Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 04, 2016 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | HSN, Inc. | |
Trading Symbol | HSNI | |
Entity Central Index Key | 1,434,729 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 52,190,377 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes |
Consolidated Statements Of Oper
Consolidated Statements Of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Net sales | $ 823,023 | $ 864,868 | $ 2,494,096 | $ 2,592,397 |
Cost of sales | 542,947 | 558,594 | 1,612,718 | 1,649,380 |
Gross profit | 280,076 | 306,274 | 881,378 | 943,017 |
Operating expenses: | ||||
Selling and marketing | 178,785 | 181,281 | 546,002 | 556,590 |
General and administrative | 42,703 | 51,552 | 139,118 | 162,939 |
Depreciation and amortization | 10,518 | 10,608 | 31,745 | 32,942 |
Loss on sale of businesses and asset impairment | 11,195 | 5,000 | 31,595 | 5,000 |
Total operating expenses | 243,201 | 248,441 | 748,460 | 757,471 |
Operating income | 36,875 | 57,833 | 132,918 | 185,546 |
Other income (expense): | ||||
Interest income | 125 | 35 | 223 | 111 |
Interest expense | (4,126) | (4,098) | (12,211) | (11,352) |
Total other expense, net | (4,001) | (4,063) | (11,988) | (11,241) |
Income before income taxes | 32,874 | 53,770 | 120,930 | 174,305 |
Income tax provision | (12,716) | (19,562) | (45,742) | (64,776) |
Net income | $ 20,158 | $ 34,208 | $ 75,188 | $ 109,529 |
Net income per share: | ||||
Basic (usd per share) | $ 0.39 | $ 0.65 | $ 1.44 | $ 2.08 |
Diluted (usd per share) | $ 0.38 | $ 0.64 | $ 1.42 | $ 2.04 |
Shares used in computing earnings per share: | ||||
Basic (shares) | 52,356 | 52,736 | 52,376 | 52,658 |
Diluted (shares) | 52,844 | 53,495 | 52,901 | 53,637 |
Dividends declared per share | $ 0.35 | $ 0.35 | $ 1.05 | $ 11.05 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 20,158 | $ 34,208 | $ 75,188 | $ 109,529 |
Change in fair value of derivative instrument, net of tax | 857 | (238) | (630) | (720) |
Other comprehensive income (loss), net of tax | 857 | (238) | (630) | (720) |
Comprehensive income | $ 21,015 | $ 33,970 | $ 74,558 | $ 108,809 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 |
Current assets: | |||
Cash and cash equivalents | $ 67,442 | $ 63,926 | $ 63,174 |
Accounts receivable, net of allowance of $15,487, $20,631 and $13,292, respectively | 226,589 | 306,575 | 208,464 |
Inventories | 450,671 | 428,025 | 506,602 |
Prepaid expenses and other current assets | 56,309 | 45,402 | 60,857 |
Total current assets | 801,011 | 843,928 | 839,097 |
Property and equipment, net | 207,216 | 211,793 | 204,668 |
Intangible assets, net | 253,619 | 255,268 | 256,896 |
Goodwill | 9,858 | 9,858 | 9,858 |
Other non-current assets | 12,809 | 13,724 | 9,910 |
TOTAL ASSETS | 1,284,513 | 1,334,571 | 1,320,429 |
Current liabilities: | |||
Accounts payable, trade | 241,637 | 254,704 | 269,392 |
Current maturities of long-term debt | 25,000 | 25,000 | 18,750 |
Accrued expenses and other current liabilities | 191,775 | 235,042 | 188,081 |
Total current liabilities | 458,412 | 514,746 | 476,223 |
Long-term debt, less current maturities and net of unamortized deferred financing costs | 600,687 | 608,108 | 673,910 |
Deferred income taxes | 43,145 | 44,498 | 46,251 |
Other long-term liabilities | 20,199 | 20,657 | 20,156 |
Total liabilities | 1,122,443 | 1,188,009 | 1,216,540 |
Commitments and contingencies (Note 12) | |||
SHAREHOLDERS’ EQUITY: | |||
Preferred stock $0.01 par value; 25,000,000 authorized shares; no issued shares | 0 | 0 | 0 |
Common stock $0.01 par value; 300,000,000 authorized shares; 52,187,351, 52,377,798 and 52,390,584 issued shares at September 30, 2016, December 31, 2015 and September 30, 2015, respectively | 522 | 524 | 524 |
Additional paid-in capital | 1,026,737 | 1,085,785 | 1,103,320 |
Accumulated deficit | (864,464) | (939,652) | (999,362) |
Accumulated other comprehensive loss | (725) | (95) | (593) |
Total shareholders’ equity | 162,070 | 146,562 | 103,889 |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ 1,284,513 | $ 1,334,571 | $ 1,320,429 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 |
Statement of Financial Position [Abstract] | |||
Accounts receivable, allowance | $ 15,487 | $ 20,631 | $ 13,292 |
Preferred stock, par value (usd per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Preferred stock, authorized shares (shares) | 25,000,000 | 25,000,000 | 25,000,000 |
Preferred stock, issued shares (shares) | 0 | 0 | 0 |
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Common stock, authorized shares (shares) | 300,000,000 | 300,000,000 | 300,000,000 |
Common stock, issued shares (shares) | 52,187,351 | 52,377,798 | 52,390,584 |
Consolidated Statements Of Shar
Consolidated Statements Of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive (Loss) Income [Member] |
Balance, shares at Dec. 31, 2014 | 0 | 52,426 | ||||
Balance, value at Dec. 31, 2014 | $ 602,341 | $ 0 | $ 524 | $ 1,710,581 | $ (1,108,891) | $ 127 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 109,529 | |||||
Other comprehensive income (loss) | (720) | |||||
Balance, value at Sep. 30, 2015 | 103,889 | |||||
Balance, shares at Dec. 31, 2014 | 0 | 52,426 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock from stock-based compensation awards, including tax benefit, shares | 900 | |||||
Repurchases of common stock, shares | (948) | |||||
Balance, shares at Dec. 31, 2015 | 0 | 52,378 | ||||
Balance, value at Dec. 31, 2014 | 602,341 | $ 0 | $ 524 | 1,710,581 | (1,108,891) | 127 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 169,239 | 169,239 | ||||
Other comprehensive income (loss) | (222) | (222) | ||||
Stock-based compensation expense for equity awards | 18,408 | 18,408 | ||||
Cash dividends declared on common stock | (597,864) | (597,864) | ||||
Issuance of common stock from stock-based compensation awards, including tax benefit | 13,170 | 9 | 13,161 | |||
Repurchases of common stock | (58,510) | (9) | (58,501) | |||
Balance, value at Dec. 31, 2015 | 146,562 | $ 0 | $ 524 | 1,085,785 | (939,652) | (95) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock from stock-based compensation awards, including tax benefit, shares | 166 | |||||
Repurchases of common stock, shares | (357) | |||||
Balance, shares at Sep. 30, 2016 | 0 | 52,187 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 75,188 | |||||
Other comprehensive income (loss) | (630) | (630) | ||||
Stock-based compensation expense for equity awards | 14,698 | 14,698 | ||||
Cash dividends declared on common stock | (54,880) | (54,880) | ||||
Issuance of common stock from stock-based compensation awards, including tax benefit | (2,302) | $ 2 | (2,304) | |||
Repurchases of common stock | (16,566) | (4) | (16,562) | |||
Balance, value at Sep. 30, 2016 | $ 162,070 | $ 0 | $ 522 | $ 1,026,737 | $ (864,464) | $ (725) |
Consolidated Statements Of Sha7
Consolidated Statements Of Shareholders' Equity (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Statement of Stockholders' Equity [Abstract] | ||
Issuance of common stock from stock-based compensation awards, income tax effect | $ (440) | $ 12,526 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities: | ||
Net income | $ 75,188 | $ 109,529 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 31,745 | 32,942 |
Stock-based compensation expense | 14,698 | 13,814 |
Asset Impairment Charges | 27,768 | 5,000 |
Amortization of debt issuance costs | 1,329 | 1,725 |
Deferred income taxes | (1,420) | (9,442) |
Bad debt expense | 13,664 | 21,010 |
Excess tax benefits from stock-based awards | (130) | (11,855) |
Other | (52) | 847 |
Changes in current assets and liabilities: | ||
Accounts receivable | 65,796 | 88,309 |
Inventories | (51,935) | (107,897) |
Prepaid expenses and other assets | (14,347) | (14,756) |
Accounts payable, accrued expenses and other current liabilities | (48,299) | (24,294) |
Net cash provided by operating activities | 114,005 | 104,932 |
Cash flows from investing activities: | ||
Capital expenditures | (28,504) | (45,289) |
Other | (627) | (1,402) |
Net cash used in investing activities | (29,131) | (46,691) |
Cash flows from financing activities: | ||
Borrowings under term loan | 0 | 500,000 |
Repayments of term loan | (18,750) | (228,125) |
Borrowings under revolving credit facility | 152,000 | 265,000 |
Repayments of revolving credit facility | (142,000) | (65,000) |
Repurchase of common stock | (16,566) | (52,063) |
Payments of debt issuance costs | 0 | (6,624) |
Cash dividends paid | (54,880) | (579,516) |
Proceeds from issuance of common stock | 1,824 | 14,755 |
Tax withholdings related to stock-based awards | (3,116) | (15,334) |
Excess tax benefits from stock-based awards | 130 | 11,855 |
Net cash used in financing activities | (81,358) | (155,052) |
Net increase in cash and cash equivalents | 3,516 | (96,811) |
Cash and cash equivalents at beginning of period | 63,926 | 159,985 |
Cash and cash equivalents at end of period | $ 67,442 | $ 63,174 |
Organization (Note)
Organization (Note) | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | ORGANIZATION Company Overview HSN, Inc. (“HSNi”) is an interactive multi-channel retailer that markets and sells a wide range of third party and proprietary merchandise directly to consumers through various platforms including (i) television home shopping programming broadcast on the HSN television networks and other direct-response television marketing; (ii) catalogs, consisting primarily of the Cornerstone portfolio of leading print catalogs which includes Ballard Designs, Frontgate, Garnet Hill, Grandin Road and Improvements; (iii) websites, which consist primarily of HSN.com, joymangano.com and the five branded websites operated by Cornerstone; (iv) mobile applications; (v) retail and outlet stores; and (vi) wholesale distribution of certain proprietary products to other retailers. HSNi’s television home shopping business, related digital sales, outlet stores and wholesale distribution are referred to herein as “HSN” and all catalog operations, including related digital sales and stores, are collectively referred to herein as “Cornerstone.” Chasing Fireflies and TravelSmith, two of the apparel brands in the Cornerstone portfolio, were sold in September 2016. See Note 14 for further discussion. HSN offerings primarily consist of jewelry, fashion (apparel & accessories), beauty & health (including beauty, wellness and fitness), and home & other (including home, electronics, culinary and other). Merchandise offered by Cornerstone primarily consists of home furnishings (including indoor/outdoor furniture, home décor, tabletop, textiles and other home related goods) and apparel & accessories. