Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Oct. 31, 2013 | |
Document Document And Entity Information [Line Items] | ' | ' |
Entity Registrant Name | 'Cambium Learning Group, Inc. | ' |
Entity Central Index Key | '0001466815 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-13 | ' |
Amendment Flag | 'false | ' |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 46,904,370 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Net revenues | $42,957 | $45,958 | $117,172 | $114,242 |
Cost of revenues: | ' | ' | ' | ' |
Cost of revenues | 12,950 | 14,274 | 37,000 | 39,837 |
Amortization expense | 4,692 | 7,035 | 12,680 | 19,984 |
Total cost of revenues | 17,642 | 21,309 | 49,680 | 59,821 |
Research and development expense | 2,486 | 2,622 | 7,345 | 8,606 |
Sales and marketing expense | 10,943 | 11,331 | 32,991 | 35,268 |
General and administrative expense | 5,122 | 4,837 | 16,795 | 15,643 |
Shipping and handling costs | 721 | 1,204 | 1,419 | 2,485 |
Depreciation and amortization expense | 1,227 | 1,592 | 3,663 | 4,842 |
Goodwill impairment | ' | ' | ' | 14,700 |
Embezzlement-related expense | 3 | 493 | 118 | 452 |
Impairment of long-lived assets | ' | 236 | ' | 3,347 |
Total costs and expenses | 38,144 | 43,624 | 112,011 | 145,164 |
Income (loss) before interest, other income (expense) and income taxes | 4,813 | 2,334 | 5,161 | -30,922 |
Net interest expense | -4,773 | -4,628 | -14,028 | -14,032 |
Other income, net | 215 | 163 | 645 | 236 |
Income (loss) before income taxes | 255 | -2,131 | -8,222 | -44,718 |
Income tax expense | -127 | -104 | -297 | -258 |
Net income (loss) | 128 | -2,235 | -8,519 | -44,976 |
Other comprehensive income (loss): | ' | ' | ' | ' |
Amortization of net pension loss | 30 | 9 | 90 | 26 |
Realized gain on available for sale securities | ' | -1 | ' | -1 |
Comprehensive income (loss) | $158 | ($2,227) | ($8,429) | ($44,951) |
Net income (loss) per common share: | ' | ' | ' | ' |
Basic net income (loss) per common share | $0 | ($0.05) | ($0.18) | ($0.90) |
Diluted net income (loss) per common share | $0 | ($0.05) | ($0.18) | ($0.90) |
Average number of common shares and equivalents outstanding: | ' | ' | ' | ' |
Basic | 47,563 | 49,284 | 47,439 | 49,722 |
Diluted | 47,657 | 49,284 | 47,439 | 49,722 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $53,793 | $51,904 |
Accounts receivable, net | 31,551 | 17,813 |
Inventory | 10,591 | 16,620 |
Tax receivables | ' | 12,234 |
Restricted assets, current | 1,350 | 4,387 |
Assets held for sale | ' | 380 |
Other current assets | 6,316 | 5,892 |
Total current assets | 103,601 | 109,230 |
Property, equipment and software at cost | 41,862 | 35,535 |
Accumulated depreciation and amortization | -20,854 | -14,514 |
Property, equipment and software, net | 21,008 | 21,021 |
Goodwill | 47,404 | 47,404 |
Acquired curriculum and technology intangibles, net | 6,508 | 9,320 |
Acquired publishing rights, net | 5,429 | 7,602 |
Other intangible assets, net | 6,481 | 7,836 |
Pre-publication costs, net | 13,949 | 11,660 |
Restricted assets, less current portion | 5,796 | 6,754 |
Other assets | 9,325 | 9,632 |
Total assets | 219,501 | 230,459 |
Current liabilities: | ' | ' |
Capital lease obligations, current | 965 | 1,290 |
Accounts payable | 1,652 | 3,007 |
Contingent value rights | ' | 7,599 |
Accrued expenses | 20,590 | 20,530 |
Deferred revenue, current | 51,023 | 45,974 |
Total current liabilities | 74,230 | 78,400 |
Long-term liabilities: | ' | ' |
Long-term debt | 174,450 | 174,328 |
Capital lease obligations, less current portion | 2,278 | 3,014 |
Deferred revenue, less current portion | 8,138 | 5,631 |
Other liabilities | 14,001 | 15,131 |
Total long-term liabilities | 198,867 | 198,104 |
Commitments and contingencies (See Note 13) | ' | ' |
Stockholders’ equity (deficit): | ' | ' |
Preferred stock ($.001 par value, 15,000 shares authorized, zero shares issued and outstanding at September 30, 2013 and December 31, 2012) | ' | ' |
Common stock ($.001 par value, 150,000 shares authorized, 51,208 and 51,208 shares issued, and 46,904 and 47,098 shares outstanding at September 30, 2013 and December 31, 2012, respectively) | 51 | 51 |
Capital surplus | 283,572 | 282,450 |
Accumulated deficit | -326,961 | -318,442 |
Treasury stock at cost (4,304 and 4,110 shares at September 30, 2013 and December 31, 2012, respectively) | -7,772 | -7,528 |
Accumulated other comprehensive loss: | ' | ' |
Pension and postretirement plans | -2,486 | -2,576 |
Accumulated other comprehensive loss | -2,486 | -2,576 |
Total stockholders’ equity (deficit) | -53,596 | -46,045 |
Total liabilities and stockholders’ equity (deficit) | $219,501 | $230,459 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, except Per Share data, unless otherwise specified | ||
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 15,000 | 15,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 150,000 | 150,000 |
Common stock, shares issued | 51,208 | 51,208 |
Common stock, shares outstanding | 46,904 | 47,098 |
Treasury stock, at cost | 4,304 | 4,110 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Operating activities: | ' | ' |
Net loss | ($8,519) | ($44,976) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ' | ' |
Depreciation and amortization expense | 16,343 | 24,826 |
Goodwill impairment | ' | 14,700 |
Loss from recovery of property held for sale | 122 | 880 |
Amortization of note discount and deferred financing costs | 1,304 | 1,308 |
Change in fair value of contingent value rights obligation | 74 | 161 |
Loss on disposal of assets | 104 | 68 |
Stock-based compensation and expense | 788 | 518 |
Impairment of long-lived assets | ' | 3,347 |
Proceeds from sale of recovered properties | 258 | ' |
Michigan tax refund received | 12,342 | ' |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable, net | -13,738 | -19,430 |
Inventory | 6,029 | 2,624 |
Other current assets | -408 | -818 |
Other assets | -875 | -223 |
Restricted assets | 3,995 | 1,023 |
Accounts payable | -1,355 | 1,378 |
Accrued expenses | 60 | -3,868 |
Deferred revenue | 7,556 | 6,390 |
Other long-term liabilities | -830 | -689 |
Net cash provided by (used in) operating activities | 23,250 | -12,781 |
Investing activities: | ' | ' |
Cash paid for contingent value rights obligation related to acquisition | -7,673 | ' |
Proceeds from sale of property, equipment, and software | ' | 264 |
Expenditures for property, equipment, software and pre-publication costs | -12,383 | -13,317 |
Net cash used in investing activities | -20,056 | -13,053 |
Financing activities: | ' | ' |
Principal payments under capital lease obligations | -1,061 | -921 |
Share repurchases | -244 | -1,297 |
Net cash used in financing activities | -1,305 | -2,218 |
Increase (decrease) in cash and cash equivalents | 1,889 | -28,052 |
Cash and cash equivalents, beginning of period | 51,904 | 63,191 |
Cash and cash equivalents, end of period | $53,793 | $35,139 |
Basis_of_Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2013 | |
Basis of Presentation | ' |
Note 1 — Basis of Presentation | |
Presentation. The Condensed Consolidated Financial Statements include the accounts of Cambium Learning Group, Inc. and subsidiaries (the “Company”) and are unaudited. The condensed balance sheet as of December 31, 2012 has been derived from audited financial statements. All intercompany transactions are eliminated. | |
As permitted under the Securities and Exchange Commission (“SEC”) requirements for interim reporting, certain information and footnote disclosures normally included in financial statements prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) have been omitted. The Company believes that these financial statements include all necessary and recurring adjustments for the fair presentation of the interim period results. These financial statements should be read in conjunction with the Consolidated Financial Statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012. Due to seasonality, the results of operations for the three and nine months ended September 30, 2013 are not necessarily indicative of the results to be expected for the year ending December 31, 2013. | |
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Subsequent actual results may differ from those estimates. | |
Nature of Operations. The Company is a leading educational solutions and services company that is committed to helping every student reach their full potential by providing evidence-based solutions and expert professional services to empower educators and raise the achievement levels of all students. The Company’s brands include: Voyager Learning and Sopris Learning, Learning A–Z, ExploreLearning, and Kurzweil Educational Systems and IntelliTools. Together, these business units provide best-in-class intervention and supplemental instructional materials; gold-standard professional development and school-improvement services; breakthrough technology solutions for online learning and professional support; valid and reliable assessments; and proven materials to support a positive and safe school environment. | |
These brands comprise four reportable segments with separate management teams and infrastructures that offer various products and services: Voyager Sopris Learning, Learning A-Z, ExploreLearning and Kurzweil/IntelliTools. Prior to the first quarter of 2013, the Company operated in two reportable segments, Voyager Sopris Learning and Cambium Learning Technologies. See Note 15 to the Condensed Consolidated Financial Statements for further information on the Company’s segment reporting structure. |
Accounts_Receivable
Accounts Receivable | 9 Months Ended |
Sep. 30, 2013 | |
Accounts Receivable | ' |
Note 2 — Accounts Receivable | |
Accounts receivable are stated net of allowances for doubtful accounts and estimated sales returns. The allowance for doubtful accounts and estimated sales returns totaled $0.6 million at September 30, 2013 and $0.4 million at December 31, 2012. The allowance for doubtful accounts is based on a review of the outstanding balances and historical collection experience. The reserve for sales returns is based on historical rates of return as well as other factors that in the Company’s judgment could reasonably be expected to cause sales returns to differ from historical experience. |
StockBased_Compensation_and_Ex
Stock-Based Compensation and Expense | 9 Months Ended | |||||||||||||||||||||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation and Expense | ' | |||||||||||||||||||||||||||||||||||||
Note 3 — Stock-Based Compensation and Expense | ||||||||||||||||||||||||||||||||||||||
The stock-based compensation and expense recorded was allocated as follows: | ||||||||||||||||||||||||||||||||||||||
(in thousands) | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||||||||||||||||
Cost of revenues | $ | 33 | $ | 13 | $ | 57 | $ | 38 | ||||||||||||||||||||||||||||||
Research and development expense | 60 | 31 | 112 | 91 | ||||||||||||||||||||||||||||||||||
Sales and marketing expense | 61 | 31 | 105 | 87 | ||||||||||||||||||||||||||||||||||
General and administrative expense | 192 | 238 | 514 | 302 | ||||||||||||||||||||||||||||||||||
Total | $ | 346 | $ | 313 | $ | 788 | $ | 518 | ||||||||||||||||||||||||||||||
Exchange Offer | ||||||||||||||||||||||||||||||||||||||
During the three month period ended September 30, 2013, the Company filed a Tender Offer Statement on Schedule TO with the SEC related to an offer by the Company to certain current U.S. employees of the Company and its subsidiaries who were selected by the Compensation Committee of the Board of Directors of the Company (the “Compensation Committee” and such employees who have been selected by the committee, “Eligible Optionholders”) to receive the opportunity to exchange all of their outstanding options to purchase shares of the Company’s common stock, par value $0.001 per share, previously granted under the Cambium Learning Group, Inc. 2009 Equity Incentive Plan (the “Plan”) for the grant of new options to purchase shares of the Company’s common stock (the “New Options”). The New Options were granted pursuant to the Plan. The number of shares of Company common stock subject to the New Options was calculated pursuant to an exchange ratio determined by the Compensation Committee for each Eligible Optionholder. On July 30, 2013, options to purchase 1,757,500 shares of the Company’s common stock were exchanged in the exchange offer and New Options to purchase 1,902,500 shares of the Company’s common stock were issued. The New Options had a grant date compensation cost, net of forecasted forfeitures, of $1.2 million which was comprised of incremental compensation cost of the New Options of $0.9 million and unamortized compensation cost of the surrendered options of $0.3 million, each as described below. | ||||||||||||||||||||||||||||||||||||||
The exercise price per share for each New Option was equal to $1.30. Each of the New Options vests in equal monthly installments on the last day of each month of the four year period commencing as of January 1, 2013. Each New Option expires on the expiration date applicable to the option for which it was exchanged. | ||||||||||||||||||||||||||||||||||||||
Under Accounting Standards Codification 718, “Compensation – Stock Compensation,” the exchange of options in this exchange offer is treated as a modification of the existing stock options for accounting purposes. Accordingly, beginning in the third quarter of 2013, the Company began recognizing the unamortized compensation cost of the surrendered options, as well as the incremental compensation cost of the New Options granted in this exchange offer, ratably over the vesting period of the New Option grants. The incremental compensation cost was measured as the excess of the fair value of each New Option grant granted to employees in exchange for surrendered options over the fair value of the surrendered options in exchange for the New Option grants, each measured as of the date the New Options were granted. | ||||||||||||||||||||||||||||||||||||||
Other Grants | ||||||||||||||||||||||||||||||||||||||
On July 30, 2013, the Company granted 377,500 options under the Plan with a total grant date fair value, net of forecasted forfeitures, of $0.3 million. Each of these options have a per-share exercise price of $1.30 and vest in equal monthly installments on the last day of each month of the four year period commencing as of January 1, 2013. The term of each of the options is ten years from the date of grant. | ||||||||||||||||||||||||||||||||||||||
On September 19, 2013, the Company granted 30,000 options under the Plan with a total grant date fair value, net of forecasted forfeitures, of $25 thousand. Each of these options have a per-share exercise price of $1.51 and vest in equal monthly installments on the last day of each month of the four year period beginning on the first day of the month of grant. The term of each of the options is ten years from the date of grant. | ||||||||||||||||||||||||||||||||||||||
Valuation assumptions | ||||||||||||||||||||||||||||||||||||||
The following assumptions were used in the Black-Scholes option-pricing model to estimate the fair value of the awards granted during the nine month periods ended September 30, 2013 and 2012: | ||||||||||||||||||||||||||||||||||||||
Nine Months Ended | ||||||||||||||||||||||||||||||||||||||
30-Sep-13 | 30-Sep-12 | |||||||||||||||||||||||||||||||||||||
Expected stock volatility | 63.1 – 63.9 | % | 35.0 | % | ||||||||||||||||||||||||||||||||||
Risk-free interest rate | 1.01 – 1.88 | % | 1.02 - 1.17 | % | ||||||||||||||||||||||||||||||||||
Expected years until exercise | 4.20 – 6.25 | 6.25 | ||||||||||||||||||||||||||||||||||||
Dividend yield | 0.00 | % | 0.00 | % | ||||||||||||||||||||||||||||||||||
Due to a lack of exercise history or other means to reasonably estimate future exercise behavior, the Company used the simplified method as described in applicable accounting guidance for stock-based compensation to estimate the expected years until exercise on new awards. | ||||||||||||||||||||||||||||||||||||||
Award activity | ||||||||||||||||||||||||||||||||||||||
The following tables detail changes in the Company’s outstanding stock options during the three and nine month periods ended September 30, 2013. Options surrendered in the exchange offer of 1,757,500 options are included in “Cancelled/Forfeited” in the tables below. | ||||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, 2013 | ||||||||||||||||||||||||||||||||||||||
Grant Date | Beginning Outstanding | Granted | Cancelled/Forfeited | Ending Outstanding | ||||||||||||||||||||||||||||||||||
December 8, 2009 | 550,000 | — | 550,000 | — | ||||||||||||||||||||||||||||||||||
January 27, 2010 | 996,421 | — | 969,044 | 27,377 | ||||||||||||||||||||||||||||||||||
May 25, 2010 | 80,000 | — | 74,128 | 5,872 | ||||||||||||||||||||||||||||||||||
