Document_And_Entity_Informatio
Document And Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Jun. 30, 2014 | Feb. 25, 2014 | |
Document Information [Line Items] | |||
Entity Registrant Name | INNERWORKINGS INC | ||
Entity Central Index Key | 1350381 | ||
Current Fiscal Year End Date | -19 | ||
Entity Filer Category | Accelerated Filer | ||
Trading Symbol | INWK | ||
Entity Common Stock, Shares Outstanding | 53,946,282 | ||
Document Type | 10-K | ||
Amendment Flag | FALSE | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2014 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $316,956,806 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | |||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||||
Revenue | $1,000,132,771 | $890,959,963 | $789,585,041 | |||
Cost of goods sold | 770,673,282 | 688,933,899 | 612,026,494 | |||
Gross profit | 229,459,489 | 202,026,064 | 177,558,547 | |||
Operating expenses: | ||||||
Selling, general and administrative expenses | 195,006,221 | 183,443,438 | 146,123,614 | |||
Depreciation and amortization | 17,723,493 | 13,663,859 | 10,790,452 | |||
Change in fair value | -37,873,588 | -31,330,567 | -27,688,774 | |||
Preference claim settlement charge | 0 | [1] | 0 | [1] | 1,099,386 | [1] |
VAT settlement charge | 0 | [2] | 0 | [2] | 1,485,088 | [2] |
Goodwill impairment charge | 0 | 37,908,000 | 0 | |||
Intangible asset impairment charges | 2,710,435 | 0 | 0 | |||
Restructuring and other charges | 0 | 4,321,862 | 0 | |||
Income (loss) from operations | 51,892,928 | -5,980,528 | 45,748,781 | |||
Other income (expense): | ||||||
Gain on sale of investment | 0 | 0 | 1,196,196 | |||
Interest income | 57,392 | 75,931 | 66,489 | |||
Interest expense | -4,427,934 | -2,954,339 | -2,438,234 | |||
Other, net | -747,316 | -357,341 | 94,411 | |||
Total other expense | -5,117,858 | -3,235,749 | -1,081,138 | |||
Income (loss) before taxes | 46,775,070 | -9,216,277 | 44,667,643 | |||
Income tax expense (benefit) | 2,313,145 | -555,928 | 5,873,621 | |||
Net income (loss) | $44,461,925 | ($8,660,349) | $38,794,022 | |||
Basic earnings (loss) per share (in dollars per share) | $0.85 | ($0.17) | $0.79 | |||
Diluted earnings (loss) per share (in dollars per share) | $0.84 | ($0.17) | $0.76 | |||
[1] | In the fourth quarter of 2012, the Company recognized a $1.1 million charge related to the settlement of a lawsuit filed by the Trustee of the Circuit City Liquidating Trust (the “Trustâ€) in connection with the Circuit City Stores, Inc. bankruptcy proceedings. A settlement agreement was entered in January 2013 with the Trust resolving this preference claim as well the administrative and general unsecured claims against the Trust. | |||||
[2] | In the fourth quarter of 2012, the Company accrued a loss reserve of $1.5 million relating to a VAT assessment issued by Her Majesty’s Revenue and Customs (“HMRCâ€) InnerWorkings Europe Limited (formerly Etrinsic). 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. |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (Loss) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Net income (loss) | $44,461,925 | ($8,660,349) | $38,794,022 |
Other comprehensive income (loss), before tax | |||
Foreign currency translation adjustments | -8,178,135 | 2,505,417 | 676,272 |
Unrealized gains on marketable securities | |||
Unrealized holding gains arising during the period | 0 | 317 | 85,958 |
Less: Reclassification adjustments for gains included in net income | 0 | -2,518 | -1,196,196 |
Unrealized losses on marketable securities, net | 0 | -2,201 | -1,110,238 |
Other comprehensive income (loss), before tax | -8,178,135 | 2,503,216 | -433,966 |
Income tax benefit related to components of other comprehensive loss | 0 | 863 | 438,556 |
Other comprehensive income (loss), net of tax | -8,178,135 | 2,504,079 | 4,590 |
Comprehensive income (loss) | $36,283,790 | ($6,156,270) | $38,798,612 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Current assets: | ||
Cash and cash equivalents | $22,577,942 | $18,606,030 |
Accounts receivable, net of allowance for doubtful accounts of $2,128,790 and $2,685,497, respectively | 179,465,922 | 171,832,907 |
Unbilled revenue | 31,698,924 | 27,483,544 |
Inventories | 27,162,642 | 26,473,732 |
Prepaid expenses | 12,684,237 | 11,746,965 |
Deferred income taxes | 1,819,139 | 1,119,333 |
Other current assets | 28,818,891 | 22,408,692 |
Total current assets | 304,227,697 | 279,671,203 |
Property and equipment, net | 29,763,583 | 23,724,750 |
Intangibles and other assets: | ||
Goodwill | 246,947,900 | 251,228,698 |
Intangible assets, net | 44,919,573 | 56,575,534 |
Deferred income taxes | 3,903,937 | 2,319,515 |
Other assets | 1,487,690 | 1,147,078 |
Total Other Assets | 297,259,100 | 311,270,825 |
Total assets | 631,250,380 | 614,666,778 |
Current liabilities: | ||
Accounts payable-trade | 144,044,592 | 169,243,349 |
Current portion of contingent consideration | 9,078,138 | 16,718,516 |
Due to seller | 402,499 | 0 |
Other liabilities | 30,636,505 | 15,818,791 |
Accrued expenses | 9,989,963 | 17,117,878 |
Total current liabilities | 194,151,697 | 218,898,534 |
Revolving credit facility | 104,538,750 | 69,000,000 |
Deferred income taxes | 9,967,039 | 9,061,535 |
Contingent consideration, net of current portion | 23,504,436 | 70,613,945 |
Other long-term liabilities | 2,941,889 | 1,651,190 |
Total liabilities | 335,103,811 | 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 61,851,709 shares issued, 51,282,185 and 52,830,842 shares outstanding, respectively | 6,185 | 6,140 |
Additional paid-in capital | 207,428,962 | 202,042,296 |
Treasury stock at cost, 10,113,309 and 9,020,867 shares, respectively | -49,996,166 | -62,312,101 |
Accumulated other comprehensive income (loss) | -5,401,135 | 2,777,000 |
Retained earnings | 144,108,723 | 102,928,239 |
Total stockholders' equity | 296,146,569 | 245,441,574 |
Total liabilities and stockholders' equity | $631,250,380 | $614,666,778 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets [Parenthetical] (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Accounts receivable, allowance for doubtful accounts | $2,685,497 | $2,128,790 |
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 | 61,851,709 | 61,395,494 |
Common stock, shares outstanding | 52,830,842 | 51,282,185 |
Treasury stock at cost, shares | 9,020,867 | 10,113,309 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Total | Common Stock [Member] | Treasury Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Retained Earnings [Member] |
Balance at Dec. 31, 2011 | $181,724,806 | $5,790 | ($71,241,947) | $179,687,503 | $268,331 | $73,005,129 |
Balance (in shares) at Dec. 31, 2011 | 57,903,418 | 10,905,407 | ||||
Net income (loss) | 38,794,022 | 38,794,022 | ||||
Other comprehensive income: | ||||||
Foreign currency translation adjustment | 676,272 | 676,272 | ||||
Change in unrealized gain on marketable securities, net of tax | -671,682 | -671,682 | ||||
Total other comprehensive income (loss) | 4,590 | 4,590 | ||||
Comprehensive income (loss) | 38,798,612 | |||||
Issuance of common stock upon exercise of stock awards | 5,445,340 | 284 | 5,445,056 | |||
Issuance of common stock upon exercise of stock awards (in shares) | 2,832,143 | |||||
Issuance of treasury shares as consideration for acquisition | 4,143,690 | 4,170,624 | 145,768 | -172,702 | ||
Issuance of treasury shares as consideration for acquisition (in shares) | -369,944 | |||||
Excess tax benefit derived from stock award exercises | 6,646,739 | 6,646,739 | ||||
Stock based compensation expense | 6,192,870 | 6,192,870 | ||||
Balance at Dec. 31, 2012 | 242,952,057 | 6,074 | -67,071,323 | 198,117,936 | 272,921 | 111,626,449 |
Balance (in shares) at Dec. 31, 2012 | 60,735,561 | 10,535,463 | ||||
Net income (loss) | -8,660,349 | -8,660,349 | ||||
Other comprehensive income: | ||||||
Foreign currency translation adjustment | 2,505,417 | 2,505,417 | ||||
Change in unrealized gain on marketable securities, net of tax | -1,338 | -1,338 | ||||
Total other comprehensive income (loss) | 2,504,079 | 2,504,079 | ||||
Comprehensive income (loss) | -6,156,270 | |||||
Issuance of common stock upon exercise of stock awards | 1,594,365 | 66 | 1,594,299 | |||
Issuance of common stock upon exercise of stock awards (in shares) | 659,933 | |||||
Issuance of treasury shares as consideration for acquisition | 5,211,883 | 4,759,222 | 490,522 | -37,861 | ||
Issuance of treasury shares as consideration for acquisition (in shares) | -422,154 | |||||
Excess tax benefit derived from stock award exercises | -2,893,492 | -2,893,492 | ||||
Stock based compensation expense | 4,733,031 | 4,733,031 | ||||
Balance at Dec. 31, 2013 | 245,441,574 | 6,140 | -62,312,101 | 202,042,296 | 2,777,000 | 102,928,239 |
Balance (in shares) at Dec. 31, 2013 | 61,395,494 | 10,113,309 | ||||
Net income (loss) | 44,461,925 | 44,461,925 | ||||
Other comprehensive income: | ||||||
Foreign currency translation adjustment | -8,178,135 | |||||
Total other comprehensive income (loss) | -8,178,135 | -8,178,135 | ||||
Comprehensive income (loss) | 36,283,790 | |||||
Issuance of common stock upon exercise of stock awards | 182,519 | 45 | 182,474 | |||
Issuance of common stock upon exercise of stock awards (in shares) | 456,215 | |||||
Issuance of treasury shares as consideration for acquisition | 9,034,494 | 12,315,935 | -3,281,441 | |||
Issuance of treasury shares as consideration for acquisition (in shares) | -1,092,442 | |||||
Excess tax benefit derived from stock award exercises | -147,380 | -147,380 | ||||
Stock based compensation expense | 5,351,572 | 5,351,572 | ||||
Balance at Dec. 31, 2014 | $296,146,569 | $6,185 | ($49,996,166) | $207,428,962 | ($5,401,135) | $144,108,723 |
Balance (in shares) at Dec. 31, 2014 | 61,851,709 | 9,020,867 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Cash flows from operating activities | |||
Net income (loss) | $44,461,925 | ($8,660,349) | $38,794,022 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 17,723,493 | 13,663,859 | 10,790,452 |
Stock-based compensation expense | 5,351,572 | 4,733,031 | 6,192,870 |
Deferred income taxes | -2,190,527 | -652,395 | -995,218 |
Gain on sale of investment | 0 | 0 | -1,196,196 |
Bad debt provision | 1,983,928 | 1,285,326 | 1,681,942 |
Excess tax benefit from exercise of stock awards | -184,593 | 2,618,779 | -6,666,884 |
Change in fair value of contingent consideration liability | -37,873,588 | -31,330,567 | -27,688,774 |
Goodwill impairment charge | 0 | 37,908,000 | 0 |
Intangible asset impairment charges | 2,710,435 | 0 | 0 |
Reduction of prepaid commissions | 0 | 3,939,974 | 0 |
Other operating activities | 363,362 | 238,778 | 533,842 |
Change in assets, net of acquisitions: | |||
Accounts receivable and unbilled revenue | -13,832,324 | -4,843,040 | -14,846,005 |
Inventories | -634,984 | -1,383,994 | -3,089,909 |
Prepaid expenses and other | -7,355,592 | 2,331,672 | -13,077,541 |
Change in liabilities, net of acquisitons: | |||
Accounts payable | -25,198,757 | 29,642,545 | 14,818,713 |
Accrued expenses and other | 2,161,388 | -12,120,684 | 4,160,421 |
Net cash provided by (used in) operating activities | -12,514,262 | 37,370,935 | 9,411,735 |
Cash flows from investing activities | |||
Purchases of property and equipment | -14,116,448 | -12,226,083 | -11,823,646 |
Payments for acquisitions, net of cash acquired | 0 | -19,300,864 | -1,127,954 |
Payments to seller for acquisitions closed prior to 2009 | 0 | 0 | -3,000,000 |
Proceeds from sale of marketable securities | 0 | 0 | 1,213,501 |
Other investing activities | -594,207 | 0 | 31,566 |
Net cash used in investing activities | -14,710,655 | -31,526,947 | -14,706,533 |
Cash flows from financing activities | |||
Net borrowings from revolving credit facility and short-term debt | 35,538,750 | 4,000,000 | 5,000,000 |
Payments of contingent consideration | -5,768,591 | -7,297,803 | -7,178,407 |
Secured borrowing arrangements | 2,618,052 | 0 | 0 |
Proceeds from exercise of stock options | 777,949 | 2,005,114 | 5,458,981 |
Excess tax benefit from exercise of stock awards | 184,593 | -2,618,779 | 6,666,884 |
Payment of debt issuance costs | -695,852 | -325,240 | -356,700 |
Other financing activities | -399,369 | -410,750 | -7,270 |
Net cash provided by (used in) financing activites | 32,255,532 | -4,647,458 | 9,583,488 |
Effect of exchange rate changes on cash and cash equivalents | -1,058,703 | 190,601 | -289,176 |
Increase in cash and cash equivalents | 3,971,912 | 1,387,131 | 3,999,514 |
Cash and cash equivalents, beginning of period | 18,606,030 | 17,218,899 | 13,219,385 |
Cash and cash equivalents, end of period | 22,577,942 | 18,606,030 | 17,218,899 |
Supplemental disclosure of cash flow information | |||
Cash paid for interest | 3,790,179 | 2,414,527 | 2,229,525 |
Cash paid for income taxes, net of refunds | $6,855,388 | $811,108 | $4,208,970 |
Description_of_the_Business
Description of the Business | 12 Months Ended | |
Dec. 31, 2014 | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Nature of Operations [Text Block] | 1 | Description of the Business |
InnerWorkings, Inc. (together with its subsidiaries, “the Company”) was incorporated in the state of Delaware on January 3, 2006. The Company is a leading global marketing execution firm for Fortune 500 brands across a wide range of industries. As a comprehensive outsourced enterprise solution, the Company leverages proprietary technology, an extensive supplier network and deep domain expertise to streamline the creation, production, and distribution of marketing and promotional materials, signage and displays, retail experiences, events and promotions, and packaging across every major market worldwide. The items the Company sources are generally procured through the marketing supply chain, and are referred to collectively as marketing materials. The Company’s technology and database of information is designed to capitalize on excess manufacturing capacity and other inefficiencies in the traditional marketing and print supply chain to obtain favorable pricing and to deliver high-quality products and services. | ||
The Company is organized and managed as three business segments, North America, Latin America and EMEA, and is viewed as three operating segments by the chief operating decision maker for purposes of resource allocation and assessing performance. See Note 17 for further information about the Company’s reportable segments. | ||
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Accounting Policies [Abstract] | |||||||||||
Significant Accounting Policies [Text Block] | 2 | Summary of Significant Accounting Policies | |||||||||
Basis of Presentation and Consolidation | |||||||||||
The consolidated financial statements include the accounts of InnerWorkings, Inc. and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. | |||||||||||
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. | |||||||||||
Preparation of Financial Statements and Use of Estimates | |||||||||||
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. On an ongoing basis, the Company evaluates its estimates, including those related to product returns, allowance for doubtful accounts, inventories and inventory valuation, valuation and impairments of goodwill and long-lived assets, income taxes, contingencies, stock-based compensation and litigation. The Company bases its estimates on historical experience and on other assumptions that its management believes are reasonable under the circumstances. These estimates form the basis for making judgments about the carrying value of assets and liabilities when those values are not readily apparent from other sources. Actual results can differ from those estimates. | |||||||||||
Foreign Currency Translation | |||||||||||
The Company determines the functional currency for its parent company and each of its subsidiaries by reviewing the currencies in which their respective operating activities occur. Assets and liabilities of these operations are translated into U.S. currency at the rates of exchange at the balance sheet date. Income and expense items are translated at average monthly rates of exchange. The resulting translation adjustments are included in accumulated other comprehensive income (loss), a separate component of stockholders’ equity. Transaction gains and losses arising from activities in other than the applicable functional currency are calculated using average exchange rates for the applicable period and reported in net income as a non-operating item in each period. Non-monetary balance sheet items denominated in a currency other than the applicable functional currency are translated using the historical rate. | |||||||||||
The net realized gains (losses) on foreign currency transactions were $0.1 million, $(0.3) million and $(0.8) million for the years ended December 31, 2012, 2013 and 2014, respectively. | |||||||||||
Revenue Recognition | |||||||||||
The Company recognizes revenue upon meeting all of the following revenue recognition criteria, which is 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 marketing 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 on a net basis. | |||||||||||
The Company recognizes revenue for creative, design, installation, warehousing and other services provided to its customers which may be delivered in conjunction with the procurement of marketing materials at the time when delivery and customer acceptance occur and all other revenue recognition criteria are met. When provided on a stand-alone basis, the Company recognizes revenue for these services upon completion of the service. Service revenue has not been material to the Company’s overall revenue to date. | |||||||||||
The Company records taxes collected from customers and remitted to governmental authorities on a net basis. | |||||||||||
Cash and Cash Equivalents | |||||||||||
The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents. | |||||||||||
Accounts Receivable | |||||||||||
Accounts receivable are uncollateralized customer obligations due under normal trade terms. Invoices generally require payment within 30 to 90 days from the invoice date. Accounts receivable are stated at the amount billed to the customer, less an estimate for amounts deemed uncollectible. Interest is not generally accrued on outstanding balances. | |||||||||||
The carrying amount of accounts receivable is reduced by an allowance that reflects management’s best estimate of the amounts that will not be collected. The Company estimates the collectability of its accounts receivable based on a combination of factors including, but not limited to, customer credit ratings and historical experience. In circumstances where the Company is aware of a specific customer’s inability to meet its financial obligations to the Company (e.g., bankruptcy filings or substantial downgrading of credit ratings), the Company provides allowances for bad debts against amounts due to reduce the net recognized receivable to the amount it reasonably believes will be collected. Fully reserved receivables are reviewed on a monthly basis and uncollectible accounts are written off when all reasonable collection efforts have been exhausted. | |||||||||||
Inventories | |||||||||||
Inventories are stated at the lower of cost or market. Cost is determined by the first-in, first-out method . Market value is based upon an estimated average selling price reduced by estimated costs of disposal. Inventories primarily consist of purchased finished goods . Finished goods inventory includes consigned inventory held on behalf of customers as well as inventory held at third-party fulfillment centers and subcontractors. | |||||||||||
