period other comprehensive income (loss) | -1,916,351 | -1,338 | -1,917,689 | 315,749 | ||||||||||
Balance, end of period | $ | -1,644,768 | $ | - | $ | -1,644,768 | $ | 3,092,749 | ||||||
Related_Party_Transactions
Related Party Transactions | 3 Months Ended | |
Mar. 31, 2014 | ||
Related Party Transactions [Abstract] | ' | |
Related Party Transactions Disclosure [Text Block] | ' | |
8 | Related Party Transactions | |
Agreements and Services with Related Parties | ||
The Company provides print procurement services to Arthur J. Gallagher & Co. J. Patrick Gallagher, Jr., a member of the Company’s Board of Directors, 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 during the three months ended March 31, 2013 and 2014 was $0.1 million and $0.5 million, 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 $0.1 million and $0.1 million for the three months ended March 31, 2013 and 2014, respectively. The net amount receivable from Arthur J. Gallagher & Co. at March 31, 2014 was $0.1 million. | ||
Fair_Value_Measurement
Fair Value Measurement | 3 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
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, 2013 and March 31, 2014. 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 $1.7 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, 2013 and March 31, 2014, respectively: | ||||||||||||||
At December 31, 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) | $ | 667,122 | $ | 667,122 | $ | - | $ | - | ||||||
Liabilities: | ||||||||||||||
Contingent consideration | $ | -87,332,461 | $ | - | $ | - | $ | -87,332,461 | ||||||
At March 31, 2014 | 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) | $ | 667,160 | $ | 667,160 | $ | - | $ | - | ||||||
Liabilities: | ||||||||||||||
Contingent consideration | $ | -81,520,382 | $ | - | $ | - | $ | -81,520,382 | ||||||
-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, 2013 | $ | -87,332,461 | ||||||||||||
Contingent consideration payments | 612,500 | |||||||||||||
Change in fair value (1) | 695,177 | |||||||||||||
Reclass to Due to seller | 4,505,090 | |||||||||||||
Foreign exchange impact (2) | -688 | |||||||||||||
Balance as of March 31, 2014 | $ | -81,520,382 | ||||||||||||
-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 operating 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. | |||||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended | |
Mar. 31, 2014 | ||
Commitments and Contingencies Disclosure [Abstract] | ' | |
Commitments and Contingencies Disclosure [Text Block] | ' | |
10 | Commitments and Contingencies | |
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 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 was denied. On March 5, 2014, e-Lynxx filed an appeal from the judgment entered in favor of the Company. The Company intends to vigorously defend the e-Lynxx appeal. 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 in excess of $9.0 million, interest, punitive damages, injunctive relief, declaratory relief, and attorneys’ fees and costs. An arbitration hearing was held in this matter in November 2013, and post-hearing briefing has been completed. 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. | ||
In October 2013, the Company removed the former owner of Productions Graphics from his role as President of Productions Graphics, the Company’s French subsidiary. He had been in that role since the Company’s 2011 acquisition of Productions Graphics, a European business then principally owned by him. In December 2013, the former owner of Productions Graphics initiated a wrongful termination claim in the Commercial Court of Paris seeking approximately €0.7 million in fees and damages. In anticipation of this claim, in November 2013, he also obtained a judicial asset attachment order in the amount of €0.7 million as payment security; the attachment order was confirmed in January 2014, and the Company filed an appeal of the order, which is currently pending. The Company disputes the allegations of the former owner of Productions Graphics and intends to vigorously defend these matters. In February 2014, based on a review the Company initiated into certain transactions associated with the former owner of Productions Graphics, the Company concluded that he had engaged in fraud by inflating the results of the Productions Graphics business in order to induce the Company into paying him €7.1 million in contingent consideration pursuant to the acquisition agreement. In light of those findings, in February 2014 the Company filed a criminal complaint in France seeking to redress the harm caused by his conduct. In addition to these pending matters, there may be other potential disputes between the Company and the former owner of Productions Graphics relating to the acquisition agreement. As of March 31, 2014, the Company had paid €5.8 million in fixed consideration and €7.1 million in contingent consideration to the former owner of Productions Graphics; the remaining maximum contingent consideration for the earn-out periods ended in 2013 and ending in 2014 and 2015 is €55.0 million. | ||
