Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | May. 06, 2016 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | INNERWORKINGS INC | |
Entity Central Index Key | 1,350,381 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Trading Symbol | INWK | |
Entity Common Stock, Shares Outstanding | 54,334,058 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,016 |
Condensed Consolidated Statemen
Condensed Consolidated Statement of Comprehensive Income - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Statement [Abstract] | ||
Revenue | $ 271,072,690 | $ 242,095,497 |
Cost of goods sold | 209,126,628 | 187,030,793 |
Gross profit | 61,946,062 | 55,064,704 |
Operating expenses: | ||
Selling, general and administrative expenses | 50,626,915 | 47,647,330 |
Depreciation and amortization | 4,595,735 | 4,090,938 |
Change in fair value of contingent consideration | 1,910,922 | 313,233 |
Restructuring Charges | 3,344,123 | 0 |
Income from operations | 1,468,367 | 3,013,203 |
Other income (expense): | ||
Interest income | 13,359 | 20,888 |
Interest expense | (1,076,807) | (1,145,319) |
Other, net | (160,703) | 84,642 |
Total other expense | (1,224,151) | (1,039,789) |
Income before income taxes | 244,216 | 1,973,414 |
Income tax expense | 2,393,089 | 834,694 |
Net income (loss) | $ (2,148,873) | $ 1,138,720 |
Basic earnings per share (in dollars per share) | $ (0.04) | $ 0.02 |
Diluted earnings per share (in dollars per share) | $ (0.04) | $ 0.02 |
Comprehensive loss | $ (2,619,281) | $ (5,303,290) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheet - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 20,928,961 | $ 30,754,930 |
Accounts receivable, net of allowance for doubtful accounts of $1,759 and $1,231, respectively | 200,628,659 | 188,818,864 |
Unbilled revenue | 34,547,963 | 30,758,319 |
Inventories | 34,715,322 | 33,327,320 |
Prepaid expenses | 12,956,761 | 14,352,955 |
Other current assets | 16,707,629 | 31,824,899 |
Total current assets | 320,485,295 | 329,837,287 |
Property and equipment, net | 33,208,007 | 32,681,365 |
Intangibles and other assets: | ||
Goodwill | 206,069,175 | 206,256,665 |
Intangible assets, net | 36,576,675 | 37,715,165 |
Deferred income taxes | 787,927 | 586,473 |
Other non-current assets | 1,469,301 | 1,389,830 |
Total intangibles and other assets | 244,903,078 | 245,948,133 |
Total assets | 598,596,380 | 608,466,785 |
Current liabilities: | ||
Accounts payable | 130,047,535 | 170,243,820 |
Current portion of contingent consideration | 11,130,816 | 11,386,914 |
Due to seller | 3,603,881 | 402,499 |
Accrued expenses | 35,376,633 | 31,363,066 |
Other current liabilities | 17,129,364 | 11,602,465 |
Total current liabilities | 197,288,229 | 224,998,764 |
Revolving credit facility | 118,615,200 | 99,257,684 |
Deferred income taxes | 13,168,276 | 12,897,935 |
Contingent consideration, net of current portion | 9,187,597 | 10,774,908 |
Other non-current liabilities | 2,771,604 | 2,509,604 |
Total liabilities | $ 341,030,906 | $ 350,438,895 |
Commitments and contingencies (See Note 11) | ||
Stockholders' equity: | ||
Common stock, par value $0.0001 per share, 200,000 and 200,000 shares authorized, 62,867 and 62,645 shares issued, 53,321 and 53,098 shares outstanding, respectively | $ 6,288 | $ 6,265 |
Additional paid-in capital | 215,723,193 | 213,566,347 |
Treasury stock at cost, 9,547 shares | (52,207,366) | (52,207,366) |
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax | (14,462,926) | (13,992,518) |
Retained earnings | 108,506,285 | 110,655,162 |
Total stockholders' equity | 257,565,474 | 258,027,890 |
Total liabilities and stockholders' equity | $ 598,596,380 | $ 608,466,785 |
Condensed Consolidated Balance4
Condensed Consolidated Balance Sheet (Parenthetical) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts (in dollars) | $ 1,759,000 | $ 1,230,561 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 62,866,919 | 62,644,969 |
Common stock, shares outstanding | 53,320,518 | 53,098,568 |
Treasury stock at cost, shares | 9,546,401 | 9,546,401 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash flows from operating activities | ||
Net income (loss) | $ (2,148,873) | $ 1,138,720 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation and amortization | 4,595,735 | 4,090,938 |
Stock-based compensation expense | 1,240,523 | 2,060,738 |
Deferred income taxes | (68,431) | (7,188) |
Bad debt provision | 656,237 | 874,501 |
Change in fair value of contingent consideration | 1,910,922 | 313,233 |
Other operating activities | 52,427 | 52,427 |
Change in assets: | ||
Accounts receivable and unbilled revenue | (16,255,677) | (3,951,614) |
Inventories | (1,388,002) | (6,488,950) |
Prepaid expenses and other assets | 16,381,567 | 3,099,672 |
Change in liabilities: | ||
Accounts payable | (40,196,285) | (3,849,922) |
Accrued expenses and other liabilities | 10,652,625 | (3,608,151) |
Net cash used in operating activities | (24,567,232) | (6,275,596) |
Cash flows from investing activities | ||
Purchases of property and equipment | (3,987,162) | (3,718,679) |
Net cash used in investing activities | (3,987,162) | (3,718,679) |
Cash flows from financing activities | ||
Net borrowings from revolving credit facility | 19,357,516 | 5,579,750 |
Net short-term secured borrowings (repayments) | (1,802,548) | 88,837 |
Repurchases of common stock | 0 | |
Stock Repurchased During Period, Value | (3,499,998) | |
Payments of contingent consideration | (525,000) | (437,500) |
Proceeds from exercise of stock options | 984,000 | 38,554 |
Other financing activities | 381,502 | (98,773) |
Net cash provided by financing activities | 18,395,470 | 1,670,870 |
Effect of exchange rate changes on cash and cash equivalents | 332,955 | (848,497) |
Decrease in cash and cash equivalents | (9,825,969) | (9,171,902) |
Cash and cash equivalents, beginning of period | 30,754,930 | |
