Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Feb. 28, 2014 | Jun. 30, 2013 | |
Document Document And Entity Information [Line Items] | ' | ' | ' |
Entity Registrant Name | 'Cambium Learning Group, Inc. | ' | ' |
Entity Central Index Key | '0001466815 | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Filer Category | 'Smaller Reporting Company | ' | ' |
Entity Public Float | ' | ' | $17,161,264 |
Entity Common Stock, Shares Outstanding | ' | 44,874,440 | ' |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations and Comprehensive Loss (USD $) | 12 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Net revenues: | ' | ' |
Product revenues | $127,799 | $130,160 |
Service revenues | 22,721 | 18,399 |
Total net revenues | 150,520 | 148,559 |
Cost of revenues: | ' | ' |
Cost of product revenues | 29,167 | 33,284 |
Cost of service revenues | 17,521 | 17,679 |
Amortization expense | 17,519 | 24,716 |
Total cost of revenues | 64,207 | 75,679 |
Research and development expense | 9,810 | 10,907 |
Sales and marketing expense | 42,233 | 46,367 |
General and administrative expense | 21,341 | 21,427 |
Shipping and handling costs | 1,722 | 2,834 |
Depreciation and amortization expense | 4,895 | 6,182 |
Goodwill impairment | ' | 66,893 |
Embezzlement-related expense | 118 | 516 |
Impairment of long-lived assets | 2,227 | 33,707 |
Total costs and expenses | 146,553 | 264,512 |
Income (loss) before interest, other income (expense) and income taxes | 3,967 | -115,953 |
Net interest income (expense): | ' | ' |
Interest income | 191 | 433 |
Interest expense | -19,010 | -19,116 |
Net interest income (expense) | -18,819 | -18,683 |
Other income (expense), net | 764 | 1,125 |
Loss before income taxes | -14,088 | -133,511 |
Income tax expense | -165 | -272 |
Net loss | -14,253 | -133,783 |
Other comprehensive income (loss): | ' | ' |
Net pension gain (loss) | 384 | -979 |
Amortization of net pension loss | 120 | 35 |
Realized loss on available for sale securities | ' | -1 |
Comprehensive loss | ($13,749) | ($134,728) |
Net loss per common share: | ' | ' |
Basic net loss per common share | ($0.30) | ($2.71) |
Diluted net loss per common share | ($0.30) | ($2.71) |
Average number of common shares and equivalents outstanding: | ' | ' |
Basic | 47,040 | 49,395 |
Diluted | 47,040 | 49,395 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $67,993 | $51,904 |
Accounts receivable, net | 15,767 | 17,813 |
Inventory | 9,221 | 16,620 |
Tax receivables | ' | 12,234 |
Restricted assets, current | 1,343 | 4,387 |
Assets held for sale | ' | 380 |
Other current assets | 6,873 | 5,892 |
Total current assets | 101,197 | 109,230 |
Property, equipment and software at cost | 43,224 | 35,535 |
Accumulated depreciation and amortization | -22,909 | -14,514 |
Property, equipment and software, net | 20,315 | 21,021 |
Goodwill | 47,842 | 47,404 |
Acquired curriculum and technology intangibles, net | 8,719 | 9,320 |
Acquired publishing rights, net | 4,705 | 7,602 |
Other intangible assets, net | 6,251 | 7,836 |
Pre-publication costs, net | 13,401 | 11,660 |
Restricted assets, less current portion | 5,492 | 6,754 |
Other assets | 8,288 | 9,632 |
Total assets | 216,210 | 230,459 |
Current liabilities: | ' | ' |
Capital lease obligations, current | 995 | 1,290 |
Accounts payable | 1,301 | 3,007 |
Contingent value rights, current | ' | 7,599 |
Accrued expenses | 25,279 | 20,530 |
Deferred revenue, current | 53,532 | 45,974 |
Total current liabilities | 81,107 | 78,400 |
Long-term liabilities: | ' | ' |
Long-term debt | 174,491 | 174,328 |
Capital lease obligations, less current portion | 2,019 | 3,014 |
Deferred revenue, less current portion | 7,829 | 5,631 |
Other liabilities | 13,954 | 15,131 |
Total long-term liabilities | 198,293 | 198,104 |
Commitments and contingencies (See Note 19) | ' | ' |
Stockholders' equity (deficit): | ' | ' |
Preferred stock ($.001 par value, 15,000 shares authorized, zero shares issued and outstanding at December 31, 2013 and 2012) | ' | ' |
Common stock ($.001 par value, 150,000 shares authorized, 51,208 and 51,208 share issued, and 45,042 and 47,098 shares outstanding at December 31, 2013 and 2012, respectively) | 51 | 51 |
Capital surplus | 283,673 | 282,450 |
Accumulated deficit | -332,695 | -318,442 |
Treasury stock at cost (6,166 and 4,110 shares at December 31, 2013 and December 31, 2012, respectively) | -12,147 | -7,528 |
Other comprehensive loss: | ' | ' |
Pension and postretirement plans | -2,072 | -2,576 |
Accumulated other comprehensive loss | -2,072 | -2,576 |
Total stockholders' equity (deficit) | -63,190 | -46,045 |
Total liabilities and stockholders' equity (deficit) | $216,210 | $230,459 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 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 | 45,042 | 47,098 |
Treasury stock, shares | 6,166 | 4,110 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Operating activities: | ' | ' |
Net loss | ($14,253) | ($133,783) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ' | ' |
Depreciation and amortization expense | 22,414 | 30,898 |
Goodwill impairment | ' | 66,893 |
Loss from recovery of property held for sale | 122 | 958 |
Amortization of note discount and deferred financing costs | 1,743 | 1,747 |
Change in fair value of contingent value rights obligation | 74 | 915 |
Loss on disposal of assets | 105 | 71 |
Stock-based compensation and expense | 890 | 874 |
Proceeds from sale of recovered properties | 258 | 1,389 |
Impairment of long-lived assets | 2,227 | 33,707 |
Michigan tax refund received | 12,342 | ' |
Deferred income taxes | -102 | -156 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable, net | 2,314 | -4,328 |
Inventory | 7,399 | 4,941 |
Other current assets | -690 | -13,254 |
Other assets | -810 | 11,252 |
Restricted assets | 4,306 | 1,334 |
Accounts payable | -1,706 | -17 |
Accrued expenses | 889 | -673 |
Deferred revenue | 9,301 | 8,317 |
Other long-term liabilities | -1,037 | -756 |
Net cash provided by operating activities | 45,786 | 10,329 |
Investing activities: | ' | ' |
Cash paid for acquisitions, net of cash acquired | -7,673 | ' |
Proceeds from sale of property, equipment, and software | ' | 264 |
Expenditures for property, equipment, software and pre-publication costs | -16,115 | -18,145 |
Net cash used in investing activities | -23,788 | -17,881 |
Financing activities: | ' | ' |
Principal payments under capital lease obligations | -1,290 | -1,138 |
Share repurchases | -4,619 | -2,597 |
Net cash used in financing activities | -5,909 | -3,735 |
Increase (decrease) in cash and cash equivalents | 16,089 | -11,287 |
Cash and cash equivalents, beginning of year | 51,904 | 63,191 |
Cash and cash equivalents, end of year | 67,993 | 51,904 |
Supplemental disclosure of cash flow information: | ' | ' |
Net income taxes paid | 93 | 459 |
Interest paid | $17,288 | $17,431 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (Deficit) (USD $) | Total | Common Stock | Additional Paid in Capital | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit |
In Thousands, except Share data | ||||||
Beginning balance at Dec. 31, 2011 | $90,070 | $51 | $281,240 | ($4,931) | ($1,631) | ($184,659) |
Beginning balance, shares at Dec. 31, 2011 | ' | 49,518,000 | ' | ' | ' | ' |
Issuance of restricted stock | 160 | ' | 160 | ' | ' | ' |
Issuance of restricted stock, shares | ' | 47,000 | ' | ' | ' | ' |
Stock-based compensation and expense | 1,050 | ' | 1,050 | ' | ' | ' |
Stock repurchases | -2,597 | ' | ' | -2,597 | ' | ' |
Stock repurchases, shares | ' | -2,467,000 | ' | ' | ' | ' |
Net loss | -133,783 | ' | ' | ' | ' | -133,783 |
Pension plan | -944 | ' | ' | ' | -944 | ' |
Unrealized loss on securities | -1 | ' | ' | ' | -1 | ' |
Ending balance at Dec. 31, 2012 | -46,045 | 51 | 282,450 | -7,528 | -2,576 | -318,442 |
Ending balance, shares at Dec. 31, 2012 | 47,098,000 | 47,098,000 | ' | ' | ' | ' |
Issuance of restricted stock | 21 | ' | 21 | ' | ' | ' |
Stock-based compensation and expense | 815 | ' | 815 | ' | ' | ' |
Issuance of warrant related to employee embezzlement matter | 387 | ' | 387 | ' | ' | ' |
Stock repurchases | -4,619 | ' | ' | -4,619 | ' | ' |
Stock repurchases, shares | ' | -2,056,000 | ' | ' | ' | ' |
Net loss | -14,253 | ' | ' | ' | ' | -14,253 |
Pension plan | 504 | ' | ' | ' | 504 | ' |
Ending balance at Dec. 31, 2013 | ($63,190) | $51 | $283,673 | ($12,147) | ($2,072) | ($332,695) |
Ending balance, shares at Dec. 31, 2013 | 45,042,000 | 45,042,000 | ' | ' | ' | ' |
Basis_of_Presentation
Basis of Presentation | 12 Months Ended | |
Dec. 31, 2013 | ||
Basis of Presentation | ' | |
Note 1 — Basis of Presentation | ||
Cambium Learning Group, Inc. Cambium Learning Group, Inc. (the “Company”) was incorporated under the laws of the State of Delaware in June 2009. On December 8, 2009, the Company completed the mergers of Voyager Learning Company (“VLCY”) and VSS-Cambium Holdings II Corp. (“Cambium”) into two of its wholly-owned subsidiaries, resulting in VLCY and Cambium becoming wholly-owned subsidiaries. Following the completion of the mergers, all of the outstanding capital stock of VLCY’s operating subsidiaries, Voyager Expanded Learning, Inc. and LAZEL, Inc., was transferred to Cambium Learning, Inc., Cambium’s operating subsidiary (“Cambium Learning”). The transaction was accounted for as an “acquisition” of VLCY by Cambium, as that term is used under U.S. Generally Accepted Accounting Principles (“GAAP”), for accounting and financial reporting purposes under the applicable accounting guidance for business combinations. | ||
Fiscal Year. The consolidated financial statements present the Company as of a calendar year ending on December 31. | ||
Nature of Operations and Segments. 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 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. The Company’s historical segment reporting results have been reclassified for comparative purposes to reflect the current organizational structure. | ||
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: | ||
Learning A-Z is a preK-6 educational resource company specializing in online delivery of leveled readers and other supplementary curriculum. Founded in 2002 to help teachers differentiate instruction and meet the unique needs of all students, Learning A-Z’s resources are currently used in over two thirds of the elementary schools in the United States and in 177 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 subscription-based websites provide online supplemental books, lessons, assessments, and other instructional resources for individual classrooms, schools, and districts. These solutions include: Reading A-Z, Raz-Kids, Science A-Z, Writing A-Z, Vocabulary A-Z, Headsprout Early Reading and Headsprout Comprehension. | ||
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. |
Significant_Accounting_Policie
Significant Accounting Policies | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Significant Accounting Policies | ' | ||||||||
Note 2 — Significant Accounting Policies | |||||||||
Use of Estimates. 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. | |||||||||
Principles of Consolidation. The consolidated financial statements of the Company include the accounts of the Company and its wholly owned subsidiaries: Voyager Learning Company, Voyager Sopris Learning, Inc., LAZEL, Inc., Cambium Learning, Inc., and Kurzweil/IntelliTools, Inc. All inter-company accounts and transactions are eliminated in consolidation. | |||||||||
Revenue Recognition. | |||||||||
Voyager Sopris Learning | |||||||||
Revenues for the Company’s VSL segment are derived from sales of literacy and math educational solutions and services to school districts. Sales include printed materials, interactive web-based programs and online educational content, courseware, training and implementation services, school improvement services, and professional development. Revenue from the sale of printed materials is recognized when the product is shipped to or received by the customer, depending on the shipping terms of the arrangement. Revenue for interactive web-based programs and online educational content, which may be sold separately or included with printed curriculum materials, courseware and school improvement services are recognized ratably over the subscription or contractual period, typically a school year. Professional services such as training, implementation and professional development are recognized over the period services are delivered. | |||||||||
Printed materials, materials and programs accessed online, and ongoing support and services generally qualify as separate units of accounting and the division of revenue among these units is determined in accordance with the accounting guidance for revenue arrangements with multiple deliverables. Under this guidance, the Company is required to allocate revenue among the deliverables in an arrangement using the relative selling price method. The guidance requires use of a selling price hierarchy for determining the selling price of each deliverable, which includes (1) vendor-specific objective evidence (“VSOE”), if available, (2) third party evidence (“TPE”), if VSOE is not available, and (3) best estimate of selling price (“BESP”), if neither VSOE nor TPE is available. The objective of BESP is to determine the price at which the Company would transact a sale if the product or service were sold on a stand-alone basis. | |||||||||
The Company is not able to establish VSOE for each deliverable. Whenever VSOE cannot be established, the Company reviews the offerings of competitors to determine whether TPE can be established. TPE is determined based on the prices charged by the Company’s competitors for a similar deliverable when sold separately. It may be difficult to obtain sufficient information on competitor pricing to substantiate TPE and therefore the Company may not always be able to use TPE. The Company also uses BESP to determine the selling price of certain deliverables, primarily for certain printed materials which have historically been priced on a bundled basis with related online materials. The determination of BESP considers the anticipated margin on that deliverable, the selling price and profit margin for similar parts or services, and the Company’s ongoing pricing strategy and policies. The Company analyzes the selling prices used in the allocation of arrangement consideration at least annually. Selling prices are analyzed on a more frequent basis if a significant change in the business necessitates a more timely analysis or if the Company experiences significant variances in selling prices. | |||||||||
In some cases, such as the Company’s blended learning solution Language! Live, printed materials and related services do not qualify as separate units of accounting. When this occurs, all deliverables associated with the sale are recognized over the life of the on-line subscription which is typically a school year. | |||||||||
The Company enters into agreements to license or sell certain publishing rights and content. The Company recognizes the revenue from these agreements when the license amount is fixed and determinable, collection is reasonably assured, and when either the license period, if applicable, has commenced or transfer of content, if applicable, has occurred. Shipments to school book depositories are on consignment and revenue is recognized based on shipments from the depositories to the schools. | |||||||||
Learning A-Z and ExploreLearning | |||||||||
The Learning A-Z and ExploreLearning segments derive revenue exclusively from sales of online subscriptions to their reading, math and science teaching websites and related training and professional development. Typically, the subscriptions are for a twelve month period (although they can be for longer periods) and the revenue is recognized ratably over the period the online access is available to the customer. Any training or professional development related to an online subscription is recognized over the same period of online access. | |||||||||
Kurzweil/IntelliTools | |||||||||
The Kurzweil/Intellitools segment derives revenue from either an online subscription or from the delivery of software or hardware. Subscription revenues are recognized ratably over the period the online access is available to the customer. Software and hardware sales are recognized when shipped or provided to customers. Maintenance and support services for the Company’s software can include telephone support, bug fixes, and, for certain products, rights to upgrades and enhancements on a when-and-if available basis. On-line services include access to digital content including literacy tools, cloud storage and the ability to individualize assignments. These services are recognized on a straight-line basis over the period they are provided. In certain instances, telephone support and software repairs are provided for free within the first three months of licensing the software. The cost of providing this service is insignificant, and is accrued at the time of revenue recognition. | |||||||||
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 $0.7 million and $0.4 million at yearend 2013 and 2012, respectively. 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 returns as well as other factors that in the Company’s judgment could reasonably be expected to cause sales returns to differ from historical experience. A reconciliation of the accounts receivable reserve is shown in the table below for the periods indicated: | |||||||||
(in thousands) | 2013 | 2012 | |||||||
Beginning accounts receivable reserve | $ | 431 | $ | 925 | |||||
Charged to costs and expenses | 9 | 48 | |||||||
Charged to other accounts (1) | 358 | (514 | ) | ||||||
Write-offs | (63 | ) | (28 | ) | |||||
Ending accounts receivable reserve | $ | 735 | $ | 431 | |||||
-1 | Changes in sales return reserve. | ||||||||
Net Loss per Common Share. Basic net loss per common share is computed by dividing net 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 loss per common share is computed by dividing net 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 loss per common share is shown in the table below for the periods indicated: | |||||||||
For the Years Ended December 31, | |||||||||
(in thousands) | 2013 | 2012 | |||||||
Basic | 47,040 | 49,395 | |||||||
Dilutive effect of awards | - | - | |||||||
Diluted | 47,040 | 49,395 | |||||||
Antidilutive securities: | |||||||||
Options | 2,367 | 3,758 | |||||||
Warrants | - | 282 | |||||||
Restricted stock | 2 | 49 | |||||||
Cash and Cash Equivalents. The Company considers all highly liquid investments with maturities of three months or less (when purchased) to be cash equivalents. The carrying amount reported in the Consolidated Balance Sheets approximates fair value. | |||||||||
Inventory. Inventory is stated at the lower of cost, determined using the first-in, first-out (FIFO) method, or market, and consists of finished goods. The Company reduces slow-moving or obsolete inventory to net realizable value. Inventory values are maintained at an amount that management considers appropriate based on factors such as the inventory aging, historical usage of the product, future sales forecasts, and product development plans. Inventory values are reviewed on a periodic basis. | |||||||||
Restricted Assets. Restricted assets consist of funds placed in a rabbi trust pursuant to the merger agreement for the purpose of funding certain obligations acquired in the VLCY merger, mostly deferred compensation, pension, and employee related obligations, and, at December 31, 2012, an escrow of funds subject to the Contingent Value Rights (“CVR”) described in Note 13. | |||||||||
Property and Equipment. Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed over the assets’ estimated useful lives using the straight-line method. Estimated lives are as follows. | |||||||||
Estimated Useful Life | |||||||||
Machinery and equipment | 5 – 15 years | ||||||||
Furniture and fixtures | 8 years | ||||||||
Computer equipment and software | 3 – 5 years | ||||||||
Leasehold improvements | Lesser of useful life or lease term | ||||||||
Expenditures for maintenance and repairs, as well as minor renewals, are charged to operations as incurred, while improvements and major renewals are capitalized. | |||||||||
Purchased and Developed Software. Purchased and developed software includes the costs to purchase third party software and to develop internal-use software, which includes software as a service offered to customers with an online subscription. The Company follows applicable guidance for the costs of computer software developed or obtained for internal use for capitalizing software projects. Software costs are amortized over the expected economic life of the product, generally three to five years. At December 31, 2013 and 2012, unamortized capitalized software was $14.4 million and $14.8 million, respectively, which included amounts of software under development of $1.1 million and 3.5 million, respectively. | |||||||||
Acquired Curriculum and Technology. Acquired curriculum and technology represents curriculum and developed technology acquired in the acquisitions of Headsprout in 2013, VLCY in 2009, and Cambium Learning in 2007 and is the initial purchase accounting value placed on the past development and refinement of the core methodologies, processes, measurement techniques, and technologies by which the Company structures curriculum. Prior to its impairment in the fourth quarter of 2013, acquired curriculum and technology also included assets acquired in the acquisition of Class.com in 2011. Acquired curriculum and technology is being amortized using an accelerated method over six to seven years, as it has an economic benefit declining over the estimated useful life. The Company periodically reviews the recoverability of the acquired curriculum and technology based on expected net realizable value, and generally retires the assets once fully depreciated. Acquired curriculum and technology is presented net of accumulated amortization of $15.1 million and $12.7 million as of yearend 2013 and 2012, respectively. | |||||||||
See Note 7 and Note 13 herein for further discussion of the Company’s review of its acquired curriculum and technology assets and the related impairment charge recognized in the years ended December 31, 2013 and 2012. | |||||||||
Acquired Publishing Rights. A publishing right allows the Company to publish and republish existing and future works, as well as transform, adapt, or create new works based on previously published materials. The Company determines the fair market value of the publishing rights arising from business combinations by discounting the after-tax cash flows projected to be derived from the publishing rights and titles to their net present value using a rate of return that accounts for the time value of money and the appropriate degree of risk. The useful life of the publishing rights is based on the lives of the various titles involved, which is generally ten years. The Company calculates amortization using either the straight-line method or the percentage of the projected discounted cash flows derived from the titles in the current year as a percentage of the total estimated discounted cash flows over the remaining useful life. The Company periodically reviews the recoverability of the publishing rights based on expected net realizable value, and generally retires the assets once fully depreciated. Acquired publishing rights are presented net of accumulated amortization of $21.5 million and $18.6 million as of yearend 2013 and 2012, respectively. | |||||||||
See Note 7 herein for further discussion of the Company’s review of its acquired publishing rights and the related impairment charge recognized in the year ended December 31, 2012. | |||||||||
Pre-Publication Costs. The Company capitalizes certain pre-publication costs of its curriculum including art, prepress, editorial, and other costs incurred in the creation of the master copy of its curriculum products. Pre-publication costs are amortized over the expected life of the education program, generally on an accelerated basis over a period of five years. The amortization methods and periods chosen reflect the expected sales generated by the education programs. The Company periodically reviews the recoverability of the capitalized costs based on expected net realizable value, and generally retires the assets once fully depreciated. Pre-publication costs are presented net of accumulated amortization of $18.3 million and $13.2 million as of yearend 2013 and 2012, respectively. Interest capitalized during 2013 and 2012 totaled $0.3 million and $0.5 million, respectively. During 2013 and 2012, the Company recorded impairment charges of $0.6 million and $1.5 million, respectively, related to expenditures capitalized as pre-publication costs for projects that were subsequently abandoned or determined to have no ongoing benefit to the Company. | |||||||||