Property and Equipment | |||||||||||
Property and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets. The estimated useful lives, by asset class, are as follows: | |||||||||||
Computer equipment | 3 years | ||||||||||
Software, including internal-use software | 1 to 6 years | ||||||||||
Office equipment | 5 years | ||||||||||
Furniture and fixtures | 7 years | ||||||||||
Leasehold improvements are depreciated using the straight-line method over the shorter of their estimated useful lives or the terms of the related leases. | |||||||||||
Internal-Use Software | |||||||||||
In accordance with ASC 350-40, Intangibles—Goodwill and Other, Internal-Use Software, certain costs incurred in the planning and evaluation stage of internal-use computer software are expensed as incurred. Certain costs incurred during the application development stage are capitalized and included in property and equipment. Capitalized internal-use software costs are depreciated over the expected economic life of three to six years using the straight-line method. Capitalized internal-use software asset depreciation expense for the years ended December 31, 2012, 2013 and 2014 was $4.3 million, $3.9 million and $7.2 million, respectively, and is included in total depreciation expense. At December 31, 2013 and 2014, the net book value of internal-use software was $17.3 million and $23.5 million, 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 the first day of the fourth fiscal quarter of each year. | |||||||||||
Under ASC 350, an entity is permitted 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 October 1, 2014, 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 October 1, 2014 as a result of this test. The Company does not believe that goodwill is impaired as of December 31, 2014. | |||||||||||
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 4. | |||||||||||
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. Impairment indicators could include significant under-performance relative to the historical or projected future operating results, significant changes in the manner of use of assets, significant negative industry or economic trends or significant changes in the Company’s market capitalization relative to net book value. Any changes in key assumptions used by the Company, including those set forth above, could result in an impairment charge and such a charge could have a material adverse effect on the Company’s consolidated results of operations. 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. | |||||||||||
In the fourth quarter of 2014, the Company recorded a non-cash, intangible asset impairment charge of $2.7 million. For additional information related to the intangible asset impairment, see Note 5. | |||||||||||
Shipping and Handling Costs | |||||||||||
Shipping and handling costs are classified in cost of goods sold in the consolidated statements of operations. | |||||||||||
Income Taxes | |||||||||||
The Company accounts for income taxes in accordance with ASC 740, Income Taxes, under which deferred tax assets and liabilities are recognized based upon anticipated future tax consequences attributable to differences between financial statement carrying values of assets and liabilities and their respective tax bases. A valuation allowance is established to reduce the carrying value of deferred tax assets if it is considered more likely than not that such assets will not be realized. Any change in the valuation allowance would be charged to income in the period such determination was made. | |||||||||||
The Company recognizes the tax benefit from an uncertain tax position only if it is “more likely than not” the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. | |||||||||||
The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. There was no interest or penalties related to unrecognized tax benefits for the years ended December 31, 2012, 2013 and 2014. | |||||||||||
Based on the Company’s evaluation, it was concluded that there are no significant uncertain tax positions requiring recognition in its financial statements. The evaluation was performed for the tax years ended December 31, 2011, 2012, 2013 and 2014, the tax years which remain subject to examination by major tax jurisdictions as of December 31, 2014. | |||||||||||
Advertising | |||||||||||
Costs of advertising, which are expensed as incurred by the Company, were $0.8 million, $0.7 million and $0.5 million for the years ended December 31, 2012, 2013 and 2014, respectively, and are included in selling, general and administrative expenses in the consolidated statement of operations. | |||||||||||
Comprehensive Income | |||||||||||
The components of accumulated comprehensive income (loss) included in the Consolidated Balance Sheets at December 31, 2013 and 2014 are as follows: | |||||||||||
Unrealized holding | Total accumulated | ||||||||||
gains on available- | other comprehensive | ||||||||||
Foreign currency | for-sale securities | income | |||||||||
Balance at December 31, 2012 | $ | 271,583 | $ | 1,338 | $ | 272,921 | |||||
Other comprehensive income before reclassifications | 2,505,417 | - | 2,505,417 | ||||||||
Amounts reclassified from AOCI | -1,338 | -1,338 | |||||||||
Net current-period other comprehensive income | 2,505,417 | -1,338 | 2,504,079 | ||||||||
Balance at December 31, 2013 | 2,777,000 | - | 2,777,000 | ||||||||
Other comprehensive income before reclassifications | -8,178,135 | - | -8,178,135 | ||||||||
Amounts reclassified from AOCI | - | - | |||||||||
Net current-period other comprehensive income | -8,178,135 | - | -8,178,135 | ||||||||
Balance at December 31, 2014 | $ | -5,401,135 | $ | - | $ | -5,401,135 | |||||
Stock-Based Compensation | |||||||||||
The Company accounts for stock-based compensation awards 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. Stock-based compensation expense is included in selling, general and administrative expenses in the consolidated statement of operations. | |||||||||||
Recent Accounting Pronouncements | |||||||||||
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which amends the existing accounting standards for revenue recognition. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to customers. ASU 2014-09 will be effective for the Company beginning on January 1, 2017. Early adoption is not permitted. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company is currently evaluating the impact of adopting the new revenue standard on its consolidated financial statements. | |||||||||||
In April 2014, the FASB issued Accounting Standards Update No. 2014-08 Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (“ASU 2014-08”). ASU 2014-08 provides a narrower definition of discontinued operations than under existing GAAP. The standard update requires that only disposals of components of an entity (or groups of components) that represent a strategic shift that has or will have a major effect on the reporting entity’s operations are reported in the financial statements as discontinued operations. The standard also provides guidance on the financial statement presentations and disclosures of discontinued operations. The standard is effective prospectively for disposals (or classifications of businesses as held-for-sale) of components of an entity that occur in annual or interim periods beginning after December 15, 2014. | |||||||||||
In July 2013, FASB issued Accounting Standards Update No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (“ASU 2013-11”) to provide guidance on the presentation of unrecognized tax benefits. This update requires that companies net their unrecognized tax benefits against all same-jurisdiction net operating losses or tax credit carryforwards that would be used to settle the position with a tax authority. The Company adopted ASU 2013-11 on January 1, 2014, and it did not have an effect on its consolidated financial statements. | |||||||||||
In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Presentation of Financial Statements - Going Concern (“ASU 2014-15”). This standard requires management to evaluate whether there are conditions and events that raise substantial doubt about the entity's ability to continue as a going concern and to provide disclosures in certain circumstances. The standard is effective for annual and interim periods beginning after December 15, 2016. The Company does not expect this guidance to have a material impact on its consolidated financial statements. | |||||||||||
Voluntary Change in Accounting Policy | |||||||||||
During the quarter ended September 30, 2014, the Company voluntarily changed the date of its annual goodwill impairment test from the last day of the fiscal year to the first day of the fourth quarter. This voluntary change is preferable under the circumstances as it provides the Company with additional time to complete its annual goodwill impairment testing in advance of its year-end reporting and results in better alignment with the Company’s strategic forecasting and budgeting process. The voluntary change in accounting principle related to the annual testing date did not delay, accelerate or avoid an impairment charge. This change was not applied retrospectively as it is impracticable to do so because retrospective application would require application of significant estimates and assumptions with the use of hindsight. Accordingly, the change has been applied prospectively. | |||||||||||
Acquisitions
Acquisitions | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Business Combinations [Abstract] | |||||||||||
Business Combination Disclosure [Text Block] | 3 | 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 $32.6 million in contingent consideration at December 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. During the years ended December 31, 2012, 2013 and 2014, the Company recorded income of $27.7 million, $31.3 million and $37.9 million for changes in the fair value of contingent consideration, reflecting the net reductions in the liability for each of those periods. | |||||||||||
For the years ended December 31, 2012, 2013 and 2014, the Company’s fair value adjustment to the contingent consideration liability includes adjustments of $25.4 million, $26.6 million and $7.2 million, respectively, to reduce the liability relating to the Productions Graphics acquisition in 2011. As of December 31, 2014, the fair value of the potential remaining $41.9 million contingent consideration payments was zero as the Company believes the likelihood of making any future payments is remote. See Note 9 for more information on Productions Graphics. | |||||||||||
For the year ended December 31, 2014, the Company’s fair value adjustment to the contingent consideration liability also included an adjustment of $30.4 million to reduce the liability relating to the DB Studios acquisition in 2013 due to a decrease in forecasted results. As of December 31, 2014, the fair value of the potential remaining $44.3 million contingent consideration payments was estimated to be $5.2 million. | |||||||||||
As of December 31, 2014, the potential maximum contingent payments are payable as follows: | |||||||||||
Cash | Common Stock | Total | |||||||||
2015 | $ | 402,499 | $ | 31,094,284 | $ | 31,496,783 | |||||
2016 | 29,354,325 | 34,061,635 | 63,415,960 | ||||||||
2017 | - | 45,751,700 | 45,751,700 | ||||||||
$ | 29,756,824 | $ | 110,907,619 | $ | 140,664,443 | ||||||
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. While the maximum potential payments shown in the table are $140.7 million, the Company estimates the fair value of the payments that will be made is $32.6 million. | |||||||||||
Goodwill
Goodwill | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||
Goodwill Disclosure [Text Block] | 4 | Goodwill | ||||||||||||
The following is a summary of the goodwill balance for each operating segment as of December 31: | ||||||||||||||
North America | Latin America | EMEA | Total | |||||||||||
Balance as of December 31, 2012 | $ | 119,162,735 | $ | 9,656,417 | $ | 83,977,270 | $ | 212,796,422 | ||||||
Goodwill acquired related to 2013 acquisitions | 52,025,837 | - | 20,576,957 | 72,602,794 | ||||||||||
Finalization of purchase accounting for prior | -34,120 | 218,819 | -40,940 | 143,759 | ||||||||||
year acquisitions | ||||||||||||||
Impairment charge | - | - | -37,908,000 | -37,908,000 | ||||||||||
Foreign exchange impact | -59,876 | - | 3,653,599 | 3,593,723 | ||||||||||
Balance 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 | -167,922 | - | 692,839 | 524,917 | ||||||||||
Foreign exchange impact | -67,233 | - | -4,738,482 | -4,805,715 | ||||||||||
Balance as of December 31, 2014 | $ | 170,859,421 | $ | 9,875,236 | $ | 66,213,243 | $ | 246,947,900 | ||||||
As discussed in Note 2, the Company performed its annual impairment test as of October 1, 2014 and did not identify an impairment in any of its three reporting units. The Company does not believe that goodwill is impaired as of December 31, 2014. | ||||||||||||||
2013 Goodwill Impairment Charge | ||||||||||||||
In the third quarter of 2013, a change in the Company’s identified reporting units along with a decline in forecasted financial performance in fiscal year 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. 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. | ||||||||||||||
Other_Intangible_Assets
Other Intangible Assets | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||
Intangible Assets Disclosure [Text Block] | 5 | Other Intangible Assets | |||||||||
The following is a summary of the Company’s other intangible assets as of December 31: | |||||||||||
Weighted | |||||||||||
2013 | 2014 | Average Life | |||||||||
Customer lists | $ | 77,244,427 | $ | 75,113,728 | 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 | 79,715,628 | ||||||||||
Less accumulated amortization | -25,270,793 | -34,796,055 | |||||||||
Intangible assets, net | $ | 56,575,534 | $ | 44,919,573 | |||||||
Amortization expense related to these intangible assets was $4.6 million, $6.9 million and $7.4 million for the years ended December 31, 2012, 2013 and 2014, respectively. | |||||||||||
The estimated amortization expense for the next five years is as follows: | |||||||||||
2015 | $ | 6,123,124 | |||||||||
2016 | 5,779,756 | ||||||||||
2017 | 5,302,817 | ||||||||||
2018 | 4,799,594 | ||||||||||
2019 | 4,473,976 | ||||||||||
Thereafter | 18,440,306 | ||||||||||
$ | 44,919,573 | ||||||||||
Customer List Impairment Charge | |||||||||||
In the fourth quarter of 2014, the Company recognized a $2.7 million non-cash, intangible asset impairment charge related to certain customer lists acquired in prior year business combinations. Due to the loss of specific customers included in the lists, the undiscounted projected cash flows from those customers did not exceed the recorded book value of the customer lists as of December 31, 2014. As such, the Company recorded an impairment charge of $2.7 million to reduce the customer lists to their respective fair values. Of the total charge, $2.4 million related to customer lists in the North America segment, and $0.3 million related to customers lists in the EMEA segment. | |||||||||||
Restructuring_Activities_and_O
Restructuring Activities and Other Charges | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||
Restructuring, Impairment, and Other Activities Disclosure [Text Block] | 6 | Restructuring Activities and Other Charges | |||||||||
2014: No restructuring charges were incurred during the year ended December 31, 2014. | |||||||||||
2013: 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. All restructuring charges were incurred during the three months ended September 30, 2013, and the obligations were paid prior to December 31, 2013. There were no new charges recognized during the year ended December 31, 2014. | |||||||||||
North America | EMEA | Total | |||||||||
Employee terminations and other benefits | $ | 2,745,373 | $ | 260,407 | $ | 3,005,780 | |||||
Cash payments | -121,482 | -260,407 | -381,889 | ||||||||
Write-off of prepaid commissions balance (1) | -2,623,891 | - | -2,623,891 | ||||||||
Accrued restructuring costs as of December 31, 2013 | $ | - | $ | - | $ | - | |||||
-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 in 2013. | |||||||||||
Property_and_Equipment
Property and Equipment | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Property, Plant and Equipment [Abstract] | ||||||||
Property, Plant and Equipment Disclosure [Text Block] | 7 | Property and Equipment | ||||||
Property and equipment at December 31, 2013 and 2014 consisted of the following: | ||||||||
2013 | 2014 | |||||||
Computer equipment | $ | 7,889,630 | $ | 7,453,903 | ||||
Software, including internal use software | 41,987,111 | 48,731,177 | ||||||
Office equipment and furniture | 2,136,168 | 4,099,076 | ||||||
Leasehold improvements | 1,468,841 | 1,901,714 | ||||||
53,481,750 | 62,185,870 | |||||||
Less accumulated depreciation | -29,757,000 | -32,422,287 | ||||||
$ | 23,724,750 | $ | 29,763,583 | |||||
Depreciation expense was $6.2 million, $6.7 million and $10.4 million for the years ended December 31, 2012, 2013 and 2014, respectively. | ||||||||
Revolving_Credit_Facility
Revolving Credit Facility | 12 Months Ended | |
Dec. 31, 2014 | ||
Debt Disclosure [Abstract] | ||
Debt Disclosure [Text Block] | 8 | Revolving Credit Facility |
The Company entered into a Credit Agreement, dated as of August 2, 2010, subsequently amended most recently as of September 25, 2014, among the Company, the lenders party thereto and Bank of America, N.A., as Administrative Agent (the “Credit Agreement”). The Credit Agreement includes a revolving commitment amount of $175 million in the aggregate with a maturity date of September 25, 2019, and provides the Company the right to increase the aggregate commitment amount by an additional $50 million. Outstanding borrowings under the revolving credit facility are guaranteed by the Company’s material domestic subsidiaries. The Company’s obligations under the Credit Agreement and such domestic subsidiaries’ guaranty obligations are secured by substantially all of their respective assets. The ranges of applicable rates charged for interest on outstanding loans and letters of credit are 125-250 basis point spread for letter of credit fees and loans based on the Eurodollar rate and 25-150 basis point spread for loans based on the base rate. | ||
The terms of the Credit Agreement include various covenants, including covenants that require the Company to maintain a maximum leverage ratio and a minimum interest coverage ratio. The Credit Agreement requires the Company to maintain a leverage ratio of no more than 3.25 to 1.0 for the quarters ended December 31, 2014, March 31, 2015 and June 30, 2015 and 3.00 to 1.0 for each period thereafter. The Company is also required to maintain an interest coverage ratio of no less than 5.00 to 1.0. The Company is in compliance with all debt covenants as of December 31, 2014. | ||
At December 31, 2014, the Company had $28.8 million of unused availability under the Credit Agreement and $0.7 million of letters of credit which have not been drawn upon. | ||
The fair value of the debt under this Credit Agreement is not materially different from its book value as of December 31, 2014. | ||
Transactions_Involving_Former_
Transactions Involving Former Owner of Productions Graphics | 12 Months Ended | |