Cash and cash equivalents, end of period | $ 20,928,961 | $ 13,406,040 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 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, 2016 are not necessarily indicative of the results to be expected for the full year ending December 31, 2016 . 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, 2015 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 10, 2016. 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 the world's most marketing intensive companies, including those in the Fortune 1000, 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 two business segments, North America and International, and is viewed as two operating segments by the chief operating decision maker for purposes of resource allocation and assessing performance. See Note 14 for further information about the Company’s reportable segments. 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 of each award using the Black-Scholes option valuation model for stock options or the closing share price for restricted shares. The fair value 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 $1.2 million and $2.1 million in stock-based compensation expense for the three months ended March 31, 2016 and 2015 , respectively. During the first quarter of 2015 , $0.4 million of stock-based compensation expense was recognized related to the modification of a former executive’s award agreements in connection with his transition agreement. Recent Accounting Pronouncements In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share - Based Payment Accounting , ("ASU 2016-09") which simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for annual and interim periods beginning after December 15, 2016. This guidance can be applied either prospectively, retrospectively or using a modified retrospective transition method. Early adoption is permitted. The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements . In March 2016, the FASB issued Accounting Standards Update No. 2016-08, Revenue from Contracts with Customers (Topic 606) Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), ("ASU 2016-08") and in April 2016, the FASB issued Accounting Standards Update No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing ("ASU 2016-10"), both of which provide supplemental adoption guidance and clarification to ASC 2014-09. ASU 2016-08 and ASU 2016-10 must be adopted concurrently with the adoption of ASU 2014-09. The Company is currently evaluating the impact of adopting these standards on its consolidated financial statements . In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) , ("ASU 2016-02") which increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and requires disclosure of key information about leasing arrangements. ASU 2016-02 requires lessees to recognize a right-of-use asset and a lease liability for most leases in the balance sheet as well as other qualitative and quantitative disclosures. The update is to be applied using a modified retrospective method and is effective for annual periods beginning after December 15, 2018 and interim periods within those annual periods. The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements . In November 2015, the FASB issued Accounting Standards Update No. 2015-17, Balance Sheet Classification of Deferred Taxes (Topic 740) , (“ASU 2015-17”) which simplifies the presentation of deferred income taxes. ASU 2015-17 provides presentation requirements to classify deferred tax assets and liabilities as noncurrent in the Balance Sheet. The standard will be effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted for financial statements that have not been previously issued. The ASU may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The Company adopted the standard as of December 31, 2015 and applied the changes prospectively. The adoption resulted in $1.9 million of net current deferred tax assets reclassified to non-current liabilities in the Consolidated Balance Sheets at December 31, 2015. Adoption had no impact on the Company's results of operations. 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. In August 2015, the FASB issued Accounting Standards Update 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date ( “ ASU 2015-14 ” ) which defers the effective date of ASU 2014-09 for all entities by one year. Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company is currently evaluating the impact of adopting these standards on its consolidated financial statements . In July 2015, the FASB issued Accounting Standards Update 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory ( “A SU 2015-11 ” ). ASU 2015-11 applies to inventory that is measured using first-in, first-out (FIFO) or average cost. Under the updated guidance, an entity should measure inventory that is within scope at the lower of cost and net realizable value, which is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Subsequent measurement is unchanged for inventory that is measured using last-in, last-out (LIFO). The standard is effective for annual and interim periods beginning after December 15, 2016, and should be applied prospectively with early adoption permitted at the beginning of an interim or annual reporting period. The Company is currently evaluating the impact of adopting ASU 2015-11 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”). ASU 2014-15 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. |
Contingent Consideration
Contingent Consideration | 3 Months Ended |
Mar. 31, 2016 | |
Business Combinations [Abstract] | |
Contingent Consideration | 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 recorded the acquisition date fair value of the contingent consideration liability as additional purchase price. As discussed in Note 10, the process for determining the fair value of the contingent consideration liability consists of 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. Subsequent to the acquisition date, the Company estimates the fair value of the contingent consideration liability each reporting period, and any adjustments made to the fair value are recorded in the Company’s results of operations. If an acquisition reaches the required performance measures within the reporting period, the fair value of the contingent consideration liability is increased to 100% , the maximum potential payment, and reclassified to Due to Seller. The Company has recorded $20.3 million in contingent consideration at March 31, 2016 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, 2016 and 2015 , the Company recorded expense of $1.9 million and $0.3 million , respectively. As of March 31, 2016 , the potential maximum contingent payments, excluding