See Note 13 herein for further discussion of the Company’s review of its pre-publication costs and the related impairment charges recognized in the years ended December 31, 2013 and 2012. | |||||||||
Goodwill and Other Intangible Assets. Goodwill and other intangible assets are related to the acquisitions of Headsprout in 2013, VLCY in 2009, and Cambium Learning in 2007. Other intangible assets include tradenames/trademarks, reseller networks, customer relationships/lists, and conference attendee relationships, which are being amortized on a straight-line basis over estimated lives ranging from six to sixteen years. Other intangible assets are presented net of accumulated amortization of $19.6 million and $17.8 million as of yearend 2013 and 2012, respectively. Prior to its impairment in the fourth quarter of 2013, other intangible assets also included assets acquired in the acquisition of Class.com in 2011. | |||||||||
See Note 7 and Note 13 herein for further discussion of the Company’s review of goodwill and other intangible assets and the related impairment charges recognized in the years ended December 31, 2013 and 2012. | |||||||||
Depreciation and Amortization. Depreciation and amortization for the years ended December 31, 2013 and 2012 was broken out as follows: | |||||||||
For the Years Ended December 31, | |||||||||
(in thousands) | 2013 | 2012 | |||||||
Acquired publishing rights | $ | 2,897 | $ | 7,952 | |||||
Acquired curriculum and technology | 3,687 | 8,315 | |||||||
Pre-publication costs | 5,115 | 4,466 | |||||||
Internally developed software related to product | 5,820 | 3,983 | |||||||
Total amortization included in cost of revenues | 17,519 | 24,716 | |||||||
Tradenames and trademarks | 492 | 1,154 | |||||||
Other intangible assets | 1,315 | 2,026 | |||||||
Property, equipment and software | 3,088 | 3,002 | |||||||
Total depreciation and amortization | |||||||||
included in operating expenses | 4,895 | 6,182 | |||||||
Total depreciation and amortization | $ | 22,414 | $ | 30,898 | |||||
Impairment of Long Lived Assets. The Company reviews the carrying value of definite-lived long lived assets for impairment whenever events or changes in circumstances indicate net book value may not be recoverable from the estimated undiscounted future cash flows. If the review indicates any assets are impaired, the impairment of those assets is measured as the amount by which the carrying amount exceeds the fair value as estimated by either quoted market prices or discounted cash flows. Assets to be disposed of are reported at the lower of the carrying amount or fair value less cost of disposal. The determination whether the Company’s definite-lived intangible assets are impaired involves significant assumptions and estimates, including projections of future cash flows, the percentage of future revenues and cash flows attributable to the intangible assets, asset lives used to generate future cash flows, and royalty relief savings attributable to trademarks. The impairments recognized in 2013 and 2012 are discussed in Note 13 to the Consolidated Financial Statements. | |||||||||
Deferred Costs. Certain up-front costs associated with completing the sale of the Company’s products are deferred and recognized as the related revenue is recognized. | |||||||||
Advertising Costs. The Company may ship products to prospective customers as samples. Samples costs are expensed to sales and marketing expense upon shipment and totaled $1.1 million and $1.5 million for the years ended December 31, 2013 and 2012, respectively. Other costs of advertising, which include advertising, print, and photography expenses, are expensed as incurred and totaled $1.6 million and $2.0 million for the years ended December 31, 2013 and 2012, respectively. The Company recognizes catalog expense when the catalog is mailed to potential customers. | |||||||||
Income Taxes. Provision is made for the expense, or benefit, associated with taxes based on income. The provision for income taxes is based on laws currently enacted in every jurisdiction in which the Company does business and considers laws mitigating the taxation of the same income by more than one jurisdiction. Significant judgment is required in determining income tax expense, current tax receivables and payables, deferred tax assets and liabilities, and valuation allowance recorded against the net deferred tax assets. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, taxable income in prior carryback years, loss carryforward limitations, and tax planning strategies in assessing whether deferred tax assets will be realized in future periods. If, after consideration of these factors, management believes it is more likely than not that a portion of the deferred tax assets will not be realized, a valuation allowance is established. The amount of the deferred tax asset considered realizable could be reduced if estimates of future taxable income during the carryforward period are reduced. | |||||||||
The Company recognizes liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if available evidence indicates that it is more likely than not that the position will be sustained on audit. The second step requires the Company to estimate and measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The Company reevaluates its uncertain tax positions on a periodic basis, based on factors such as changes in facts and circumstances, changes in tax law, effectively settled issues under audit and new audit activity. The Company accrues interest and penalties, if any, related to unrecognized tax benefits as a component of income tax expense. | |||||||||
Royalty Advances. Royalty advances to authors are capitalized and represent amounts paid in advance of the sale of an author’s product. These costs are then expensed as the related publication is sold. The Company evaluates advances periodically to determine if they are expected to be utilized and reserves any portion of a royalty advance that is not expected to be recovered. | |||||||||
Sales Taxes. The Company reports sales taxes collected from customers and remitted to governmental authorities on a net basis. Sales tax collected from customers is excluded from revenues. Collected but unremitted sales tax is included as part of Accrued Expenses in the accompanying Consolidated Balance Sheets. | |||||||||
Stock-Based Compensation. The Company accounts for its stock-based compensation in accordance with applicable accounting guidance for share-based payments. This guidance requires all share-based payments to be recognized in the Consolidated Statements of Operations based on their fair values. Compensation costs for awards with graded vesting are recognized on a straight-line basis over the anticipated vesting period. | |||||||||
Recently Issued Financial Accounting Standards. In July 2013, new guidance was issued which states that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. This guidance is effective prospectively for reporting periods beginning after December 15, 2013. The Company does not expect the adoption of this standard to have a significant impact on the Company’s results of operations or financial position. | |||||||||
Embezzlement_Related_Expense
Embezzlement Related Expense | 12 Months Ended |
Dec. 31, 2013 | |
Embezzlement Related Expense | ' |
Note 3 — Embezzlement Related Expense | |
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 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. | |
During the third quarter of 2013, the Company substantially completed the recovery and sale of property related to the employee embezzlement matter. The net expense recorded in the year ended December 31, 2013 was primarily due to reductions 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 year ended December 31, 2013, shares under the warrant were increased by 17,864. Additionally, as the number of shares exercisable under the warrant is now substantially finalized and no other significant contingencies remain, these awards have been reclassified from Other Liabilities to Capital Surplus in the Consolidated Balance Sheet in accordance with relevant GAAP. | |
During the year ended December 31, 2012, the net expense recognized related to the embezzlement matter was due to a reduction in the estimated sales price of the recovered properties partially offset by a corresponding decline in the warrant liability. As a result of the recoveries during 2012, the number of shares of common stock issuable under the warrant was increased by 130,490 shares. Also, as the Company would be required to issue additional shares under the warrant when the final recovered property was sold, the Consolidated Balance Sheets at December 31, 2012 included Accrued Expenses of $0.1 million and Assets Held for Sale of $0.4 million. | |
See Note 17 to the Consolidated Financial Statements for further information on the warrant. |
Acquisitions
Acquisitions | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Acquisitions | ' | ||||||||
Note 4 — Acquisition of Headsprout | |||||||||
On December 23, 2013, LAZEL, Inc., a wholly owned subsidiary of the Company completed the acquisition of certain assets of Headsprout from Mimio, LLC. Headsprout has patented and award-winning adaptive software titles. The software has earned industry-wide respect for its effort in improving reading skills for students. Currently used in thousands of classrooms, learning labs, and homes, Headsprout became part of Learning A-Z's larger reading offering and is marketed and sold as Headsprout Early Reading and Headsprout Reading Comprehension. The Company believes the acquisition will be beneficial as it will increase its digital subscription product offerings and the purchased assets add proven, student-facing phonics and comprehension resources to its Learning A-Z segment. Due to the timing of the transaction and future integration activities, the acquisition did not significantly impact net income in 2013 and is not expected to be accretive to the Company’s net income in 2014. | |||||||||
The transaction was accounted for as a purchase transaction with the Company acquiring certain of Headsprout’s assets for $4.0 million. Of the total purchase price, $3.6 million was paid in January 2014 and the remaining $0.4 million will be paid 18 months after the closing date subject to the holdback provisions of the purchase agreement. Therefore, this acquisition was treated as a non-cash transaction for the purposes of the Consolidated Statements of Cash Flows included herein. The Consolidated Financial Statements of the Company include the results of Headsprout from December 23, 2013, the date of acquisition. The following represents the allocation of the purchase price: | |||||||||
(in thousands) | |||||||||
Accounts receivable | $ | 268 | |||||||
Intangible assets | 3,859 | ||||||||
Deferred revenue | (455 | ) | |||||||
Accrued expenses | (110 | ) | |||||||
Goodwill | 438 | ||||||||
Total net assets acquired | $ | 4,000 | |||||||
The Goodwill resulting from this acquisition is not expected to be tax deductible. | |||||||||
Other identified intangibles acquired consist of the following: | |||||||||
(in thousands) | Asset Value | Useful Life | |||||||
Curriculum and technology | 3,579 | 7 years | |||||||
Tradenames and trademarks | 280 | 15 years | |||||||
Supplemental Pro Forma Information | |||||||||
After the December 23, 2013 acquisition date, the Headsprout acquisition did not make a contribution to the 2013 results of the Company’s Learning A-Z segment. The following unaudited supplemental pro forma information presents the results of operations as if the Headsprout acquisition occurred at the beginning of the reporting period: | |||||||||
Year Ended December 31, | |||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
(unaudited) | |||||||||
Net revenues | $ | 153,122 | $ | 151,687 | |||||
Loss before income taxes | (16,019 | ) | (137,969 | ) | |||||
Net loss | (16,206 | ) | (138,250 | ) | |||||
Net loss per share - basic and diluted | (0.34 | ) | (2.80 | ) | |||||
The supplemental pro forma information has been adjusted to include: | |||||||||
· | the pro forma impact of the amortization of intangible assets and the reduction in deferred revenue based on the purchase price allocation and | ||||||||
· | the pro forma tax effect of the merger, which was adjusted to remain consistent with the tax rate of the Company. | ||||||||
The pro forma results are presented for illustrative purposes only and do not reflect the realization of potential cost savings, or any integration costs. These pro forma results do not purport to be indicative of the results that would have actually been obtained if the acquisition occurred at the beginning of the respective reporting periods, nor is the pro forma data intended to be a projection of future results. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Income Taxes | ' | ||||||||
Note 5 — Income Taxes | |||||||||
Losses before income taxes for the years ended December 31, 2013 and 2012 were primarily attributable to the United States. | |||||||||
Income tax expense attributable to income included the following: | |||||||||
Years Ended December 31, | |||||||||
(in thousands) | 2013 | 2012 | |||||||
Current income tax expense: | |||||||||
United States federal | $ | - | $ | 2 | |||||
State and local | 218 | 376 | |||||||
Current income tax expense | 218 | 378 | |||||||
Deferred income tax expense: | |||||||||
United States federal | 49 | 49 | |||||||
State and local | (102 | ) | (155 | ) | |||||
Deferred income tax expense | (53 | ) | (106 | ) | |||||
Income tax expense | $ | 165 | $ | 272 | |||||
Reconciliation of income tax expense and the domestic federal statutory income tax benefit is as follows: | |||||||||
Years Ended December 31, | |||||||||
(in thousands) | 2013 | 2012 | |||||||
Statutory federal income tax benefit | $ | (4,931 | ) | $ | (46,729 | ) | |||
Increase (reduction) from: | |||||||||
State taxes (net of federal benefit) | 116 | 221 | |||||||
Goodwill impairment | - | 23,413 | |||||||
Change in valuation allowance | 4,773 | 24,269 | |||||||
Other | 207 | (902 | ) | ||||||
Income tax expense | $ | 165 | $ | 272 | |||||
Deferred income taxes are primarily provided for temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities. | |||||||||
The tax effects of each type of temporary difference and carryforward that give rise to a significant portion of deferred tax assets (liabilities) at the end of fiscal 2013 and 2012 were as follows: | |||||||||
(in thousands) | 2013 | 2012 | |||||||
Deferred tax assets are attributable to: | |||||||||
Net operating loss carryforwards | $ | 25,589 | $ | 23,910 | |||||
Tax credit carryforwards | 7,622 | 7,622 | |||||||
Reserves | 4,546 | 4,897 | |||||||
Inventory | 5,552 | 6,210 | |||||||
Deferred financing costs | 1,589 | 1,036 | |||||||
Fixed assets | 1,691 | 1,303 | |||||||
Deferred revenue | 2,959 | 1,987 | |||||||
Intangibles | 5,391 | - | |||||||
Other | 1,867 | 1,555 | |||||||
Total gross deferred tax assets | 56,806 | 48,520 | |||||||
Valuation allowance | (51,849 | ) | (47,076 | ) | |||||
Net deferred tax assets | 4,957 | 1,444 | |||||||
Deferred tax liabilities are attributable to intangibles | (4,991 | ) | (1,580 | ) | |||||
Net deferred tax liability | $ | (34 | ) | $ | (136 | ) | |||
The deferred tax asset (liability) is classified as follows: | |||||||||
(in thousands) | 2013 | 2012 | |||||||
Short-term deferred tax asset | $ | 536 | $ | 137 | |||||
Long-term deferred tax liability | (570 | ) | (273 | ) | |||||
Net deferred tax liability | $ | (34 | ) | $ | (136 | ) | |||
The net increase in the valuation allowance in 2013 and 2012 was $4.8 million and $24.3 million, respectively. The valuation allowance increased primarily because it offset the increase in the deferred tax asset derived from pre-tax losses. As of December 31, 2013, there is no amount of the valuation allowance for which subsequently recognized benefits will be allocated to reduce goodwill. | |||||||||
At December 31, 2013, the amounts and expiration dates of loss and tax credit carryforwards were as follows: | |||||||||
(in thousands) | Amount as of December 31, 2013 | Expire or start expiring at the end of: | |||||||
U.S. net operating loss (1) | $ | 71,114 | 2028 | ||||||
State net operating loss carryforward (net): | |||||||||
State tax net operating losses | 2,542 | 2014 - 2028 | |||||||
Tax credits: | |||||||||
Minimum tax credit | 7,444 | Carry forward indefinitely | |||||||
Other tax credits | 178 | 2014 - 2021 | |||||||
Total tax credits | $ | 7,622 | |||||||
-1 | $27.8 million of the U.S net operating loss (NOL) above is related to the VLCY acquisition. The utilization of this NOL is subject to an annual limitation of $7.1 million. | ||||||||
Income taxes paid, net of tax refunds, were $0.1 million and $0.5 million for fiscal years 2013 and 2012, respectively. | |||||||||
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 the financial statements. For each position, the difference between the benefit realized on the Company’s tax return and the benefit reflected in the financial statements is recorded to Other Liabilities on the Consolidated Balance Sheets 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. | |||||||||
A reconciliation of the change in the UTB balance from January 1, 2013 to December 31, 2013, and January 1, 2012 to December 31, 2012, is as follows: | |||||||||
(in thousands) | 2013 | 2012 | |||||||
Balance at the beginning of the year | $ | 7,141 | $ | 7,141 | |||||
Decreases for expiration of the statute of limitations | (752 | ) | - | ||||||
Balance at the end of the year | $ | 6,389 | $ | 7,141 | |||||
Included in the balance of unrecognized tax benefits at December 31, 2013 are approximately $0.9 million of tax benefits that, if recognized, would affect the effective tax rate. The recognition of the remaining uncertain tax positions would not affect the effective tax rate, but would instead increase or would have increased available tax attributes. However, the recognition of the tax attribute would be offset by an increase in the deferred tax asset valuation allowance resulting in no net impact in the effective tax rate. | |||||||||
The Company recognizes interest accrued related to unrecognized tax benefits and penalties as income tax expense. Related to the unrecognized tax benefits noted above, the Company recognized no penalties and immaterial amounts for interest (gross) during 2013 and, as of December 31, 2013, has a liability for interest (gross) of approximately $0.2 million. | |||||||||
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. |
Property_Equipment_and_Softwar
Property, Equipment and Software | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Property, Equipment and Software | ' | ||||||||
Note 6 — Property, Equipment and Software | |||||||||
Balances of major classes of assets and accumulated depreciation and amortization consist of the following: | |||||||||
Year Ended December 31, | |||||||||
2013 | 2012 | ||||||||
Software | $ | 30,500 | $ | 24,395 | |||||
Machinery, computers and equipment | 6,870 | 5,352 | |||||||
Sublease asset (See Note 12) | 2,814 | 2,814 | |||||||
Leasehold improvements | 1,546 | 1,560 | |||||||
Furniture and fixtures | 1,494 | 1,414 | |||||||
Total | 43,224 | 35,535 | |||||||
Less accumulated depreciation and amortization | 22,909 | 14,514 | |||||||
Property, equipment and software, net | $ | 20,315 | $ | 21,021 | |||||
Goodwill_and_Other_Intangible_
Goodwill and Other Intangible Assets | 12 Months Ended | ||||||||||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | ' | ||||||||||||||||||||||||||||||||||||
Note 7 — Goodwill and Other Intangible Assets | |||||||||||||||||||||||||||||||||||||
Goodwill | |||||||||||||||||||||||||||||||||||||
The changes in the carrying amount of goodwill for the years ended December 31, 2013 and December 31, 2012 are as follows: | |||||||||||||||||||||||||||||||||||||
(in thousands) | Voyager Sopris Learning | Learning A-Z | ExploreLearning | Kurzweil/ IntelliTools | Total | ||||||||||||||||||||||||||||||||
Balance as of December 31, 2011 | |||||||||||||||||||||||||||||||||||||
Goodwill | $ | 178,456 | $ | 12,777 | $ | 6,947 | $ | 38,806 | $ | 236,986 | |||||||||||||||||||||||||||
Accumulated impairment losses | (104,245 | ) | - | - | (18,444 | ) | (122,689 | ) | |||||||||||||||||||||||||||||
74,211 | 12,777 | 6,947 | 20,362 | 114,297 | |||||||||||||||||||||||||||||||||
Goodwill impairment | (52,193 | ) | - | - | (14,700 | ) | (66,893 | ) | |||||||||||||||||||||||||||||
Goodwill from acquisitions | - | - | - | - | - | ||||||||||||||||||||||||||||||||
Balance as of December 31, 2012 | |||||||||||||||||||||||||||||||||||||
Goodwill | 178,456 | 12,777 | 6,947 | 38,806 | 236,986 | ||||||||||||||||||||||||||||||||
Accumulated impairment losses | (156,438 | ) | - | - | (33,144 | ) | (189,582 | ) | |||||||||||||||||||||||||||||
22,018 | 12,777 | 6,947 | 5,662 | 47,404 | |||||||||||||||||||||||||||||||||
Goodwill impairment | - | - | - | - | - | ||||||||||||||||||||||||||||||||
Goodwill from acquisitions | - | 438 | - | - | 438 | ||||||||||||||||||||||||||||||||
Balance as of December 31, 2013 | |||||||||||||||||||||||||||||||||||||
Goodwill | 178,456 | 13,215 | 6,947 | 38,806 | 237,424 | ||||||||||||||||||||||||||||||||
Accumulated impairment losses | (156,438 | ) | - | - | (33,144 | ) | (189,582 | ) | |||||||||||||||||||||||||||||
$ | 22,018 | $ | 13,215 | $ | 6,947 | $ | 5,662 | $ | 47,842 | ||||||||||||||||||||||||||||
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. | |||||||||||||||||||||||||||||||||||||
Relevant accounting guidance provides entities with the option of performing a “qualitative” assessment to determine if it is more-likely-than-not that goodwill might be impaired or a quantitative two-step goodwill impairment test. | |||||||||||||||||||||||||||||||||||||
When performing the two-step quantitative impairment test for all periods presented, the Company first determined the fair market value of each reporting unit to be tested using a weighted income and market approach. The income approach was dependent on multiple assumptions and estimates, including future cash flow projections with a terminal value multiple and the discount rate used to determine the expected present value of the estimated future cash flows. Future cash flow projections were based on management’s best estimates of economic and market conditions over the projected period, including industry fundamentals such as the state of educational funding, revenue growth rates, future costs and operating margins, working capital needs, capital and other expenditures, and tax rates. The discount rate applied to the future cash flows was a weighted-average cost of capital and took into consideration market and industry conditions, returns for comparable companies, the rate of return an outside investor would expect to earn, and other relevant factors. The fair values of each reporting unit also took into consideration a market approach, based on historical and projected multiples of certain guideline companies. If the carrying value of the reporting unit exceeds the fair value of that unit for the first step of the impairment test, then a second step was performed to determine the implied fair value of the reporting entity’s goodwill. The second step of the impairment test requires the allocation of the fair value of a reporting unit to all of the assets and liabilities of that reporting unit as if the reporting unit had been acquired in a business combination. If the carrying value of a reporting unit’s goodwill exceeds its implied fair value, then an impairment loss equal to the difference is recorded. | |||||||||||||||||||||||||||||||||||||
2013 Annual Impairment Analysis | |||||||||||||||||||||||||||||||||||||
The Company performed the 2013 annual impairment analysis using four reporting units: Voyager Sopris Learning, Learning A-Z, ExploreLearning and Kurzweil/IntelliTools. | |||||||||||||||||||||||||||||||||||||
For the 2013 annual impairment analysis, the Company elected to perform the optional qualitative assessment on the Learning A-Z and ExploreLearning reporting units. The qualitative assessment did not result in a conclusion that it was more-likely-than-not that goodwill was impaired and, therefore, it was not necessary to perform the two-step goodwill impairment test for the Learning A-Z and ExploreLearning reporting units. For the Voyager Sopris Learning and Kurzweil/Intellitools reporting units, the Company performed the quantitative two-step impairment test. As the calculated fair values of the Voyager Sopris Learning and Kurzweil/Intellitools reporting units exceeded their carrying values by at least 10%, no second step of testing was required. | |||||||||||||||||||||||||||||||||||||
