Document_And_Entity_Informatio
Document And Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 4-May-15 | |
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 | 53,324,408 | |
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2015 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statement of Comprehensive Income (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Revenue | $242,095,497 | $241,489,664 |
Cost of goods sold | 187,030,793 | 186,905,270 |
Gross profit | 55,064,704 | 54,584,394 |
Operating expenses: | ||
Selling, general and administrative expenses | 47,647,330 | 49,571,481 |
Depreciation and amortization | 4,090,938 | 4,170,716 |
Change in fair value of contingent consideration | 313,233 | -695,177 |
Income from operations | 3,013,203 | 1,537,374 |
Other income (expense): | ||
Interest income | 20,888 | 49,945 |
Interest expense | -1,145,319 | -1,115,844 |
Other, net | 84,642 | -49,774 |
Total other expense | -1,039,789 | -1,115,673 |
Income before taxes | 1,973,414 | 421,701 |
Income tax expense | 834,694 | 132,294 |
Net income | 1,138,720 | 289,407 |
Basic earnings per share (in dollars per share) | $0.02 | $0.01 |
Diluted earnings per share (in dollars per share) | $0.02 | $0.01 |
Comprehensive (loss) income | ($5,303,290) | $605,156 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheet (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $13,406,040 | $22,577,942 |
Accounts receivable, net of allowance for doubtful accounts of $2,015,508 and $2,685,497, respectively | 178,595,264 | 179,465,922 |
Unbilled revenue | 35,646,695 | 31,698,924 |
Inventories | 33,651,592 | 27,162,642 |
Prepaid expenses | 12,765,069 | 12,684,237 |
Deferred income taxes | 1,850,134 | 1,819,139 |
Other current assets | 25,263,315 | 28,818,891 |
Total current assets | 301,178,109 | 304,227,697 |
Property and equipment, net | 30,585,550 | 29,763,583 |
Intangibles and other assets: | ||
Goodwill | 243,919,330 | 246,947,900 |
Intangible assets, net | 42,320,765 | 44,919,573 |
Deferred income taxes | 4,245,530 | 3,903,937 |
Other assets | 1,779,340 | 1,487,690 |
Total intangibles and other assets | 292,264,965 | 297,259,100 |
Total assets | 624,028,624 | 631,250,380 |
Current liabilities: | ||
Accounts payable | 140,194,670 | 144,044,592 |
Current portion of contingent consideration | 10,833,455 | 9,078,138 |
Due to seller | 839,999 | 402,499 |
Other liabilities | 27,952,776 | 30,636,505 |
Accrued expenses | 10,762,495 | 9,989,963 |
Total current liabilities | 190,583,395 | 194,151,697 |
Revolving credit facility | 110,118,500 | 104,538,750 |
Deferred income taxes | 10,056,053 | 9,967,039 |
Contingent consideration, net of current portion | 20,556,277 | 23,504,436 |
Other long-term liabilities | 3,146,086 | 2,941,889 |
Total liabilities | 334,460,311 | 335,103,811 |
Commitments and contingencies (See Note 10) | ||
Stockholders' equity: | ||
Common stock, par value $0.0001 per share, 200,000,000 and 200,000,000 shares authorized, 61,971,828 and 61,851,709 shares issued, 52,406,337 and 52,830,842 shares outstanding, respectively | 6,197 | 6,185 |
Additional paid-in capital | 209,653,982 | 207,428,962 |
Treasury stock at cost, 9,565,491 and 9,020,867 shares, respectively | -53,496,164 | -49,996,166 |
Accumulated other comprehensive loss | -11,843,145 | -5,401,135 |
Retained earnings | 145,247,443 | 144,108,723 |
Total stockholders' equity | 289,568,313 | 296,146,569 |
Total liabilities and stockholders' equity | $624,028,624 | $631,250,380 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheet [Parenthetical] (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Accounts receivable, allowance for doubtful accounts (in dollars) | $2,015,508 | $2,685,497 |
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 | 61,971,828 | 61,851,709 |
Common stock, shares outstanding | 52,406,337 | 52,830,842 |
Treasury stock at cost, shares | 9,565,491 | 9,020,867 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statement of Cash Flows (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Cash flows from operating activities | ||
Net income | $1,138,720 | $289,407 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation and amortization | 4,090,938 | 4,170,716 |
Stock-based compensation expense | 2,060,738 | 1,396,274 |
Deferred income taxes | -7,188 | 52,774 |
Bad debt provision | 874,501 | 68,932 |
Change in fair value of contingent consideration | 313,233 | -695,177 |
Other operating activities | 52,427 | 104,415 |
Change in assets: | ||
Accounts receivable and unbilled revenue | -3,951,614 | -13,127,932 |
Inventories | -6,488,950 | 1,121,698 |
Prepaid expenses and other assets | 3,099,672 | -6,017,193 |
Change in liabilities: | ||
Accounts payable | -3,849,922 | 854,794 |
Accrued expenses and other liabilities | -3,608,151 | 3,372,949 |
Net cash used in operating activities | -6,275,596 | -8,408,343 |
Cash flows from investing activities | ||
Purchases of property and equipment | -3,718,679 | -4,483,271 |
Net cash used in investing activities | -3,718,679 | -4,483,271 |
Cash flows from financing activities | ||
Net borrowings from revolving credit facility | 5,579,750 | 16,000,000 |
Repurchases of common stock | -3,499,998 | 0 |
Payments of contingent consideration | -437,500 | -612,500 |
Secured borrowing arrangements | 88,837 | 0 |
Proceeds from exercise of stock options | 38,554 | 43,852 |
Other financing activities | -98,773 | 0 |
Net cash provided by financing activities | 1,670,870 | 15,431,352 |
Effect of exchange rate changes on cash and cash equivalents | -848,497 | -22,449 |
(Decrease) increase in cash and cash equivalents | -9,171,902 | 2,517,289 |
Cash and cash equivalents, beginning of period | 22,577,942 | 18,606,303 |
Cash and cash equivalents, end of period | $13,406,040 | $21,123,592 |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended | |
Mar. 31, 2015 | ||
Accounting Policies [Abstract] | ||
Significant Accounting Policies [Text Block] | 1 | Summary of Significant Accounting Policies |
Basis of Presentation of Interim Financial Statements | ||
The accompanying unaudited consolidated financial statements of InnerWorkings, Inc. and subsidiaries (the “Company”) included herein have been prepared to conform to the rules and regulations of the Securities and Exchange Commission (“SEC”) and accounting principles generally accepted in the United States (“GAAP”) for interim financial information. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments considered necessary for a fair presentation of the accompanying unaudited financial statements have been included, and all adjustments are of a normal and recurring nature. The operating results for the three months ended March 31, 2015 are not necessarily indicative of the results to be expected for the full year ending December 31, 2015. These condensed interim consolidated financial statements and notes should be read in conjunction with the Company’s Consolidated Financial Statements and Notes thereto as of and for the year ended December 31, 2014 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 6, 2015. | ||
Description of the Business | ||
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 13 for further information about the Company’s reportable segments. | ||
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 GAAP 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 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. | ||
Revenue Recognition | ||
The Company recognizes revenue upon meeting all of the following revenue recognition criteria, which are typically met upon shipment or delivery of its 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 marketing 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 marketing materials and products. When the Company is not the primary obligor, revenues are reported net. | ||