In February 2014, following the Company’s February 2014 announcement of its intention to restate certain historical financial statements, an individual filed a putative securities class action complaint in the United States District Court for the Northern District of Illinois entitled Van Noppen v. InnerWorkings et al. The complaint alleges that the Company and certain executive officers and a former subsidiary officer violated federal securities laws by making materially false or misleading statements or omissions relating to the Company’s financial results. The complaint seeks unspecified damages, interest, attorneys’ fees and other costs. The Company disputes the claims and intends to vigorously defend the matter. Any loss that the Company may incur as a result of this matter cannot be estimated. | ||
Business_Segments
Business Segments | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||
Segment Reporting Disclosure [Text Block] | ' | ||||||||||||||||
11 | 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. The Company is 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 table below presents financial information for the Company’s reportable operating segments and Other for the three month periods noted (in thousands): | |||||||||||||||||
North America | Latin America | EMEA | Other | Total | |||||||||||||
Three Months Ended March 31, 2014: | |||||||||||||||||
Net revenue from third parties | $ | 167,442 | $ | 24,709 | $ | 49,339 | $ | - | $ | 241,490 | |||||||
Net revenue from other segments | - | 68 | 990 | -1,058 | - | ||||||||||||
Total net revenues | 167,442 | 24,777 | 50,329 | -1,058 | 241,490 | ||||||||||||
Adjusted EBITDA (1) | 12,453 | 1,134 | 1,097 | -6,181 | -8,503 | ||||||||||||
Three Months Ended March 31, 2013: | |||||||||||||||||
Net revenue from third parties | $ | 164,370 | $ | 18,175 | $ | 22,032 | $ | - | $ | 204,577 | |||||||
Net revenue from other segments | 18 | 264 | 3 | -285 | - | ||||||||||||
Total net revenues | 164,388 | 18,439 | 22,035 | -285 | 204,577 | ||||||||||||
Adjusted EBITDA (1) | 12,783 | 624 | -79 | -6,562 | 6,766 | ||||||||||||
-1 | Adjusted EBITDA, which represents income from operations with the addition of depreciation and amortization, stock-based compensation expense, change in the fair value of contingent consideration liabilities and certain legal settlements, 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 (loss) before income taxes (in thousands): | |||||||||||||||||
Three Months Ended March 31, | |||||||||||||||||
2013 | 2014 | ||||||||||||||||
Adjusted EBITDA | $ | 6,766 | $ | 8,503 | |||||||||||||
Depreciation and amortization | -2,466 | -4,171 | |||||||||||||||
Stock-based compensation | -973 | -1,396 | |||||||||||||||
Change in fair value of contingent consideration | -609 | 695 | |||||||||||||||
Payments to former owner of Productions Graphics, net of cash recovered | -6,309 | - | |||||||||||||||
Legal fees in connection with patent infringement defense | -244 | - | |||||||||||||||
Restatement - related professional fees | - | -2,093 | |||||||||||||||
Total other expense | -925 | -1,116 | |||||||||||||||
Income (loss) before income taxes | $ | -4,760 | $ | 422 | |||||||||||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2014 | |
Accounting Policies [Abstract] | ' |
Basis of Presentation of Interim Financial Statements [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 months ended March 31, 2014 are not necessarily indicative of the results to be expected for the full year of 2014. 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 and for the year ended December 31, 2013 included in the Company’s Annual Report on Form 10-K/A filed with the SEC on April 21, 2014. | |
Reclassification, Policy [Policy Text Block] | ' |
Reclassifications | |
Certain prior year amounts have been reclassified to conform to the current presentation. These reclassifications have not been material and have not affected net income. | |