2012 Annual Impairment Analysis | |||||||||||||||||||||||||||||||||||||
The Company performed the 2012 annual impairment analyses using four reporting units: Voyager Learning; Sopris Learning; the Learning A-Z and ExploreLearning product lines from the former Cambium Learning Technologies segment; and the Kurzweil and IntelliTools product lines from the former Cambium Learning Technologies segment. | |||||||||||||||||||||||||||||||||||||
For the 2012 annual impairment analysis, the Company elected to perform the optional qualitative assessment on the Learning A-Z/ExploreLearning reporting unit. The qualitative assessment did not result in a conclusion that it was more-likely-than-not that goodwill was impaired and, therefore, it was not necessary to perform the two-step goodwill impairment test for the Learning A-Z/ExploreLearning reporting unit. For the Voyager Learning, Sopris Learning and Kurzweil/Intellitools reporting units, the Company performed the quantitative two-step impairment test. The first step of the fiscal 2012 impairment test showed that the carrying value of the Voyager Learning reporting unit exceeded its fair value and that the second step of testing was required. The calculated fair values of the Sopris Learning and Kurzweil/Intellitools reporting units exceeded their carrying values by at least 10%; therefore, no second step of testing was required. | |||||||||||||||||||||||||||||||||||||
As a result of the second step of the Company’s fiscal 2012 impairment test, the goodwill balance for the Voyager Learning reporting unit was determined to be partially impaired, and an impairment charge of $52.2 million was recorded as of October 1, 2012. Order volumes for the Voyager Learning reporting unit declined in 2011 and 2012, and the Company’s estimates of future cash flows were impacted by expected continued funding pressure. | |||||||||||||||||||||||||||||||||||||
2012 Interim Impairment Analysis | |||||||||||||||||||||||||||||||||||||
During the quarter ended June 30, 2012, significant sustained sales declines in Kurzweil/IntelliTools caused the Company to re-evaluate the forecasts for this reporting unit. The Company determined that future sales for the Kurzweil/IntelliTools reporting unit 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. | |||||||||||||||||||||||||||||||||||||
The first step of impairment testing as of June 30, 2012 concluded that the carrying value of the Kurzweil/IntelliTools reporting unit exceeded its fair value and the second step of testing was required. As a result of the second step of the Company’s 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. | |||||||||||||||||||||||||||||||||||||
Intangible Assets | |||||||||||||||||||||||||||||||||||||
The Company’s definite lived intangible assets and related accumulated amortization at the end of fiscal 2013 and 2012 consist of the following: | |||||||||||||||||||||||||||||||||||||
(in thousands) | Balance at | Balance at | Balance at | ||||||||||||||||||||||||||||||||||
December 31, 2011 | Additions | Disposals | Impairments | December 31, 2012 | Additions | Disposals | Impairments | December 31, 2013 | |||||||||||||||||||||||||||||
Other intangible assets - gross book value: | |||||||||||||||||||||||||||||||||||||
Publishing rights | $ | 90,300 | $ | - | $ | (52,793 | ) | $ | (11,307 | ) | $ | 26,200 | $ | - | $ | - | $ | - | $ | 26,200 | |||||||||||||||||
Trademark | 18,028 | - | (6,286 | ) | (6,273 | ) | 5,469 | 280 | (1 | ) | (58 | ) | 5,690 | ||||||||||||||||||||||||
Customer relationships | 19,080 | - | (10,907 | ) | (822 | ) | 7,351 | - | - | - | 7,351 | ||||||||||||||||||||||||||
Acquired curriculum and technology | 53,112 | - | (21,750 | ) | (9,361 | ) | 22,001 | 3,579 | (259 | ) | (493 | ) | 24,828 | ||||||||||||||||||||||||
Reseller network | 12,300 | - | - | - | 12,300 | - | - | - | 12,300 | ||||||||||||||||||||||||||||
Conference attendees | 500 | - | - | - | 500 | - | - | - | 500 | ||||||||||||||||||||||||||||
Total other intangibles - gross book value | 193,320 | - | (91,736 | ) | (27,763 | ) | 73,821 | 3,859 | (260 | ) | (551 | ) | 76,869 | ||||||||||||||||||||||||
Other intangible assets - accumulated amortization: | |||||||||||||||||||||||||||||||||||||
Publishing rights | (63,439 | ) | (7,952 | ) | 52,793 | - | (18,598 | ) | (2,897 | ) | - | - | (21,495 | ) | |||||||||||||||||||||||
Trademark | (6,707 | ) | (1,154 | ) | 6,286 | - | (1,575 | ) | (492 | ) | 1 | - | (2,066 | ) | |||||||||||||||||||||||
Customer relationships | (14,337 | ) | (1,218 | ) | 10,907 | - | (4,648 | ) | (768 | ) | - | - | (5,416 | ) | |||||||||||||||||||||||
Acquired curriculum and technology | (26,116 | ) | (8,315 | ) | 21,750 | - | (12,681 | ) | (3,687 | ) | 259 | - | (16,109 | ) | |||||||||||||||||||||||
Reseller network | (10,289 | ) | (790 | ) | - | - | (11,079 | ) | (537 | ) | - | - | (11,616 | ) | |||||||||||||||||||||||
Conference attendees | (464 | ) | (18 | ) | - | - | (482 | ) | (10 | ) | - | - | (492 | ) | |||||||||||||||||||||||
Total other intangibles - accumulated amortization | (121,352 | ) | (19,447 | ) | 91,736 | - | (49,063 | ) | (8,391 | ) | 260 | - | (57,194 | ) | |||||||||||||||||||||||
Other intangible assets, net | $ | 71,968 | $ | (19,447 | ) | $ | - | $ | (27,763 | ) | $ | 24,758 | $ | (4,532 | ) | $ | - | $ | (551 | ) | $ | 19,675 | |||||||||||||||
2013 Intangible Asset Impairments | |||||||||||||||||||||||||||||||||||||
During the fourth quarter of 2013, the Company recorded impairment charges of $0.6 million related to the intangible assets of the Class.com product line. See Note 13 herein for further information on these impairments. | |||||||||||||||||||||||||||||||||||||
2012 Intangible Asset Impairments | |||||||||||||||||||||||||||||||||||||
The Voyager Learning reporting unit’s 2012 decline in order volume and impact of expected continued funding pressure on the Company’s estimates of future cash flows that resulted in goodwill impairment were also considered triggering events to review the recoverability of the definite-lived intangible assets associated with that unit. After determining that certain intangible assets would not be recovered with future undiscounted cash flows, the Company calculated an impairment loss for these assets equal to the excess of their carrying values over their fair values using the same date as the annual goodwill impairment analysis, October 1, 2012. Fair values were estimated using discounted cash flow analyses and were dependent on multiple assumptions and estimates, including future cash flow projections, the discount rate used to determine the expected present value of the estimated future cash flows, the percentage of the future revenues and cash flows attributable to each of the intangible assets, asset lives used to generate future cash flows, and royalty charges attributable to trademarks. Total impairment charges were $27.8 million for fiscal 2012. | |||||||||||||||||||||||||||||||||||||
The future cash flow projections used in the definite-lived impairment analyses were based on management’s best estimates of economic and market conditions over the projected period, including industry fundamentals such as the state of educational funding, revenue growth rates, future costs and operating margins, working capital needs, capital and other expenditures, and tax rates. The discount rate applied to the future cash flows was a weighted-average cost of capital and took into consideration market and industry conditions, returns for comparable companies, the rate of return an outside investor would expect to earn, and other relevant factors. | |||||||||||||||||||||||||||||||||||||
Estimated Future Amortization Expense | |||||||||||||||||||||||||||||||||||||
Estimated aggregate amortization expense expected for each of the next five years related to intangibles subject to amortization is as follows: | |||||||||||||||||||||||||||||||||||||
Amortization - | Amortization - | Total | |||||||||||||||||||||||||||||||||||
(in thousands) | Cost of Revenues | Operating Expense | Amortization | ||||||||||||||||||||||||||||||||||
2014 | $ | 5,454 | $ | 1,524 | $ | 6,978 | |||||||||||||||||||||||||||||||
2015 | 3,781 | 1,305 | 5,086 | ||||||||||||||||||||||||||||||||||
2016 | 2,339 | 1,115 | 3,454 | ||||||||||||||||||||||||||||||||||
2017 | 1,092 | 458 | 1,550 | ||||||||||||||||||||||||||||||||||
2018 | 380 | 357 | 737 | ||||||||||||||||||||||||||||||||||
Thereafter | 378 | 1,492 | 1,870 | ||||||||||||||||||||||||||||||||||
$ | 13,424 | $ | 6,251 | $ | 19,675 | ||||||||||||||||||||||||||||||||
Other_Current_Assets
Other Current Assets | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Other Current Assets | ' | ||||||||
Note 8 — Other Current Assets | |||||||||
Other Current Assets at the end of fiscal 2013 and 2012 consist of the following: | |||||||||
(in thousands) | 2013 | 2012 | |||||||
Deferred costs | $ | 4,968 | $ | 4,132 | |||||
Prepaid expenses | 1,369 | 1,599 | |||||||
Deferred taxes | 536 | 137 | |||||||
Other current assets | - | 24 | |||||||
Total | $ | 6,873 | $ | 5,892 | |||||
Other_Assets
Other Assets | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Other Assets | ' | ||||||||
Note 9 — Other Assets | |||||||||
Other Assets at the end of fiscal 2013 and 2012 consist of the following: | |||||||||
(in thousands) | 2013 | 2012 | |||||||
Deferred financing costs | $ | 4,541 | $ | 6,121 | |||||
Collateral investments | 1,971 | 1,969 | |||||||
Other | 1,776 | 1,542 | |||||||
Total | $ | 8,288 | $ | 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 Consolidated Financial Statements. |
Accrued_Expenses
Accrued Expenses | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Accrued Expenses | ' | ||||||||
Note 10 — Accrued Expenses | |||||||||
Accrued Expenses at the end of fiscal 2013 and 2012 consist of the following: | |||||||||
(in thousands) | 2013 | 2012 | |||||||
Salaries, bonuses and benefits | $ | 9,687 | $ | 7,593 | |||||
Accrued interest | 6,471 | 6,490 | |||||||
Headsprout acquisition accrual | 3,600 | - | |||||||
Accrued royalties | 1,649 | 1,399 | |||||||
Pension and post-retirement medical benefits | 1,214 | 1,218 | |||||||
Other | 2,658 | 3,830 | |||||||
Total | $ | 25,279 | $ | 20,530 | |||||
Accrued interest at December 31, 2013 and 2012 primarily relates to the Company’s 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. | |||||||||
The Headsprout acquisition accrual relates to the January 2014 payment of a portion of the total $4.0 million purchase price. The remainder of the purchase price will be paid 18 months after the closing date subject to the holdback provisions of the purchase agreement. See Note 4 herein for further information on the Headsprout acquisition. |
Other_Liabilities
Other Liabilities | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Other Liabilities | ' | ||||||||
Note 11 — Other Liabilities | |||||||||
Other Liabilities at the end of fiscal 2013 and 2012 consist of the following: | |||||||||
(in thousands) | 2013 | 2012 | |||||||
Pension and post-retirement medical benefits, long-term portion | $ | 10,241 | $ | 11,392 | |||||
Deferred rent | 1,201 | 1,457 | |||||||
Long-term income tax payable | 902 | 852 | |||||||
Long-term deferred tax liability | 570 | 273 | |||||||
Long-term deferred compensation | 491 | 503 | |||||||
Headsprout acquisition accrual | 400 | - | |||||||
Other | 149 | 654 | |||||||
Total | $ | 13,954 | $ | 15,131 | |||||
See Note 15 for further description of the Company’s pension benefits. | |||||||||
The Headsprout acquisition accrual relates to the final purchase price payment to be made 18 months after the closing date subject to the holdback provisions of the purchase agreement. See Note 4 herein for further information on the Headsprout acquisition. | |||||||||
Leases
Leases | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Leases | ' | ||||
Note 12 — Leases | |||||
Capital Lease Obligations | |||||
The Company leases a warehouse, office space and certain administrative equipment under capital lease agreements with original lease terms up to 10 years. Capital leases that exist as of yearend 2013 expire no later than 2016. | |||||
The Company has a build-to-suit lease for warehouse and office space in Frederick, Colorado with a minimum term through October 31, 2016. The lease is renewable at the Company’s option for two additional periods of five years each. The Company has an outstanding letter of credit in the amount of $1.0 million to secure the lease. At the lease inception date, the Company evaluated the provisions of the accounting guidance relating to the effect of a lessee’s involvement in an asset construction and concluded that due to the Company’s collateral to the landlord, in the form of the $1.0 million letter of credit, that it was deemed the owner of the land and building for accounting purposes. As a result, the related costs were capitalized and a corresponding liability was recorded in Capital Lease Obligations, Current and Capital Lease Obligations, Less Current Portion. | |||||
On February 15, 2012, the Company’s Board of Directors approved a plan to outsource warehouse operations to a third party logistics provider, Ozburn-Hessey Logistics, LLC (“OHL”), and to cease use of this leased facility. As a result of this decision, the Company determined it was more likely than not that the pattern of usage for the warehouse and related assets would change under the restructuring plan; therefore the Company evaluated the change in accordance with applicable accounting guidance. This evaluation resulted in an impairment to the value of the land, leasehold improvements, and building associated with the Company’s Frederick, Colorado facility and the estimated useful lives of the remaining assets were reduced to match the remaining minimum term of the lease. The remaining asset primarily represents the discounted cash flows expected from estimated sublease receipts. As a result of this action the related assets and liabilities were reduced by $7.7 million and impairment charges of $1.0 million were recorded as Impairment of Long-Lived Assets on the Consolidated Statements of Operations. The sublease of the warehouse facility began in July 2012 and has a minimum term through October 2016 with monthly rental payments totaling $0.1 million. The total sublease income through the end of the minimum term is expected to be $2.5 million. | |||||
The amount of the depreciation expense on the leased capital assets was $0.6 million and $0.4 million for the years ended December 31, 2013 and 2012. Additionally, the obligation will be reduced over the life of the lease at an interest rate of 5.54%. The gross value of assets leased under the build-to-suit lease of $2.8 million at December 31, 2013 and 2012 are included in the Sublease asset in Property, Equipment and Software as shown in Note 6 to the Consolidated Financial Statements. The accumulated amortization of these leased capital assets was $1.0 million and $0.4 million at December 31, 2013 and December 31, 2012, respectively. | |||||
The gross value of other leased capital assets used for administrative purposes was $1.2 million at December 31, 2013 and December 31, 2012. These assets are included in the Software category in Property, Equipment and Software. The accumulated amortization of leased capital assets was $1.1 million and $0.7 million at December 31, 2013 and December 31, 2012, respectively. Amortization of capital lease assets is recognized over the term of the lease on a straight line basis and included in depreciation and amortization expense. | |||||
Operating Leases | |||||
The Company leases certain facilities and equipment for production, selling and administrative purposes under agreements with original lease periods up to 10 years. Leases generally include provisions requiring payment of taxes, insurance, and maintenance on the leased property. Some leases may include renewal options, rent escalation clauses, or options to purchase the leased property during or at the end of the lease term. | |||||
Rent holidays and rent escalation provisions are considered in determining straight-line rent expense to be recorded over the lease term. The lease term begins on the commencement date defined in the relevant lease agreement. Lease renewal periods are considered on a lease-by-lease basis and are generally not included in the initial lease term. Operating rent expense was $2.0 million and $2.3 million for the years ended December 31, 2013 and 2012, respectively. Sublease income for existing operating leases was $0.1 million in the year ended December 31, 2013 and is expected to total $0.1 million through February 2015. | |||||
Future minimum build-to-suit lease payments at December 31, 2013 are as follows: | |||||
(in thousands) | |||||
2014 | $ | 1,138 | |||
2015 | 1,160 | ||||
2016 | 967 | ||||
Total minimum lease payments | 3,265 | ||||
Less: Amount representing interest | (251 | ) | |||
Present value of net minimum lease payments | 3,014 | ||||
Less: Current portion | (995 | ) | |||
Capital lease obligations, less current portion | $ | 2,019 | |||
Future minimum payments under all remaining non-cancelable operating leases are payable as follows: | |||||
(in thousands) | |||||
2014 | $ | 1,916 | |||
2015 | 1,527 | ||||
2016 | 1,431 | ||||
2017 | 1,465 | ||||
2018 | 948 | ||||
Thereafter | 20 | ||||
Total minimum lease payments | $ | 7,307 | |||
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Fair Value of Financial Instruments | ' | ||||||||||||||||
Note 13 — Fair Value of Financial Instruments | |||||||||||||||||
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 December 31, 2013, financial instruments include $68.0 million of cash and cash equivalents, restricted assets of $6.8 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 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. During the third quarter of 2013, the Company substantially completed the recovery and sale of property related to the employee embezzlement matter. As the number of shares exercisable under the warrant is now substantially finalized and no other significant contingencies remain, these awards have been reclassified from Other Liabilities to Capital Surplus in the Consolidated Financial Statements in accordance with relevant GAAP. | |||||||||||||||||
As of December 31, 2013, the fair value of the senior secured notes was $166.5 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 December 31, 2013 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Restricted Assets: | |||||||||||||||||
Money Market | $ | 6,835 | $ | 6,835 | $ | - | $ | - | |||||||||
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 in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Restricted Assets: | |||||||||||||||||
Money Market | $ | 11,141 | $ | 11,141 | $ | - | $ | - | |||||||||
Collateral Investments: | |||||||||||||||||
Money Market | 902 | 902 | - | - | |||||||||||||
Certificate of Deposit | 1,067 | 1,067 | - | - | |||||||||||||
Warrant | 310 | - | 310 | - | |||||||||||||
Assets held for sale: | |||||||||||||||||
Recovered Properties | 380 | - | 380 | - | |||||||||||||
CVRs | 7,599 | - | - | 7,599 | |||||||||||||
(in thousands) | Total Gains (Losses) for the Years Ended December 31, | ||||||||||||||||
Description | 2013 | 2012 | |||||||||||||||
Restricted Assets: | |||||||||||||||||
Money Market | $ | - | $ | - | |||||||||||||
Collateral Investments: | |||||||||||||||||
Money Market | - | - | |||||||||||||||
Certificate of Deposit | - | - | |||||||||||||||
Warrant | (53 | ) | 336 | ||||||||||||||
Assets held for sale: | |||||||||||||||||
Recovered Properties | (122 | ) | (958 | ) | |||||||||||||
CVRs | (74 | ) | (915 | ) | |||||||||||||
Contingent Value Rights | |||||||||||||||||
As part of the 2009 merger with 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 19 for further information on the Michigan tax matter. | |||||||||||||||||
During the years ended December 31, 2013 and 2012, losses of $0.1 million and $0.9 million were recorded in general and administrative expense to reflect changes in the estimated fair value of the CVR liability. 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 December 31, 2013 | $ | - | |||||||||||||||
(in thousands) | Fair Value Measurements Using Significant Unobservable Inputs (Level 3)CVRs | ||||||||||||||||
Fair Value as of December 31, 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 that are Measured at Fair Value on a Nonrecurring Basis | |||||||||||||||||
Assets and liabilities that are measured at fair value on a nonrecurring basis relate primarily to tangible fixed assets, goodwill and other intangible assets, which are remeasured when the derived fair value is below carrying value on the Consolidated Balance Sheets. For these assets, the Company does not periodically adjust carrying value to fair value except in the event of impairment. If it is determined that impairment has occurred, the carrying value of the asset is reduced to fair value and the difference is recorded within Income (loss) before interest, other income (expense) and income taxes in the Consolidated Statements of Operations. | |||||||||||||||||
Such assets and liabilities are listed below at their carrying values as of each reporting date: | |||||||||||||||||
(in thousands) | Value at Reporting Date Using | ||||||||||||||||
Description | As of December 31, 2013 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Goodwill | $ | 47,842 | $ | - | $ | - | $ | 47,842 | |||||||||
Property, equipment and software | 20,315 | - | - | 20,315 | |||||||||||||
Pre-publication costs, net | 13,401 | - | - | 13,401 | |||||||||||||
Acquired curriculum and technology intangibles, net | 8,719 | - | - | 8,719 | |||||||||||||
Acquired publishing rights, net | 4,705 | - | - | 4,705 | |||||||||||||
Other intangible assets, net | 6,251 | - | - | 6,251 | |||||||||||||
(in thousands) | Value at Reporting Date Using | ||||||||||||||||
Description | As of December 31, 2012 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
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 Years Ended December 31, | ||||||||||||||||
Description | 2013 | 2012 | |||||||||||||||
Goodwill | $ | - | $ | (66,893 | ) | ||||||||||||
Property, equipment and software | (319 | ) | (4,448 | ) | |||||||||||||
Pre-publication costs, net | (633 | ) | (1,496 | ) | |||||||||||||
Acquired curriculum and technology intangibles, net | (493 | ) | (9,361 | ) | |||||||||||||
Acquired publishing rights, net | - | (11,307 | ) | ||||||||||||||
Other intangible assets, net | (58 | ) | (7,095 | ) | |||||||||||||
2013 Impairments | |||||||||||||||||
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, during the third quarter of 2013 the Voyager Sopris Learning segment began considering strategic alternatives, including a potential sale of the Class.com assets. | |||||||||||||||||
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 likelihood of completing a sales transaction began to decline during the fourth quarter of 2013 and the sales effort was withdrawn in early 2014. The Company determined that this decline in estimated future cash flows related to the product line was a trigger event for performing another review of the recoverability of the related assets. Given that the Company plans to cease selling the product line after completion of its remaining service contracts, the related assets were determined to not be recoverable. As such, the Company performed an impairment analysis resulting in a total charge of $1.2 million. The impairment was allocated as follows: | |||||||||||||||||
(in thousands) | |||||||||||||||||
Description | |||||||||||||||||
Property, equipment and software | $ | (319 | ) | ||||||||||||||
Pre-publication costs, net | (230 | ) | |||||||||||||||
Acquired curriculum and technology intangibles, net | (493 | ) | |||||||||||||||
Other intangible assets, net | (58 | ) | |||||||||||||||
Other assets | (89 | ) | |||||||||||||||
Total | $ | (1,189 | ) | ||||||||||||||
Additionally, during the fourth quarter of 2013 the Company made a decision to terminate a development agreement with a third party. As a result of this decision, the Company recorded a $0.5 million impairment charge for pre-paid royalties in Other Assets and a $0.1 million impairment charge for contract settlement to Accrued Expenses. | |||||||||||||||||
The Company also recorded an impairment charge of $0.4 million during the fourth quarter of 2013 for previously capitalized development expenses that were determined to have no ongoing benefit to the Company, with the charge recorded to Pre-Publication Costs. | |||||||||||||||||
2012 Impairments | |||||||||||||||||
In accordance with the provisions in the accounting guidance for intangibles—goodwill and other, for the year ended December 31, 2012, goodwill with a carrying amount of $114.3 million was written down to $47.4 million, resulting in a goodwill impairment charge of $66.9 million, which was included in earnings for the period. See Note 7 above for further information on the Company’s impairment analyses. | |||||||||||||||||