Dec. 31, 2014 | ||
Loss Contingency [Abstract] | ||
Contingencies Disclosure [Text Block] | 9 | Transactions Involving Former Owner of Productions Graphics |
The Company removed the former owner of Productions Graphics from his role as President of the Company’s French subsidiary in October 2013 for performance-related reasons, and he is no longer an employee of the Company. This individual had served in such role since the Company’s acquisition in 2011 of Productions Graphics, a European business then owned by this individual and an organization affiliated with him (collectively, the “Seller”). As of December 31, 2014, the Company had paid to the Seller €5.8 million in fixed consideration and €7.1 million in contingent earn-out consideration. | ||
There are certain potential disputes between the former owner of Productions Graphics and the Company relating to, among other things, the termination of his employment and the Productions Graphics acquisition agreement. In connection with such disputes, the Company initiated a review of this individual’s conduct in connection with certain transactions impacting the earn-out payments made to the Seller (collectively, the “Transactions”). As a result of the review, the Company concluded it was the victim of a fraud perpetrated by the former owner of Productions Graphics. Specifically, the Company concluded that the former owner of Productions Graphics artificially inflated the financial results of Productions Graphics in order to induce the Company to make earn-out payments of €1.2 and €5.9 million for the 2011 and 2012 earn-out measurement periods, respectively. He inflated the results by directing the issuance of fraudulent invoices to purported third-party customers and then, indirectly or directly, funded or reimbursed the third parties’ payments in respect of such invoices. The Company estimates that he issued approximately €6.9 million of fraudulent invoices in 2011 and 2012, collectively, of which €5.7 million was subsequently received by the Company. The Company has accounted for these aggregate payments of €5.7 million as a partial refund of the €7.1 million in earn-out consideration unduly paid to the Seller. | ||
The Company intends to seek to redress the harm caused by conduct of the former owner of Productions Graphics through appropriate legal proceedings. See Note 10 for further discussion of the legal matters relating to the former owner of Productions Graphics. | ||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments and Contingencies Disclosure [Abstract] | |||||
Commitments and Contingencies Disclosure [Text Block] | 10 | Commitments and Contingencies | |||
Lease Commitments | |||||
The Company leases many of its office facilities for various terms under long-term, noncancelable operating lease agreements. The leases expire at various dates from fiscal year 2015 through fiscal year 2021. Future minimum lease payments are presented below | |||||
Operating | |||||
Leases | |||||
2015 | $ | 7,013,184 | |||
2016 | 6,112,734 | ||||
2017 | 4,656,062 | ||||
2018 | 3,437,026 | ||||
2019 | 2,978,252 | ||||
Thereafter | 3,567,247 | ||||
Total minimum lease payments | $ | 27,764,505 | |||
The Company recognizes rental expense on a straight-line basis over the term of the lease. The total rent expense for the years ended December 31, 2012, 2013 and 2014 was $7.7 million, $9.1 million and $10.0 million, respectively. | |||||
Secured Borrowing Arrangements | |||||
Certain international subsidiaries are party to short-term secured borrowing arrangements which allow the Company to borrow against the value of a pool of current accounts receivable. The Company retains possession of the accounts receivable which are pledged as collateral. The pledged amounts are immaterial to the consolidated accounts receivable balance. | |||||
Legal 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. On February 9, 2015, the Federal Circuit Court of Appeals affirmed the judgment entered in favor of the Company. Absent further appellate review, the judgment will become final, and the Company will have no liability in the matter. If e-Lynxx seeks further appellate review, the Company would vigorously defend any such proceedings. The Company believes that the likelihood of an unfavorable outcome is remote. | |||||
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 alleged disability discrimination, defamation, breach of employment agreement, invasion of privacy, and wage payment claims, and sought 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. The Company disputed these allegations and vigorously defended itself in the matter. Specifically, the Company contended that it lawfully terminated his employment for cause, and, therefore, that he is not entitled to any relief and his claims should be dismissed. On May 7, 2014, the Arbitrator issued a final decision in favor of the Company on all of the alleged claims. Therefore, the Company has no liability to the claimant, and the matter is closed. | |||||
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 to pay 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 December 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 period ending in 2015 is €34.5 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, as amended in July 2014, alleges that the Company and certain executive officers violated federal securities laws by making materially false or misleading statements or omissions, and by engaging in a scheme to defraud purchasers of securities, relating to the Company’s financial results and prospects. The purported misstatements and scheme relate to the Company’s inside sales initiative and the Productions Graphics business based in France. The complaint seeks unspecified damages, interest, attorneys’ fees and other costs. The Company and individual defendants dispute the claims and intend to vigorously defend the matter. On September 29, 2014, the Company and individual defendants filed a motion to dismiss the complaint for failure to state a claim, and this motion is currently pending. On December 12, 2014, the Company received a derivative demand letter on behalf of Tom Turberg, a purported stockholder, demanding that the Company’s Board of Directors investigate and take action on behalf of the Company against the executive officers named in the Van Noppen action as well as certain past and current members of the Audit Committee of the Board of Directors. The demand letter’s allegations relate to (i) the Company’s restatement of financial statements for the fourth quarter of 2011 through the third quarter of 2013, (ii) the Company’s use of gross revenue accounting, (iii) incentive compensation paid to executive officers in 2011 and 2012, (iv) allegations in the Van Noppen action, and (v) typographical errors in the 2013 Form 10-K. The demand letter has been forwarded to the Company’s Board of Directors for its review and handling. Any loss that the Company and individual defendants may incur as a result of these matters cannot be estimated. | |||||
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Income Tax Disclosure [Abstract] | |||||||||||
Income Tax Disclosure [Text Block] | 11 | Income Taxes | |||||||||
The Company accounts for income taxes in accordance with ASC 740, Income Taxes, under which deferred assets and liabilities are recognized based upon anticipated future tax consequences attributable to differences between financial statement carrying values of assets and liabilities and their respective tax bases. | |||||||||||
The provision for income taxes consisted of the following components for the years ended December 31, 2012, 2013 and 2014: | |||||||||||
Year Ended December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
Current | |||||||||||
Federal | $ | 5,364,247 | $ | -1,803,191 | $ | 236,511 | |||||
State | 703,380 | -316,367 | 196,637 | ||||||||
Foreign | 801,212 | 2,216,025 | 4,070,524 | ||||||||
Total current | 6,868,839 | 96,467 | 4,503,672 | ||||||||
Deferred | |||||||||||
Federal | 1,494,274 | 2,823,798 | 87,396 | ||||||||
State | 206,125 | 449,424 | 2,697 | ||||||||
Foreign | -2,695,617 | -3,925,617 | -2,280,620 | ||||||||
Total deferred | -995,218 | -652,395 | -2,190,527 | ||||||||
Income tax expense (benefit) | $ | 5,873,621 | $ | -555,928 | $ | 2,313,145 | |||||
The provision for income taxes for the years ended December 31, 2012, 2013 and 2014 differs from the amount computed by applying the U.S. federal income tax rate of 35% to pretax income because of the effect of the following items: | |||||||||||
Year Ended December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
Tax expense at U.S. federal income tax rate | $ | 15,633,675 | $ | -3,225,697 | $ | 16,371,275 | |||||
State income taxes, net of federal income tax effect | 747,802 | 204,687 | 1,465,344 | ||||||||
Effect of non-US operations | -1,294,217 | -644,353 | -1,631,614 | ||||||||
Foreign valuation allowances | - | 607,467 | 850,323 | ||||||||
Nontaxable contingent liability fair value changes and goodwill impairment | -8,737,329 | 3,827,806 | -14,334,053 | ||||||||
Research and development credit | - | -1,046,430 | -376,350 | ||||||||
199 Domestic production activities deduction | -141,376 | - | - | ||||||||
Nondeductible (benefit) and other | -334,934 | -279,408 | -31,780 | ||||||||
Income tax expense (benefit) | $ | 5,873,621 | $ | -555,928 | $ | 2,313,145 | |||||
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax return reporting purposes. At December 31, 2013 and 2014, the Company’s deferred tax assets and liabilities consisted of the following: | |||||||||||
December 31, | |||||||||||
2013 | 2014 | ||||||||||
Current deferred tax assets: | |||||||||||
Reserves and allowances not currently deductible | $ | 1,452,133 | $ | 1,857,862 | |||||||
Other | 19,561 | 77,466 | |||||||||
Total current deferred tax assets | 1,471,694 | 1,935,328 | |||||||||
Noncurrent deferred tax assets: | |||||||||||
Income tax basis in excess of financial statement basis in intangible assets | 6,140,517 | 5,234,704 | |||||||||
Deductible stock-based compensation | 3,974,354 | 4,739,865 | |||||||||
Net operating loss carryforward | 10,002,615 | 10,983,464 | |||||||||
Tax credit carryforwards | 1,353,589 | 1,338,409 | |||||||||
Other | 46,303 | - | |||||||||
21,517,378 | 22,296,442 | ||||||||||
Valuation allowance | -762,123 | -1,603,665 | |||||||||
Total noncurrent deferred tax assets | 20,755,255 | 20,692,777 | |||||||||
Total deferred tax assets | 22,226,949 | 22,628,105 | |||||||||
Total current deferred tax liability: | |||||||||||
Prepaid & other expenses | -352,361 | -116,189 | |||||||||
Total current deferred tax liability | -352,361 | -116,189 | |||||||||
Noncurrent deferred tax liabilities: | |||||||||||
Fixed assets | -5,085,865 | -4,930,792 | |||||||||
Intangible assets | -22,411,410 | -21,825,087 | |||||||||
Total noncurrent deferred tax liabilities | -27,497,275 | -26,755,879 | |||||||||
Total deferred tax liabilities | -27,849,636 | -26,872,068 | |||||||||
Net deferred tax liability | $ | -5,622,687 | $ | -4,243,963 | |||||||
Net current deferred tax asset | $ | 1,119,333 | $ | 1,819,139 | |||||||
Net noncurrent deferred tax liability | -6,742,020 | -6,063,102 | |||||||||
Net deferred tax liability | $ | -5,622,687 | $ | -4,243,963 | |||||||
The realizability of deferred income tax assets is based on a more likely than not standard. If it is determined that it is more likely than not that deferred income tax assets will not be realized, a valuation allowance must be established against the deferred income tax assets. Realization of deferred tax assets is dependent primarily on the generation of future taxable income. In considering the need for a valuation allowance the Company considers historical, as well as, future projected taxable income along with other positive and negative evidence in assessing the realizability of its deferred tax assets. | |||||||||||
For the years ended December 31, 2013 and 2014, the Company recorded net increases in its valuation allowances of $0.6 million and $0.8 million, respectively. | |||||||||||
As of December 31, 2014, the Company has gross federal and state net operating loss (“NOLs”) carryforwards of $20.5 million and $16.5 million, respectively. The federal carryovers begin to expire in 2025, and the state carryovers begin to expire in 2022. Section 382 of the Internal Revenue Code imposes an annual limitation on the utilization of net operating loss carryforwards related to acquired corporations based on a statutory rate of return (usually the “applicable federal funds rate” as defined in the Internal Revenue Code) and the value of the corporation at the time of a “change in ownership” as defined by Section 382. The Company’s total federal NOL as of December 31, 2014 includes $2.0 million of NOLs from acquired corporations. These acquired NOLs have an annual limitation under Section 382 of the Internal Revenue Code of $0.2 million. | |||||||||||
As of December 31, 2014, the Company had gross NOLs in France, Italy, Chile and Brazil of $17.1 million, $1.4 million, $2.7 million and $0.5 million, respectively, which have an indefinite carryover period. | |||||||||||
As of December 31, 2014, the Company had gross federal and state research and development credit carryforwards of approximately $1.2 million and $0.5 million, respectively. The federal carryovers begin to expire in 2031, and the state carryovers begin to expire in 2015. | |||||||||||
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, 2014, the Company has $13.4 million and $11.4 million in federal and state tax deductions, respectively, related to these stock option exercises which have not been recorded but are 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. | |||||||||||
The Company's intention is to permanently reinvest the undistributed earnings of its foreign subsidiaries in accordance with ASC 740. Deferred income taxes were not calculated on undistributed earnings of foreign subsidiaries, which were $3.1 million and $8.9 million at December 31, 2013 and 2014, respectively. Determination of the amount of unrecognized deferred tax liability on the undistributed earnings considered permanently reinvested is not practicable. If the undistributed earnings were to be remitted to the Company, foreign tax credits would be available to reduce any U.S. tax due upon repatriation. | |||||||||||
The Company's income (loss) before taxes on foreign operations was $23.8 million, $(13.8) million and $15.4 million for the years ended December 31, 2012, 2013 and 2014, respectively. | |||||||||||
Fair_Value_Measurement
Fair Value Measurement | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||
Fair Value Disclosures [Text Block] | 12 | 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 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 $0.5 million. | ||||||||||||||
The following tables set 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 2014, respectively: | ||||||||||||||
Quoted Prices in | ||||||||||||||
Active Markets for | Significant Other | Significant | ||||||||||||
Total Fair Value | Identical Assets | Observable Inputs | Unobservable Inputs | |||||||||||
At December 31, 2013 | Measurement | (Level 1) | (Level 2) | (Level 3) | ||||||||||
Assets: | ||||||||||||||
Money market funds(1) | $ | 667,122 | $ | 667,122 | $ | - | $ | - | ||||||
Liabilities: | ||||||||||||||
Contingent consideration | $ | -87,332,461 | $ | - | $ | - | $ | -87,332,461 | ||||||
Quoted Prices in | ||||||||||||||
Active Markets for | Significant Other | Significant | ||||||||||||
Total Fair Value | Identical Assets | Observable Inputs | Unobservable Inputs | |||||||||||
At December 31, 2014 | Measurement | (Level 1) | (Level 2) | (Level 3) | ||||||||||
Assets: | ||||||||||||||
Money market funds(1) | $ | 667,127 | $ | 667,127 | $ | - | $ | - | ||||||
Liabilities: | ||||||||||||||
Contingent consideration | $ | -32,582,574 | $ | - | $ | - | $ | -32,582,574 | ||||||
-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 at December 31, 2012 | $ | -54,497,824 | ||||||||||||
Contingent consideration from 2013 acquisitions | -68,165,674 | |||||||||||||
Contingent consideration payments paid in cash | 4,297,803 | |||||||||||||
Contingent consideration payments paid in stock | 614,216 | |||||||||||||
Change in fair value (1) | 31,330,567 | |||||||||||||
Foreign exchange impact (2) | -911,549 | |||||||||||||
Balance as of December 31, 2013 | -87,332,461 | |||||||||||||
Contingent consideration payments paid in cash | 5,768,591 | |||||||||||||
Contingent consideration payments paid in stock | 9,132,682 | |||||||||||||
Change in fair value (1) | 37,873,588 | |||||||||||||
Reclass to Due to seller | 402,499 | |||||||||||||
Foreign exchange impact (2) | 1,572,527 | |||||||||||||
Balance as of December 31, 2014 | $ | -32,582,574 | ||||||||||||
-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 statements of operations. | |||||||||||||
-2 | Changes in the contingent consideration liability which are caused by foreign exchange rate fluctuations are recognized in other comprehensive income. | |||||||||||||
Earnings_Per_Share
Earnings Per Share | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Earnings Per Share [Abstract] | |||||||||||
Earnings Per Share [Text Block] | 13 | 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. For the years ended December 31, 2012, 2013 and 2014, respectively, 1,099,604, 4,288,084 and 2,427,089 options and restricted common shares were excluded from the calculation as these options and restricted common shares were anti-dilutive. | |||||||||||
The computation of basic and diluted earnings per common share for the years ended December 31, 2012, 2013, and 2014, is as follows: | |||||||||||
Year Ended December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
Numerator: | |||||||||||
Net income (loss) | $ | 38,794,022 | $ | -8,660,349 | $ | 44,461,925 | |||||
Denominator: | |||||||||||
Denominator for basic earnings per share—weighted-average shares outstanding | 48,811,218 | 50,875,131 | 52,095,481 | ||||||||
Effect of dilutive securities: | |||||||||||
Employee stock options and restricted common shares | 2,411,260 | - | 924,189 | ||||||||
Contingently issuable shares | 17,598 | - | 84,273 | ||||||||
Denominator for dilutive earnings per share | 51,240,076 | 50,875,131 | 53,103,943 | ||||||||
Basic earnings (loss) per share | $ | 0.79 | $ | -0.17 | $ | 0.85 | |||||
Diluted earnings (loss) per share | $ | 0.76 | $ | -0.17 | $ | 0.84 | |||||
StockBased_Compensation_Plans
Stock-Based Compensation Plans | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | 14 | Stock-Based Compensation Plans | |||||||||||||||
In 2006, the Company adopted the 2006 Stock Incentive Plan (the Plan). Upon adoption, all previously existing plans were merged into the Plan and ceased to separately exist. The Plan was amended and restated effective June 2014 resulting in an increase in the maximum number of shares of common stock that may be issued under the Plan by 2,200,000, from 5,650,000 to 7,850,000. The Company’s policy is to issue shares resulting from the exercise of stock options and conversion of restricted stock as new shares. | |||||||||||||||||
