| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE
2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Principles
of Consolidation and Basis of Presentation The
condensed consolidated financial statements include the accounts of B. Riley Financial, Inc. and its wholly-owned and majority-owned
subsidiaries. On July 1, 2016 B. Riley Financial, Inc. acquired UOL which is included in the consolidated financial statements
for periods after July 1, 2016. The condensed consolidated financial statements also include the accounts of Great American Global
Partners, LLC which is controlled by the Company as a result of its ownership of a 50% member interest, appointment of two of
the three executive officers and significant influence over the funding of operations. The condensed consolidated financial statements
also include the accounts of GA Retail Investments, L.P. which is controlled by the Company as a result of its ownership of a
50% partnership interest, appointment of executive officers and significant influence over the operations, and guarantee of certain
amounts under the promissory note. The condensed consolidated financial statements have been prepared by the Company, without
audit, pursuant to interim financial reporting guidelines and the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations.
In the opinion of the Company’s management, all adjustments, consisting of only normal and recurring adjustments, necessary
for a fair presentation of the financial position and the results of operations for the periods presented have been included.
These condensed consolidated financial statements and the accompanying notes should be read in conjunction with the audited consolidated
financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended
December 31, 2015, filed with the Securities and Exchange Commission on March 28, 2016. The results of operations for the nine
months ended September 30, 2016 are not necessarily indicative of the operating results to be expected for the full fiscal year
or any future periods.
(b) Use of Estimates The
preparation of the condensed consolidated financial statements in accordance with GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements
and reported amounts of revenue and expense during the reporting period. Estimates are used when accounting for certain items
such as valuation of securities, reserves for accounts receivable and slow moving goods held for sale or auction, the carrying
value of intangible assets and goodwill, the fair value of mandatorily redeemable noncontrolling interests, fair value of share
based arrangements, fair value of contingent consideration in business combination’s and accounting for income tax valuation
allowances. Estimates are based on historical experience, where applicable, and assumptions that management believes are reasonable
under the circumstances. Due to the inherent uncertainty involved with estimates, actual results may differ.
(c) Revenue Recognition
Revenues
are recognized in accordance with the accounting guidance when persuasive evidence of an arrangement exists, the related services
have been provided, the fee is fixed or determinable, and collection is reasonably assured. Revenues
in the Capital Markets segment are primarily comprised of (i) fees earned from corporate finance, investment banking, restructuring
and wealth management services; and (ii) revenues from sales and trading activities. Fees
earned from corporate finance, investment banking and restructuring services are derived from debt, equity and convertible securities
offerings in which the Company acted as an underwriter or placement agent and from financial advisory services rendered in connection
with client mergers, acquisitions, restructurings, recapitalizations and other strategic transactions. Fees from underwriting
activities are recognized in earnings when the services related to the underwriting transaction are completed under the terms
of the engagement and when the income was determined and is not subject to any other contingencies. Fees
from wealth management services consist primarily of investment management fees that are recognized over the period the services
are provided. Investment management fees are primarily comprised of fees for investment management services and are generally
based on the dollar amount of the assets being managed. Revenues
from sales and trading include (i) commissions resulting from equity securities transactions executed as agent or principal and
are recorded on a trade date basis, (ii) related net trading gains and losses from market making activities and from the
commitment of capital to facilitate customer orders, (iii) fees paid for equity research and (iv) principal transactions
which include realized and unrealized net gains and losses resulting from our principal investments in equity and other securities
for the Company’s account. Revenues
in the Auction and Liquidation segment are comprised of (i) commissions and fees earned on the sale of goods at auctions
and liquidations; (ii) revenues from auction and liquidation services contracts where the Company guarantees a minimum recovery
value for goods being sold at auction or liquidation; (iii) revenue from the sale of goods that are purchased by the Company
for sale at auction or liquidation sales events; (iv) fees earned from real estate services and the origination of loans;