During the year ended December 31, 2012, an Impairment of long-lived assets charge of $4.4 million was recorded related to the restructuring and reengineering plans discussed in Note 18 to the Consolidated Financial Statements. This charge was primarily due to the Company’s decision to outsource its warehouse operations to OHL and to cease use of its leased facility in Frederick, Colorado. As a result of this decision, the Company determined it was more likely than not that the pattern of usage for the warehouse facility and related assets would change under the restructuring plan. This change triggered an impairment analysis that resulted in charges of $1.0 million and $2.0 million related to the leased capital assets and other warehouse equipment, respectively. Additionally, as part of its ongoing process reengineering efforts, the Company determined during 2012 that certain of its internally developed software assets were going to be replaced or abandoned. The Company reviewed the affected assets and determined that only minimal parts of the prior capitalized amounts would be used in the future and concluded that it was appropriate to fully impair the assets. This decision resulted in additional impairment charges of $1.4 million. | |||||||||||||||||
Additionally, the Company recorded an Impairment of long-lived assets charge of $1.5 million related to expenditures capitalized as pre-publication costs in 2012 for a project that was subsequently abandoned. | |||||||||||||||||
See Note 7 to the consolidated financial statements above for further information on the impairments recognized for the Company’s Acquired Curriculum and Technology Intangibles, Acquired Publishing Rights, and Other Intangible Assets. |
Debt
Debt | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Debt | ' | ||||||||
Note 14 — Debt | |||||||||
Long-term debt consists of the following at December 31, 2013 and 2012: | |||||||||
December 31, | December 31, | ||||||||
(in thousands) | 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 | (509 | ) | (672 | ) | |||||
Total long-term debt | $ | 174,491 | $ | 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 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 December 31, 2013 and December 31, 2012 were $4.5 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 December 31, 2013, the balances of accounts receivable and inventory collateralizing the ABL Facility were $15.8 million and $9.2 million, respectively. As of December 31, 2013, the Company had a borrowing base under the ABL Loan Agreement of up to $8.7 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 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. 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. As of December 31, 2013, the Company was in compliance with this covenant. Subsequent to year end, the Company’s excess availability and fixed charge coverage ratios fell below the required thresholds, which put the Company in a Trigger Period as defined under the ABL Facility agreement. On March 5, 2014, the Company notified its ABL lenders of its intent to terminate the ABL Facility and expects the termination to be effective within five days of this notification. As the Company does not currently have any funds outstanding under the facility and does not anticipate any borrowing needs in the near term, the Company does not expect this to have any impact on its liquidity. |
ProfitSharing_Pension_and_Othe
Profit-Sharing, Pension, and Other Postretirement Benefit Plans | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Profit-Sharing, Pension, and Other Postretirement Benefit Plans | ' | ||||||||||
Note 15 — Profit-Sharing, Pension, and Other Postretirement Benefit Plans | |||||||||||
Defined Contribution Plans | |||||||||||
The Company’s 401(k) plan provides matching contributions of 50% of participant contributions up to 6%. Additionally, the Company may make discretionary contributions based upon exceeding Company performance targets of up to 2% of eligible earnings for all employees regardless of participation. The 401(k) matching contribution expense was $1.1 million and $1.1 million for the years ended December 31, 2013 and 2012, respectively. No discretionary contributions were made in 2013 or 2012. | |||||||||||
As a result of the acquisition of VLCY, the Company also has contractual obligations under a frozen replacement benefit plan (“RBP”) for a small number of terminated and retired executives and one current employee. Because the RBP is frozen, no participant can make or is entitled to additional contributions. Instead, the Company has accrued a liability totaling $0.5 million and $0.6 million as of yearend 2013 and 2012, respectively, to reflect its estimated future obligation for the RBP. The current portion of the RBP liability, which was $0.1 million and $0.1 million at yearend 2013 and 2012, respectively, is included on the line “Other” in Note 10. The long-term portion of the RBP liability, which was $0.4 million and $0.5 million at yearend 2013 and 2012, respectively, is included on the line “Long-term deferred compensation” in Note 11. | |||||||||||
Defined Benefit Plan | |||||||||||
As a result of the acquisition of VLCY, the Company also has a frozen defined benefit pension plan covering certain terminated and retired former domestic employees. The benefits are primarily based on years of service and/or compensation during the years immediately preceding retirement. The Company uses a measurement date of December 31 for its pension plan. | |||||||||||
Applicable accounting guidance for employers’ accounting for defined benefit pension and other postretirement plans requires reporting of the funded status of defined benefit postretirement plans as an asset or liability in the statement of financial position, recognizing changes in the funded status due to gains or losses, prior service costs, and net transition assets or obligations in other comprehensive income in the year the changes occur, adjusting other comprehensive income when the gains or losses, prior service costs, and net transition assets or obligations are recognized as components of net period benefit cost through amortization, and measuring the funded status of a plan as of the date of the statement of financial position, with limited exceptions. | |||||||||||
The net costs of the Company’s defined benefit pension plan for the years ended December 31, 2013 and 2012 are as follows: | |||||||||||
(in thousands) | 2013 | 2012 | |||||||||
Interest cost | $ | 419 | $ | 497 | |||||||
Recognized net actuarial (gain) loss | (384 | ) | 979 | ||||||||
Net pension and other postretirement benefit cost | $ | 35 | $ | 1,476 | |||||||
Obligation and Funded Status | |||||||||||
The funded status of the Company’s U.S. defined benefit pension plan at the end of fiscal 2013 and 2012 is as follows: | |||||||||||
(in thousands) | 2013 | 2012 | |||||||||
Change in Benefit Obligation | |||||||||||
Benefit obligation, beginning of period | $ | 12,571 | $ | 12,291 | |||||||
Service cost | - | - | |||||||||
Interest cost | 419 | 497 | |||||||||
Actuarial (gain) loss | (384 | ) | 979 | ||||||||
Benefits paid | (1,193 | ) | (1,196 | ) | |||||||
Benefit obligation, end of year | $ | 11,413 | $ | 12,571 | |||||||
Change in Plan Assets | |||||||||||
Fair value, beginning of period | $ | - | $ | - | |||||||
Company contributions | 1,193 | 1,196 | |||||||||
Benefits paid | (1,193 | ) | (1,196 | ) | |||||||
Fair value, end of year | $ | - | $ | - | |||||||
Unfunded status | $ | (11,413 | ) | $ | (12,571 | ) | |||||
Accrued benefit cost | $ | (11,413 | ) | $ | (12,571 | ) | |||||
Amounts recognized in the Consolidated Balance Sheets | |||||||||||
Current accrued benefit liability | $ | (1,172 | ) | $ | (1,179 | ) | |||||
Non-current accrued benefit liability | (10,241 | ) | (11,392 | ) | |||||||
Net amount recognized | $ | (11,413 | ) | $ | (12,571 | ) | |||||
The Company had a net actuarial (gain) loss of $(0.4) million and $1.0 million for its U.S. pension plan in the years ended December 31, 2013 and 2012, respectively. These amounts are included in Accumulated Other Comprehensive Income (Loss) in the Consolidated Balance Sheets. Of this amount, the Company recognized $0.1 million and $35 thousand as a component of net pension cost (income) during 2013 and 2012, respectively, and expects to recognize approximately $0.1 million in 2014. | |||||||||||
Plan Assumptions | |||||||||||
2013 | 2012 | ||||||||||
Discount rate | 4.25 | % | 3.5 | % | |||||||
The discount rate is determined by analyzing the average returns of high-quality fixed income investments defined as AA-rated or better. The Company also utilizes an interest rate yield curve for instruments with maturities corresponding to the benefit obligations. | |||||||||||
Additional Information | |||||||||||
For the Company’s U.S. defined benefit pension plan, the projected benefit obligation and accumulated benefit obligation at the end of fiscal 2013 and 2012 are as follows: | |||||||||||
(in thousands) | 2013 | 2012 | |||||||||
Projected benefit obligation | $ | 11,413 | $ | 12,571 | |||||||
Accumulated benefit obligation | 11,413 | 12,571 | |||||||||
Future Contributions | |||||||||||
Total contributions expected to be paid under the Company’s frozen U.S. retirement plans or to the beneficiaries thereof during fiscal 2014 are $1.2 million, consisting of $1.2 million to its U.S. defined benefit plan and $0.1 million to the RBP. | |||||||||||
Gross benefit payment obligations under the Company’s continuing plans for the next ten years are anticipated to be as follows: | |||||||||||
(in thousands) | U.S. Retirement Plans | ||||||||||
(Pension Plan and RBP) | |||||||||||
2014 | $ | 1,193 | |||||||||
2015 | 1,152 | ||||||||||
2016 | 1,109 | ||||||||||
2017 | 1,061 | ||||||||||
2018 | 1,016 | ||||||||||
2019 - 2023 | 4,366 | ||||||||||
Stockholders_Equity_Deficit
Stockholders' Equity (Deficit) | 12 Months Ended | |||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||
Stockholders' Equity (Deficit) | ' | |||||||||||||||||||||
Note 16 — Stockholders’ Equity (Deficit) | ||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||
Shares Authorized, Issued, and Outstanding. The Company is authorized to issue 150,000,000 shares of common stock, par value $0.001 per share. As of December 31, 2013, there were 51,208,331 shares of common stock issued, 45,042,401 shares of common stock outstanding, and an additional 4,896,721 shares of common stock reserved for issuance pursuant to the 2009 Equity Incentive Plan. | ||||||||||||||||||||||
Shares of the Company’s common stock are not convertible into or exchangeable for shares of any other class of capital stock. There are no redemption or sinking fund provisions applicable to the common stock. | ||||||||||||||||||||||
Treasury Stock. During 2012, the Company’s board of directors authorized a $5 million share repurchase program (the “Program”) through July 5, 2013. | ||||||||||||||||||||||
On June 28, 2012, the Company adopted a Rule 10b5-1 plan (the “Plan”) with Robert W. Baird & Company, Inc. under which the Company could repurchase its shares at times when the Company might otherwise be precluded from doing so under insider trading laws. This Plan was established pursuant to, and as part of, the Program. The timing and extent of the repurchases under the Rule 10b5-1 plan were subject to Securities and Exchange Commission regulations as well as certain price, market volume and timing constraints specified in the Plan. The Company began repurchasing shares under the terms of the Plan on July 5, 2012. On March 19, 2013, the Company’s board of directors authorized the termination of the Plan. | ||||||||||||||||||||||
Although the Plan was cancelled, the Program was extended for an additional one year period (through July 5, 2014) and the remaining authorization was reset to $5 million. | ||||||||||||||||||||||
Shares repurchased under the Plan | Other shares repurchased under the Program | Total shares repurchased under the Program | Cost of shares repurchased under the Program ($ thousands) | |||||||||||||||||||
2012 | 601,974 | 1,864,622 | 2,466,596 | $ | 2,597 | |||||||||||||||||
2013 | 193,858 | 1,861,969 | 2,055,827 | 4,619 | ||||||||||||||||||
Total | 795,832 | 3,726,591 | 4,522,423 | $ | 7,216 | |||||||||||||||||
To date in the first quarter of 2014, we have repurchased another $0.3 million under the Program. $0.3 million remains under the Program. | ||||||||||||||||||||||
Upon repurchase these treasury shares are no longer registered shares of the Company. These shares are recorded to the treasury stock line as an offset to common stock and additional paid in capital. | ||||||||||||||||||||||
Voting Rights . Each holder of shares of the Company’s common stock is entitled to one vote for each share held of record on the applicable record date on all matters submitted to a vote of stockholders, including the election of directors. | ||||||||||||||||||||||
Dividend Rights. Holders of the Company’s common stock are entitled to receive dividends when, as and if declared by the board of directors out of funds legally available for payment, subject to the rights of holders of the Company’s preferred stock, if any. The Company does not expect to pay dividends in the short term. | ||||||||||||||||||||||
Rights Upon Liquidation. In the event of a voluntary or involuntary liquidation, dissolution or winding up, the holders of the Company’s common stock will be entitled to share equally in any of the assets available for distribution after payment in full of all debts and after the holders of all series of the Company’s outstanding preferred stock, if any, have received their liquidation preferences in full. | ||||||||||||||||||||||
Preemptive Rights. In general, holders of the Company’s common stock have no preemptive rights to purchase, subscribe for or otherwise acquire any unissued or treasury shares or its other securities. However, under the terms of the stockholders agreement, entered into in connection with the mergers (the “Stockholders Agreement”) except with respect to specified exempt issuances, for so long as VSS-Cambium Holdings III, LLC and funds managed or controlled by VSS (collectively “VSS”) beneficially own in the aggregate at least 25% of the outstanding shares of the Company’s common stock, VSS has preemptive rights to purchase the Company’s common stock (or other securities that may be approved by the audit committee of the board of directors), in connection with any proposed securities offering by the Company. These preemptive rights generally give VSS the opportunity to purchase an amount of common stock (or such other securities as may be approved by the audit committee) in the new issuance sufficient to enable VSS to maintain their same collective percentage ownership following the new issuance. | ||||||||||||||||||||||
Preferred Stock | ||||||||||||||||||||||
Shares Authorized and Outstanding. The Company is authorized to issue 15,000,000 shares of preferred stock, par value $0.001 per share. As of December 31, 2013, there are no shares of preferred stock issued or outstanding. | ||||||||||||||||||||||
Blank Check Preferred Stock. Under the certificate of incorporation, without further stockholder action, the board of directors is authorized to provide for the issuance of shares of preferred stock in one or more series, to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of the shares of each such series and any qualifications, limitations or restrictions on such shares. The board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of the Company’s common stock. |
StockBased_Compensation_and_Ex
Stock-Based Compensation and Expense | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Stock-Based Compensation and Expense | ' | ||||||||||||||||||||||||
Note 17 — Stock-Based Compensation and Expense | |||||||||||||||||||||||||
The stock-based compensation and expense recorded was allocated as follows: | |||||||||||||||||||||||||
(in thousands) | 2013 | 2012 | |||||||||||||||||||||||
Cost of revenues | $ | 65 | $ | 51 | |||||||||||||||||||||
Research and development expense | 132 | 122 | |||||||||||||||||||||||
Sales and marketing expense | 124 | 114 | |||||||||||||||||||||||
General and administrative expense | 569 | 587 | |||||||||||||||||||||||
Total | $ | 890 | $ | 874 | |||||||||||||||||||||
As of December 31, 2013, the Company has one stock-based compensation plan, which is described below. The total income tax expense recognized for book purposes in the Consolidated Statement of Operations related to stock-based compensation was zero for the years ended December 31, 2013 and 2012. The total tax benefit realized was zero for all years presented. | |||||||||||||||||||||||||
Stock Option Plan | |||||||||||||||||||||||||
In fiscal 2009, the Company adopted the Cambium Learning Group, Inc. 2009 Equity Incentive Plan (“Incentive Plan”). Under the Incentive Plan, 5,000,000 shares of common stock were reserved for issuance. The Incentive Plan is administered by the board of directors which has the authority to establish the terms and conditions of awards granted under the Incentive Plan. Under the Incentive Plan, the Company can grant incentive stock options, non-statutory stock options, stock appreciation rights (“SARs”), restricted stock, restricted stock units, conversion stock options, conversion SARs, and other stock or cash awards. | |||||||||||||||||||||||||
Warrant | |||||||||||||||||||||||||
In connection with the completion of the merger with VLCY on December 8, 2009, the Company issued to VSS-Cambium Holdings III, LLC a warrant to purchase shares of the Company’s common stock (the “Holdings Warrant”). As of December 31, 2013, the Holdings Warrant was exercisable for 755,077 shares of the Company’s common stock at an exercise price of $0.01 per share. The Holdings Warrant expires on December 8, 2014. The number of shares of the Company’s common stock issuable under the Holdings Warrant is based upon the calculation of three separate amounts, described herein as the Cambium Specified Asset Recoupment Amount, the Additional Share Amount and the Formula Amount. The 755,077 shares that are exercisable, or will be exercisable upon issuance, represent 299,847 shares originating from the Cambium Specified Asset Recoupment Amount and 455,230 shares originating from the Formula Amount, which are summarized as follows: | |||||||||||||||||||||||||
· | The Cambium Specified Asset Recoupment Amount is based upon the net amount of recoveries that the Company received on and after June 1, 2009, including periods after the effective time of the mergers, with respect to the embezzlement matter that was discovered in April 2008. The Company has received net recoveries of approximately $4.3 million with respect to this matter. The Cambium Specified Asset Recoupment Amount equals 0.45 multiplied by the quotient of the aggregate net recoveries divided by $6.50. Therefore 299,847 shares are exercisable under the Holdings Warrant related to the Cambium Specified Asset Recoupment Amount. In accordance with applicable accounting guidance for distinguishing liabilities from equity, this award was initially recorded as a liability in the Other Liabilities line on the Consolidated Balance Sheets and measured at fair value. The initial recording of the award attributable to embezzlement recoveries is recorded to Embezzlement-Related Expense on the Consolidated Statements of Operations and subsequent changes in fair value are recorded to General and Administrative Expense. As no other significant contingencies remain related to the Cambium Specified Asset Recoupment Amount, it was reclassified from Other Liabilities to Capital Surplus in the Consolidated Balance Sheets during 2013. | ||||||||||||||||||||||||
· | The Additional Share Amount was calculated over a period commencing at the effective time of the mergers with VLCY and Cambium and ending two years thereafter. The Additional Share Amount was equal to the number of shares of VLCY common stock, if any, that were surrendered upon consummation of the VLCY merger in excess of the sum of the 29,874,145 shares that were known to be outstanding plus the number of shares of VLCY common stock that were issued upon the exercise of options known to be outstanding. Following completion of the merger with VLCY, 29,999 shares of VLCY common stock in excess of 29,874,145 shares were surrendered and, pursuant to the merger agreement, the number of shares of the Company’s common stock issuable to VSS-Cambium Holdings III, LLC was adjusted to increase the number of shares it received. At the effective time of the merger with VLCY all outstanding stock options were terminated. Thus, no Holdings Warrant was issued with respect to any shares relating to the Additional Share Amount. | ||||||||||||||||||||||||
· | The Formula Amount added shares to the Holdings Warrant only if, prior to completion of the mergers with Cambium and VLCY, equity cure payments were made under Cambium’s existing credit agreements, debt was retired under those agreements or payments were made to obtain default-related waivers under those agreements. The only applicable event was an equity cure payment of $3.0 million made in August 2009. The Formula Amount equals the equity cure payment of $3.0 million divided by $6.50, or 455,230 shares. Thus, 455,230 shares of the Company’s common stock are currently exercisable under the Holdings Warrant with respect to the Formula Amount. In accordance with applicable accounting guidance for distinguishing liabilities from equity, this award is recorded to equity with the offset to the capital contribution made to affect the debt cure. | ||||||||||||||||||||||||
Stock Options | |||||||||||||||||||||||||
2012 Grants | |||||||||||||||||||||||||
During the year ended December 31, 2012, the Company granted 235,000 options under the Incentive Plan with a total grant date fair value, net of forecasted forfeitures, of $0.2 million. Each of these options have a per-share exercise price equal to $4.50 and vest equally on the anniversary of the grant date over a four-year service period. The term of each of the options is ten years from the date of grant. | |||||||||||||||||||||||||
2013 Exchange Offer | |||||||||||||||||||||||||
During the third quarter of 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 Incentive 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 Incentive 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. A total of 40 Eligible Optionholders participated in the exchange offer. | |||||||||||||||||||||||||
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 2013 Grants | |||||||||||||||||||||||||
On July 30, 2013, the Company granted 377,500 options under the Incentive 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 Incentive 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. | |||||||||||||||||||||||||
On October 28, 2013, the Company granted 40,000 options under the Incentive Plan with a total grant date fair value, net of forecasted forfeitures, of $29 thousand. Each of these options have a per-share exercise price of $1.33 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. | |||||||||||||||||||||||||
On November 18, 2013, the Company granted 15,000 options under the Incentive Plan with a total grant date fair value, net of forecasted forfeitures, of $12 thousand. Each of these options have a per-share exercise price of $1.43 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 fair value of each stock-based compensation award granted is estimated on the date of grant using the Black-Scholes option-pricing model. The following assumptions were used in the Black-Scholes option-pricing model to estimate the fair value of the awards granted during the years ended December 31, 2013 and 2012: | |||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||
Expected stock volatility | 63.1% - 63.9 | % | 35 | % | |||||||||||||||||||||
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 | % | 0 | % | |||||||||||||||||||||
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 years ended December 31, 2013 and 2012. Options surrendered in the exchange offer of 1,757,500 options are included in “Cancelled/Forfeited” in the 2013 table below. | |||||||||||||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||||||||||
Grant Date | Beginning Outstanding | Granted | Cancelled/Forfeited | Ending Outstanding | |||||||||||||||||||||
8-Dec-09 | 1,550,000 | - | 1,550,000 | - | |||||||||||||||||||||
27-Jan-10 | 1,065,398 | - | 1,060,398 | 5,000 | |||||||||||||||||||||
25-May-10 | 92,401 | - | 92,401 | - | |||||||||||||||||||||
1-Feb-11 | 165,290 | - | 165,290 | - | |||||||||||||||||||||