The Company recorded $6.2 million, $4.7 million and $5.4 million in compensation expense related to stock-based compensation, for the years ended December 31, 2012, 2013 and 2014, respectively. All stock-based compensation expense is recorded net of an estimated forfeiture rate and adjusted to reflect actual forfeiture activity. The estimated forfeiture rates applied as of December 31, 2014 ranged from 7.0% to 8.0% for various types of employees. The Company recorded $2.0 million, $0.5 million and $0.5 million of additional stock-based compensation expense for the years ended December 31, 2012, 2013 and 2014, respectively, for awards vested which exceeded the expense recorded using the estimated forfeiture rate. | |||||||||||||||||
Stock Options | |||||||||||||||||
Eligible employees receive non-qualified stock options as a portion of their total compensation. The options vest over various time periods depending upon the grant, but generally vest ratably over a four to five year service period. Vested options may be exercised and converted to one share of the Company’s common stock in exchange for the exercise price which is generally equal to the share price on the grant date. The Company measures the compensation cost based on the Black-Scholes option valuation model at the grant date. The stock-based compensation expense related to stock options for the years ended December 31, 2012, 2013 and 2014 was $3.0 million, $2.1 million and $1.7 million, respectively. | |||||||||||||||||
A summary of stock option activity for the years ended December 31, 2012, 2013 and 2014 is as follows: | |||||||||||||||||
Weighted- | |||||||||||||||||
Outstanding | Average | Aggregate | |||||||||||||||
Options | Exercise Price | Intrinsic Value | |||||||||||||||
Outstanding at December 31, 2011 | 5,950,481 | $ | 5.07 | $ | 28,048,306 | ||||||||||||
Granted | 538,933 | 12.15 | - | ||||||||||||||
Exercised | -2,474,713 | 2.23 | 23,936,039 | ||||||||||||||
Forfeited | -93,519 | 7.35 | - | ||||||||||||||
Outstanding at December 31, 2012 | 3,921,182 | 5.07 | 28,048,306 | ||||||||||||||
Granted | 226,971 | 14.6 | - | ||||||||||||||
Exercised | -415,480 | 4.83 | 3,190,219 | ||||||||||||||
Forfeited | -179,139 | 8.97 | - | ||||||||||||||
Outstanding at December 31, 2013 | 3,553,534 | 8.52 | 4,778,565 | ||||||||||||||
Granted | 778,906 | 7.23 | - | ||||||||||||||
Exercised | -161,486 | 4.82 | 3,301,667 | ||||||||||||||
Forfeited | -125,370 | 4.11 | - | ||||||||||||||
Outstanding at December 31, 2014 | 4,045,584 | $ | 8.35 | $ | 4,725,483 | ||||||||||||
Options vested at December 31, 2014 | 2,702,753 | $ | 7.95 | $ | 4,247,128 | ||||||||||||
The weighted-average fair values and ranges of exercise prices for stock options granted during the years ended December 31, 2012, 2013 and 2014, which vest ratably from one to five years, are as follows: | |||||||||||||||||
Weighted-Average | |||||||||||||||||
Options Granted | Fair Value | Exercise Prices | |||||||||||||||
2012 | 538,933 | $ | 5.99 | $11.97 - $14.39 | |||||||||||||
2013 | 226,971 | 5.58 | $10.76 - $15.05 | ||||||||||||||
2014 | 778,906 | 3.57 | $7.18 - $8.72 | ||||||||||||||
Vested options totaled 2.5 million, 2.6 million and 2.7 million as of December 31, 2012, 2013 and 2014, respectively. | |||||||||||||||||
The aggregate intrinsic value of options outstanding and exercisable represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of each fiscal year and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options in 2012, 2013 and 2014, respectively. These amounts change based on the fair market value of the Company’s stock which was $13.78, $7.79 and $7.79 on the last business day of the years ended December 31, 2012, 2013 and 2014, respectively. | |||||||||||||||||
The following assumptions were utilized in the Black-Scholes valuation model for options granted in 2012, 2013 and 2014: | |||||||||||||||||
2012 | 2013 | 2014 | |||||||||||||||
Dividend yield | — | % | — | % | — | % | |||||||||||
Risk-free interest rate | 1.03%-1.67 | % | 1.32%-1.41 | % | 1.32%-2.17 | % | |||||||||||
Expected life | 6-7 years | 6 years | 6 years | ||||||||||||||
Volatility | 38.0%-47.5 | % | 38 | % | 38.0%-50.0 | % | |||||||||||
Expected term is estimated based on historical experience related to similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior. The Company believes that its historical experience provides the best estimate of future expected life. The risk-free interest rate is based on actual U.S. Treasury zero-coupon rates for bonds commensurate with the expected term. The expected volatility assumption is based on the historical volatility of the Company’s common stock over a period commensurate with the expected term. | |||||||||||||||||
There was $3.9 million, $2.9 million and $5.8 million of unrecognized compensation costs related to the stock options granted under the Plan as of December 31, 2012, 2013 and 2014, respectively. This cost was expected to be recognized over a weighted average period of 3.1, 2.6 and 2.4 years, respectively. | |||||||||||||||||
The following table summarizes information about all stock options outstanding for the Company as of December 31, 2014: | |||||||||||||||||
Options Outstanding | Options Vested | ||||||||||||||||
Weighted- | Weighted- | ||||||||||||||||
Number | Weighted- | Average | Number | Average | |||||||||||||
Exercise Price | Outstanding | Average Life | Exercise Price | Exercisable | Exercise Price | ||||||||||||
$0.65 - $4.92 | 662,258 | 1.46 | $ | 3.52 | 662,258 | $ | 3.52 | ||||||||||
$5.19 - $7.86 | 1,730,266 | 6.76 | 6.69 | 919,555 | 6.25 | ||||||||||||
$8.07 - $11.97 | 628,607 | 6.42 | 9.37 | 435,797 | 9.27 | ||||||||||||
$12.10 - $16.41 | 1,024,453 | 5.58 | 13.61 | 685,143 | 13.68 | ||||||||||||
4,045,584 | $ | 8.35 | 2,702,753 | $ | 7.95 | ||||||||||||
Restricted Common Shares | |||||||||||||||||
Eligible employees receive restricted common shares as a portion of their total compensation. The restricted common shares vest over various time periods depending upon the grant, but generally vest from zero to five years and convert to common stock at the conclusion of the vesting period. The Company measures the compensation cost based on the closing market price of the Company’s common stock at the grant date. The stock-based compensation expense related to restricted common shares for the years ended December 31, 2012, 2013 and 2014 was $3.2 million, $2.6 million and $3.6 million, respectively. | |||||||||||||||||
A summary of restricted share activity is as follows: | |||||||||||||||||
Outstanding | Weighted- | ||||||||||||||||
Restricted | Average Grant- | ||||||||||||||||
Common Shares | Date Fair Value | ||||||||||||||||
Nonvested Restricted Common Shares at December 31, 2011 | 783,816 | $ | 7.52 | ||||||||||||||
Granted | 306,296 | 11.92 | |||||||||||||||
Vested and transferred to unrestricted common stock | -362,116 | 8.86 | |||||||||||||||
Forfeited | -35,864 | 7.02 | |||||||||||||||
Nonvested Restricted Common Shares at December 31, 2012 | 692,132 | 8.95 | |||||||||||||||
Granted | 448,158 | 11.46 | |||||||||||||||
Vested and transferred to unrestricted common stock | -278,461 | 9.22 | |||||||||||||||
Forfeited | -127,279 | 8.56 | |||||||||||||||
Nonvested Restricted Common Shares at December 31, 2013 | 734,550 | 10.45 | |||||||||||||||
Granted | 736,238 | 7.59 | |||||||||||||||
Vested and transferred to unrestricted common stock | -361,650 | 8.9 | |||||||||||||||
Forfeited | -19,077 | 8.02 | |||||||||||||||
Nonvested Restricted Common Shares at December 31, 2014 | 1,090,061 | $ | 8.92 | ||||||||||||||
There was $3.6 million, $4.5 million $8.9 of total unrecognized compensation costs related to the restricted common shares as of December 31, 2012, 2013 and 2014, respectively. This cost was expected to be recognized over a weighted average period of 2.8, 2.9 and 2.4 years, as of December 31, 2012, 2013 and 2014, respectively. | |||||||||||||||||
Benefit_Plans
Benefit Plans | 12 Months Ended | |
Dec. 31, 2014 | ||
Compensation and Retirement Disclosure [Abstract] | ||
Compensation and Employee Benefit Plans [Text Block] | 15 | Benefit Plans |
The Company adopted a 401(k) savings plan effective February 1, 2005, covering all of the Company’s employees upon completion of 90 days of service. Employees may contribute a percentage of eligible compensation on both a before-tax basis and after-tax basis. The Company has the right to make discretionary contributions to the plan. For the years ended December 31, 2012, 2013 and 2014, total costs incurred from the Company’s contributions to the 401(k) plan were $0.5 million, $0.1 million and $1.0 million, respectively. | ||
Related_Party_Transactions
Related Party Transactions | 12 Months Ended | |
Dec. 31, 2014 | ||
Related Party Transactions [Abstract] | ||
Related Party Transactions Disclosure [Text Block] | 16 | 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 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 during the years ended December 31, 2012, 2013 and 2014 was $0.6 million, $0.7 million and $1.7 million, respectively. Additionally, Arthur J. Gallagher & Co. provides insurance brokerage and risk management services to the Company. As consideration for these services, Arthur J. Gallagher & Co. billed the Company $0.4 million, $0.5 million and $0.6 million for the years ended December 31, 2012, 2013 and 2014, respectively. The net amounts payable to Arthur J. Gallagher & Co. as of December 31, 2013 and 2014 were immaterial. | ||
Business_Segments
Business Segments | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||
Segment Reporting Disclosure [Text Block] | 17 | 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 Mexico, 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 2. 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 our reportable operating segments and Other for the fiscal years noted (in thousands): | |||||||||||||||||
North America | Latin America | EMEA | Other | Total | |||||||||||||
Fiscal 2014: | |||||||||||||||||
Net revenues from third parties | $ | 688,942 | $ | 99,734 | $ | 211,457 | $ | - | $ | 1,000,133 | |||||||
Net revenues from other segments | 48 | 429 | 5,160 | -5,637 | - | ||||||||||||
Total net revenues | 688,990 | 100,163 | 216,617 | -5,637 | 1,000,133 | ||||||||||||
Adjusted EBITDA (1) | 57,662 | 5,273 | 5,893 | -25,990 | 42,838 | ||||||||||||
Total assets | 443,530 | 30,488 | 135,257 | 21,975 | 631,250 | ||||||||||||
Fiscal 2013: | |||||||||||||||||
Net revenues from third parties | 657,989 | 88,016 | 144,955 | - | 890,960 | ||||||||||||
Net revenues from other segments | 33 | 1,270 | 75 | -1,378 | - | ||||||||||||
Total net revenues | 658,022 | 89,286 | 145,030 | -1,378 | 890,960 | ||||||||||||
Adjusted EBITDA (1) | 51,873 | 3,098 | 764 | -28,834 | 26,901 | ||||||||||||
Total assets | 431,562 | 29,841 | 119,531 | 33,733 | 614,667 | ||||||||||||
Fiscal 2012: | |||||||||||||||||
Net revenues from third parties | 648,732 | 57,575 | 83,278 | - | 789,585 | ||||||||||||
Net revenues from other segments | 68 | 1,625 | 27 | -1,720 | - | ||||||||||||
Total net revenues | 648,800 | 59,200 | 83,305 | -1,720 | 789,585 | ||||||||||||
Adjusted EBITDA (1) | 61,890 | 1,745 | -2,664 | -23,754 | 37,217 | ||||||||||||
Total assets | 330,159 | 23,219 | 139,466 | 21,936 | 514,780 | ||||||||||||
-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 and intangible asset 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 consolidated income before income taxes (in thousands): | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2012 | 2013 | 2014 | |||||||||||||||
Adjusted EBITDA | $ | 37,217 | $ | 26,901 | $ | 42,838 | |||||||||||
Depreciation and amortization | -10,791 | -13,664 | -17,723 | ||||||||||||||
Stock-based compensation | -6,193 | -4,733 | -5,352 | ||||||||||||||
Change in fair value of contingent consideration | 27,689 | 31,331 | 37,873 | ||||||||||||||
Preference claim charge (1) | -1,099 | - | - | ||||||||||||||
VAT settlement charge (2) | -1,485 | - | - | ||||||||||||||
Payments to former owner of Productions Graphics, net of cash recovered | 411 | -2,624 | - | ||||||||||||||
Goodwill impairment charge | - | -37,908 | - | ||||||||||||||
Intangible asset impairment charges | - | - | -2,710 | ||||||||||||||
Restructuring and other charges | - | -4,322 | - | ||||||||||||||
Legal fees in connection with patent infringement | - | -961 | - | ||||||||||||||
Restatement-related professional fees | - | - | -2,093 | ||||||||||||||
Secured asset reserve | - | - | -940 | ||||||||||||||
Total other expense | -1,081 | -3,236 | -5,118 | ||||||||||||||
Income (loss) before income taxes | $ | 44,668 | $ | -9,216 | $ | 46,775 | |||||||||||
-1 | In the fourth quarter of 2012, the Company recognized a $1.1 million charge related to the settlement of a lawsuit filed by the Trustee of the Circuit City Liquidating Trust (the “Trust”) in connection with the Circuit City Stores, Inc. bankruptcy proceedings. A settlement agreement was entered in January 2013 with the Trust resolving this preference claim as well the administrative and general unsecured claims against the Trust. | ||||||||||||||||
-2 | In the fourth quarter of 2012, the Company accrued a loss reserve of $1.5 million relating to a VAT assessment issued by Her Majesty’s Revenue and Customs (“HMRC”) InnerWorkings Europe Limited (formerly Etrinsic). 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. | ||||||||||||||||
The Company had long-lived assets, consisting of net property and equipment, in the United States of $13.9 million, $18.1 million and $21.5 million at December 31, 2012, 2013 and 2014, respectively. Long-lived assets in foreign countries were $3.2 million, $5.6 million and $8.3 million at December 31, 2012, 2013 and 2014, respectively. | |||||||||||||||||
Subsequent_Event
Subsequent Event | 12 Months Ended | |
Dec. 31, 2014 | ||
Subsequent Events [Abstract] | ||
Subsequent Events [Text Block] | 18 | Subsequent Event |
On February 12, 2015, the Company announced that its Board of Directors approved a share repurchase program providing it authorization to repurchase up to an aggregate of $20 million of its common stock through open market and privately negotiated transactions over a two-year period. The timing and amount of any share repurchases will be determined based on market conditions, share price and other factors, and the program may be discontinued or suspended at any time. Repurchases will be made in compliance with SEC rules and other legal requirements | ||
Quarterly_Financial_Data_Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||
Quarterly Financial Information [Text Block] | 18 | Quarterly Financial Data (Unaudited) | ||||||||||||
The tables below are a condensed summary of the Company’s unaudited quarterly statements of income and quarterly earnings per share data for the years ended December 31, 2013 and 2014 (in thousands): | ||||||||||||||
Year Ended December 31, 2014 | ||||||||||||||
First | Second | Third | Fourth | |||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||
(In thousands, except per share data) | ||||||||||||||
Revenue | $ | 241,490 | $ | 260,350 | $ | 251,652 | $ | 246,641 | ||||||
Gross profit | 54,584 | 58,927 | 57,098 | 58,850 | ||||||||||
Net income (loss) | 289 | 1,605 | 5,114 | 37,454 | ||||||||||
Net income (loss) per share: | ||||||||||||||
Basic | $ | 0.01 | $ | 0.03 | $ | 0.1 | $ | 0.71 | ||||||
Diluted | $ | 0.01 | $ | 0.03 | $ | 0.1 | $ | 0.69 | ||||||
Year Ended December 31, 2013 | ||||||||||||||
First | Second | Third | Fourth | |||||||||||
Quarter(1) | Quarter(2) | Quarter(3) | Quarter | |||||||||||
(In thousands, except per share data) | ||||||||||||||
Revenue | $ | 204,577 | $ | 210,876 | $ | 232,630 | $ | 242,877 | ||||||
Gross profit | 46,350 | 48,177 | 53,181 | 54,318 | ||||||||||
Net income (loss) | -2,801 | 3,675 | -9,066 | -468 | ||||||||||
Net income (loss) per share: | ||||||||||||||
Basic | $ | -0.06 | $ | 0.07 | $ | -0.18 | $ | -0.01 | ||||||
Diluted | $ | -0.06 | $ | 0.07 | $ | -0.18 | $ | -0.01 | ||||||
-1 | The Company acquired DB Studios, Inc. in March 2013. Financial results for this acquisition are included in the Consolidated Financial Statements beginning in March 2013. | |||||||||||||
-2 | The Company made acquisitions during the second quarter of 2013 which were not material to the Company’s operations. Financial results for these acquisitions are included in the Consolidated Financial Statements beginning at the respective acquisition dates. | |||||||||||||
-3 | The Company acquired U.S. and international businesses of EYELEVEL in July 2013 as well as one other company which was not material to the Company’s operations. Financial results for these acquisitions are included in the Consolidated Financial Statements beginning at the respective acquisition dates. | |||||||||||||
SCHEDULE_IIVALUATION_AND_QUALI
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Valuation and Qualifying Accounts [Abstract] | |||||||||||||||||
Schedule of Valuation and Qualifying Accounts Disclosure [Text Block] | SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS | ||||||||||||||||
Valuation and Qualifying Accounts | |||||||||||||||||
(Uncollectible | |||||||||||||||||
Accounts | |||||||||||||||||
Balance at | Written Off, | ||||||||||||||||
Beginning of | Charged to | Net of | Balance at End | ||||||||||||||
Description | Period | Expense | Recoveries) | Other | of Period | ||||||||||||
Fiscal year ended December 31, 2014 Allowance for doubtful accounts | $ | 2,128,790 | $ | 1,983,928 | $ | -1,427,221 | $ | - | $ | 2,685,497 | |||||||
Fiscal year ended December 31, 2013 Allowance for doubtful accounts | $ | 1,553,926 | $ | 1,285,326 | $ | -710,462 | $ | - | $ | 2,128,790 | |||||||
Fiscal year ended December 31, 2012 Allowance for doubtful accounts | $ | 3,293,241 | $ | 1,681,942 | $ | -3,421,257 | $ | - | $ | 1,553,926 | |||||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Accounting Policies [Abstract] | |||||||||||
Basis of Presentation and Consolidation [Policy Text Block] | Basis of Presentation and Consolidation | ||||||||||
The consolidated financial statements include the accounts of InnerWorkings, Inc. and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. | |||||||||||
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. | |||||||||||
Use of Estimates, Policy [Policy Text Block] | Preparation of Financial Statements and Use of Estimates | ||||||||||
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. On an ongoing basis, the Company evaluates its estimates, including those related to product returns, allowance for doubtful accounts, inventories and inventory valuation, valuation and impairments of goodwill and long-lived assets, income taxes, contingencies, stock-based compensation and litigation. The Company bases its estimates on historical experience and on other assumptions that its management believes are reasonable under the circumstances. These estimates form the basis for making judgments about the carrying value of assets and liabilities when those values are not readily apparent from other sources. Actual results can differ from those estimates. | |||||||||||
Foreign Currency Transactions and Translations Policy [Policy Text Block] | Foreign Currency Translation | ||||||||||
The Company determines the functional currency for its parent company and each of its subsidiaries by reviewing the currencies in which their respective operating activities occur. Assets and liabilities of these operations are translated into U.S. currency at the rates of exchange at the balance sheet date. Income and expense items are translated at average monthly rates of exchange. The resulting translation adjustments are included in accumulated other comprehensive income (loss), a separate component of stockholders’ equity. Transaction gains and losses arising from activities in other than the applicable functional currency are calculated using average exchange rates for the applicable period and reported in net income as a non-operating item in each period. Non-monetary balance sheet items denominated in a currency other than the applicable functional currency are translated using the historical rate. | |||||||||||