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. Realized losses on foreign currency transactions were $0.4 million and less than $0.1 million during the three months ended March 31, 2013 and 2014, respectively. | |
Revenue Recognition, Policy [Policy Text Block] | ' |
Revenue Recognition | |
The Company recognizes revenue upon meeting all of the following revenue recognition criteria, which are typically met upon shipment or delivery of our products to customers: (i) persuasive evidence of an arrangement exists through customer contracts and orders, (ii) the customer takes title and assumes the risks and rewards of ownership, (iii) the sales price charged is fixed or determinable as evidenced by customer contracts and orders, and (iv) collectability is reasonably assured. Unbilled revenue relates to shipments that have been made to customers for which the related account receivable has not yet been billed. | |
In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 605-45, Revenue Recognition – Principal Agent Considerations, the Company generally reports revenue on a gross basis because the Company is the primary obligor in its arrangements to procure printed materials and other products for its customers. Under these arrangements, the Company is responsible for the fulfillment, including the acceptability, of the printed materials and other products. In addition, the Company (i) determines which suppliers are included in its network, (ii) has discretion to select from among the suppliers within its network, (iii) is obligated to pay its suppliers regardless of whether it is paid by its customers, and (iv) has reasonable latitude to establish exchange price. In some transactions, the Company also has general inventory risk and is involved in the determination of the nature or characteristics of the printed materials and products. When the Company is not the primary obligor, revenues are reported net. | |
The Company recognizes revenue for creative and other services provided to its customers which may be delivered in conjunction with the procurement of printed materials at the time when delivery and customer acceptance occur and all other revenue recognition criteria are met. The Company recognizes revenue for creative and other services provided on a stand-alone basis upon completion of the service. Service revenue has not been material to the Company’s overall revenue to date. | |
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. | |
The Company defines its three reporting units as North America, Latin America and EMEA. At December 31, 2013, the Company elected to perform the quantitative impairment test for each of its three reporting units. In performing this test, the Company determined the fair value of the reporting units based on the income approach. Under the income approach, the fair value of a reporting unit is calculated based on the present value of estimated future cash flows. No impairment was identified as of December 31, 2013 as a result of this test. | |
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. | |
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. | |
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 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 three months ended March 31, 2013 and 2014, the Company granted 207,601 and 12,315 options, respectively. In addition, during the three months ended March 31, 2013 and 2014, the Company granted 150,100 and 291,291 restricted common shares, respectively. During the three months ended March 31, 2013 and 2014, 245,178 and 125,060 options were exercised and restricted common shares vested, respectively. The Company recorded $1.0 million and $1.4 million in compensation expense for the three months ended March 31, 2013 and 2014, respectively. | |
Acquisitions_Tables
Acquisitions (Tables) | 3 Months Ended | ||||||||||
Mar. 31, 2014 | |||||||||||
Schedule of Business Acquisitions by Acquisition, Contingent Consideration [Table Text Block] | ' | ||||||||||
As of March 31, 2014, the potential maximum contingent payments are payable as follows: | |||||||||||
Cash | Common Stock | Total | |||||||||
2014 | $ | 6,141,923 | $ | 9,633,666 | $ | 15,775,589 | |||||
2015 | 13,476,960 | 36,135,694 | 49,612,654 | ||||||||
2016 | 33,211,080 | 36,291,080 | 69,502,160 | ||||||||
2017 | - | 45,975,280 | 45,975,280 | ||||||||
$ | 52,829,963 | $ | 128,035,720 | $ | 180,865,683 | ||||||
Goodwill_Tables