21-Nov-11 | 150,000 | - | 70,842 | 79,158 | |||||||||||||||||||||
1-Dec-11 | 500,000 | - | 500,000 | - | |||||||||||||||||||||
8-Feb-12 | 195,000 | - | 195,000 | - | |||||||||||||||||||||
16-Apr-12 | 15,000 | - | 15,000 | - | |||||||||||||||||||||
14-May-12 | 25,000 | - | 14,802 | 10,198 | |||||||||||||||||||||
30-Jul-13 | - | 2,280,000 | 92,656 | 2,187,344 | |||||||||||||||||||||
19-Sep-13 | - | 30,000 | - | 30,000 | |||||||||||||||||||||
28-Oct-13 | - | 40,000 | - | 40,000 | |||||||||||||||||||||
18-Nov-13 | - | 15,000 | - | 15,000 | |||||||||||||||||||||
Total | 3,758,089 | 2,365,000 | 3,756,389 | 2,366,700 | |||||||||||||||||||||
Year Ended December 31, 2012 | |||||||||||||||||||||||||
Grant Date | Beginning Outstanding | Granted | Cancelled/Forfeited | Ending Outstanding | |||||||||||||||||||||
8-Dec-09 | 1,853,080 | - | 303,080 | 1,550,000 | |||||||||||||||||||||
27-Jan-10 | 1,255,926 | - | 190,528 | 1,065,398 | |||||||||||||||||||||
25-May-10 | 100,000 | - | 7,599 | 92,401 | |||||||||||||||||||||
1-Feb-11 | 198,640 | - | 33,350 | 165,290 | |||||||||||||||||||||
11-Aug-11 | 10,000 | - | 10,000 | - | |||||||||||||||||||||
21-Nov-11 | 150,000 | - | - | 150,000 | |||||||||||||||||||||
1-Dec-11 | 500,000 | - | - | 500,000 | |||||||||||||||||||||
8-Feb-12 | - | 195,000 | - | 195,000 | |||||||||||||||||||||
16-Apr-12 | - | 15,000 | - | 15,000 | |||||||||||||||||||||
14-May-12 | - | 25,000 | - | 25,000 | |||||||||||||||||||||
Total | 4,067,646 | 235,000 | 544,557 | 3,758,089 | |||||||||||||||||||||
Additionally, the conversion SARs with respect to 200,000 shares, which had been issued in replacement of share-based awards held by an employee of VLCY, expired during 2012. | |||||||||||||||||||||||||
Restricted Stock | |||||||||||||||||||||||||
During 2012, restricted common stock awards of 46,295 shares were issued. The restrictions on the common stock awards will lapse one year from the date of grant or upon a change in control of the Company. These awards were valued based on the Company’s closing stock price on the date of grant. The related restrictions lapsed on restricted common stock awards of 47,795 shares and 46,234 shares during the years ended December 31, 2013 and 2012, respectively. | |||||||||||||||||||||||||
Expense of $0.1 million and $0.2 million was recorded to general and administrative expense for outstanding restricted stock for the years ended December 31, 2013 and 2012, respectively. | |||||||||||||||||||||||||
Summary of Stock Option and SAR Activity | |||||||||||||||||||||||||
A summary of the stock option and restricted stock transactions for the year ended December 31, 2013 is as follows: | |||||||||||||||||||||||||
Stock Option Grantees | Restricted Stock | ||||||||||||||||||||||||
Weighted | Weighted | ||||||||||||||||||||||||
Average | Average | ||||||||||||||||||||||||
Shares | Exercise | Shares | Grant Date | ||||||||||||||||||||||
(000s) | Price | (000s) | Fair Value | ||||||||||||||||||||||
Awards outstanding at December 31, 2012 | 3,758 | $ | 4.89 | 50 | $ | 3.23 | |||||||||||||||||||
For the year ended December 31, 2013: | |||||||||||||||||||||||||
Granted | 2,365 | 1.3 | - | - | |||||||||||||||||||||
Exercised/Restricted Stock Vested | - | - | 48 | 3.25 | |||||||||||||||||||||
Forfeited/cancelled | 3,756 | 4.81 | - | - | |||||||||||||||||||||
Awards outstanding at December 31, 2013 | 2,367 | $ | 1.43 | 2 | $ | 3 | |||||||||||||||||||
Awards exercisable at December 31, 2013 | 653 | $ | 1.77 | ||||||||||||||||||||||
Weighted average fair value of awards granted during the year ended December 31, 2013 | $ | 0.67 | |||||||||||||||||||||||
A summary of the nonvested stock option transactions for the year ended December 31, 2013 is as follows: | |||||||||||||||||||||||||
Weighted | |||||||||||||||||||||||||
Average | |||||||||||||||||||||||||
Shares | Grant Date | ||||||||||||||||||||||||
(000s) | Fair Value | ||||||||||||||||||||||||
Nonvested awards outstanding at December 31, 2012 | 1,498 | $ | 0.98 | ||||||||||||||||||||||
For the year ended December 31, 2013: | |||||||||||||||||||||||||
Granted | 2,365 | 0.67 | |||||||||||||||||||||||
Vested | 856 | 0.77 | |||||||||||||||||||||||
Forfeited/cancelled | 1,293 | 0.96 | |||||||||||||||||||||||
Nonvested awards outstanding at December 31, 2013 | 1,714 | $ | 0.67 | ||||||||||||||||||||||
The total intrinsic value of options outstanding and exercisable as of December 31, 2013 was $0.8 million and $0.2 million, respectively. The total intrinsic value of options outstanding and exercisable as of December 31, 2012 was zero. The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock price of $1.66 of the Company’s common stock on December 31, 2013. The total grant date fair value of stock options granted during the years ended December 31, 2013 and 2012 was $1.6 million and $0.2 million, respectively. The total grant date fair value of restricted stock awards granted during the years ended December 31, 2013 and 2012 was zero and $0.2 million, respectively. | |||||||||||||||||||||||||
As of December 31, 2013, the total future compensation cost related to unvested stock options and restricted stock not yet recognized in the consolidated statements of operations was $1.1 million. Of that total, $0.4 million, $0.4 million and $0.3 million will be recognized in 2014, 2015 and 2016, respectively. To the extent the forfeiture rate is different than anticipated, stock-based compensation related to these awards will be adjusted in accordance with applicable accounting guidance for stock based compensation. | |||||||||||||||||||||||||
The following tables provide additional information with respect to stock options outstanding at the end of fiscal 2013: | |||||||||||||||||||||||||
Awards Outstanding | Awards Exercisable | ||||||||||||||||||||||||
Weighted | Weighted | ||||||||||||||||||||||||
Average | Weighted | Average | Weighted | ||||||||||||||||||||||
Number | Remaining | Average | Number | Remaining | Average | ||||||||||||||||||||
Range of | Outstanding | Contractual | Exercise | Exercisable | Contractual | Exercise | |||||||||||||||||||
Exercise Price | (000's) | Life (Years) | Price | (000's) | Life (Years) | Price | |||||||||||||||||||
$1.51 and below | 2,273 | 6.9 | $ | 1.3 | 559 | 6.8 | $ | 1.3 | |||||||||||||||||
$1.52 - $6.50 | 94 | 7.8 | 4.53 | 94 | 7.8 | 4.53 | |||||||||||||||||||
2,367 | 6.9 | $ | 1.43 | 653 | 6.9 | $ | 1.77 | ||||||||||||||||||
Securities Authorized for Issuance | |||||||||||||||||||||||||
Securities authorized for issuance under equity compensation plans at December 31, 2013 are as follows: | |||||||||||||||||||||||||
(in thousands, except per share amounts) | Number of securities to be | Weighted-average | Number of securities | ||||||||||||||||||||||
Plan Category | issued upon exercise of | exercise price of | remaining available | ||||||||||||||||||||||
outstanding options | outstanding options | for future issuance | |||||||||||||||||||||||
under equity | |||||||||||||||||||||||||
incentive plan (a) | |||||||||||||||||||||||||
Equity compensation plans approved by security holders | 2,367 | $ | 1.43 | 2,530 | |||||||||||||||||||||
Equity compensation plans not approved by security holders | — | — | — | ||||||||||||||||||||||
2,367 | $ | 1.43 | 2,530 | ||||||||||||||||||||||
Total | |||||||||||||||||||||||||
(a) | Excludes securities reflected in the first column, “Number of securities to be issued upon exercise of outstanding options and rights,” and issued restricted stock. |
Restructuring
Restructuring | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Restructuring | ' | ||||||||||
Note 18 — 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 Year Ended December 31, 2012 | Total Incurred as of December 31, 2012 | Total Amount Incurred Under the Plan | ||||||||
One-time termination benefits | $ | 2,507 | $ | 3,696 | $ | 3,696 | |||||
Impairment of long-lived assets | 4,448 | 4,448 | 4,448 | ||||||||
Warehouse transition costs | 1,003 | 1,003 | 1,003 | ||||||||
Facility rationalization costs | 209 | 209 | 209 | ||||||||
Process reengineering costs | 203 | 203 | 203 | ||||||||
$ | 8,370 | $ | 9,559 | $ | 9,559 | ||||||
Reengineering and restructuring charges were recorded to the following line items in the Consolidated Statements of Operations during the year ended December 31, 2012: $1.6 million to Cost of Revenues; $0.4 million to Research and Development Expense; $1.0 million to Sales and Marketing Expense; $0.6 million to General and Administrative Expense; $0.4 million to Shipping and Handling Costs; and $4.4 million to Impairment of Long-Lived Assets. All of these charges were recorded in unallocated shared services for segment reporting purposes. | |||||||||||
The change in the reengineering and restructuring accrual for the years ended December 31, 2012 and 2013 are as follows: | |||||||||||
(in thousands) | One-time Termination Benefits | ||||||||||
Balance as of December 31, 2011 | $ | 1,133 | |||||||||
Accrual changes | 2,507 | ||||||||||
Payments made | (2,812 | ) | |||||||||
Balance as of December 31, 2012 | 828 | ||||||||||
Accrual changes | (18 | ) | |||||||||
Payments made | (810 | ) | |||||||||
Balance as of December 31, 2013 | $ | - | |||||||||
Contingent_Liabilities
Contingent Liabilities | 12 Months Ended |
Dec. 31, 2013 | |
Contingent Liabilities | ' |
Note 19 — Contingent Liabilities | |
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. | |
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 $0.1 million as of December 31, 2013. | |
The Company has letters of credit outstanding as of December 31, 2013 in the amount of $2.9 million to support the build-to-suit lease, credit collections, and performance bonds for certain contracts. The Company maintains a $1.1 million certificate of deposit as collateral for the letters of credit relating to the workers’ compensation activity and 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. |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended | |
Dec. 31, 2013 | ||
Related Party Transactions | ' | |
Note 20 — Related Party Transactions | ||
Agreements with VSS | ||
Jeffrey Stevenson and David Bainbridge, each of whom serves on the Company’s board of directors, are both affiliates of VSS. Funds managed by VSS own a majority of the equity interests of VSS-Cambium Holdings III, LLC, which holds approximately 70% of the Company’s outstanding common stock. As such, VSS-Cambium Holdings III, LLC has the ability to determine the outcome of matters submitted to the Company’s stockholders for approval, including the election and removal of directors and any merger, consolidation or sale of all or substantially all of the Company’s assets, and will likely have the ability to control the Company’s management, affairs and operations. | ||
On December 8, 2009, the Company entered into a consulting fee agreement with VSS (the “Consulting Agreement”) entitling VSS to the following fees: (i) a fee equal to 1% of the gross proceeds of any debt or equity financing by the Company, and (ii) a fee equal to 1% of the enterprise value of any entities acquired or disposed of by the Company. These obligations will remain in effect until the earlier of the date on which funds managed by VSS cease to beneficially own at least 10% of the Company’s outstanding common stock or, unless the Company’s audit committee renews the Consulting Agreement, January 1, 2015. | ||
The Company and VSS agreed to amend the Consulting Agreement, effective March 19, 2013, and have entered into Amendment No. 1 to the Consulting Agreement (the "Amendment") such that, in addition to the fees currently payable to VSS thereunder, on January 1 of each calendar year, with the first payment payable to VSS as of January 1, 2013, VSS will be entitled to an annual payment of $70,000 for monitoring services for the then-current calendar year, provided that if an employee of VSS serves as Chairman of the Company’s Board of Directors (the "Board"), such fee is subject to a dollar-for-dollar reduction in the amount of the annual retainer received by such VSS employee (as contemplated by the Company’s then current board compensation program). | ||
The Amendment also allows VSS to designate from time to time one or more of its affiliates to receive any of the fees payable under the Consulting Agreement. | ||
The Amendment provides that these obligations will remain in effect until the earlier of the date on which VSS no longer has any employees serving on the Board, the date on which funds managed by VSS cease to beneficially own at least 10% of the Company’s outstanding common stock or, unless the Company’s audit committee renews the Consulting Agreement, January 1, 2017. | ||
VSS also currently receives an annual retainer of $65,000 each for the services of Mr. Stevenson and Mr. Bainbridge on the board of directors. In addition, VSS received a retainer of $70,000 in 2012 for the services of Scott Troeller as chairman of the board of directors. As previously disclosed, Mr. Troeller resigned from the board of directors on April 20, 2012. In total, VSS received $0.2 million in cash during 2013 and 2012 related to the services of these directors, plus reimbursement of out-of-pocket expenses. | ||
Stockholders Agreement | ||
The Company entered into the Stockholders Agreement on December 8, 2009, at the effective time of the mergers, with VSS-Cambium Holdings III, LLC and Vowel Representative, LLC, the stockholder representative for the former VLCY stockholders. | ||
Board of Directors. The Stockholders Agreement contains several agreements among the parties with respect to the board of directors. These provisions include an agreement by VSS-Cambium Holdings III, LLC to vote its shares of the Company’s common stock as necessary to ensure that the size of the board of directors was set at nine directors until December 8, 2012. These provisions also include an agreement by VSS-Cambium Holdings III, LLC not to vote its shares or take any other action to remove or disqualify any of the VLCY designees named as Class II directors (the “Voyager Class II designees”) or as Class III directors (the “Voyager Class III designees”), in each case other than for “cause” as determined in accordance with Delaware law, until the earliest to occur of: | ||
· | the written consent of Vowel Representative, LLC, which consent may be granted or withheld in its sole and absolute discretion; | |
· | the full distribution by the escrow agent of the CVR escrow fund in accordance with the terms of the escrow agreement entered into in connection with the merger transaction; | |
· | the second anniversary of the effective time of the mergers with respect to the Voyager Class II designees and the third anniversary of the effective time with respect to the Voyager Class III designees; or | |
· | the date on which funds managed or controlled by VSS cease to collectively beneficially own in the aggregate at least 10% of the issued and outstanding shares of the Company’s common stock. | |
VSS-Cambium Holdings III, LLC also has agreed that, until December 8, 2012, for so long as VSS-Cambium Holdings III, LLC and funds managed or controlled by VSS collectively beneficially own in the aggregate at least 10% of the issued and outstanding shares of the Company’s common stock: | ||
· | none of the funds managed or controlled by VSS nor VSS-Cambium Holdings III, LLC will vote or otherwise take any action to amend, modify or repeal the Company’s certificate of incorporation or bylaws to eliminate the Class II or Class III director classes, to increase or decrease the size of the board of directors or in any other manner that would result in a breach of the Stockholders Agreement; and | |
· | VSS-Cambium Holdings III, LLC and funds managed or controlled by VSS will vote or act by written consent to maintain a classified or staggered board of directors, with the director classes and other terms as set forth in the Company’s certificate of incorporation and bylaws. | |
Preemptive Rights. Except with respect to specified exempt issuances that are described below, so long as VSS-Cambium Holdings III, LLC and funds managed or controlled by VSS beneficially own in the aggregate at least 25% of the outstanding shares of the Company’s common stock, they will have preemptive rights to purchase the Company’s common stock (or such other securities as may be approved by the audit committee) in connection with any proposed issuance of securities after December 8, 2009. These preemptive rights generally give the holders of those rights the opportunity to purchase an amount of the Company’s securities in the new issuance that would enable the holders of those rights to maintain their same collective percentage ownership following the new issuance. Certain specified issuances of securities by the Company constitute “exempt issuances” and will not be subject to these preemptive rights. | ||
Walsh Consulting Agreement | ||
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. | ||
2012 Stock Repurchases | ||
During December 2012, the Company entered into stock purchase agreements with Foxhill Opportunity Fund, L.P. (“Foxhill Domestic Fund”) and Kellner Catalyst Master Fund, Ltd. (“Kellner Fund”) pursuant to its previously announced $5 million share repurchase program. See Note 16 to the consolidated financial statements for further information on the Program. Neil Weiner, a former member of the Company’s board of directors, as the managing member of Foxhill Capital Partners, LLC (which is the investment manager of Foxhill Domestic Fund), the managing member of Foxhill Capital (GP), LLC (which is the general partner of Foxhill Domestic Fund), and the Chief Investment Officer of Kellner Fund, may be deemed to beneficially own the shares of Common Stock held by Foxhill Domestic Fund and previously held by Kellner Fund. The transactions settled in December 2012 with the Company purchasing 1,042,979 shares for a total cost of $1.1 million. | ||
2012 Consulting Agreement | ||
During 2012, the Company entered into a $0.1 million consulting agreement with a former member of the Company’s board of directors, Richard Surratt. The agreement was completed during the fourth quarter of 2012 and the contracted amount was paid. In addition to this payment, Mr. Surratt also received $35,000 and common stock awards for his service on the board of directors, plus reimbursement of out-of-pocket expenses. |
Segment_Reporting
Segment Reporting | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Segment Reporting | ' | ||||||||||||||||||||||||
Note 21 — Segment Reporting | |||||||||||||||||||||||||
The Company’s geographic area of operation is predominantly the United States. Export or foreign sales to locations outside the United States was 10% and 6% of total sales for the years ended December 31, 2013 and 2012, respectively, with 5% and 4%, respectively, of total sales shipped to Canada. No single customer accounted for more than 10% of consolidated net revenues for any of the years presented. One single customer accounted for approximately 14% of the accounts receivable balance at December 31, 2013. Although the loss of a single customer or a few customers would not have a material adverse effect on the Company’s business, schedules of school adoptions, available funding for school districts, and market acceptance of the Company’s products can materially affect year-to-year revenue performance. The Company evaluates the performance of its operating segments based on income (loss) from operations before depreciation and amortization, interest income and expense, income taxes, and certain non-operational and non-cash items. The significant accounting policies of the reportable segments are the same as those for the Company. There were no inter-segment revenues or transfers. | |||||||||||||||||||||||||
The Company operates in 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: | |||||||||||||||||||||||||
Learning A-Z is a preK-6 educational resource company specializing in online delivery of leveled readers and other supplementary curriculum. Founded in 2002 to help teachers differentiate instruction and meet the unique needs of all students, Learning A-Z’s resources are currently used in over two thirds of the elementary schools in the United States and in 177 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 subscription-based websites provide online supplemental books, lessons, assessments, and other instructional resources for individual classrooms, schools, and districts. These solutions include: Reading A-Z, Raz-Kids, Science A-Z, Writing A-Z, Vocabulary A-Z, Headsprout Early Reading and Headsprout Comprehension. | |||||||||||||||||||||||||
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 | Learning A-Z | ExploreLearning | Kurzweil/ IntelliTools | Other | Consolidated | |||||||||||||||||||
Year ended December 31, 2013 | |||||||||||||||||||||||||
Product revenues | $ | 67,619 | $ | 33,483 | $ | 16,279 | $ | 10,418 | $ | - | $ | 127,799 | |||||||||||||
Service revenues | 22,721 | - | - | - | - | 22,721 | |||||||||||||||||||
Net revenues | 90,340 | 33,483 | 16,279 | 10,418 | - | 150,520 | |||||||||||||||||||
Cost of product revenues | 23,720 | 908 | 2,249 | 2,290 | - | 29,167 | |||||||||||||||||||
Cost of service revenues | 17,521 | - | - | - | - | 17,521 | |||||||||||||||||||
Amortization | - | - | - | - | 17,519 | 17,519 | |||||||||||||||||||
Total cost of revenues | 41,241 | 908 | 2,249 | 2,290 | 17,519 | 64,207 | |||||||||||||||||||
Other operating expenses | 31,115 | 13,607 | 9,152 | 4,486 | 16,746 | 75,106 | |||||||||||||||||||
Embezzlement related expense | - | - | - | - | 118 | 118 | |||||||||||||||||||
Depreciation and amortization | - | - | - | - | 4,895 | 4,895 | |||||||||||||||||||
Impairment of long-lived assets | 1,038 | - | - | - | 1,189 | 2,227 | |||||||||||||||||||
Net interest expense | - | - | - | - | 18,819 | 18,819 | |||||||||||||||||||
Other income, net | - | - | - | - | (764 | ) | (764 | ) | |||||||||||||||||
Income tax expense | - | - | - | - | 165 | 165 | |||||||||||||||||||
Segment net income (loss) | $ | 16,946 | $ | 18,968 | $ | 4,878 | $ | 3,642 | $ | (58,687 | ) | $ | (14,253 | ) | |||||||||||
Capital expenditures | $ | 7,110 | $ | 4,401 | $ | 1,462 | $ | 418 | $ | 2,724 | $ | 16,115 | |||||||||||||
(in thousands) | Voyager Sopris Learning | Learning A-Z | ExploreLearning | Kurzweil/ IntelliTools | Other | Consolidated | |||||||||||||||||||
Year ended December 31, 2012 | |||||||||||||||||||||||||
Product revenues | $ | 78,463 | $ | 26,189 | $ | 14,283 | $ | 11,225 | $ | - | $ | 130,160 | |||||||||||||
Service revenues | 18,399 | - | - | - | - | 18,399 | |||||||||||||||||||
Net revenues | 96,862 | 26,189 | 14,283 | 11,225 | - | 148,559 | |||||||||||||||||||
Cost of product revenues | 26,406 | 659 | 1,929 | 2,712 | 1,578 | 33,284 | |||||||||||||||||||
Cost of service revenues | 17,679 | - | - | - | - | 17,679 | |||||||||||||||||||
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 | |||||||||||||||||||
Embezzlement related expense | - | - | - | - | 516 | 516 | |||||||||||||||||||
Goodwill impairment | - | - | - | - | 66,893 | 66,893 | |||||||||||||||||||
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 18 to the Consolidated Financial Statements. |
Interim_Financial_Information_
Interim Financial Information (Unaudited) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Interim Financial Information (Unaudited) | ' | ||||||||||||||||||||
Note 22 — Interim Financial Information (Unaudited) | |||||||||||||||||||||
The following table presents the Company’s quarterly results of operations for fiscal 2013 and 2012. | |||||||||||||||||||||
(in thousands, except per share data) | First | Second | Third | Fourth | Total | ||||||||||||||||
Quarter | Quarter | Quarter | Quarter | Year | |||||||||||||||||
2013 | |||||||||||||||||||||
Net revenues | $ | 31,429 | $ | 42,786 | $ | 42,957 | $ | 33,348 | $ | 150,520 | |||||||||||
Cost of revenues | 11,403 | 12,647 | 12,950 | 9,688 | 46,688 | ||||||||||||||||
Other operating expenses | 24,679 | 25,138 | 25,194 | 24,854 | 99,865 | ||||||||||||||||
Earnings (loss) before income taxes | (9,010 | ) | 533 | 255 | (5,866 | ) | (14,088 | ) | |||||||||||||
Income tax (expense) benefit | (68 | ) | (102 | ) | (127 | ) | 132 | (165 | ) | ||||||||||||
Net income (loss) | (9,078 | ) | 431 | 128 | (5,734 | ) | (14,253 | ) | |||||||||||||
Basic income (loss) per share | $ | (0.19 | ) | $ | 0.01 | $ | - | $ | (0.13 | ) | $ | (0.30 | ) | ||||||||
Diluted income (loss) per share | $ | (0.19 | ) | $ | 0.01 | $ | - | $ | (0.13 | ) | $ | (0.30 | ) | ||||||||
2012 | |||||||||||||||||||||
Net revenues | $ | 27,855 | $ | 40,429 | $ | 45,958 | $ | 34,317 | $ | 148,559 | |||||||||||
Cost of revenues | 11,166 | 14,397 | 14,274 | 11,126 | 50,963 | ||||||||||||||||
Other operating expenses | 32,035 | 43,942 | 29,350 | 108,222 | 213,549 | ||||||||||||||||