The net realized gains (losses) on foreign currency transactions were $0.1 million, $(0.3) million and $(0.8) million for the years ended December 31, 2012, 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 is 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 marketing 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 on a net basis. | |||||||||||
The Company recognizes revenue for creative, design, installation, warehousing and other services provided to its customers which may be delivered in conjunction with the procurement of marketing materials at the time when delivery and customer acceptance occur and all other revenue recognition criteria are met. When provided on a stand-alone basis, the Company recognizes revenue for these services upon completion of the service. Service revenue has not been material to the Company’s overall revenue to date. | |||||||||||
The Company records taxes collected from customers and remitted to governmental authorities on a net basis. | |||||||||||
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents | ||||||||||
The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents. | |||||||||||
Trade and Other Accounts Receivable, Policy [Policy Text Block] | Accounts Receivable | ||||||||||
Accounts receivable are uncollateralized customer obligations due under normal trade terms. Invoices generally require payment within 30 to 90 days from the invoice date. Accounts receivable are stated at the amount billed to the customer, less an estimate for amounts deemed uncollectible. Interest is not generally accrued on outstanding balances. | |||||||||||
The carrying amount of accounts receivable is reduced by an allowance that reflects management’s best estimate of the amounts that will not be collected. The Company estimates the collectability of its accounts receivable based on a combination of factors including, but not limited to, customer credit ratings and historical experience. In circumstances where the Company is aware of a specific customer’s inability to meet its financial obligations to the Company (e.g., bankruptcy filings or substantial downgrading of credit ratings), the Company provides allowances for bad debts against amounts due to reduce the net recognized receivable to the amount it reasonably believes will be collected. Fully reserved receivables are reviewed on a monthly basis and uncollectible accounts are written off when all reasonable collection efforts have been exhausted. | |||||||||||
Inventory, Policy [Policy Text Block] | Inventories | ||||||||||
Inventories are stated at the lower of cost or market. Cost is determined by the first-in, first-out method . Market value is based upon an estimated average selling price reduced by estimated costs of disposal. Inventories primarily consist of purchased finished goods . Finished goods inventory includes consigned inventory held on behalf of customers as well as inventory held at third-party fulfillment centers and subcontractors. | |||||||||||
Property, Plant and Equipment, Policy [Policy Text Block] | Property and Equipment | ||||||||||
Property and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets. The estimated useful lives, by asset class, are as follows: | |||||||||||
Computer equipment | 3 years | ||||||||||
Software, including internal-use software | 1 to 6 years | ||||||||||
Office equipment | 5 years | ||||||||||
Furniture and fixtures | 7 years | ||||||||||
Leasehold improvements are depreciated using the straight-line method over the shorter of their estimated useful lives or the terms of the related leases. | |||||||||||
Internal Use Software, Policy [Policy Text Block] | Internal-Use Software | ||||||||||
In accordance with ASC 350-40, Intangibles—Goodwill and Other, Internal-Use Software, certain costs incurred in the planning and evaluation stage of internal-use computer software are expensed as incurred. Certain costs incurred during the application development stage are capitalized and included in property and equipment. Capitalized internal-use software costs are depreciated over the expected economic life of three to six years using the straight-line method. Capitalized internal-use software asset depreciation expense for the years ended December 31, 2012, 2013 and 2014 was $4.3 million, $3.9 million and $7.2 million, respectively, and is included in total depreciation expense. At December 31, 2013 and 2014, the net book value of internal-use software was $17.3 million and $23.5 million, 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 the first day of the fourth fiscal quarter of each year. | |||||||||||
Under ASC 350, an entity is permitted 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 October 1, 2014, 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 October 1, 2014 as a result of this test. The Company does not believe that goodwill is impaired as of December 31, 2014. | |||||||||||
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 4. | |||||||||||
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. Impairment indicators could include significant under-performance relative to the historical or projected future operating results, significant changes in the manner of use of assets, significant negative industry or economic trends or significant changes in the Company’s market capitalization relative to net book value. Any changes in key assumptions used by the Company, including those set forth above, could result in an impairment charge and such a charge could have a material adverse effect on the Company’s consolidated results of operations. 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. | |||||||||||
In the fourth quarter of 2014, the Company recorded a non-cash, intangible asset impairment charge of $2.7 million. For additional information related to the intangible asset impairment, see Note 5. | |||||||||||
Shipping and Handling Cost, Policy [Policy Text Block] | Shipping and Handling Costs | ||||||||||
Shipping and handling costs are classified in cost of goods sold in the consolidated statements of operations. | |||||||||||
Income Tax, Policy [Policy Text Block] | Income Taxes | ||||||||||
The Company accounts for income taxes in accordance with ASC 740, Income Taxes, under which deferred tax assets and liabilities are recognized based upon anticipated future tax consequences attributable to differences between financial statement carrying values of assets and liabilities and their respective tax bases. A valuation allowance is established to reduce the carrying value of deferred tax assets if it is considered more likely than not that such assets will not be realized. Any change in the valuation allowance would be charged to income in the period such determination was made. | |||||||||||
The Company recognizes the tax benefit from an uncertain tax position only if it is “more likely than not” the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. | |||||||||||
The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. There was no interest or penalties related to unrecognized tax benefits for the years ended December 31, 2012, 2013 and 2014. | |||||||||||
Based on the Company’s evaluation, it was concluded that there are no significant uncertain tax positions requiring recognition in its financial statements. The evaluation was performed for the tax years ended December 31, 2011, 2012, 2013 and 2014, the tax years which remain subject to examination by major tax jurisdictions as of December 31, 2014. | |||||||||||
Advertising Costs, Policy [Policy Text Block] | Advertising | ||||||||||
Costs of advertising, which are expensed as incurred by the Company, were $0.8 million, $0.7 million and $0.5 million for the years ended December 31, 2012, 2013 and 2014, respectively, and are included in selling, general and administrative expenses in the consolidated statement of operations. | |||||||||||
Comprehensive Income, Policy [Policy Text Block] | Comprehensive Income | ||||||||||
The components of accumulated comprehensive income (loss) included in the Consolidated Balance Sheets at December 31, 2013 and 2014 are as follows: | |||||||||||
Unrealized holding | Total accumulated | ||||||||||
gains on available- | other comprehensive | ||||||||||
Foreign currency | for-sale securities | income | |||||||||
Balance at December 31, 2012 | $ | 271,583 | $ | 1,338 | $ | 272,921 | |||||
Other comprehensive income before reclassifications | 2,505,417 | - | 2,505,417 | ||||||||
Amounts reclassified from AOCI | -1,338 | -1,338 | |||||||||
Net current-period other comprehensive income | 2,505,417 | -1,338 | 2,504,079 | ||||||||
Balance at December 31, 2013 | 2,777,000 | - | 2,777,000 | ||||||||
Other comprehensive income before reclassifications | -8,178,135 | - | -8,178,135 | ||||||||
Amounts reclassified from AOCI | - | - | |||||||||
Net current-period other comprehensive income | -8,178,135 | - | -8,178,135 | ||||||||
Balance at December 31, 2014 | $ | -5,401,135 | $ | - | $ | -5,401,135 | |||||
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Stock-Based Compensation | ||||||||||
The Company accounts for stock-based compensation awards 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. Stock-based compensation expense is included in selling, general and administrative expenses in the consolidated statement of operations. | |||||||||||
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements | ||||||||||
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which amends the existing accounting standards for revenue recognition. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to customers. ASU 2014-09 will be effective for the Company beginning on January 1, 2017. Early adoption is not permitted. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company is currently evaluating the impact of adopting the new revenue standard on its consolidated financial statements. | |||||||||||
In April 2014, the FASB issued Accounting Standards Update No. 2014-08 Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (“ASU 2014-08”). ASU 2014-08 provides a narrower definition of discontinued operations than under existing GAAP. The standard update requires that only disposals of components of an entity (or groups of components) that represent a strategic shift that has or will have a major effect on the reporting entity’s operations are reported in the financial statements as discontinued operations. The standard also provides guidance on the financial statement presentations and disclosures of discontinued operations. The standard is effective prospectively for disposals (or classifications of businesses as held-for-sale) of components of an entity that occur in annual or interim periods beginning after December 15, 2014. | |||||||||||
In July 2013, FASB issued Accounting Standards Update No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (“ASU 2013-11”) to provide guidance on the presentation of unrecognized tax benefits. This update requires that companies net their unrecognized tax benefits against all same-jurisdiction net operating losses or tax credit carryforwards that would be used to settle the position with a tax authority. The Company adopted ASU 2013-11 on January 1, 2014, and it did not have an effect on its consolidated financial statements. | |||||||||||
In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Presentation of Financial Statements - Going Concern (“ASU 2014-15”). This standard requires management to evaluate whether there are conditions and events that raise substantial doubt about the entity's ability to continue as a going concern and to provide disclosures in certain circumstances. The standard is effective for annual and interim periods beginning after December 15, 2016. The Company does not expect this guidance to have a material impact on its consolidated financial statements. | |||||||||||
Voluntary change in Accounting policy [Policy Text Block] | Voluntary Change in Accounting Policy | ||||||||||
During the quarter ended September 30, 2014, the Company voluntarily changed the date of its annual goodwill impairment test from the last day of the fiscal year to the first day of the fourth quarter. This voluntary change is preferable under the circumstances as it provides the Company with additional time to complete its annual goodwill impairment testing in advance of its year-end reporting and results in better alignment with the Company’s strategic forecasting and budgeting process. The voluntary change in accounting principle related to the annual testing date did not delay, accelerate or avoid an impairment charge. This change was not applied retrospectively as it is impracticable to do so because retrospective application would require application of significant estimates and assumptions with the use of hindsight. Accordingly, the change has been applied prospectively. | |||||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Accounting Policies [Abstract] | |||||||||||
Property, Plant and Equipment, Schedule of Significant Acquisitions and Disposals [Table Text Block] | The estimated useful lives, by asset class, are as follows: | ||||||||||
Computer equipment | 3 years | ||||||||||
Software, including internal-use software | 1 to 6 years | ||||||||||
Office equipment | 5 years | ||||||||||
Furniture and fixtures | 7 years | ||||||||||
Comprehensive Income (Loss) [Table Text Block] | The components of accumulated comprehensive income (loss) included in the Consolidated Balance Sheets at December 31, 2013 and 2014 are as follows: | ||||||||||
Unrealized holding | Total accumulated | ||||||||||
gains on available- | other comprehensive | ||||||||||
Foreign currency | for-sale securities | income | |||||||||
Balance at December 31, 2012 | $ | 271,583 | $ | 1,338 | $ | 272,921 | |||||
Other comprehensive income before reclassifications | 2,505,417 | - | 2,505,417 | ||||||||
Amounts reclassified from AOCI | -1,338 | -1,338 | |||||||||
Net current-period other comprehensive income | 2,505,417 | -1,338 | 2,504,079 | ||||||||
Balance at December 31, 2013 | 2,777,000 | - | 2,777,000 | ||||||||
Other comprehensive income before reclassifications | -8,178,135 | - | -8,178,135 | ||||||||
Amounts reclassified from AOCI | - | - | |||||||||
Net current-period other comprehensive income | -8,178,135 | - | -8,178,135 | ||||||||
Balance at December 31, 2014 | $ | -5,401,135 | $ | - | $ | -5,401,135 | |||||
Acquisitions_Tables
Acquisitions (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Business Combinations [Abstract] | |||||||||||
Schedule of Business Acquisitions by Acquisition, Contingent Consideration [Table Text Block] | As of December 31, 2014, the potential maximum contingent payments are payable as follows: | ||||||||||
Cash | Common Stock | Total | |||||||||
2015 | $ | 402,499 | $ | 31,094,284 | $ | 31,496,783 | |||||
2016 | 29,354,325 | 34,061,635 | 63,415,960 | ||||||||
2017 | - | 45,751,700 | 45,751,700 | ||||||||
$ | 29,756,824 | $ | 110,907,619 | $ | 140,664,443 | ||||||
Goodwill_Tables
Goodwill (Tables) | 12 Months Ended | |||||||||||||
Dec. 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 December 31: | |||||||||||||
North America | Latin America | EMEA | Total | |||||||||||
Balance as of December 31, 2012 | $ | 119,162,735 | $ | 9,656,417 | $ | 83,977,270 | $ | 212,796,422 | ||||||
Goodwill acquired related to 2013 acquisitions | 52,025,837 | - | 20,576,957 | 72,602,794 | ||||||||||
Finalization of purchase accounting for prior | -34,120 | 218,819 | -40,940 | 143,759 | ||||||||||
year acquisitions | ||||||||||||||
Impairment charge | - | - | -37,908,000 | -37,908,000 | ||||||||||
Foreign exchange impact | -59,876 | - | 3,653,599 | 3,593,723 | ||||||||||
Balance 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 | -167,922 | - | 692,839 | 524,917 | ||||||||||
Foreign exchange impact | -67,233 | - | -4,738,482 | -4,805,715 | ||||||||||
Balance as of December 31, 2014 | $ | 170,859,421 | $ | 9,875,236 | $ | 66,213,243 | $ | 246,947,900 | ||||||
Other_Intangible_Assets_Tables
Other Intangible Assets (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||
Schedule of Finite-Lived Intangible Assets [Table Text Block] | The following is a summary of the Company’s other intangible assets as of December 31: | ||||||||||
Weighted | |||||||||||
2013 | 2014 | Average Life | |||||||||
Customer lists | $ | 77,244,427 | $ | 75,113,728 | 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 | 79,715,628 | ||||||||||
Less accumulated amortization | -25,270,793 | -34,796,055 | |||||||||
Intangible assets, net | $ | 56,575,534 | $ | 44,919,573 | |||||||
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | The estimated amortization expense for the next five years is as follows: | ||||||||||
2015 | $ | 6,123,124 | |||||||||
2016 | 5,779,756 | ||||||||||
2017 | 5,302,817 | ||||||||||
2018 | 4,799,594 | ||||||||||
2019 | 4,473,976 | ||||||||||
Thereafter | 18,440,306 | ||||||||||
$ | 44,919,573 | ||||||||||
Restructuring_Activities_and_O1
Restructuring Activities and Other Charges (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||
Restructuring Charges By Reportable Segment [Table Text Block] | The following table summarizes the restructuring charges by reportable segment. All restructuring charges were incurred during the three months ended September 30, 2013, and the obligations were paid prior to December 31, 2013. There were no new charges recognized during the year ended December 31, 2014. | ||||||||||
North America | EMEA | Total | |||||||||
Employee terminations and other benefits | $ | 2,745,373 | $ | 260,407 | $ | 3,005,780 | |||||
Cash payments | -121,482 | -260,407 | -381,889 | ||||||||
Write-off of prepaid commissions balance (1) | -2,623,891 | - | -2,623,891 | ||||||||
Accrued restructuring costs as of December 31, 2013 | $ | - | $ | - | $ | - | |||||
-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. | ||||||||||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Property, Plant and Equipment [Abstract] | ||||||||
Property, Plant and Equipment [Table Text Block] | Property and equipment at December 31, 2013 and 2014 consisted of the following: | |||||||
2013 | 2014 | |||||||
Computer equipment | $ | 7,889,630 | $ | 7,453,903 | ||||
Software, including internal use software | 41,987,111 | 48,731,177 | ||||||
Office equipment and furniture | 2,136,168 | 4,099,076 | ||||||
Leasehold improvements | 1,468,841 | 1,901,714 | ||||||
53,481,750 | 62,185,870 | |||||||
Less accumulated depreciation | -29,757,000 | -32,422,287 | ||||||
$ | 23,724,750 | $ | 29,763,583 | |||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments and Contingencies Disclosure [Abstract] | |||||
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | Future minimum lease payments are presented below | ||||
Operating | |||||
Leases | |||||
2015 | $ | 7,013,184 | |||
2016 | 6,112,734 | ||||
2017 | 4,656,062 | ||||
2018 | 3,437,026 | ||||
2019 | 2,978,252 | ||||
Thereafter | 3,567,247 | ||||
Total minimum lease payments | $ | 27,764,505 | |||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Income Tax Disclosure [Abstract] | |||||||||||