February 1, 2011 | 122,908 | — | 119,616 | 3,292 | ||||||||||||||||||||||||||||||||||
November 21, 2011 | 150,000 | — | — | 150,000 | ||||||||||||||||||||||||||||||||||
February 8, 2012 | 195,000 | — | 195,000 | — | ||||||||||||||||||||||||||||||||||
April 16, 2012 | 15,000 | — | 15,000 | — | ||||||||||||||||||||||||||||||||||
May 14, 2012 | 25,000 | — | — | 25,000 | ||||||||||||||||||||||||||||||||||
July 30, 2013 | — | 2,280,000 | 4,108 | 2,275,892 | ||||||||||||||||||||||||||||||||||
September 19, 2013 | — | 30,000 | — | 30,000 | ||||||||||||||||||||||||||||||||||
Total | 2,134,329 | 2,310,000 | 1,926,896 | 2,517,433 | ||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2013 | ||||||||||||||||||||||||||||||||||||||
Grant Date | Beginning Outstanding | Granted | Cancelled/Forfeited | Ending Outstanding | ||||||||||||||||||||||||||||||||||
December 8, 2009 | 1,550,000 | — | 1,550,000 | — | ||||||||||||||||||||||||||||||||||
January 27, 2010 | 1,065,398 | — | 1,038,021 | 27,377 | ||||||||||||||||||||||||||||||||||
May 25, 2010 | 92,401 | — | 86,529 | 5,872 | ||||||||||||||||||||||||||||||||||
February 1, 2011 | 165,290 | — | 161,998 | 3,292 | ||||||||||||||||||||||||||||||||||
November 21, 2011 | 150,000 | — | — | 150,000 | ||||||||||||||||||||||||||||||||||
December 1, 2011 | 500,000 | — | 500,000 | — | ||||||||||||||||||||||||||||||||||
February 8, 2012 | 195,000 | — | 195,000 | — | ||||||||||||||||||||||||||||||||||
April 16, 2012 | 15,000 | — | 15,000 | — | ||||||||||||||||||||||||||||||||||
May 14, 2012 | 25,000 | — | — | 25,000 | ||||||||||||||||||||||||||||||||||
July 30, 2013 | — | 2,280,000 | 4,108 | 2,275,892 | ||||||||||||||||||||||||||||||||||
September 19, 2013 | — | 30,000 | — | 30,000 | ||||||||||||||||||||||||||||||||||
Total | 3,758,089 | 2,310,000 | 3,550,656 | 2,517,433 | ||||||||||||||||||||||||||||||||||
During the three and nine months ended Septmber 30, 2013, the related restrictions lapsed on restricted common stock awards of zero shares and 47,795 shares, respectively. |
Net_Income_Loss_per_Common_Sha
Net Income (Loss) per Common Share | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||
Net Income (Loss) per Common Share | ' | |||||||||||||||||||
Note 4 — Net Income (Loss) per Common Share | ||||||||||||||||||||
Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period including a warrant for shares issuable for little or no cash consideration which is considered a common share equivalent. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period, including the potential dilution that could occur if all of the Company’s outstanding stock awards that are in-the-money were exercised, using the treasury stock method. | ||||||||||||||||||||
A reconciliation of the weighted-average number of common shares and equivalents outstanding used in the calculation of basic and diluted net income (loss) per common share is shown in the table below for the periods indicated: | ||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
(in thousands) | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||
Basic | 47,563 | 49,284 | 47,439 | 49,722 | ||||||||||||||||
Dilutive effect of awards | 94 | — | — | — | ||||||||||||||||
Diluted | 47,657 | 49,284 | 47,439 | 49,722 | ||||||||||||||||
Antidilutive securities: | ||||||||||||||||||||
Options | 2,517 | 4,107 | 2,517 | 4,107 | ||||||||||||||||
Warrants | — | 188 | 300 | 188 | ||||||||||||||||
Restricted stock | 2 | 49 | 2 | 49 | ||||||||||||||||
Fair_Value_Measurements
Fair Value Measurements | 9 Months Ended | ||||||||||||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||||||||||||||||||||
Note 5 — Fair Value Measurements | |||||||||||||||||||||||||||||||||||
Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability (exit price), in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques are based on observable or unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs have created the following fair value hierarchy: | |||||||||||||||||||||||||||||||||||
Level 1 — Quoted prices for identical instruments in active markets. | |||||||||||||||||||||||||||||||||||
Level 2 — 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 in which significant value drivers are observable. | |||||||||||||||||||||||||||||||||||
Level 3 — Valuations derived from valuation techniques in which significant value drivers are unobservable. | |||||||||||||||||||||||||||||||||||
Applicable guidance requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. | |||||||||||||||||||||||||||||||||||
As of September 30, 2013, financial instruments include $53.8 million of cash and cash equivalents, restricted assets of $7.1 million, collateral investments of $2.0 million, and $174.5 million of senior secured notes. As of December 31, 2012, financial instruments include $51.9 million of cash and cash equivalents, restricted assets of $11.1 million, collateral investments of $2.0 million, $174.3 million of senior secured notes, $0.3 million of warrants, assets held for sale of $0.4 million, and $7.6 million in contingent value rights (“CVRs”). The fair market values of cash equivalents and restricted assets are equal to their carrying value, as these investments are recorded based on quoted market prices and/or other market data for the same or comparable instruments and transactions as of the end of the reporting period. The final recovered property related to the employee embezzlement matter was sold during the quarter ended September 30, 2013. See Note 16 to the Condensed Consolidated Financial Statements for further information. The sale of the remaining recovered property also represented the final contingency related to the warrant. As such, the warranty liability was reclassified from Other Liabilities to Capital Surplus in the Condensed Consolidated Financial Statements in accordance with relevant GAAP. | |||||||||||||||||||||||||||||||||||
As of September 30, 2013, the fair value of the senior secured notes was $165.6 million based on quoted market prices in active markets for these debt instruments when traded as assets. | |||||||||||||||||||||||||||||||||||
Assets and liabilities measured at fair value on a recurring basis are as follows: | |||||||||||||||||||||||||||||||||||
(in thousands) | Fair Value at Reporting Date Using | ||||||||||||||||||||||||||||||||||
Description | As of September 30, 2013 | Quoted Prices | Significant | Significant | |||||||||||||||||||||||||||||||
in Active | Other | Unobservable | |||||||||||||||||||||||||||||||||
Markets for | Observable | Inputs | |||||||||||||||||||||||||||||||||
Identical | Inputs | (Level 3) | |||||||||||||||||||||||||||||||||
Assets | (Level 2) | ||||||||||||||||||||||||||||||||||
(Level 1) | |||||||||||||||||||||||||||||||||||
Restricted assets: | |||||||||||||||||||||||||||||||||||
Money market | $ | 7,146 | $ | 7,146 | $ | — | $ | — | |||||||||||||||||||||||||||
Collateral investments: | |||||||||||||||||||||||||||||||||||
Money market | 903 | 903 | — | — | |||||||||||||||||||||||||||||||
Certificate of deposit | 1,068 | 1,068 | — | — | |||||||||||||||||||||||||||||||
(in thousands) | Fair Value at Reporting Date Using | ||||||||||||||||||||||||||||||||||
Description | As of December 31, 2012 | Quoted Prices | Significant | Significant | |||||||||||||||||||||||||||||||
in Active | Other | Unobservable | |||||||||||||||||||||||||||||||||
Markets for | Observable | Inputs | |||||||||||||||||||||||||||||||||
Identical | Inputs | (Level 3) | |||||||||||||||||||||||||||||||||
Assets | (Level 2) | ||||||||||||||||||||||||||||||||||
(Level 1) | |||||||||||||||||||||||||||||||||||
Restricted assets: | |||||||||||||||||||||||||||||||||||
Money market | $ | 11,141 | $ | 11,141 | $ | — | $ | — | |||||||||||||||||||||||||||
Collateral investments: | |||||||||||||||||||||||||||||||||||
Money market | 902 | 902 | — | — | |||||||||||||||||||||||||||||||
Certificate of deposit | 1,067 | 1,067 | — | — | |||||||||||||||||||||||||||||||
Warrant liability | 310 | — | 310 | — | |||||||||||||||||||||||||||||||
Assets held for sale: | |||||||||||||||||||||||||||||||||||
Recovered properties | 380 | — | 380 | — | |||||||||||||||||||||||||||||||
CVRs | 7,599 | — | — | 7,599 | |||||||||||||||||||||||||||||||
(in thousands) | Total Gains (Losses) for the Nine | ||||||||||||||||||||||||||||||||||
Months Ended September 30, | |||||||||||||||||||||||||||||||||||
Description | 2013 | 2012 | |||||||||||||||||||||||||||||||||
Restricted assets: | |||||||||||||||||||||||||||||||||||
Money market | $ | — | $ | — | |||||||||||||||||||||||||||||||
Collateral investments: | |||||||||||||||||||||||||||||||||||
Money market | — | — | |||||||||||||||||||||||||||||||||
Certificate of deposit | — | — | |||||||||||||||||||||||||||||||||
Warrant liability | (53 | ) | 389 | ||||||||||||||||||||||||||||||||
Assets held for sale: | |||||||||||||||||||||||||||||||||||
Recovered properties | (122 | ) | (880 | ) | |||||||||||||||||||||||||||||||
CVRs | (74 | ) | (161 | ) | |||||||||||||||||||||||||||||||
The warrant was valued using the Black-Scholes pricing model. Due to the low exercise price of the warrant, the model assumptions do not significantly impact the valuation. | |||||||||||||||||||||||||||||||||||
Contingent Value Rights | |||||||||||||||||||||||||||||||||||
As part of the 2009 merger with Voyager Learning Company (“VLCY”), each former VLCY shareholder received a CVR to receive cash in an amount equal to the aggregate amount of specified tax refunds received after the closing of the mergers and various other amounts deposited in escrow on or after the closing date, reduced by any payments to be made under the escrow agreement entered into in connection with the mergers, with respect to agreed contingencies, a potential working capital adjustment and allowed expenses, divided by the total number of shares of VLCY common stock outstanding immediately prior to the effective time of the mergers. | |||||||||||||||||||||||||||||||||||
The first and second CVR payment dates were in September 2010 and June 2011, with $1.1 million and $2.0 million, respectively, distributed to the escrow agent at those times for distribution to holders of the CVRs. | |||||||||||||||||||||||||||||||||||
During the second quarter of 2013, the remaining contingencies related to the CVR liability were resolved and the final payment of $7.7 million was issued. This payment comprised $5.8 million related to a Michigan state tax matter and $1.9 million related to a potential tax indemnity obligation. Restricted cash in an escrow account for the benefit of the CVRs was $3.0 million for the potential tax indemnity obligation. As the potential tax indemnity obligation was not triggered, the remaining $1.1 million in the escrow account reverted back to the general cash of the Company in the second quarter of 2013. | |||||||||||||||||||||||||||||||||||
See Note 13 for further information on the Michigan tax matter. | |||||||||||||||||||||||||||||||||||
A detail of the elements included in the CVR is as follows: | |||||||||||||||||||||||||||||||||||
(in thousands) | Fair Value Measurements | ||||||||||||||||||||||||||||||||||
Using Significant | |||||||||||||||||||||||||||||||||||
Unobservable Inputs | |||||||||||||||||||||||||||||||||||
(Level 3) CVRs | |||||||||||||||||||||||||||||||||||
Balance as of December 31, 2012 | $ | 7,599 | |||||||||||||||||||||||||||||||||
Accrued interest | 74 | ||||||||||||||||||||||||||||||||||
Payments made | (7,673 | ) | |||||||||||||||||||||||||||||||||
Balance as of September 30, 2013 | $ | — | |||||||||||||||||||||||||||||||||
(in thousands) | Fair Value Measurements | ||||||||||||||||||||||||||||||||||
Using Significant | |||||||||||||||||||||||||||||||||||
Unobservable Inputs | |||||||||||||||||||||||||||||||||||
(Level 3) CVRs | |||||||||||||||||||||||||||||||||||
Fair Value as of | |||||||||||||||||||||||||||||||||||
September 30, 2013 | |||||||||||||||||||||||||||||||||||
Components of CVR Total: | |||||||||||||||||||||||||||||||||||
Tax refunds received before closing of the merger | $ | 1,583 | |||||||||||||||||||||||||||||||||
Other specified tax refunds | 4,797 | ||||||||||||||||||||||||||||||||||
Tax indemnity obligation | 1,868 | ||||||||||||||||||||||||||||||||||
Legal receivable | 2,400 | ||||||||||||||||||||||||||||||||||
Interest income from Michigan tax refund | 607 | ||||||||||||||||||||||||||||||||||
Other specified tax related liabilities | (53 | ) | |||||||||||||||||||||||||||||||||
Costs incurred to collect tax refunds and by stockholders’ representative | (430 | ) | |||||||||||||||||||||||||||||||||
Total CVR liability | 10,772 | ||||||||||||||||||||||||||||||||||
September 2010 payment | (1,106 | ) | |||||||||||||||||||||||||||||||||
June 2011 payment | (1,993 | ) | |||||||||||||||||||||||||||||||||
June 2013 payment | (7,673 | ) | |||||||||||||||||||||||||||||||||
Remaining CVR liability | $ | — | |||||||||||||||||||||||||||||||||
Assets and liabilities measured at fair value on a non-recurring basis are as follows: | |||||||||||||||||||||||||||||||||||
(in thousands) | Fair Value at Reporting Date Using | ||||||||||||||||||||||||||||||||||
Description | As of September 30, 2013 | Quoted Prices | Significant | Significant | |||||||||||||||||||||||||||||||
in Active | Other | Unobservable | |||||||||||||||||||||||||||||||||
Markets for | Observable | Inputs | |||||||||||||||||||||||||||||||||
Identical | Inputs | (Level 3) | |||||||||||||||||||||||||||||||||
Assets | (Level 2) | ||||||||||||||||||||||||||||||||||
(Level 1) | |||||||||||||||||||||||||||||||||||
Goodwill | $ | 47,404 | $ | — | $ | — | $ | 47,404 | |||||||||||||||||||||||||||
Property, equipment and software | 21,008 | — | — | 21,008 | |||||||||||||||||||||||||||||||
Pre-publication costs, net | 13,949 | — | — | 13,949 | |||||||||||||||||||||||||||||||
Acquired curriculum and technology intangibles, net | 6,508 | — | — | 6,508 | |||||||||||||||||||||||||||||||
Acquired publishing rights, net | 5,429 | — | — | 5,429 | |||||||||||||||||||||||||||||||
Other intangible assets, net | 6,481 | — | — | 6,481 | |||||||||||||||||||||||||||||||
(in thousands) | Fair Value at Reporting Date Using | ||||||||||||||||||||||||||||||||||
Description | As of December 31, 2012 | Quoted Prices | Significant | Significant | |||||||||||||||||||||||||||||||
in Active | Other | Unobservable | |||||||||||||||||||||||||||||||||
Markets for | Observable | Inputs | |||||||||||||||||||||||||||||||||
Identical | Inputs | (Level 3) | |||||||||||||||||||||||||||||||||
Assets | (Level 2) | ||||||||||||||||||||||||||||||||||
(Level 1) | |||||||||||||||||||||||||||||||||||
Goodwill | $ | 47,404 | $ | — | $ | — | $ | 47,404 | |||||||||||||||||||||||||||
Property, equipment and software | 21,021 | — | — | 21,021 | |||||||||||||||||||||||||||||||
Pre-publication costs, net | 11,660 | — | — | 11,660 | |||||||||||||||||||||||||||||||
Acquired curriculum and technology intangibles, net | 9,320 | — | — | 9,320 | |||||||||||||||||||||||||||||||
Acquired publishing rights, net | 7,602 | — | — | 7,602 | |||||||||||||||||||||||||||||||
Other intangible assets, net | 7,836 | — | — | 7,836 | |||||||||||||||||||||||||||||||
(in thousands) | Total Gains (Losses) for the Nine | ||||||||||||||||||||||||||||||||||
Months Ended September 30, | |||||||||||||||||||||||||||||||||||
Description | 2013 | 2012 | |||||||||||||||||||||||||||||||||
Goodwill | $ | — | $ | (14,700 | ) | ||||||||||||||||||||||||||||||
Property, equipment and software | — | (3,347 | ) | ||||||||||||||||||||||||||||||||
Pre-publication costs, net | — | — | |||||||||||||||||||||||||||||||||
Acquired curriculum and technology intangibles, net | — | — | |||||||||||||||||||||||||||||||||
Acquired publishing rights, net | — | — | |||||||||||||||||||||||||||||||||
Other intangible assets, net | — | — | |||||||||||||||||||||||||||||||||
There were no significant remeasurements of these assets during the nine months ended September 30, 2013. | |||||||||||||||||||||||||||||||||||
During the quarter ended March 31, 2012, an Impairment of Long-Lived Assets charge of $2.8 million was recorded primarily due to the Company’s decision to outsource its warehouse operations to Ozburn Hessey Logistics and to cease use of its leased facility in Frederick, Colorado. During the quarter ended June 30, 2012, an Impairment of Long-Lived Assets charge of $0.3 million was recorded for the impairment of previously capitalized development costs that, as a result of certain actions in our restructuring and reengineering initiative, were determined to have no ongoing value. During the quarter ended September 30, 2012, an Impairment of Long-Lived Assets charge of $0.2 million was recorded for the impairment of certain warehouse equipment as a result of the Company’s restructuring and reengineering initiatives. | |||||||||||||||||||||||||||||||||||
Goodwill Impairment | |||||||||||||||||||||||||||||||||||