The Company recognizes revenue for creative and other services provided to its customers which may be delivered in conjunction with the procurement of marketing materials at the time when delivery and customer acceptance occur and all other revenue recognition criteria are met. The Company recognizes revenue for creative and other services provided on a stand-alone basis upon completion of the service. Service revenue has not been material to the Company’s overall revenue to date. | ||
Stock-Based Compensation | ||
The Company accounts for stock-based compensation awards to employees and directors in accordance with ASC 718, Compensation – Stock Compensation. Compensation expense is measured by determining the fair value using the Black-Scholes option valuation model and is then recognized over the requisite service period of the awards, which is generally the vesting period, on a straight-line basis for the entire award. | ||
Stock-based compensation cost recognized during the period is based on the portion of the share-based payment awards that are ultimately expected to vest. Accordingly, stock-based compensation cost recognized has been reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. | ||
The Company recorded $2.1 million and $1.4 million in compensation expense for the three months ended March 31, 2015 and 2014, respectively. During the first quarter, $0.4 million of stock-based compensation was recognized related to the modification of a former executive’s award agreements in connection with his transition agreement. | ||
Recent Accounting Pronouncements | ||
In April 2015, the FASB issued Accounting Standards Update 2015-03, Interest – Imputation of Interest (Subtopic 835-30) (“ASU 2015-03”), which simplifies the presentation of debt issuance costs. This guidance requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with debt discounts. The standard is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted for financial statements that have not been previously issued. The new guidance should be applied on a retrospective basis. The Company is currently evaluating the impact of adopting ASU 2015-03 on its consolidated financial statements. | ||
In January 2015, the FASB issued Accounting Standards Update 2015-01, Income Statement – Extraordinary and Unusual Items (Subtopic 225-20) (“ASU 2015-01”). ASU 2015-01 eliminates from GAAP the concept of extraordinary items. The standard is effective for financial statements issued for fiscal years beginning after December 15, 2015. Early adoption is permitted provided that guidance is applied from the beginning of the fiscal period of adoption. The Company may also apply the amendments retrospectively to all prior periods presented in the financial statements. The Company does not expect ASU 2015-01 to have a material impact on its consolidated financial statements. | ||
In May 2014, the FASB issued Accounting Standards Update 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. In April 2015, the FASB proposed a one-year deferral of the effective date, with early application permitted as of the original effective date. The Company is currently evaluating the impact of adopting the new revenue standard on its consolidated financial statements. | ||
In August 2014, the FASB issued Accounting Standards Update 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 ASU 2014-15 to have a material impact on its consolidated financial statements. | ||
In April 2014, the FASB issued Accounting Standards Update 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 currently exists under GAAP. The standard 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. The Company adopted ASU 2014-08 on January 1, 2015, and it did not have an effect on its consolidated financial statements. | ||
Contingent_Consideration
Contingent Consideration | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
Business Combinations [Abstract] | |||||||||||
Business Combination Disclosure [Text Block] | 2 | 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 $31.4 million in contingent consideration at March 31, 2015 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 three months ended March 31, 2015 and 2014, the Company recorded expense of $0.3 million and income of $0.7 million, respectively. | |||||||||||
As of March 31, 2015, the potential maximum contingent payments are payable as follows: | |||||||||||
Cash | Common Stock | Total | |||||||||
2015 | $ | 839,999 | $ | 29,707,124 | $ | 30,547,123 | |||||
2016 | 26,202,750 | 32,226,610 | 58,429,360 | ||||||||
2017 | - | 45,569,000 | 45,569,000 | ||||||||
$ | 27,042,749 | $ | 107,502,734 | $ | 134,545,483 | ||||||
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 $134.5 million, the Company estimates the fair value of the payments that will be made is $31.4 million. | |||||||||||
Goodwill
Goodwill | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||
Goodwill Disclosure [Text Block] | 3 | Goodwill | ||||||||||||
The following is a summary of the goodwill balance for each operating segment as of March 31, 2015: | ||||||||||||||
North America | Latin America | EMEA | Total | |||||||||||
Net goodwill as of December 31, 2014 | $ | 170,859,421 | $ | 9,875,236 | $ | 66,213,243 | $ | 246,947,900 | ||||||
Foreign exchange impact | -61,854 | - | -2,966,716 | -3,028,570 | ||||||||||
Net goodwill as of March 31, 2015 | $ | 170,797,567 | $ | 9,875,236 | $ | 63,246,527 | $ | 243,919,330 | ||||||
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 used, 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 and the Company does not believe that goodwill is impaired as of March 31, 2015. | ||||||||||||||
The fair value estimates used in the goodwill impairment analysis required significant judgment. The Company's fair value estimates for purposes of performing the analysis 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 | 3 Months Ended | |||||||||
Mar. 31, 2015 | ||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||
Intangible Assets Disclosure [Text Block] | 4 | Other Intangible Assets | ||||||||
The following is a summary of the Company’s other intangible assets as of March 31, 2015 and December 31, 2014: | ||||||||||
March 31, | December 31, | Weighted | ||||||||
2015 | 2014 | Average Life | ||||||||
Customer lists | $ | 73,736,806 | $ | 75,113,728 | 13.6 years | |||||
Noncompete agreements | 988,474 | 1,077,349 | 4.0 years | |||||||
Trade names | 3,229,684 | 3,467,655 | 12.6 years | |||||||
Patents | 56,896 | 56,896 | 9.0 years | |||||||
78,011,860 | 79,715,628 | |||||||||
Less accumulated amortization | -35,691,095 | -34,796,055 | ||||||||
Intangible assets, net | $ | 42,320,765 | $ | 44,919,573 | ||||||
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 a straight-line basis over their estimated weighted-average useful lives of approximately four years, twelve years and nine years, respectively. | ||||||||||
Amortization expense related to these intangible assets was $1.4 million and $1.8 million for the three months ended March 31, 2015 and 2014, respectively. | ||||||||||
The estimated amortization expense for the next five years and thereafter is as follows: | ||||||||||
Remainder of 2015 | $ | 4,434,879 | ||||||||
2016 | 5,590,944 | |||||||||
2017 | 5,146,472 | |||||||||
2018 | 4,651,521 | |||||||||
2019 | 4,349,247 | |||||||||
Thereafter | 18,147,702 | |||||||||
$ | 42,320,765 | |||||||||
Income_Taxes
Income Taxes | 3 Months Ended | |
Mar. 31, 2015 | ||
Income Tax Disclosure [Abstract] | ||