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). They do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of HSNi's management, all normal recurring adjustments considered necessary for a fair presentation have been included. Interim results are not necessarily indicative of the results that may be expected for a full year. The accompanying unaudited consolidated financial statements should be read in conjunction with HSNi's audited consolidated financial statements and notes thereto for the year ended December 31, 2015 . The consolidated balance sheet as of December 31, 2015 and the consolidated statement of shareholders' equity for the year ended December 31, 2015 were derived from the audited consolidated financial statements at that date but may not include all disclosures required by GAAP. Intercompany transactions and accounts have been eliminated in consolidation. Recent Accounting Developments Recently Adopted Accounting Standard Updates In April 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30) - Simplifying the Presentation of Debt Issuance Costs ("ASU 2015-03"). ASU 2015-03 simplifies the presentation of debt issuance costs by requiring debt issuance costs to be presented as a deduction from the corresponding debt liability. The new standard is limited to the presentation of debt issuance costs and does not affect their recognition and measurement. ASU 2015-03 is effective for periods beginning after December 15, 2015, including interim periods within that annual period. HSNi retrospectively adopted ASU 2015-03 in the first quarter of 2016 resulting in the reclassification of its debt issuance costs from "Other non-current assets" to a deduction from "Long-term debt, less current maturities and net of unamortized deferred financing costs" in the consolidated balance sheets. See Note 6 for additional information regarding the deferred issuance costs. In April 2015, the FASB issued ASU No. 2015-05, Customer's Accounting for Fees Paid in a Cloud Computing Arrangement ("ASU 2015-05"), which provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If the arrangement does not include a software license, the customer should account for a cloud computing arrangement as a service contract. HSNi prospectively adopted ASU 2015-05 on January 1, 2016 and will apply this guidance to all arrangements entered into or materially modified after the effective date. Accounting Standard Updates Not Yet Adopted In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"). ASU 2014-09 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that revenue is recognized when a customer obtains control of a good or service. A customer obtains control when it has the ability to direct the use of and obtain the benefits from the good or service. Additionally, ASU 2014-09 will disallow the capitalization of direct-response advertising costs which will impact the timing of recognition of Cornerstone's catalog production and distribution costs. In July 2015, the FASB approved a one-year deferral of the effective date of ASU 2014-09. This standard will now become effective for HSNi in the first quarter of 2018. Early adoption is permitted in the first quarter of 2017. HSNi is in the process of assessing the impact of the adoption of ASU 2014-09 to its consolidated financial statements and is evaluating the accounting, transition method, disclosure requirements and timing of adoption. In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory (Topic 330) ("ASU 2015-11"). The amendments, which apply to inventory that is measured using any method other than the last-in, first-out (LIFO) or retail inventory method, require that entities measure inventory at the lower of cost or net realizable value. ASU 2015-11 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016 and should be applied on a prospective basis; however, early adoption is permitted. HSNi will adopt ASU 2015-11 on January 1, 2017. HSNi is currently assessing the potential impact ASU 2015-11 will have to its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases ("ASU 2016-02"). ASU 2016-02 requires lessees to reflect most leases on their balance sheet as assets and obligations. The effective date for the standard is for interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. The standard is to be applied on a modified retrospective method. HSNi is currently assessing the timing of adoption of ASU 2016-02 and the impact it will have on its consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718) ("ASU 2016-09"). This standard makes several modifications to Topic 718 related to the accounting for forfeitures, employer tax withholding on share-based compensation and the financial statement presentation of excess tax benefits or deficiencies. ASU 2016-09 also clarifies the statement of cash flows presentation for certain components of share-based awards. The effective date for the standard is for interim and annual reporting periods beginning after December 15, 2016. Early adoption is permitted. HSNi is currently assessing the timing of adoption of ASU 2016-09 and the impact it will have on its consolidated financial statements and related disclosures. Reclassifications Reclassifications were made to prior period amounts to conform to the current year's presentation. Changes included the reclassification of certain operating expenses in the consolidated statement of operations and reclassification of deferred income taxes and deferred financing costs in the consolidated balance sheets due to the implementation of recent accounting standard updates. Current deferred tax assets of $24.1 million in the September 30, 2015 consolidated balance sheet were reclassified as non-current and netted against non-current deferred tax liabilities as a result of retrospectively adopting ASU 2015-17, Balance Sheet Classification of Deferred Taxes, in the fourth quarter of 2015. |
Significant Accounting Policies
Significant Accounting Policies Significant Accounting Policies (Note) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | SIGNIFICANT ACCOUNTING POLICIES Accounting Estimates HSNi prepares its financial statements in conformity with GAAP. These principles require management to make certain estimates and assumptions during the preparation of its consolidated financial statements. These estimates and assumptions impact the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements. They also impact the reported amount of net earnings during any period. Actual results could differ from those estimates. In the opinion of HSNi's management, the assumptions underlying these interim unaudited financial statements are reasonable. Significant estimates underlying the accompanying consolidated financial statements include: the determination of the lower of cost or market adjustment for inventory; sales returns and other revenue allowances; the allowance for doubtful accounts; the recoverability of long-lived assets; the impairment of intangible assets; the annual expected effective tax rate; the determination of deferred income taxes, including related valuation allowances; the accrual for actual, pending or threatened litigation, claims and assessments; and assumptions related to the determination of incentive compensation and contingent consideration. |
Property And Equipment (Note)
Property And Equipment (Note) | 9 Months Ended |
Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property And Equipment | PROPERTY AND EQUIPMENT The balance of property and equipment, net, is as follows (in thousands): September 30, December 31, September 30, 2016 2015 2015 Capitalized software $ 248,389 $ 234,249 $ 231,701 Computer and broadcast equipment 98,842 91,533 93,436 Buildings and leasehold improvements 110,711 108,656 105,658 Furniture and other equipment 123,799 96,512 95,985 Projects in progress 25,806 55,294 49,140 Land and land improvements 10,615 10,597 10,511 618,162 596,841 586,431 Less: accumulated depreciation and amortization (410,946 ) (385,048 ) (381,763 ) Total property and equipment, net $ 207,216 $ 211,793 $ 204,668 |
Segment Information (Note)
Segment Information (Note) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting Information, Profit (Loss) [Abstract] | |
Segment Information | SEGMENT INFORMATION HSNi presents its operating segments and related financial information in a manner consistent with how the chief operating decision maker and executive management view the businesses, how the businesses are organized as to segment management, and the focus of the businesses with regards to the types of products or services offered and/or the target market. HSNi has two reportable segments, HSN and Cornerstone. The accounting policies of the segments are the same as those described in Note 2 – Summary of Significant Accounting Policies included in HSNi's Annual Report on Form 10-K for the year ended December 31, 2015 . Intercompany accounts and transactions have been eliminated in consolidation. HSNi’s primary performance metric is Adjusted EBITDA, which is defined as operating income excluding, if applicable: (1) non-cash charges including: (a) stock-based compensation expense, (b) amortization of intangibles, (c) depreciation and gains and losses on asset dispositions, and (d) goodwill, long-lived asset and intangible asset impairments; (2) pro forma adjustments for significant acquisitions; and (3) other significant items. Significant items, while periodically affecting our results, may vary significantly from period to period and have a disproportionate effect in a given period, thereby affecting the comparability of results. Adjusted EBITDA is not a measure determined in accordance with GAAP, and should not be considered in isolation or as a substitute for operating income, net income or any other measure determined in accordance with GAAP. Adjusted EBITDA is used as a measurement of operating efficiency and overall financial performance and HSNi believes it to be a helpful measure for those evaluating companies in the retail and media industries. Adjusted EBITDA has certain limitations in that it does not take into account the impact to HSNi’s consolidated statements of operations of certain expenses, gains and losses; including stock-based compensation, amortization of intangibles, depreciation, gains and losses on asset dispositions, asset impairment charges, acquisition-related accounting expenses and other significant items. The following tables reconcile Adjusted EBITDA to operating income for HSNi’s operating segments and to HSNi’s consolidated net income (in thousands): Three Months Ended September 30, 2016 Three Months Ended September 30, 2015 HSN Cornerstone Total HSN Cornerstone Total Adjusted EBITDA $ 58,020 $ 4,889 $ 62,909 $ 67,109 $ 11,028 $ 78,137 Stock-based compensation expense (3,671 ) (568 ) (4,239 ) (3,292 ) (1,097 ) (4,389 ) Depreciation and amortization (7,304 ) (3,214 ) (10,518 ) (7,318 ) (3,290 ) (10,608 ) Distribution center closure (a) — — — (189 ) — (189 ) Loss on sale of businesses and asset impairment (b)(c) — (11,195 ) (11,195 ) — (5,000 ) (5,000 ) Loss on disposition of fixed assets (82 ) — (82 ) (115 ) (3 ) (118 ) Operating income (loss) $ 46,963 $ (10,088 ) 36,875 $ 56,195 $ 1,638 57,833 Total other expense, net (4,001 ) (4,063 ) Income before income taxes 32,874 53,770 Income tax provision (12,716 ) (19,562 ) Net income $ 20,158 $ 34,208 Nine Months Ended September 30, 2016 Nine Months Ended September 30, 2015 HSN Cornerstone Total HSN Cornerstone Total Adjusted EBITDA $ 184,990 $ 26,052 $ 211,042 $ 201,493 $ 39,820 $ 241,313 Stock-based compensation expense (11,577 ) (3,121 ) (14,698 ) (10,518 ) (3,296 ) (13,814 ) Depreciation and amortization (21,582 ) (10,163 ) (31,745 ) (22,326 ) (10,616 ) (32,942 ) Distribution center closure (a) — — — (3,221 ) — (3,221 ) Loss on sale of businesses and asset impairment (b)(c) — (31,595 ) (31,595 ) — (5,000 ) (5,000 ) Loss on disposition of fixed assets (86 ) — (86 ) (779 ) (11 ) (790 ) Operating income (loss) $ 151,745 $ (18,827 ) 132,918 $ 164,649 $ 20,897 185,546 Total other expense, net (11,988 ) (11,241 ) Income before income taxes 120,930 174,305 Income tax provision (45,742 ) (64,776 ) Net income $ 75,188 $ 109,529 (a) HSN recorded $0.2 million and $3.2 million in the third quarter and nine months ended September 30, 2015, respectively, for certain costs associated with the planned closure of one of its distribution centers. (b) Cornerstone recorded a loss on the sale of TravelSmith and Chasing Fireflies of $11.2 million in the third quarter of 2016 and related asset impairment charges of $20.4 million in the second quarter of 2016. See Note 14 for further information. (c) Cornerstone recorded a $5.0 million non-cash charge for the impairment of intangible assets related to Chasing Fireflies in the third quarter of 2015. The net sales for each of HSNi's reportable segments are as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Net sales: HSN $ 569,669 $ 590,588 $ 1,705,215 $ 1,763,384 Cornerstone 253,354 274,280 788,881 829,013 Total $ 823,023 $ 864,868 $ 2,494,096 $ 2,592,397 |