In accordance with applicable accounting guidance, goodwill and other indefinite-lived intangible assets are not amortized but are instead reviewed for impairment at least annually and if a triggering event is determined to have occurred in an interim period. The Company’s annual impairment testing is performed as of October 1 of each year. During the quarter ended June 30, 2012, significant sustained sales declines in the Company’s Kurzweil/IntelliTools segment caused the Company to re-evaluate the forecasts for this reporting unit. The Company determined that future sales for Kurzweil/IntelliTools were not expected to achieve previous forecasts. This adverse change in expected future cash flows triggered the need for an interim goodwill impairment analysis for this reporting unit. As a result of our interim impairment test, the goodwill balance for the Kurzweil/IntelliTools reporting unit was determined to be partially impaired, and an impairment charge of $14.7 million was recorded as of June 30, 2012. The goodwill impairment charge was primarily the result of lowered forecasts of future sales. | |||||||||||||||||||||||||||||||||||
During the three and nine months ended September 30, 2013, the Company did not identify any triggering events that would warrant an interim goodwill impairment test. | |||||||||||||||||||||||||||||||||||
Class.com | |||||||||||||||||||||||||||||||||||
In late 2011, the Company completed the acquisition of certain assets of Class.com, a provider of online learning solutions and courseware. To better align its product portfolio with the Company’s strategic focus, the Voyager Sopris Learning segment is considering strategic alternatives which could include a sale of the Class.com assets. The Company is actively pursuing a sale transaction, but it is unknown at this time whether a transaction will be completed. If the strategic alternative process does result in a sale transaction, it would most likely be completed in the fourth quarter of 2013 or the first quarter of 2014. The Class.com product line was not recorded as held for sale or discontinued operations at September 30, 2013 as it was reasonably possible that the plan to sell the Class.com assets could significantly change or be withdrawn. | |||||||||||||||||||||||||||||||||||
The Company determined that the potential sale of the Class.com assets was a trigger event for performing a review of the recoverability of the related assets. After reviewing the recoverability of the assets and the fair values, as necessary, it was determined that no impairment was present at September 30, 2013. The related product line assets include intangible assets of $0.6 million, capitalized software of $0.3 million, and developed curriculum of $0.2 million. The Company will continue to monitor any changes to its strategic alternatives process and the related impact to its asset values. |
Other_Current_Assets
Other Current Assets | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Other Current Assets | ' | ||||||||||
Note 6 — Other Current Assets | |||||||||||
Other current assets at September 30, 2013 and December 31, 2012 consisted of the following: | |||||||||||
As of | |||||||||||
(in thousands) | September 30, | December 31, | |||||||||
2013 | 2012 | ||||||||||
Deferred costs | $ | 4,399 | $ | 4,132 | |||||||
Prepaid expenses | 1,656 | 1,599 | |||||||||
Deferred taxes | 261 | 137 | |||||||||
Other current assets | — | 24 | |||||||||
Total | $ | 6,316 | $ | 5,892 | |||||||
Other_Assets
Other Assets | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Other Assets | ' | ||||||||||
Note 7 — Other Assets | |||||||||||
Other assets at September 30, 2013 and December 31, 2012 consisted of the following: | |||||||||||
As of | |||||||||||
(in thousands) | September 30, | December 31, | |||||||||
2013 | 2012 | ||||||||||
Deferred financing costs | $ | 4,939 | $ | 6,121 | |||||||
Collateral investments | 1,971 | 1,969 | |||||||||
Other | 2,415 | 1,542 | |||||||||
Total | $ | 9,325 | $ | 9,632 | |||||||
The deferred financing costs represent costs incurred in connection with the issuance of the $175 million aggregate principal amount of 9.75% senior secured notes as described in Note 14 to the Condensed Consolidated Financial Statements. |
Accrued_Expenses
Accrued Expenses | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Accrued Expenses | ' | ||||||||||
Note 8 — Accrued Expenses | |||||||||||
Accrued expenses at September 30, 2013 and December 31, 2012 consisted of the following: | |||||||||||
As of | |||||||||||
(in thousands) | September 30, | December 31, | |||||||||
2013 | 2012 | ||||||||||
Salaries, bonuses and benefits | $ | 12,814 | $ | 7,593 | |||||||
Accrued interest | 2,202 | 6,490 | |||||||||
Accrued royalties | 1,505 | 1,399 | |||||||||
Pension and post-retirement medical benefits | 1,221 | 1,218 | |||||||||
Deferred compensation | 21 | 57 | |||||||||
Other | 2,827 | 3,773 | |||||||||
Total | $ | 20,590 | $ | 20,530 | |||||||
Accrued interest primarily relates to the 9.75% senior secured notes. The notes require semi-annual interest payments in arrears on each February 15 and August 15 over the life of the notes. |
Other_Liabilities
Other Liabilities | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Other Liabilities | ' | ||||||||||
Note 9 — Other Liabilities | |||||||||||
Other liabilities at September 30, 2013 and December 31, 2012 consisted of the following: | |||||||||||
As of | |||||||||||
(in thousands) | September 30, | December 31, | |||||||||
2013 | 2012 | ||||||||||
Pension and post-retirement medical benefits, long-term portion | $ | 10,812 | $ | 11,392 | |||||||
Deferred rent | 1,262 | 1,457 | |||||||||
Long-term income tax payable | 889 | 852 | |||||||||
Long-term deferred compensation | 488 | 503 | |||||||||
Long-term deferred tax liability | 397 | 273 | |||||||||
Other | 153 | 654 | |||||||||
Total | $ | 14,001 | $ | 15,131 | |||||||
Pension_Plan
Pension Plan | 9 Months Ended |
Sep. 30, 2013 | |
Pension Plan | ' |
Note 10 — Pension Plan | |
The net pension costs of the Company’s defined benefit pension plan were primarily comprised of interest costs and totaled $0.1 million for the three month periods ended September 30, 2013 and 2012 and $0.4 million for the nine month periods ended September 30, 2013 and 2012. The net pension costs for the three and nine months ended September 30, 2013 and 2012 also included immaterial accumulated net loss amortization. |
Restructuring
Restructuring | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Restructuring | ' | |||||||||||||||
Note 11 — Restructuring | ||||||||||||||||
In late 2011, the Company launched a reengineering and restructuring initiative to align its organizational and cost structure to its strategic goals. Reengineering and restructuring activities were completed during 2012 and included: | ||||||||||||||||
Obtaining new leadership and employee skill sets that support the transformation of the Company to focus more heavily on technology solutions and services and other strategic objectives; | ||||||||||||||||
Outsourcing warehouse operations to a third party logistics provider, which will allow the Company to take advantage of a lower and more variable cost structure for its print based products, as well as locate operations closer to the geographic center of its nationwide customer base; | ||||||||||||||||
Rationalizing facilities space by consolidating facilities and subleasing entire or partial facilities where feasible; | ||||||||||||||||
Assessing and implementing optimization projects to improve cost efficiencies and enhance the customer experience throughout the order to cash, professional service delivery, procurement processes, and sales channel structure; | ||||||||||||||||
Reduction of job positions that do not support the Company’s key strategic goals; and | ||||||||||||||||
Other reductions and costs to improve the Company’s cost structure. | ||||||||||||||||
The total expense for all reengineering and restructuring initiatives from the fourth quarter of 2011 through the end of 2012 was $9.6 million, including both cash and non-cash items, and capital expenditures were $0.7 million. | ||||||||||||||||
The following table summarizes the amounts incurred in connection with the reengineering and restructuring initiative: | ||||||||||||||||
(in thousands) | Incurred in | Incurred in | Total Amount | |||||||||||||
Year Ended | Year Ended | Incurred Under | ||||||||||||||
December 31, | December 31, | the Plan | ||||||||||||||
2011 | 2012 | |||||||||||||||
One-time termination benefits | $ | 1,189 | $ | 2,507 | $ | 3,696 | ||||||||||
Impairment of long-lived assets | — | 4,448 | 4,448 | |||||||||||||
Warehouse transition costs | — | 1,003 | 1,003 | |||||||||||||
Facility rationalization costs | — | 209 | 209 | |||||||||||||
Process reengineering costs | — | 203 | 203 | |||||||||||||
$ | 1,189 | $ | 8,370 | $ | 9,559 | |||||||||||
Reengineering and restructuring charges were recorded to the following line items in the Condensed Consolidated Statements of Operations for the three and nine months, respectively, ended September 30, 2012: $0.1 million and $1.5 million to Cost of Revenues; zero and $0.3 million to Research and Development Expense; zero and $0.5 million to Sales and Marketing Expense; $0.2 million and $0.3 million to General and Administrative Expense; zero and $0.4 million to Shipping and Handling Costs; and $0.2 million and $3.3 million to Impairment of Long-Lived Assets. All of these charges were recorded in unallocated shared services. | ||||||||||||||||
(in thousands) | One-Time | |||||||||||||||
Termination | ||||||||||||||||
Benefits | ||||||||||||||||
Balance as of December 31, 2012 | $ | 828 | ||||||||||||||
Accrual changes | (18 | ) | ||||||||||||||
Payments made | (757 | ) | ||||||||||||||
Balance as of September 30, 2013 | $ | 53 | ||||||||||||||
Uncertain_Tax_Positions
Uncertain Tax Positions | 9 Months Ended |
Sep. 30, 2013 | |
Uncertain Tax Positions | ' |
Note 12 — Uncertain Tax Positions | |
The Company recognizes the financial statement impacts of a tax return position when it is more likely than not, based on technical merits, that the position will ultimately be sustained. For tax positions that meet this recognition threshold, the Company applies judgment, taking into account applicable tax laws, experience managing tax audits and relevant GAAP, to determine the amount of tax benefits to recognize in its financial statements. For each position, the difference between the benefit realized on the Company’s tax return and the benefit reflected in its financial statements is recorded on the Condensed Consolidated Balance Sheet as an unrecognized tax benefit (“UTB”). The Company updates its UTBs at each financial statement date to reflect the impacts of audit settlements and other resolution of audit issues, expiration of statutes of limitation, developments in tax law and ongoing discussions with tax authorities. The balance of UTBs was $7.1 million at September 30, 2013 and December 31, 2012. | |
The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. All U.S. tax years prior to 2008 related to the VLCY acquired entities have been audited by the Internal Revenue Service. Cambium and its subsidiaries have been examined by the Internal Revenue Service through the end of 2006. The Company has been audited by the various state tax authorities through 2007. |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2013 | |
Commitments and Contingencies | ' |
Note 13 — Commitments and Contingencies | |
The Company is involved in various legal proceedings incidental to its business. Management believes that the outcome of these proceedings will not have a material adverse effect upon the Company’s consolidated operations or financial condition and the Company has recognized appropriate liabilities as necessary based on facts and circumstances known to management. The Company expenses legal costs related to legal contingencies as incurred. | |
In March 2013, the Company’s Board of Directors announced that they had accepted the resignations of Ron Klausner, Chief Executive Officer; Vernon Johnson, President of Voyager Sopris Learning; and Brad Almond, Chief Financial Officer. These resignations were not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices. Severance charges of $1.5 million were recorded in the first quarter of 2013 in connection with these resignations. | |
The Company had a potential contingent liability related to state income taxes and related interest that had been assessed against a former subsidiary. On August 27, 2010, the former subsidiary received a decision and order of determination from the Michigan taxing authority. According to the determination of the Michigan taxing authority, the former subsidiary was liable to the State of Michigan for unpaid taxes and interest in the amount of approximately $10.4 million. In order to expedite resolution of this matter and access the Michigan Court of Claims, the Company paid this liability to the state of Michigan on behalf of the former subsidiary on September 7, 2010 and filed an action in the Michigan Court of Claims to pursue a refund of the assessment. On November 16, 2011, the Michigan Court of Claims ruled in the Company’s favor. The Michigan state taxing authority then appealed the decision of the Court of Claims to the Michigan Court of Appeals. On January 16, 2013, the Michigan Court of Appeals affirmed the verdict of the Court of Claims. As the Michigan state taxing authority declined to appeal the case to the Michigan Supreme Court, the matter was closed and the Company received $11.7 million related to this claim in the second quarter of 2013. | |
This liability was identified as an agreed contingency for purposes of the CVRs issued as part of a 2009 merger. In accordance with the terms of the merger agreement, dated June 20, 2009, fifty percent (50%) of any amount that is paid or due and payable with respect to each agreed contingency would offset payments due under the CVRs from an amount held for such payments by Wells Fargo Bank, N.A., as escrow agent, in an escrow account. Upon payment of the approximately $10.4 million, the Company requested a disbursement to the Company from the escrow account in an amount equal to fifty percent (50%) of the payment, or approximately $5.2 million. This cash disbursement was received by the Company during the third quarter of 2010. On September 20, 2010, the Company amended the merger agreement and the escrow agreement to extend the term of the escrow agreement until the later of the full distribution of the escrow funds or the final resolution of the agreed contingency. The final resolution of the tax litigation resulted in a total refund from the taxing authority to the Company of $11.7 million of which $5.8 million was paid to the holders of the CVRs. The total payment to the holders of the CVRs during the second quarter of 2013 also included $1.9 million related to a potential tax indemnity obligation. | |
The Michigan Court of Appeals also ruled in the Company’s favor on two other tax matters that resulted in a refund of $0.6 million. These tax refunds were retained by the Company and were not subject to payment to the holders of the CVRs. | |
From time to time, the Company may enter into firm purchase commitments for printed materials included in inventory which the Company expects to use in the ordinary course of business. These commitments are typically for terms less than one year and require the Company to buy minimum quantities of materials with specific delivery dates at a fixed price over the term. These open purchase commitments totaled $0.3 million as of September 30, 2013. | |
The Company has letters of credit outstanding as of September 30, 2013 in the amount of $2.9 million to support workers’ compensation insurance coverage, certain credit card programs, the build-to-suit lease, and performance bonds for certain contracts. The Company maintains a $1.1 million certificate of deposit as collateral for the workers’ compensation insurance and credit card program letters of credit and for Automated Clearinghouse (ACH) programs. The Company also maintains a $0.9 million money market fund investment as collateral for a travel card program. The certificate of deposit and money market fund investment are recorded in Other Assets. |
Long_Term_Debt
Long Term Debt | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Long-Term Debt | ' | |||||||||
Note 14 — Long-Term Debt | ||||||||||
Long-term debt consists of the following at September 30, 2013 and December 31, 2012: | ||||||||||
(in thousands) | September 30, | December 31, | ||||||||
2013 | 2012 | |||||||||
$175.0 million of 9.75% senior secured notes due February 15, 2017, interest payable semiannually | $ | 175,000 | $ | 175,000 | ||||||
Less: Unamortized discount | (550 | ) | (672 | ) | ||||||