Income Tax Disclosure [Text Block] | 5 | Income Taxes |
The Company's tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items. The Company’s effective income tax rate was 42.3% and 31.4% in the three months ended March 31, 2015 and 2014, respectively. The Company’s effective income tax rate differs from the U.S. federal statutory rate each year due to certain operations that are subject to tax incentives, state and local taxes, and foreign taxes that are different than the U.S. federal statutory rate. In addition, the effective tax rate can be impacted each period by discrete factors and events. | ||
The effective tax rates were affected by the fair value changes to contingent consideration in each period. Portions of the total amount recognized from fair value changes to contingent consideration relate to non-taxable acquisitions for which deferred taxes are not recognized, consistent with the treatment of goodwill and intangible assets for those acquisitions under GAAP. Excluding the impact of these transactions and other discrete items in each period, the effective tax rate was 34.1% and 31.4% in the three months ended March 31, 2015 and 2014, respectively. The increase in the effective tax rates is primarily due to forecasted changes in pre-tax income mix by jurisdiction. | ||
Earnings_Per_Share
Earnings Per Share | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Earnings Per Share [Abstract] | ||||||||
Earnings Per Share [Text Block] | 6 | Earnings Per Share | ||||||
Basic earnings per common share is calculated by dividing net income by the weighted average number of common shares outstanding. Diluted earnings per share is calculated by dividing net income by the weighted average shares outstanding plus share equivalents that would arise from the exercise of stock options, vesting of restricted common shares, and contingently issuable shares in connection with the Company’s acquisitions. During the three months ended March 31, 2015 and 2014, an aggregate of 2,724,264 and 1,938,029 options and restricted common shares, respectively, were excluded from the calculation as these options and restricted common shares were anti-dilutive. The computations of basic and diluted earnings per common share for the three months ended March 31, 2015 and 2014 are as follows: | ||||||||
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
Numerator: | ||||||||
Net income | $ | 1,138,720 | $ | 289,407 | ||||
Denominator: | ||||||||
Denominator for basic earnings per share—weighted-average shares | 52,753,621 | 51,312,649 | ||||||
Effect of dilutive securities: | ||||||||
Employee and director stock options and restricted common shares | 937,444 | 785,515 | ||||||
Contingently issuable shares | 187,632 | 90,927 | ||||||
Denominator for dilutive earnings per share | 53,878,697 | 52,189,091 | ||||||
Basic earnings per share | $ | 0.02 | $ | 0.01 | ||||
Diluted earnings per share | $ | 0.02 | $ | 0.01 | ||||
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Loss | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||||||
Comprehensive Income (Loss) Note [Text Block] | 7 | Accumulated Other Comprehensive Loss | ||||||
The table below presents changes in the components of accumulated other comprehensive loss for the three months ended March 31, 2015 and 2014: | ||||||||
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
Foreign currency | Foreign currency | |||||||
Balance, beginning of period | $ | -5,401,135 | $ | 2,777,000 | ||||
Other comprehensive loss before reclassifications | -6,442,010 | 315,749 | ||||||
Net current-period other comprehensive loss | -6,442,010 | 315,749 | ||||||
Balance, end of period | $ | -11,843,145 | $ | 3,092,749 | ||||
Related_Party_Transactions
Related Party Transactions | 3 Months Ended | |
Mar. 31, 2015 | ||
Related Party Transactions [Abstract] | ||
Related Party Transactions Disclosure [Text Block] | 8 | Related Party Transactions |
The Company provides print procurement services to Arthur J. Gallagher & Co. J. Patrick Gallagher, Jr., a member of the Company’s Board of Directors, is the Chairman, President and Chief Executive Officer of Arthur J. Gallagher & Co. and has a direct ownership interest in Arthur J. Gallagher & Co. The total amount billed for such print procurement services during the three months ended March 31, 2015 and 2014 was $0.4 million and $0.5 million, respectively. Additionally, Arthur J. Gallagher & Co. provides insurance brokerage and risk management services to the Company. As consideration of these services, Arthur J. Gallagher & Co. billed the Company $0.1 million and $0.1 million for the three months ended March 31, 2015 and 2014, respectively. The net amount receivable from Arthur J. Gallagher & Co. at March 31, 2015 was $0.1 million. | ||
Fair_Value_Measurement
Fair Value Measurement | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||
Fair Value Disclosures [Text Block] | 9 | Fair Value Measurement | ||||||||||||
ASC 820 includes a fair value hierarchy that is intended to increase consistency and comparability in fair value measurements and related disclosures. The fair value hierarchy is based on observable or unobservable inputs to valuation techniques that are used to measure fair value. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing based upon its own market assumptions. | ||||||||||||||
The fair value hierarchy consists of the following three levels: | ||||||||||||||
• | Level 1: Inputs are quoted prices in active markets for identical assets or liabilities. | |||||||||||||
• | Level 2: Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted prices that are observable and market-corroborated inputs, which are derived principally from or corroborated by observable market data. | |||||||||||||
• | Level 3: Inputs that are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable. | |||||||||||||
The Company's potential contingent consideration payments relating to acquisitions occurring subsequent to January 1, 2009 are its only Level 3 liabilities as of March 31, 2015 and December 31, 2014. The fair value of the liabilities determined by this analysis is primarily driven by the probability of reaching the performance measures required by the purchase agreements and the associated discount rate. Probabilities are estimated by reviewing financial forecasts and assessing the likelihood of reaching the required performance measures based on factors specific to each acquisition as well as the Company’s historical experience with similar arrangements. If an acquisition reaches the required performance measure, the estimated probability would be increased to 100%, and if the measure is not reached, the probability would be reduced to reflect the amount earned, if any, depending on the terms of the agreement. Discount rates are estimated by using the local government bond yields plus the Company’s credit spread. A one percentage point increase in the discount rate across all contingent consideration liabilities would result in a decrease to the fair value of approximately $0.4 million. | ||||||||||||||
The following table sets forth the Company’s financial assets and financial liabilities measured at fair value on a recurring basis and the basis of measurement at March 31, 2015 and December 31, 2014, respectively: | ||||||||||||||
At March 31, 2015 | Total Fair Value Measurement | Quoted Prices in Active Markets for | Significant Other Observable Inputs | Significant Unobservable Inputs | ||||||||||
Identical Assets (Level 1) | (Level 2) | (Level 3) | ||||||||||||
Assets: | ||||||||||||||
Money market funds(1) | $ | 667,169 | $ | 667,169 | $ | - | $ | - | ||||||
Liabilities: | ||||||||||||||