Goodwill (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||||
Business Combination, Segment Allocation [Table Text Block] | ' | |||||||||||||
The following is a summary of the goodwill balance for each operating segment as of March 31, 2014: | ||||||||||||||
North America | Latin America | EMEA | Total | |||||||||||
Net goodwill as of December 31, 2013 | $ | 171,094,576 | $ | 9,875,236 | $ | 70,258,886 | $ | 251,228,698 | ||||||
Finalization of purchase accounting for prior year acquisitions | 29,341 | - | - | 29,341 | ||||||||||
Foreign exchange impact | -27,789 | - | 80,086 | 52,297 | ||||||||||
Net goodwill as of March 31, 2014 | $ | 171,096,128 | $ | 9,875,236 | $ | 70,338,972 | $ | 251,310,336 | ||||||
Other_Intangible_Assets_Tables
Other Intangible Assets (Tables) | 3 Months Ended | |||||||||
Mar. 31, 2014 | ||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||
Schedule Of Finite Lived And Indefinite Lived Intangible Assets [Table Text Block] | ' | |||||||||
The following is a summary of the Company’s other intangible assets as of December 31, 2013 and March 31, 2014: | ||||||||||
December 31, 2013 | March 31, 2014 | Weighted | ||||||||
Average Life | ||||||||||
Customer lists | $ | 77,244,427 | $ | 77,265,170 | 13.8 years | |||||
Noncompete agreements | 1,077,349 | 1,077,349 | 3.9 years | |||||||
Trade names | 3,467,655 | 3,467,655 | 12.4 years | |||||||
Patents | 56,896 | 56,896 | 9.0 years | |||||||
81,846,327 | 81,867,070 | |||||||||
Less accumulated amortization | -25,270,793 | -27,111,036 | ||||||||
Intangible assets, net | $ | 56,575,534 | $ | 54,756,034 | ||||||
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 2014 | $ | 5,468,160 | ||||||||
2015 | 6,616,292 | |||||||||
2016 | 6,182,423 | |||||||||
2017 | 5,715,438 | |||||||||
2018 | 5,188,233 | |||||||||
Thereafter | 25,585,488 | |||||||||
$ | 54,756,034 | |||||||||
Earnings_Loss_Per_Share_Tables
Earnings (Loss) Per Share (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Earnings Per Share [Abstract] | ' | |||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | ' | |||||||
The computations of basic and diluted earnings (loss) per common share for the three months ended March 31, 2013 and 2014 are as follows: | ||||||||
Three Months Ended March 31, | ||||||||
2013 | 2014 | |||||||
Numerator: | ||||||||
Net income (loss) | $ | -2,801,274 | $ | 289,407 | ||||
Denominator: | ||||||||
Denominator for basic earnings (loss) per share—weighted-average shares | 50,338,994 | 51,312,649 | ||||||
Effect of dilutive securities: | ||||||||
Employee stock options and restricted common shares | - | 785,515 | ||||||
Contingently issuable shares | - | 90,927 | ||||||
Denominator for dilutive earnings (loss) per share | 50,338,994 | 52,189,091 | ||||||
Basic earnings (loss) per share | $ | -0.06 | $ | 0.01 | ||||
Diluted earnings (loss) per share | $ | -0.06 | $ | 0.01 | ||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
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 (loss) for the three months ended March 31, 2013 and 2014: | ||||||||||||||
Three Months Ended March 31, | ||||||||||||||
2013 | 2014 | |||||||||||||
Foreign currency | Unrealized holding | Total | Foreign currency | |||||||||||
gains on available- | ||||||||||||||
for-sale securities | ||||||||||||||
Balance, beginning of period | $ | 271,583 | $ | 1,338 | $ | 272,921 | $ | 2,777,000 | ||||||
Other comprehensive income before reclassifications | -1,916,351 | - | -1,916,351 | 315,749 | ||||||||||
Amounts reclassified from AOCI | - | -1,338 | -1,338 | - | ||||||||||
Net current-period other comprehensive income (loss) | -1,916,351 | -1,338 | -1,917,689 | 315,749 | ||||||||||
Balance, end of period | $ | -1,644,768 | $ | - | $ | -1,644,768 | $ | 3,092,749 | ||||||
Fair_Value_Measurement_Tables
Fair Value Measurement (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
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, 2013 and March 31, 2014, respectively: | ||||||||||||||
At December 31, 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) | $ | 667,122 | $ | 667,122 | $ | - | $ | - | ||||||
Liabilities: | ||||||||||||||
Contingent consideration | $ | -87,332,461 | $ | - | $ | - | $ | -87,332,461 | ||||||
At March 31, 2014 | 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) | $ | 667,160 | $ | 667,160 | $ | - | $ | - | ||||||
Liabilities: | ||||||||||||||
Contingent consideration | $ | -81,520,382 | $ | - | $ | - | $ | -81,520,382 | ||||||
-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, 2013 | $ | -87,332,461 | ||||||||||||