Total long-term debt | $ | 174,450 | $ | 174,328 | ||||||
In February 2011, the Company closed an offering of $175 million aggregate principal amount of 9.75% senior secured notes due 2017 (the “Notes”) and entered into an asset-based revolving credit facility with potential for up to $40 million in borrowing capacity. Deferred financing costs are capitalized in Other Assets in the Condensed Consolidated Balance Sheets, net of accumulated amortization, and are to be amortized over the term of the related debt using the effective interest method. Unamortized capitalized deferred financing costs at September 30, 2013 and December 31, 2012 were $4.9 million and $6.1 million, respectively. | ||||||||||
Interest on the Notes accrues at a rate of 9.75% per annum from the date of original issuance and is payable semi-annually in arrears on each February 15 and August 15 to the holders of record of the Notes on the immediately preceding February 1 and August 1. No principal repayments are due until the maturity date of the Notes. | ||||||||||
The Notes are secured by (i) a first priority lien on substantially all of the Company’s assets (other than inventory and accounts receivable and related assets of the ABL Credit Parties in connection with the ABL Facility (each as defined and discussed below) and subject to certain exceptions), including capital stock of the guarantors (which are certain of the Company’s subsidiaries), and (ii) a second-priority lien on substantially all of the inventory and accounts receivable and related assets of the ABL Credit Parties, in each case, subject to certain permitted liens. The Notes also contain customary covenants, including limitations on the Company’s ability to incur debt, and events of default as defined by the agreement. The Company may, at its option, redeem the Notes prior to their maturity based on the terms included in the agreement. | ||||||||||
ABL Facility. In February 2011, the Company’s wholly owned subsidiary, Cambium Learning, Inc. (together with its wholly owned subsidiaries, the “ABL Credit Parties”), entered into a credit facility (the “ABL Facility”) pursuant to a Loan and Security Agreement (the “ABL Loan Agreement”), by and among the ABL Credit Parties, Harris N.A., individually and as Agent (the “Agent”) for any ABL Lender (as hereinafter defined) which is or becomes a party to said ABL Loan Agreement, certain other lenders party thereto (together with Harris N.A. in its capacity as a lender, the “ABL Lenders”), Barclays Bank PLC, individually and as Collateral Agent, and BMO Capital Markets and Barclays Capital, as Joint Lead Arrangers and Joint Book Runners. The ABL Facility consists of a four-year $40.0 million revolving credit facility, which includes a $5.0 million subfacility for swing line loans and a $5.0 million subfacility for letters of credit. In addition, the ABL Facility provides that the ABL Credit Parties may increase the aggregate principal amount of the ABL Facility by up to an additional $20.0 million, subject to the consent of the Agent (whose consent shall not be unreasonably withheld) and subject to the satisfaction of certain other conditions. | ||||||||||
The interest rate for the ABL Facility will be, at the ABL Credit Parties’ option, either an amount to be determined (ranging from 2.75% to 3.25%, depending upon the ABL Credit Parties’ fixed charge coverage ratio at the time) above the London Interbank Offered Rate (“LIBOR”) or at an amount to be determined (ranging from 1.75% to 2.25%, depending upon the ABL Credit Parties’ fixed charge coverage ratio at the time) above the “base rate.” On any day, the base rate will be the greatest of (i) the Agent’s then-effective prime commercial rate, (ii) an average federal funds rate plus 0.50% and (iii) the LIBOR quoted rate plus 1.00%. The ABL Facility is, subject to certain exceptions, secured by a first-priority lien on the ABL Credit Parties’ inventory and accounts receivable and related assets and a second-priority lien (junior to the lien securing the ABL Credit Parties’ obligations with respect to the Notes) on substantially all of the ABL Credit Parties’ other assets. | ||||||||||
As of September 30, 2013, the balances of accounts receivable and inventory collateralizing the ABL Facility were $31.6 million and $10.6 million, respectively. As of September 30, 2013, the Company had a borrowing base under the ABL Loan Agreement of up to $24.3 million. | ||||||||||
Revolving loans under the ABL Facility may be used solely for (i) the satisfaction of existing indebtedness of the ABL Credit Parties under their prior senior secured credit facility and outstanding pursuant to their prior existing senior unsecured notes, (ii) general operating capital needs of the ABL Credit Parties in a manner consistent with the provisions of the ABL Facility and all applicable laws, (iii) working capital and other general corporate purposes in a manner consistent with the provisions of the ABL Facility and all applicable laws, (iv) the payment of certain fees and expenses incurred in connection with the ABL Facility and/or the Notes, and (v) other purposes permitted under the ABL Loan Agreement. | ||||||||||
The ABL Facility contains a financial covenant that generally requires the ABL Credit Parties to maintain, on a consolidated basis, either (i) excess availability of at least the greater of $8 million and 15% of the revolver commitment or (ii) a fixed charge coverage ratio of 1.1 to 1.0. The ABL Credit Parties will be required to pay, quarterly in arrears, an unused line fee equal to the product of (x) either 0.375% or 0.50% (depending upon the ABL Credit Parties’ fixed charge coverage ratio at the time) and (y) the average daily unused amount of the revolver. As of September 30, 2013, the Company was in compliance with this covenant. |
Segment_Reporting
Segment Reporting | 9 Months Ended | ||||||||||||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||||||||||||
Segment Reporting | ' | ||||||||||||||||||||||||||||||||||
Note 15 — Segment Reporting | |||||||||||||||||||||||||||||||||||
During the first quarter of 2013, the Company’s Board of Directors announced that they had accepted the resignation of Ron Klausner, the Company’s Chief Executive Officer. In response to Mr. Klausner’s resignation, John Campbell was promoted from President of the Company’s Cambium Learning Technologies segment to Chief Executive Officer of the Company. Based on the Company’s organizational structure and management reporting and resource allocation practices subsequent to the management change, the Company has identified four reportable segments with separate management teams and infrastructures that offer various products and services: | |||||||||||||||||||||||||||||||||||
Voyager Sopris Learning: | |||||||||||||||||||||||||||||||||||
Voyager Sopris Learning (“VSL”) is a comprehensive provider of research-based education solutions and online learning tools—including curriculum products, personalized professional development, assessment, and school improvement/turnaround services. With the ultimate goal of advancing student achievement, VSL partners with PreK–12 schools to build teaching and leadership capacity, keep students on track, and accelerate struggling students to grade-level proficiency. VSL’s products include the work of world-renowned researchers and education leaders. | |||||||||||||||||||||||||||||||||||
Learning A-Z: | |||||||||||||||||||||||||||||||||||
Founded in 2002, Learning A-Z is an educational resource company specializing in online delivery of leveled readers and other supplementary curriculum resources for PreK-6. Learning A-Z’s resources are currently used in nearly half of the districts in the U.S. and Canada and over 165 countries worldwide. In addition to general classroom use, Learning A-Z serves a wide range of student need, including English Language Learners, Response to Intervention, Special Education, and more. Learning A-Z’s value proposition focuses on three key things: | |||||||||||||||||||||||||||||||||||
Saving teachers time, giving them all the resources they need, all online, all accessible at the click of a mouse | |||||||||||||||||||||||||||||||||||
Saving teachers money, delivering thousands of resources for a fraction of the cost of print and other online providers | |||||||||||||||||||||||||||||||||||
Supporting student achievement through differentiated instruction, ensuring the right high-quality resources for every PreK-6 student | |||||||||||||||||||||||||||||||||||
Winner of more than 15 industry awards in 2013 alone, Learning A-Z’s five subscription-based websites provide online supplemental books, lessons, assessments, and other instructional resources for individual classrooms, schools, and districts. They include: Reading A-Z, Raz-Kids, Science A-Z, Writing A-Z, and Vocabulary A-Z. | |||||||||||||||||||||||||||||||||||
ExploreLearning: | |||||||||||||||||||||||||||||||||||
ExploreLearning develops online solutions to improve student learning in math and science. ExploreLearning currently has two products: Gizmos, the world’s largest library of interactive, online simulations for math and science in grades 3-12; and Reflex, a powerful solution available for math fact fluency development. Gizmos and Reflex bring research-proven instructional strategies to classrooms around the world. | |||||||||||||||||||||||||||||||||||
Kurzweil/IntelliTools: | |||||||||||||||||||||||||||||||||||
The Kurzweil/IntelliTools reporting segment includes the Kurzweil Educational Systems and IntelliTools product lines. | |||||||||||||||||||||||||||||||||||
Kurzweil Educational Systems is recognized as the leading developer of literacy software for people with learning differences such as dyslexia, attention deficit disorder, and those who are English Language Learners as well as those who are blind or visually impaired. Kurzweil provides complete reading, study skills, writing, and test taking support for students. For over 30 years the company has been driven by the vision to serve the needs of struggling learners to enable them to reach their full potential. We offer products that bring the power and pleasure of reading and learning to the lives of users, striving to enhance learning and expand literacy. Kurzweil Educational Systems is committed to providing research-based solutions that help educators raise the achievement levels of preK–12 students as well as adult learning communities. | |||||||||||||||||||||||||||||||||||
IntelliTools offers hardware products that target students with physical, visual and cognitive disabilities that make using a standard keyboard and mouse difficult. IntelliTools also offers software products that target elementary and middle school special education students struggling with reading and math. | |||||||||||||||||||||||||||||||||||
Other: | |||||||||||||||||||||||||||||||||||
This consists of unallocated shared services, such as accounting, legal, human resources and corporate related items. Depreciation and amortization expense, goodwill impairment, interest income and expense, other income and expense, and income taxes are also included in Other, as the Company and its chief operating decision maker evaluate the performance of operating segments excluding these captions. | |||||||||||||||||||||||||||||||||||
Prior Period Reclassifications: | |||||||||||||||||||||||||||||||||||
Certain prior period reclassifications have been made to conform to the current period segment presentation. | |||||||||||||||||||||||||||||||||||
Prior to the first quarter of 2013, the Cambium Learning Technologies segment included: Learning A-Z; ExploreLearning; Kurzweil/IntelliTools; and certain management charges related to the entire Cambium Learning Technologies segment. In the current presentation, Learning A-Z, ExploreLearning, and Kurzweil/IntelliTools are presented in separate segments. The management charges that were related to the overall Cambium Learning Technologies segment, which did not directly relate to any of the three new segments, are included in Other consistent with the 2013 presentation. | |||||||||||||||||||||||||||||||||||
In late 2012, the management teams and infrastructures for the former Voyager Learning and Sopris Learning segments were merged into a combined VSL business unit. Prior to the fourth quarter of 2012, the Company reported segment results separately for Voyager Learning and Sopris Learning. The Company’s historical segment reporting results have been restated for comparative purposes to reflect the current organizational structure. | |||||||||||||||||||||||||||||||||||
The following table represents the revenue, operating expenses, income (loss) from operations, and capital expenditures which are used by the Company’s chief operating decision maker to measure the segment’s operating performance. The Company does not track assets directly by segment and the chief operating decision maker does not use assets to measure a segment’s operating performance, and therefore this information is not presented. | |||||||||||||||||||||||||||||||||||
(in thousands) | Voyager Sopris | Learning A-Z | ExploreLearning | Kurzweil/ | Other | Consolidated | |||||||||||||||||||||||||||||
Learning | IntelliTools | ||||||||||||||||||||||||||||||||||
Quarter ended September 30, 2013 | |||||||||||||||||||||||||||||||||||
Net revenues | $ | 28,212 | $ | 8,362 | $ | 3,700 | $ | 2,683 | $ | — | $ | 42,957 | |||||||||||||||||||||||
Cost of revenues | 11,434 | 167 | 670 | 679 | — | 12,950 | |||||||||||||||||||||||||||||
Amortization | — | — | — | — | 4,692 | 4,692 | |||||||||||||||||||||||||||||
Total cost of revenues | 11,434 | 167 | 670 | 679 | 4,692 | 17,642 | |||||||||||||||||||||||||||||
Other operating expenses | 8,589 | 3,512 | 2,322 | 1,038 | 3,811 | 19,272 | |||||||||||||||||||||||||||||
Embezzlement-related expense | — | — | — | — | 3 | 3 | |||||||||||||||||||||||||||||
Depreciation and amortization | — | — | — | — | 1,227 | 1,227 | |||||||||||||||||||||||||||||
Net interest expense | — | — | — | — | 4,773 | 4,773 | |||||||||||||||||||||||||||||
Other income, net | — | — | — | — | (215 | ) | (215 | ) | |||||||||||||||||||||||||||
Income tax expense | — | — | — | — | 127 | 127 | |||||||||||||||||||||||||||||
Segment net income (loss) | $ | 8,189 | $ | 4,683 | $ | 708 | $ | 966 | $ | (14,418 | ) | $ | 128 | ||||||||||||||||||||||
Capital expenditures | $ | 2,007 | $ | 1,112 | $ | 382 | $ | 154 | $ | 754 | $ | 4,409 | |||||||||||||||||||||||
Quarter ended September 30, 2012 | |||||||||||||||||||||||||||||||||||
Net revenues | $ | 32,957 | $ | 6,520 | $ | 3,637 | $ | 2,844 | $ | — | $ | 45,958 | |||||||||||||||||||||||
Cost of revenues | 13,069 | 91 | 542 | 478 | 94 | 14,274 | |||||||||||||||||||||||||||||
Amortization | — | — | — | — | 7,035 | 7,035 | |||||||||||||||||||||||||||||
Total cost of revenues | 13,069 | 91 | 542 | 478 | 7,129 | 21,309 | |||||||||||||||||||||||||||||
Other operating expenses | 10,292 | 2,753 | 1,813 | 1,409 | 3,727 | 19,994 | |||||||||||||||||||||||||||||
Embezzlement-related expense | — | — | — | — | 493 | 493 | |||||||||||||||||||||||||||||
Depreciation and amortization | — | — | — | — | 1,592 | 1,592 | |||||||||||||||||||||||||||||
Impairment of long-lived assets | — | — | — | — | 236 | 236 | |||||||||||||||||||||||||||||
Net interest expense | — | — | — | — | 4,628 | 4,628 | |||||||||||||||||||||||||||||
Other income, net | — | — | — | — | (163 | ) | (163 | ) | |||||||||||||||||||||||||||
Income tax expense | — | — | — | — | 104 | 104 | |||||||||||||||||||||||||||||
Segment net income (loss) | $ | 9,596 | $ | 3,676 | $ | 1,282 | $ | 957 | $ | (17,746 | ) | $ | (2,235 | ) | |||||||||||||||||||||
Capital expenditures | $ | 2,775 | $ | 1,167 | $ | 272 | $ | 66 | $ | 610 | $ | 4,890 | |||||||||||||||||||||||
(in thousands) | Voyager Sopris | Learning A-Z | ExploreLearning | Kurzweil/ | Other | Consolidated | |||||||||||||||||||||||||||||
Learning | IntelliTools | ||||||||||||||||||||||||||||||||||
Nine months ended September 30, 2013 | |||||||||||||||||||||||||||||||||||
Net revenues | $ | 74,032 | $ | 24,047 | $ | 11,497 | $ | 7,596 | $ | — | $ | 117,172 | |||||||||||||||||||||||
Cost of revenues | 32,934 | 646 | 1,693 | 1,727 | — | 37,000 | |||||||||||||||||||||||||||||
Amortization | — | — | — | — | 12,680 | 12,680 | |||||||||||||||||||||||||||||
Total cost of revenues | 32,934 | 646 | 1,693 | 1,727 | 12,680 | 49,680 | |||||||||||||||||||||||||||||
Other operating expenses | 25,032 | 10,211 | 6,662 | 3,348 | 13,297 | 58,550 | |||||||||||||||||||||||||||||
Embezzlement-related expense | — | — | — | — | 118 | 118 | |||||||||||||||||||||||||||||
Depreciation and amortization | — | — | — | — | 3,663 | 3,663 | |||||||||||||||||||||||||||||
Net interest expense | — | — | — | — | 14,028 | 14,028 | |||||||||||||||||||||||||||||
Other income, net | — | — | — | — | (645 | ) | (645 | ) | |||||||||||||||||||||||||||