Earnings (loss) before income taxes | (20,087 | ) | (22,500 | ) | (2,131 | ) | (88,793 | ) | (133,511 | ) | |||||||||||
Income tax (expense) benefit | (177 | ) | 23 | (104 | ) | (14 | ) | (272 | ) | ||||||||||||
Net income (loss) | (20,264 | ) | (22,477 | ) | (2,235 | ) | (88,807 | ) | (133,783 | ) | |||||||||||
Basic income (loss) per share | $ | (0.41 | ) | $ | (0.45 | ) | $ | (0.05 | ) | $ | (1.83 | ) | $ | (2.71 | ) | ||||||
Diluted income (loss) per share | $ | (0.41 | ) | $ | (0.45 | ) | $ | (0.05 | ) | $ | (1.83 | ) | $ | (2.71 | ) | ||||||
The net loss for the fourth quarter of 2013 includes an impairment of long-lived assets charge of $2.2 million. The net losses for the second and fourth quarters of 2012 include goodwill impairment charges of $14.7 million, and $52.2 million, respectively. Additionally, the net losses for the first through fourth quarters of 2012 include impairment of long-lived assets charges of $2.8 million, $0.3 million, $0.2 million, and $30.4 million, respectively. |
Subsidiary_Guarantor_Financial
Subsidiary Guarantor Financial Statements | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Subsidiary Guarantor Financial Statements (Unaudited) | ' | ||||||||||||||||||||
Note 23 — Subsidiary Guarantor Financial Statements | |||||||||||||||||||||
The following tables present condensed consolidated financial information as of December 31, 2013 and 2012 and for the twelve month periods ended December 31, 2013 and 2012 for: (a) the Company without its consolidated subsidiaries (the “Parent Company”); (b) on a combined basis, the guarantors of the Notes, which include Cambium Learning, Inc., Voyager Sopris Learning, Inc. (formerly Cambium Education, Inc.), LAZEL, Inc., and Kurzweil/IntelliTools, Inc. (the “Subsidiary Guarantors”); and (c) Voyager Learning Company (the “Non-Guarantor Subsidiary”). Separate financial statements of the Subsidiary Guarantors are not presented because the guarantors are unconditionally, jointly, and severally liable under the guarantees, and the Company believes such separate statements or disclosures would not be useful to investors. | |||||||||||||||||||||
Condensed Consolidated Statement of Operations | |||||||||||||||||||||
Twelve Months Ended December 31, 2013 | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||
Parent Company | Subsidiary Guarantors | Non-Guarantor Subsidiary | Eliminations | Consolidated | |||||||||||||||||
Net revenues | $ | - | $ | 150,520 | $ | - | $ | - | $ | 150,520 | |||||||||||
Total costs and expenses | 1,444 | 144,484 | 625 | - | 146,553 | ||||||||||||||||
Income (loss) before interest, other income and income taxes | (1,444 | ) | 6,036 | (625 | ) | - | 3,967 | ||||||||||||||
Net interest expense | (18,604 | ) | (209 | ) | (6 | ) | - | (18,819 | ) | ||||||||||||
Other income, net | - | 764 | - | - | 764 | ||||||||||||||||
Income tax expense | - | (165 | ) | - | - | (165 | ) | ||||||||||||||
Net income (loss) | $ | (20,048 | ) | $ | 6,426 | $ | (631 | ) | $ | - | $ | (14,253 | ) | ||||||||
Condensed Consolidated Statement of Operations | |||||||||||||||||||||
Twelve Months Ended December 31, 2012 | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||
Parent Company | Subsidiary Guarantors | Non-Guarantor Subsidiary | Eliminations | Consolidated | |||||||||||||||||
Net revenues | $ | - | $ | 148,559 | $ | - | $ | - | $ | 148,559 | |||||||||||
Total costs and expenses | 2,094 | 261,754 | 664 | - | 264,512 | ||||||||||||||||
Loss before interest, other income and income taxes | (2,094 | ) | (113,195 | ) | (664 | ) | - | (115,953 | ) | ||||||||||||
Net interest expense | (18,608 | ) | (65 | ) | (10 | ) | - | (18,683 | ) | ||||||||||||
Other income, net | - | 1,125 | - | - | 1,125 | ||||||||||||||||
Income tax expense | - | (272 | ) | - | - | (272 | ) | ||||||||||||||
Net loss | $ | (20,702 | ) | $ | (112,407 | ) | $ | (674 | ) | $ | - | $ | (133,783 | ) | |||||||
Condensed Consolidated Balance Sheet | |||||||||||||||||||||
As of December 31, 2013 | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||
Parent Company | Subsidiary Guarantors | Non-Guarantor Subsidiary | Eliminations | Consolidated | |||||||||||||||||
Investment in subsidiaries | $ | 252,333 | $ | - | $ | - | $ | (252,333 | ) | $ | - | ||||||||||
Other assets | 211,805 | 259,776 | 19,022 | (274,393 | ) | 216,210 | |||||||||||||||
Total assets | $ | 464,138 | $ | 259,776 | $ | 19,022 | $ | (526,726 | ) | $ | 216,210 | ||||||||||
Total liabilities | $ | 253,322 | $ | 279,346 | $ | 21,125 | $ | (274,393 | ) | $ | 279,400 | ||||||||||
Total stockholders' equity | 210,816 | (19,570 | ) | (2,103 | ) | (252,333 | ) | (63,190 | ) | ||||||||||||
Total liabilities and stockholders' equity | $ | 464,138 | $ | 259,776 | $ | 19,022 | $ | (526,726 | ) | $ | 216,210 | ||||||||||
Condensed Consolidated Balance Sheet | |||||||||||||||||||||
As of December 31, 2012 | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||
Parent Company | Subsidiary Guarantors | Non-Guarantor Subsidiary | Eliminations | Consolidated | |||||||||||||||||
Investment in subsidiaries | $ | 252,333 | $ | - | $ | - | $ | (252,333 | ) | $ | - | ||||||||||
Other assets | 209,034 | 241,827 | 20,314 | (240,716 | ) | 230,459 | |||||||||||||||
Total assets | $ | 461,367 | $ | 241,827 | $ | 20,314 | $ | (493,049 | ) | $ | 230,459 | ||||||||||
Total liabilities | $ | 227,107 | $ | 267,823 | $ | 22,290 | $ | (240,716 | ) | $ | 276,504 | ||||||||||
Total stockholders' equity | 234,260 | (25,996 | ) | (1,976 | ) | (252,333 | ) | (46,045 | ) | ||||||||||||
Total liabilities and stockholders' equity | $ | 461,367 | $ | 241,827 | $ | 20,314 | $ | (493,049 | ) | $ | 230,459 | ||||||||||
Condensed Statement of Cash Flows | |||||||||||||||||||||
Twelve Months Ended December 31, 2013 | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||
Parent Company | Subsidiary Guarantors | Non-Guarantor Subsidiary | Eliminations | Consolidated | |||||||||||||||||
Net cash provided by operating activities | $ | 19,033 | $ | 26,753 | $ | - | $ | - | $ | 45,786 | |||||||||||
Net cash used in investing activities | (7,673 | ) | (16,115 | ) | - | - | (23,788 | ) | |||||||||||||
Net cash used in financing activities | (4,619 | ) | (1,290 | ) | - | - | (5,909 | ) | |||||||||||||
Increase in cash and cash equivalents | 6,741 | 9,348 | - | - | 16,089 | ||||||||||||||||
Cash and cash equivalents, beginning of period | 5,288 | 46,616 | - | - | 51,904 | ||||||||||||||||
Cash and cash equivalents, end of period | $ | 12,029 | $ | 55,964 | $ | - | $ | - | $ | 67,993 | |||||||||||
Condensed Statement of Cash Flows | |||||||||||||||||||||
Twelve Months Ended December 31, 2012 | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||
Parent Company | Subsidiary Guarantors | Non-Guarantor Subsidiary | Eliminations | Consolidated | |||||||||||||||||
Net cash provided by operating activities | $ | 2,597 | $ | 7,732 | $ | - | $ | - | $ | 10,329 | |||||||||||
Net cash used in investing activities | - | (17,881 | ) | - | - | (17,881 | ) | ||||||||||||||
Net cash used in financing activities | (2,597 | ) | (1,138 | ) | - | - | (3,735 | ) | |||||||||||||
Decrease in cash and cash equivalents | - | (11,287 | ) | - | - | (11,287 | ) | ||||||||||||||
Cash and cash equivalents, beginning of period | 5,288 | 57,903 | - | - | 63,191 | ||||||||||||||||
Cash and cash equivalents, end of period | $ | 5,288 | $ | 46,616 | $ | - | $ | - | $ | 51,904 | |||||||||||
Significant_Accounting_Policie1
Significant Accounting Policies (Policies) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Use of Estimates | ' | ||||||||
Use of Estimates. 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. | |||||||||
Principles of Consolidation | ' | ||||||||
Principles of Consolidation. The consolidated financial statements of the Company include the accounts of the Company and its wholly owned subsidiaries: Voyager Learning Company, Voyager Sopris Learning, Inc., LAZEL, Inc., Cambium Learning, Inc., and Kurzweil/IntelliTools, Inc. All inter-company accounts and transactions are eliminated in consolidation. | |||||||||
Revenue Recognition | ' | ||||||||
Revenue Recognition. | |||||||||
Voyager Sopris Learning | |||||||||
Revenues for the Company’s VSL segment are derived from sales of literacy and math educational solutions and services to school districts. Sales include printed materials, interactive web-based programs and online educational content, courseware, training and implementation services, school improvement services, and professional development. Revenue from the sale of printed materials is recognized when the product is shipped to or received by the customer, depending on the shipping terms of the arrangement. Revenue for interactive web-based programs and online educational content, which may be sold separately or included with printed curriculum materials, courseware and school improvement services are recognized ratably over the subscription or contractual period, typically a school year. Professional services such as training, implementation and professional development are recognized over the period services are delivered. | |||||||||
Printed materials, materials and programs accessed online, and ongoing support and services generally qualify as separate units of accounting and the division of revenue among these units is determined in accordance with the accounting guidance for revenue arrangements with multiple deliverables. Under this guidance, the Company is required to allocate revenue among the deliverables in an arrangement using the relative selling price method. The guidance requires use of a selling price hierarchy for determining the selling price of each deliverable, which includes (1) vendor-specific objective evidence (“VSOE”), if available, (2) third party evidence (“TPE”), if VSOE is not available, and (3) best estimate of selling price (“BESP”), if neither VSOE nor TPE is available. The objective of BESP is to determine the price at which the Company would transact a sale if the product or service were sold on a stand-alone basis. | |||||||||
The Company is not able to establish VSOE for each deliverable. Whenever VSOE cannot be established, the Company reviews the offerings of competitors to determine whether TPE can be established. TPE is determined based on the prices charged by the Company’s competitors for a similar deliverable when sold separately. It may be difficult to obtain sufficient information on competitor pricing to substantiate TPE and therefore the Company may not always be able to use TPE. The Company also uses BESP to determine the selling price of certain deliverables, primarily for certain printed materials which have historically been priced on a bundled basis with related online materials. The determination of BESP considers the anticipated margin on that deliverable, the selling price and profit margin for similar parts or services, and the Company’s ongoing pricing strategy and policies. The Company analyzes the selling prices used in the allocation of arrangement consideration at least annually. Selling prices are analyzed on a more frequent basis if a significant change in the business necessitates a more timely analysis or if the Company experiences significant variances in selling prices. | |||||||||
In some cases, such as the Company’s blended learning solution Language! Live, printed materials and related services do not qualify as separate units of accounting. When this occurs, all deliverables associated with the sale are recognized over the life of the on-line subscription which is typically a school year. | |||||||||
The Company enters into agreements to license or sell certain publishing rights and content. The Company recognizes the revenue from these agreements when the license amount is fixed and determinable, collection is reasonably assured, and when either the license period, if applicable, has commenced or transfer of content, if applicable, has occurred. Shipments to school book depositories are on consignment and revenue is recognized based on shipments from the depositories to the schools. | |||||||||
Learning A-Z and ExploreLearning | |||||||||
The Learning A-Z and ExploreLearning segments derive revenue exclusively from sales of online subscriptions to their reading, math and science teaching websites and related training and professional development. Typically, the subscriptions are for a twelve month period (although they can be for longer periods) and the revenue is recognized ratably over the period the online access is available to the customer. Any training or professional development related to an online subscription is recognized over the same period of online access. | |||||||||
Kurzweil/IntelliTools | |||||||||
The Kurzweil/Intellitools segment derives revenue from either an online subscription or from the delivery of software or hardware. Subscription revenues are recognized ratably over the period the online access is available to the customer. Software and hardware sales are recognized when shipped or provided to customers. Maintenance and support services for the Company’s software can include telephone support, bug fixes, and, for certain products, rights to upgrades and enhancements on a when-and-if available basis. On-line services include access to digital content including literacy tools, cloud storage and the ability to individualize assignments. These services are recognized on a straight-line basis over the period they are provided. In certain instances, telephone support and software repairs are provided for free within the first three months of licensing the software. The cost of providing this service is insignificant, and is accrued at the time of revenue recognition. | |||||||||
Accounts Receivable | ' | ||||||||
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 $0.7 million and $0.4 million at yearend 2013 and 2012, respectively. 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 returns as well as other factors that in the Company’s judgment could reasonably be expected to cause sales returns to differ from historical experience. A reconciliation of the accounts receivable reserve is shown in the table below for the periods indicated: | |||||||||
(in thousands) | 2013 | 2012 | |||||||
Beginning accounts receivable reserve | $ | 431 | $ | 925 | |||||
Charged to costs and expenses | 9 | 48 | |||||||
Charged to other accounts (1) | 358 | (514 | ) | ||||||
Write-offs | (63 | ) | (28 | ) | |||||
Ending accounts receivable reserve | $ | 735 | $ | 431 | |||||
· | Changes in sales return reserve. | ||||||||
Net Loss per Common Share | ' | ||||||||
Net Loss per Common Share. Basic net loss per common share is computed by dividing net 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 loss per common share is computed by dividing net 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 loss per common share is shown in the table below for the periods indicated: | |||||||||
For the Years Ended December 31, | |||||||||
(in thousands) | 2013 | 2012 | |||||||
Basic | 47,040 | 49,395 | |||||||
Dilutive effect of awards | - | - | |||||||
Diluted | 47,040 | 49,395 | |||||||
Antidilutive securities: | |||||||||
Options | 2,367 | 3,758 | |||||||
Warrants | - | 282 | |||||||
Restricted stock | 2 | 49 | |||||||
Cash and Cash Equivalents | ' | ||||||||
Cash and Cash Equivalents. The Company considers all highly liquid investments with maturities of three months or less (when purchased) to be cash equivalents. The carrying amount reported in the Consolidated Balance Sheets approximates fair value. | |||||||||
Inventory | ' | ||||||||
Inventory. Inventory is stated at the lower of cost, determined using the first-in, first-out (FIFO) method, or market, and consists of finished goods. The Company reduces slow-moving or obsolete inventory to net realizable value. Inventory values are maintained at an amount that management considers appropriate based on factors such as the inventory aging, historical usage of the product, future sales forecasts, and product development plans. Inventory values are reviewed on a periodic basis. | |||||||||
Restricted Assets | ' | ||||||||
Restricted Assets. Restricted assets consist of funds placed in a rabbi trust pursuant to the merger agreement for the purpose of funding certain obligations acquired in the VLCY merger, mostly deferred compensation, pension, and employee related obligations, and, at December 31, 2012, an escrow of funds subject to the Contingent Value Rights (“CVR”) described in Note 13. | |||||||||
Property and Equipment | ' | ||||||||
Property and Equipment. Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed over the assets’ estimated useful lives using the straight-line method. Estimated lives are as follows. | |||||||||
Estimated Useful Life | |||||||||
Machinery and equipment | 5 – 15 years | ||||||||
Furniture and fixtures | 8 years | ||||||||
Computer equipment and software | 3 – 5 years | ||||||||
Leasehold improvements | Lesser of useful life or lease term | ||||||||
Expenditures for maintenance and repairs, as well as minor renewals, are charged to operations as incurred, while improvements and major renewals are capitalized. | |||||||||
Purchased and Developed Software | ' | ||||||||
Purchased and Developed Software. Purchased and developed software includes the costs to purchase third party software and to develop internal-use software, which includes software as a service offered to customers with an online subscription. The Company follows applicable guidance for the costs of computer software developed or obtained for internal use for capitalizing software projects. Software costs are amortized over the expected economic life of the product, generally three to five years. At December 31, 2013 and 2012, unamortized capitalized software was $14.4 million and $14.8 million, respectively, which included amounts of software under development of $1.1 million and 3.5 million, respectively. | |||||||||
Acquired Curriculum and Technology | ' | ||||||||
Acquired Curriculum and Technology. Acquired curriculum and technology represents curriculum and developed technology acquired in the acquisitions of Headsprout in 2013, VLCY in 2009, and Cambium Learning in 2007 and is the initial purchase accounting value placed on the past development and refinement of the core methodologies, processes, measurement techniques, and technologies by which the Company structures curriculum. Prior to its impairment in the fourth quarter of 2013, acquired curriculum and technology also included assets acquired in the acquisition of Class.com in 2011. Acquired curriculum and technology is being amortized using an accelerated method over six to seven years, as it has an economic benefit declining over the estimated useful life. The Company periodically reviews the recoverability of the acquired curriculum and technology based on expected net realizable value, and generally retires the assets once fully depreciated. Acquired curriculum and technology is presented net of accumulated amortization of $15.1 million and $12.7 million as of yearend 2013 and 2012, respectively. | |||||||||
See Note 7 and Note 13 herein for further discussion of the Company’s review of its acquired curriculum and technology assets and the related impairment charge recognized in the years ended December 31, 2013 and 2012. | |||||||||
Acquired Publishing Rights | ' | ||||||||
Acquired Publishing Rights. A publishing right allows the Company to publish and republish existing and future works, as well as transform, adapt, or create new works based on previously published materials. The Company determines the fair market value of the publishing rights arising from business combinations by discounting the after-tax cash flows projected to be derived from the publishing rights and titles to their net present value using a rate of return that accounts for the time value of money and the appropriate degree of risk. The useful life of the publishing rights is based on the lives of the various titles involved, which is generally ten years. The Company calculates amortization using either the straight-line method or the percentage of the projected discounted cash flows derived from the titles in the current year as a percentage of the total estimated discounted cash flows over the remaining useful life. The Company periodically reviews the recoverability of the publishing rights based on expected net realizable value, and generally retires the assets once fully depreciated. Acquired publishing rights are presented net of accumulated amortization of $21.5 million and $18.6 million as of yearend 2013 and 2012, respectively. | |||||||||
See Note 7 herein for further discussion of the Company’s review of its acquired publishing rights and the related impairment charge recognized in the year ended December 31, 2012. | |||||||||
Pre-Publication Costs | ' | ||||||||
Pre-Publication Costs. The Company capitalizes certain pre-publication costs of its curriculum including art, prepress, editorial, and other costs incurred in the creation of the master copy of its curriculum products. Pre-publication costs are amortized over the expected life of the education program, generally on an accelerated basis over a period of five years. The amortization methods and periods chosen reflect the expected sales generated by the education programs. The Company periodically reviews the recoverability of the capitalized costs based on expected net realizable value, and generally retires the assets once fully depreciated. Pre-publication costs are presented net of accumulated amortization of $18.3 million and $13.2 million as of yearend 2013 and 2012, respectively. Interest capitalized during 2013 and 2012 totaled $0.3 million and $0.5 million, respectively. During 2013 and 2012, the Company recorded impairment charges of $0.6 million and $1.5 million, respectively, related to expenditures capitalized as pre-publication costs for projects that were subsequently abandoned or determined to have no ongoing benefit to the Company. | |||||||||
Goodwill and Other Intangible Assets | ' | ||||||||
Goodwill and Other Intangible Assets. Goodwill and other intangible assets are related to the acquisitions of Headsprout in 2013, VLCY in 2009, and Cambium Learning in 2007. Other intangible assets include tradenames/trademarks, reseller networks, customer relationships/lists, and conference attendee relationships, which are being amortized on a straight-line basis over estimated lives ranging from six to sixteen years. Other intangible assets are presented net of accumulated amortization of $19.6 million and $17.8 million as of yearend 2013 and 2012, respectively. Prior to its impairment in the fourth quarter of 2013, other intangible assets also included assets acquired in the acquisition of Class.com in 2011. | |||||||||
See Note 7 and Note 13 herein for further discussion of the Company’s review of goodwill and other intangible assets and the related impairment charges recognized in the years ended December 31, 2013 and 2012. | |||||||||
Depreciation and Amortization | ' | ||||||||
Depreciation and Amortization. Depreciation and amortization for the years ended December 31, 2013 and 2012 was broken out as follows: | |||||||||
For the Years Ended December 31, | |||||||||
(in thousands) | 2013 | 2012 | |||||||
Acquired publishing rights | $ | 2,897 | $ | 7,952 | |||||
Acquired curriculum and technology | 3,687 | 8,315 | |||||||
Pre-publication costs | 5,115 | 4,466 | |||||||
Internally developed software related to product | 5,820 | 3,983 | |||||||
Total amortization included in cost of revenues | 17,519 | 24,716 | |||||||
Tradenames and trademarks | 492 | 1,154 | |||||||
Other intangible assets | 1,315 | 2,026 | |||||||
Property, equipment and software | 3,088 | 3,002 | |||||||
Total depreciation and amortization | |||||||||
included in operating expenses | 4,895 | 6,182 | |||||||
Total depreciation and amortization | $ | 22,414 | $ | 30,898 | |||||
Impairment of Long Lived Assets | ' | ||||||||
Impairment of Long Lived Assets. The Company reviews the carrying value of definite-lived long lived assets for impairment whenever events or changes in circumstances indicate net book value may not be recoverable from the estimated undiscounted future cash flows. If the review indicates any assets are impaired, the impairment of those assets is measured as the amount by which the carrying amount exceeds the fair value as estimated by either quoted market prices or discounted cash flows. Assets to be disposed of are reported at the lower of the carrying amount or fair value less cost of disposal. The determination whether the Company’s definite-lived intangible assets are impaired involves significant assumptions and estimates, including projections of future cash flows, the percentage of future revenues and cash flows attributable to the intangible assets, asset lives used to generate future cash flows, and royalty relief savings attributable to trademarks. The impairments recognized in 2013 and 2012 are discussed in Note 13 to the Consolidated Financial Statements. | |||||||||