the amounts recorded in Due to seller which are currently payable, would be due as follows if all performance measures are achieved (in thousands): Maximum Potential Payment Fair Value of Liability 2016 $ 12,733 $ 9,112 2017 69,269 11,206 $ 82,002 $ 20,318 If the performance measures required by the purchase agreements are not achieved, the Company may pay less than the maximum amounts presented in the table above, depending on the terms of the agreement. While the maximum potential payments shown in the table are $82.0 million , the Company estimates that the fair value of the payments that will be made is $20.3 million . |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The following is a summary of the goodwill balance for each operating segment as of March 31, 2016 (in thousands): North America International Total Net goodwill as of December 31, 2015 $ 170,735 $ 35,522 $ 206,257 Foreign exchange impact 42 (230 ) (188 ) Net goodwill as of March 31, 2016 $ 170,777 $ 35,292 $ 206,069 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 ("ASC 350"), 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. The fair value estimates used in the goodwill impairment analysis require 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. The Company reviews for potential impairment indicators each reporting period and does not believe that goodwill is impaired as of March 31, 2016 . |
Other Intangible Assets
Other Intangible Assets | 3 Months Ended |
Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Other Intangible Assets | Other Intangible Assets The following is a summary of the Company’s other intangible assets as of March 31, 2016 and December 31, 2015 (in thousands): March 31, December 31, 2015 Weighted Average Life Customer lists $ 74,114 $ 73,759 13.6 Noncompete agreements 981 988 4.0 Trade names 3,208 3,228 12.6 Patents 57 57 9.0 78,360 78,032 Less accumulated amortization (41,783 ) (40,317 ) Intangible assets, net $ 36,577 $ 37,715 In accordance with ASC 350, 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 approximately 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, thirteen years and nine years, respectively. Amortization expense related to these intangible assets was $1.4 million and $1.4 million for the three months ended March 31, 2016 and 2015 , respectively. The estimated amortization expense for the next five years and thereafter is as follows (in thousands): Remainder of 2016 $ 4,119 2017 5,157 2018 4,644 2019 4,353 2020 4,292 Thereafter 14,012 $ 36,577 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 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 979.9% and 42.3% for the three months ended March 31, 2016 and 2015 , 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 U.S. GAAP. In the three months ended March 31, 2016 and 2015 , $1.9 million and $0.3 million was recognized as expense from fair value changes to contingent consideration, respectively, which did not result in recognition of a deferred tax asset, therefore, increasing the effective tax rate for these periods. Additionally, the global realignment plan resulted in restructuring and other charges in jurisdictions which have valuation allowances against tax loss carryforwards, so a tax benefit has not been recognized in the financial statements. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 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, 2016 and 2015 , an aggregate of 3.4 million and 2.7 million 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, 2016 and 2015 are as follows (in thousands, except per share amounts): Three Months Ended March 31, 2016 2015 Numerator: Net income (loss) $ (2,149 ) $ 1,139 Denominator: Weighted-average shares outstanding – basic 53,145 52,754 Effect of dilutive securities: Employee and director stock options and restricted common shares — 937 Contingently issuable shares — 188 Weighted-average shares outstanding – diluted 53,145 53,879 Basic earnings (loss) per share $ (0.04 ) $ 0.02 Diluted earnings (loss) per share $ (0.04 ) $ 0.02 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2016 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive (Loss) | Accumulated Other Comprehensive Loss The table below presents changes in the components of accumulated other comprehensive loss for the three months ended March 31, 2016 and 2015 (in thousands): Three Months Ended March 31, 2016 2015 Foreign currency Foreign currency Balance, beginning of period $ (13,993 ) $ (5,401 ) Other comprehensive loss before reclassifications (470 ) (6,442 ) Net current-period other comprehensive loss (470 ) (6,442 ) Balance, end of period $ (14,463 ) $ (11,843 ) |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 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, 2016 and 2015 was $0.4 million and $0.4 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, 2016 and 2015 , respectively. The net amount receivable from Arthur J. Gallagher & Co. at March 31, 2016 was $0.2 million . |
Fair Value Measurement
Fair Value Measurement | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | 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, 2016 and December 31, 2015 . 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 rates. 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 reclassified to Due to Seller, 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 $0.2 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, 2016 and December 31, 2015 (in thousands): At March 31, 2016 Total Fair Value Measurement Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Money market funds (1) $ 667 $ 667 $ — $ — Liabilities: Contingent consideration $ (20,318 ) $ — $ — $ (20,318 ) At December 31, 2015 Total Fair Value Measurement Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Money market funds (1) $ 667 $ 667 $ — $ — Liabilities: Contingent consideration $ (22,162 ) $ — $ — $ (22,162 ) (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) (in thousands): Fair Value Measurements at Reporting Date Using Significant Unobservable Inputs (Level 3) Contingent Consideration Balance as of December 31, 2015 $ (22,162 ) Contingent consideration payments paid in cash 525 Change in fair value (1) (1,911 ) Reclassification to Due to seller 3,201 Foreign exchange impact (2) 29 Balance as of March 31, 2016 $ (20,318 ) (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, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies 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 (approximately $1.0 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 (approximately ( $1.0 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 and this proceeding is currently pending. In addition, in September 2015 the Company initiated a civil claim in the Paris Commercial Court against the former owner of Production Graphics, seeking civil damages to redress these same harms. 