Income tax expense | — | — | — | — | 297 | 297 | |||||||||||||||||||||||||||||
Segment net income (loss) | $ | 16,066 | $ | 13,190 | $ | 3,142 | $ | 2,521 | $ | (43,438 | ) | $ | (8,519 | ) | |||||||||||||||||||||
Capital expenditures | $ | 5,627 | $ | 3,320 | $ | 1,070 | $ | 279 | $ | 2,087 | $ | 12,383 | |||||||||||||||||||||||
Nine months ended September 30, 2012 | |||||||||||||||||||||||||||||||||||
Net revenues | $ | 76,074 | $ | 18,864 | $ | 10,558 | $ | 8,746 | $ | — | $ | 114,242 | |||||||||||||||||||||||
Cost of revenues | 34,705 | 266 | 1,364 | 1,978 | 1,524 | 39,837 | |||||||||||||||||||||||||||||
Amortization | — | — | — | — | 19,984 | 19,984 | |||||||||||||||||||||||||||||
Total cost of revenues | 34,705 | 266 | 1,364 | 1,978 | 21,508 | 59,821 | |||||||||||||||||||||||||||||
Other operating expenses | 30,461 | 8,007 | 5,778 | 4,677 | 13,079 | 62,002 | |||||||||||||||||||||||||||||
Goodwill impairment | — | — | — | — | 14,700 | 14,700 | |||||||||||||||||||||||||||||
Embezzlement-related expense | — | — | — | — | 452 | 452 | |||||||||||||||||||||||||||||
Depreciation and amortization | — | — | — | — | 4,842 | 4,842 | |||||||||||||||||||||||||||||
Impairment of long-lived assets | — | — | — | — | 3,347 | 3,347 | |||||||||||||||||||||||||||||
Net interest expense | — | — | — | — | 14,032 | 14,032 | |||||||||||||||||||||||||||||
Other income, net | — | — | — | — | (236 | ) | (236 | ) | |||||||||||||||||||||||||||
Income tax expense | — | — | — | — | 258 | 258 | |||||||||||||||||||||||||||||
Segment net income (loss) | $ | 10,908 | $ | 10,591 | $ | 3,416 | $ | 2,091 | $ | (71,982 | ) | $ | (44,976 | ) | |||||||||||||||||||||
Capital expenditures | $ | 6,890 | $ | 2,885 | $ | 825 | $ | 281 | $ | 2,436 | $ | 13,317 | |||||||||||||||||||||||
Voyager Sopris | Learning A-Z | ExploreLearning | Kurzweil/ | Other | Consolidated | ||||||||||||||||||||||||||||||
Learning | IntelliTools | ||||||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||||
Year ended December 31, 2012 | |||||||||||||||||||||||||||||||||||
Product revenues | $ | 78,463 | $ | 26,189 | $ | 14,283 | $ | 10,812 | $ | — | $ | 129,747 | |||||||||||||||||||||||
Service revenues | 18,399 | — | — | 413 | — | 18,812 | |||||||||||||||||||||||||||||
Net revenues | 96,862 | 26,189 | 14,283 | 11,225 | — | 148,559 | |||||||||||||||||||||||||||||
Cost of product revenues | 26,406 | 659 | 1,929 | 2,056 | 1,578 | 32,628 | |||||||||||||||||||||||||||||
Cost of service revenues | 17,679 | — | — | 656 | — | 18,335 | |||||||||||||||||||||||||||||
Amortization | — | — | — | — | 24,716 | 24,716 | |||||||||||||||||||||||||||||
Total cost of revenues | 44,085 | 659 | 1,929 | 2,712 | 26,294 | 75,679 | |||||||||||||||||||||||||||||
Other operating expenses | 38,551 | 10,920 | 7,747 | 5,646 | 18,671 | 81,535 | |||||||||||||||||||||||||||||
Goodwill impairment | — | — | — | — | 66,893 | 66,893 | |||||||||||||||||||||||||||||
Embezzlement-related expense | — | — | — | — | 516 | 516 | |||||||||||||||||||||||||||||
Depreciation and amortization | — | — | — | — | 6,182 | 6,182 | |||||||||||||||||||||||||||||
Impairment of long-lived assets | 1,496 | — | — | — | 32,211 | 33,707 | |||||||||||||||||||||||||||||
Net interest expense | — | — | — | — | 18,683 | 18,683 | |||||||||||||||||||||||||||||
Other income, net | — | — | — | — | (1,125 | ) | (1,125 | ) | |||||||||||||||||||||||||||
Income tax expense | — | — | — | — | 272 | 272 | |||||||||||||||||||||||||||||
Segment net income (loss) | $ | 12,730 | $ | 14,610 | $ | 4,607 | $ | 2,867 | $ | (168,597 | ) | $ | (133,783 | ) | |||||||||||||||||||||
Capital expenditures | $ | 9,618 | $ | 4,039 | $ | 1,090 | $ | 365 | $ | 3,033 | $ | 18,145 | |||||||||||||||||||||||
The capital expenditures disclosed for each segment represent development expenses, primarily developed curriculum and capitalized software. The capital expenditures disclosed for Other represent general capital expenditures that benefit the entire Company such as back-office systems, computer equipment or office furniture. The capital expenditures recorded in Other in 2012 also include capitalized costs from our re-engineering and restructuring initiatives described in Note 11 to the Condensed Consolidated Financial Statements. | |||||||||||||||||||||||||||||||||||
Embezzlement
Embezzlement | 9 Months Ended |
Sep. 30, 2013 | |
Embezzlement | ' |
Note 16 — Embezzlement | |
On April 26, 2008, the Company began an internal investigation that revealed irregularities over the control and use of cash and certain other general ledger accounts of the Company, revealing a misappropriation of assets, or embezzlement. These irregularities were perpetrated by a former employee over more than a three-year period beginning in 2004 and continuing through April 2008 with total embezzlement losses of approximately $14.0 million. Charges included in the Condensed Consolidated Statements of Operations after April 2008 represent expenses incurred by the Company to recover property purchased by the former employee using the embezzled funds, net of any recoveries. | |
The final recovered property related to the employee embezzlement matter was sold during the third quarter of 2013. The net expense recorded in the three and nine month periods ended September 30, 2013 was primarily due to a reduction in the carrying value of the recovered property to the final sales price. | |
The number of shares of common stock issuable under a warrant held by VSS-Cambium Holdings III, LLC is increased based on the cash recoveries, net of related expenses, that the Company receives or received on and after June 1, 2009. The number of shares to be issued under the warrant equals 0.45 multiplied by the quotient of the net cash recovery divided by $6.50. As a result of the recoveries of $0.3 million during the third quarter of 2013, shares under the warrant were increased by 17,864. Additionally, as the final number of shares exercisable under the warrant is now set and no other contingencies remain, these awards have been reclassified from Other Liabilities to Capital Surplus in the Condensed Consolidated Balance Sheet in accordance with relevant GAAP. | |
During the three and nine months ended September 30, 2012, the net expenses represented a reduction in the fair value of the recovered properties partially offset by a decline in the estimated fair value of the warrants expected to be issued upon the sale of the recovered properties. | |
Related_Party_Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2013 | |
Related Party Transactions | ' |
Note 17 — Related Party Transactions | |
During the first quarter of 2013, the Company entered into a consulting agreement with Joe Walsh, Chairman of the Company’s Board of Directors. For his services as Chairman and as a consultant to the Company, Mr. Walsh will receive total annual compensation of $300,000, comprised of the compensation to which he is entitled as Chairman and the balance comprised of fees received pursuant to the consulting agreement. This agreement was subsequently amended to name Mr. Walsh an employee of the Company rather than a consultant. With the exception of the fact that Mr. Walsh is eligible for employee benefits, the terms of the amended agreement are substantially the same as the original agreement. |
Subsequent_Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2013 | |
Subsequent Events | ' |
Note 18 — Subsequent Events | |
On November 4, 2013, the Company entered into a stock purchase agreement with an investor pursuant to its share repurchase program. As previously announced, on March 19, 2013 the Company's board of directors authorized the extension of the Company’s $5 million share repurchase program for an additional one year period (through July 5, 2014) and increased the remaining $2.2 million available for repurchases of shares thereunder up to $5 million. The transaction settled on November 6, 2013 with the Company purchasing 1,861,969 shares for a total cost of $4.4 million. Upon repurchase these treasury shares are no longer registered under the Securities Act of 1933. |
StockBased_Compensation_and_Ex1
Stock-Based Compensation and Expense (Tables) | 9 Months Ended | |||||||||||||||||||||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation and Expense | ' | |||||||||||||||||||||||||||||||||||||
The stock-based compensation and expense recorded was allocated as follows: | ||||||||||||||||||||||||||||||||||||||
(in thousands) | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||||||||||||||||
Cost of revenues | $ | 33 | $ | 13 | $ | 57 | $ | 38 | ||||||||||||||||||||||||||||||
Research and development expense | 60 | 31 | 112 | 91 | ||||||||||||||||||||||||||||||||||
Sales and marketing expense | 61 | 31 | 105 | 87 | ||||||||||||||||||||||||||||||||||
General and administrative expense | 192 | 238 | 514 | 302 | ||||||||||||||||||||||||||||||||||
Total | $ | 346 | $ | 313 | $ | 788 | $ | 518 | ||||||||||||||||||||||||||||||
Black-Scholes Option-Pricing Assumptions Used to Estimate Fair Value of Stock Awards | ' | |||||||||||||||||||||||||||||||||||||
The following assumptions were used in the Black-Scholes option-pricing model to estimate the fair value of the awards granted during the nine month periods ended September 30, 2013 and 2012: | ||||||||||||||||||||||||||||||||||||||
Nine Months Ended | ||||||||||||||||||||||||||||||||||||||
30-Sep-13 | 30-Sep-12 | |||||||||||||||||||||||||||||||||||||
Expected stock volatility | 63.1 – 63.9 | % | 35.0 | % | ||||||||||||||||||||||||||||||||||
Risk-free interest rate | 1.01 – 1.88 | % | 1.02 - 1.17 | % | ||||||||||||||||||||||||||||||||||
Expected years until exercise | 4.20 – 6.25 | 6.25 | ||||||||||||||||||||||||||||||||||||
Dividend yield | 0.00 | % | 0.00 | % | ||||||||||||||||||||||||||||||||||
Schedule of Outstanding Stock Options | ' | |||||||||||||||||||||||||||||||||||||
The following tables detail changes in the Company’s outstanding stock options during the three and nine month periods ended September 30, 2013. Options surrendered in the exchange offer of 1,757,500 options are included in “Cancelled/Forfeited” in the tables below. | ||||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, 2013 | ||||||||||||||||||||||||||||||||||||||
Grant Date | Beginning Outstanding | Granted | Cancelled/Forfeited | Ending Outstanding | ||||||||||||||||||||||||||||||||||
December 8, 2009 | 550,000 | — | 550,000 | — | ||||||||||||||||||||||||||||||||||
January 27, 2010 | 996,421 | — | 969,044 | 27,377 | ||||||||||||||||||||||||||||||||||
May 25, 2010 | 80,000 | — | 74,128 | 5,872 | ||||||||||||||||||||||||||||||||||
February 1, 2011 | 122,908 | — | 119,616 | 3,292 | ||||||||||||||||||||||||||||||||||
November 21, 2011 | 150,000 | — | — | 150,000 | ||||||||||||||||||||||||||||||||||
February 8, 2012 | 195,000 | — | 195,000 | — | ||||||||||||||||||||||||||||||||||
April 16, 2012 | 15,000 | — | 15,000 | — | ||||||||||||||||||||||||||||||||||
May 14, 2012 | 25,000 | — | — | 25,000 | ||||||||||||||||||||||||||||||||||
July 30, 2013 | — | 2,280,000 | 4,108 | 2,275,892 | ||||||||||||||||||||||||||||||||||
September 19, 2013 | — | 30,000 | — | 30,000 | ||||||||||||||||||||||||||||||||||
Total | 2,134,329 | 2,310,000 | 1,926,896 | 2,517,433 | ||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2013 | ||||||||||||||||||||||||||||||||||||||
Grant Date | Beginning Outstanding | Granted | Cancelled/Forfeited | Ending Outstanding | ||||||||||||||||||||||||||||||||||
December 8, 2009 | 1,550,000 | — | 1,550,000 | — | ||||||||||||||||||||||||||||||||||
January 27, 2010 | 1,065,398 | — | 1,038,021 | 27,377 | ||||||||||||||||||||||||||||||||||
May 25, 2010 | 92,401 | — | 86,529 | 5,872 | ||||||||||||||||||||||||||||||||||
February 1, 2011 | 165,290 | — | 161,998 | 3,292 | ||||||||||||||||||||||||||||||||||
November 21, 2011 | 150,000 | — | — | 150,000 | ||||||||||||||||||||||||||||||||||
December 1, 2011 | 500,000 | — | 500,000 | — | ||||||||||||||||||||||||||||||||||
February 8, 2012 | 195,000 | — | 195,000 | — | ||||||||||||||||||||||||||||||||||
April 16, 2012 | 15,000 | — | 15,000 | — | ||||||||||||||||||||||||||||||||||
May 14, 2012 | 25,000 | — | — | 25,000 | ||||||||||||||||||||||||||||||||||
July 30, 2013 | — | 2,280,000 | 4,108 | 2,275,892 | ||||||||||||||||||||||||||||||||||
September 19, 2013 | — | 30,000 | — | 30,000 | ||||||||||||||||||||||||||||||||||
Total | 3,758,089 | 2,310,000 | 3,550,656 | 2,517,433 | ||||||||||||||||||||||||||||||||||
Net_Income_Loss_per_Common_Sha1
Net Income (Loss) per Common Share (Tables) | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||
Reconciliation of the Basic and Diluted Net Income (Loss) per Common Share | ' | |||||||||||||||||||
A reconciliation of the weighted-average number of common shares and equivalents outstanding used in the calculation of basic and diluted net income (loss) per common share is shown in the table below for the periods indicated: | ||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
(in thousands) | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||
Basic | 47,563 | 49,284 | 47,439 | 49,722 | ||||||||||||||||
Dilutive effect of awards | 94 | — | — | — | ||||||||||||||||
Diluted | 47,657 | 49,284 | 47,439 | 49,722 | ||||||||||||||||
Antidilutive securities: | ||||||||||||||||||||
Options | 2,517 | 4,107 | 2,517 | 4,107 | ||||||||||||||||
Warrants | — | 188 | 300 | 188 | ||||||||||||||||
Restricted stock | 2 | 49 | 2 | 49 | ||||||||||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ' | ||||||||||||||||||||||||||||||||||
Assets and liabilities measured at fair value on a recurring basis are as follows: | |||||||||||||||||||||||||||||||||||
(in thousands) | Fair Value at Reporting Date Using | ||||||||||||||||||||||||||||||||||
Description | As of September 30, 2013 | Quoted Prices | Significant | Significant | |||||||||||||||||||||||||||||||
in Active | Other | Unobservable | |||||||||||||||||||||||||||||||||
Markets for | Observable | Inputs | |||||||||||||||||||||||||||||||||
Identical | Inputs | (Level 3) | |||||||||||||||||||||||||||||||||
Assets | (Level 2) | ||||||||||||||||||||||||||||||||||
(Level 1) | |||||||||||||||||||||||||||||||||||
Restricted assets: | |||||||||||||||||||||||||||||||||||
Money market | $ | 7,146 | $ | 7,146 | $ | — | $ | — | |||||||||||||||||||||||||||
Collateral investments: | |||||||||||||||||||||||||||||||||||
Money market | 903 | 903 | — | — | |||||||||||||||||||||||||||||||
Certificate of deposit | 1,068 | 1,068 | — | — | |||||||||||||||||||||||||||||||
(in thousands) | Fair Value at Reporting Date Using | ||||||||||||||||||||||||||||||||||
Description | As of December 31, 2012 | Quoted Prices | Significant | Significant | |||||||||||||||||||||||||||||||
in Active | Other | Unobservable | |||||||||||||||||||||||||||||||||
Markets for | Observable | Inputs | |||||||||||||||||||||||||||||||||
Identical | Inputs | (Level 3) | |||||||||||||||||||||||||||||||||
Assets | (Level 2) | ||||||||||||||||||||||||||||||||||
(Level 1) | |||||||||||||||||||||||||||||||||||
Restricted assets: | |||||||||||||||||||||||||||||||||||
Money market | $ | 11,141 | $ | 11,141 | $ | — | $ | — | |||||||||||||||||||||||||||
Collateral investments: | |||||||||||||||||||||||||||||||||||
Money market | 902 | 902 | — | — | |||||||||||||||||||||||||||||||
Certificate of deposit | 1,067 | 1,067 | — | — | |||||||||||||||||||||||||||||||
Warrant liability | 310 | — | 310 | — | |||||||||||||||||||||||||||||||
Assets held for sale: | |||||||||||||||||||||||||||||||||||
Recovered properties | 380 | — | 380 | — | |||||||||||||||||||||||||||||||
CVRs | 7,599 | — | — | 7,599 | |||||||||||||||||||||||||||||||
(in thousands) | Total Gains (Losses) for the Nine | ||||||||||||||||||||||||||||||||||
Months Ended September 30, | |||||||||||||||||||||||||||||||||||
Description | 2013 | 2012 | |||||||||||||||||||||||||||||||||
Restricted assets: | |||||||||||||||||||||||||||||||||||
Money market | $ | — | $ | — | |||||||||||||||||||||||||||||||
Collateral investments: | |||||||||||||||||||||||||||||||||||
Money market | — | — | |||||||||||||||||||||||||||||||||
Certificate of deposit | — | — | |||||||||||||||||||||||||||||||||
Warrant liability | (53 | ) | 389 | ||||||||||||||||||||||||||||||||
Assets held for sale: | |||||||||||||||||||||||||||||||||||
Recovered properties | (122 | ) | (880 | ) | |||||||||||||||||||||||||||||||
CVRs | (74 | ) | (161 | ) | |||||||||||||||||||||||||||||||
Fair Value Measurements Using Significant Unobservable Inputs | ' | ||||||||||||||||||||||||||||||||||
A detail of the elements included in the CVR is as follows: | |||||||||||||||||||||||||||||||||||
(in thousands) | Fair Value Measurements | ||||||||||||||||||||||||||||||||||
Using Significant | |||||||||||||||||||||||||||||||||||
Unobservable Inputs | |||||||||||||||||||||||||||||||||||
(Level 3) CVRs | |||||||||||||||||||||||||||||||||||