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | The provision for income taxes consisted of the following components for the years ended December 31, 2012, 2013 and 2014: | ||||||||||
Year Ended December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
Current | |||||||||||
Federal | $ | 5,364,247 | $ | -1,803,191 | $ | 236,511 | |||||
State | 703,380 | -316,367 | 196,637 | ||||||||
Foreign | 801,212 | 2,216,025 | 4,070,524 | ||||||||
Total current | 6,868,839 | 96,467 | 4,503,672 | ||||||||
Deferred | |||||||||||
Federal | 1,494,274 | 2,823,798 | 87,396 | ||||||||
State | 206,125 | 449,424 | 2,697 | ||||||||
Foreign | -2,695,617 | -3,925,617 | -2,280,620 | ||||||||
Total deferred | -995,218 | -652,395 | -2,190,527 | ||||||||
Income tax expense (benefit) | $ | 5,873,621 | $ | -555,928 | $ | 2,313,145 | |||||
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | The provision for income taxes for the years ended December 31, 2012, 2013 and 2014 differs from the amount computed by applying the U.S. federal income tax rate of 35% to pretax income because of the effect of the following items: | ||||||||||
Year Ended December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
Tax expense at U.S. federal income tax rate | $ | 15,633,675 | $ | -3,225,697 | $ | 16,371,275 | |||||
State income taxes, net of federal income tax effect | 747,802 | 204,687 | 1,465,344 | ||||||||
Effect of non-US operations | -1,294,217 | -644,353 | -1,631,614 | ||||||||
Foreign valuation allowances | - | 607,467 | 850,323 | ||||||||
Nontaxable contingent liability fair value changes and goodwill impairment | -8,737,329 | 3,827,806 | -14,334,053 | ||||||||
Research and development credit | - | -1,046,430 | -376,350 | ||||||||
199 Domestic production activities deduction | -141,376 | - | - | ||||||||
Nondeductible (benefit) and other | -334,934 | -279,408 | -31,780 | ||||||||
Income tax expense (benefit) | $ | 5,873,621 | $ | -555,928 | $ | 2,313,145 | |||||
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax return reporting purposes. At December 31, 2013 and 2014, the Company’s deferred tax assets and liabilities consisted of the following: | ||||||||||
December 31, | |||||||||||
2013 | 2014 | ||||||||||
Current deferred tax assets: | |||||||||||
Reserves and allowances not currently deductible | $ | 1,452,133 | $ | 1,857,862 | |||||||
Other | 19,561 | 77,466 | |||||||||
Total current deferred tax assets | 1,471,694 | 1,935,328 | |||||||||
Noncurrent deferred tax assets: | |||||||||||
Income tax basis in excess of financial statement basis in intangible assets | 6,140,517 | 5,234,704 | |||||||||
Deductible stock-based compensation | 3,974,354 | 4,739,865 | |||||||||
Net operating loss carryforward | 10,002,615 | 10,983,464 | |||||||||
Tax credit carryforwards | 1,353,589 | 1,338,409 | |||||||||
Other | 46,303 | - | |||||||||
21,517,378 | 22,296,442 | ||||||||||
Valuation allowance | -762,123 | -1,603,665 | |||||||||
Total noncurrent deferred tax assets | 20,755,255 | 20,692,777 | |||||||||
Total deferred tax assets | 22,226,949 | 22,628,105 | |||||||||
Total current deferred tax liability: | |||||||||||
Prepaid & other expenses | -352,361 | -116,189 | |||||||||
Total current deferred tax liability | -352,361 | -116,189 | |||||||||
Noncurrent deferred tax liabilities: | |||||||||||
Fixed assets | -5,085,865 | -4,930,792 | |||||||||
Intangible assets | -22,411,410 | -21,825,087 | |||||||||
Total noncurrent deferred tax liabilities | -27,497,275 | -26,755,879 | |||||||||
Total deferred tax liabilities | -27,849,636 | -26,872,068 | |||||||||
Net deferred tax liability | $ | -5,622,687 | $ | -4,243,963 | |||||||
Net current deferred tax asset | $ | 1,119,333 | $ | 1,819,139 | |||||||
Net noncurrent deferred tax liability | -6,742,020 | -6,063,102 | |||||||||
Net deferred tax liability | $ | -5,622,687 | $ | -4,243,963 | |||||||
Fair_Value_Measurement_Tables
Fair Value Measurement (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Related Party Transactions [Abstract] | ||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | The following tables set 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 2014, respectively: | |||||||||||||
Quoted Prices in | ||||||||||||||
Active Markets for | Significant Other | Significant | ||||||||||||
Total Fair Value | Identical Assets | Observable Inputs | Unobservable Inputs | |||||||||||
At December 31, 2013 | Measurement | (Level 1) | (Level 2) | (Level 3) | ||||||||||
Assets: | ||||||||||||||
Money market funds(1) | $ | 667,122 | $ | 667,122 | $ | - | $ | - | ||||||
Liabilities: | ||||||||||||||
Contingent consideration | $ | -87,332,461 | $ | - | $ | - | $ | -87,332,461 | ||||||
Quoted Prices in | ||||||||||||||
Active Markets for | Significant Other | Significant | ||||||||||||
Total Fair Value | Identical Assets | Observable Inputs | Unobservable Inputs | |||||||||||
At December 31, 2014 | Measurement | (Level 1) | (Level 2) | (Level 3) | ||||||||||
Assets: | ||||||||||||||
Money market funds(1) | $ | 667,127 | $ | 667,127 | $ | - | $ | - | ||||||
Liabilities: | ||||||||||||||
Contingent consideration | $ | -32,582,574 | $ | - | $ | - | $ | -32,582,574 | ||||||
-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 at December 31, 2012 | $ | -54,497,824 | ||||||||||||
Contingent consideration from 2013 acquisitions | -68,165,674 | |||||||||||||
Contingent consideration payments paid in cash | 4,297,803 | |||||||||||||
Contingent consideration payments paid in stock | 614,216 | |||||||||||||
Change in fair value (1) | 31,330,567 | |||||||||||||
Foreign exchange impact (2) | -911,549 | |||||||||||||
Balance as of December 31, 2013 | -87,332,461 | |||||||||||||
Contingent consideration payments paid in cash | 5,768,591 | |||||||||||||
Contingent consideration payments paid in stock | 9,132,682 | |||||||||||||
Change in fair value (1) | 37,873,588 | |||||||||||||
Reclass to Due to seller | 402,499 | |||||||||||||
Foreign exchange impact (2) | 1,572,527 | |||||||||||||
Balance as of December 31, 2014 | $ | -32,582,574 | ||||||||||||
-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 statements of operations. | |||||||||||||
-2 | Changes in the contingent consideration liability which are caused by foreign exchange rate fluctuations are recognized in other comprehensive income. | |||||||||||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Earnings Per Share [Abstract] | |||||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The computation of basic and diluted earnings per common share for the years ended December 31, 2012, 2013, and 2014, is as follows: | ||||||||||
Year Ended December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
Numerator: | |||||||||||
Net income (loss) | $ | 38,794,022 | $ | -8,660,349 | $ | 44,461,925 | |||||
Denominator: | |||||||||||
Denominator for basic earnings per share—weighted-average shares outstanding | 48,811,218 | 50,875,131 | 52,095,481 | ||||||||
Effect of dilutive securities: | |||||||||||
Employee stock options and restricted common shares | 2,411,260 | - | 924,189 | ||||||||
Contingently issuable shares | 17,598 | - | 84,273 | ||||||||
Denominator for dilutive earnings per share | 51,240,076 | 50,875,131 | 53,103,943 | ||||||||
Basic earnings (loss) per share | $ | 0.79 | $ | -0.17 | $ | 0.85 | |||||
Diluted earnings (loss) per share | $ | 0.76 | $ | -0.17 | $ | 0.84 | |||||
StockBased_Compensation_Plans_
Stock-Based Compensation Plans (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | A summary of stock option activity for the years ended December 31, 2012, 2013 and 2014 is as follows: | ||||||||||||||||
Weighted- | |||||||||||||||||
Outstanding | Average | Aggregate | |||||||||||||||
Options | Exercise Price | Intrinsic Value | |||||||||||||||
Outstanding at December 31, 2011 | 5,950,481 | $ | 5.07 | $ | 28,048,306 | ||||||||||||
Granted | 538,933 | 12.15 | - | ||||||||||||||
Exercised | -2,474,713 | 2.23 | 23,936,039 | ||||||||||||||
Forfeited | -93,519 | 7.35 | - | ||||||||||||||
Outstanding at December 31, 2012 | 3,921,182 | 5.07 | 28,048,306 | ||||||||||||||
Granted | 226,971 | 14.6 | - | ||||||||||||||
Exercised | -415,480 | 4.83 | 3,190,219 | ||||||||||||||
Forfeited | -179,139 | 8.97 | - | ||||||||||||||
Outstanding at December 31, 2013 | 3,553,534 | 8.52 | 4,778,565 | ||||||||||||||
Granted | 778,906 | 7.23 | - | ||||||||||||||
Exercised | -161,486 | 4.82 | 3,301,667 | ||||||||||||||
Forfeited | -125,370 | 4.11 | - | ||||||||||||||
Outstanding at December 31, 2014 | 4,045,584 | $ | 8.35 | $ | 4,725,483 | ||||||||||||
Options vested at December 31, 2014 | 2,702,753 | $ | 7.95 | $ | 4,247,128 | ||||||||||||
Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block] | The weighted-average fair values and ranges of exercise prices for stock options granted during the years ended December 31, 2012, 2013 and 2014, which vest ratably from one to five years, are as follows: | ||||||||||||||||
Weighted-Average | |||||||||||||||||
Options Granted | Fair Value | Exercise Prices | |||||||||||||||
2012 | 538,933 | $ | 5.99 | $11.97 - $14.39 | |||||||||||||
2013 | 226,971 | 5.58 | $10.76 - $15.05 | ||||||||||||||
2014 | 778,906 | 3.57 | $7.18 - $8.72 | ||||||||||||||
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | The following assumptions were utilized in the Black-Scholes valuation model for options granted in 2012, 2013 and 2014: | ||||||||||||||||
2012 | 2013 | 2014 | |||||||||||||||
Dividend yield | — | % | — | % | — | % | |||||||||||
Risk-free interest rate | 1.03%-1.67 | % | 1.32%-1.41 | % | 1.32%-2.17 | % | |||||||||||
Expected life | 6-7 years | 6 years | 6 years | ||||||||||||||
Volatility | 38.0%-47.5 | % | 38 | % | 38.0%-50.0 | % | |||||||||||
Schedule Of Stock Options Outstanding [Table Text Block] | The following table summarizes information about all stock options outstanding for the Company as of December 31, 2014: | ||||||||||||||||
Options Outstanding | Options Vested | ||||||||||||||||
Weighted- | Weighted- | ||||||||||||||||
Number | Weighted- | Average | Number | Average | |||||||||||||
Exercise Price | Outstanding | Average Life | Exercise Price | Exercisable | Exercise Price | ||||||||||||
$0.65 - $4.92 | 662,258 | 1.46 | $ | 3.52 | 662,258 | $ | 3.52 | ||||||||||
$5.19 - $7.86 | 1,730,266 | 6.76 | 6.69 | 919,555 | 6.25 | ||||||||||||
$8.07 - $11.97 | 628,607 | 6.42 | 9.37 | 435,797 | 9.27 | ||||||||||||
$12.10 - $16.41 | 1,024,453 | 5.58 | 13.61 | 685,143 | 13.68 | ||||||||||||
4,045,584 | $ | 8.35 | 2,702,753 | $ | 7.95 | ||||||||||||
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block] | A summary of restricted share activity is as follows: | ||||||||||||||||
Outstanding | Weighted- | ||||||||||||||||
Restricted | Average Grant- | ||||||||||||||||
Common Shares | Date Fair Value | ||||||||||||||||
Nonvested Restricted Common Shares at December 31, 2011 | 783,816 | $ | 7.52 | ||||||||||||||
Granted | 306,296 | 11.92 | |||||||||||||||
Vested and transferred to unrestricted common stock | -362,116 | 8.86 | |||||||||||||||
Forfeited | -35,864 | 7.02 | |||||||||||||||
Nonvested Restricted Common Shares at December 31, 2012 | 692,132 | 8.95 | |||||||||||||||
Granted | 448,158 | 11.46 | |||||||||||||||
Vested and transferred to unrestricted common stock | -278,461 | 9.22 | |||||||||||||||
Forfeited | -127,279 | 8.56 | |||||||||||||||
Nonvested Restricted Common Shares at December 31, 2013 | 734,550 | 10.45 | |||||||||||||||
Granted | 736,238 | 7.59 | |||||||||||||||
Vested and transferred to unrestricted common stock | -361,650 | 8.9 | |||||||||||||||
Forfeited | -19,077 | 8.02 | |||||||||||||||
Nonvested Restricted Common Shares at December 31, 2014 | 1,090,061 | $ | 8.92 | ||||||||||||||
Business_Segments_Tables
Business Segments (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||
Schedule of Segment Reporting Information, by Segment [Table Text Block] | The table below presents financial information for our reportable operating segments and Other for the fiscal years noted (in thousands): | ||||||||||||||||
North America | Latin America | EMEA | Other | Total | |||||||||||||
Fiscal 2014: | |||||||||||||||||
Net revenues from third parties | $ | 688,942 | $ | 99,734 | $ | 211,457 | $ | - | $ | 1,000,133 | |||||||
Net revenues from other segments | 48 | 429 | 5,160 | -5,637 | - | ||||||||||||
Total net revenues | 688,990 | 100,163 | 216,617 | -5,637 | 1,000,133 | ||||||||||||
Adjusted EBITDA (1) | 57,662 | 5,273 | 5,893 | -25,990 | 42,838 | ||||||||||||
Total assets | 443,530 | 30,488 | 135,257 | 21,975 | 631,250 | ||||||||||||
Fiscal 2013: | |||||||||||||||||
Net revenues from third parties | 657,989 | 88,016 | 144,955 | - | 890,960 | ||||||||||||
Net revenues from other segments | 33 | 1,270 | 75 | -1,378 | - | ||||||||||||
Total net revenues | 658,022 | 89,286 | 145,030 | -1,378 | 890,960 | ||||||||||||
Adjusted EBITDA (1) | 51,873 | 3,098 | 764 | -28,834 | 26,901 | ||||||||||||
Total assets | 431,562 | 29,841 | 119,531 | 33,733 | 614,667 | ||||||||||||
Fiscal 2012: | |||||||||||||||||
Net revenues from third parties | 648,732 | 57,575 | 83,278 | - | 789,585 | ||||||||||||
Net revenues from other segments | 68 | 1,625 | 27 | -1,720 | - | ||||||||||||
Total net revenues | 648,800 | 59,200 | 83,305 | -1,720 | 789,585 | ||||||||||||
Adjusted EBITDA (1) | 61,890 | 1,745 | -2,664 | -23,754 | 37,217 | ||||||||||||
Total assets | 330,159 | 23,219 | 139,466 | 21,936 | 514,780 | ||||||||||||
-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 and intangible asset 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 consolidated income before income taxes (in thousands): | ||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2012 | 2013 | 2014 | |||||||||||||||
Adjusted EBITDA | $ | 37,217 | $ | 26,901 | $ | 42,838 | |||||||||||
Depreciation and amortization | -10,791 | -13,664 | -17,723 | ||||||||||||||
Stock-based compensation | -6,193 | -4,733 | -5,352 | ||||||||||||||
Change in fair value of contingent consideration | 27,689 | 31,331 | 37,873 | ||||||||||||||
Preference claim charge (1) | -1,099 | - | - | ||||||||||||||
VAT settlement charge (2) | -1,485 | - | - | ||||||||||||||
Payments to former owner of Productions Graphics, net of cash recovered | 411 | -2,624 | - | ||||||||||||||
Goodwill impairment charge | - | -37,908 | - | ||||||||||||||
Intangible asset impairment charges | - | - | -2,710 | ||||||||||||||
Restructuring and other charges | - | -4,322 | - | ||||||||||||||
Legal fees in connection with patent infringement | - | -961 | - | ||||||||||||||
Restatement-related professional fees | - | - | -2,093 | ||||||||||||||
Secured asset reserve | - | - | -940 | ||||||||||||||
Total other expense | -1,081 | -3,236 | -5,118 | ||||||||||||||
Income (loss) before income taxes | $ | 44,668 | $ | -9,216 | $ | 46,775 | |||||||||||
-1 | In the fourth quarter of 2012, the Company recognized a $1.1 million charge related to the settlement of a lawsuit filed by the Trustee of the Circuit City Liquidating Trust (the “Trust”) in connection with the Circuit City Stores, Inc. bankruptcy proceedings. A settlement agreement was entered in January 2013 with the Trust resolving this preference claim as well the administrative and general unsecured claims against the Trust. | ||||||||||||||||
-2 | In the fourth quarter of 2012, the Company accrued a loss reserve of $1.5 million relating to a VAT assessment issued by Her Majesty’s Revenue and Customs (“HMRC”) InnerWorkings Europe Limited (formerly Etrinsic). 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. | ||||||||||||||||
Quarterly_Financial_Data_Unaud1
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||
Schedule of Quarterly Financial Information [Table Text Block] | The tables below are a condensed summary of the Company’s unaudited quarterly statements of operations and quarterly earnings per share data for the years ended December 31, 2013 and 2014 (in thousands): | |||||||||||||
Year Ended December 31, 2014 | ||||||||||||||
First | Second | Third | Fourth | |||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||
(In thousands, except per share data) | ||||||||||||||
Revenue | $ | 241,490 | $ | 260,350 | $ | 251,652 | $ | 246,641 | ||||||
Gross profit | 54,584 | 58,927 | 57,098 | 58,850 | ||||||||||
Net income (loss) | 289 | 1,605 | 5,114 | 37,454 | ||||||||||
Net income (loss) per share: | ||||||||||||||
Basic | $ | 0.01 | $ | 0.03 | $ | 0.1 | $ | 0.71 | ||||||
Diluted | $ | 0.01 | $ | 0.03 | $ | 0.1 | $ | 0.69 | ||||||
Year Ended December 31, 2013 | ||||||||||||||
First | Second | Third | Fourth | |||||||||||
Quarter(1) | Quarter(2) | Quarter(3) | Quarter | |||||||||||
(In thousands, except per share data) | ||||||||||||||
Revenue | $ | 204,577 | $ | 210,876 | $ | 232,630 | $ | 242,877 | ||||||
Gross profit | 46,350 | 48,177 | 53,181 | 54,318 | ||||||||||
Net income (loss) | -2,801 | 3,675 | -9,066 | -468 | ||||||||||
Net income (loss) per share: | ||||||||||||||
Basic | $ | -0.06 | $ | 0.07 | $ | -0.18 | $ | -0.01 | ||||||
Diluted | $ | -0.06 | $ | 0.07 | $ | -0.18 | $ | -0.01 | ||||||
-1 | The Company acquired DB Studios, Inc. in March 2013. Financial results for this acquisition are included in the Consolidated Financial Statements beginning in March 2013. | |||||||||||||
-2 | The Company made acquisitions during the second quarter of 2013 which were not material to the Company’s operations. Financial results for these acquisitions are included in the Consolidated Financial Statements beginning at the respective acquisition dates. | |||||||||||||
-3 | The Company acquired U.S. and international businesses of EYELEVEL in July 2013 as well as one other company which was not material to the Company’s operations. Financial results for these acquisitions are included in the Consolidated Financial Statements beginning at the respective acquisition dates. | |||||||||||||
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Computer Equipment [Member] | |
Schedule of Significant Accounting Policies [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Office Equipment [Member] | |
Schedule of Significant Accounting Policies [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Furniture and Fixtures [Member] | |
Schedule of Significant Accounting Policies [Line Items] | |
Property, Plant and Equipment, Useful Life | 7 years |
Software, including internal-use software [Member] | Maximum [Member] | |
Schedule of Significant Accounting Policies [Line Items] | |
Property, Plant and Equipment, Useful Life | 6 years |
Software, including internal-use software [Member] | Minimum [Member] | |
Schedule of Significant Accounting Policies [Line Items] | |
Property, Plant and Equipment, Useful Life | 1 year |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details 1) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Schedule of Significant Accounting Policies [Line Items] | |||
Balance | $2,777,000 | $272,921 | |
Other comprehensive income before reclassifications | -8,178,135 | 2,505,417 | |
Amounts reclassified from AOCI | 0 | -1,338 | |
Net current-period other comprehensive income | -8,178,135 | 2,504,079 | 4,590 |
Balance | -5,401,135 | 2,777,000 | 272,921 |
Foreign Currency [Member] | |||
Schedule of Significant Accounting Policies [Line Items] | |||
Balance | 2,777,000 | 271,583 | |
Other comprehensive income before reclassifications | -8,178,135 | 2,505,417 | |
Net current-period other comprehensive income | -8,178,135 | 2,505,417 | |
Balance | -5,401,135 | 2,777,000 | |
Unrealized Holdings Gain on available Sale of Securities [Member] | |||