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. The Company had paid €5.8 million (approximately $8.0 million ) in fixed consideration and €7.1 million (approximately $9.4 million ) in contingent consideration to the former owner of Productions Graphics; the remaining maximum contingent consideration under the acquisition agreemen t was €34.5 million (approximately $37.6 million ) and the Company has determined that none of this amount was earned and payable. 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 (approximately $0.8 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. The labor claim has been stayed in deference to the Company’s related criminal complaint. 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. On September 29, 2014, the Company and individual defendants filed a motion to dismiss the complaint for failure to state a claim. On September 30, 2015, the Court granted in part and denied in part the motion to dismiss, resulting in the dismissal with prejudice of all claims relating to the inside sales initiative. On March 18, 2016, the parties reached an agreement in principle to settle the litigation. The settlement, which remains subject to Court approval, provides for payment to the class of $6.0 million , including plaintiff’s attorneys’ fees, in exchange for a full and final release; the settlement also includes a denial of liability or any wrongdoing by the Company and the individual defendants. The settlement payment will be fully paid by the Company’s insurance carrier. 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, and a Committee of three independent directors of the Board of Directors is reviewing and evaluating the matters raised in the letter. In March 2016, Capgemini America, Inc. (“Capgemini”) filed a complaint against the Company in the United States District Court for the Northern District of Illinois, alleging breach of contract and unjust enrichment in connection with the Company’s termination of Capgemini’s services under an agreement requiring Capgemini to provide certain business process outsourcing services to the Company. The complaint seeks damages of $2.4 million , interest, costs, and attorney’s fees. The Company disputes the claims and intends to vigorously defend the matter. In April 2016, the Company filed an answer, affirmative defenses and counterclaims against Capgemini. The Company’s counterclaims allege fraud in the inducement, Illinois Consumer Fraud Act liability, and breach of contract, and seek compensatory and punitive damages, costs, and attorney’s fees in an amount to be determined. |
Revolving Credit Facility
Revolving Credit Facility | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Revolving Credit Facility | 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, as defined in the Credit Agreement. 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 3.00 to 1.0 for the quarter ended March 31, 2016 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, 2016 . At March 31, 2016 , the Company had $32.7 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, 2016 . |
Share Repurchase Program
Share Repurchase Program | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Share Repurchase Program | 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, 2016 , the Company did not repurchase any shares of its common stock. During the three months ended March 31, 2015 , the Company repurchased 544,624 shares of its common stock for $3.5 million in the aggregate 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, 2016 | |
Segment Reporting [Abstract] | |
Business Segments | usiness Segments Segment information is prepared on the same basis that our Chief Executive Officer, who is our chief operating decision maker (“CODM”), manages the segments, evaluates financial results, and makes key operating decisions. In fiscal year 2015 , segments were organized and managed by the CODM as three business segments: North America, including the United States and Canada; EMEA, including operations in the United Kingdom, continental Europe, the Middle East, Africa and Asia; and LATAM, including operations in Mexico, South America and Central America. Effective in the first fiscal quarter of 2016 , the Company implemented changes to the organizational structure of the Latin America and EMEA segments which included combining the two segments under single management and managing those businesses as one segment. In conjunction with this change, the CODM now manages the results of the Company as two business segments: North America and International. The North America segment includes operations in the United States and Canada; the International segment includes all other operations across Europe, Asia, Mexico, Central America and South America; 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 segments and Other for the three month periods noted (in thousands): North America International Other Total Three Months Ended March 31, 2016: Net revenue from third parties $ 190,004 $ 81,069 $ — $ 271,073 Net revenue from other segments — 3,767 (3,767 ) — Total net revenues 190,004 84,836 (3,767 ) 271,073 Adjusted EBITDA (1) 16,346 4,102 (7,888 ) 12,560 Three Months Ended March 31, 2015: Net revenue from third parties $ 170,801 $ 71,294 $ — $ 242,095 Net revenue from other segments — 186 (186 ) — Total net revenues 170,801 71,480 (186 ) 242,095 Adjusted EBITDA (1) 15,664 1,247 (7,433 ) 9,478 (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, 2016 2015 Adjusted EBITDA $ 12,560 $ 9,478 Depreciation and amortization (4,596 ) (4,091 ) Stock-based compensation expense (1,241 ) (2,061 ) Change in fair value of contingent consideration (1,911 ) (313 ) Restructuring and other charges (3,344 ) — Income from operations 1,468 3,013 Total other expense (1,224 ) (1,040 ) Income before income taxes $ 244 $ 1,973 |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation of Interim Financial Statements | 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, 2016 are not necessarily indicative of the results to be expected for the full year ending December 31, 2016 . 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, 2015 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 10, 2016. |