Deferred Costs | ' | ||||||||
Deferred Costs. Certain up-front costs associated with completing the sale of the Company’s products are deferred and recognized as the related revenue is recognized. | |||||||||
Advertising Costs | ' | ||||||||
Advertising Costs. The Company may ship products to prospective customers as samples. Samples costs are expensed to sales and marketing expense upon shipment and totaled $1.1 million and $1.5 million for the years ended December 31, 2013 and 2012, respectively. Other costs of advertising, which include advertising, print, and photography expenses, are expensed as incurred and totaled $1.6 million and $2.0 million for the years ended December 31, 2013 and 2012, respectively. The Company recognizes catalog expense when the catalog is mailed to potential customers. | |||||||||
Income Taxes | ' | ||||||||
Income Taxes. Provision is made for the expense, or benefit, associated with taxes based on income. The provision for income taxes is based on laws currently enacted in every jurisdiction in which the Company does business and considers laws mitigating the taxation of the same income by more than one jurisdiction. Significant judgment is required in determining income tax expense, current tax receivables and payables, deferred tax assets and liabilities, and valuation allowance recorded against the net deferred tax assets. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, taxable income in prior carryback years, loss carryforward limitations, and tax planning strategies in assessing whether deferred tax assets will be realized in future periods. If, after consideration of these factors, management believes it is more likely than not that a portion of the deferred tax assets will not be realized, a valuation allowance is established. The amount of the deferred tax asset considered realizable could be reduced if estimates of future taxable income during the carryforward period are reduced. | |||||||||
The Company recognizes liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if available evidence indicates that it is more likely than not that the position will be sustained on audit. The second step requires the Company to estimate and measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The Company reevaluates its uncertain tax positions on a periodic basis, based on factors such as changes in facts and circumstances, changes in tax law, effectively settled issues under audit and new audit activity. The Company accrues interest and penalties, if any, related to unrecognized tax benefits as a component of income tax expense. | |||||||||
Royalty Advances | ' | ||||||||
Royalty Advances. Royalty advances to authors are capitalized and represent amounts paid in advance of the sale of an author’s product. These costs are then expensed as the related publication is sold. The Company evaluates advances periodically to determine if they are expected to be utilized and reserves any portion of a royalty advance that is not expected to be recovered. | |||||||||
Sales Taxes | ' | ||||||||
Sales Taxes. The Company reports sales taxes collected from customers and remitted to governmental authorities on a net basis. Sales tax collected from customers is excluded from revenues. Collected but unremitted sales tax is included as part of Accrued Expenses in the accompanying Consolidated Balance Sheets. | |||||||||
Stock-Based Compensation | ' | ||||||||
Stock-Based Compensation. The Company accounts for its stock-based compensation in accordance with applicable accounting guidance for share-based payments. This guidance requires all share-based payments to be recognized in the Consolidated Statements of Operations based on their fair values. Compensation costs for awards with graded vesting are recognized on a straight-line basis over the anticipated vesting period. | |||||||||
Recently Issued Financial Accounting Standards | ' | ||||||||
Recently Issued Financial Accounting Standards. In July 2013, new guidance was issued which states that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. This guidance is effective prospectively for reporting periods beginning after December 15, 2013. The Company does not expect the adoption of this standard to have a significant impact on the Company’s results of operations or financial position. | |||||||||
Significant_Accounting_Policie2
Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Reconciliation of the Accounts Receivable Reserve | ' | ||||||||
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 $0.7 million and $0.4 million at yearend 2013 and 2012, respectively. 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 returns as well as other factors that in the Company’s judgment could reasonably be expected to cause sales returns to differ from historical experience. A reconciliation of the accounts receivable reserve is shown in the table below for the periods indicated: | |||||||||
(in thousands) | 2013 | 2012 | |||||||
Beginning accounts receivable reserve | $ | 431 | $ | 925 | |||||
Charged to costs and expenses | 9 | 48 | |||||||
Charged to other accounts (1) | 358 | (514 | ) | ||||||
Write-offs | (63 | ) | (28 | ) | |||||
Ending accounts receivable reserve | $ | 735 | $ | 431 | |||||
· | Changes in sales return reserve. | ||||||||
Summary of Basic and Diluted Net Loss Per Common Share | ' | ||||||||
Net Loss per Common Share. Basic net loss per common share is computed by dividing net 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 loss per common share is computed by dividing net 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 loss per common share is shown in the table below for the periods indicated: | |||||||||
For the Years Ended December 31, | |||||||||
(in thousands) | 2013 | 2012 | |||||||
Basic | 47,040 | 49,395 | |||||||
Dilutive effect of awards | - | - | |||||||
Diluted | 47,040 | 49,395 | |||||||
Antidilutive securities: | |||||||||
Options | 2,367 | 3,758 | |||||||
Warrants | - | 282 | |||||||
Restricted stock | 2 | 49 | |||||||
Estimated Lives | ' | ||||||||
Property and Equipment. Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed over the assets’ estimated useful lives using the straight-line method. Estimated lives are as follows. | |||||||||
Estimated Useful Life | |||||||||
Machinery and equipment | 5 – 15 years | ||||||||
Furniture and fixtures | 8 years | ||||||||
Computer equipment and software | 3 – 5 years | ||||||||
Leasehold improvements | Lesser of useful life or lease term | ||||||||
Depreciation and Amortization | ' | ||||||||
Depreciation and Amortization. Depreciation and amortization for the years ended December 31, 2013 and 2012 was broken out as follows: | |||||||||
For the Years Ended December 31, | |||||||||
(in thousands) | 2013 | 2012 | |||||||
Acquired publishing rights | $ | 2,897 | $ | 7,952 | |||||
Acquired curriculum and technology | 3,687 | 8,315 | |||||||
Pre-publication costs | 5,115 | 4,466 | |||||||
Internally developed software related to product | 5,820 | 3,983 | |||||||
Total amortization included in cost of revenues | 17,519 | 24,716 | |||||||
Tradenames and trademarks | 492 | 1,154 | |||||||
Other intangible assets | 1,315 | 2,026 | |||||||
Property, equipment and software | 3,088 | 3,002 | |||||||
Total depreciation and amortization | |||||||||
included in operating expenses | 4,895 | 6,182 | |||||||
Total depreciation and amortization | $ | 22,414 | $ | 30,898 | |||||
Acquisitions_Tables
Acquisitions (Tables) (Headsprout) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Headsprout | ' | ||||||||
Allocation of the Purchase Price | ' | ||||||||
The transaction was accounted for as a purchase transaction with the Company acquiring certain of Headsprout’s assets for $4.0 million. Of the total purchase price, $3.6 million was paid in January 2014 and the remaining $0.4 million will be paid 18 months after the closing date subject to the holdback provisions of the purchase agreement. Therefore, this acquisition was treated as a non-cash transaction for the purposes of the Consolidated Statements of Cash Flows included herein. The Consolidated Financial Statements of the Company include the results of Headsprout from December 23, 2013, the date of acquisition. The following represents the allocation of the purchase price: | |||||||||
(in thousands) | |||||||||
Accounts receivable | $ | 268 | |||||||
Intangible assets | 3,859 | ||||||||
Deferred revenue | (455 | ) | |||||||
Accrued expenses | (110 | ) | |||||||
Goodwill | 438 | ||||||||
Total net assets acquired | $ | 4,000 | |||||||
Other Identified Intangibles Acquired | ' | ||||||||
The Goodwill resulting from this acquisition is not expected to be tax deductible. | |||||||||
Other identified intangibles acquired consist of the following: | |||||||||
(in thousands) | Asset Value | Useful Life | |||||||
Curriculum and technology | 3,579 | 7 years | |||||||
Tradenames and trademarks | 280 | 15 years | |||||||
Supplemental Pro Forma Information | ' | ||||||||
After the December 23, 2013 acquisition date, the Headsprout acquisition did not make a contribution to the 2013 results of the Company’s Learning A-Z segment. The following unaudited supplemental pro forma information presents the results of operations as if the Headsprout acquisition occurred at the beginning of the reporting period: | |||||||||
Year Ended December 31, | |||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
(unaudited) | |||||||||
Net revenues | $ | 153,122 | $ | 151,687 | |||||
Loss before income taxes | (16,019 | ) | (137,969 | ) | |||||
Net loss | (16,206 | ) | (138,250 | ) | |||||
Net loss per share - basic and diluted | (0.34 | ) | (2.80 | ) | |||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Income Tax Expense Attributable to Income | ' | ||||||||
Income tax expense attributable to income included the following: | |||||||||
Years Ended December 31, | |||||||||
(in thousands) | 2013 | 2012 | |||||||
Current income tax expense: | |||||||||
United States federal | $ | - | $ | 2 | |||||
State and local | 218 | 376 | |||||||
Current income tax expense | 218 | 378 | |||||||
Deferred income tax expense: | |||||||||
United States federal | 49 | 49 | |||||||
State and local | (102 | ) | (155 | ) | |||||
Deferred income tax expense | (53 | ) | (106 | ) | |||||
Income tax expense | $ | 165 | $ | 272 | |||||
Reconciliation of Income Tax Expense and Domestic Federal Statutory Income Tax Benefit | ' | ||||||||
Reconciliation of income tax expense and the domestic federal statutory income tax benefit is as follows: | |||||||||
Years Ended December 31, | |||||||||
(in thousands) | 2013 | 2012 | |||||||
Statutory federal income tax benefit | $ | (4,931 | ) | $ | (46,729 | ) | |||
Increase (reduction) from: | |||||||||
State taxes (net of federal benefit) | 116 | 221 | |||||||
Goodwill impairment | - | 23,413 | |||||||
Change in valuation allowance | 4,773 | 24,269 | |||||||
Other | 207 | (902 | ) | ||||||
Income tax expense | $ | 165 | $ | 272 | |||||
Deferred Tax Assets (Liabilities) | ' | ||||||||
The tax effects of each type of temporary difference and carryforward that give rise to a significant portion of deferred tax assets (liabilities) at the end of fiscal 2013 and 2012 were as follows: | |||||||||
(in thousands) | 2013 | 2012 | |||||||
Deferred tax assets are attributable to: | |||||||||
Net operating loss carryforwards | $ | 25,589 | $ | 23,910 | |||||
Tax credit carryforwards | 7,622 | 7,622 | |||||||
Reserves | 4,546 | 4,897 | |||||||
Inventory | 5,552 | 6,210 | |||||||
Deferred financing costs | 1,589 | 1,036 | |||||||
Fixed assets | 1,691 | 1,303 | |||||||
Deferred revenue | 2,959 | 1,987 | |||||||
Intangibles | 5,391 | - | |||||||
Other | 1,867 | 1,555 | |||||||
Total gross deferred tax assets | 56,806 | 48,520 | |||||||
Valuation allowance | (51,849 | ) | (47,076 | ) | |||||
Net deferred tax assets | 4,957 | 1,444 | |||||||
Deferred tax liabilities are attributable to intangibles | (4,991 | ) | (1,580 | ) | |||||
Net deferred tax liability | $ | (34 | ) | $ | (136 | ) | |||
Deferred Tax Assets Liabilities Net | ' | ||||||||
The deferred tax asset (liability) is classified as follows: | |||||||||
(in thousands) | 2013 | 2012 | |||||||
Short-term deferred tax asset | $ | 536 | $ | 137 | |||||
Long-term deferred tax liability | (570 | ) | (273 | ) | |||||
Net deferred tax liability | $ | (34 | ) | $ | (136 | ) | |||
Summary of Amounts and Expiration Dates of Loss and Tax Credit Carryforwards | ' | ||||||||
At December 31, 2013, the amounts and expiration dates of loss and tax credit carryforwards were as follows: | |||||||||
(in thousands) | Amount as of December 31, 2013 | Expire or start expiring at the end of: | |||||||
U.S. net operating loss (1) | $ | 71,114 | 2028 | ||||||
State net operating loss carryforward (net): | |||||||||
State tax net operating losses | 2,542 | 2014 - 2028 | |||||||
Tax credits: | |||||||||
Minimum tax credit | 7,444 | Carry forward indefinitely | |||||||
Other tax credits | 178 | 2014 - 2021 | |||||||
Total tax credits | $ | 7,622 | |||||||
-1 | $27.8 million of the U.S net operating loss (NOL) above is related to the VLCY acquisition. The utilization of this NOL is subject to an annual limitation of $7.1 million. | ||||||||
Reconciliation of Change in UTB Balance | ' | ||||||||
A reconciliation of the change in the UTB balance from January 1, 2013 to December 31, 2013, and January 1, 2012 to December 31, 2012, is as follows: | |||||||||
(in thousands) | 2013 | 2012 | |||||||
Balance at the beginning of the year | $ | 7,141 | $ | 7,141 | |||||
Decreases for expiration of the statute of limitations | (752 | ) | - | ||||||
Balance at the end of the year | $ | 6,389 | $ | 7,141 | |||||
Property_Equipment_and_Softwar1
Property, Equipment and Software (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Balances of major classes of assets and accumulated depreciation and amortization | ' | ||||||||
Balances of major classes of assets and accumulated depreciation and amortization consist of the following: | |||||||||
Year Ended December 31, | |||||||||
2013 | 2012 | ||||||||
Software | $ | 30,500 | $ | 24,395 | |||||
Machinery, computers and equipment | 6,870 | 5,352 | |||||||
Sublease asset (See Note 12) | 2,814 | 2,814 | |||||||
Leasehold improvements | 1,546 | 1,560 | |||||||
Furniture and fixtures | 1,494 | 1,414 | |||||||
Total | 43,224 | 35,535 | |||||||
Less accumulated depreciation and amortization | 22,909 | 14,514 | |||||||
Property, equipment and software, net | $ | 20,315 | $ | 21,021 | |||||
Goodwill_and_Other_Intangible_1
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||||||||||
Changes in Carrying Amount of Goodwill | ' | ||||||||||||||||||||||||||||||||||||
The changes in the carrying amount of goodwill for the years ended December 31, 2013 and December 31, 2012 are as follows: | |||||||||||||||||||||||||||||||||||||
(in thousands) | Voyager Sopris Learning | Learning A-Z | ExploreLearning | Kurzweil/ IntelliTools | Total | ||||||||||||||||||||||||||||||||
Balance as of December 31, 2011 | |||||||||||||||||||||||||||||||||||||
Goodwill | $ | 178,456 | $ | 12,777 | $ | 6,947 | $ | 38,806 | $ | 236,986 | |||||||||||||||||||||||||||
Accumulated impairment losses | (104,245 | ) | - | - | (18,444 | ) | (122,689 | ) | |||||||||||||||||||||||||||||
74,211 | 12,777 | 6,947 | 20,362 | 114,297 | |||||||||||||||||||||||||||||||||
Goodwill impairment | (52,193 | ) | - | - | (14,700 | ) | (66,893 | ) | |||||||||||||||||||||||||||||
Goodwill from acquisitions | - | - | - | - | - | ||||||||||||||||||||||||||||||||
Balance as of December 31, 2012 | |||||||||||||||||||||||||||||||||||||
Goodwill | 178,456 | 12,777 | 6,947 | 38,806 | 236,986 | ||||||||||||||||||||||||||||||||
Accumulated impairment losses | (156,438 | ) | - | - | (33,144 | ) | (189,582 | ) | |||||||||||||||||||||||||||||
22,018 | 12,777 | 6,947 | 5,662 | 47,404 | |||||||||||||||||||||||||||||||||
Goodwill impairment | - | - | - | - | - | ||||||||||||||||||||||||||||||||
Goodwill from acquisitions | - | 438 | - | - | 438 | ||||||||||||||||||||||||||||||||
Balance as of December 31, 2013 | |||||||||||||||||||||||||||||||||||||
Goodwill | 178,456 | 13,215 | 6,947 | 38,806 | 237,424 | ||||||||||||||||||||||||||||||||
Accumulated impairment losses | (156,438 | ) | - | - | (33,144 | ) | (189,582 | ) | |||||||||||||||||||||||||||||
$ | 22,018 | $ | 13,215 | $ | 6,947 | $ | 5,662 | $ | 47,842 | ||||||||||||||||||||||||||||
Company's Definite Lived Intangible Assets and Related Accumulated Amortization | ' | ||||||||||||||||||||||||||||||||||||
The Company’s definite lived intangible assets and related accumulated amortization at the end of fiscal 2013 and 2012 consist of the following: | |||||||||||||||||||||||||||||||||||||
(in thousands) | Balance at | Balance at | Balance at | ||||||||||||||||||||||||||||||||||
December 31, 2011 | Additions | Disposals | Impairments | December 31, 2012 | Additions | Disposals | Impairments | December 31, 2013 | |||||||||||||||||||||||||||||
Other intangible assets - gross book value: | |||||||||||||||||||||||||||||||||||||
Publishing rights | $ | 90,300 | $ | - | $ | (52,793 | ) | $ | (11,307 | ) | $ | 26,200 | $ | - | $ | - | $ | - | $ | 26,200 | |||||||||||||||||
Trademark | 18,028 | - | (6,286 | ) | (6,273 | ) | 5,469 | 280 | (1 | ) | (58 | ) | 5,690 | ||||||||||||||||||||||||
Customer relationships | 19,080 | - | (10,907 | ) | (822 | ) | 7,351 | - | - | - | 7,351 | ||||||||||||||||||||||||||
Acquired curriculum and technology | 53,112 | - | (21,750 | ) | (9,361 | ) | 22,001 | 3,579 | (259 | ) | (493 | ) | 24,828 | ||||||||||||||||||||||||
Reseller network | 12,300 | - | - | - | 12,300 | - | - | - | 12,300 | ||||||||||||||||||||||||||||
Conference attendees | 500 | - | - | - | 500 | - | - | - | 500 | ||||||||||||||||||||||||||||
Total other intangibles - gross book value | 193,320 | - | (91,736 | ) | (27,763 | ) | 73,821 | 3,859 | (260 | ) | (551 | ) | 76,869 | ||||||||||||||||||||||||
Other intangible assets - accumulated amortization: | |||||||||||||||||||||||||||||||||||||
Publishing rights | (63,439 | ) | (7,952 | ) | 52,793 | - | (18,598 | ) | (2,897 | ) | - | - | (21,495 | ) | |||||||||||||||||||||||
Trademark | (6,707 | ) | (1,154 | ) | 6,286 | - | (1,575 | ) | (492 | ) | 1 | - | (2,066 | ) | |||||||||||||||||||||||
Customer relationships | (14,337 | ) | (1,218 | ) | 10,907 | - | (4,648 | ) | (768 | ) | - | - | (5,416 | ) | |||||||||||||||||||||||
Acquired curriculum and technology | (26,116 | ) | (8,315 | ) | 21,750 | - | (12,681 | ) | (3,687 | ) | 259 | - | (16,109 | ) | |||||||||||||||||||||||
Reseller network | (10,289 | ) | (790 | ) | - | - | (11,079 | ) | (537 | ) | - | - | (11,616 | ) | |||||||||||||||||||||||
Conference attendees | (464 | ) | (18 | ) | - | - | (482 | ) | (10 | ) | - | - | (492 | ) | |||||||||||||||||||||||
Total other intangibles - accumulated amortization | (121,352 | ) | (19,447 | ) | 91,736 | - | (49,063 | ) | (8,391 | ) | 260 | - | (57,194 | ) | |||||||||||||||||||||||
Other intangible assets, net | $ | 71,968 | $ | (19,447 | ) | $ | - | $ | (27,763 | ) | $ | 24,758 | $ | (4,532 | ) | $ | - | $ | (551 | ) | $ | 19,675 | |||||||||||||||
Estimated Aggregate Amortization Expense | ' | ||||||||||||||||||||||||||||||||||||
Estimated aggregate amortization expense expected for each of the next five years related to intangibles subject to amortization is as follows: | |||||||||||||||||||||||||||||||||||||
Amortization - | Amortization - | Total | |||||||||||||||||||||||||||||||||||
(in thousands) | Cost of Revenues | Operating Expense | Amortization | ||||||||||||||||||||||||||||||||||
2014 | $ | 5,454 | $ | 1,524 | $ | 6,978 | |||||||||||||||||||||||||||||||
2015 | 3,781 | 1,305 | 5,086 | ||||||||||||||||||||||||||||||||||
2016 | 2,339 | 1,115 | 3,454 | ||||||||||||||||||||||||||||||||||
2017 | 1,092 | 458 | 1,550 | ||||||||||||||||||||||||||||||||||
2018 | 380 | 357 | 737 | ||||||||||||||||||||||||||||||||||
Thereafter | 378 | 1,492 | 1,870 | ||||||||||||||||||||||||||||||||||
$ | 13,424 | $ | 6,251 | $ | 19,675 | ||||||||||||||||||||||||||||||||
Other_Current_Assets_Tables
Other Current Assets (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Other Current Assets | ' | ||||||||
Other Current Assets at the end of fiscal 2013 and 2012 consist of the following: | |||||||||
(in thousands) | 2013 | 2012 | |||||||
Deferred costs | $ | 4,968 | $ | 4,132 | |||||
Prepaid expenses | 1,369 | 1,599 | |||||||
Deferred taxes | 536 | 137 | |||||||
Other current assets | - | 24 | |||||||
Total | $ | 6,873 | $ | 5,892 | |||||
Other_Assets_Tables
Other Assets (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Other Assets | ' | ||||||||
Other Assets at the end of fiscal 2013 and 2012 consist of the following: | |||||||||
(in thousands) | 2013 | 2012 | |||||||
Deferred financing costs | $ | 4,541 | $ | 6,121 | |||||
Collateral investments | 1,971 | 1,969 | |||||||
Other | 1,776 | 1,542 | |||||||
Total | $ | 8,288 | $ | 9,632 | |||||
Accrued_Expenses_Tables
Accrued Expenses (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Accrued Expenses | ' | ||||||||
Accrued Expenses at the end of fiscal 2013 and 2012 consist of the following: | |||||||||
(in thousands) | 2013 | 2012 | |||||||
Salaries, bonuses and benefits | $ | 9,687 | $ | 7,593 | |||||
Accrued interest | 6,471 | 6,490 | |||||||
Headsprout acquisition accrual | 3,600 | - | |||||||
Accrued royalties | 1,649 | 1,399 | |||||||
Pension and post-retirement medical benefits | 1,214 | 1,218 | |||||||
Other | 2,658 | 3,830 | |||||||
Total | $ | 25,279 | $ | 20,530 | |||||
Other_Liabilities_Tables
Other Liabilities (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Other Liabilities | ' | ||||||||
Other Liabilities at the end of fiscal 2013 and 2012 consist of the following: | |||||||||
(in thousands) | 2013 | 2012 | |||||||
Pension and post-retirement medical benefits, long-term portion | $ | 10,241 | $ | 11,392 | |||||
Deferred rent | 1,201 | 1,457 | |||||||
Long-term income tax payable | 902 | 852 | |||||||
Long-term deferred tax liability | 570 | 273 | |||||||
Long-term deferred compensation | 491 | 503 | |||||||
Headsprout acquisition accrual | 400 | - | |||||||
Other | 149 | 654 | |||||||
Total | $ | 13,954 | $ | 15,131 | |||||
Leases_Tables
Leases (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Future Minimum Build-to-Suit Lease Payments | ' | ||||
Future minimum build-to-suit lease payments at December 31, 2013 are as follows: | |||||
(in thousands) | |||||
2014 | $ | 1,138 | |||
2015 | 1,160 | ||||
2016 | 967 | ||||
Total minimum lease payments | 3,265 | ||||
Less: Amount representing interest | (251 | ) | |||
Present value of net minimum lease payments | 3,014 | ||||
Less: Current portion | (995 | ) | |||
Capital lease obligations, less current portion | $ | 2,019 | |||
Future Minimum Payments under all Remaining Non-Cancelable Operating Leases | ' | ||||
Future minimum payments under all remaining non-cancelable operating leases are payable as follows: | |||||
(in thousands) | |||||
2014 | $ | 1,916 | |||
2015 | 1,527 | ||||
2016 | 1,431 | ||||
2017 | 1,465 | ||||
2018 | 948 | ||||
Thereafter | 20 | ||||
Total minimum lease payments | $ | 7,307 | |||
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 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 December 31, 2013 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Restricted Assets: | |||||||||||||||||
Money Market | $ | 6,835 | $ | 6,835 | $ | - | $ | - | |||||||||
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 in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Restricted Assets: | |||||||||||||||||
Money Market | $ | 11,141 | $ | 11,141 | $ | - | $ | - | |||||||||
Collateral Investments: | |||||||||||||||||
Money Market | 902 | 902 | - | - | |||||||||||||
Certificate of Deposit | 1,067 | 1,067 | - | - | |||||||||||||
Warrant | 310 | - | 310 | - | |||||||||||||
Assets held for sale: | |||||||||||||||||
Recovered Properties | 380 | - | 380 | - | |||||||||||||
CVRs | 7,599 | - | - | 7,599 | |||||||||||||
(in thousands) | Total Gains (Losses) for the Years Ended December 31, | ||||||||||||||||
Description | 2013 | 2012 | |||||||||||||||
Restricted Assets: | |||||||||||||||||
Money Market | $ | - | $ | - | |||||||||||||
Collateral Investments: | |||||||||||||||||
Money Market | - | - | |||||||||||||||
Certificate of Deposit | - | - | |||||||||||||||
Warrant | (53 | ) | 336 | ||||||||||||||
Assets held for sale: | |||||||||||||||||
Recovered Properties | (122 | ) | (958 | ) | |||||||||||||
CVRs | (74 | ) | (915 | ) | |||||||||||||
Fair Value Measurements Using Significant Unobservable Inputs | ' | ||||||||||||||||
During the years ended December 31, 2013 and 2012, losses of $0.1 million and $0.9 million were recorded in general and administrative expense to reflect changes in the estimated fair value of the CVR liability. 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 December 31, 2013 | $ | - | |||||||||||||||