Contingent consideration | $ | -31,389,732 | $ | - | $ | - | $ | -31,389,732 | ||||||
At December 31, 2014 | Total Fair Value Measurement | Quoted Prices in Active Markets for | Significant Other Observable Inputs | Significant Unobservable Inputs | ||||||||||
Identical Assets (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 as of December 31, 2014 | $ | -32,582,574 | ||||||||||||
Contingent consideration payments paid in cash | 437,500 | |||||||||||||
Change in fair value (1) | -313,233 | |||||||||||||
Reclassification to Due to seller | 437,500 | |||||||||||||
Foreign exchange impact (2) | 631,075 | |||||||||||||
Balance as of March 31, 2015 | $ | -31,389,732 | ||||||||||||
-1 | Adjustments to original contingent consideration obligations recorded were the result of using revised financial forecasts and updated fair value measurements. These changes are recognized within operating expenses on the consolidated statement of comprehensive income. | |||||||||||||
-2 | Changes in the contingent consideration liability which are caused by foreign exchange rate fluctuations are recognized in other comprehensive loss. | |||||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended | |
Mar. 31, 2015 | ||
Commitments and Contingencies Disclosure [Abstract] | ||
Commitments and Contingencies Disclosure [Text Block] | 10 | Commitments and Contingencies |
In December 2010, e-Lynxx Corporation filed a complaint against the Company and numerous other defendants for patent infringement in the United States District Court for the Middle District of Pennsylvania. As to the Company, the complaint alleges, among other things, that certain aspects of the Company’s PPM4 technology infringe on two patents owned by e-Lynxx purporting to cover a system and method for competitive pricing and procurement of customized goods and services, and seeks monetary damages, interest, costs, attorneys’ fees, punitive damages and a permanent injunction. In May 2013, e-Lynxx asserted that the monetary damages it seeks from the Company are in the range of $35 million to $88 million for the period from May 2009 through December 2012; e-Lynxx has not yet specified damages sought for 2013 and future periods. The Company disputes the allegations contained in e-Lynxx’s complaint and intends to vigorously defend this matter. Specifically, the Company contends that the patents at issue are invalid and not infringed, and, therefore, e-Lynxx is not entitled to any relief and the complaint should be dismissed. Further, even if e-Lynxx could establish liability, the Company contends that e-Lynxx is not entitled to the excessive monetary relief it seeks. On July 25, 2013, the court granted the Company’s motion for summary judgment, finding that the Company did not infringe the patents-in-suit. E-Lynxx filed a motion for reconsideration, which was denied. On March 5, 2014, e-Lynxx filed an appeal from the judgment entered in favor of the Company. 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 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. In March 2015, the appellate court ruled in the Company’s favor in the attachment proceedings, releasing all attachments. 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 March 31, 2015, 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 January 2014, a former finance employee of Productions Graphics initiated wrongful termination and overtime claims in the Labor Court of Boulogne-Billancourt, and he currently seeks damages of approximately €0.6 million. The Company disputes these allegations and intends to vigorously defend these matters. In addition, the Company’s criminal complaint in France, described above, seeks to redress harm caused by this former employee in light of his participation in the fraudulent transactions described above. | ||
In February 2014, shortly following the Company’s 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. | ||
Revolving_Credit_Facility
Revolving Credit Facility | 3 Months Ended | |
Mar. 31, 2015 | ||
Debt Disclosure [Abstract] | ||
Debt Disclosure [Text Block] | 11 | 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 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 March 31, 2015. | ||
At March 31, 2015, the Company had $36.3 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 March 31, 2015. | ||
Share_Repurchase_Program
Share Repurchase Program | 3 Months Ended | |
Mar. 31, 2015 | ||
Equity [Abstract] | ||
Treasury Stock [Text Block] | 12 | Share Repurchase Program |
On February 12, 2015, the Company announced that its Board of Directors approved a share repurchase program authorizing the repurchase of 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. | ||
During the three months ended March 31, 2015, the Company repurchased 544,624 shares of its common stock for $3.5 million at an average cost of $6.43 per share. Shares repurchased under this program are recorded at acquisition cost, including related expenses. | ||
Business_Segments
Business Segments | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||
Segment Reporting Disclosure [Text Block] | 13 | 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 Europe, the Middle East, Africa, and Asia. “Other” consists of intersegment eliminations, shared service activities and unallocated corporate expenses. All transactions between segments are presented at their gross amounts and eliminated through Other. | |||||||||||||||||
Management evaluates the performance of its operating segments based on net revenues and Adjusted EBITDA, which is a non-GAAP financial measure. The accounting policies of each of the operating segments are the same as those described in the summary of significant accounting policies in Note 1. Adjusted EBITDA represents income from operations excluding depreciation and amortization, stock-based compensation expense, income/expense related to changes in the fair value of contingent consideration liabilities and other items as described below. Management does not evaluate the performance of its operating segments using asset measures. | |||||||||||||||||
The table below presents financial information for the Company’s reportable operating segments and Other for the three month periods noted (in thousands): | |||||||||||||||||
North America | Latin America | EMEA | Other | Total | |||||||||||||
Three Months Ended March 31, 2015: | |||||||||||||||||
Net revenue from third parties | $ | 170,801 | $ | 21,948 | $ | 49,346 | $ | - | $ | 242,095 | |||||||
Net revenue from other segments | - | 186 | 2,011 | -2,197 | - | ||||||||||||
Total net revenues | 170,801 | 22,134 | 51,357 | -2,197 | 242,095 | ||||||||||||
Adjusted EBITDA (1) | 15,664 | 1,403 | -156 | -7,433 | 9,478 | ||||||||||||
Three Months Ended March 31, 2014: | |||||||||||||||||
Net revenue from third parties | $ | 167,442 | $ | 24,709 | $ | 49,339 | $ | - | $ | 241,490 | |||||||
Net revenue from other segments | - | 68 | 990 | -1,058 | - | ||||||||||||
Total net revenues | 167,442 | 24,777 | 50,329 | -1,058 | 241,490 | ||||||||||||
Adjusted EBITDA (1) | 12,453 | 1,134 | 1,097 | -6,181 | 8,503 | ||||||||||||
-1 | Adjusted EBITDA, which represents income from operations with the addition of depreciation and amortization, stock-based compensation expense, change in the fair value of contingent consideration liabilities and certain legal settlements, is considered a non-GAAP financial measure under SEC regulations. Income from operations is the most directly comparable financial measure calculated in accordance with GAAP. The Company presents this measure as supplemental information to help investors better understand trends in its business results over time. The Company’s management team uses Adjusted EBITDA to evaluate the performance of the business. Adjusted EBITDA is not equivalent to any measure of performance required to be reported under GAAP, nor should this data be considered an indicator of the Company’s overall financial performance and liquidity. Moreover, the Adjusted EBITDA definition the Company uses may not be comparable to similarly titled measures reported by other companies. | ||||||||||||||||