Contingent consideration payments | 612,500 | |||||||||||||
Change in fair value (1) | 695,177 | |||||||||||||
Reclass to Due to seller | 4,505,090 | |||||||||||||
Foreign exchange impact (2) | -688 | |||||||||||||
Balance as of March 31, 2014 | $ | -81,520,382 | ||||||||||||
-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 operating 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) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
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 month periods noted (in thousands): | |||||||||||||||||
North America | Latin America | EMEA | Other | Total | |||||||||||||
Three Months Ended March 31, 2014: | |||||||||||||||||
Net revenue from third parties | $ | 167,442 | $ | 24,709 | $ | 49,339 | $ | - | $ | 241,490 | |||||||
Net revenue from other segments | - | 68 | 990 | -1,058 | - | ||||||||||||
Total net revenues | 167,442 | 24,777 | 50,329 | -1,058 | 241,490 | ||||||||||||
Adjusted EBITDA (1) | 12,453 | 1,134 | 1,097 | -6,181 | -8,503 | ||||||||||||
Three Months Ended March 31, 2013: | |||||||||||||||||
Net revenue from third parties | $ | 164,370 | $ | 18,175 | $ | 22,032 | $ | - | $ | 204,577 | |||||||
Net revenue from other segments | 18 | 264 | 3 | -285 | - | ||||||||||||
Total net revenues | 164,388 | 18,439 | 22,035 | -285 | 204,577 | ||||||||||||
Adjusted EBITDA (1) | 12,783 | 624 | -79 | -6,562 | 6,766 | ||||||||||||
-1 | Adjusted EBITDA, which represents income from operations with the addition of depreciation and amortization, stock-based compensation expense, change in the fair value of contingent consideration liabilities and certain legal settlements, 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 (loss) before income taxes (in thousands): | |||||||||||||||||
Three Months Ended March 31, | |||||||||||||||||
2013 | 2014 | ||||||||||||||||
Adjusted EBITDA | $ | 6,766 | $ | 8,503 | |||||||||||||
Depreciation and amortization | -2,466 | -4,171 | |||||||||||||||
Stock-based compensation | -973 | -1,396 | |||||||||||||||
Change in fair value of contingent consideration | -609 | 695 | |||||||||||||||
Payments to former owner of Productions Graphics, net of cash recovered | -6,309 | - | |||||||||||||||
Legal fees in connection with patent infringement defense | -244 | - | |||||||||||||||
Restatement - related professional fees | - | -2,093 | |||||||||||||||
Total other expense | -925 | -1,116 | |||||||||||||||
Income (loss) before income taxes | $ | -4,760 | $ | 422 | |||||||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details Textual) (USD $) | 3 Months Ended | |
In Millions, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Schedule of Significant Accounting Policies [Line Items] | ' | ' |
Foreign Currency Transaction Gain (Loss), Realized | $0.10 | $0.40 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures, Total | 12,315 | 207,601 |
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures, Total | 291,291 | 150,100 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Number | 125,060 | 245,178 |
Allocated Share-based Compensation Expense | $1.40 | $1 |
Acquisitions_Details
Acquisitions (Details) (USD $) | Mar. 31, 2014 |
Schedule of Business Acquisitions, by Consideration [Line Items] | ' |
Potential Maximum Contingent Payments | $180,865,683 |
Common Stock [Member] | ' |
Schedule of Business Acquisitions, by Consideration [Line Items] | ' |
Potential Maximum Contingent Payments | 128,035,720 |
Cash [Member] | ' |
Schedule of Business Acquisitions, by Consideration [Line Items] | ' |
Potential Maximum Contingent Payments | 52,829,963 |
2014 [Member] | ' |
Schedule of Business Acquisitions, by Consideration [Line Items] | ' |
Potential Maximum Contingent Payments | 15,775,589 |
2014 [Member] | Common Stock [Member] | ' |
Schedule of Business Acquisitions, by Consideration [Line Items] | ' |
Potential Maximum Contingent Payments | 9,633,666 |
2014 [Member] | Cash [Member] | ' |
Schedule of Business Acquisitions, by Consideration [Line Items] | ' |
Potential Maximum Contingent Payments | 6,141,923 |
2015 [Member] | ' |
Schedule of Business Acquisitions, by Consideration [Line Items] | ' |
Potential Maximum Contingent Payments | 49,612,654 |
2015 [Member] | Common Stock [Member] | ' |
Schedule of Business Acquisitions, by Consideration [Line Items] | ' |
Potential Maximum Contingent Payments | 36,135,694 |
2015 [Member] | Cash [Member] | ' |
Schedule of Business Acquisitions, by Consideration [Line Items] | ' |
Potential Maximum Contingent Payments | 13,476,960 |