and (v) revenues from contractual reimbursable expenses incurred in connection with auction and liquidation contracts. Commission
and fees earned on the sale of goods at auction and liquidation sales are recognized when evidence of an arrangement exists, the
sales price has been determined, title has passed to the buyer and the buyer has assumed the risks of ownership, and collection
is reasonably assured. The commission and fees earned for these services are included in revenues in the accompanying consolidated
statements of operations. Under these types of arrangements, revenues also include contractual reimbursable costs which totaled
$1,607 and $1,921 for the three months ended September 30, 2016 and 2015, respectively, and $6,450 and $5,910 for the nine months
ended September 30, 2016 and 2015, respectively. Revenues
earned from auction and liquidation services contracts where the Company guarantees a minimum recovery value for goods being sold
at auction or liquidation are recognized based on proceeds received. The Company records proceeds received from these types of
engagements first as a reduction of contractual reimbursable expenses, second as a recovery of its guarantee and thereafter as
revenue, subject to such revenue meeting the criteria of having been fixed or determinable. Contractual reimbursable expenses
and amounts advanced to customers for minimum guarantees are initially recorded as advances against customer contracts in the
accompanying consolidated balance sheets. If, during the auction or liquidation sale, the Company determines that the proceeds
from the sale will not meet the minimum guaranteed recovery value as defined in the auction or liquidation services contract,
the Company accrues a loss on the contract in the period that the loss becomes known. The
Company also evaluates revenue from auction and liquidation contracts in accordance with the accounting guidance to determine
whether to report Auction and Liquidation segment revenue on a gross or net basis. The Company has determined that it acts as
an agent in a substantial majority of its auction and liquidation services contracts and therefore reports the auction and liquidation
revenues on a net basis. Revenues
from the sale of goods are recorded gross and are recognized in the period in which the sale of goods held for sale or auction
are completed, title to the property passes to the purchaser and the Company has fulfilled its obligations with respect to the
transaction. These revenues are primarily the result of the Company acquiring title to merchandise with the intent of selling
the items at auction or for augmenting liquidation sales. For liquidation contracts where we take title to retail goods, our net
sales represent gross sales invoiced to customers, less certain related charges for discounts, returns, and other promotional
allowances and are recorded net of sales or value added tax. Revenues
in the Valuation and Appraisal segment are primarily comprised of fees for valuation and appraisal services. Revenues are recognized
upon the delivery of the completed services to the related customers and collection of the fee is reasonably assured. Revenues
in the Valuation and Appraisal segment also include contractual reimbursable costs which totaled $673 and $734 for the three months
ended September 30, 2016 and 2015, respectively, and $2,059 and $2,156 for the nine months ended September 30, 2016 and 2015,
respectively. Revenues
in the Communications segment are primarily comprised of services revenues, which are derived primarily from fees charged to pay
accounts; advertising and other revenues; and products revenues, which are derived primarily from the sale mobile broadband service
devices, including the related shipping and handling fees. Service
revenues are derived primarily from fees charged to pay accounts and are recognized in the period in which fees are fixed or determinable
and the related services are provided to the customer. The Company’s pay accounts generally pay in advance for their services
by credit card, PayPal, automated clearinghouse or check, and revenues are then recognized ratably over the service period. Advance
payments from pay accounts are recorded on the condensed consolidated balance sheet as deferred revenue. In circumstances where
payment is not received in advance, revenues are only recognized if collectibility is reasonably assured. Advertising
revenues consist primarily of amounts from the Company’s internet search partner that are generated as a result of users
utilizing the partner’s internet search services and amounts generated from display advertisements. The Company recognizes
such advertising revenues in the period in which the advertisement is displayed or, for performance-based arrangements, when the
related performance criteria are met. In determining whether an arrangement exists, the Company ensures that a written contract
is in place, such as a standard insertion order or a customer-specific agreement. The Company assesses whether performance criteria
have been met and whether the fees are fixed or determinable based on a reconciliation of the performance criteria and the payment
terms associated with the transaction. The reconciliation of the performance criteria generally includes a comparison of the Company’s
internally-tracked performance data to the contractual performance obligation and, when available, to third-party or customer-provided
performance data.