The table below reconciles the total of the reportable segments' Adjusted EBITDA and the Adjusted EBITDA included in Other to income before income taxes (in thousands): | |||||||||||||||||
Three Months Ended March 31, | |||||||||||||||||
2015 | 2014 | ||||||||||||||||
Adjusted EBITDA | $ | 9,478 | $ | 8,503 | |||||||||||||
Depreciation and amortization | -4,091 | -4,171 | |||||||||||||||
Stock-based compensation expense | -2,061 | -1,396 | |||||||||||||||
Change in fair value of contingent consideration | -313 | 695 | |||||||||||||||
Restatement-related professional fees | - | -2,093 | |||||||||||||||
Total other expense | -1,040 | -1,116 | |||||||||||||||
Income before income taxes | $ | 1,973 | $ | 422 | |||||||||||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation of Interim Financial Statements |
The accompanying unaudited consolidated financial statements of InnerWorkings, Inc. and subsidiaries (the “Company”) included herein have been prepared to conform to the rules and regulations of the Securities and Exchange Commission (“SEC”) and accounting principles generally accepted in the United States (“GAAP”) for interim financial information. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments considered necessary for a fair presentation of the accompanying unaudited financial statements have been included, and all adjustments are of a normal and recurring nature. The operating results for the three months ended March 31, 2015 are not necessarily indicative of the results to be expected for the full year ending December 31, 2015. These condensed interim consolidated financial statements and notes should be read in conjunction with the Company’s Consolidated Financial Statements and Notes thereto as of and for the year ended December 31, 2014 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 6, 2015. | |
Business Combinations Policy [Policy Text Block] | Description of the Business |
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 13 for further information about the Company’s reportable segments. | |
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 GAAP 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 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. | |
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition |
The Company recognizes revenue upon meeting all of the following revenue recognition criteria, which are typically met upon shipment or delivery of its 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 marketing 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 marketing materials and products. When the Company is not the primary obligor, revenues are reported net. | |
The Company recognizes revenue for creative and other services provided to its customers which may be delivered in conjunction with the procurement of marketing materials at the time when delivery and customer acceptance occur and all other revenue recognition criteria are met. The Company recognizes revenue for creative and other services provided on a stand-alone basis upon completion of the service. Service revenue has not been material to the Company’s overall revenue to date. | |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Stock-Based Compensation |
The Company accounts for stock-based compensation awards to employees and directors in accordance with ASC 718, Compensation – Stock Compensation. Compensation expense is measured by determining the fair value using the Black-Scholes option valuation model and is then recognized over the requisite service period of the awards, which is generally the vesting period, on a straight-line basis for the entire award. | |
Stock-based compensation cost recognized during the period is based on the portion of the share-based payment awards that are ultimately expected to vest. Accordingly, stock-based compensation cost recognized has been reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. | |
The Company recorded $2.1 million and $1.4 million in compensation expense for the three months ended March 31, 2015 and 2014, respectively. During the first quarter, $0.4 million of stock-based compensation was recognized related to the modification of a former executive’s award agreements in connection with his transition agreement. | |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements |
In April 2015, the FASB issued Accounting Standards Update 2015-03, Interest – Imputation of Interest (Subtopic 835-30) (“ASU 2015-03”), which simplifies the presentation of debt issuance costs. This guidance requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with debt discounts. The standard is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted for financial statements that have not been previously issued. The new guidance should be applied on a retrospective basis. The Company is currently evaluating the impact of adopting ASU 2015-03 on its consolidated financial statements. | |
In January 2015, the FASB issued Accounting Standards Update 2015-01, Income Statement – Extraordinary and Unusual Items (Subtopic 225-20) (“ASU 2015-01”). ASU 2015-01 eliminates from GAAP the concept of extraordinary items. The standard is effective for financial statements issued for fiscal years beginning after December 15, 2015. Early adoption is permitted provided that guidance is applied from the beginning of the fiscal period of adoption. The Company may also apply the amendments retrospectively to all prior periods presented in the financial statements. The Company does not expect ASU 2015-01 to have a material impact on its consolidated financial statements. | |
In May 2014, the FASB issued Accounting Standards Update 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. In April 2015, the FASB proposed a one-year deferral of the effective date, with early application permitted as of the original effective date. The Company is currently evaluating the impact of adopting the new revenue standard on its consolidated financial statements. | |
In August 2014, the FASB issued Accounting Standards Update 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 ASU 2014-15 to have a material impact on its consolidated financial statements. | |
In April 2014, the FASB issued Accounting Standards Update 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 currently exists under GAAP. The standard 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. The Company adopted ASU 2014-08 on January 1, 2015, and it did not have an effect on its consolidated financial statements. | |
Contingent_Consideration_Table
Contingent Consideration (Tables) | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
Business Combinations [Abstract] | |||||||||||
Schedule of Business Acquisitions by Acquisition, Contingent Consideration [Table Text Block] | As of March 31, 2015, the potential maximum contingent payments are payable as follows: | ||||||||||
Cash | Common Stock | Total | |||||||||
2015 | $ | 839,999 | $ | 29,707,124 | $ | 30,547,123 | |||||
2016 | 26,202,750 | 32,226,610 | 58,429,360 | ||||||||
2017 | - | 45,569,000 | 45,569,000 | ||||||||
$ | 27,042,749 | $ | 107,502,734 | $ | 134,545,483 | ||||||
Goodwill_Tables