2016 [Member] | ' |
Schedule of Business Acquisitions, by Consideration [Line Items] | ' |
Potential Maximum Contingent Payments | 69,502,160 |
2016 [Member] | Common Stock [Member] | ' |
Schedule of Business Acquisitions, by Consideration [Line Items] | ' |
Potential Maximum Contingent Payments | 36,291,080 |
2016 [Member] | Cash [Member] | ' |
Schedule of Business Acquisitions, by Consideration [Line Items] | ' |
Potential Maximum Contingent Payments | 33,211,080 |
2017 [Member] | ' |
Schedule of Business Acquisitions, by Consideration [Line Items] | ' |
Potential Maximum Contingent Payments | 45,975,280 |
2017 [Member] | Common Stock [Member] | ' |
Schedule of Business Acquisitions, by Consideration [Line Items] | ' |
Potential Maximum Contingent Payments | 45,975,280 |
2017 [Member] | Cash [Member] | ' |
Schedule of Business Acquisitions, by Consideration [Line Items] | ' |
Potential Maximum Contingent Payments | $0 |
Acquisitions_Details_Textual
Acquisitions (Details Textual) (USD $) | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | |
Business Acquisition [Line Items] | ' | ' | ' |
Business Acquisitions Contingent Consideration Change In Fair Value | $700,000 | $600,000 | ' |
Contingent consideration | ($81,520,382) | ' | ($87,332,461) |
Goodwill_Details
Goodwill (Details) (USD $) | 3 Months Ended |
Mar. 31, 2014 | |
Business Combination Segment Allocation [Line Items] | ' |
Net goodwill as of December 31, 2013 | $251,228,698 |
Finalization of purchase accounting for prior year acquisitions | 29,341 |
Foreign exchange impact | 52,297 |
Net goodwill as of March 31, 2014 | 251,310,336 |
North America [Member] | ' |
Business Combination Segment Allocation [Line Items] | ' |
Net goodwill as of December 31, 2013 | 171,094,576 |
Finalization of purchase accounting for prior year acquisitions | 29,341 |
Foreign exchange impact | -27,789 |
Net goodwill as of March 31, 2014 | 171,096,128 |
Latin America [Member] | ' |
Business Combination Segment Allocation [Line Items] | ' |
Net goodwill as of December 31, 2013 | 9,875,236 |
Finalization of purchase accounting for prior year acquisitions | 0 |
Foreign exchange impact | 0 |
Net goodwill as of March 31, 2014 | 9,875,236 |
EMEA [Member] | ' |
Business Combination Segment Allocation [Line Items] | ' |
Net goodwill as of December 31, 2013 | 70,258,886 |
Finalization of purchase accounting for prior year acquisitions | 0 |
Foreign exchange impact | 80,086 |
Net goodwill as of March 31, 2014 | $70,338,972 |
Other_Intangible_Assets_Detail
Other Intangible Assets (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Dec. 31, 2013 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite-Lived Intangible Assets, Gross | $81,867,070 | $81,846,327 |
Less accumulated amortization | -27,111,036 | -25,270,793 |
Intangible assets, net | 54,756,034 | 56,575,534 |
Trade Names [Member] | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite-Lived Intangible Assets, Gross | 3,467,655 | 3,467,655 |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | '12 years 4 months 24 days | ' |
Customer Lists [Member] | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite-Lived Intangible Assets, Gross | 77,265,170 | 77,244,427 |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | '13 years 9 months 18 days | ' |
Noncompete Agreements [Member] | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite-Lived Intangible Assets, Gross | 1,077,349 | 1,077,349 |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | '3 years 10 months 24 days | ' |
Patents [Member] | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite-Lived Intangible Assets, Gross | $56,896 | $56,896 |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | '9 years | ' |
Other_Intangible_Assets_Detail1
Other Intangible Assets (Details 1) (USD $) | Mar. 31, 2014 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Line Items] | ' |
Remainder of 2014 | $5,468,160 |
2015 | 6,616,292 |
2016 | 6,182,423 |
2017 | 5,715,438 |
2018 | 5,188,233 |
Thereafter | 25,585,488 |
Finite-Lived Intangible Assets, Net | $54,756,034 |
Other_Intangible_Assets_Detail2
Other Intangible Assets (Details Textual) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Amortization Of Intangible Assets | $1.80 | $0.90 |
Income_Taxes_Details_Textual
Income Taxes (Details Textual) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Operating Loss Carryforwards [Line Items] | ' | ' |
Effective Income Tax Rate Reconciliation, Percent, Total | 31.40% | 41.20% |
Earnings_Loss_Per_Share_Detail