Earnings Per Share (Note)
Earnings Per Share (Note) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE HSNi computes basic earnings per share using the weighted average number of common shares outstanding for the period. HSNi computes diluted earnings per share using the treasury stock method, which includes the weighted average number of common shares outstanding for the period plus the potential dilution that could occur if various equity awards to issue common stock were exercised or restricted equity awards were vested resulting in the issuance of common stock that could share in HSNi’s earnings. The following table presents HSNi’s basic and diluted earnings per share (in thousands, except per share data): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Net income $20,158 $34,208 $75,188 $109,529 Weighted average number of shares outstanding: Basic 52,356 52,736 52,376 52,658 Dilutive effect of stock-based compensation awards 488 759 525 979 Diluted 52,844 53,495 52,901 53,637 Net income per share: Basic $ 0.39 $ 0.65 $ 1.44 $ 2.08 Diluted $ 0.38 $ 0.64 $ 1.42 $ 2.04 Unexercised employee stock options and stock appreciation rights and unvested restricted stock units excluded from the diluted EPS calculation because their effect would have been antidilutive 2,121 557 1,963 544 |
Long-Term Debt (Note)
Long-Term Debt (Note) | 9 Months Ended |
Sep. 30, 2016 | |
Long-term Debt, Unclassified [Abstract] | |
Long-Term Debt | LONG-TERM DEBT The balance of long-term debt, including current maturities, is as follows (in thousands): September 30, December 31, September 30, 2016 2015 2015 Secured credit agreement expiring January 27, 2020: Term loan $ 481,250 $ 500,000 $ 500,000 Revolving credit facility 150,000 140,000 200,000 Long-term debt 631,250 640,000 700,000 Unamortized deferred financing costs (5,563 ) (6,892 ) (7,340 ) Long-term debt, net of unamortized deferred financing costs 625,687 633,108 692,660 Less: current maturities (25,000 ) (25,000 ) (18,750 ) Long-term debt, less current maturities and net of unamortized deferred financing costs $ 600,687 $ 608,108 $ 673,910 On January 27, 2015, HSNi entered into a $1.25 billion five -year syndicated credit agreement ("Credit Agreement") which is secured by 100% of the voting equity securities of HSNi's U.S. subsidiaries and 65% of HSNi's first-tier foreign subsidiaries. This Credit Agreement replaced the credit agreement that was set to expire in April 2017. Certain HSNi subsidiaries have unconditionally guaranteed HSNi's obligations under the Credit Agreement. The Credit Agreement, which includes a $750 million revolving credit facility and a $500 million term loan, may be increased up to $1.75 billion subject to certain conditions and expires January 27, 2020. HSNi drew $200 million from its term loan under the Credit Agreement on January 27, 2015 to repay in full its existing term loan of $228.1 million . HSNi drew the remaining $300 million from the term loan and $200 million under the revolving credit facility, both under the Credit Agreement, on February 18, 2015 to fund a $524 million special cash dividend that was paid on February 19, 2015. In connection with the termination of the prior credit agreement, $0.5 million of the $2.4 million of unamortized deferred financing costs were expensed in the first quarter of 2015. The remaining balance of $1.9 million along with the $6.6 million in capitalized financing costs related to the Credit Agreement are being amortized to interest expense over the five-year term of the Credit Agreement. Capitalized financing costs, net of accumulated amortization, are presented as a deduction from the corresponding debt liability for all periods presented. The Credit Agreement includes various covenants, limitations and events of default customary for similar facilities including a maximum leverage ratio of 3.50 x and a minimum interest coverage ratio of 3.00 x (both as defined in the Credit Agreement). HSNi was in compliance with all such covenants as of September 30, 2016 with a leverage ratio of 1.9 x and an interest coverage ratio of 22.7 x. The Credit Agreement also contains covenants that limit our ability and the ability of our subsidiaries to, among other things, incur additional indebtedness, pay dividends or make other distributions to third parties, repurchase or redeem our stock, make investments, sell assets, incur liens, enter into agreements restricting our subsidiaries' ability to pay dividends, enter into transactions with affiliates and consolidate, merge or sell all or substantially all of our assets. The Credit Agreement also contains provisions that limit the ability of HSNi to make Restricted Payments, defined as cash dividends, distribution of other property, repurchase of the Company’s common stock, prepayment or redemption of debt, etc., however, so long as the Company’s leverage ratio is below 3.00 x after giving pro forma effect to any proposed Restricted Payments, the amount of such Restricted Payments are not limited. In the event the Company’s leverage ratio is equal to or greater than 3.00 x or after giving pro forma effect to any proposed Restricted Payments, then such Restricted Payments are limited to $150 million in any such fiscal year. The current cash dividend of $1.40 annually per share represents a Restricted Payment of approximately $73.2 million . Dividends, loans or advances to HSNi by its subsidiaries are not restricted by the Credit Agreement. Loans under the Credit Agreement bear interest at a per annum rate equal to LIBOR plus a predetermined margin that ranges from 1.25% to 2.25% or the Base Rate (as defined in the Credit Agreement) plus a predetermined margin that ranges from 0.25% to 1.25% . HSNi can elect to borrow at either LIBOR or the Base Rate plus a predetermined margin which is determined by HSNi's leverage ratio. The interest rate on the $631.3 million outstanding long-term debt balance as of September 30, 2016 was 2.02% . HSNi pays a commitment fee ranging from 0.20% to 0.40% (based on the leverage ratio) on the unused portion of the revolving credit facility. The amount available to HSNi under the revolving credit facility portion of the Credit Agreement is reduced by the amount of outstanding letters of credit issued under the revolving credit facility, which totaled $13.9 million as of September 30, 2016 . The ability to draw funds under the revolving credit facility is dependent upon meeting the aforementioned financial covenants. As of September 30, 2016 , the amount that could be borrowed under the revolving credit facility, after consideration of the financial covenants and the outstanding letters of credit, was approximately $586.1 million . |
Derivative Instruments (Note)
Derivative Instruments (Note) | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | DERIVATIVE INSTRUMENTS HSNi uses derivatives in the management of its interest rate risk with respect to its variable rate debt. HSNi's strategy is to eliminate the cash flow risk on a portion of its variable rate debt caused by changes in the benchmark interest rate (LIBOR). Derivative instruments are not entered into for speculative purposes. HSNi uses interest rate swap contracts to eliminate the cash flow risk on a portion of its variable rate debt. HSNi pays at a fixed rate and receives payments at a variable rate based on one-month LIBOR. The swaps effectively fix the floating LIBOR-based interest of our outstanding LIBOR-based debt. The interest rate swaps were designated and qualified as cash flow hedges; therefore, the effective portions of the changes in fair value are recorded in accumulated other comprehensive income (loss). Any ineffective portions of the changes in fair value of the interest rate swaps will be immediately recognized in earnings in the consolidated statements of operations. The interest rate swaps effectively convert $187.5 million of our variable rate term loan to a fixed-rate of 0.8525% through April 2017, and then increases to $250.0 million in April 2017 with a maturity date in January 2020 with a fixed rate of 1.05% (in both cases the swapped fixed rate is exclusive of the credit spread under the Credit Agreement). Based on HSNi's leverage ratio as of September 30, 2016 , the all-in fixed rate was 2.3525% . The changes in fair value of the interest rate swaps (inclusive of reclassifications to net income and net of tax) for the three months ended September 30, 2016 and 2015 were income of approximately $0.9 million and a loss of approximately $0.2 million , respectively, and were included in other comprehensive income (loss). The changes in fair value of the interest rate swap (inclusive of reclassifications to net income and net of tax) for the nine months ended September 30, 2016 and 2015 were losses of approximately $0.6 million and $0.7 million , respectively, and were included in other comprehensive income (loss). The fair values of the interest rate swaps at September 30, 2016 , December 31, 2015 and September 30, 2015 were liabilities of $1.2 million , $0.2 million and $0.9 million , respectively, and were recorded in "Other long-term liabilities" in the consolidated balance sheets. HSNi estimates that approximately $0.6 million of unrealized losses included in accumulated other comprehensive loss related to these swaps will be realized and reported in earnings within the next twelve months. See Note 8 for discussion of the fair value measurements concerning these interest rate swaps. |
Fair Value Measurements (Note)