Goodwill (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||
Business Combination, Segment Allocation [Table Text Block] | The following is a summary of the goodwill balance for each operating segment as of March 31, 2015: | |||||||||||||
North America | Latin America | EMEA | Total | |||||||||||
Net goodwill as of December 31, 2014 | $ | 170,859,421 | $ | 9,875,236 | $ | 66,213,243 | $ | 246,947,900 | ||||||
Foreign exchange impact | -61,854 | - | -2,966,716 | -3,028,570 | ||||||||||
Net goodwill as of March 31, 2015 | $ | 170,797,567 | $ | 9,875,236 | $ | 63,246,527 | $ | 243,919,330 | ||||||
Other_Intangible_Assets_Tables
Other Intangible Assets (Tables) | 3 Months Ended | |||||||||
Mar. 31, 2015 | ||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||
Schedule Of Finite Lived And Indefinite Lived Intangible Assets [Table Text Block] | The following is a summary of the Company’s other intangible assets as of March 31, 2015 and December 31, 2014: | |||||||||
March 31, | December 31, | Weighted | ||||||||
2015 | 2014 | Average Life | ||||||||
Customer lists | $ | 73,736,806 | $ | 75,113,728 | 13.6 years | |||||
Noncompete agreements | 988,474 | 1,077,349 | 4.0 years | |||||||
Trade names | 3,229,684 | 3,467,655 | 12.6 years | |||||||
Patents | 56,896 | 56,896 | 9.0 years | |||||||
78,011,860 | 79,715,628 | |||||||||
Less accumulated amortization | -35,691,095 | -34,796,055 | ||||||||
Intangible assets, net | $ | 42,320,765 | $ | 44,919,573 | ||||||
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | The estimated amortization expense for the next five years and thereafter is as follows: | |||||||||
Remainder of 2015 | $ | 4,434,879 | ||||||||
2016 | 5,590,944 | |||||||||
2017 | 5,146,472 | |||||||||
2018 | 4,651,521 | |||||||||
2019 | 4,349,247 | |||||||||
Thereafter | 18,147,702 | |||||||||
$ | 42,320,765 | |||||||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Earnings Per Share [Abstract] | ||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The computations of basic and diluted earnings per common share for the three months ended March 31, 2015 and 2014 are as follows: | |||||||
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
Numerator: | ||||||||
Net income | $ | 1,138,720 | $ | 289,407 | ||||
Denominator: | ||||||||
Denominator for basic earnings per share—weighted-average shares | 52,753,621 | 51,312,649 | ||||||
Effect of dilutive securities: | ||||||||
Employee and director stock options and restricted common shares | 937,444 | 785,515 | ||||||
Contingently issuable shares | 187,632 | 90,927 | ||||||
Denominator for dilutive earnings per share | 53,878,697 | 52,189,091 | ||||||
Basic earnings per share | $ | 0.02 | $ | 0.01 | ||||
Diluted earnings per share | $ | 0.02 | $ | 0.01 | ||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | The table below presents changes in the components of accumulated other comprehensive loss for the three months ended March 31, 2015 and 2014: | |||||||
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
Foreign currency | Foreign currency | |||||||
Balance, beginning of period | $ | -5,401,135 | $ | 2,777,000 | ||||
Other comprehensive loss before reclassifications | -6,442,010 | 315,749 | ||||||
Net current-period other comprehensive loss | -6,442,010 | 315,749 | ||||||
Balance, end of period | $ | -11,843,145 | $ | 3,092,749 | ||||
Fair_Value_Measurement_Tables
Fair Value Measurement (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Related Party Transactions [Abstract] | ||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | The following table sets forth the Company’s financial assets and financial liabilities measured at fair value on a recurring basis and the basis of measurement at March 31, 2015 and December 31, 2014, respectively: | |||||||||||||
At March 31, 2015 | Total Fair Value Measurement | Quoted Prices in Active Markets for | Significant Other Observable Inputs | Significant Unobservable Inputs | ||||||||||
Identical Assets (Level 1) | (Level 2) | (Level 3) | ||||||||||||
Assets: | ||||||||||||||
Money market funds(1) | $ | 667,169 | $ | 667,169 | $ | - | $ | - | ||||||
Liabilities: | ||||||||||||||
Contingent consideration | $ | -31,389,732 | $ | - | $ | - | $ | -31,389,732 | ||||||
At December 31, 2014 | Total Fair Value Measurement | Quoted Prices in Active Markets for | Significant Other Observable Inputs | Significant Unobservable Inputs | ||||||||||
Identical Assets (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 as of December 31, 2014 | $ | -32,582,574 | ||||||||||||
Contingent consideration payments paid in cash | 437,500 | |||||||||||||
Change in fair value (1) | -313,233 | |||||||||||||
Reclassification to Due to seller | 437,500 | |||||||||||||
Foreign exchange impact (2) | 631,075 | |||||||||||||
Balance as of March 31, 2015 | $ | -31,389,732 | ||||||||||||
-1 | Adjustments to original contingent consideration obligations recorded were the result of using revised financial forecasts and updated fair value measurements. These changes are recognized within operating expenses on the consolidated statement of comprehensive income. | |||||||||||||
-2 | Changes in the contingent consideration liability which are caused by foreign exchange rate fluctuations are recognized in other comprehensive loss. | |||||||||||||
Business_Segments_Tables
Business Segments (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||
Schedule of Segment Reporting Information, by Segment [Table Text Block] | The table below presents financial information for the Company’s reportable operating segments and Other for the three month periods noted (in thousands): | ||||||||||||||||
North America | Latin America | EMEA | Other | Total | |||||||||||||
Three Months Ended March 31, 2015: | |||||||||||||||||
Net revenue from third parties | $ | 170,801 | $ | 21,948 | $ | 49,346 | $ | - | $ | 242,095 | |||||||
Net revenue from other segments | - | 186 | 2,011 | -2,197 | - | ||||||||||||
Total net revenues | 170,801 | 22,134 | 51,357 | -2,197 | 242,095 | ||||||||||||
Adjusted EBITDA (1) | 15,664 | 1,403 | -156 | -7,433 | 9,478 | ||||||||||||
Three Months Ended March 31, 2014: | |||||||||||||||||
Net revenue from third parties | $ | 167,442 | $ | 24,709 | $ | 49,339 | $ | - | $ | 241,490 | |||||||
Net revenue from other segments | - | 68 | 990 | -1,058 | - | ||||||||||||
Total net revenues | 167,442 | 24,777 | 50,329 | -1,058 | 241,490 | ||||||||||||
Adjusted EBITDA (1) | 12,453 | 1,134 | 1,097 | -6,181 | 8,503 | ||||||||||||
-1 | Adjusted EBITDA, which represents income from operations with the addition of depreciation and amortization, stock-based compensation expense, change in the fair value of contingent consideration liabilities and certain legal settlements, is considered a non-GAAP financial measure under SEC regulations. Income from operations is the most directly comparable financial measure calculated in accordance with GAAP. The Company presents this measure as supplemental information to help investors better understand trends in its business results over time. The Company’s management team uses Adjusted EBITDA to evaluate the performance of the business. Adjusted EBITDA is not equivalent to any measure of performance required to be reported under GAAP, nor should this data be considered an indicator of the Company’s overall financial performance and liquidity. Moreover, the Adjusted EBITDA definition the Company uses may not be comparable to similarly titled measures reported by other companies. | ||||||||||||||||
Schedule Of Earnings Before Interest Tax Depreciation And Amortization Reconciliation [Table Text Block] | The table below reconciles the total of the reportable segments' Adjusted EBITDA and the Adjusted EBITDA included in Other to income before income taxes (in thousands): | ||||||||||||||||