Balance as of December 31, 2012 | $ | 7,599 | |||||||||||||||||||||||||||||||||
Accrued interest | 74 | ||||||||||||||||||||||||||||||||||
Payments made | (7,673 | ) | |||||||||||||||||||||||||||||||||
Balance as of September 30, 2013 | $ | — | |||||||||||||||||||||||||||||||||
(in thousands) | Fair Value Measurements | ||||||||||||||||||||||||||||||||||
Using Significant | |||||||||||||||||||||||||||||||||||
Unobservable Inputs | |||||||||||||||||||||||||||||||||||
(Level 3) CVRs | |||||||||||||||||||||||||||||||||||
Fair Value as of | |||||||||||||||||||||||||||||||||||
September 30, 2013 | |||||||||||||||||||||||||||||||||||
Components of CVR Total: | |||||||||||||||||||||||||||||||||||
Tax refunds received before closing of the merger | $ | 1,583 | |||||||||||||||||||||||||||||||||
Other specified tax refunds | 4,797 | ||||||||||||||||||||||||||||||||||
Tax indemnity obligation | 1,868 | ||||||||||||||||||||||||||||||||||
Legal receivable | 2,400 | ||||||||||||||||||||||||||||||||||
Interest income from Michigan tax refund | 607 | ||||||||||||||||||||||||||||||||||
Other specified tax related liabilities | (53 | ) | |||||||||||||||||||||||||||||||||
Costs incurred to collect tax refunds and by stockholders’ representative | (430 | ) | |||||||||||||||||||||||||||||||||
Total CVR liability | 10,772 | ||||||||||||||||||||||||||||||||||
September 2010 payment | (1,106 | ) | |||||||||||||||||||||||||||||||||
June 2011 payment | (1,993 | ) | |||||||||||||||||||||||||||||||||
June 2013 payment | (7,673 | ) | |||||||||||||||||||||||||||||||||
Remaining CVR liability | $ | — | |||||||||||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on a Non-recurring Basis | ' | ||||||||||||||||||||||||||||||||||
Assets and liabilities measured at fair value on a non-recurring basis are as follows: | |||||||||||||||||||||||||||||||||||
(in thousands) | Fair Value at Reporting Date Using | ||||||||||||||||||||||||||||||||||
Description | As of September 30, 2013 | Quoted Prices | Significant | Significant | |||||||||||||||||||||||||||||||
in Active | Other | Unobservable | |||||||||||||||||||||||||||||||||
Markets for | Observable | Inputs | |||||||||||||||||||||||||||||||||
Identical | Inputs | (Level 3) | |||||||||||||||||||||||||||||||||
Assets | (Level 2) | ||||||||||||||||||||||||||||||||||
(Level 1) | |||||||||||||||||||||||||||||||||||
Goodwill | $ | 47,404 | $ | — | $ | — | $ | 47,404 | |||||||||||||||||||||||||||
Property, equipment and software | 21,008 | — | — | 21,008 | |||||||||||||||||||||||||||||||
Pre-publication costs, net | 13,949 | — | — | 13,949 | |||||||||||||||||||||||||||||||
Acquired curriculum and technology intangibles, net | 6,508 | — | — | 6,508 | |||||||||||||||||||||||||||||||
Acquired publishing rights, net | 5,429 | — | — | 5,429 | |||||||||||||||||||||||||||||||
Other intangible assets, net | 6,481 | — | — | 6,481 | |||||||||||||||||||||||||||||||
(in thousands) | Fair Value at Reporting Date Using | ||||||||||||||||||||||||||||||||||
Description | As of December 31, 2012 | Quoted Prices | Significant | Significant | |||||||||||||||||||||||||||||||
in Active | Other | Unobservable | |||||||||||||||||||||||||||||||||
Markets for | Observable | Inputs | |||||||||||||||||||||||||||||||||
Identical | Inputs | (Level 3) | |||||||||||||||||||||||||||||||||
Assets | (Level 2) | ||||||||||||||||||||||||||||||||||
(Level 1) | |||||||||||||||||||||||||||||||||||
Goodwill | $ | 47,404 | $ | — | $ | — | $ | 47,404 | |||||||||||||||||||||||||||
Property, equipment and software | 21,021 | — | — | 21,021 | |||||||||||||||||||||||||||||||
Pre-publication costs, net | 11,660 | — | — | 11,660 | |||||||||||||||||||||||||||||||
Acquired curriculum and technology intangibles, net | 9,320 | — | — | 9,320 | |||||||||||||||||||||||||||||||
Acquired publishing rights, net | 7,602 | — | — | 7,602 | |||||||||||||||||||||||||||||||
Other intangible assets, net | 7,836 | — | — | 7,836 | |||||||||||||||||||||||||||||||
(in thousands) | Total Gains (Losses) for the Nine | ||||||||||||||||||||||||||||||||||
Months Ended September 30, | |||||||||||||||||||||||||||||||||||
Description | 2013 | 2012 | |||||||||||||||||||||||||||||||||
Goodwill | $ | — | $ | (14,700 | ) | ||||||||||||||||||||||||||||||
Property, equipment and software | — | (3,347 | ) | ||||||||||||||||||||||||||||||||
Pre-publication costs, net | — | — | |||||||||||||||||||||||||||||||||
Acquired curriculum and technology intangibles, net | — | — | |||||||||||||||||||||||||||||||||
Acquired publishing rights, net | — | — | |||||||||||||||||||||||||||||||||
Other intangible assets, net | — | — | |||||||||||||||||||||||||||||||||
Other_Current_Assets_Tables
Other Current Assets (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Other Current Assets | ' | ||||||||||
Other current assets at September 30, 2013 and December 31, 2012 consisted of the following: | |||||||||||
As of | |||||||||||
(in thousands) | September 30, | December 31, | |||||||||
2013 | 2012 | ||||||||||
Deferred costs | $ | 4,399 | $ | 4,132 | |||||||
Prepaid expenses | 1,656 | 1,599 | |||||||||
Deferred taxes | 261 | 137 | |||||||||
Other current assets | — | 24 | |||||||||
Total | $ | 6,316 | $ | 5,892 | |||||||
Other_Assets_Tables
Other Assets (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Other Assets | ' | ||||||||||
Other assets at September 30, 2013 and December 31, 2012 consisted of the following: | |||||||||||
As of | |||||||||||
(in thousands) | September 30, | December 31, | |||||||||
2013 | 2012 | ||||||||||
Deferred financing costs | $ | 4,939 | $ | 6,121 | |||||||
Collateral investments | 1,971 | 1,969 | |||||||||
Other | 2,415 | 1,542 | |||||||||
Total | $ | 9,325 | $ | 9,632 | |||||||
Accrued_Expenses_Table
Accrued Expenses (Table) | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Accrued Expenses | ' | ||||||||||
Accrued expenses at September 30, 2013 and December 31, 2012 consisted of the following: | |||||||||||
As of | |||||||||||
(in thousands) | September 30, | December 31, | |||||||||
2013 | 2012 | ||||||||||
Salaries, bonuses and benefits | $ | 12,814 | $ | 7,593 | |||||||
Accrued interest | 2,202 | 6,490 | |||||||||
Accrued royalties | 1,505 | 1,399 | |||||||||
Pension and post-retirement medical benefits | 1,221 | 1,218 | |||||||||
Deferred compensation | 21 | 57 | |||||||||
Other | 2,827 | 3,773 | |||||||||
Total | $ | 20,590 | $ | 20,530 | |||||||
Other_Liabilities_Tables
Other Liabilities (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Other Liabilities | ' | ||||||||||
Other liabilities at September 30, 2013 and December 31, 2012 consisted of the following: | |||||||||||
As of | |||||||||||
(in thousands) | September 30, | December 31, | |||||||||
2013 | 2012 | ||||||||||
Pension and post-retirement medical benefits, long-term portion | $ | 10,812 | $ | 11,392 | |||||||
Deferred rent | 1,262 | 1,457 | |||||||||
Long-term income tax payable | 889 | 852 | |||||||||
Long-term deferred compensation | 488 | 503 | |||||||||
Long-term deferred tax liability | 397 | 273 | |||||||||
Other | 153 | 654 | |||||||||
Total | $ | 14,001 | $ | 15,131 | |||||||
Restructuring_Tables
Restructuring (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Amounts Incurred and Expected to be Incurred in Connection with the Reengineering and Restructuring Initiative | ' | |||||||||||||||
The following table summarizes the amounts incurred in connection with the reengineering and restructuring initiative: | ||||||||||||||||
(in thousands) | Incurred in | Incurred in | Total Amount | |||||||||||||
Year Ended | Year Ended | Incurred Under | ||||||||||||||
December 31, | December 31, | the Plan | ||||||||||||||
2011 | 2012 | |||||||||||||||
One-time termination benefits | $ | 1,189 | $ | 2,507 | $ | 3,696 | ||||||||||
Impairment of long-lived assets | — | 4,448 | 4,448 | |||||||||||||
Warehouse transition costs | — | 1,003 | 1,003 | |||||||||||||
Facility rationalization costs | — | 209 | 209 | |||||||||||||
Process reengineering costs | — | 203 | 203 | |||||||||||||
$ | 1,189 | $ | 8,370 | $ | 9,559 | |||||||||||
Change in the Reengineering and Restructuring Accrual | ' | |||||||||||||||
Reengineering and restructuring charges were recorded to the following line items in the Condensed Consolidated Statements of Operations for the three and nine months, respectively, ended September 30, 2012: $0.1 million and $1.5 million to Cost of Revenues; zero and $0.3 million to Research and Development Expense; zero and $0.5 million to Sales and Marketing Expense; $0.2 million and $0.3 million to General and Administrative Expense; zero and $0.4 million to Shipping and Handling Costs; and $0.2 million and $3.3 million to Impairment of Long-Lived Assets. All of these charges were recorded in unallocated shared services. | ||||||||||||||||
(in thousands) | One-Time | |||||||||||||||
Termination | ||||||||||||||||
Benefits | ||||||||||||||||
Balance as of December 31, 2012 | $ | 828 | ||||||||||||||
Accrual changes | (18 | ) | ||||||||||||||
Payments made | (757 | ) | ||||||||||||||
Balance as of September 30, 2013 | $ | 53 | ||||||||||||||
LongTerm_Debt_Tables
Long-Term Debt (Tables) | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Long-Term Debt | ' | |||||||||
Long-term debt consists of the following at September 30, 2013 and December 31, 2012: | ||||||||||
(in thousands) | September 30, | December 31, | ||||||||
2013 | 2012 | |||||||||
$175.0 million of 9.75% senior secured notes due February 15, 2017, interest payable semiannually | $ | 175,000 | $ | 175,000 | ||||||
Less: Unamortized discount | (550 | ) | (672 | ) | ||||||
Total long-term debt | $ | 174,450 | $ | 174,328 | ||||||
Segment_Reporting_Tables
Segment Reporting (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||||||||||||
Revenue, Operating Expenses and Income (Loss) from Operations | ' | ||||||||||||||||||||||||||||||||||
The following table represents the revenue, operating expenses, income (loss) from operations, and capital expenditures which are used by the Company’s chief operating decision maker to measure the segment’s operating performance. The Company does not track assets directly by segment and the chief operating decision maker does not use assets to measure a segment’s operating performance, and therefore this information is not presented. | |||||||||||||||||||||||||||||||||||
(in thousands) | Voyager Sopris | Learning A-Z | ExploreLearning | Kurzweil/ | Other | Consolidated | |||||||||||||||||||||||||||||
Learning | IntelliTools | ||||||||||||||||||||||||||||||||||
Quarter ended September 30, 2013 | |||||||||||||||||||||||||||||||||||
Net revenues | $ | 28,212 | $ | 8,362 | $ | 3,700 | $ | 2,683 | $ | — | $ | 42,957 | |||||||||||||||||||||||
Cost of revenues | 11,434 | 167 | 670 | 679 | — | 12,950 | |||||||||||||||||||||||||||||
Amortization | — | — | — | — | 4,692 | 4,692 | |||||||||||||||||||||||||||||
Total cost of revenues | 11,434 | 167 | 670 | 679 | 4,692 | 17,642 | |||||||||||||||||||||||||||||
Other operating expenses | 8,589 | 3,512 | 2,322 | 1,038 | 3,811 | 19,272 | |||||||||||||||||||||||||||||
Embezzlement-related expense | — | — | — | — | 3 | 3 | |||||||||||||||||||||||||||||
Depreciation and amortization | — | — | — | — | 1,227 | 1,227 | |||||||||||||||||||||||||||||
Net interest expense | — | — | — | — | 4,773 | 4,773 | |||||||||||||||||||||||||||||
Other income, net | — | — | — | — | (215 | ) | (215 | ) | |||||||||||||||||||||||||||
Income tax expense | — | — | — | — | 127 | 127 | |||||||||||||||||||||||||||||
Segment net income (loss) | $ | 8,189 | $ | 4,683 | $ | 708 | $ | 966 | $ | (14,418 | ) | $ | 128 | ||||||||||||||||||||||
Capital expenditures | $ | 2,007 | $ | 1,112 | $ | 382 | $ | 154 | $ | 754 | $ | 4,409 | |||||||||||||||||||||||
Quarter ended September 30, 2012 | |||||||||||||||||||||||||||||||||||
Net revenues | $ | 32,957 | $ | 6,520 | $ | 3,637 | $ | 2,844 | $ | — | $ | 45,958 | |||||||||||||||||||||||
Cost of revenues | 13,069 | 91 | 542 | 478 | 94 | 14,274 | |||||||||||||||||||||||||||||
Amortization | — | — | — | — | 7,035 | 7,035 | |||||||||||||||||||||||||||||
Total cost of revenues | 13,069 | 91 | 542 | 478 | 7,129 | 21,309 | |||||||||||||||||||||||||||||
Other operating expenses | 10,292 | 2,753 | 1,813 | 1,409 | 3,727 | 19,994 | |||||||||||||||||||||||||||||
Embezzlement-related expense | — | — | — | — | 493 | 493 | |||||||||||||||||||||||||||||
Depreciation and amortization | — | — | — | — | 1,592 | 1,592 | |||||||||||||||||||||||||||||
Impairment of long-lived assets | — | — | — | — | 236 | 236 | |||||||||||||||||||||||||||||
Net interest expense | — | — | — | — | 4,628 | 4,628 | |||||||||||||||||||||||||||||
Other income, net | — | — | — | — | (163 | ) | (163 | ) | |||||||||||||||||||||||||||
Income tax expense | — | — | — | — | 104 | 104 | |||||||||||||||||||||||||||||
Segment net income (loss) | $ | 9,596 | $ | 3,676 | $ | 1,282 | $ | 957 | $ | (17,746 | ) | $ | (2,235 | ) | |||||||||||||||||||||
Capital expenditures | $ | 2,775 | $ | 1,167 | $ | 272 | $ | 66 | $ | 610 | $ | 4,890 | |||||||||||||||||||||||
(in thousands) | Voyager Sopris | Learning A-Z | ExploreLearning | Kurzweil/ | Other | Consolidated | |||||||||||||||||||||||||||||
Learning | IntelliTools | ||||||||||||||||||||||||||||||||||
Nine months ended September 30, 2013 | |||||||||||||||||||||||||||||||||||
Net revenues | $ | 74,032 | $ | 24,047 | $ | 11,497 | $ | 7,596 | $ | — | $ | 117,172 | |||||||||||||||||||||||
Cost of revenues | 32,934 | 646 | 1,693 | 1,727 | — | 37,000 | |||||||||||||||||||||||||||||
Amortization | — | — | — | — | 12,680 | 12,680 | |||||||||||||||||||||||||||||
Total cost of revenues | 32,934 | 646 | 1,693 | 1,727 | 12,680 | 49,680 | |||||||||||||||||||||||||||||
Other operating expenses | 25,032 | 10,211 | 6,662 | 3,348 | 13,297 | 58,550 | |||||||||||||||||||||||||||||
Embezzlement-related expense | — | — | — | — | 118 | 118 | |||||||||||||||||||||||||||||
Depreciation and amortization | — | — | — | — | 3,663 | 3,663 | |||||||||||||||||||||||||||||
Net interest expense | — | — | — | — | 14,028 | 14,028 | |||||||||||||||||||||||||||||
Other income, net | — | — | — | — | (645 | ) | (645 | ) | |||||||||||||||||||||||||||
Income tax expense | — | — | — | — | 297 | 297 | |||||||||||||||||||||||||||||
Segment net income (loss) | $ | 16,066 | $ | 13,190 | $ | 3,142 | $ | 2,521 | $ | (43,438 | ) | $ | (8,519 | ) | |||||||||||||||||||||
Capital expenditures | $ | 5,627 | $ | 3,320 | $ | 1,070 | $ | 279 | $ | 2,087 | $ | 12,383 | |||||||||||||||||||||||
Nine months ended September 30, 2012 | |||||||||||||||||||||||||||||||||||
Net revenues | $ | 76,074 | $ | 18,864 | $ | 10,558 | $ | 8,746 | $ | — | $ | 114,242 | |||||||||||||||||||||||
Cost of revenues | 34,705 | 266 | 1,364 | 1,978 | 1,524 | 39,837 | |||||||||||||||||||||||||||||
Amortization | — | — | — | — | 19,984 | 19,984 | |||||||||||||||||||||||||||||
Total cost of revenues | 34,705 | 266 | 1,364 | 1,978 | 21,508 | 59,821 | |||||||||||||||||||||||||||||
Other operating expenses | 30,461 | 8,007 | 5,778 | 4,677 | 13,079 | 62,002 | |||||||||||||||||||||||||||||
Goodwill impairment | — | — | — | — | 14,700 | 14,700 | |||||||||||||||||||||||||||||
Embezzlement-related expense | — | — | — | — | 452 | 452 | |||||||||||||||||||||||||||||
Depreciation and amortization | — | — | — | — | 4,842 | 4,842 | |||||||||||||||||||||||||||||
Impairment of long-lived assets | — | — | — | — | 3,347 | 3,347 | |||||||||||||||||||||||||||||
Net interest expense | — | — | — | — | 14,032 | 14,032 | |||||||||||||||||||||||||||||
Other income, net | — | — | — | — | (236 | ) | (236 | ) | |||||||||||||||||||||||||||
Income tax expense | — | — | — | — | 258 | 258 | |||||||||||||||||||||||||||||
Segment net income (loss) | $ | 10,908 | $ | 10,591 | $ | 3,416 | $ | 2,091 | $ | (71,982 | ) | $ | (44,976 | ) | |||||||||||||||||||||
Capital expenditures | $ | 6,890 | $ | 2,885 | $ | 825 | $ | 281 | $ | 2,436 | $ | 13,317 | |||||||||||||||||||||||
Voyager Sopris | Learning A-Z | ExploreLearning | Kurzweil/ | Other | Consolidated | ||||||||||||||||||||||||||||||
Learning | IntelliTools | ||||||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||||
Year ended December 31, 2012 | |||||||||||||||||||||||||||||||||||
Product revenues | $ | 78,463 | $ | 26,189 | $ | 14,283 | $ | 10,812 | $ | — | $ | 129,747 | |||||||||||||||||||||||
Service revenues | 18,399 | — | — | 413 | — | 18,812 | |||||||||||||||||||||||||||||
Net revenues | 96,862 | 26,189 | 14,283 | 11,225 | — | 148,559 | |||||||||||||||||||||||||||||
Cost of product revenues | 26,406 | 659 | 1,929 | 2,056 | 1,578 | 32,628 | |||||||||||||||||||||||||||||
Cost of service revenues | 17,679 | — | — | 656 | — | 18,335 | |||||||||||||||||||||||||||||
Amortization | — | — | — | — | 24,716 | 24,716 | |||||||||||||||||||||||||||||
Total cost of revenues | 44,085 | 659 | 1,929 | 2,712 | 26,294 | 75,679 | |||||||||||||||||||||||||||||
Other operating expenses | 38,551 | 10,920 | 7,747 | 5,646 | 18,671 | 81,535 | |||||||||||||||||||||||||||||