Fair Value Measurements (Note) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value assumptions are made at a specific point in time and changes in underlying assumptions could significantly affect these estimates. HSNi applies the following framework for measuring fair value which is based on a three-level hierarchy: Level 1 —Valuations based on quoted prices for identical assets and liabilities in active markets. Level 2 —Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Level 3 —Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment. The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of the short maturity of these items. The following table summarizes the fair value of HSNi's other financial assets and liabilities which are measured at fair value on a recurring basis in the consolidated balance sheets (in thousands): September 30, 2016 Total Fair Value and Carrying Value on Balance Sheet Fair Value Measurement Category Level 1 Level 2 Level 3 Liabilities: Interest rate swaps $ 1,160 $ — $ 1,160 $ — December 31, 2015 Total Fair Value and Carrying Value on Balance Sheet Fair Value Measurement Category Level 1 Level 2 Level 3 Liabilities: Interest rate swap $ 169 $ — $ 169 $ — September 30, 2015 Total Fair Value and Carrying Value on Balance Sheet Fair Value Measurement Category Level 1 Level 2 Level 3 Liabilities: Interest rate swap $ 949 $ — $ 949 $ — HSNi's interest rate swaps are carried on the balance sheet at fair value. The swaps are entered into for the purpose of hedging the variability of interest expense and interest payments on HSNi's long-term variable rate debt. The fair value is based on a valuation model which utilizes interest rate yield curves and credit spreads as the significant inputs to the model. These inputs are observable in active markets (level 2 criteria). HSNi considers credit risk associated with its own standing as well as the credit standing of any counterparties involved in the valuation of its financial instruments. The following table summarizes the fair value of HSNi’s financial assets and liabilities which are carried at cost (in thousands): September 30, 2016 Carrying Value Fair Value Fair Value Measurement Category Level 1 Level 2 Level 3 Term loan expiring January 27, 2020 $ 481,250 $ 481,250 $ — $ 481,250 $ — Revolving credit facility $ 150,000 $ 150,000 $ — $ 150,000 $ — December 31, 2015 Carrying Value Fair Value Fair Value Measurement Category Level 1 Level 2 Level 3 Term loan expiring January 27, 2020 $ 500,000 $ 500,000 $ — $ 500,000 $ — Revolving credit facility $ 140,000 $ 140,000 $ — $ 140,000 $ — September 30, 2015 Carrying Value Fair Value Fair Value Measurement Category Level 1 Level 2 Level 3 Term loan expiring January 27, 2020 $ 500,000 $ 500,000 $ — $ 500,000 $ — Revolving credit facility $ 200,000 $ 200,000 $ — $ 200,000 $ — The fair value of the term loan was estimated by discounting expected cash flows at the rates currently offered to HSNi for debt of the same remaining maturities (level 2 criteria). HSNi assesses the impairment of goodwill and indefinite-lived intangible assets at fair value at least annually during the fourth quarter and whenever events or circumstances indicate that the carrying value may not be fully recoverable. HSNi also measures certain assets, such as property and equipment and definite-lived intangible assets, at fair value on a non-recurring basis. At June 30, 2016, the assets and liabilities of Chasing Fireflies and TravelSmith were considered to be a disposal group held for sale. Therefore, the disposal group was measured at its fair value less the estimated costs to sell which resulted in a non-cash asset impairment charge of $20.4 million that was recognized during the second quarter. On September 8, 2016, Cornerstone completed the divestiture of Chasing Fireflies and TravelSmith and recorded a loss on sale of $11.2 million during the three months ended September 30, 2016. See Note 14 for further discussion. As a result of the divestiture, HSNi performed a qualitative assessment of its goodwill and noted no impairment as of September 30, 2016. During the third quarter of 2015, HSNi performed a quantitative assessment of certain intangible assets related to its acquisition of Chasing Fireflies and concluded a fair value adjustment was necessary. An impairment charge of $5.0 million was recorded in the third quarter of 2015 within the Cornerstone segment and is included in "Loss on sale of businesses and asset impairment" in the accompanying consolidated statements of operations. The fair value of the intangible assets, consisting of trademarks and tradenames, was determined using the relief from royalty method (level 3 criteria). Key inputs used in this calculation included revenue growth and discount, royalty and terminal growth rates. |
Income Taxes (Note)
Income Taxes (Note) | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES HSNi calculates its interim income tax provision in accordance with the accounting guidance for income taxes in interim periods. At the end of each interim period, HSNi makes its best estimate of the annual expected effective tax rate and applies that rate to its ordinary year-to-date income or loss. The tax or benefit related to significant or unusual items that will be separately reported or reported net of their related tax effect are individually computed and recognized in the interim period in which those items occur. In addition, the effect of changes in enacted tax laws or rates, tax status, or judgment on the realizability of beginning-of-the-year deferred taxes in future years is recognized in the interim period in which the change occurs. The computation of the annual expected effective tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the expected operating income for the year, permanent and temporary differences, and the likelihood of recovering deferred tax assets generated in the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur, more experience is acquired, additional information is obtained or the tax environment changes. To the extent that the estimated annual effective tax rate changes during a quarter, the effect of the change on prior quarters is included in tax expense for the current quarter. For the three and nine months ended September 30, 2016 , HSNi recorded tax provisions of $12.7 million and $45.7 million , respectively, which represents effective tax rates of 38.7% and 37.8% . For the three and nine months ended September 30, 2015 , HSNi recorded tax provisions of $19.6 million and $64.8 million , respectively, which represents effective tax rates of 36.4% and 37.2% . The Internal Revenue Service ("IRS") has concluded its examination of HSNi's consolidated federal income tax return for the year ended December 31, 2010 and its limited scope examination of HSNi's consolidated federal income tax return for the year ended December 31, 2011. No material adjustments resulted from these IRS examinations. There are currently no income tax examinations in progress. New York State concluded an income tax examination of the years ended December 31, 2011 through December 31, 2013. No material adjustment to our tax liabilities resulted from this examination. HSNi and several companies previously owned by IAC/InterActiveCorp, or IAC, were spun-off from IAC on August 20, 2008. In connection with the spin-off, HSNi entered into a Tax Sharing Agreement with IAC. Pursuant to this agreement, each of the companies included in the spin-off (the "Spincos") was indemnified by IAC for additional tax liabilities related to consolidated or combined federal and state tax returns prepared and filed by IAC prior to the spin-off. However, each Spinco agreed to, among other things, assume any additional tax liabilities related to their separately filed state income tax returns. All examinations have concluded or statutes of limitations have expired related to IAC's consolidated or combined federal and state tax returns for years including HSNi operations prior to the spin-off. The Tax Sharing Agreement also provides, among other things, that each Spinco indemnifies IAC and the other Spincos for any taxes resulting from the spin-off of such Spinco (and any related interest, penalties, legal and professional fees, and all costs and damages associated with related shareholder litigation or controversies) to the extent such amounts result from any post spin-off (i) act or failure to act by such Spinco described in the covenants in the Tax Sharing Agreement, (ii) acquisition of equity, securities, or assets of such Spinco or a member of its group, and (iii) breach by such Spinco or any member of its group of any representation or covenant contained in the separation documents or in the documents relating to the IRS private letter ruling and/or tax opinions. This indemnification remains effective until IAC's tax returns for the two year period after the spin-off are no longer subject to examination. |
Stock-Based Awards (Note)
Stock-Based Awards (Note) | 9 Months Ended |
Sep. 30, 2016 | |
Share-based Compensation [Abstract] | |
Stock-Based Awards | STOCK-BASED AWARDS Stock-based compensation expense is included in the following line items in the accompanying consolidated statements of operations (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Selling and marketing $ 1,369 $ 1,472 $ 4,880 $ 4,624 General and administrative 2,870 2,917 9,818 9,190 Stock-based compensation expense before income taxes 4,239 4,389 14,698 13,814 Income tax benefit (1,493 ) (1,539 ) (5,134 ) (4,897 ) Stock-based compensation expense after income taxes $ 2,746 $ 2,850 $ 9,564 $ 8,917 As of September 30, 2016 , there was approximately $26.0 million of unrecognized compensation cost, net of estimated forfeitures, related to all equity-based awards which is currently expected to be recognized on a straight-line basis over a weighted average period of approximately 1.8 years. The Second Amended and Restated 2008 Stock and Annual Incentive Plan, as amended (the “Plan”), authorizes the issuance of 8.0 million shares ( 8.8 million shares after giving effect to the anti-dilution provisions of the Plan related to the special cash dividend paid in February 2015) of HSNi common stock for new awards granted by HSNi. The purpose of the Plan is to assist HSNi in attracting, retaining and motivating officers, employees, directors and consultants, and to provide HSNi with the ability to provide incentives more directly linked to the profitability of HSNi’s business and increases in shareholder value. As of September 30, 2016 , there were approximately 1.6 million shares of common stock available for grants under the Plan. During the first quarter of 2016, HSNi granted approximately 92,000 performance share units ("PSUs") to certain executive employees. PSUs vest after a three year performance period. PSUs have rights to receive dividend equivalents that vest concurrently with the underlying PSUs once the requisite service has been rendered. Vesting percentages range between 0% and 200% of the target award based on HSNi's Total Shareholder Return relative to a peer group at the end of the performance period. The compensation expense for these PSUs is based on the fair value of the awards measured at the grant date and is expensed ratably over the vesting term. A summary of the stock-based awards granted during the nine months ended September 30, 2016 is as follows: Nine Months Ended September 30, 2016 Number of Awards Granted Weighted Average per Share Fair Value Stock appreciation rights 928,990 $7.31 Restricted stock units 264,774 $45.52 Performance share units 92,290 $54.06 Employee stock purchase plan options 61,091 $11.70 Dividend equivalents due to quarterly dividend 19,438 - The fair values of the options granted under the HSN, Inc. 2010 Employee Stock Purchase Plan and the stock appreciation rights are estimated on the grant date using the Black-Scholes option pricing model. The fair value of PSUs is estimated on the grant date using a Monte-Carlo simulation pricing model which estimates the potential outcome of reaching the market condition based on simulated future stock prices. The weighted average assumptions used in the valuation of each for the nine months ended September 30, 2016 are as follows: Nine Months Ended September 30, 2016 Stock Appreciation Rights Employee Stock Purchase Plan Options Performance Share Units Volatility factor 26.3 % 32.3 % 25.2 % Risk-free interest rate 1.23 % 0.43 % 0.89 % Expected term 4.5 0.5 2.9 Dividend yield 3.1 % 2.8 % 0.0 % |