(d) Direct Cost
of Services Direct
cost of services relate to service and fee revenues in the Valuation and Appraisal, Auction and Liquidation and Communications
segments. Direct cost of services for the Valuation and Appraisal segment consist of employee compensation and related payroll
benefits, travel expenses, the cost of consultants assigned to revenue-generating activities and direct expenses billable to clients
in the Valuation and Appraisal segment. Direct costs of services in the Auction and Liquidation segment include the cost of consultants
and other direct expenses related to auction and liquidation contracts pursuant to commission and fee based arrangements and amounts
for profit participation under collaborative arrangements in which the Company is a majority participant. Direct cost of services
in the C ommunications segment include cost of telecommunications and data center costs,
personnel and overhead-related costs associated with operating the Company’s networks and data centers, depreciation of
network computers and equipment, third party advertising sales commissions, license fees, costs related to providing customer
support, costs related to customer billing and processing of customer credit cards and associated bank fees.
(e) Concentration
of Risk Revenue
from one liquidation engagement represented 24.4% of total revenues during the three months ended September 30, 2016 and 15.6%
of total revenues during the nine months ended September 30, 2016. Revenue from one wholesale auction and liquidation engagement
represented 11.7% of total revenues during the three months ended September 30, 2015 and revenues from one liquidation engagement
represented 14.0% of total revenues during the nine months ended September 30, 2015. Revenues in the Valuation and Appraisal segment
and the Auction and Liquidation segment are currently primarily generated in the United States. Revenues
in the Capital Markets, Auction and Liquidation, Valuation and Appraisal and Communications segment are primarily generated in
the United States, Canada and Europe. The Company’s activities in the Auction and Liquidation segment are executed frequently
with, and on behalf of, distressed customers and secured creditors. Concentrations of credit risk can be affected by changes in
economic, industry, or geographical factors. The Company seeks to control its credit risk and potential risk concentration through
risk management activities that limit the Company’s exposure to losses on any one specific liquidation services contract
or concentration within any one specific industry. To mitigate the exposure to losses on any one specific liquidation services
contract, the Company sometimes conducts operations with third parties through collaborative arrangements. The
Company maintains cash in various federally insured banking institutions. The account balances at each institution periodically
exceed the Federal Deposit Insurance Corporation’s (“FDIC”) insurance coverage, and as a result, there is a
concentration of credit risk related to amounts in excess of FDIC insurance coverage. The Company has not experienced any losses
in such accounts. The Company also has substantial cash balances from proceeds received from auctions and liquidation engagements
that are distributed to parties in accordance with the collaborative arrangements.
(f) Share-Based
Compensation The
Company’s share based payment awards principally consist of grants of restricted stock and restricted stock units. Share
based payment awards also include grants of membership interests in the Company’s majority owned subsidiaries. The grants
of membership interests consist of percentage interests in the Company’s majority owned subsidiaries as determined at the
date of grant. In accordance with the applicable accounting guidance, share based payment awards are classified as either equity
or liabilities. For equity-classified awards, the Company measures compensation cost for the grant of membership interests at
fair value on the date of grant and recognizes compensation expense in the condensed consolidated statement of operations over
the requisite service or performance period the award is expected to vest. The fair value of the liability-classified award will
be subsequently remeasured at each reporting date through the settlement date. Change in fair value during the requisite service
period will be recognized as compensation cost over that period.
(g) Income Taxes
The
Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included
in the condensed consolidated financial statements or tax returns. Deferred tax liabilities and assets are determined based on
the difference between the financial statement basis and tax basis of assets and liabilities using enacted tax rates in effect
for the year in which the differences are expected to reverse. The Company estimates the degree to which tax assets and credit
carry forwards will result in a benefit based on expected profitability by tax jurisdiction. A valuation allowance for such tax
assets and loss carry forwards is provided when it is determined to be more likely than not that the benefit of such deferred
tax asset will not be realized in future periods. Tax benefits of operating loss carry forwards are evaluated on an ongoing basis,
including a review of historical and projected future operating results, the eligible carry forward period, and other circumstances.
If it becomes more likely than not that a tax asset will be used, the related valuation allowance on such assets would be reduced. The
Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be
sustained on examination by the taxing authorities, based on the technical merits of the position. Once this threshold has been
met, the Company's measurement of its expected tax benefits is recognized in its financial statements. The Company accrues interest
on unrecognized tax benefits as a component of income tax expense. Penalties, if incurred, would be recognized as a component
of income tax expense.