Three Months Ended March 31, | |||||||||||||||||
2015 | 2014 | ||||||||||||||||
Adjusted EBITDA | $ | 9,478 | $ | 8,503 | |||||||||||||
Depreciation and amortization | -4,091 | -4,171 | |||||||||||||||
Stock-based compensation expense | -2,061 | -1,396 | |||||||||||||||
Change in fair value of contingent consideration | -313 | 695 | |||||||||||||||
Restatement-related professional fees | - | -2,093 | |||||||||||||||
Total other expense | -1,040 | -1,116 | |||||||||||||||
Income before income taxes | $ | 1,973 | $ | 422 | |||||||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details Textual) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Schedule of Significant Accounting Policies [Line Items] | ||
Allocated Share-based Compensation Expense | $2.10 | $1.40 |
Share-based Compensation Arrangement by Share-based Payment Award, Plan Modification, Incremental Compensation Cost | $0.40 |
Contingent_Consideration_Detai
Contingent Consideration (Details) (USD $) | Mar. 31, 2015 |
Business Acquisition, Contingent Consideration [Line Items] | |
Potential Maximum Contingent Payments | $134,545,483 |
Common Stock [Member] | |
Business Acquisition, Contingent Consideration [Line Items] | |
Potential Maximum Contingent Payments | 107,502,734 |
Cash [Member] | |
Business Acquisition, Contingent Consideration [Line Items] | |
Potential Maximum Contingent Payments | 27,042,749 |
2015 [Member] | |
Business Acquisition, Contingent Consideration [Line Items] | |
Potential Maximum Contingent Payments | 30,547,123 |
2015 [Member] | Common Stock [Member] | |
Business Acquisition, Contingent Consideration [Line Items] | |
Potential Maximum Contingent Payments | 29,707,124 |
2015 [Member] | Cash [Member] | |
Business Acquisition, Contingent Consideration [Line Items] | |
Potential Maximum Contingent Payments | 839,999 |
2016 [Member] | |
Business Acquisition, Contingent Consideration [Line Items] | |
Potential Maximum Contingent Payments | 58,429,360 |
2016 [Member] | Common Stock [Member] | |
Business Acquisition, Contingent Consideration [Line Items] | |
Potential Maximum Contingent Payments | 32,226,610 |
2016 [Member] | Cash [Member] | |
Business Acquisition, Contingent Consideration [Line Items] | |
Potential Maximum Contingent Payments | 26,202,750 |
2017 [Member] | |
Business Acquisition, Contingent Consideration [Line Items] | |
Potential Maximum Contingent Payments | 45,569,000 |
2017 [Member] | Common Stock [Member] | |
Business Acquisition, Contingent Consideration [Line Items] | |
Potential Maximum Contingent Payments | 45,569,000 |
2017 [Member] | Cash [Member] | |
Business Acquisition, Contingent Consideration [Line Items] | |
Potential Maximum Contingent Payments | $0 |
Contingent_Consideration_Detai1
Contingent Consideration (Details Textual) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Business Acquisition [Line Items] | ||
Recorded income and expenses | $300,000 | $700,000 |
Business Combination, Contingent Consideration, Potential Cash Payment | 134,545,483 | |
Business Combination, Contingent Consideration, Liability | $31,400,000 |
Goodwill_Details
Goodwill (Details) (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Business Combination Segment Allocation [Line Items] | |
Net goodwill as of December 31, 2014 | $246,947,900 |
Foreign exchange impact | -3,028,570 |
Net goodwill as of March 31, 2015 | 243,919,330 |
North America [Member] | |
Business Combination Segment Allocation [Line Items] | |
Net goodwill as of December 31, 2014 | 170,859,421 |
Foreign exchange impact | -61,854 |
Net goodwill as of March 31, 2015 | 170,797,567 |
Latin America [Member] | |
Business Combination Segment Allocation [Line Items] | |
Net goodwill as of December 31, 2014 | 9,875,236 |
Foreign exchange impact | 0 |
Net goodwill as of March 31, 2015 | 9,875,236 |
EMEA [Member] | |
Business Combination Segment Allocation [Line Items] | |
Net goodwill as of December 31, 2014 | 66,213,243 |
Foreign exchange impact | -2,966,716 |
Net goodwill as of March 31, 2015 | $63,246,527 |
Other_Intangible_Assets_Detail
Other Intangible Assets (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2014 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $78,011,860 | $79,715,628 |
Less accumulated amortization | -35,691,095 | -34,796,055 |
Intangible assets, net | 42,320,765 | 44,919,573 |
Trade names [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 3,229,684 | 3,467,655 |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 12 years 7 months 6 days | |
Customer lists [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 73,736,806 | 75,113,728 |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 13 years 7 months 6 days | |
Noncompete agreements [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 988,474 | 1,077,349 |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 4 years | |
Patents [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $56,896 | $56,896 |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 9 years |
Other_Intangible_Assets_Detail1
Other Intangible Assets (Details 1) (USD $) | Mar. 31, 2015 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Line Items] | |
Remainder of 2015 | $4,434,879 |
2016 | 5,590,944 |
2017 | 5,146,472 |
2018 | 4,651,521 |
2019 | 4,349,247 |
Thereafter | 18,147,702 |
Finite-Lived Intangible Assets, Net | $42,320,765 |
Other_Intangible_Assets_Detail2
Other Intangible Assets (Details Textual) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Of Intangible Assets | $1.40 | $1.80 |
Income_Taxes_Details_Textual
Income Taxes (Details Textual) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Income Tax Disclosure [Line Items] | ||
Effective Income Tax Rate Reconciliation, Percent, Total | 34.10% | 31.40% |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 42.30% | 31.40% |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Numerator: | ||
Net income | $1,138,720 | $289,407 |
Denominator: | ||
Denominator for basic earnings per shareBweighted-average shares | 52,753,621 | 51,312,649 |
Effect of dilutive securities: | ||
Employee and director stock options and restricted common shares | 937,444 | 785,515 |
Contingently issuable shares | 187,632 | 90,927 |
Denominator for dilutive earnings per share | 53,878,697 | 52,189,091 |
Basic earnings per share (in dollars per share) | $0.02 | $0.01 |
Diluted earnings per share (in dollars per share) | $0.02 | $0.01 |
Earnings_Per_Share_Details_Tex
Earnings Per Share (Details Textual) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,724,264 | 1,938,029 |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Loss (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance, beginning of period - Foreign currency | ($5,401,135) | $2,777,000 |
Other comprehensive loss before reclassifications - Foreign currency | -6,442,010 | 315,749 |
Net current-period other comprehensive loss - Foreign currency | -6,442,010 | 315,749 |
Balance, end of period - Foreign currency | ($11,843,145) | $3,092,749 |
Related_Party_Transactions_Det
Related Party Transactions (Details Textual) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Related Party Transaction [Line Items] | ||
Print Procurement Services | $0.40 | $0.50 |
Insurance and Risk Management Services | 0.1 | 0.1 |
Arthur J.Gallagher & Co [Member] | ||
Related Party Transaction [Line Items] | ||
Due from Related Parties, Current | $0.10 |
Fair_Value_Measurement_Details
Fair Value Measurement (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | ||
Assets: | ||||
Money market funds | $667,169 | [1] | $667,127 | [1] |