Shareholders' Equity (Note)
Shareholders' Equity (Note) | 9 Months Ended |
Sep. 30, 2016 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | SHAREHOLDERS’ EQUITY Share Repurchase Program Effective January 27, 2015, HSNi’s Board of Directors approved a share repurchase program which allows HSNi to purchase up to 4 million shares of its common stock from time to time through privately negotiated and/or open market transactions. The timing of repurchases and actual number of shares repurchased depends on a variety of factors, including the stock price, corporate and regulatory requirements, restrictions under HSNi’s debt obligations and other market and economic conditions. During the nine months ended September 30, 2016 , HSNi acquired approximately 357,000 shares of its outstanding common stock for $16.6 million at an average price of $46.45 . All shares were retired immediately following purchase. As of September 30, 2016 , approximately 2.7 million shares remain authorized for repurchase under the program. Dividend Policy In the third quarter of 2016, HSNi's Board of Directors approved a quarterly cash dividend of $0.35 per common share resulting in a payment of $18.3 million on September 22, 2016 to HSNi's shareholders of record as of September 7, 2016. In the fourth quarter of 2016, HSNi's Board of Directors approved a quarterly cash dividend of $0.35 per common share. The dividend will be paid on December 20, 2016 to HSNi's shareholders of record as of December 7, 2016. Accumulated Other Comprehensive (Loss) Income Accumulated other comprehensive (loss) income includes the cumulative gains and losses of derivative instruments that qualify as cash flow hedges. The following table provides a rollforward of accumulated other comprehensive income (loss) (in thousands): Nine Months Ended September 30, 2016 2015 Accumulated other comprehensive (loss) income as of January 1, $ (95 ) $ 127 Other comprehensive loss before reclassifications (1,579 ) (2,111 ) Amounts reclassified from accumulated other comprehensive income (loss) to interest expense in the consolidated statements of operations 567 954 Income tax benefit 382 437 Other comprehensive loss, net of tax (630 ) (720 ) Accumulated other comprehensive (loss) income as of September 30, $ (725 ) $ (593 ) |
Commitments And Contingencies (
Commitments And Contingencies (Note) | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments And Contingencies | COMMITMENTS AND CONTINGENCIES In the ordinary course of business, HSNi is a party to various audits, claims and lawsuits. These audits or litigation may relate to claims involving property, personal injury, contract, intellectual property (including patent infringement), sales tax, product recalls, regulatory compliance, employment matters and other claims. HSNi has established reserves for specific legal, tax or other compliance matters for which it has determined the likelihood of an unfavorable outcome is probable and the loss is reasonably estimable. Management has also identified certain legal, tax or other matters where it believes an unfavorable outcome is not probable and, therefore, no reserve is established. Although management currently believes that an unfavorable resolution of claims against HSNi, including claims where an unfavorable outcome is reasonably possible, will not have a material impact on its liquidity, results of operations, financial condition or cash flows, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future and an unfavorable resolution of such a proceeding could have a material impact. Moreover, any claims or regulatory actions against HSNi, whether meritorious or not, could be time-consuming, result in costly litigation, require significant amounts of management time and result in the diversion of significant operational resources. HSNi also evaluates other contingent matters, including tax contingencies, to assess the probability and estimated extent of potential loss. See Note 9 for discussion related to income tax contingencies. |
Costs Associated with an Exit A
Costs Associated with an Exit Activity Costs Associated with an Exit Activity (Note) | 9 Months Ended |
Sep. 30, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Activities Disclosure | COSTS ASSOCIATED WITH AN EXIT ACTIVITY As part of its supply chain optimization initiative, HSNi announced in June 2015 its plan to close the HSN distribution center in Roanoke, Virginia and expand the capabilities of its distribution center in Piney Flats, Tennessee. The closure will involve the eventual elimination of approximately 350 positions at the Virginia facility. HSNi expects the closure to occur in accordance with a two-year transition plan and be substantially completed in 2017. HSN expects to incur approximately $4 million to $5 million in total charges related to the closure. These charges include approximately $3 million to $4 million in employee-related expenses, including severance payments and retention incentives. A summary of HSNi’s liability associated with exit activities, which is recorded in “Accrued expenses and other current liabilities” in the accompanying consolidated balance sheets, are presented in the following table (in thousands): Employee Related Costs Balance at January 1, 2016 $ 3,221 Provisions — Payments (65 ) Adjustments — Balance at September 30, 2016 $ 3,156 |
Divestitures Divestitures (Note
Divestitures Divestitures (Notes) | 9 Months Ended |
Sep. 30, 2016 | |
Disposal Group, Not Discontinued Operation, Disposal Disclosures [Abstract] | |
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | DIVESTITURES On September 8, 2016, HSNi completed the sale of substantially all of the assets and certain liabilities of Chasing Fireflies and TravelSmith, two of the apparel brands included within the Cornerstone segment. The sale price included $1 million in cash and $2 million of contingent consideration that is based on the achievement of certain performance metrics in 2016. As of September 30, 2016, HSNi assigned no value to the contingent consideration as it was not considered probable of being earned. During the third quarter of 2016, Cornerstone recorded a pre-tax loss on sale of $11.2 million . The transaction included cash charges of approximately $3.8 million related to transactions costs and employee and lease liabilities. As of September 30, 2016, there was approximately $1.8 million in exit-related liabilities that were included in "Accrued expenses and other current liabilities" in the accompanying balance sheet. The assets and liabilities of the two brands were classified as held for sale as of June 30, 2016 which resulted in a non-cash asset impairment charge of $20.4 million recorded in the second quarter of 2016. The loss on sale and asset impairment charges related to this sale are recorded in the consolidated statements of operations in the line item “Loss on sale and asset impairment.” The assets sold were largely represented by $29.3 million of inventory and $8.4 million of other assets, and approximately $8.6 million of current liabilities. HSNi determined the sale of these businesses would not represent a strategic shift in its business nor will it have a major effect on its consolidated results of operations, financial position or cash flows. Accordingly, the disposal group is not presented in the consolidated financial statements as a discontinued operation. |
Organization Recent Accounting
Organization Recent Accounting Developments (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Developments Recently Adopted Accounting Standard Updates In April 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30) - Simplifying the Presentation of Debt Issuance Costs ("ASU 2015-03"). ASU 2015-03 simplifies the presentation of debt issuance costs by requiring debt issuance costs to be presented as a deduction from the corresponding debt liability. The new standard is limited to the presentation of debt issuance costs and does not affect their recognition and measurement. ASU 2015-03 is effective for periods beginning after December 15, 2015, including interim periods within that annual period. HSNi retrospectively adopted ASU 2015-03 in the first quarter of 2016 resulting in the reclassification of its debt issuance costs from "Other non-current assets" to a deduction from "Long-term debt, less current maturities and net of unamortized deferred financing costs" in the consolidated balance sheets. See Note 6 for additional information regarding the deferred issuance costs. In April 2015, the FASB issued ASU No. 2015-05, Customer's Accounting for Fees Paid in a Cloud Computing Arrangement ("ASU 2015-05"), which provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If the arrangement does not include a software license, the customer should account for a cloud computing arrangement as a service contract. HSNi prospectively adopted ASU 2015-05 on January 1, 2016 and will apply this guidance to all arrangements entered into or materially modified after the effective date. Accounting Standard Updates Not Yet Adopted In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"). ASU 2014-09 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that revenue is recognized when a customer obtains control of a good or service. A customer obtains control when it has the ability to direct the use of and obtain the benefits from the good or service. Additionally, ASU 2014-09 will disallow the capitalization of direct-response advertising costs which will impact the timing of recognition of Cornerstone's catalog production and distribution costs. In July 2015, the FASB approved a one-year deferral of the effective date of ASU 2014-09. This standard will now become effective for HSNi in the first quarter of 2018. Early adoption is permitted in the first quarter of 2017. HSNi is in the process of assessing the impact of the adoption of ASU 2014-09 to its consolidated financial statements and