(h) Cash and Cash
Equivalents The
Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.
(i) Restricted
Cash As
of September 30, 2016, restricted cash included $76,343 of cash collateral related to a retail liquidation engagement in Australia,
$1,119 of cash collateral for letters of credit, $292 of cash collateral for foreign exchange contracts and $533 cash segregated
in a special bank accounts for the benefit of customers related to our broker dealer subsidiary and collateral for one of our
telecommunication suppliers. As of December 31, 2015, restricted cash included $51 of cash segregated in a special reserve bank
account for the benefit of customers related to our broker dealer subsidiary.
(j) Accounts Receivable
Accounts
receivable represents amounts due from the Company’s auction and liquidation, valuation and appraisal, capital markets customers
and communication customers primarily from revenues earned from advertising. The Company maintains an allowance for doubtful accounts
for estimated losses inherent in its accounts receivable portfolio. In establishing the required allowance, management utilizes
a specific customer identification methodology. Management also considers historical losses adjusted for current market conditions
and the customers’ financial condition and the current receivables aging and current payment patterns. Account balances
are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered
remote. The Company does not have any off-balance sheet credit exposure related to its customers. Bad debt expense and changes
in the allowance for doubtful accounts for the three and nine months ended September 30, 2016 and 2015 are included in Note 3.
(k) Advances Against
Customer Contracts
Advances
against customer contracts represent advances of contractually reimbursable expenses incurred prior to, and during the term of
the auction and liquidation services contract. These advances are charged to expense in the period that revenue is recognized
under the contract.
(l) Goods Held
for Sale or Auction Goods
held for sale or auction are stated at the lower of cost, determined by the specific-identification method, or market. At September
30, 2016, goods held for sale or auction includes retail inventory of $8,600 related to a retail liquidation engagement in the
Netherlands, mobile broadband service devices and modems of $509 and aircraft parts and other with a carrying value of $36 (which
includes a lower of cost or market adjustment
of $1,331). At December 31, 2015, goods held for sale or auction includes aircraft parts and other
with a carrying value of $37 (which
(m) Property and
Equipment
Property
and equipment are stated at cost. Depreciation and amortization is computed using the straight-line method over the estimated
useful lives of the assets. Property and equipment held under capital leases are amortized on a straight-line basis over the shorter
of the lease term or estimated useful life of the asset. Property and equipment under capital leases are stated at the present
value of minimum lease payments. Depreciation and amortization expense was $531 and $102 for the three months ended September
30, 2016 and 2015, respectively, and $706 and $315 for the nine months ended September 30, 2016 and 2015, respectively.
(n) Securities
Owned and Securities Sold Not Yet Purchased Securities
owned consist of marketable securities and investments in partnership interests and other securities recorded at fair value. Securities
sold, but not yet purchased represents obligations of the Company to deliver the specified security at the contracted price and
thereby create a liability to purchase the security in the market at prevailing prices. Changes in the value of these
securities are reflected currently in the results of operations. As
of September 30, 2016 and December 31, 2015, the Company’s securities owned and securities sold not yet purchased at fair
value consisted of the following securities:
September
30, December
31,
2016 2015
Securities
owned
Common
stocks $ 1,352 $ 17,586
Corporate
bonds 2,302 941
Partnership
interests 5,374 7,016
$ 9,028 $ 25,543
Securities
sold not yet purchased
Corporate
bonds $ 370 $ 713
(o) Fair Value
Measurements The
Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment
and considers factors specific to the asset or liability. Fair value is the price that would be received to sell an asset or paid
to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement
assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability
or, in the absence of a principal market, the most advantageous market. In general, fair values determined by Level 1 inputs utilize
quoted prices (unadjusted) for identical instruments that are highly liquid, observable and actively traded in over-the-counter