Description of the Business | 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 the world's most marketing intensive companies, including those in the Fortune 1000, 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 two business segments, North America and International, and is viewed as two operating segments by the chief operating decision maker for purposes of resource allocation and assessing performance. See Note 14 for further information about the Company’s reportable segments. |
Reclassifications | |
Preparation of Financial Statements and Use of Estimates | 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 | 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 | 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 | 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 of each award using the Black-Scholes option valuation model for stock options or the closing share price for restricted shares. The fair value 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 $1.2 million and $2.1 million in stock-based compensation expense for the three months ended March 31, 2016 and 2015 , respectively. During the first quarter of 2015 , $0.4 million of stock-based compensation expense was recognized related to the modification of a former executive’s award agreements in connection with his transition agreement. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share - Based Payment Accounting , ("ASU 2016-09") which simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for annual and interim periods beginning after December 15, 2016. This guidance can be applied either prospectively, retrospectively or using a modified retrospective transition method. Early adoption is permitted. The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements . In March 2016, the FASB issued Accounting Standards Update No. 2016-08, Revenue from Contracts with Customers (Topic 606) Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), ("ASU 2016-08") and in April 2016, the FASB issued Accounting Standards Update No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing ("ASU 2016-10"), both of which provide supplemental adoption guidance and clarification to ASC 2014-09. ASU 2016-08 and ASU 2016-10 must be adopted concurrently with the adoption of ASU 2014-09. The Company is currently evaluating the impact of adopting these standards on its consolidated financial statements . In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) , ("ASU 2016-02") which increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and requires disclosure of key information about leasing arrangements. ASU 2016-02 requires lessees to recognize a right-of-use asset and a lease liability for most leases in the balance sheet as well as other qualitative and quantitative disclosures. The update is to be applied using a modified retrospective method and is effective for annual periods beginning after December 15, 2018 and interim periods within those annual periods. The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements . In November 2015, the FASB issued Accounting Standards Update No. 2015-17, Balance Sheet Classification of Deferred Taxes (Topic 740) , (“ASU 2015-17”) which simplifies the presentation of deferred income taxes. ASU 2015-17 provides presentation requirements to classify deferred tax assets and liabilities as noncurrent in the Balance Sheet. The standard will be effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted for financial statements that have not been previously issued. The ASU may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The Company adopted the standard as of December 31, 2015 and applied the changes prospectively. The adoption resulted in $1.9 million of net current deferred tax assets reclassified to non-current liabilities in the Consolidated Balance Sheets at December 31, 2015. Adoption had no impact on the Company's results of operations. 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. In August 2015, the FASB issued Accounting Standards Update 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date ( “ ASU 2015-14 ” ) which defers the effective date of ASU 2014-09 for all entities by one year. Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company is currently evaluating the impact of adopting these standards on its consolidated financial statements . In July 2015, the FASB issued Accounting Standards Update 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory ( “A SU 2015-11 ” ). ASU 2015-11 applies to inventory that is measured using first-in, first-out (FIFO) or average cost. Under the updated guidance, an entity should measure inventory that is within scope at the lower of cost and net realizable value, which is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Subsequent measurement is unchanged for inventory that is measured using last-in, last-out (LIFO). The standard is effective for annual and interim periods beginning after December 15, 2016, and should be applied prospectively with early adoption permitted at the beginning of an interim or annual reporting period. The Company is currently evaluating the impact of adopting ASU 2015-11 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”). ASU 2014-15 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. |
Contingent Consideration (Table
Contingent Consideration (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions by Acquisition, Contingent Consideration | As of March 31, 2016 , the potential maximum contingent payments, excluding the amounts recorded in Due to seller which are currently payable, would be due as follows if all performance measures are achieved (in thousands): Maximum Potential Payment Fair Value of Liability 2016 $ 12,733 $ 9,112 2017 69,269 11,206 $ 82,002 $ 20,318 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Business Combination, Segment Allocation | The following is a summary of the goodwill balance for each operating segment as of March 31, 2016 (in thousands): North America International Total Net goodwill as of December 31, 2015 $ 170,735 $ 35,522 $ 206,257 Foreign exchange impact 42 (230 ) (188 ) Net goodwill as of March 31, 2016 $ 170,777 $ 35,292 $ 206,069 |