Goodwill impairment | — | — | — | — | 66,893 | 66,893 | |||||||||||||||||||||||||||||
Embezzlement-related expense | — | — | — | — | 516 | 516 | |||||||||||||||||||||||||||||
Depreciation and amortization | — | — | — | — | 6,182 | 6,182 | |||||||||||||||||||||||||||||
Impairment of long-lived assets | 1,496 | — | — | — | 32,211 | 33,707 | |||||||||||||||||||||||||||||
Net interest expense | — | — | — | — | 18,683 | 18,683 | |||||||||||||||||||||||||||||
Other income, net | — | — | — | — | (1,125 | ) | (1,125 | ) | |||||||||||||||||||||||||||
Income tax expense | — | — | — | — | 272 | 272 | |||||||||||||||||||||||||||||
Segment net income (loss) | $ | 12,730 | $ | 14,610 | $ | 4,607 | $ | 2,867 | $ | (168,597 | ) | $ | (133,783 | ) | |||||||||||||||||||||
Capital expenditures | $ | 9,618 | $ | 4,039 | $ | 1,090 | $ | 365 | $ | 3,033 | $ | 18,145 | |||||||||||||||||||||||
Basis_of_Presentation_Details_
Basis of Presentation (Details Textual) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
Brands | Segment | |
Segment | ||
Basis of Presentation (Textual) [Abstract] | ' | ' |
Number of industry leading brands | 6 | ' |
Number of reportable business segments | 4 | 2 |
Technology Education Business 1 | ' | ' |
Basis of Presentation (Textual) [Abstract] | ' | ' |
Company's industry leading brands | 'Learning A–Z | ' |
Technology Education Business 2 | ' | ' |
Basis of Presentation (Textual) [Abstract] | ' | ' |
Company's industry leading brands | 'ExploreLearning | ' |
Technology Education Business 3 | ' | ' |
Basis of Presentation (Textual) [Abstract] | ' | ' |
Company's industry leading brands | 'Kurzweil Educational Systems | ' |
Technology Education Business 4 | ' | ' |
Basis of Presentation (Textual) [Abstract] | ' | ' |
Company's industry leading brands | 'IntelliTools | ' |
Technology Education Business 5 | ' | ' |
Basis of Presentation (Textual) [Abstract] | ' | ' |
Company's industry leading brands | 'Voyager Learning | ' |
Technology Education Business 6 | ' | ' |
Basis of Presentation (Textual) [Abstract] | ' | ' |
Company's industry leading brands | 'Sopris Learning | ' |
Accounts_Receivable_Details
Accounts Receivable (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Accounts Receivable (Textual) [Abstract] | ' | ' |
Allowance for doubtful accounts and estimated sales returns | $0.60 | $0.40 |
StockBased_Compensation_and_Ex2
Stock-Based Compensation and Expense (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Expense for stock based compensation | ' | ' | ' | ' |
Stock-based compensation expense | $346 | $313 | $788 | $518 |
Cost of Revenues | ' | ' | ' | ' |
Expense for stock based compensation | ' | ' | ' | ' |
Stock-based compensation expense | 33 | 13 | 57 | 38 |
Research and Development Expense | ' | ' | ' | ' |
Expense for stock based compensation | ' | ' | ' | ' |
Stock-based compensation expense | 60 | 31 | 112 | 91 |
Sales and Marketing Expense | ' | ' | ' | ' |
Expense for stock based compensation | ' | ' | ' | ' |
Stock-based compensation expense | 61 | 31 | 105 | 87 |
General and Administrative Expense | ' | ' | ' | ' |
Expense for stock based compensation | ' | ' | ' | ' |
Stock-based compensation expense | $192 | $238 | $514 | $302 |
StockBased_Compensation_and_Ex3
Stock-Based Compensation and Expense (Details 1) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Black-Scholes option-pricing assumptions used to estimate fair value of stock awards | ' | ' |
Expected stock volatility | ' | 35.00% |
Expected years until exercise | ' | '6 years 3 months |
Dividend yield | 0.00% | 0.00% |
Minimum | ' | ' |
Black-Scholes option-pricing assumptions used to estimate fair value of stock awards | ' | ' |
Expected stock volatility | 63.10% | ' |
Risk-free interest rate | 1.01% | 1.02% |
Expected years until exercise | '4 years 2 months 12 days | ' |
Maximum | ' | ' |
Black-Scholes option-pricing assumptions used to estimate fair value of stock awards | ' | ' |
Expected stock volatility | 63.90% | ' |
Risk-free interest rate | 1.88% | 1.17% |
Expected years until exercise | '6 years 3 months | ' |
StockBased_Compensation_and_Ex4
Stock-Based Compensation and Expense (Details Textual) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Sep. 19, 2013 | Jul. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | |
Stock-Based Compensation and Expense (Additional Textual) [Abstract] | ' | ' | ' | ' | ' |
Related restrictions lapsed on restricted common stock | ' | ' | 0 | 47,795 | ' |
Common stock, par value | ' | ' | $0.00 | $0.00 | $0.00 |
Options cancelled under exchange offer | ' | ' | 1,926,896 | 3,550,656 | ' |
New options to purchase company's common stock under exchange offer | 30,000 | 377,500 | 2,310,000 | 2,310,000 | ' |
Options, Net of forfeitures | $25,000 | $300,000 | ' | ' | ' |
Unamortized compensation cost | ' | ' | 300,000 | 300,000 | ' |
New options vesting period under exchange offer | '4 years | '4 years | ' | '4 years | ' |
Exercise price per option | $1.51 | $1.30 | ' | ' | ' |
Term of options | '10 years | '10 years | ' | ' | ' |
2009 Equity Incentive Plan | ' | ' | ' | ' | ' |
Stock-Based Compensation and Expense (Additional Textual) [Abstract] | ' | ' | ' | ' | ' |
Common stock, par value | ' | ' | $0.00 | $0.00 | ' |
Options cancelled under exchange offer | ' | 1,757,500 | ' | ' | ' |
New options | ' | ' | ' | ' | ' |
Stock-Based Compensation and Expense (Additional Textual) [Abstract] | ' | ' | ' | ' | ' |
New options to purchase company's common stock under exchange offer | ' | 1,902,500 | ' | ' | ' |
Options, Net of forfeitures | ' | ' | 1,200,000 | ' | ' |
Incremental compensation cost | ' | ' | $900,000 | ' | ' |
StockBased_Compensation_and_Ex5
Stock-Based Compensation and Expense (Details 2) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||
Sep. 19, 2013 | Jul. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | |
8-Dec-09 | 8-Dec-09 | 27-Jan-10 | 27-Jan-10 | 25-May-10 | 25-May-10 | 1-Feb-11 | 1-Feb-11 | 21-Nov-11 | 21-Nov-11 | 21-Nov-11 | 8-Feb-12 | 8-Feb-12 | 16-Apr-12 | 16-Apr-12 | 14-May-12 | 14-May-12 | 14-May-12 | 30-Jul-13 | 30-Jul-13 | 19-Sep-13 | 19-Sep-13 | 1-Dec-11 | |||||
Disclosure Stock Based Compensation And Expense Details1 [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Beginning Outstanding | ' | 2,134,329 | 2,134,329 | 3,758,089 | 550,000 | 1,550,000 | 996,421 | 1,065,398 | 80,000 | 92,401 | 122,908 | 165,290 | 150,000 | 150,000 | 150,000 | 195,000 | 195,000 | 15,000 | 15,000 | 25,000 | 25,000 | 25,000 | ' | ' | ' | ' | 500,000 |
Granted | 30,000 | 377,500 | 2,310,000 | 2,310,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,280,000 | 2,280,000 | 30,000 | 30,000 | ' |
Cancelled/Forfeited | ' | ' | 1,926,896 | 3,550,656 | 550,000 | 1,550,000 | 969,044 | 1,038,021 | 74,128 | 86,529 | 119,616 | 161,998 | ' | ' | ' | 195,000 | 195,000 | 15,000 | 15,000 | ' | ' | ' | 4,108 | 4,108 | ' | ' | 500,000 |
Ending Outstanding | ' | ' | 2,517,433 | 2,517,433 | ' | ' | 27,377 | 27,377 | 5,872 | 5,872 | 3,292 | 3,292 | 150,000 | 150,000 | 150,000 | ' | ' | ' | ' | 25,000 | 25,000 | 25,000 | 2,275,892 | 2,275,892 | 30,000 | 30,000 | ' |
Net_Income_Loss_per_Common_Sha2
Net Income (Loss) per Common Share (Details) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Reconciliation of the basic and diluted net loss per common share | ' | ' | ' | ' |
Basic | 47,563 | 49,284 | 47,439 | 49,722 |
Dilutive effect of awards | 94 | ' | ' | ' |
Diluted | 47,657 | 49,284 | 47,439 | 49,722 |
Options | ' | ' | ' | ' |
Antidilutive securities: | ' | ' | ' | ' |
Antidilutive securities | 2,517 | 4,107 | 2,517 | 4,107 |
Warrants | ' | ' | ' | ' |
Antidilutive securities: | ' | ' | ' | ' |
Antidilutive securities | ' | 188 | 300 | 188 |
Restricted stock | ' | ' | ' | ' |
Antidilutive securities: | ' | ' | ' | ' |
Antidilutive securities | 2 | 49 | 2 | 49 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
In Thousands, unless otherwise specified | Quoted Prices in Active Markets for Identical Assets (Level 1) | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Significant Unobservable Inputs (Level 3) | Year to Date Gains (Losses) | Year to Date Gains (Losses) | ||
Assets and liabilities measured at fair value on a recurring basis | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Restricted assets: Money market | $7,146 | $11,141 | $7,146 | $11,141 | ' | ' | ' | ' | ' |
Collateral investments: Money market | 903 | 902 | 903 | 902 | ' | ' | ' | ' | ' |
Collateral investments: Certificate of deposit | 1,068 | 1,067 | 1,068 | 1,067 | ' | ' | ' | ' | ' |
Warrant liability | ' | 310 | ' | ' | 310 | ' | ' | -53 | 389 |
Assets held for sale: Recovered properties | ' | 380 | ' | ' | 380 | ' | ' | -122 | -880 |
CVRs | ' | $7,599 | ' | ' | ' | ' | $7,599 | ($74) | ($161) |
Fair_Value_Measurements_Detail1
Fair Value Measurements (Details 1) (USD $) | Jun. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | Fair Value Measurements Using Significant Unobservable Inputs (Level 3) CVRs | Fair Value Measurements Using Significant Unobservable Inputs (Level 3) CVRs | Tax Refunds Received Before Closing Of Merger | Other Specified Tax Refunds | Tax Indemnity Obligation | Tax Indemnity Obligation | Legal Receivable | Michigan State Tax Liability | Michigan State Tax Liability | Other Specified Tax Related Liabilities | Costs Incurred To Collect Tax Refunds And By Stockholder S Representative | September Two Thousand And Ten Payment | June Two Thousand And Eleven Payment | June Two Thousand And Thirteen Payment | ||
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) CVRs | Fair Value Measurements Using Significant Unobservable Inputs (Level 3) CVRs | Fair Value Measurements Using Significant Unobservable Inputs (Level 3) CVRs | Fair Value Measurements Using Significant Unobservable Inputs (Level 3) CVRs | Fair Value Measurements Using Significant Unobservable Inputs (Level 3) CVRs | Fair Value Measurements Using Significant Unobservable Inputs (Level 3) CVRs | Fair Value Measurements Using Significant Unobservable Inputs (Level 3) CVRs | Fair Value Measurements Using Significant Unobservable Inputs (Level 3) CVRs | Fair Value Measurements Using Significant Unobservable Inputs (Level 3) CVRs | Fair Value Measurements Using Significant Unobservable Inputs (Level 3) CVRs | |||||||
Components of CVR Total: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Estimated Fair Value as of September 30, 2013 | ' | ' | $10,772 | ' | $1,583 | $4,797 | ' | $1,868 | $2,400 | ' | $607 | ($53) | ($430) | ' | ' | ' |
Payment to Holder of CVRs | -7,700 | ' | -7,673 | ' | ' | ' | -1,900 | ' | ' | -5,800 | ' | ' | ' | -1,106 | -1,993 | -7,673 |
Remaining CVR liability | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
CVRs | ' | 7,599 | ' | 7,599 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accrued interest | ' | ' | $74 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair_Value_Measurements_Detail2
Fair Value Measurements (Details 2) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
In Thousands, unless otherwise specified | Quoted Prices in Active Markets for Identical Assets (Level 1) | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Significant Unobservable Inputs (Level 3) | Total Gains (Losses) | Total Gains (Losses) | ||
Assets and liabilities measured at fair value on a non-recurring basis | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill | $47,404 | $47,404 | ' | ' | ' | ' | $47,404 | $47,404 | ' | ($14,700) |
Property, equipment and software | 21,008 | 21,021 | ' | ' | ' | ' | 21,008 | 21,021 | ' | -3,347 |
Pre-publication costs, net | 13,949 | 11,660 | ' | ' | ' | ' | 13,949 | 11,660 | ' | ' |
Acquired curriculum and technology intangibles, net | 6,508 | 9,320 | ' | ' | ' | ' | 6,508 | 9,320 | ' | ' |
Acquired publishing rights, net | 5,429 | 7,602 | ' | ' | ' | ' | 5,429 | 7,602 | ' | ' |
Other intangible assets, net | $6,481 | $7,836 | ' | ' | ' | ' | $6,481 | $7,836 | ' | ' |
Fair_Value_Measurements_Detail3
Fair Value Measurements (Details Textual) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Jun. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Jun. 30, 2013 | |
Fair Value Measurements (Additional Textual) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash and cash equivalents | ' | ' | ' | ' | ' | ' | $51,900,000 | $53,800,000 | ' |
Restricted assets | ' | ' | ' | ' | ' | ' | 11,100,000 | 7,100,000 | ' |
Collateral investments | ' | ' | ' | ' | ' | ' | 1,969,000 | 1,971,000 | ' |
Long-term debt | ' | ' | ' | ' | ' | ' | 174,328,000 | 174,450,000 | ' |
Warrants | ' | ' | ' | ' | ' | ' | 300,000 | ' | ' |
Assets held for sale | ' | ' | ' | ' | ' | ' | 380,000 | ' | ' |
Liability for the remaining CVR payments | ' | ' | ' | ' | ' | ' | 7,599,000 | ' | ' |
First CVR payment | ' | 1,100,000 | ' | ' | ' | ' | ' | ' | ' |
Second CVR payment | 2,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill impairment | ' | ' | ' | 14,700,000 | ' | 14,700,000 | 66,893,000 | ' | ' |
Fair value of senior secured notes | ' | ' | ' | ' | ' | ' | ' | 165,600,000 | ' |
Fair Value Measurements (Textual) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payment to Holder of CVRs | ' | ' | ' | ' | ' | ' | ' | ' | 7,700,000 |
Restricted assets for potential tax indemnity obligation | ' | ' | ' | ' | ' | ' | ' | ' | 3,000,000 |
Restricted assets for potential tax indemnity obligation if not triggered | ' | ' | ' | ' | ' | ' | ' | ' | 1,100,000 |
Long lived assets | ' | ' | 200,000 | 300,000 | 2,800,000 | ' | ' | ' | ' |
Class. Com | Product Line Assets | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair Value Measurements (Textual) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Intangible Assets | ' | ' | ' | ' | ' | ' | ' | 600,000 | ' |
Capitalized Software | ' | ' | ' | ' | ' | ' | ' | 300,000 | ' |
Developed Curriculum | ' | ' | ' | ' | ' | ' | ' | 200,000 | ' |
Michigan State Tax Liability | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair Value Measurements (Textual) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payment to Holder of CVRs | ' | ' | ' | ' | ' | ' | ' | ' | 5,800,000 |
Tax Indemnity Obligation | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair Value Measurements (Textual) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payment to Holder of CVRs | ' | ' | ' | ' | ' | ' | ' | ' | $1,900,000 |
Other_Current_Assets_Details
Other Current Assets (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Deferred costs | $4,399 | $4,132 |
Prepaid expenses | 1,656 | 1,599 |
Deferred taxes | 261 | 137 |
Other current assets | ' | 24 |
Total | $6,316 | $5,892 |
Other_Assets_Details
Other Assets (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Other assets | ' | ' |
Deferred financing costs | $4,939 | $6,121 |
Collateral investments | 1,971 | 1,969 |
Other | 2,415 | 1,542 |
Total | $9,325 | $9,632 |
Other_Assets_Details_Textual
Other Assets (Details Textual) (USD $) | Sep. 30, 2013 | Feb. 28, 2011 |
In Millions, unless otherwise specified | ||
Other Assets (Textual) [Abstract] | ' | ' |
Issuance of senior secured notes | $175 | $175 |
Senior secured notes percentage | 9.75% | ' |
Accrued_Expenses_Details
Accrued Expenses (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Accrued expenses | ' | ' |
Salaries, bonuses and benefits | $12,814 | $7,593 |
Accrued interest | 2,202 | 6,490 |
Accrued royalties | 1,505 | 1,399 |
Pension and post-retirement medical benefits | 1,221 | 1,218 |
Deferred compensation | 21 | 57 |
Other | 2,827 | 3,773 |
Total | $20,590 | $20,530 |
Accrued_Expenses_Details_Textu
Accrued Expenses (Details Textual) | Sep. 30, 2013 |
Accrued Expenses (Textual) [Abstract] | ' |
Senior secured notes, interest rate | 9.75% |
Senior secured notes | ' |
Accrued Expenses (Textual) [Abstract] | ' |
Senior secured notes, interest rate | 9.75% |
Other_Liabilities_Details
Other Liabilities (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Other liabilities | ' | ' |
Pension and post-retirement medical benefits, long-term portion | $10,812 | $11,392 |
Deferred rent | 1,262 | 1,457 |
Long-term income tax payable | 889 | 852 |
Long-term deferred compensation | 488 | 503 |
Long-term deferred tax liability | 397 | 273 |
Other | 153 | 654 |
Total | $14,001 | $15,131 |
Pension_Plan_Details_Textual
Pension Plan (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Pension Plan (Textual) [Abstract] | ' | ' | ' | ' |
Net pension costs | $0.10 | $0.10 | $0.40 | $0.40 |
Restructuring_Details
Restructuring (Details) (USD $) | 12 Months Ended | 15 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 |
Amounts incurred and expected to be incurred in connection with the reengineering and restructuring initiative | ' | ' | ' |
Incurred During Period | $8,370 | $1,189 | ' |
Total Amount Incurred Under the Plan | ' | ' | 9,559 |
One-time termination benefits | ' | ' | ' |