is evaluating the accounting, transition method, disclosure requirements and timing of adoption. In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory (Topic 330) ("ASU 2015-11"). The amendments, which apply to inventory that is measured using any method other than the last-in, first-out (LIFO) or retail inventory method, require that entities measure inventory at the lower of cost or net realizable value. ASU 2015-11 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016 and should be applied on a prospective basis; however, early adoption is permitted. HSNi will adopt ASU 2015-11 on January 1, 2017. HSNi is currently assessing the potential impact ASU 2015-11 will have to its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases ("ASU 2016-02"). ASU 2016-02 requires lessees to reflect most leases on their balance sheet as assets and obligations. The effective date for the standard is for interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. The standard is to be applied on a modified retrospective method. HSNi is currently assessing the timing of adoption of ASU 2016-02 and the impact it will have on its consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718) ("ASU 2016-09"). This standard makes several modifications to Topic 718 related to the accounting for forfeitures, employer tax withholding on share-based compensation and the financial statement presentation of excess tax benefits or deficiencies. ASU 2016-09 also clarifies the statement of cash flows presentation for certain components of share-based awards. The effective date for the standard is for interim and annual reporting periods beginning after December 15, 2016. Early adoption is permitted. HSNi is currently assessing the timing of adoption of ASU 2016-09 and the impact it will have on its consolidated financial statements and related disclosures. Reclassifications Reclassifications were made to prior period amounts to conform to the current year's presentation. Changes included the reclassification of certain operating expenses in the consolidated statement of operations and reclassification of deferred income taxes and deferred financing costs in the consolidated balance sheets due to the implementation of recent accounting standard updates. Current deferred tax assets of $24.1 million in the September 30, 2015 consolidated balance sheet were reclassified as non-current and netted against non-current deferred tax liabilities as a result of retrospectively adopting ASU 2015-17, Balance Sheet Classification of Deferred Taxes, in the fourth quarter of 2015. |
Significant Accounting Polici24
Significant Accounting Policies Signficant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Use of Estimates, Policy [Policy Text Block] | Accounting Estimates HSNi prepares its financial statements in conformity with GAAP. These principles require management to make certain estimates and assumptions during the preparation of its consolidated financial statements. These estimates and assumptions impact the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements. They also impact the reported amount of net earnings during any period. Actual results could differ from those estimates. In the opinion of HSNi's management, the assumptions underlying these interim unaudited financial statements are reasonable. Significant estimates underlying the accompanying consolidated financial statements include: the determination of the lower of cost or market adjustment for inventory; sales returns and other revenue allowances; the allowance for doubtful accounts; the recoverability of long-lived assets; the impairment of intangible assets; the annual expected effective tax rate; the determination of deferred income taxes, including related valuation allowances; the accrual for actual, pending or threatened litigation, claims and assessments; and assumptions related to the determination of incentive compensation and contingent consideration. |
Property And Equipment (Tables)
Property And Equipment (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule Of Property And Equipment | The balance of property and equipment, net, is as follows (in thousands): September 30, December 31, September 30, 2016 2015 2015 Capitalized software $ 248,389 $ 234,249 $ 231,701 Computer and broadcast equipment 98,842 91,533 93,436 Buildings and leasehold improvements 110,711 108,656 105,658 Furniture and other equipment 123,799 96,512 95,985 Projects in progress 25,806 55,294 49,140 Land and land improvements 10,615 10,597 10,511 618,162 596,841 586,431 Less: accumulated depreciation and amortization (410,946 ) (385,048 ) (381,763 ) Total property and equipment, net $ 207,216 $ 211,793 $ 204,668 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting Information, Profit (Loss) [Abstract] | |
Adjusted EBITDA To Operating Income (Loss) And Consolidated Net Income | The following tables reconcile Adjusted EBITDA to operating income for HSNi’s operating segments and to HSNi’s consolidated net income (in thousands): Three Months Ended September 30, 2016 Three Months Ended September 30, 2015 HSN Cornerstone Total HSN Cornerstone Total Adjusted EBITDA $ 58,020 $ 4,889 $ 62,909 $ 67,109 $ 11,028 $ 78,137 Stock-based compensation expense (3,671 ) (568 ) (4,239 ) (3,292 ) (1,097 ) (4,389 ) Depreciation and amortization (7,304 ) (3,214 ) (10,518 ) (7,318 ) (3,290 ) (10,608 ) Distribution center closure (a) — — — (189 ) — (189 ) Loss on sale of businesses and asset impairment (b)(c) — (11,195 ) (11,195 ) — (5,000 ) (5,000 ) Loss on disposition of fixed assets (82 ) — (82 ) (115 ) (3 ) (118 ) Operating income (loss) $ 46,963 $ (10,088 ) 36,875 $ 56,195 $ 1,638 57,833 Total other expense, net (4,001 ) (4,063 ) Income before income taxes 32,874 53,770 Income tax provision (12,716 ) (19,562 ) Net income $ 20,158 $ 34,208 Nine Months Ended September 30, 2016 Nine Months Ended September 30, 2015 HSN Cornerstone Total HSN Cornerstone Total Adjusted EBITDA $ 184,990 $ 26,052 $ 211,042 $ 201,493 $ 39,820 $ 241,313 Stock-based compensation expense (11,577 ) (3,121 ) (14,698 ) (10,518 ) (3,296 ) (13,814 ) Depreciation and amortization (21,582 ) (10,163 ) (31,745 ) (22,326 ) (10,616 ) (32,942 ) Distribution center closure (a) — — — (3,221 ) — (3,221 ) Loss on sale of businesses and asset impairment (b)(c) — (31,595 ) (31,595 ) — (5,000 ) (5,000 ) Loss on disposition of fixed assets (86 ) — (86 ) (779 ) (11 ) (790 ) Operating income (loss) $ 151,745 $ (18,827 ) 132,918 $ 164,649 $ 20,897 185,546 Total other expense, net (11,988 ) (11,241 ) Income before income taxes 120,930 174,305 Income tax provision (45,742 ) (64,776 ) Net income $ 75,188 $ 109,529 (a) HSN recorded $0.2 million and $3.2 million in the third quarter and nine months ended September 30, 2015, respectively, for certain costs associated with the planned closure of one of its distribution centers. (b) Cornerstone recorded a loss on the sale of TravelSmith and Chasing Fireflies of $11.2 million in the third quarter of 2016 and related asset impairment charges of $20.4 million in the second quarter of 2016. See Note 14 for further information. (c) Cornerstone recorded a $5.0 million non-cash charge for the impairment of intangible assets related to Chasing Fireflies in the third quarter of 2015. |
Financial Information By Segment | The net sales for each of HSNi's reportable segments are as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Net sales: HSN $ 569,669 $ 590,588 $ 1,705,215 $ 1,763,384 Cornerstone 253,354 274,280 788,881 829,013 Total $ 823,023 $ 864,868 $ 2,494,096 $ 2,592,397 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Basic And Diluted Earnings Per Share | The following table presents HSNi’s basic and diluted earnings per share (in thousands, except per share data): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Net income $20,158 $34,208 $75,188 $109,529 Weighted average number of shares outstanding: Basic 52,356 52,736 52,376 52,658 Dilutive effect of stock-based compensation awards 488 759 525 979 Diluted 52,844 53,495 52,901 53,637 Net income per share: Basic $ 0.39 $ 0.65 $ 1.44 $ 2.08 Diluted $ 0.38 $ 0.64 $ 1.42 $ 2.04 Unexercised employee stock options and stock appreciation rights and unvested restricted stock units excluded from the diluted EPS calculation because their effect would have been antidilutive 2,121 557 1,963 544 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Long-term Debt, Unclassified [Abstract] | |
Schedule Of Long-Term Debt | The balance of long-term debt, including current maturities, is as follows (in thousands): September 30, December 31, September 30, 2016 2015 2015 Secured credit agreement expiring January 27, 2020: Term loan $ 481,250 $ 500,000 $ 500,000 Revolving credit facility 150,000 140,000 200,000 Long-term debt 631,250 640,000 700,000 Unamortized deferred financing costs (5,563 ) (6,892 ) (7,340 ) Long-term debt, net of unamortized deferred financing costs 625,687 633,108 692,660 Less: current maturities (25,000 ) (25,000 ) (18,750 ) Long-term debt, less current maturities and net of unamortized deferred financing costs $ 600,687 $ 608,108 $ 673,910 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Liabilities Measured on Recurring Basis | The following table summarizes the fair value of HSNi's other financial assets and liabilities which are measured at fair value on a recurring basis in the consolidated balance sheets (in thousands): September 30, 2016 Total Fair Value and Carrying Value on Balance Sheet Fair Value Measurement Category Level 1 Level 2 Level 3 Liabilities: Interest rate swaps $ 1,160 $ — $ 1,160 $ — December 31, 2015 Total Fair Value and Carrying Value on Balance Sheet Fair Value Measurement Category Level 1 Level 2 Level 3 Liabilities: Interest rate swap $ 169 $ — $ 169 $ — September 30, 2015 Total Fair Value and Carrying Value on Balance Sheet Fair Value Measurement Category Level 1 Level 2 Level 3 Liabilities: Interest rate swap $ 949 $ — $ 949 $ — |
Fair Value Of Assets And Liabilities | The following table summarizes the fair value of HSNi’s financial assets and liabilities which are carried at cost (in thousands): September 30, 2016 Carrying Value Fair Value Fair Value Measurement Category Level 1 Level 2 Level 3 Term loan expiring January 27, 2020 $ 481,250 $ 481,250 $ — $ 481,250 $ — Revolving credit facility $ 150,000 $ 150,000 $ — $ 150,000 $ — December 31, 2015 Carrying Value Fair Value Fair Value Measurement Category Level 1 Level 2 Level 3 Term loan expiring January 27, 2020 $ 500,000 $ 500,000 $ — $ 500,000 $ — Revolving credit facility $ 140,000 $ 140,000 $ — $ 140,000 $ — September 30, 2015 Carrying Value Fair Value Fair Value Measurement Category Level 1 Level 2 Level 3 Term loan expiring January 27, 2020 $ 500,000 $ 500,000 $ — $ 500,000 $ — Revolving credit facility $ 200,000 $ 200,000 $ — $ 200,000 $ — |
Stock-Based Awards (Tables)
Stock-Based Awards (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Share-based Compensation [Abstract] | |