Other Intangible Assets (Tables
Other Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule Of Finite Lived And Indefinite Lived Intangible Assets | The following is a summary of the Company’s other intangible assets as of March 31, 2016 and December 31, 2015 (in thousands): March 31, December 31, 2015 Weighted Average Life Customer lists $ 74,114 $ 73,759 13.6 Noncompete agreements 981 988 4.0 Trade names 3,208 3,228 12.6 Patents 57 57 9.0 78,360 78,032 Less accumulated amortization (41,783 ) (40,317 ) Intangible assets, net $ 36,577 $ 37,715 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The estimated amortization expense for the next five years and thereafter is as follows (in thousands): Remainder of 2016 $ 4,119 2017 5,157 2018 4,644 2019 4,353 2020 4,292 Thereafter 14,012 $ 36,577 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The computations of basic and diluted earnings per common share for the three months ended March 31, 2016 and 2015 are as follows (in thousands, except per share amounts): Three Months Ended March 31, 2016 2015 Numerator: Net income (loss) $ (2,149 ) $ 1,139 Denominator: Weighted-average shares outstanding – basic 53,145 52,754 Effect of dilutive securities: Employee and director stock options and restricted common shares — 937 Contingently issuable shares — 188 Weighted-average shares outstanding – diluted 53,145 53,879 Basic earnings (loss) per share $ (0.04 ) $ 0.02 Diluted earnings (loss) per share $ (0.04 ) $ 0.02 |
Accumulated Other Comprehensi24
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The table below presents changes in the components of accumulated other comprehensive loss for the three months ended March 31, 2016 and 2015 (in thousands): Three Months Ended March 31, 2016 2015 Foreign currency Foreign currency Balance, beginning of period $ (13,993 ) $ (5,401 ) Other comprehensive loss before reclassifications (470 ) (6,442 ) Net current-period other comprehensive loss (470 ) (6,442 ) Balance, end of period $ (14,463 ) $ (11,843 ) |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | 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, 2016 and December 31, 2015 (in thousands): At March 31, 2016 Total Fair Value Measurement Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Money market funds (1) $ 667 $ 667 $ — $ — Liabilities: Contingent consideration $ (20,318 ) $ — $ — $ (20,318 ) At December 31, 2015 Total Fair Value Measurement Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Money market funds (1) $ 667 $ 667 $ — $ — Liabilities: Contingent consideration $ (22,162 ) $ — $ — $ (22,162 ) (1) Included in cash and cash equivalents on the balance sheet. |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | 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) (in thousands): Fair Value Measurements at Reporting Date Using Significant Unobservable Inputs (Level 3) Contingent Consideration Balance as of December 31, 2015 $ (22,162 ) Contingent consideration payments paid in cash 525 Change in fair value (1) (1,911 ) Reclassification to Due to seller 3,201 Foreign exchange impact (2) 29 Balance as of March 31, 2016 $ (20,318 ) (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, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The table below presents financial information for the Company’s reportable segments and Other for the three month periods noted (in thousands): North America International Other Total Three Months Ended March 31, 2016: Net revenue from third parties $ 190,004 $ 81,069 $ — $ 271,073 Net revenue from other segments — 3,767 (3,767 ) — Total net revenues 190,004 84,836 (3,767 ) 271,073 Adjusted EBITDA (1) 16,346 4,102 (7,888 ) 12,560 Three Months Ended March 31, 2015: Net revenue from third parties $ 170,801 $ 71,294 $ — $ 242,095 Net revenue from other segments — 186 (186 ) — Total net revenues 170,801 71,480 (186 ) 242,095 Adjusted EBITDA (1) 15,664 1,247 (7,433 ) 9,478 (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 | 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, 2016 2015 Adjusted EBITDA $ 12,560 $ 9,478 Depreciation and amortization (4,596 ) (4,091 ) Stock-based compensation expense (1,241 ) (2,061 ) Change in fair value of contingent consideration (1,911 ) (313 ) Restructuring and other charges (3,344 ) — Income from operations 1,468 3,013 Total other expense (1,224 ) (1,040 ) Income before income taxes $ 244 $ 1,973 |
Summary of Significant Accoun27
Summary of Significant Accounting Policies (Details) | 3 Months Ended | |
Mar. 31, 2016USD ($)Unit | Mar. 31, 2015USD ($) | |
Accounting Policies [Abstract] | ||
Number of Reportable Segments | Unit | 2 | |
Share-based compensation | $ (1,240,523) | $ (2,060,738) |
Share-based compensation arrangement by share-based payment award, plan modification, incremental compensation cost | $ 400,000 |
Contingent Consideration - Sche
Contingent Consideration - Schedule of Contingent Consideration (Details) | Mar. 31, 2016USD ($) |
Business Acquisition, Contingent Consideration [Line Items] | |
Potential Maximum Contingent Payments | $ 82,002,442 |
Common Stock [Member] | |
Business Acquisition, Contingent Consideration [Line Items] | |
Potential Maximum Contingent Payments | 20,318,109 |
Cash [Member] | |
Business Acquisition, Contingent Consideration [Line Items] | |
Potential Maximum Contingent Payments | 82,002,442 |
2015 [Member] | Common Stock [Member] | |
Business Acquisition, Contingent Consideration [Line Items] | |
Potential Maximum Contingent Payments | 9,111,838 |
2015 [Member] | Cash [Member] | |
Business Acquisition, Contingent Consideration [Line Items] | |
Potential Maximum Contingent Payments | 12,733,050 |
2016 [Member] | Common Stock [Member] | |
Business Acquisition, Contingent Consideration [Line Items] | |
Potential Maximum Contingent Payments | 11,206,271 |
2016 [Member] | Cash [Member] | |