Earnings (Loss) Per Share (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Numerator: | ' | ' |
Net income (loss) | $289,407 | ($2,801,274) |
Denominator: | ' | ' |
Denominator for basic earnings (loss) per shareBweighted-average shares | 51,312,649 | 50,338,994 |
Effect of dilutive securities: | ' | ' |
Employee stock options and restricted common shares | 785,515 | 0 |
Contingently issuable shares | 90,927 | 0 |
Denominator for dilutive earnings (loss) per share | 52,189,091 | 50,338,994 |
Basic earnings (loss) per share (in dollars per share) | $0.01 | ($0.06) |
Diluted earnings (loss) per share (in dollars per share) | $0.01 | ($0.06) |
Earnings_Loss_Per_Share_Detail1
Earnings (Loss) Per Share (Details Textual) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,938,029 | 4,575,491 |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Loss) (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' |
Balance, beginning of period - Foreign currency | $2,777,000 | $271,583 |
Other comprehensive income before reclassifications - Foreign currency | 315,749 | -1,916,351 |
Amounts reclassified from accumulated other comprehensive income - Foreign currency | 0 | 0 |
Net current-period other comprehensive income (loss) - Foreign currency | 315,749 | -1,916,351 |
Balance, end of period - Foreign currency | 3,092,749 | -1,644,768 |
Balance - Unrealized holding gains on available-for-sale securities | ' | 1,338 |
Other comprehensive income before reclassifications - Unrealized holding gains on available-for-sale securities | ' | 0 |
Amounts reclassified from accumulated other comprehensive income - Unrealized holding gains on available-for-sale securities | ' | -1,338 |
Net current-period other comprehensive income - Unrealized holding gains on available-for-sale securities | ' | -1,338 |
Balance - Unrealized holding gains on available-for-sale securities | ' | 0 |
Balance, beginning of period | 2,777,000 | 272,921 |
Other comprehensive income before reclassifications Available For Sale Securities Adjustment Before Tax Reclassification Adjustments | ' | -1,916,351 |
Amounts reclassified from accumulated other comprehensive income | ' | -1,338 |
Net current-period other comprehensive income | ' | -1,917,689 |
Balance, end of period | $3,092,749 | ($1,644,768) |
Related_Party_Transactions_Det
Related Party Transactions (Details Textual) (Arthur J.Gallagher Co [Member], USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Arthur J.Gallagher Co [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Print Procurement Services | $0.50 | $0.10 |
Insurance and Risk Management Services | 0.1 | 0.1 |
Due from Related Parties, Current | $0.10 | ' |
Fair_Value_Measurement_Details
Fair Value Measurement (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | ||
Assets: | ' | ' | ||
Money market funds | $667,160 | [1] | $667,122 | [1] |
Liabilities: | ' | ' | ||
Contingent consideration | -81,520,382 | -87,332,461 | ||
Fair Value, Inputs, Level 1 [Member] | ' | ' | ||
Assets: | ' | ' | ||
Money market funds | 667,160 | 667,122 | [1] | |
Liabilities: | ' | ' | ||
Contingent consideration | 0 | 0 | ||
Fair Value, Inputs, Level 2 [Member] | ' | ' | ||
Assets: | ' | ' | ||
Money market funds | 0 | [1] | 0 | [1] |
Liabilities: | ' | ' | ||
Contingent consideration | 0 | 0 | ||
Fair Value, Inputs, Level 3 [Member] | ' | ' | ||
Assets: | ' | ' | ||
Money market funds | 0 | [1] | 0 | [1] |
Liabilities: | ' | ' | ||
Contingent consideration | ($81,520,382) | ($87,332,461) | ||
[1] | Included in cash and cash equivalents on the balance sheet. |
Fair_Value_Measurement_Details1
Fair Value Measurement (Details 1) (USD $) | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | |
Balance | ($87,332,461) | ' | |
Change in fair value | 695,177 | -608,832 | |
Balance | -81,520,382 | ' | |
Fair Value, Inputs, Level 3 [Member] | ' | ' | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | |
Balance | -87,332,461 | ' | |
Contingent consideration payments | 612,500 | ' | |
Change in fair value | 695,177 | [1] | ' |
Reclass to Due to seller | 4,505,090 | ' | |
Foreign exchange impact | -688 | [2] | ' |
Balance | ($81,520,382) | ' | |
[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 operating 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. |
Fair_Value_Measurement_Details2
Fair Value Measurement (Details Textual) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2014 |
Fair Value, Adjustment Disclosure [Line Items] | ' |
Effect Of Discount Rate Increase In Fair Value | $1.70 |