markets. Fair values determined by Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable
for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar instruments in active
markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations whose
inputs are observable and can be corroborated by market data. Level 3 inputs are unobservable inputs that are supported by little
or no market activity and that are significant to the fair value of the assets or liabilities. In certain cases, the inputs used
to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy
within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant
to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the
fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. The
Company’s securities owned and securities sold and not yet purchased are comprised of common stocks, corporate bonds and
investments in partnerships. Investments in common stocks are based on quoted prices in active markets which are included in Level
1 of the fair value hierarchy. The Company also holds nonpublic common stocks and warrants for which there is little or no public
market and fair value is determined by management on a consistent basis. For investments where little or no public market exists,
management’s determination of fair value is based on the best available information which may incorporate management’s
own assumptions and involves a significant degree of judgment, taking into consideration various factors including earnings history,
financial condition, recent sales prices of the issuer’s securities and liquidity risks. These investments are included
in Level 3 of the fair value hierarchy. Investments in partnership interests include investments in private equity partnerships
that primarily invest in equity securities, bonds, and direct lending funds. The Company’s partnership interests are valued
based on the Company’s proportionate share of the net assets of the partnership which is derived from the most recent statements
received from the general partner which are included in Level 2 of the fair value hierarchy. The
fair value of mandatorily redeemable noncontrolling interests is determined based on the issuance of similar interests for cash,
references to industry comparables, and relied, in part, on information obtained from appraisal reports and internal valuation
models. The
following tables present information on the financial assets and liabilities measured and recorded at fair value on a recurring
basis as of September 30, 2016 and December 31, 2015.
Financial
Assets and Liabilities Measured at Fair Value
on
a Recurring Basis at September 30, 2016, Using
Quoted
prices in Other Significant
Fair
Value at active
markets for observable unobservable
September
30, identical
assets inputs inputs
2016 (Level
1) (Level
2) (Level
3)
Assets:
Securities owned
Common
stocks $ 1,352 $ 1,077 $ - $ 275
Corporate
bonds 2,302 - 2,142 160
Partnership
interests 5,374 - 2,973 2,401
Total
assets measured at fair value $ 9,028 $ 1,077 $ 5,115 $ 2,836
Liabilities:
Securities sold not
yet purchased
Corporate
bonds $ 370 $ - $ 370 $ -
Mandatorily
redeemable noncontrolling interests issued after November 5, 2003 2,234 - - 2,234
Contingent
consideration 1,219 - - 1,219
Total
liabilities measured at fair value $ 3,823 $ - $ 370 $ 3,453
Financial
Assets and Liabilities Measured at Fair Value
on
a Recurring Basis at December 31, 2015, Using
Quoted
prices in Other Significant
Fair
Value at active
markets for observable unobservable
December
31, identical
assets inputs inputs
2015 (Level
1) (Level
2) (Level
3)
Assets:
Securities owned
Common
stocks $ 17,586 $ 17,296 $ - $ 290
Corporate
bonds 941 - 941 -
Partnership
interests 7,016 - 5,250 1,766
Total
assets measured at fair value $ 25,543 $ 17,296 $ 6,191 $ 2,056
Liabilities:
Securities sold not
yet purchased
Corporate
bonds $ 713 $ - $ 713 $ -
Mandatorily
redeemable noncontrolling interests issued after November 5, 2003 $ 2,330 $ - $ - $ 2,330
Contingent
consideration $ 2,391 $ - $ - $ 2,391
Total
liabilities measured at fair value $ 5,434 $ - $ 713 $ 4,721 The
changes in Level 3 fair value hierarchy during the nine months ended September 30, 2016 and 2015 is as follows:
Level
3 Level
3 Changes During the Year Level
3
Balance
at Fair Relating
to Purchases, Transfer
in Balance
at
Beginning
of Value Undistributed Sales
and and/or
out End
of
Period Adjustments Earnings Settlements of
Level 3 Period
Nine Months Ended
September 30, 2016
Common
stocks $ 290 $ (15 ) $ - $ - $ - $ 275
Corporate bonds - (409 ) - 569 - 160
Partnership interests 1,766 123 418 94 - 2,401
Mandatorily
redeemable noncontrolling interests issued after November 5, 2003 2,330 - (96 ) - - 2,234
Contingent consideration 2,391 78 - (1,250 ) - 1,219
Nine Months Ended
September 30, 2015
Common stocks $ 319 $ - $ - $ (293 ) $ - $ 26