Business Acquisition, Contingent Consideration [Line Items] | |
Potential Maximum Contingent Payments | $ 69,269,392 |
Contingent Consideration - Cont
Contingent Consideration - Contingent Consideration (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Business Combinations [Abstract] | ||
Fair Value Measurements Valuation Process Probability Percentage | 100.00% | |
Business combination, contingent consideration, liability | $ 20,300,000 | |
Fair value of contingent consideration adjustment expense (income) | 1,910,922 | $ 313,233 |
Business combination, contingent consideration, maximum potential cash payment | $ 82,002,442 |
Goodwill (Details)
Goodwill (Details) | 3 Months Ended |
Mar. 31, 2016USD ($)Unit | |
Goodwill [Roll Forward] | |
Net goodwill as of December 31, 2014 | $ 206,256,665 |
Foreign exchange impact | (187,490) |
Net goodwill as of June 30, 2015 | $ 206,069,175 |
Number of Reportable Segments | Unit | 2 |
North America [Member] | |
Goodwill [Roll Forward] | |
Net goodwill as of December 31, 2014 | $ 170,734,819 |
Foreign exchange impact | 41,954 |
Net goodwill as of June 30, 2015 | 170,776,773 |
International [Member] | |
Goodwill [Roll Forward] | |
Net goodwill as of December 31, 2014 | 35,521,846 |
Foreign exchange impact | (229,444) |
Net goodwill as of June 30, 2015 | $ 35,292,402 |
Other Intangible Assets - Sched
Other Intangible Assets - Schedule of Other Intangible Assets (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | $ 78,359,987 | $ 78,032,041 |
Less accumulated amortization | (41,783,311) | (40,316,876) |
Intangible assets, net | 36,576,675 | 37,715,165 |
Trade names [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | $ 3,208,290 | 3,228,133 |
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 | $ 74,114,317 | 73,759,118 |
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 | $ 980,484 | 987,894 |
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 - Addit
Other Intangible Assets - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization Of Intangible Assets | $ 1.4 | $ 1.4 |
Other Intangible Assets - Sch33
Other Intangible Assets - Schedule of Other Intangible Amortization (Details) | Mar. 31, 2016USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of 2015 | $ 4,118,901 |
2,016 | 5,157,137 |
2,017 | 4,643,570 |
2,018 | 4,353,316 |
2,019 | 4,292,223 |
Thereafter | 14,011,528 |
Finite-Lived Intangible Assets, Net | $ 36,576,675 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 979.90% | 42.30% |
Fair value of contingent consideration adjustment expense (income) | $ 1,910,922 | $ 313,233 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - shares | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Earnings Per Share [Abstract] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 3,445,275 | 2,724,264 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Basic and Diluted Earnings per Share (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Numerator: | ||
Net income (loss) | $ (2,148,873) | $ 1,138,720 |
Denominator: | ||
Weighted-average shares outstanding – basic | 53,145,186 | 52,753,621 |
Effect of dilutive securities: | ||
Employee and director stock options and restricted common shares | 0 | 937,444 |
Contingently issuable shares | 0 | 187,632 |
Weighted-average shares outstanding – diluted | 53,145,186 | 53,878,697 |
Basic earnings per share (in dollars per share) | $ (0.04) | $ 0.02 |
Diluted earnings per share (in dollars per share) | $ (0.04) | $ 0.02 |
Accumulated Other Comprehensi37
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance, beginning of period | $ (13,992,518) | |
Other comprehensive loss before reclassifications | (470,408) | $ (6,442,000) |
Net current-period other comprehensive loss | (470,408) | (6,442,000) |
Balance, end of period | $ (14,462,926) | $ (11,843,000) |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Related Party Transaction [Line Items] | ||
Print Procurement Services | $ 0.4 | $ 0.4 |
Insurance and Risk Management Services | 0.1 | $ 0.1 |
Arthur J.Gallagher Co [Member] | ||
Related Party Transaction [Line Items] | ||
Due from Related Parties, Current | $ 0.2 |
Fair Value Measurement - Additi
Fair Value Measurement - Additional Information (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements Valuation Process Probability Percentage | 100.00% |
Effect Of Discount Rate Increase In Fair Value | $ 0.2 |
Fair Value Measurement - Schedu
Fair Value Measurement - Schedule of Fair Value Measurement (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Assets: | ||
Money market funds(1) | $ 667,356 | $ 667,211 |
Liabilities: | ||
Contingent consideration | (20,318,413) | (22,161,822) |
Fair Value, Inputs, Level 1 [Member] | ||
Assets: | ||
Money market funds(1) | 667,356 | 667,211 |
Liabilities: | ||
Contingent consideration | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Assets: | ||
Money market funds(1) | 0 | 0 |
Liabilities: | ||
Contingent consideration | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ||
Assets: | ||
Money market funds(1) | 0 | 0 |
Liabilities: | ||
Contingent consideration | $ (20,318,413) | $ (22,161,822) |
Fair Value Measurement - Sche41
Fair Value Measurement - Schedule of Unobservable Fair Value Inputs (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance as of December 31, 2015 | $ (22,161,822) | |
Change in fair value of contingent consideration | 1,910,922 | $ 313,233 |
Foreign exchange impact(2) | (187,490) | |
Balance as of March 31, 2016 | (20,318,413) | |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance as of December 31, 2015 | (22,161,822) | |
Contingent consideration payments paid in cash | 525,000 | |
Change in fair value of contingent consideration | (1,910,922) | |
Reclassification to Due to seller | 3,201,382 | |
Foreign exchange impact(2) | 27,949 | |
Balance as of March 31, 2016 | $ (20,318,413) |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands, € in Millions | 1 Months Ended | 3 Months Ended | 15 Months Ended | |||||||
Jan. 31, 2014USD ($) | Jan. 31, 2014EUR (€) | Dec. 31, 2013USD ($) | Dec. 31, 2013EUR (€) | Nov. 30, 2013EUR (€) | Mar. 31, 2016 | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2015EUR (€) | Feb. 28, 2014EUR (€) | |
Other Commitments [Line Items] | ||||||||||
Loss Contingency, Damages Awarded, Value | $ | $ 6,030 | |||||||||