Fair Value Measurements Valuation Process Probability Percentage | 100.00% |
Commitments_and_Contingencies_
Commitments and Contingencies (Details Textual) | 1 Months Ended | 12 Months Ended | 44 Months Ended | ||
In Millions, unless otherwise specified | Oct. 31, 2012 | Dec. 31, 2013 | Feb. 28, 2014 | Dec. 31, 2012 | Dec. 31, 2012 |
USD ($) | EUR (€) | EUR (€) | Maximum [Member] | Minimum [Member] | |
USD ($) | USD ($) | ||||
Other Commitments [Line Items] | ' | ' | ' | ' | ' |
Loss Contingency Accrual, Carrying Value, Payments | $9 | ' | ' | ' | ' |
Loss Contingency, Damages Sought, Value | ' | 0.7 | ' | 88 | 35 |
Loss Contingency Damages Value Contingent Consideration | ' | 7.1 | 7.1 | ' | ' |
Loss Contingency Damages Value Fixed Consideration | ' | 5.8 | ' | ' | ' |
Loss Contingency Damages Maximum Contingent Consideration | ' | € 55 | ' | ' | ' |
Business_Segments_Details
Business Segments (Details) (USD $) | 3 Months Ended | |||
Mar. 31, 2014 | Mar. 31, 2013 | |||
Segment Reporting Information [Line Items] | ' | ' | ||
Net revenues from third parties | $241,490,000 | $204,577,000 | ||
Net revenues from other segments | 0 | 0 | ||
Total net revenues | 241,489,664 | 204,577,416 | ||
Adjusted EBITDA | -8,503,000 | [1] | 6,766,000 | [1] |
North America [Member] | ' | ' | ||
Segment Reporting Information [Line Items] | ' | ' | ||
Net revenues from third parties | 167,442,000 | 164,370,000 | ||
Net revenues from other segments | 0 | 18,000 | ||
Total net revenues | 167,442,000 | 164,388,000 | ||
Adjusted EBITDA | 12,453,000 | [1] | 12,783,000 | [1] |
Latin America [Member] | ' | ' | ||
Segment Reporting Information [Line Items] | ' | ' | ||
Net revenues from third parties | 24,709,000 | 18,175,000 | ||
Net revenues from other segments | 68,000 | 264,000 | ||
Total net revenues | 24,777,000 | 18,439,000 | ||
Adjusted EBITDA | 1,134,000 | [1] | 624,000 | [1] |
EMEA [Member] | ' | ' | ||
Segment Reporting Information [Line Items] | ' | ' | ||
Net revenues from third parties | 49,339,000 | 22,032,000 | ||
Net revenues from other segments | 990,000 | 3,000 | ||
Total net revenues | 50,329,000 | 22,035,000 | ||
Adjusted EBITDA | 1,097,000 | [1] | -79,000 | [1] |
Other [Member] | ' | ' | ||
Segment Reporting Information [Line Items] | ' | ' | ||
Net revenues from third parties | 0 | 0 | ||
Net revenues from other segments | -1,058,000 | -285,000 | ||
Total net revenues | -1,058,000 | -285,000 | ||
Adjusted EBITDA | ($6,181,000) | [1] | ($6,562,000) | [1] |
[1] | Adjusted EBITDA, which represents income from operations with the addition of depreciation and amortization, stock-based compensation expense, change in the fair value of contingent consideration liabilities and certain legal settlements, 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 Companybs 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 Companybs 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 | |||
Mar. 31, 2014 | Mar. 31, 2013 | |||
Revenue from External Customer [Line Items] | ' | ' | ||
Adjusted EBITDA | ($8,503,000) | [1] | $6,766,000 | [1] |
Depreciation and amortization | -4,170,716 | -2,465,667 | ||
Stock-based compensation | -1,396,274 | -973,193 | ||
Payments to former owner of Productions Graphics, net of cash recovered | 0 | 6,261,942 | ||
Total other expense | -1,115,673 | -923,936 | ||
Income (loss) before income taxes | 421,701 | -4,760,251 | ||
Reportable Segment [Member] | ' | ' | ||
Revenue from External Customer [Line Items] | ' | ' | ||
Adjusted EBITDA | 8,503,000 | 6,766,000 | ||
Depreciation and amortization | -4,171,000 | -2,466,000 | ||
Stock-based compensation | -1,396,000 | -973,000 | ||
Change in fair value of contingent consideration | 695,000 | -609,000 | ||
Payments to former owner of Productions Graphics, net of cash recovered | 0 | -6,309,000 | ||
Restatement - related professional fees | -2,093,000 | 0 | ||
Legal fees in connection with patent infringement defense | 0 | -244,000 | ||
Total other expense | -1,116,000 | -925,000 | ||
Income (loss) before income taxes | $422,000 | ($4,760,000) | ||
[1] | Adjusted EBITDA, which represents income from operations with the addition of depreciation and amortization, stock-based compensation expense, change in the fair value of contingent consideration liabilities and certain legal settlements, 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 Companybs 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 Companybs 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. |