Partnership interests - 41 - 1,125 - 1,166
Mandatorily
redeemable noncontrolling interests issued after November 5, 2003 2,285 - (7 ) - - 2,278
Contingent consideration - 2,347 - - - 2,347 The
amount reported in the table above for the nine months ended September 30, 2016 and 2015 includes the amount of undistributed
earnings attributable to the noncontrolling interests that is distributed on a quarterly basis. The fair value adjustment for
contingent consideration in the table above during the nine months ended September 30, 2016 includes an adjustment for imputed
interest of $78. The fair value adjustment for contingent consideration in the table above of $2,347 during the nine months ended
September 30, 2015 includes the initial value of contingent consideration of $2,229 and an adjustment for imputed interest of
$118. The
carrying amounts reported in the condensed consolidated financial statements for cash, restricted cash, accounts receivable, accounts
payable, accrued payroll and related, accrued value added tax, and accrued expenses and other current liabilities approximate
fair value based on the short-term maturity of these instruments. The
carrying amounts of the asset based credit facility approximate fair value because the contractual interest rates or effective
yields of such instruments are consistent with current market rates of interest for instruments of comparable credit risk. (p)
Contingent Consideration In
connection with the acquisition of MK Capital on February 2, 2015, the purchase agreement required the payment of contingent consideration
to the former members of MK Capital in the form of future cash payments of $1,250 and issuance of 166,667 shares of common stock
on the first anniversary date of the closing (February 2, 2016) and a final cash payment of $1,250 and issuance of 166,666 shares
of common stock on the second anniversary date of the closing (February 2, 2017). The contingent cash consideration has been classified
as a liability in the condensed balance sheets in accordance with ASC 805, “Business Combination” (“ASC 805”).
The fair value of the contingent cash consideration has been discounted at 8.0%. The balance of the contingent consideration liability
was $1,219 (discount of $31) at September 30, 2016. The balance of the contingent consideration liability was $2,391 (discount
of $109) at December 31, 2015 and has been recorded as contingent consideration liability – current portion in the amount
of $1,241 and contingent consideration liability, net of current portion in the amount of $1,150 in the condensed consolidated
balance sheet. Imputed interest expense totaled $23 and $45 for the three months ended September 30, 2016 and 2015, respectively,
and $78 and $118 for the nine months ended September 30, 2016 and 2015, respectively. The fair value of the contingent stock consideration
has been classified as equity in accordance with ASC 805. The contingent cash and stock consideration is payable on the first
and second anniversary dates of the closing provided that MK Capital generates a minimum amount of gross revenues as defined in
the purchase agreement for the twelve months following the first and second anniversary dates of the closing. MK Capital achieved
the minimum amount of revenues for the first anniversary period and the contingent cash consideration in the amount of $1,250
and contingent stock consideration consisting of 166,667 shares of common stock for such first anniversary period was paid and
issued on February 2, 2016. (q)
Derivative and Foreign Currency Translation The
Company periodically uses derivative instruments, which primarily consist of the purchase of forward exchange contracts, for certain
auction and liquidation engagements with operations outside the United States. During the nine months ended September 30, 2016,
the Company’s use of derivatives consisted of the purchase of forward exchange contracts (a) in the amount of $10,200 Canadian
dollars that was settled at various periods prior to August 31, 2016, (b) in the amount of $20,000 Australian dollars to be settled
on December 30, 2016, and (c) 5,600 Euro’s to be settled on December 30, 2016. During the nine months ended September
30, 2015, the Company’s use of derivatives consisted of the purchase of forward exchange contracts totaling $16,870 Canadian
dollars that were settled prior to November 30, 2015. The net loss from the foreign exchange contracts was $76 and $115
during the three and nine months ended September 30, 2016, respectively, and the net gain from the foreign exchange contracts
was $68 and $28 during the three and nine months ended September 30, 2015, respectively. These amounts are reported as a component
of selling, general and administrative expenses in the condensed consolidated fi |