Amounts incurred and expected to be incurred in connection with the reengineering and restructuring initiative | ' | ' | ' |
Incurred During Period | 2,507 | 1,189 | ' |
Total Amount Incurred Under the Plan | ' | ' | 3,696 |
Impairment of long-lived assets | ' | ' | ' |
Amounts incurred and expected to be incurred in connection with the reengineering and restructuring initiative | ' | ' | ' |
Incurred During Period | 4,448 | ' | ' |
Total Amount Incurred Under the Plan | 4,448 | ' | ' |
Warehouse transition costs | ' | ' | ' |
Amounts incurred and expected to be incurred in connection with the reengineering and restructuring initiative | ' | ' | ' |
Incurred During Period | 1,003 | ' | ' |
Total Amount Incurred Under the Plan | 1,003 | ' | ' |
Facility rationalization costs | ' | ' | ' |
Amounts incurred and expected to be incurred in connection with the reengineering and restructuring initiative | ' | ' | ' |
Incurred During Period | 209 | ' | ' |
Total Amount Incurred Under the Plan | 209 | ' | ' |
Process reengineering costs | ' | ' | ' |
Amounts incurred and expected to be incurred in connection with the reengineering and restructuring initiative | ' | ' | ' |
Incurred During Period | 203 | ' | ' |
Total Amount Incurred Under the Plan | $203 | ' | ' |
Restructuring_Details_1
Restructuring (Details 1) (One-time termination benefits, USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 |
One-time termination benefits | ' |
Change in the reengineering and restructuring accrual | ' |
Beginning Accrual | $828 |
Accrual changes | -18 |
Payments made | -757 |
Ending Accrual | $53 |
Restructuring_Details_Textual
Restructuring (Details Textual) (USD $) | 15 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Dec. 31, 2012 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2012 | Dec. 31, 2012 | |
Cost of Revenues | Cost of Revenues | Research and Development Expense | Research and Development Expense | Sales and Marketing Expense | Sales and Marketing Expense | General and Administrative Expense | General and Administrative Expense | Shipping and Handling Costs | Shipping and Handling Costs | Impairment of long-lived assets | Impairment of long-lived assets | Impairment of long-lived assets | ||
Reengineering and Restructuring (Additional Textual) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total Amount Incurred Under the Plan | $9,559,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $4,448,000 |
Expected Capital expenditures | 700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reengineering and Restructuring (Textual) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reengineering and restructuring charges | ' | $100,000 | $1,500,000 | $0 | $300,000 | $0 | $500,000 | $200,000 | $300,000 | $0 | $400,000 | $200,000 | $3,300,000 | ' |
Uncertain_Tax_Positions_Detail
Uncertain Tax Positions (Details Textual) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Uncertain Tax Positions (Textual) [Abstract] | ' | ' |
Unrecognized Tax Benefits | $7.10 | $7.10 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details Textual) (USD $) | 3 Months Ended | 3 Months Ended | |||||
In Millions, unless otherwise specified | Mar. 31, 2013 | Sep. 30, 2010 | Sep. 30, 2013 | Jun. 30, 2013 | Aug. 27, 2010 | Jun. 20, 2009 | Sep. 30, 2013 |
Maximum | |||||||
Commitments and Contingencies (Additional Textual) [Abstract] | ' | ' | ' | ' | ' | ' | ' |
Severance charges | $1.50 | ' | ' | ' | ' | ' | ' |
Michigan taxes assessed | ' | ' | ' | ' | 10.4 | ' | ' |
Michigan taxes paid | ' | 10.4 | ' | ' | ' | ' | ' |
Disbursement from the escrow account of portion of CVR liability | ' | 5.2 | ' | ' | ' | ' | ' |
Total refund from the taxing authority | ' | ' | 11.7 | ' | ' | ' | ' |
Michigan SBT portion of CVR liability | ' | ' | 5.8 | ' | ' | ' | ' |
Amount paid or due and payable with respect to each agreed contingency attributable to contingent value rights | ' | ' | ' | ' | ' | 50.00% | ' |
Payment of tax indemnity obligation | ' | ' | ' | 1.9 | ' | ' | ' |
Tax refund | ' | ' | 0.6 | ' | ' | ' | ' |
Purchase commitments | ' | ' | 0.3 | ' | ' | ' | ' |
Letters of credit outstanding | ' | ' | 2.9 | ' | ' | ' | ' |
Certificate of deposit | ' | ' | 1.1 | ' | ' | ' | ' |
Money market fund investment | ' | ' | $0.90 | ' | ' | ' | ' |
Commitments and Contingencies (Textual) [Abstract] | ' | ' | ' | ' | ' | ' | ' |
Term of purchase commitment | ' | ' | ' | ' | ' | ' | '1 year |
LongTerm_Debt_Details
Long-Term Debt (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Summary Long-term debt | ' | ' |
Total long-term debt | $174,450 | $174,328 |
Senior secured notes | ' | ' |
Summary Long-term debt | ' | ' |
$175.0 million of 9.75% senior secured notes due February 15, 2017, interest payable semiannually | 175,000 | 175,000 |
Less: Unamortized discount | -550 | -672 |
Total long-term debt | $174,450 | $174,328 |
LongTerm_Debt_Details_Textual
Long-Term Debt (Details Textual) (USD $) | 9 Months Ended | ||
Sep. 30, 2013 | Dec. 31, 2012 | Feb. 28, 2011 | |
Long-Term Debt (Textual) [Abstract] | ' | ' | ' |
Asset-based revolving credit facility | $40,000,000 | ' | ' |
Inventory | 10,591,000 | 16,620,000 | ' |
Fixed charge coverage ratio | '1.1 to 1.0 | ' | ' |
Long-Term Debt (Additional Textual) [Abstract] | ' | ' | ' |
Senior secured notes | 175,000,000 | ' | 175,000,000 |
Senior secured notes, maturity year | '2017 | ' | ' |
Unamortized capitalized deferred financing cost | 4,900,000 | 6,100,000 | ' |
Senior secured notes, interest rate | 9.75% | ' | ' |
Sub-facility for swing line loans | 5,000,000 | ' | ' |
Sub-facility for letters of credit | 5,000,000 | ' | ' |
ABL Credit Parties may increase the aggregate principal amount | 20,000,000 | ' | ' |
Borrowing base under the ABL Loan Agreement | 24,300,000 | ' | ' |
ABL Facility financial covenant | 'Excess availability of at least the greater of $8 million and 15% of the revolver commitment | ' | ' |
Amount of excess availability for ABL Credit Parties | 8,000,000 | ' | ' |
ABL Credit Parties revolver commitment percentage | 15.00% | ' | ' |
Minimum | ' | ' | ' |
Long-Term Debt (Textual) [Abstract] | ' | ' | ' |
Unused line fee | 0.38% | ' | ' |
Fixed charges coverage ratio | 1 | ' | ' |
Maximum | ' | ' | ' |
Long-Term Debt (Textual) [Abstract] | ' | ' | ' |
Unused line fee | 0.50% | ' | ' |
Fixed charges coverage ratio | 1.1 | ' | ' |
ABL Credit Facility | ' | ' | ' |
Long-Term Debt (Textual) [Abstract] | ' | ' | ' |
Duration of ABL facility | '4 years | ' | ' |
Accounts receivable collateralizing the ABL Facility | 31,600,000 | ' | ' |
Inventory | 10,600,000 | ' | ' |
Revolving Credit Facility | ABL Credit Facility | ' | ' | ' |
Long-Term Debt (Textual) [Abstract] | ' | ' | ' |
Asset-based revolving credit facility | $40,000,000 | ' | ' |
Senior secured notes | ' | ' | ' |
Long-Term Debt (Additional Textual) [Abstract] | ' | ' | ' |
Senior secured notes, interest rate | 9.75% | ' | ' |
LIBOR | ' | ' | ' |
Long-Term Debt (Textual) [Abstract] | ' | ' | ' |
Interest rate on the Senior Facility in percentage | 1.00% | ' | ' |
LIBOR | Minimum | ' | ' | ' |
Long-Term Debt (Textual) [Abstract] | ' | ' | ' |
Interest rate on the Senior Facility in percentage | 2.75% | ' | ' |
LIBOR | Maximum | ' | ' | ' |
Long-Term Debt (Textual) [Abstract] | ' | ' | ' |
Interest rate on the Senior Facility in percentage | 3.25% | ' | ' |
Base Rate | Minimum | ' | ' | ' |
Long-Term Debt (Textual) [Abstract] | ' | ' | ' |
Interest rate on the Senior Facility in percentage | 1.75% | ' | ' |
Base Rate | Maximum | ' | ' | ' |
Long-Term Debt (Textual) [Abstract] | ' | ' | ' |
Interest rate on the Senior Facility in percentage | 2.25% | ' | ' |
Federal Funds Rate | ' | ' | ' |
Long-Term Debt (Textual) [Abstract] | ' | ' | ' |
Interest rate on the Senior Facility in percentage | 0.50% | ' | ' |
Segment_Reporting_Details
Segment Reporting (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Jun. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Revenue, operating expenses and income (loss) from operations | ' | ' | ' | ' | ' | ' |
Product revenues | ' | ' | ' | ' | ' | $129,747 |
Service revenues | ' | ' | ' | ' | ' | 18,812 |
Net revenues | 42,957 | 45,958 | ' | 117,172 | 114,242 | 148,559 |
Cost of product revenues | ' | ' | ' | ' | ' | 32,628 |
Cost of service revenues | ' | ' | ' | ' | ' | 18,335 |
Cost of revenues | 12,950 | 14,274 | ' | 37,000 | 39,837 | ' |
Amortization expense | 4,692 | 7,035 | ' | 12,680 | 19,984 | 24,716 |
Total cost of revenues | 17,642 | 21,309 | ' | 49,680 | 59,821 | 75,679 |
Other operating expenses | 19,272 | 19,994 | ' | 58,550 | 62,002 | 81,535 |
Goodwill impairment | ' | ' | 14,700 | ' | 14,700 | 66,893 |
Embezzlement-related expense | 3 | 493 | ' | 118 | 452 | 516 |
Depreciation and amortization expense | 1,227 | 1,592 | ' | 3,663 | 4,842 | 6,182 |
Impairment of long-lived assets | ' | 236 | ' | ' | 3,347 | 33,707 |
Net interest expense | 4,773 | 4,628 | ' | 14,028 | 14,032 | 18,683 |
Other income, net | -215 | -163 | ' | -645 | -236 | -1,125 |
Income tax benefit (expense) | 127 | 104 | ' | 297 | 258 | 272 |
Segment net income (loss) | 128 | -2,235 | ' | -8,519 | -44,976 | -133,783 |
Capital expenditures | 4,409 | 4,890 | ' | 12,383 | 13,317 | 18,145 |
Operating Segments | Voyager Sopris Learning | ' | ' | ' | ' | ' | ' |
Revenue, operating expenses and income (loss) from operations | ' | ' | ' | ' | ' | ' |
Product revenues | ' | ' | ' | ' | ' | 78,463 |
Service revenues | ' | ' | ' | ' | ' | 18,399 |
Net revenues | 28,212 | 32,957 | ' | 74,032 | 76,074 | 96,862 |
Cost of product revenues | ' | ' | ' | ' | ' | 26,406 |
Cost of service revenues | ' | ' | ' | ' | ' | 17,679 |
Cost of revenues | 11,434 | 13,069 | ' | 32,934 | 34,705 | ' |
Amortization expense | ' | ' | ' | ' | ' | ' |
Total cost of revenues | 11,434 | 13,069 | ' | 32,934 | 34,705 | 44,085 |
Other operating expenses | 8,589 | 10,292 | ' | 25,032 | 30,461 | 38,551 |
Embezzlement-related expense | ' | ' | ' | ' | ' | ' |
Depreciation and amortization expense | ' | ' | ' | ' | ' | ' |
Impairment of long-lived assets | ' | ' | ' | ' | ' | 1,496 |
Net interest expense | ' | ' | ' | ' | ' | ' |
Other income, net | ' | ' | ' | ' | ' | ' |
Income tax benefit (expense) | ' | ' | ' | ' | ' | ' |
Segment net income (loss) | 8,189 | 9,596 | ' | 16,066 | 10,908 | 12,730 |
Capital expenditures | 2,007 | 2,775 | ' | 5,627 | 6,890 | 9,618 |
Operating Segments | Learning A-Z | ' | ' | ' | ' | ' | ' |
Revenue, operating expenses and income (loss) from operations | ' | ' | ' | ' | ' | ' |
Product revenues | ' | ' | ' | ' | ' | 26,189 |
Net revenues | 8,362 | 6,520 | ' | 24,047 | 18,864 | 26,189 |
Cost of product revenues | ' | ' | ' | ' | ' | 659 |
Cost of service revenues | ' | ' | ' | ' | ' | ' |
Cost of revenues | 167 | 91 | ' | 646 | 266 | ' |
Amortization expense | ' | ' | ' | ' | ' | ' |
Total cost of revenues | 167 | 91 | ' | 646 | 266 | 659 |
Other operating expenses | 3,512 | 2,753 | ' | 10,211 | 8,007 | 10,920 |
Embezzlement-related expense | ' | ' | ' | ' | ' | ' |
Depreciation and amortization expense | ' | ' | ' | ' | ' | ' |
Net interest expense | ' | ' | ' | ' | ' | ' |
Other income, net | ' | ' | ' | ' | ' | ' |
Income tax benefit (expense) | ' | ' | ' | ' | ' | ' |
Segment net income (loss) | 4,683 | 3,676 | ' | 13,190 | 10,591 | 14,610 |
Capital expenditures | 1,112 | 1,167 | ' | 3,320 | 2,885 | 4,039 |
Operating Segments | Explore Learning | ' | ' | ' | ' | ' | ' |
Revenue, operating expenses and income (loss) from operations | ' | ' | ' | ' | ' | ' |
Product revenues | ' | ' | ' | ' | ' | 14,283 |
Net revenues | 3,700 | 3,637 | ' | 11,497 | 10,558 | 14,283 |
Cost of product revenues | ' | ' | ' | ' | ' | 1,929 |
Cost of service revenues | ' | ' | ' | ' | ' | ' |
Cost of revenues | 670 | 542 | ' | 1,693 | 1,364 | ' |
Amortization expense | ' | ' | ' | ' | ' | ' |
Total cost of revenues | 670 | 542 | ' | 1,693 | 1,364 | 1,929 |
Other operating expenses | 2,322 | 1,813 | ' | 6,662 | 5,778 | 7,747 |
Embezzlement-related expense | ' | ' | ' | ' | ' | ' |
Depreciation and amortization expense | ' | ' | ' | ' | ' | ' |
Impairment of long-lived assets | ' | ' | ' | ' | ' | ' |
Net interest expense | ' | ' | ' | ' | ' | ' |
Other income, net | ' | ' | ' | ' | ' | ' |
Income tax benefit (expense) | ' | ' | ' | ' | ' | ' |
Segment net income (loss) | 708 | 1,282 | ' | 3,142 | 3,416 | 4,607 |
Capital expenditures | 382 | 272 | ' | 1,070 | 825 | 1,090 |
Operating Segments | Kurzweil/IntelliTools | ' | ' | ' | ' | ' | ' |
Revenue, operating expenses and income (loss) from operations | ' | ' | ' | ' | ' | ' |
Product revenues | ' | ' | ' | ' | ' | 10,812 |
Service revenues | ' | ' | ' | ' | ' | 413 |
Net revenues | 2,683 | 2,844 | ' | 7,596 | 8,746 | 11,225 |
Cost of product revenues | ' | ' | ' | ' | ' | 2,056 |
Cost of service revenues | ' | ' | ' | ' | ' | 656 |
Cost of revenues | 679 | 478 | ' | 1,727 | 1,978 | ' |
Amortization expense | ' | ' | ' | ' | ' | ' |
Total cost of revenues | 679 | 478 | ' | 1,727 | 1,978 | 2,712 |
Other operating expenses | 1,038 | 1,409 | ' | 3,348 | 4,677 | 5,646 |
Goodwill impairment | ' | ' | ' | ' | ' | ' |
Embezzlement-related expense | ' | ' | ' | ' | ' | ' |
Depreciation and amortization expense | ' | ' | ' | ' | ' | ' |
Impairment of long-lived assets | ' | ' | ' | ' | ' | ' |
Net interest expense | ' | ' | ' | ' | ' | ' |
Other income, net | ' | ' | ' | ' | ' | ' |
Income tax benefit (expense) | ' | ' | ' | ' | ' | ' |
Segment net income (loss) | 966 | 957 | ' | 2,521 | 2,091 | 2,867 |
Capital expenditures | 154 | 66 | ' | 279 | 281 | 365 |
Other | ' | ' | ' | ' | ' | ' |
Revenue, operating expenses and income (loss) from operations | ' | ' | ' | ' | ' | ' |
Net revenues | ' | ' | ' | ' | ' | ' |
Cost of product revenues | ' | ' | ' | ' | ' | 1,578 |
Cost of revenues | ' | 94 | ' | ' | 1,524 | ' |
Amortization expense | 4,692 | 7,035 | ' | 12,680 | 19,984 | 24,716 |
Total cost of revenues | 4,692 | 7,129 | ' | 12,680 | 21,508 | 26,294 |
Other operating expenses | 3,811 | 3,727 | ' | 13,297 | 13,079 | 18,671 |
Goodwill impairment | ' | ' | ' | ' | 14,700 | 66,893 |
Embezzlement-related expense | 3 | 493 | ' | 118 | 452 | 516 |
Depreciation and amortization expense | 1,227 | 1,592 | ' | 3,663 | 4,842 | 6,182 |
Impairment of long-lived assets | ' | 236 | ' | ' | 3,347 | 32,211 |
Net interest expense | 4,773 | 4,628 | ' | 14,028 | 14,032 | 18,683 |
Other income, net | -215 | -163 | ' | -645 | -236 | -1,125 |
Income tax benefit (expense) | 127 | 104 | ' | 297 | 258 | 272 |
Segment net income (loss) | -14,418 | -17,746 | ' | -43,438 | -71,982 | -168,597 |
Capital expenditures | $754 | $610 | ' | $2,087 | $2,436 | $3,033 |
Segment_Reporting_Details_Text
Segment Reporting (Details Textual) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
Segment | Segment | |
Segment Reporting (Additional Textual) [Abstract] | ' | ' |
Number of reportable business segments | 4 | 2 |
Number of new segments, after prior period reclassifications | 3 | ' |
Operating Segments | Learning A-Z | ' | ' |
Segment Reporting (Textual) [Abstract] | ' | ' |
Number of Countries in which Product is used | 165 | ' |
Operating Segments | Explore Learning | ' | ' |
Segment Reporting (Textual) [Abstract] | ' | ' |
Number of Products under Explore Learning | 2 | ' |
Embezzlement_Details_Textual
Embezzlement (Details Textual) (USD $) | 1 Months Ended | 9 Months Ended |
In Millions, except Share data, unless otherwise specified | Apr. 30, 2008 | Sep. 30, 2013 |
Embezzlement (Textual) [Abstract] | ' | ' |
Embezzlement internal investigation review period | ' | '3 years |
Losses incurred | $14 | ' |
Embezzlement warrants adjustment due to net cash recoveries numerator | ' | 0.45 |
Embezzlement Warrants Adjustment due to Net Cash Recoveries Denominator | ' | $6.50 |
Number of warrants to be issued | ' | 'The number of shares to be issued under the warrant equals 0.45 multiplied by the quotient of the net cash recovery divided by $6.50. |
Cash recoveries | ' | $0.30 |
Increase in shares under the warrants | ' | 17,864 |
Related_Party_Transactions_Det
Related Party Transactions (Details Textual) (Board of Directors Chairman, USD $) | 3 Months Ended |
Mar. 31, 2013 | |
Board of Directors Chairman | ' |
Related Party Transactions (Textual) [Abstract] | ' |
Chairman's compensation | $300,000 |
Subsequent_Events_Details_Text
Subsequent Events (Details Textual) (USD $) | 1 Months Ended | 0 Months Ended | 9 Months Ended | |
In Millions, except Share data, unless otherwise specified | Mar. 18, 2013 | Mar. 19, 2013 | Nov. 06, 2013 | Sep. 30, 2013 |
Subsequent Events | Subsequent Events | |||
Subsequent Event [Line Items] | ' | ' | ' | ' |
Stock purchase agreement date | ' | ' | ' | 4-Nov-13 |
Stock repurchase program | ' | $5 | ' | ' |
Number of shares repurchased | ' | ' | 1,861,969 | ' |
Stock Repurchase Program, Period in Force | ' | ' | ' | '1 year |
Remaining stock repurchase program | 2.2 | ' | ' | ' |
Cost of shares repurchased | ' | ' | $4.40 | ' |