Liabilities: | ||||
Contingent consideration | -31,389,732 | -32,582,574 | ||
Fair Value, Inputs, Level 1 [Member] | ||||
Assets: | ||||
Money market funds | 667,169 | [1] | 667,127 | [1] |
Liabilities: | ||||
Contingent consideration | 0 | 0 | ||
Fair Value, Inputs, Level 2 [Member] | ||||
Assets: | ||||
Money market funds | 0 | [1] | 0 | [1] |
Liabilities: | ||||
Contingent consideration | 0 | 0 | ||
Fair Value, Inputs, Level 3 [Member] | ||||
Assets: | ||||
Money market funds | 0 | [1] | 0 | [1] |
Liabilities: | ||||
Contingent consideration | ($31,389,732) | ($32,582,574) | ||
[1] | Included in cash and cash equivalents on the balance sheet. |
Fair_Value_Measurement_Details1
Fair Value Measurement (Details 1) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Balance | ($32,582,574) | ||
Change in fair value | 313,233 | -695,177 | |
Foreign exchange impact | 3,028,570 | ||
Balance | -31,389,732 | ||
Fair Value, Inputs, Level 3 [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Balance | -32,582,574 | ||
Contingent consideration payments paid in cash | 437,500 | ||
Change in fair value | -313,233 | [1] | |
Reclassification to Due to seller | 437,500 | ||
Foreign exchange impact | 631,075 | [2] | |
Balance | ($31,389,732) | ||
[1] | Adjustments to original contingent consideration obligations recorded were the result of using revised financial forecasts and updated fair value measurements. These changes are recognized within operating expenses on the consolidated statement of comprehensive income. | ||
[2] | Changes in the contingent consideration liability which are caused by foreign exchange rate fluctuations are recognized in other comprehensive loss. |
Fair_Value_Measurement_Details2
Fair Value Measurement (Details Textual) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2015 |
Fair Value, Adjustment Disclosure [Line Items] | |
Effect Of Discount Rate Increase In Fair Value | $0.40 |
Fair Value Measurements Valuation Process Probability Percentage | 100.00% |
Commitments_and_Contingencies_
Commitments and Contingencies (Details Textual) | 1 Months Ended | 44 Months Ended | ||||||
In Millions, unless otherwise specified | Jan. 31, 2014 | Dec. 31, 2013 | Nov. 30, 2013 | Mar. 31, 2015 | Feb. 28, 2014 | Mar. 31, 2015 | Dec. 31, 2012 | Dec. 31, 2012 |
EUR (€) | EUR (€) | EUR (€) | EUR (€) | EUR (€) | Subsequent Event [Member] | Maximum [Member] | Minimum [Member] | |
EUR (€) | USD ($) | USD ($) | ||||||
Other Commitments [Line Items] | ||||||||
Loss Contingency, Damages Sought, Value | € 0.60 | € 0.70 | € 0.70 | $88 | $35 | |||
Loss Contingency Damages Value Contingent Consideration | 7.1 | 7.1 | ||||||
Loss Contingency Damages Value Fixed Consideration | 5.8 | |||||||
Loss Contingency Damages Maximum Contingent Consideration | € 34.50 |
Revolving_Credit_Facility_Deta
Revolving Credit Facility (Details Textual) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2015 |
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 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 | 36.3 |
Line of Credit Facility Borrowings to be Drawn | $0.70 |
Share_Repurchase_Program_Detai
Share Repurchase Program (Details Textual) (USD $) | 0 Months Ended | 3 Months Ended |
In Millions, except Share data, unless otherwise specified | Feb. 12, 2015 | Mar. 31, 2015 |
Stock Repurchase Program, Authorized Amount | $20 | |
Stock Repurchase Program, Period in Force | 2 years | |
Treasury Stock, Shares, Acquired | 544,624 | |
Treasury Stock, Value, Acquired, Cost Method | $3.50 | |
Treasury Stock Acquired, Average Cost Per Share | $6.43 |
Business_Segments_Details
Business Segments (Details) (USD $) | 3 Months Ended | |||
Mar. 31, 2015 | Mar. 31, 2014 | |||
Segment Reporting Information [Line Items] | ||||
Net revenues from third parties | $242,095,000 | $241,490,000 | ||
Net revenues from other segments | 0 | 0 | ||
Total net revenues | 242,095,497 | 241,489,664 | ||
Adjusted EBITDA | 9,478,000 | [1] | 8,503,000 | [1] |
North America [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues from third parties | 170,801,000 | 167,442,000 | ||
Net revenues from other segments | 0 | 0 | ||
Total net revenues | 170,801,000 | 167,442,000 | ||
Adjusted EBITDA | 15,664,000 | [1] | 12,453,000 | [1] |
Latin America [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues from third parties | 21,948,000 | 24,709,000 | ||
Net revenues from other segments | 186,000 | 68,000 | ||
Total net revenues | 22,134,000 | 24,777,000 | ||
Adjusted EBITDA | 1,403,000 | [1] | 1,134,000 | [1] |
EMEA [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues from third parties | 49,346,000 | 49,339,000 | ||
Net revenues from other segments | 2,011,000 | 990,000 | ||
Total net revenues | 51,357,000 | 50,329,000 | ||
Adjusted EBITDA | -156,000 | [1] | 1,097,000 | [1] |
Other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues from third parties | 0 | 0 | ||
Net revenues from other segments | -2,197,000 | -1,058,000 | ||
Total net revenues | -2,197,000 | -1,058,000 | ||
Adjusted EBITDA | ($7,433,000) | [1] | ($6,181,000) | [1] |
[1] | Adjusted EBITDA, which represents income from operations with the addition of depreciation and amortization, stock-based compensation expense, change in the fair value of contingent consideration liabilities and certain legal settlements, is considered a non-GAAP financial measure under SEC regulations. Income from operations is the most directly comparable financial measure calculated in accordance with GAAP. The Company presents this measure as supplemental information to help investors better understand trends in its business results over time. The Companybs management team uses Adjusted EBITDA to evaluate the performance of the business. Adjusted EBITDA is not equivalent to any measure of performance required to be reported under GAAP, nor should this data be considered an indicator of the Companybs overall financial performance and liquidity. Moreover, the Adjusted EBITDA definition the Company uses may not be comparable to similarly titled measures reported by other companies. |
Business_Segments_Details_1
Business Segments (Details 1) (USD $) | 3 Months Ended | |||
Mar. 31, 2015 | Mar. 31, 2014 | |||
Revenue from External Customer [Line Items] | ||||
Adjusted EBITDA | $9,478,000 | [1] | $8,503,000 | [1] |
Depreciation and amortization | -4,090,938 | -4,170,716 | ||
Stock-based compensation expense | -2,060,738 | -1,396,274 | ||
Change in fair value of contingent consideration | -313,000 | 695,000 | ||
Restatement-related professional fees | 0 | -2,093,000 | ||
Total other expense | -1,039,789 | -1,115,673 | ||
Income before income taxes | $1,973,414 | $421,701 | ||
[1] | Adjusted EBITDA, which represents income from operations with the addition of depreciation and amortization, stock-based compensation expense, change in the fair value of contingent consideration liabilities and certain legal settlements, is considered a non-GAAP financial measure under SEC regulations. Income from operations is the most directly comparable financial measure calculated in accordance with GAAP. The Company presents this measure as supplemental information to help investors better understand trends in its business results over time. The Companybs management team uses Adjusted EBITDA to evaluate the performance of the business. Adjusted EBITDA is not equivalent to any measure of performance required to be reported under GAAP, nor should this data be considered an indicator of the Companybs overall financial performance and liquidity. Moreover, the Adjusted EBITDA definition the Company uses may not be comparable to similarly titled measures reported by other companies. |