Stock-Based Compensation Expense | Stock-based compensation expense is included in the following line items in the accompanying consolidated statements of operations (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Selling and marketing $ 1,369 $ 1,472 $ 4,880 $ 4,624 General and administrative 2,870 2,917 9,818 9,190 Stock-based compensation expense before income taxes 4,239 4,389 14,698 13,814 Income tax benefit (1,493 ) (1,539 ) (5,134 ) (4,897 ) Stock-based compensation expense after income taxes $ 2,746 $ 2,850 $ 9,564 $ 8,917 |
Summary of Stock-Based Awards Granted | A summary of the stock-based awards granted during the nine months ended September 30, 2016 is as follows: Nine Months Ended September 30, 2016 Number of Awards Granted Weighted Average per Share Fair Value Stock appreciation rights 928,990 $7.31 Restricted stock units 264,774 $45.52 Performance share units 92,290 $54.06 Employee stock purchase plan options 61,091 $11.70 Dividend equivalents due to quarterly dividend 19,438 - |
Weighted Average Assumptions Used In Black-Scholes Option Pricing Model | The weighted average assumptions used in the valuation of each for the nine months ended September 30, 2016 are as follows: Nine Months Ended September 30, 2016 Stock Appreciation Rights Employee Stock Purchase Plan Options Performance Share Units Volatility factor 26.3 % 32.3 % 25.2 % Risk-free interest rate 1.23 % 0.43 % 0.89 % Expected term 4.5 0.5 2.9 Dividend yield 3.1 % 2.8 % 0.0 % |
Shareholders' Equity Shareholde
Shareholders' Equity Shareholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table provides a rollforward of accumulated other comprehensive income (loss) (in thousands): Nine Months Ended September 30, 2016 2015 Accumulated other comprehensive (loss) income as of January 1, $ (95 ) $ 127 Other comprehensive loss before reclassifications (1,579 ) (2,111 ) Amounts reclassified from accumulated other comprehensive income (loss) to interest expense in the consolidated statements of operations 567 954 Income tax benefit 382 437 Other comprehensive loss, net of tax (630 ) (720 ) Accumulated other comprehensive (loss) income as of September 30, $ (725 ) $ (593 ) |
Costs Associated with an Exit32
Costs Associated with an Exit Activity Costs Associated with an Exit Activity (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Reserve by Type of Cost | A summary of HSNi’s liability associated with exit activities, which is recorded in “Accrued expenses and other current liabilities” in the accompanying consolidated balance sheets, are presented in the following table (in thousands): Employee Related Costs Balance at January 1, 2016 $ 3,221 Provisions — Payments (65 ) Adjustments — Balance at September 30, 2016 $ 3,156 |
Organization Reclassifications
Organization Reclassifications (Details) $ in Millions | Sep. 30, 2015USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Deferred Tax Assets, Net, Current | $ 24.1 |
Property And Equipment (Schedul
Property And Equipment (Schedule Of Property And Equipment) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 |
Property, Plant and Equipment [Abstract] | |||
Capitalized software | $ 248,389 | $ 234,249 | $ 231,701 |
Computer and broadcast equipment | 98,842 | 91,533 | 93,436 |
Buildings and leasehold improvements | 110,711 | 108,656 | 105,658 |
Furniture and other equipment | 123,799 | 96,512 | 95,985 |
Projects in progress | 25,806 | 55,294 | 49,140 |
Land and land improvements | 10,615 | 10,597 | 10,511 |
Property and equipment, gross | 618,162 | 596,841 | 586,431 |
Less: accumulated depreciation and amortization | (410,946) | (385,048) | (381,763) |
Total property and equipment, net | $ 207,216 | $ 211,793 | $ 204,668 |
Segment Information (Adjusted E
Segment Information (Adjusted EBITDA To Operating Income (Loss) And Consolidated Net Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2016 | Jun. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | ||||||
Adjusted EBITDA | $ 62,909 | $ 78,137 | $ 211,042 | $ 241,313 | ||
Stock-based compensation expense | (4,239) | (4,389) | (14,698) | (13,814) | ||
Depreciation and amortization | (10,518) | (10,608) | (31,745) | (32,942) | ||
Distribution center closure | 0 | 189 | 0 | 3,221 | ||
Loss on sale of businesses and asset impairment | 11,195 | 5,000 | 31,595 | 5,000 | ||
Loss on disposition of fixed assets | (82) | (118) | (86) | (790) | ||
Operating income | 36,875 | 57,833 | 132,918 | 185,546 | ||
Total other expense, net | (4,001) | (4,063) | (11,988) | (11,241) | ||
Income before income taxes | 32,874 | 53,770 | 120,930 | 174,305 | ||
Income tax provision | (12,716) | (19,562) | (45,742) | (64,776) | ||
Net income | 20,158 | 34,208 | 75,188 | 109,529 | $ 169,239 | |
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal | (11,200) | |||||
Disposal Group, Not Discontinued Operation, Loss (Gain) on Write-down | $ 20,400 | |||||
Asset Impairment Charges | 5,000 | 27,768 | 5,000 | |||
HSN [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Adjusted EBITDA | 58,020 | 67,109 | 184,990 | 201,493 | ||
Stock-based compensation expense | (3,671) | (3,292) | (11,577) | (10,518) | ||
Depreciation and amortization | (7,304) | (7,318) | (21,582) | (22,326) | ||
Distribution center closure | 0 | 189 | 0 | 3,221 | ||
Loss on sale of businesses and asset impairment | 0 | 0 | 0 | 0 | ||
Loss on disposition of fixed assets | (82) | (115) | (86) | (779) | ||
Operating income | 46,963 | 56,195 | 151,745 | 164,649 | ||
Cornerstone [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Adjusted EBITDA | 4,889 | 11,028 | 26,052 | 39,820 | ||
Stock-based compensation expense | (568) | (1,097) | (3,121) | (3,296) | ||
Depreciation and amortization | (3,214) | (3,290) | (10,163) | (10,616) | ||
Distribution center closure | 0 | 0 | 0 | 0 | ||
Loss on sale of businesses and asset impairment | 11,195 | 5,000 | 31,595 | 5,000 | ||
Loss on disposition of fixed assets | 0 | (3) | 0 | (11) | ||
Operating income | (10,088) | 1,638 | $ (18,827) | 20,897 | ||
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal | $ (11,200) | |||||
Disposal Group, Not Discontinued Operation, Loss (Gain) on Write-down | $ 20,400 | |||||
Asset Impairment Charges | $ 5,000 | $ 5,000 |
Segment Information (Financial
Segment Information (Financial Information By Segment) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 823,023 | $ 864,868 | $ 2,494,096 | $ 2,592,397 |
HSN [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 569,669 | 590,588 | 1,705,215 | 1,763,384 |
Cornerstone [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | $ 253,354 | $ 274,280 | $ 788,881 | $ 829,013 |
Earnings Per Share (Basic And D
Earnings Per Share (Basic And Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Net income: | |||||
Net income | $ 20,158 | $ 34,208 | $ 75,188 | $ 109,529 | $ 169,239 |
Weighted average number of shares outstanding: | |||||
Basic | 52,356 | 52,736 | 52,376 | 52,658 | |
Dilutive effect of stock-based compensation awards | 488 | 759 | 525 | 979 | |
Diluted | 52,844 | 53,495 | 52,901 | 53,637 | |
Net income per share: | |||||
Basic (usd per share) | $ 0.39 | $ 0.65 | $ 1.44 | $ 2.08 | |
Diluted (usd per share) | $ 0.38 | $ 0.64 | $ 1.42 | $ 2.04 | |
Unexercised employee stock options and stock appreciation rights and unvested restricted stock units excluded from the diluted EPS calculation because their effect would have been antidilutive | 2,121 | 557 | 1,963 | 544 |
Long-Term Debt (Schedule Of Lon
Long-Term Debt (Schedule Of Long-Term Debt) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jan. 27, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | |||||
Long-term debt, net of unamortized deferred financing costs | $ 625,687 | $ 633,108 | $ 692,660 | ||
Less: current maturities | (25,000) | (25,000) | (18,750) | ||
Long-term debt, less current maturities and net of unamortized deferred financing costs | 600,687 | 608,108 | 673,910 | ||
Revolving credit facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Secured credit | 150,000 | 140,000 | 200,000 | ||
Credit Agreement Terminated January 27, 2015 [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term Debt, Gross | $ 228,100 | ||||
Unamortized deferred financing costs | (1,900) | $ (2,400) | |||
Credit Agreement 1.25B [Member] | |||||
Debt Instrument [Line Items] | |||||
Secured credit | 1,250,000 | ||||
Long-term Debt, Gross | 631,250 | 640,000 | 700,000 | ||
Unamortized deferred financing costs | (5,563) | (6,892) | (7,340) | (6,600) | |
Credit Agreement 1.25B [Member] | Long-term Debt [Member] | |||||
Debt Instrument [Line Items] | |||||
Secured credit | 481,250 | 500,000 | 500,000 | $ 500,000 | |
Credit Agreement 1.25B [Member] | Revolving credit facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Secured credit | $ 150,000 | $ 140,000 | $ 200,000 |
Long-Term Debt (Narrative) (Det
Long-Term Debt (Narrative) (Details) $ / shares in Units, $ in Thousands | Sep. 22, 2016$ / shares | Feb. 19, 2015USD ($) | Jan. 27, 2015USD ($) | Mar. 31, 2015USD ($) | Sep. 30, 2016USD ($)$ / sharesRate | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Debt Instrument [Line Items] | ||||||||
Borrowings under term loan | $ 0 | $ 500,000 | ||||||
Dividends, Cash | $ 524,000 | |||||||
Payments of Dividends | 54,880 | 579,516 | ||||||
Common Stock, Dividends, Per Share, Cash Paid | $ / shares | $ 0.35 | |||||||
Revolving credit facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Secured credit | 150,000 | 200,000 | $ 140,000 | |||||
Credit Agreement 1.25B [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Secured credit | $ 1,250,000 | |||||||
Debt Instrument, Term | 5 years | |||||||
Maximum borrowing capacity | $ 1,750,000 | |||||||
Long-term Debt, Gross | 631,250 | 700,000 | 640,000 | |||||
Deferred Finance Costs, Noncurrent, Net | $ 6,600 | $ 5,563 | 7,340 | 6,892 | ||||
Maximum leverage ratio, required | 3.50 | |||||||
Minimum interest coverage ratio, required | 3 | |||||||
Actual leverage ratio | 1.9 | |||||||
Actual interest coverage ratio | 22.73 | |||||||
Leverage Ratio | 3 | |||||||
Payments of Dividends | $ 150,000 | $ 73,200 | ||||||
Common Stock, Dividends, Per Share, Cash Paid | $ / shares | $ 1.40 | |||||||
Debt Instrument, Interest Rate, Effective Percentage | Rate | 2.02% | |||||||
Credit Agreement 1.25B [Member] | Long-term Debt [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Secured credit | 500,000 | $ 481,250 | 500,000 | 500,000 | ||||
Borrowings under term loan | 300,000 | 200,000 | ||||||
Credit Agreement 1.25B [Member] | Revolving credit facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Secured credit | 150,000 | $ 200,000 | $ 140,000 | |||||
Revolving credit facility | $ 750,000 | |||||||
Proceeds from Issuance of Debt | $ 200,000 | |||||||
Letters of Credit Outstanding, Amount | 13,900 | |||||||
Line of Credit Facility, Remaining Borrowing Capacity | $ 586,100 | |||||||
Credit Agreement 1.25B [Member] | Minimum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Interest Rate, Stated Percentage | 1.25% | |||||||
Debt Instrument, Interest Rate, Effective Percentage | 0.25% | |||||||
Line of Credit Facility, Commitment Fee Percentage | 0.20% | |||||||
Credit Agreement 1.25B [Member] | Maximum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Interest Rate, Stated Percentage | 2.25% | |||||||