Schedule of Significant Accounting Policies [Line Items] | |||
Balance | 0 | 1,338 | |
Other comprehensive income before reclassifications | 0 | 0 | |
Amounts reclassified from AOCI | 0 | -1,338 | |
Net current-period other comprehensive income | 0 | -1,338 | |
Balance | 0 | 0 | |
Accumulated Other Comprehensive Income (Loss) [Member] | |||
Schedule of Significant Accounting Policies [Line Items] | |||
Net current-period other comprehensive income | ($8,178,135) | $2,504,079 | $4,590 |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies (Details Textual) (USD $) | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2014 | Sep. 30, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Schedule of Significant Accounting Policies [Line Items] | |||||
Foreign Currency Transaction Gain (Loss), Realized | ($800,000) | ($300,000) | $100,000 | ||
Amortization of Intangible Assets | 7,400,000 | 6,900,000 | 4,600,000 | ||
Finite-Lived Intangible Assets, Net | 44,919,573 | 44,919,573 | |||
Goodwill, Impaired, Adjustment to Initial Estimate Amount | 37,900,000 | 37,908,000 | |||
Impairment of Intangible Assets, Finite-lived | 2,700,000 | 2,710,000 | 0 | 0 | |
Advertising Expense | 500,000 | 700,000 | 800,000 | ||
Internal Use Software [Member] | |||||
Schedule of Significant Accounting Policies [Line Items] | |||||
Amortization of Intangible Assets | 7,200,000 | 3,900,000 | 4,300,000 | ||
Finite-Lived Intangible Assets, Net | $23,500,000 | $23,500,000 | $17,300,000 |
Acquisitions_Details
Acquisitions (Details) (USD $) | Dec. 31, 2014 |
Business Acquisition, Contingent Consideration [Line Items] | |
Potential Maximum Contingent Payments | $140,664,443 |
Common Stock [Member] | |
Business Acquisition, Contingent Consideration [Line Items] | |
Potential Maximum Contingent Payments | 110,907,619 |
Cash [Member] | |
Business Acquisition, Contingent Consideration [Line Items] | |
Potential Maximum Contingent Payments | 29,756,824 |
2015 [Member] | |
Business Acquisition, Contingent Consideration [Line Items] | |
Potential Maximum Contingent Payments | 31,496,783 |
2015 [Member] | Common Stock [Member] | |
Business Acquisition, Contingent Consideration [Line Items] | |
Potential Maximum Contingent Payments | 31,094,284 |
2015 [Member] | Cash [Member] | |
Business Acquisition, Contingent Consideration [Line Items] | |
Potential Maximum Contingent Payments | 402,499 |
2016 [Member] | |
Business Acquisition, Contingent Consideration [Line Items] | |
Potential Maximum Contingent Payments | 63,415,960 |
2016 [Member] | Common Stock [Member] | |
Business Acquisition, Contingent Consideration [Line Items] | |
Potential Maximum Contingent Payments | 34,061,635 |
2016 [Member] | Cash [Member] | |
Business Acquisition, Contingent Consideration [Line Items] | |
Potential Maximum Contingent Payments | 29,354,325 |
2017 [Member] | |
Business Acquisition, Contingent Consideration [Line Items] | |
Potential Maximum Contingent Payments | 45,751,700 |
2017 [Member] | Common Stock [Member] | |
Business Acquisition, Contingent Consideration [Line Items] | |
Potential Maximum Contingent Payments | 45,751,700 |
2017 [Member] | Cash [Member] | |
Business Acquisition, Contingent Consideration [Line Items] | |
Potential Maximum Contingent Payments | $0 |
Acquisitions_Details_Textual
Acquisitions (Details Textual) | 12 Months Ended | |||||||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
USD ($) | USD ($) | USD ($) | EUR (€) | EUR (€) | EUR (€) | EUR (€) | Production Graphics [Member] | Production Graphics [Member] | Production Graphics [Member] | |
USD ($) | USD ($) | USD ($) | ||||||||
Business Acquisition [Line Items] | ||||||||||
Business Combination, Contingent Consideration, Liability | $32,600,000 | |||||||||
Business Acquisitions Contingent Consideration Decreased Fair Value | 30,400,000 | 7,200,000 | 26,600,000 | 25,400,000 | ||||||
Business Acquisition Contingent Consideration Earnout Payment Due | 5,200,000 | |||||||||
Change in fair value | 37,900,000 | 31,300,000 | 27,700,000 | |||||||
Loss Contingency Damages Maximum Contingent Consideration | 44,300,000 | 34,500,000 | 34,500,000 | 5,900,000 | 1,200,000 | 41,900,000 | ||||
Business Combination, Contingent Consideration, Potential Cash Payment | $140,664,443 |
Goodwill_Details
Goodwill (Details) (USD $) | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | |
Business Combination Segment Allocation [Line Items] | |||
Balance | $251,228,698 | $212,796,422 | |
Goodwill acquired related to acquisitions | 72,602,794 | ||
Finalization of purchase accounting for prior year acquisitions | 524,917 | 143,759 | |
Impairment charge | -37,900,000 | -37,908,000 | |
Less accumulated depreciation | -4,805,715 | 3,593,723 | |
Balance | 246,947,900 | 251,228,698 | |
North America [Member] | |||
Business Combination Segment Allocation [Line Items] | |||
Balance | 171,094,576 | 119,162,735 | |
Goodwill acquired related to acquisitions | 52,025,837 | ||
Finalization of purchase accounting for prior year acquisitions | -167,922 | -34,120 | |
Impairment charge | 0 | ||
Less accumulated depreciation | -67,233 | -59,876 | |
Balance | 170,859,421 | 171,094,576 | |
Latin America [Member] | |||
Business Combination Segment Allocation [Line Items] | |||
Balance | 9,875,236 | 9,656,417 | |
Goodwill acquired related to acquisitions | 0 | ||
Finalization of purchase accounting for prior year acquisitions | 0 | 218,819 | |
Impairment charge | 0 | ||
Less accumulated depreciation | 0 | 0 | |
Balance | 9,875,236 | 9,875,236 | |
EMEA [Member] | |||
Business Combination Segment Allocation [Line Items] | |||
Balance | 70,258,886 | 83,977,270 | |
Goodwill acquired related to acquisitions | 20,576,957 | ||
Finalization of purchase accounting for prior year acquisitions | 692,839 | -40,940 | |
Impairment charge | -37,908,000 | ||
Less accumulated depreciation | -4,738,482 | 3,653,599 | |
Balance | $66,213,243 | $70,258,886 |
Goodwill_Details_Textual
Goodwill (Details Textual) (USD $) | 3 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Business Combination Segment Allocation [Line Items] | ||||
Goodwill, Impairment Loss | $37,900 | $0 | $37,908 | $0 |
Other_Intangible_Assets_Detail
Other Intangible Assets (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $79,715,628 | $81,846,327 |
Less accumulated amortization | -34,796,055 | -25,270,793 |
Intangible assets, net | 44,919,573 | 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 | 75,113,728 | 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 $) | Dec. 31, 2014 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Line Items] | |
2015 | $6,123,124 |
2016 | 5,779,756 |
2017 | 5,302,817 |
2018 | 4,799,594 |
2019 | 4,473,976 |
Thereafter | 18,440,306 |
Finite-Lived Intangible Assets, Net | $44,919,573 |
Other_Intangible_Assets_Detail2
Other Intangible Assets (Details Textual) (USD $) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization Of Intangible Assets | $7,400,000 | $6,900,000 | $4,600,000 | |
Impairment of Intangible Assets, Finite-lived | 2,700,000 | 2,710,000 | 0 | 0 |
North America [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Impairment of Intangible Assets, Finite-lived | 2,400,000 | |||
EMEA [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Impairment of Intangible Assets, Finite-lived | $300,000 |
Restructuring_Activities_and_O2
Restructuring Activities and Other Charges (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | ||
Schedule Of Restructuring Activities And Other Charges [Line Items] | ||
Employee terminations and other benefits | $3,005,780 | |
Cash payments | -381,889 | |
Write-off of prepaid commissions balance (1) | -2,623,891 | [1] |
Accrued restructuring costs as of December 31, 2013 | 0 | |
North America [Member] | ||
Schedule Of Restructuring Activities And Other Charges [Line Items] | ||
Employee terminations and other benefits | 2,745,373 | |
Cash payments | -121,482 | |
Write-off of prepaid commissions balance (1) | -2,623,891 | [1] |
Accrued restructuring costs as of December 31, 2013 | 0 | |
EMEA [Member] | ||
Schedule Of Restructuring Activities And Other Charges [Line Items] | ||
Employee terminations and other benefits | 260,407 | |
Cash payments | -260,407 | |
Write-off of prepaid commissions balance (1) | 0 | [1] |
Accrued restructuring costs as of December 31, 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 who had a balance and were affected by the restructuring actions, which primarily includes Small and Medium Business (bSMBb) account executives, the Company included these balances as part of the severance paid to these individuals. |
Restructuring_Activities_and_O3
Restructuring Activities and Other Charges (Details Textual) (USD $) | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Schedule Of Restructuring Activities And Other Charges [Line Items] | ||||
Restructuring Charges | $3,000,000 | $0 | $4,321,862 | $0 |
Additional Charges | $1,300,000 |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Property, Plant and Equipment, Gross | $62,185,870 | $53,481,750 |
Less accumulated depreciation | -32,422,287 | -29,757,000 |
Property, Plant and Equipment, Net, Total | 29,763,583 | 23,724,750 |
Computer equipment [Member] | ||
Property, Plant and Equipment, Gross | 7,453,903 | 7,889,630 |
Software, including internal use software [Member] | ||
Property, Plant and Equipment, Gross | 48,731,177 | 41,987,111 |
Office equipment and furniture [Member] | ||
Property, Plant and Equipment, Gross | 4,099,076 | 2,136,168 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment, Gross | $1,901,714 | $1,468,841 |
Property_and_Equipment_Details1
Property and Equipment (Details Textual) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Depreciation | $10.40 | $6.70 | $6.20 |
Revolving_Credit_Facility_Deta
Revolving Credit Facility (Details Textual) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2014 |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Maximum Borrowing Capacity | $175 |
Line of Credit Facility Increased Current Borrowing Capacity | 50 |
Line of Credit Facility Maturity Date | 25-Sep-19 |
Line of Credit Facility, Interest Rate Description | The ranges of applicable rates charged for interest on outstanding loans and letters of credit are 125-250 basis point spread for letter of credit fees and loans based on the Eurodollar rate and 25-150 basis point spread for loans based on the base rate. |
Line of Credit Facility Leverage Ratio Description | leverage ratio of no more than 3.25 to 1.0 for the quarters ended December 31, 2014, March 31, 2015 and June 30, 2015 and 3.00 to 1.0 for each period thereafter. |
Line of Credit Facility Interest Coverage Ratio Description | interest coverage ratio of no less than 5.00 to 1.0. |
Line of Credit Facility Unused Capacity | 28.8 |
Line of Credit Facility Borrowings to be Drawn | $0.70 |
Transactions_Involving_Former_1
Transactions Involving Former Owner of Productions Graphics (Details Textual) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2014 | Feb. 28, 2014 | Dec. 31, 2013 |
EUR (€) | EUR (€) | EUR (€) | USD ($) | EUR (€) | EUR (€) | |
Loss Contingencies [Line Items] | ||||||
Loss Contingency Damages Value Fixed Consideration | € 5.80 | |||||
Loss Contingency Damages Value Contingent Consideration | 7.1 | 7.1 | ||||
Fraudulent Invoice Amount | 6.9 | 6.9 | ||||
Loss Contingency Damages Value Contingent Consideration Partial Refund | 5.7 | |||||
Loss Contingency Damages Maximum Contingent Consideration | € 34.50 | € 5.90 | € 1.20 | $44.30 | € 34.50 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | Dec. 31, 2014 |
Schedule of Operating Leases, Future Minimum Payments [Line Items] | |
2015 | $7,013,184 |
2016 | 6,112,734 |
2017 | 4,656,062 |
2018 | 3,437,026 |
2019 | 2,978,252 |
Thereafter | 3,567,247 |
Total minimum lease payments | $27,764,505 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details Textual) | 1 Months Ended | 12 Months Ended | 44 Months Ended | ||||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Nov. 30, 2013 | Oct. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Feb. 28, 2014 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2015 | Dec. 31, 2012 | Dec. 31, 2012 |
EUR (€) | EUR (€) | USD ($) | USD ($) | USD ($) | USD ($) | EUR (€) | EUR (€) | EUR (€) | EUR (€) | Subsequent Event [Member] | Maximum [Member] | Minimum [Member] | |
EUR (€) | USD ($) | USD ($) | |||||||||||
Other Commitments [Line Items] | |||||||||||||
Loss Contingency Accrual, Carrying Value, Payments | $9 | ||||||||||||
Loss Contingency, Damages Sought, Value | 0.7 | 0.7 | 35 | 88 | |||||||||
Loss Contingency Damages Value Contingent Consideration | 7.1 | 7.1 | |||||||||||
Loss Contingency Damages Value Fixed Consideration | 5.8 | ||||||||||||
Loss Contingency Damages Maximum Contingent Consideration | 34.5 | 44.3 | 34.5 | 5.9 | 1.2 | 34.5 | |||||||
Operating Leases, Rent Expense | $10 | $9.10 | $7.70 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Current | |||
Federal | $236,511 | ($1,803,191) | $5,364,247 |
State | 196,637 | -316,367 | 703,380 |
Foreign | 4,070,524 | 2,216,025 | 801,212 |
Total current | 4,503,672 | 96,467 | 6,868,839 |
Deferred | |||
Federal | 87,396 | 2,823,798 | 1,494,274 |
State | 2,697 | 449,424 | 206,125 |
Foreign | -2,280,620 | -3,925,617 | -2,695,617 |
Total deferred | -2,190,527 | -652,395 | -995,218 |
Income tax expense (benefit) | $2,313,145 | ($555,928) | $5,873,621 |
Income_Taxes_Details_1
Income Taxes (Details 1) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Effective Income Tax Rate Reconciliation [Line Items] | |||
Tax expense at U.S. federal income tax rate | $16,371,275 | ($3,225,697) | $15,633,675 |
State income taxes, net of federal income tax effect | 1,465,344 | 204,687 | 747,802 |
Effect of non-US operations | -1,631,614 | -644,353 | -1,294,217 |
Foreign valuation allowances | 850,323 | 607,467 | 0 |
Nontaxable contingent liability fair value changes and goodwill impairment | -14,334,053 | 3,827,806 | -8,737,329 |
Research and development credit | -376,350 | -1,046,430 | 0 |
199 Domestic production activities deduction | 0 | 0 | -141,376 |
Nondeductible (benefit) and other | -31,780 | -279,408 | -334,934 |
Income tax expense (benefit) | $2,313,145 | ($555,928) | $5,873,621 |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Current deferred tax assets: | ||
Reserves and allowances not currently deductible | $1,857,862 | $1,452,133 |
Other | 77,466 | 19,561 |
Total current deferred tax assets | 1,935,328 | 1,471,694 |
Noncurrent deferred tax assets: | ||
Income tax basis in excess of financial statement basis in intangible assets | 5,234,704 | 6,140,517 |
Deductible stock-based compensation | 4,739,865 | 3,974,354 |
Net operating loss carryforward | 10,983,464 | 10,002,615 |
Tax credit carryforwards | 1,338,409 | 1,353,589 |
Other | 0 | 46,303 |
Deferred Tax Assets, Gross, Noncurrent | 22,296,442 | 21,517,378 |
Valuation allowance | -1,603,665 | -762,123 |
Total noncurrent deferred tax assets | 20,692,777 | 20,755,255 |
Total deferred tax assets | 22,628,105 | 22,226,949 |
Total current deferred tax liability: | ||
Prepaid & other expenses | -116,189 | -352,361 |
Total current deferred tax liability | -116,189 | -352,361 |
Noncurrent deferred tax liabilities: | ||
Fixed assets | -4,930,792 | -5,085,865 |
Intangible assets | -21,825,087 | -22,411,410 |
Total noncurrent deferred tax liabilities | -26,755,879 | -27,497,275 |
Total deferred tax liabilities | -26,872,068 | -27,849,636 |
Net deferred tax liability | -4,243,963 | -5,622,687 |
Net current deferred tax asset | 1,819,139 | 1,119,333 |
Net noncurrent deferred tax liability | -6,063,102 | -6,742,020 |
Net deferred tax liability | ($4,243,963) | ($5,622,687) |
Income_Taxes_Details_Textual
Income Taxes (Details Textual) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Disclosure [Line Items] | ||||
Operating Loss Carry Forward Limit | $0.20 | |||
Operating Loss Carryforwards, Valuation Allowance | 0.8 | 0.6 | ||
Undistributed Earnings of Foreign Subsidiaries | 8.9 | 3.1 | ||
Income (Loss) from Continuing Operations before Income Taxes, Foreign | 15.4 | -13.8 | 23.8 | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% | 35.00% | 35.00% | [1] |
Domestic Tax Authority [Member] | ||||
Income Tax Disclosure [Line Items] | ||||
Total Operating Loss Carry Forwards | 2 | |||
Tax Credit Carry forward Expiration | 2031 | |||
Deferred Tax Asset Tax Deduction On Equity Component | 13.4 | |||
Operating Loss Carry forwards Expiration Period | 2025 | |||
Operating Loss Carryforwards | 20.5 | |||
Tax Credit Carryforward, Amount | 1.2 | |||
State and Local Jurisdiction [Member] | ||||
Income Tax Disclosure [Line Items] | ||||
Tax Credit Carry forward Expiration | 2015 | |||
Deferred Tax Asset Tax Deduction On Equity Component | 11.4 | |||
Operating Loss Carry forwards Expiration Period | 2022 | |||
Operating Loss Carryforwards | 16.5 | |||
Tax Credit Carryforward, Amount | 0.5 | |||
France Tax Authority [Member] | ||||
Income Tax Disclosure [Line Items] | ||||
Operating Loss Carryforwards | 17.1 | |||
Italy Tax Authority [Member] | ||||
Income Tax Disclosure [Line Items] | ||||
Operating Loss Carryforwards | 1.4 | |||
Chile Tax Authority [Member] | ||||
Income Tax Disclosure [Line Items] | ||||
Operating Loss Carryforwards | 2.7 | |||
Brazil Tax Authority [Member] | ||||
Income Tax Disclosure [Line Items] | ||||
Operating Loss Carryforwards | $0.50 | |||
[1] | Include in cash and cash equivalents on the balance sheet. |
Fair_Value_Measurement_Details
Fair Value Measurement (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||
Assets: | |||||
Money market funds | $667,127 | [1] | $667,122 | [1] | |
Liabilities: | |||||
Contingent consideration | -32,582,574 | -87,332,461 | |||
Fair Value, Inputs, Level 1 [Member] | |||||
Assets: | |||||
Money market funds | 667,127 | [1] | 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 | 0 | [1] | ||
Liabilities: | |||||
Contingent consideration | ($32,582,574) | ($87,332,461) | ($54,497,824) | ||
[1] | Include in cash and cash equivalents on the balance sheet. |
Fair_Value_Measurement_Details1
Fair Value Measurement (Details 1) (USD $) | 12 Months Ended | ||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Balance | ($87,332,461) | ||||
Change in fair value | -37,873,588 | -31,330,567 | -27,688,774 | ||
Foreign exchange impact | 4,805,715 | -3,593,723 | |||
Balance | -32,582,574 | -87,332,461 | |||
Fair Value, Inputs, Level 3 [Member] | |||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Balance | -87,332,461 | -54,497,824 | |||
Contingent consideration from 2013 acquisitions | -68,165,674 | ||||
Contingent consideration payments paid in cash | 5,768,591 | 4,297,803 | |||
Contingent consideration payments paid in stock | 9,132,682 | 614,216 | |||
Change in fair value | 37,873,588 | [1] | 31,330,567 | [1] | |
Reclass to Due to seller | 402,499 | ||||
Foreign exchange impact | 1,572,527 | [2] | -911,549 | [2] | |
Balance | ($32,582,574) | ($87,332,461) | |||
[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 statements of operations. | ||||
[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 $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2014 |
Fair Value, Adjustment Disclosure [Line Items] | |
Effect Of Discount Rate Increase In Fair Value | $0.50 |
Fair Value Measurements Valuation Process Probability Percentage | 100.00% |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||||
Numerator: | ||||||||||||||
Net income (loss) | $37,454,000 | $5,114,000 | $1,605,000 | $289,000 | ($468,000) | ($9,066,000) | [1] | $3,675,000 | [2] | ($2,801,000) | [3] | $44,461,925 | ($8,660,349) | $38,794,022 |