Loss Contingency, Damages Sought | 2.4 | |||||||||
Wrongful Termination Lawsuit - Productions Graphics [Member] | ||||||||||
Other Commitments [Line Items] | ||||||||||
Loss Contingency, Damages Sought, Value | $ 1,000 | € 0.7 | ||||||||
Loss Contingency, Judicial Asset Attachment Order, Amount | € | € 0.7 | |||||||||
Loss Contingency Damages Value Contingent Consideration | $ 9,400 | € 7.1 | € 7.1 | |||||||
Loss Contingency Damages Value Fixed Consideration | 8,000 | 5.8 | ||||||||
Loss Contingency Damages Maximum Contingent Consideration | $ 37,600 | € 34.5 | ||||||||
Employment Arbitration Claim [Member] | ||||||||||
Other Commitments [Line Items] | ||||||||||
Loss Contingency, Damages Sought, Value | $ 800 | € 0.6 |
Revolving Credit Facility (Deta
Revolving Credit Facility (Details) | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 175,000,000 |
Line of Credit Facility Maturity Date | Sep. 25, 2019 |
Line of Credit Facility Increased Current Borrowing Capacity | $ 50,000,000 |
Line of Credit Facility Required Leverage Ratio | 3 |
Line of Credit Facility Unused Capacity | $ 32,700,000 |
Line of Credit Facility Borrowings to be Drawn | $ 700,000 |
Eurodollar [Member] | Minimum [Member] | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility Basis Spread on Variable Rate | 1.25% |
Eurodollar [Member] | Maximum [Member] | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility Basis Spread on Variable Rate | 2.50% |
Base Rate [Member] | Minimum [Member] | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility Basis Spread on Variable Rate | 0.25% |
Base Rate [Member] | Maximum [Member] | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility Basis Spread on Variable Rate | 1.50% |
Leverage Ratio Required After the Quarter Ended June 30, 2015 [Member] | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility Required Leverage Ratio | 3 |
Line of Credit Facility Required Interest Coverage Ratio | 5 |
Restructuring and Related Activ
Restructuring and Related Activities (Details) | Dec. 14, 2015USD ($)employee | Mar. 31, 2016USD ($) | Mar. 31, 2015USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Expected Number of Positions Eliminated | employee | 100 | ||||
Restructuring Reserve | $ 3,094,000 | $ 3,094,000 | $ 359,000 | ||
Restructuring Charges | 3,344,123 | $ 0 | 4,397,000 | ||
Payments for Restructuring | (609,000) | ||||
Contract Termination [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Reserve | 874,000 | 874,000 | 75,000 | ||
Restructuring Charges | 799,000 | ||||
Payments for Restructuring | 0 | ||||
Employee Severance [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Reserve | 2,220,000 | 2,220,000 | $ 284,000 | ||
Restructuring Charges | 2,545,000 | ||||
Payments for Restructuring | $ (609,000) | ||||
International [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Charges | 3,300,000 | ||||
Other Restructuring [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Charges | 800,000 | ||||
North America [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Charges | $ 300,000 | ||||
Maximum [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Expected Cost | $ 6,000,000 | ||||
Maximum [Member] | Contract Termination [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Expected Cost | 1,100,000 | ||||
Maximum [Member] | Employee Severance [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Expected Cost | 4,900,000 | ||||
Minimum [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Expected Cost | 4,500,000 | ||||
Minimum [Member] | Contract Termination [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Expected Cost | 1,000,000 | ||||
Minimum [Member] | Employee Severance [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Expected Cost | $ 3,500,000 |
Share Repurchase Program (Detai
Share Repurchase Program (Details) - USD ($) | Feb. 12, 2015 | Mar. 31, 2015 |
Equity [Abstract] | ||
Stock Repurchase Program, Authorized Amount | $ 20,000,000 | |
Stock Repurchase Program, Period in Force | 2 years | |
Treasury Stock Acquired, Average Cost Per Share (in USD per Share) | $ 6.43 | |
Stock Repurchased During Period, Shares | 544,624 | |
Stock Repurchased During Period, Value | $ (3,499,998) |
Business Segments - Schedule of
Business Segments - Schedule of Business Segment Financial Information (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016USD ($)segment | Mar. 31, 2015USD ($) | Dec. 31, 2015segment | |
Segment Reporting Information [Line Items] | |||
Fair value of contingent consideration adjustment expense (income) | $ 1,910,922 | $ 313,233 | |
Number of Operating Segments | segment | 2 | 3 | |
Net revenue from third parties | $ 271,072,690 | 242,095,497 | |
Net revenue from other segments | 0 | 0 | |
Total net revenues | 271,072,690 | 242,095,497 | |
Adjusted EBITDA | 12,559,670 | 9,478,112 | |
North America [Member] | |||
Segment Reporting Information [Line Items] | |||
Net revenue from third parties | 190,003,756 | 170,801,000 | |
Net revenue from other segments | 0 | 0 | |
Total net revenues | 190,003,756 | 170,801,000 | |
Adjusted EBITDA | 16,346,339 | 15,664,000 | |
Latin America [Member] | |||
Segment Reporting Information [Line Items] | |||
Net revenue from third parties | 81,068,934 | 71,294,497 | |
Net revenue from other segments | 3,767,242 | 186,000 | |
Total net revenues | 84,836,176 | 71,480,497 | |
Adjusted EBITDA | 4,102,198 | 1,247,000 | |
Other [Member] | |||
Segment Reporting Information [Line Items] | |||
Net revenue from third parties | 0 | 0 | |
Net revenue from other segments | (3,767,242) | (186,000) | |
Total net revenues | (3,767,242) | (186,000) | |
Adjusted EBITDA | $ (7,888,867) | $ (7,432,888) |
Business Segments - Schedule 47
Business Segments - Schedule of Business Segments Adjusted EBITDA (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Segment Reporting [Abstract] | ||
Adjusted EBITDA | $ 12,559,670 | $ 9,478,112 |
Depreciation and amortization | (4,595,735) | (4,090,938) |
Stock-based compensation expense | (1,240,523) | (2,060,738) |
Change in fair value of contingent consideration | (1,910,922) | (313,233) |
Restructuring and other charges | (3,344,123) | 0 |
Income from operations | 1,468,367 | 3,013,203 |
Total other expense | (1,224,151) | (1,039,789) |
Income before income taxes | $ 244,216 | $ 1,973,414 |