Debt Instrument, Interest Rate, Effective Percentage | 1.25% | |||||||
Line of Credit Facility, Commitment Fee Percentage | 0.40% | |||||||
Credit Agreement Terminated January 27, 2015 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term Debt, Gross | $ 228,100 | |||||||
Write off of Deferred Debt Issuance Cost | $ 500 | |||||||
Deferred Finance Costs, Noncurrent, Net | $ 1,900 | $ 2,400 | ||||||
HSNi Subsidiaries [Member] | Credit Agreement 1.25B [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Secured rate | 100.00% | |||||||
First Tier Subsidiaries [Member] | Credit Agreement 1.25B [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Secured rate | 65.00% |
Derivative Instruments (Details
Derivative Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Apr. 24, 2017 | Dec. 31, 2015 | Dec. 20, 2012 | |
Derivative [Line Items] | |||||||
Derivative, notional amount | $ 187,500 | $ 187,500 | |||||
Derivative, fixed interest rate | 2.3525% | 2.3525% | 0.8525% | ||||
Change in fair value of derivative instrument, net of tax | $ 857 | $ (238) | $ (630) | $ (720) | |||
Interest Rate Derivative Liabilities, at Fair Value | $ 1,160 | $ 949 | 1,160 | $ 949 | $ 169 | ||
Estimated unrealized loss to be realized in the next twelve months | $ 600 | ||||||
Scenario, Forecast [Member] | |||||||
Derivative [Line Items] | |||||||
Derivative, notional amount | $ 250,000 | ||||||
Derivative, fixed interest rate | 1.05% |
Fair Value Measurements (Fair V
Fair Value Measurements (Fair Value, Liabilities Measured on Recurring Basis) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest Rate Derivative Liabilities, at Fair Value | $ 1,160 | $ 169 | $ 949 |
Level 1 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest Rate Derivative Liabilities, at Fair Value | 0 | 0 | 0 |
Level 2 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest Rate Derivative Liabilities, at Fair Value | 1,160 | 169 | 949 |
Level 3 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest Rate Derivative Liabilities, at Fair Value | $ 0 | $ 0 | $ 0 |
Fair Value Measurements (Fair42
Fair Value Measurements (Fair Value Of Assets And Liabilities) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 |
Term Loan [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Term loan, carrying value | $ 481,250 | $ 500,000 | $ 500,000 |
Term loan, fair value | 481,250 | 500,000 | 500,000 |
Term Loan [Member] | Level 1 [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Term loan, fair value | 0 | 0 | 0 |
Term Loan [Member] | Level 2 [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Term loan, fair value | 481,250 | 500,000 | 500,000 |
Term Loan [Member] | Level 3 [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Term loan, fair value | 0 | 0 | 0 |
Revolving Credit Facility [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Term loan, carrying value | 150,000 | 140,000 | 200,000 |
Term loan, fair value | 150,000 | 140,000 | 200,000 |
Revolving Credit Facility [Member] | Level 1 [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Term loan, fair value | 0 | 0 | 0 |
Revolving Credit Facility [Member] | Level 2 [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Term loan, fair value | 150,000 | 140,000 | 200,000 |
Revolving Credit Facility [Member] | Level 3 [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Term loan, fair value | $ 0 | $ 0 | $ 0 |
Fair Value Measurements Fair Va
Fair Value Measurements Fair Value Measurements (Narrantive) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Jun. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |||||
Disposal Group, Not Discontinued Operation, Loss (Gain) on Write-down | $ 20,400 | ||||
Asset Impairment Charges | $ 5,000 | $ 27,768 | $ 5,000 | ||
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal | $ (11,200) |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | ||||
Income Tax Expense (Benefit) | $ 12,716 | $ 19,562 | $ 45,742 | $ 64,776 |
Effective Income Tax Rate, Continuing Operations | (38.70%) | (36.40%) | (37.80%) | (37.20%) |
Stock-Based Awards (Stock-Based
Stock-Based Awards (Stock-Based Compensation Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense before income taxes | $ 4,239 | $ 4,389 | $ 14,698 | $ 13,814 |
Income tax benefit | (1,493) | (1,539) | (5,134) | (4,897) |
Stock-based compensation expense after income taxes | 2,746 | 2,850 | 9,564 | 8,917 |
Selling and marketing | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Allocated Share-based compensation expense | 1,369 | 1,472 | 4,880 | 4,624 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Allocated Share-based compensation expense | $ 2,870 | $ 2,917 | $ 9,818 | $ 9,190 |
Stock-Based Awards Stock-Based
Stock-Based Awards Stock-Based Awards (Summary of Stock-Based Awards Granted) (Details) | 9 Months Ended |
Sep. 30, 2016$ / sharesshares | |
Stock appreciation rights | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Awards Granted | 928,990 |
Weighted Average per Share Fair Value | $ / shares | $ 7.31 |
Restricted stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Awards Granted | 264,774 |
Weighted Average per Share Fair Value | $ / shares | $ 45.52 |
Performance share units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Awards Granted | 92,290 |
Weighted Average per Share Fair Value | $ / shares | $ 54.06 |
Employee stock purchase plan options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Awards Granted | 61,091 |
Weighted Average per Share Fair Value | $ / shares | $ 11.70 |
Dividend equivalents due to quarterly dividend | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Awards Granted | 19,438 |
Stock-Based Awards (Weighted Av
Stock-Based Awards (Weighted Average Assumptions Used In Black-Scholes Option Pricing Model) (Details) | 9 Months Ended |
Sep. 30, 2016Rate | |
Stock Appreciation Rights | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Volatility factor | 26.30% |
Risk-free interest rate | 1.23% |
Expected term | 4 years 6 months |
Dividend yield | 3.10% |
Employee stock purchase plan options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Volatility factor | 32.30% |
Risk-free interest rate | 0.43% |
Expected term | 6 months |
Dividend yield | 2.80% |
Performance Shares [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Volatility factor | 25.20% |
Risk-free interest rate | 0.89% |
Expected term | 2 years 11 months |
Dividend yield | 0.00% |
Stock-Based Awards (Narrative)
Stock-Based Awards (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Mar. 31, 2016 | Sep. 30, 2016 | Jan. 27, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation cost | $ 26 | ||
Weighted average period of recognition of unrecognized compensation cost, years | 1 year 10 months | ||
New awards authorized | 8,800,000 | 8,000,000 | |
Available for grants | 1,600,000 | ||
Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 0.00% | ||
Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 200.00% | ||
Market Stock Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of Awards Granted | 92,000 |
Shareholders' Equity Sharehol49
Shareholders' Equity Shareholders' Equity (Schedule of Accumulated Other Comprehensive Income(Loss)) (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||
Other comprehensive loss before reclassifications | $ (1,579) | $ (2,111) | ||
Amounts reclassified from accumulated other comprehensive income (loss) to interest expense in the consolidated statements of operations | 567 | 954 | ||
Income tax benefit | 382 | 437 | ||
Other comprehensive loss, net of tax | (630) | (720) | ||
Accumulated other comprehensive loss | $ (725) | $ (593) | $ (95) | $ 127 |
Shareholders' Equity (Narrative
Shareholders' Equity (Narrative) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Sep. 22, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | Jan. 27, 2015 |
Share Repurchase Program [Line Items] | ||||
Share repurchased and retired | 357 | |||
Value of shares repurchased and retired | $ 16,600 | |||
Outstanding common stock acquired, average price | $ 46.45 | |||
Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased | 2,700 | |||
Dividends, Common Stock, Cash | $ 18,300 | $ 54,880 | $ 597,864 | |
Common Stock, Dividends, Per Share, Cash Paid | $ 0.35 | |||
4 Million Share Program Approved 1/27/2015 [Member] | ||||
Share Repurchase Program [Line Items] | ||||
Stock Repurchase Program, Number of Shares Authorized to be Repurchased | 4,000 |
Shareholders' Equity Dividend P
Shareholders' Equity Dividend Policy (Details) - $ / shares | Dec. 20, 2016 | Sep. 22, 2016 |
Dividends Payable [Line Items] | ||
Common Stock, Dividends, Per Share, Cash Paid | $ 0.35 | |
Subsequent Event [Member] | ||
Dividends Payable [Line Items] | ||
Common Stock, Dividends, Per Share, Cash Paid | $ 0.35 |
Commitments And Contingencies52
Commitments And Contingencies (Narrative) (Details) | Sep. 30, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Contingency reserve | $ 0 |
Costs Associated with an Exit53
Costs Associated with an Exit Activity Costs Associated with an Exit Activity (Schedule of Restructuring Reserve by Type) (Details) - HSN [Member] - Employee Severance [Member] - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Reserve | $ 3,156 | $ 3,221 |
Provisions | 0 | |
Payments | (65) | |
Adjustments | $ 0 |
Costs Associated with an Exit54
Costs Associated with an Exit Activity Costs Associated with an Exit Activity (Narrative) (Details) - HSN [Member] $ in Millions | Jun. 01, 2015 | Sep. 30, 2016USD ($) |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and Related Cost, Expected Number of Positions Eliminated | 350 | |
Minimum [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and Related Cost, Expected Cost | $ 4 | |
Maximum [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and Related Cost, Expected Cost | 5 | |
Employee Severance [Member] | Minimum [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and Related Cost, Expected Cost | 3 | |
Employee Severance [Member] | Maximum [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and Related Cost, Expected Cost | $ 4 |
Divestitures Divestitures (Deta
Divestitures Divestitures (Details) - USD ($) | 3 Months Ended | ||
Sep. 30, 2016 | Jun. 30, 2016 | Sep. 08, 2016 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Disposal Group, Including Discontinued Operation, Consideration | $ 0 | ||
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal | (11,200,000) | ||
Disposal Group, Not Discontinued Operation, Loss (Gain) on Write-down | $ 20,400,000 | ||
Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Disposal Group, Including Discontinued Operation, Consideration | $ 1,000,000 | ||
Gain Contingency, Unrecorded Amount | 2,000,000 | ||
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal | (11,200,000) | ||
Transaction and Exit Costs | 3,800,000 | ||
Restructuring Reserve | $ 1,800,000 | ||
Disposal Group, Not Discontinued Operation, Loss (Gain) on Write-down | $ 20,400,000 | ||
Disposal Group, Including Discontinued Operation, Inventory, Current | 29,300,000 | ||
Disposal Group, Including Discontinued Operation, Other Assets, Noncurrent | 8,400,000 | ||
Disposal Group, Including Discontinued Operation, Liabilities, Current | $ 8.6 |