Denominator: | ||||||||||||||
Denominator for basic earnings per shareBweighted-average shares outstanding | 52,095,481 | 50,875,131 | 48,811,218 | |||||||||||
Effect of dilutive securities: | ||||||||||||||
Employee stock options and restricted common shares | 924,189 | 0 | 2,411,260 | |||||||||||
Contingently issuable shares | 84,273 | 0 | 17,598 | |||||||||||
Denominator for dilutive earnings per share | 53,103,943 | 50,875,131 | 51,240,076 | |||||||||||
Basic earnings (loss) per share (in dollars per share) | $0.71 | $0.10 | $0.03 | $0.01 | ($0.01) | ($0.18) | [1] | $0.07 | [2] | ($0.06) | [3] | $0.85 | ($0.17) | $0.79 |
Diluted earnings (loss) per share (in dollars per share) | $0.69 | $0.10 | $0.03 | $0.01 | ($0.01) | ($0.18) | [1] | $0.07 | [2] | ($0.06) | [3] | $0.84 | ($0.17) | $0.76 |
[1] | The Company acquired U.S. and international businesses of EYELEVEL in July 2013 as well as one other company which was not material to the Companybs operations. Financial results for these acquisitions are included in the Consolidated Financial Statements beginning at the respective acquisition dates. | |||||||||||||
[2] | The Company made acquisitions during the second quarter of 2013 which were not material to the Companybs operations. Financial results for these acquisitions are included in the Consolidated Financial Statements beginning at the respective acquisition dates. | |||||||||||||
[3] | The Company acquired DB Studios, Inc. in March 2013. Financial results for this acquisition are included in the Consolidated Financial Statements beginning in March 2013. |
Earnings_Per_Share_Details_Tex
Earnings Per Share (Details Textual) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,427,089 | 4,288,084 | 1,099,604 |
StockBased_Compensation_Plans_1
Stock-Based Compensation Plans (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Outstanding -Outstanding Options | 3,553,534 | 3,921,182 | 5,950,481 |
Granted - Outstanding Options | 778,906 | 226,971 | 538,933 |
Exercised - Outstanding Options | -161,486 | -415,480 | -2,474,713 |
Forfeited - Outstanding Options | -125,370 | -179,139 | -93,519 |
Outstanding -Outstanding Options | 4,045,584 | 3,553,534 | 3,921,182 |
Options vested- Outstanding Options | 2,702,753 | 2,600,000 | 2,500,000 |
Outstanding - Weighted- Average Exercise Price | $8.52 | $5.07 | $5.07 |
Granted - Weighted- Average Exercise Price | $7.23 | $14.60 | $12.15 |
Exercised - Weighted- Average Exercise Price | $4.82 | $4.83 | $2.23 |
Forfeited - Weighted- Average Exercise Price | $4.11 | $8.97 | $7.35 |
Outstanding - Weighted- Average Exercise Price | $8.35 | $8.52 | $5.07 |
Options vested - Weighted- Average Exercise Price | $7.95 | ||
Outstanding - Aggregate Intrinsic Value | $4,778,565 | $28,048,306 | $28,048,306 |
Granted - Aggregate Intrinsic Value | 0 | 0 | 0 |
Exercised - Aggregate Intrinsic Value | 3,301,667 | 3,190,219 | 23,936,039 |
Forfeited - Aggregate Intrinsic Value | 0 | 0 | 0 |
Outstanding - Aggregate Intrinsic Value | 4,725,483 | 4,778,565 | 28,048,306 |
Options vested - Aggregate Intrinsic Value | $4,247,128 |
StockBased_Compensation_Plans_2
Stock-Based Compensation Plans (Details 1) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 778,906 | 226,971 | 538,933 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Weighted Average Grant Date Fair Value | $3.57 | $5.58 | $5.99 |
Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $8.72 | $15.05 | $14.39 |
Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $7.18 | $10.76 | $11.97 |
StockBased_Compensation_Plans_3
Stock-Based Compensation Plans (Details 2) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Dividend yield | 0.00% | 0.00% | 0.00% |
Expected life | 6 years | 6 years | |
Volatility | 38.00% | ||
Maximum [Member] | |||
Risk-free interest rate | 2.17% | 1.41% | 1.67% |
Expected life | 7 years | ||
Volatility | 50.00% | 47.50% | |
Minimum [Member] | |||
Risk-free interest rate | 1.32% | 1.32% | 1.03% |
Expected life | 6 years | ||
Volatility | 38.00% | 38.00% |
StockBased_Compensation_Plans_4
Stock-Based Compensation Plans (Details 3) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Share based Compensation Activity [Line Items] | ||||
Options Outstanding - Number Outstanding | 4,045,584 | 3,553,534 | 3,921,182 | 5,950,481 |
Options Outstanding - Weighted-Average Exercise Price | $8.35 | $8.52 | $5.07 | $5.07 |
Options Vested - Number Exercisable | 2,702,753 | 2,600,000 | 2,500,000 | |
Options Vested - Weighted-Average Exercise Price | $7.95 | |||
Stock Option One [Member] | ||||
Share based Compensation Activity [Line Items] | ||||
Options Outstanding - Number Outstanding | 662,258 | |||
Options Outstanding - Weighted-Average Life | 1 year 5 months 16 days | |||
Options Outstanding - Weighted-Average Exercise Price | $3.52 | |||
Options Vested - Number Exercisable | 662,258 | |||
Options Vested - Weighted-Average Exercise Price | $3.52 | |||
Stock Option One [Member] | Maximum [Member] | ||||
Share based Compensation Activity [Line Items] | ||||
Options Exercise Price | $4.92 | |||
Stock Option One [Member] | Minimum [Member] | ||||
Share based Compensation Activity [Line Items] | ||||
Options Exercise Price | $0.65 | |||
Stock Option Two [Member] | ||||
Share based Compensation Activity [Line Items] | ||||
Options Outstanding - Number Outstanding | 1,730,266 | |||
Options Outstanding - Weighted-Average Life | 6 years 9 months 4 days | |||
Options Outstanding - Weighted-Average Exercise Price | $6.69 | |||
Options Vested - Number Exercisable | 919,555 | |||
Options Vested - Weighted-Average Exercise Price | $6.25 | |||
Stock Option Two [Member] | Maximum [Member] | ||||
Share based Compensation Activity [Line Items] | ||||
Options Exercise Price | $7.86 | |||
Stock Option Two [Member] | Minimum [Member] | ||||
Share based Compensation Activity [Line Items] | ||||
Options Exercise Price | $5.19 | |||
Stock Option Three [Member] | ||||
Share based Compensation Activity [Line Items] | ||||
Options Outstanding - Number Outstanding | 628,607 | |||
Options Outstanding - Weighted-Average Life | 6 years 5 months 1 day | |||
Options Outstanding - Weighted-Average Exercise Price | $9.37 | |||
Options Vested - Number Exercisable | 435,797 | |||
Options Vested - Weighted-Average Exercise Price | $9.27 | |||
Stock Option Three [Member] | Maximum [Member] | ||||
Share based Compensation Activity [Line Items] | ||||
Options Exercise Price | $11.97 | |||
Stock Option Three [Member] | Minimum [Member] | ||||
Share based Compensation Activity [Line Items] | ||||
Options Exercise Price | $8.07 | |||
Stock Option Four [Member] | ||||
Share based Compensation Activity [Line Items] | ||||
Options Outstanding - Number Outstanding | 1,024,453 | |||
Options Outstanding - Weighted-Average Life | 5 years 6 months 29 days | |||
Options Outstanding - Weighted-Average Exercise Price | $13.61 | |||
Options Vested - Number Exercisable | 685,143 | |||
Options Vested - Weighted-Average Exercise Price | $13.68 | |||
Stock Option Four [Member] | Maximum [Member] | ||||
Share based Compensation Activity [Line Items] | ||||
Options Exercise Price | $16.41 | |||
Stock Option Four [Member] | Minimum [Member] | ||||
Share based Compensation Activity [Line Items] | ||||
Options Exercise Price | $12.10 |
StockBased_Compensation_Plans_5
Stock-Based Compensation Plans (Details 4) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Nonvested Restricted Common Shares, Outstanding | 734,550 | 692,132 | 783,816 |
Granted, Outstanding Restricted Common Shares | 736,238 | 448,158 | 306,296 |
Vested and transferred to unrestricted common stock, Outstanding Restricted Common Shares | -361,650 | -278,461 | -362,116 |
Uncollectible Accounts Written Off, Net of Recoveries | -19,077 | -127,279 | -35,864 |
Nonvested Restricted Common Shares, Outstanding | 1,090,061 | 734,550 | 692,132 |
Nonvested Restricted Common Shares, Weighted-Average Grant Date Fair Value | $10.45 | $8.95 | $7.52 |
Granted, Weighted-Average Grant Date Fair Value | $7.59 | $11.46 | $11.92 |
Vested and transferred to unrestricted common stock, Weighted-Average Grant Date Fair Value | $8.90 | $9.22 | $8.86 |
Forfeited, Weighted-Average Grant Date Fair Value | $8.02 | $8.56 | $7.02 |
Nonvested Restricted Common Shares, Weighted-Average Grant Date Fair Value | $8.92 | $10.45 | $8.95 |
StockBased_Compensation_Plans_6
Stock-Based Compensation Plans (Details Textual) (USD $) | 12 Months Ended | 1 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2014 | Dec. 31, 2006 | |
Stock-based compensation expense | $5,351,572 | $4,733,031 | $6,192,870 | ||
Additional Stock Based Compensation | 500,000 | 500,000 | 2,000,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number | 2,702,753 | 2,600,000 | 2,500,000 | ||
Share Price | $7.79 | $7.79 | $13.78 | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years 4 months 24 days | 2 years 10 months 24 days | 2 years 9 months 18 days | ||
Equity Option [Member] | |||||
Stock-based compensation expense | 1,700,000 | 2,100,000 | 3,000,000 | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | 5,800,000 | 2,900,000 | 3,900,000 | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years 4 months 24 days | 2 years 7 months 6 days | 3 years 1 month 6 days | ||
Minimum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 7.00% | ||||
Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 8.00% | ||||
Incentive Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized | 2,200,000 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 7,850,000 | 5,650,000 | |||
Restricted Stock [Member] | |||||
Stock-based compensation expense | 3,600,000 | 2,600,000 | 3,200,000 | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | $8,900,000 | $4,500,000 | $3,600,000 |
Benefit_Plans_Details_Textual
Benefit Plans (Details Textual) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Contribution Plan, Employer Discretionary Contribution Amount | $1 | $0.10 | $0.50 |
Related_Party_Transactions_Det
Related Party Transactions (Details Textual) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Related Party Transaction [Line Items] | |||
Print Procurement Services | $1.70 | $0.70 | $0.60 |
Insurance and Risk Management Services | $0.60 | $0.50 | $0.40 |
Business_Segments_Details
Business Segments (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||||||
Segment Reporting Information [Line Items] | |||||||||||||||||
Net revenues from third parties | $1,000,133,000 | $890,960,000 | $789,585,000 | ||||||||||||||
Net revenues from other segments | 0 | 0 | 0 | ||||||||||||||
Total net revenues | 246,641,000 | 251,652,000 | 260,350,000 | 241,490,000 | 242,877,000 | 232,630,000 | [1] | 210,876,000 | [2] | 204,577,000 | [3] | 1,000,132,771 | 890,959,963 | 789,585,041 | |||
Adjusted EBITDA | 42,838,000 | [4] | 26,901,000 | [4] | 37,217,000 | [4] | |||||||||||
Total assets | 631,250,380 | 614,666,778 | 631,250,380 | 614,666,778 | 514,780,000 | ||||||||||||
North America [Member] | |||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||
Net revenues from third parties | 688,942,000 | 657,989,000 | 648,732,000 | ||||||||||||||
Net revenues from other segments | 48,000 | 33,000 | 68,000 | ||||||||||||||
Total net revenues | 688,990,000 | 658,022,000 | 648,800,000 | ||||||||||||||
Adjusted EBITDA | 57,662,000 | [4] | 51,873,000 | [4] | 61,890,000 | [4] | |||||||||||
Total assets | 443,530,000 | 431,562,000 | 443,530,000 | 431,562,000 | 330,159,000 | ||||||||||||
Latin America [Member] | |||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||
Net revenues from third parties | 99,734,000 | 88,016,000 | 57,575,000 | ||||||||||||||
Net revenues from other segments | 429,000 | 1,270,000 | 1,625,000 | ||||||||||||||
Total net revenues | 100,163,000 | 89,286,000 | 59,200,000 | ||||||||||||||
Adjusted EBITDA | 5,273,000 | [4] | 3,098,000 | [4] | 1,745,000 | [4] | |||||||||||
Total assets | 30,488,000 | 29,841,000 | 30,488,000 | 29,841,000 | 23,219,000 | ||||||||||||
EMEA [Member] | |||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||
Net revenues from third parties | 211,457,000 | 144,955,000 | 83,278,000 | ||||||||||||||
Net revenues from other segments | 5,160,000 | 75,000 | 27,000 | ||||||||||||||
Total net revenues | 216,617,000 | 145,030,000 | 83,305,000 | ||||||||||||||
Adjusted EBITDA | 5,893,000 | [4] | 764,000 | [4] | -2,664,000 | [4] | |||||||||||
Total assets | 135,257,000 | 119,531,000 | 135,257,000 | 119,531,000 | 139,466,000 | ||||||||||||
Other [Member] | |||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||
Net revenues from third parties | 0 | 0 | 0 | ||||||||||||||
Net revenues from other segments | -5,637,000 | -1,378,000 | -1,720,000 | ||||||||||||||
Total net revenues | -5,637,000 | -1,378,000 | -1,720,000 | ||||||||||||||
Adjusted EBITDA | -25,990,000 | [4] | -28,834,000 | [4] | -23,754,000 | [4] | |||||||||||
Total assets | $21,975,000 | $33,733,000 | $21,975,000 | $33,733,000 | $21,936,000 | ||||||||||||
[1] | The Company acquired U.S. and international businesses of EYELEVEL in July 2013 as well as one other company which was not material to the Companybs operations. Financial results for these acquisitions are included in the Consolidated Financial Statements beginning at the respective acquisition dates. | ||||||||||||||||
[2] | The Company made acquisitions during the second quarter of 2013 which were not material to the Companybs operations. Financial results for these acquisitions are included in the Consolidated Financial Statements beginning at the respective acquisition dates. | ||||||||||||||||
[3] | The Company acquired DB Studios, Inc. in March 2013. Financial results for this acquisition are included in the Consolidated Financial Statements beginning in March 2013. | ||||||||||||||||
[4] | 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. |
Business_Segments_Details_1
Business Segments (Details 1) (USD $) | 3 Months Ended | 12 Months Ended | ||||||
Dec. 31, 2014 | Sep. 30, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||||
Revenue from External Customer [Line Items] | ||||||||
Adjusted EBITDA | $42,838,000 | [1] | $26,901,000 | [1] | $37,217,000 | [1] | ||
Depreciation and amortization | -17,723,493 | -13,663,859 | -10,790,452 | |||||
Stock-based compensation | -5,351,572 | -4,733,031 | -6,192,870 | |||||
Change in fair value of contingent consideration | 37,873,000 | 31,331,000 | 27,689,000 | |||||
Preference claim charge | 0 | [2] | 0 | [2] | -1,099,386 | [2] | ||
VAT settlement charge | 0 | [3] | 0 | [3] | -1,485,088 | [3] | ||
Payments to former owner of Productions Graphics, net of cash recovered | 0 | 19,300,864 | 1,127,954 | |||||
Goodwill impairment charge | -37,900,000 | 0 | -37,908,000 | 0 | ||||
Intangible asset impairment charges | -2,700,000 | -2,710,000 | 0 | 0 | ||||
Restructuring and other charges | 0 | -4,322,000 | 0 | |||||
Legal fees in connection with patent infringement | 0 | -961,000 | 0 | |||||
Restatement-related professional fees | -2,093,000 | 0 | 0 | |||||
Secured asset reserve | -940,000 | 0 | 0 | |||||
Total other expense | -5,117,858 | -3,235,749 | -1,081,138 | |||||
Income (loss) before income taxes | $46,775,070 | ($9,216,277) | $44,667,643 | |||||
[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. | |||||||
[2] | In the fourth quarter of 2012, the Company recognized a $1.1 million charge related to the settlement of a lawsuit filed by the Trustee of the Circuit City Liquidating Trust (the bTrustb) in connection with the Circuit City Stores, Inc. bankruptcy proceedings. A settlement agreement was entered in January 2013 with the Trust resolving this preference claim as well the administrative and general unsecured claims against the Trust. | |||||||
[3] | In the fourth quarter of 2012, the Company accrued a loss reserve of $1.5 million relating to a VAT assessment issued by Her Majestybs Revenue and Customs (bHMRCb) InnerWorkings Europe Limited (formerly Etrinsic). 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. |
Business_Segments_Details_Text
Business Segments (Details Textual) (USD $) | 3 Months Ended | ||
Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | |
Long-lived Assets by Geographic Areas [Line Items] | |||
Property, Plant and Equipment, Net, Total | $29,763,583 | $23,724,750 | |
Accrued Loss Reserve Recognized During Period | 1,500,000 | ||
Litigation Settlement, Expense | 1,100,000 | ||
Unitedstates [Member] | |||
Long-lived Assets by Geographic Areas [Line Items] | |||
Property, Plant and Equipment, Net, Total | 13,900,000 | 21,500,000 | 18,100,000 |
International [Member] | |||
Long-lived Assets by Geographic Areas [Line Items] | |||
Property, Plant and Equipment, Net, Total | $3,200,000 | $8,300,000 | $5,600,000 |
Subsequent_Event_Details_Textu
Subsequent Event (Details Textual) (Subsequent Event [Member]) | 0 Months Ended |
Feb. 12, 2015 | |
Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Treasury Stock Acquired, Repurchase Authorization | On February 12, 2015, the Company announced that its Board of Directors approved a share repurchase program providing it authorization to repurchase up to an aggregate of $20 million of its common stock through open market and privately negotiated transactions over a two-year period. |
Quarterly_Financial_Data_Unaud2
Quarterly Financial Data (Unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||||
Quarterly Financial Information [Line Items] | ||||||||||||||
Revenue | $246,641,000 | $251,652,000 | $260,350,000 | $241,490,000 | $242,877,000 | $232,630,000 | [1] | $210,876,000 | [2] | $204,577,000 | [3] | $1,000,132,771 | $890,959,963 | $789,585,041 |
Gross profit | 58,850,000 | 57,098,000 | 58,927,000 | 54,584,000 | 54,318,000 | 53,181,000 | [1] | 48,177,000 | [2] | 46,350,000 | [3] | 229,459,489 | 202,026,064 | 177,558,547 |
Net income (loss) | $37,454,000 | $5,114,000 | $1,605,000 | $289,000 | ($468,000) | ($9,066,000) | [1] | $3,675,000 | [2] | ($2,801,000) | [3] | $44,461,925 | ($8,660,349) | $38,794,022 |
Net income (loss) per share: | ||||||||||||||
Basic (in dollars per share) | $0.71 | $0.10 | $0.03 | $0.01 | ($0.01) | ($0.18) | [1] | $0.07 | [2] | ($0.06) | [3] | $0.85 | ($0.17) | $0.79 |
Diluted (in dollars per share) | $0.69 | $0.10 | $0.03 | $0.01 | ($0.01) | ($0.18) | [1] | $0.07 | [2] | ($0.06) | [3] | $0.84 | ($0.17) | $0.76 |
[1] | The Company acquired U.S. and international businesses of EYELEVEL in July 2013 as well as one other company which was not material to the Companybs operations. Financial results for these acquisitions are included in the Consolidated Financial Statements beginning at the respective acquisition dates. | |||||||||||||
[2] | The Company made acquisitions during the second quarter of 2013 which were not material to the Companybs operations. Financial results for these acquisitions are included in the Consolidated Financial Statements beginning at the respective acquisition dates. | |||||||||||||
[3] | The Company acquired DB Studios, Inc. in March 2013. Financial results for this acquisition are included in the Consolidated Financial Statements beginning in March 2013. |
SCHEDULE_IIVALUATION_AND_QUALI1
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Balance at Beginning of Period | $2,128,790 | $1,553,926 | $3,293,241 |
Charged to Expense | 1,983,928 | 1,285,326 | 1,681,942 |
Uncollectible Accounts Written Off, Net of Recoveries | -1,427,221 | -710,462 | -3,421,257 |
Other | 0 | 0 | 0 |
Balance at End of Period | $2,685,497 | $2,128,790 | $1,553,926 |