(in thousands) | Fair Value Measurements Using Significant Unobservable Inputs (Level 3)CVRs | ||||||||||||||||
Fair Value as of December 31, 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 Nonrecurring Basis | ' | ||||||||||||||||
Such assets and liabilities are listed below at their carrying values as of each reporting date: | |||||||||||||||||
(in thousands) | Value at Reporting Date Using | ||||||||||||||||
Description | As of December 31, 2013 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Goodwill | $ | 47,842 | $ | - | $ | - | $ | 47,842 | |||||||||
Property, equipment and software | 20,315 | - | - | 20,315 | |||||||||||||
Pre-publication costs, net | 13,401 | - | - | 13,401 | |||||||||||||
Acquired curriculum and technology intangibles, net | 8,719 | - | - | 8,719 | |||||||||||||
Acquired publishing rights, net | 4,705 | - | - | 4,705 | |||||||||||||
Other intangible assets, net | 6,251 | - | - | 6,251 | |||||||||||||
(in thousands) | Value at Reporting Date Using | ||||||||||||||||
Description | As of December 31, 2012 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
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 Years Ended December 31, | ||||||||||||||||
Description | 2013 | 2012 | |||||||||||||||
Goodwill | $ | - | $ | (66,893 | ) | ||||||||||||
Property, equipment and software | (319 | ) | (4,448 | ) | |||||||||||||
Pre-publication costs, net | (633 | ) | (1,496 | ) | |||||||||||||
Acquired curriculum and technology intangibles, net | (493 | ) | (9,361 | ) | |||||||||||||
Acquired publishing rights, net | - | (11,307 | ) | ||||||||||||||
Other intangible assets, net | (58 | ) | (7,095 | ) | |||||||||||||
Schedule of Impairment of Long-Lived Assets | ' | ||||||||||||||||
The likelihood of completing a sales transaction began to decline during the fourth quarter of 2013 and the sales effort was withdrawn in early 2014. The Company determined that this decline in estimated future cash flows related to the product line was a trigger event for performing another review of the recoverability of the related assets. Given that the Company plans to cease selling the product line after completion of its remaining service contracts, the related assets were determined to not be recoverable. As such, the Company performed an impairment analysis resulting in a total charge of $1.2 million. The impairment was allocated as follows: | |||||||||||||||||
(in thousands) | |||||||||||||||||
Description | |||||||||||||||||
Property, equipment and software | $ | (319 | ) | ||||||||||||||
Pre-publication costs, net | (230 | ) | |||||||||||||||
Acquired curriculum and technology intangibles, net | (493 | ) | |||||||||||||||
Other intangible assets, net | (58 | ) | |||||||||||||||
Other assets | (89 | ) | |||||||||||||||
Total | $ | (1,189 | ) | ||||||||||||||
Debt_Tables
Debt (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Long-Term Debt | ' | ||||||||
Long-term debt consists of the following at December 31, 2013 and 2012: | |||||||||
December 31, | December 31, | ||||||||
(in thousands) | 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 | (509 | ) | (672 | ) | |||||
Total long-term debt | $ | 174,491 | $ | 174,328 | |||||
ProfitSharing_Pension_and_Othe1
Profit-Sharing, Pension, and Other Postretirement Benefit Plans (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Schedule of net cost benefit pension plan | ' | ||||||||||
The net costs of the Company’s defined benefit pension plan for the years ended December 31, 2013 and 2012 are as follows: | |||||||||||
(in thousands) | 2013 | 2012 | |||||||||
Interest cost | $ | 419 | $ | 497 | |||||||
Recognized net actuarial (gain) loss | (384 | ) | 979 | ||||||||
Net pension and other postretirement benefit cost | $ | 35 | $ | 1,476 | |||||||
Schedule of funded status defined benefit pension plan | ' | ||||||||||
The funded status of the Company’s U.S. defined benefit pension plan at the end of fiscal 2013 and 2012 is as follows: | |||||||||||
(in thousands) | 2013 | 2012 | |||||||||
Change in Benefit Obligation | |||||||||||
Benefit obligation, beginning of period | $ | 12,571 | $ | 12,291 | |||||||
Service cost | - | - | |||||||||
Interest cost | 419 | 497 | |||||||||
Actuarial (gain) loss | (384 | ) | 979 | ||||||||
Benefits paid | (1,193 | ) | (1,196 | ) | |||||||
Benefit obligation, end of year | $ | 11,413 | $ | 12,571 | |||||||
Change in Plan Assets | |||||||||||
Fair value, beginning of period | $ | - | $ | - | |||||||
Company contributions | 1,193 | 1,196 | |||||||||
Benefits paid | (1,193 | ) | (1,196 | ) | |||||||
Fair value, end of year | $ | - | $ | - | |||||||
Unfunded status | $ | (11,413 | ) | $ | (12,571 | ) | |||||
Accrued benefit cost | $ | (11,413 | ) | $ | (12,571 | ) | |||||
Amounts recognized in the Consolidated Balance Sheets | |||||||||||
Current accrued benefit liability | $ | (1,172 | ) | $ | (1,179 | ) | |||||
Non-current accrued benefit liability | (10,241 | ) | (11,392 | ) | |||||||
Net amount recognized | $ | (11,413 | ) | $ | (12,571 | ) | |||||
Recognized component of net pension cost | ' | ||||||||||
Plan Assumptions | |||||||||||
2013 | 2012 | ||||||||||
Discount rate | 4.25 | % | 3.5 | % | |||||||
Projected benefit obligation and accumulated benefit obligation of pension plan | ' | ||||||||||
For the Company’s U.S. defined benefit pension plan, the projected benefit obligation and accumulated benefit obligation at the end of fiscal 2013 and 2012 are as follows: | |||||||||||
(in thousands) | 2013 | 2012 | |||||||||
Projected benefit obligation | $ | 11,413 | $ | 12,571 | |||||||
Accumulated benefit obligation | 11,413 | 12,571 | |||||||||
Gross benefit payment obligations | ' | ||||||||||
Gross benefit payment obligations under the Company’s continuing plans for the next ten years are anticipated to be as follows: | |||||||||||
(in thousands) | U.S. Retirement Plans | ||||||||||
(Pension Plan and RBP) | |||||||||||
2014 | $ | 1,193 | |||||||||
2015 | 1,152 | ||||||||||
2016 | 1,109 | ||||||||||
2017 | 1,061 | ||||||||||
2018 | 1,016 | ||||||||||
2019 - 2023 | 4,366 | ||||||||||
Stockholders_Equity_Deficit_Ta
Stockholders' Equity (Deficit) (Tables) | 12 Months Ended | |||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||
Shares Repurchased Under the Program | ' | |||||||||||||||||||||
Shares repurchased under the Plan | Other shares repurchased under the Program | Total shares repurchased under the Program | Cost of shares repurchased under the Program ($ thousands) | |||||||||||||||||||
2012 | 601,974 | 1,864,622 | 2,466,596 | $ | 2,597 | |||||||||||||||||
2013 | 193,858 | 1,861,969 | 2,055,827 | 4,619 | ||||||||||||||||||
Total | 795,832 | 3,726,591 | 4,522,423 | $ | 7,216 | |||||||||||||||||
StockBased_Compensation_and_Ex1
Stock-Based Compensation and Expense (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Stock-Based Compensation and Expense | ' | ||||||||||||||||||||||||
The stock-based compensation and expense recorded was allocated as follows: | |||||||||||||||||||||||||
(in thousands) | 2013 | 2012 | |||||||||||||||||||||||
Cost of revenues | $ | 65 | $ | 51 | |||||||||||||||||||||
Research and development expense | 132 | 122 | |||||||||||||||||||||||
Sales and marketing expense | 124 | 114 | |||||||||||||||||||||||
General and administrative expense | 569 | 587 | |||||||||||||||||||||||
Total | $ | 890 | $ | 874 | |||||||||||||||||||||
Black-Scholes Option-Pricing Assumptions Used to Estimate Fair Value of Stock Awards | ' | ||||||||||||||||||||||||
The fair value of each stock-based compensation award granted is estimated on the date of grant using the Black-Scholes option-pricing model. The following assumptions were used in the Black-Scholes option-pricing model to estimate the fair value of the awards granted during the years ended December 31, 2013 and 2012: | |||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||
Expected stock volatility | 63.1% - 63.9 | % | 35 | % | |||||||||||||||||||||
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 | % | 0 | % | |||||||||||||||||||||
Schedule of Outstanding Stock Options | ' | ||||||||||||||||||||||||
The following tables detail changes in the Company’s outstanding stock options during the years ended December 31, 2013 and 2012. Options surrendered in the exchange offer of 1,757,500 options are included in “Cancelled/Forfeited” in the 2013 table below. | |||||||||||||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||||||||||
Grant Date | Beginning Outstanding | Granted | Cancelled/Forfeited | Ending Outstanding | |||||||||||||||||||||
8-Dec-09 | 1,550,000 | - | 1,550,000 | - | |||||||||||||||||||||
27-Jan-10 | 1,065,398 | - | 1,060,398 | 5,000 | |||||||||||||||||||||
25-May-10 | 92,401 | - | 92,401 | - | |||||||||||||||||||||
1-Feb-11 | 165,290 | - | 165,290 | - | |||||||||||||||||||||
21-Nov-11 | 150,000 | - | 70,842 | 79,158 | |||||||||||||||||||||
1-Dec-11 | 500,000 | - | 500,000 | - | |||||||||||||||||||||
8-Feb-12 | 195,000 | - | 195,000 | - | |||||||||||||||||||||
16-Apr-12 | 15,000 | - | 15,000 | - | |||||||||||||||||||||
14-May-12 | 25,000 | - | 14,802 | 10,198 | |||||||||||||||||||||
30-Jul-13 | - | 2,280,000 | 92,656 | 2,187,344 | |||||||||||||||||||||
19-Sep-13 | - | 30,000 | - | 30,000 | |||||||||||||||||||||
28-Oct-13 | - | 40,000 | - | 40,000 | |||||||||||||||||||||
18-Nov-13 | - | 15,000 | - | 15,000 | |||||||||||||||||||||
Total | 3,758,089 | 2,365,000 | 3,756,389 | 2,366,700 | |||||||||||||||||||||
Year Ended December 31, 2012 | |||||||||||||||||||||||||
Grant Date | Beginning Outstanding | Granted | Cancelled/Forfeited | Ending Outstanding | |||||||||||||||||||||
8-Dec-09 | 1,853,080 | - | 303,080 | 1,550,000 | |||||||||||||||||||||
27-Jan-10 | 1,255,926 | - | 190,528 | 1,065,398 | |||||||||||||||||||||
25-May-10 | 100,000 | - | 7,599 | 92,401 | |||||||||||||||||||||
1-Feb-11 | 198,640 | - | 33,350 | 165,290 | |||||||||||||||||||||
11-Aug-11 | 10,000 | - | 10,000 | - | |||||||||||||||||||||
21-Nov-11 | 150,000 | - | - | 150,000 | |||||||||||||||||||||
1-Dec-11 | 500,000 | - | - | 500,000 | |||||||||||||||||||||
8-Feb-12 | - | 195,000 | - | 195,000 | |||||||||||||||||||||
16-Apr-12 | - | 15,000 | - | 15,000 | |||||||||||||||||||||
14-May-12 | - | 25,000 | - | 25,000 | |||||||||||||||||||||
Total | 4,067,646 | 235,000 | 544,557 | 3,758,089 | |||||||||||||||||||||
Summary of Stock Option, Stock Appreciation Right and Restricted Stock Transactions | ' | ||||||||||||||||||||||||
A summary of the stock option and restricted stock transactions for the year ended December 31, 2013 is as follows: | |||||||||||||||||||||||||
Stock Option Grantees | Restricted Stock | ||||||||||||||||||||||||
Weighted | Weighted | ||||||||||||||||||||||||
Average | Average | ||||||||||||||||||||||||
Shares | Exercise | Shares | Grant Date | ||||||||||||||||||||||
(000s) | Price | (000s) | Fair Value | ||||||||||||||||||||||
Awards outstanding at December 31, 2012 | 3,758 | $ | 4.89 | 50 | $ | 3.23 | |||||||||||||||||||
For the year ended December 31, 2013: | |||||||||||||||||||||||||
Granted | 2,365 | 1.3 | - | - | |||||||||||||||||||||
Exercised/Restricted Stock Vested | - | - | 48 | 3.25 | |||||||||||||||||||||
Forfeited/cancelled | 3,756 | 4.81 | - | - | |||||||||||||||||||||
Awards outstanding at December 31, 2013 | 2,367 | $ | 1.43 | 2 | $ | 3 | |||||||||||||||||||
Awards exercisable at December 31, 2013 | 653 | $ | 1.77 | ||||||||||||||||||||||
Weighted average fair value of awards granted during the year ended December 31, 2013 | $ | 0.67 | |||||||||||||||||||||||
Summary of Nonvested Stock Option Transactions | ' | ||||||||||||||||||||||||
A summary of the nonvested stock option transactions for the year ended December 31, 2013 is as follows: | |||||||||||||||||||||||||
Weighted | |||||||||||||||||||||||||
Average | |||||||||||||||||||||||||
Shares | Grant Date | ||||||||||||||||||||||||
(000s) | Fair Value | ||||||||||||||||||||||||
Nonvested awards outstanding at December 31, 2012 | 1,498 | $ | 0.98 | ||||||||||||||||||||||
For the year ended December 31, 2013: | |||||||||||||||||||||||||
Granted | 2,365 | 0.67 | |||||||||||||||||||||||
Vested | 856 | 0.77 | |||||||||||||||||||||||
Forfeited/cancelled | 1,293 | 0.96 | |||||||||||||||||||||||
Nonvested awards outstanding at December 31, 2013 | 1,714 | $ | 0.67 | ||||||||||||||||||||||
Additional Information on Stock Options and Stock Appreciation Rights Outstanding | ' | ||||||||||||||||||||||||
The following tables provide additional information with respect to stock options outstanding at the end of fiscal 2013: | |||||||||||||||||||||||||
Awards Outstanding | Awards Exercisable | ||||||||||||||||||||||||
Weighted | Weighted | ||||||||||||||||||||||||
Average | Weighted | Average | Weighted | ||||||||||||||||||||||
Number | Remaining | Average | Number | Remaining | Average | ||||||||||||||||||||
Range of | Outstanding | Contractual | Exercise | Exercisable | Contractual | Exercise | |||||||||||||||||||
Exercise Price | (000's) | Life (Years) | Price | (000's) | Life (Years) | Price | |||||||||||||||||||
$1.51 and below | 2,273 | 6.9 | $ | 1.3 | 559 | 6.8 | $ | 1.3 | |||||||||||||||||
$1.52 - $6.50 | 94 | 7.8 | 4.53 | 94 | 7.8 | 4.53 | |||||||||||||||||||
2,367 | 6.9 | $ | 1.43 | 653 | 6.9 | $ | 1.77 | ||||||||||||||||||
Securities Authorized for Issuance Under Equity Compensation Plans | ' | ||||||||||||||||||||||||
Securities authorized for issuance under equity compensation plans at December 31, 2013 are as follows: | |||||||||||||||||||||||||
(in thousands, except per share amounts) | Number of securities to be | Weighted-average | Number of securities | ||||||||||||||||||||||
Plan Category | issued upon exercise of | exercise price of | remaining available | ||||||||||||||||||||||
outstanding options | outstanding options | for future issuance | |||||||||||||||||||||||
under equity | |||||||||||||||||||||||||
incentive plan (a) | |||||||||||||||||||||||||
Equity compensation plans approved by security holders | 2,367 | $ | 1.43 | 2,530 | |||||||||||||||||||||
Equity compensation plans not approved by security holders | — | — | — | ||||||||||||||||||||||
2,367 | $ | 1.43 | 2,530 | ||||||||||||||||||||||
Total | |||||||||||||||||||||||||
· | Excludes securities reflected in the first column, “Number of securities to be issued upon exercise of outstanding options and rights,” and issued restricted stock. |
Restructuring_Tables
Restructuring (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 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 Year Ended December 31, 2012 | Total Incurred as of December 31, 2012 | Total Amount Incurred Under the Plan | ||||||||
One-time termination benefits | $ | 2,507 | $ | 3,696 | $ | 3,696 | |||||
Impairment of long-lived assets | 4,448 | 4,448 | 4,448 | ||||||||
Warehouse transition costs | 1,003 | 1,003 | 1,003 | ||||||||
Facility rationalization costs | 209 | 209 | 209 | ||||||||
Process reengineering costs | 203 | 203 | 203 | ||||||||
$ | 8,370 | $ | 9,559 | $ | 9,559 | ||||||
Change in the Reengineering and Restructuring Accrual | ' | ||||||||||
The change in the reengineering and restructuring accrual for the years ended December 31, 2012 and 2013 are as follows: | |||||||||||
(in thousands) | One-time Termination Benefits | ||||||||||
Balance as of December 31, 2011 | $ | 1,133 | |||||||||
Accrual changes | 2,507 | ||||||||||
Payments made | (2,812 | ) | |||||||||
Balance as of December 31, 2012 | 828 | ||||||||||
Accrual changes | (18 | ) | |||||||||
Payments made | (810 | ) | |||||||||
Balance as of December 31, 2013 | $ | - | |||||||||
Segment_Reporting_Tables
Segment Reporting (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 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 | Learning A-Z | ExploreLearning | Kurzweil/ IntelliTools | Other | Consolidated | |||||||||||||||||||
Year ended December 31, 2013 | |||||||||||||||||||||||||
Product revenues | $ | 67,619 | $ | 33,483 | $ | 16,279 | $ | 10,418 | $ | - | $ | 127,799 | |||||||||||||
Service revenues | 22,721 | - | - | - | - | 22,721 | |||||||||||||||||||
Net revenues | 90,340 | 33,483 | 16,279 | 10,418 | - | 150,520 | |||||||||||||||||||
Cost of product revenues | 23,720 | 908 | 2,249 | 2,290 | - | 29,167 | |||||||||||||||||||
Cost of service revenues | 17,521 | - | - | - | - | 17,521 | |||||||||||||||||||
Amortization | - | - | - | - | 17,519 | 17,519 | |||||||||||||||||||
Total cost of revenues | 41,241 | 908 | 2,249 | 2,290 | 17,519 | 64,207 | |||||||||||||||||||
Other operating expenses | 31,115 | 13,607 | 9,152 | 4,486 | 16,746 | 75,106 | |||||||||||||||||||
Embezzlement related expense | - | - | - | - | 118 | 118 | |||||||||||||||||||
Depreciation and amortization | - | - | - | - | 4,895 | 4,895 | |||||||||||||||||||
Impairment of long-lived assets | 1,038 | - | - | - | 1,189 | 2,227 | |||||||||||||||||||
Net interest expense | - | - | - | - | 18,819 | 18,819 | |||||||||||||||||||
Other income, net | - | - | - | - | (764 | ) | (764 | ) | |||||||||||||||||
Income tax expense | - | - | - | - | 165 | 165 | |||||||||||||||||||
Segment net income (loss) | $ | 16,946 | $ | 18,968 | $ | 4,878 | $ | 3,642 | $ | (58,687 | ) | $ | (14,253 | ) | |||||||||||
Capital expenditures | $ | 7,110 | $ | 4,401 | $ | 1,462 | $ | 418 | $ | 2,724 | $ | 16,115 | |||||||||||||
(in thousands) | Voyager Sopris Learning | Learning A-Z | ExploreLearning | Kurzweil/ IntelliTools | Other | Consolidated | |||||||||||||||||||
Year ended December 31, 2012 | |||||||||||||||||||||||||
Product revenues | $ | 78,463 | $ | 26,189 | $ | 14,283 | $ | 11,225 | $ | - | $ | 130,160 | |||||||||||||
Service revenues | 18,399 | - | - | - | - | 18,399 | |||||||||||||||||||
Net revenues | 96,862 | 26,189 | 14,283 | 11,225 | - | 148,559 | |||||||||||||||||||
Cost of product revenues | 26,406 | 659 | 1,929 | 2,712 | 1,578 | 33,284 | |||||||||||||||||||
Cost of service revenues | 17,679 | - | - | - | - | 17,679 | |||||||||||||||||||
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 | |||||||||||||||||||
Embezzlement related expense | - | - | - | - | 516 | 516 | |||||||||||||||||||
Goodwill impairment | - | - | - | - | 66,893 | 66,893 | |||||||||||||||||||
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 18 to the Consolidated Financial Statements. |
Interim_Financial_Information_1
Interim Financial Information (Unaudited) (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Schedule of Quarterly Financial Information | ' | ||||||||||||||||||||
The following table presents the Company’s quarterly results of operations for fiscal 2013 and 2012. | |||||||||||||||||||||
(in thousands, except per share data) | First | Second | Third | Fourth | Total | ||||||||||||||||
Quarter | Quarter | Quarter | Quarter | Year | |||||||||||||||||
2013 | |||||||||||||||||||||
Net revenues | $ | 31,429 | $ | 42,786 | $ | 42,957 | $ | 33,348 | $ | 150,520 | |||||||||||
Cost of revenues | 11,403 | 12,647 | 12,950 | 9,688 | 46,688 | ||||||||||||||||
Other operating expenses | 24,679 | 25,138 | 25,194 | 24,854 | 99,865 | ||||||||||||||||
Earnings (loss) before income taxes | (9,010 | ) | 533 | 255 | (5,866 | ) | (14,088 | ) | |||||||||||||
Income tax (expense) benefit | (68 | ) | (102 | ) | (127 | ) | 132 | (165 | ) | ||||||||||||
Net income (loss) | (9,078 | ) | 431 | 128 | (5,734 | ) | (14,253 | ) | |||||||||||||
Basic income (loss) per share | $ | (0.19 | ) | $ | 0.01 | $ | - | $ | (0.13 | ) | $ | (0.30 | ) | ||||||||
Diluted income (loss) per share | $ | (0.19 | ) | $ | 0.01 | $ | - | $ | (0.13 | ) | $ | (0.30 | ) | ||||||||
2012 | |||||||||||||||||||||
Net revenues | $ | 27,855 | $ | 40,429 | $ | 45,958 | $ | 34,317 | $ | 148,559 | |||||||||||
Cost of revenues | 11,166 | 14,397 | 14,274 | 11,126 | 50,963 | ||||||||||||||||
Other operating expenses | 32,035 | 43,942 | 29,350 | 108,222 | 213,549 | ||||||||||||||||
Earnings (loss) before income taxes | (20,087 | ) | (22,500 | ) | (2,131 | ) | (88,793 | ) | (133,511 | ) | |||||||||||
Income tax (expense) benefit | (177 | ) | 23 | (104 | ) | (14 | ) | (272 | ) | ||||||||||||
Net income (loss) | (20,264 | ) | (22,477 | ) | (2,235 | ) | (88,807 | ) | (133,783 | ) | |||||||||||
Basic income (loss) per share | $ | (0.41 | ) | $ | (0.45 | ) | $ | (0.05 | ) | $ | (1.83 | ) | $ | (2.71 | ) | ||||||
Diluted income (loss) per share | $ | (0.41 | ) | $ | (0.45 | ) | $ | (0.05 | ) | $ | (1.83 | ) | $ | (2.71 | ) | ||||||
Subsidiary_Guarantor_Financial1
Subsidiary Guarantor Financial Statements (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Condensed Consolidated Statement of Operations | ' | ||||||||||||||||||||
Condensed Consolidated Statement of Operations | |||||||||||||||||||||
Twelve Months Ended December 31, 2013 | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||
Parent Company | Subsidiary Guarantors | Non-Guarantor Subsidiary | Eliminations | Consolidated | |||||||||||||||||
Net revenues | $ | - | $ | 150,520 | $ | - | $ | - | $ | 150,520 | |||||||||||
Total costs and expenses | 1,444 | 144,484 | 625 | - | 146,553 | ||||||||||||||||
Income (loss) before interest, other income and income taxes | (1,444 | ) | 6,036 | (625 | ) | - | 3,967 | ||||||||||||||
Net interest expense | (18,604 | ) | (209 | ) | (6 | ) | - | (18,819 | ) | ||||||||||||
Other income, net | - | 764 | - | - | 764 | ||||||||||||||||
Income tax expense | - | (165 | ) | - | - | (165 | ) | ||||||||||||||
Net income (loss) | $ | (20,048 | ) | $ | 6,426 | $ | (631 | ) | $ | - | $ | (14,253 | ) | ||||||||
Condensed Consolidated Statement of Operations | |||||||||||||||||||||
Twelve Months Ended December 31, 2012 | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||
Parent Company | Subsidiary Guarantors | Non-Guarantor Subsidiary | Eliminations | Consolidated | |||||||||||||||||
Net revenues | $ | - | $ | 148,559 | $ | - | $ | - | $ | 148,559 | |||||||||||
Total costs and expenses | 2,094 | 261,754 | 664 | - | 264,512 | ||||||||||||||||
Loss before interest, other income and income taxes | (2,094 | ) | (113,195 | ) | (664 | ) | - | (115,953 | ) | ||||||||||||
Net interest expense | (18,608 | ) | (65 | ) | (10 | ) | - | (18,683 | ) | ||||||||||||
Other income, net | - | 1,125 | - | - | 1,125 | ||||||||||||||||
Income tax expense | - | (272 | ) | - | - | (272 | ) | ||||||||||||||
Net loss | $ | (20,702 | ) | $ | (112,407 | ) | $ | (674 | ) | $ | - | $ | (133,783 | ) | |||||||
Condensed Consolidated Balance Sheet | ' | ||||||||||||||||||||
Condensed Consolidated Balance Sheet | |||||||||||||||||||||
As of December 31, 2013 | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||
Parent Company | Subsidiary Guarantors | Non-Guarantor Subsidiary | Eliminations | Consolidated | |||||||||||||||||
Investment in subsidiaries | $ | 252,333 | $ | - | $ | - | $ | (252,333 | ) | $ | - | ||||||||||
Other assets | 211,805 | 259,776 | 19,022 | (274,393 | ) | 216,210 | |||||||||||||||
Total assets | $ | 464,138 | $ | 259,776 | $ | 19,022 | $ | (526,726 | ) | $ | 216,210 | ||||||||||
Total liabilities | $ | 253,322 | $ | 279,346 | $ | 21,125 | $ | (274,393 | ) | $ | 279,400 | ||||||||||
Total stockholders' equity | 210,816 | (19,570 | ) | (2,103 | ) | (252,333 | ) | (63,190 | ) | ||||||||||||
Total liabilities and stockholders' equity | $ | 464,138 | $ | 259,776 | $ | 19,022 | $ | (526,726 | ) | $ | 216,210 | ||||||||||
Condensed Consolidated Balance Sheet | |||||||||||||||||||||
As of December 31, 2012 | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||
Parent Company | Subsidiary Guarantors | Non-Guarantor Subsidiary | Eliminations | Consolidated | |||||||||||||||||
Investment in subsidiaries | $ | 252,333 | $ | - | $ | - | $ | (252,333 | ) | $ | - | ||||||||||
Other assets | 209,034 | 241,827 | 20,314 | (240,716 | ) | 230,459 | |||||||||||||||
Total assets | $ | 461,367 | $ | 241,827 | $ | 20,314 | $ | (493,049 | ) | $ | 230,459 | ||||||||||
Total liabilities | $ | 227,107 | $ | 267,823 | $ | 22,290 | $ | (240,716 | ) | $ | 276,504 | ||||||||||
Total stockholders' equity | 234,260 | (25,996 | ) | (1,976 | ) | (252,333 | ) | (46,045 | ) | ||||||||||||
Total liabilities and stockholders' equity | $ | 461,367 | $ | 241,827 | $ | 20,314 | $ | (493,049 | ) | $ | 230,459 | ||||||||||
Condensed Statement of Cash Flows | ' | ||||||||||||||||||||
Condensed Statement of Cash Flows | |||||||||||||||||||||
Twelve Months Ended December 31, 2013 | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||
Parent Company | Subsidiary Guarantors | Non-Guarantor Subsidiary | Eliminations | Consolidated | |||||||||||||||||
Net cash provided by operating activities | $ | 19,033 | $ | 26,753 | $ | - | $ | - | $ | 45,786 | |||||||||||
Net cash used in investing activities | (7,673 | ) | (16,115 | ) | - | - | (23,788 | ) | |||||||||||||
Net cash used in financing activities | (4,619 | ) | (1,290 | ) | - | - | (5,909 | ) | |||||||||||||
Increase in cash and cash equivalents | 6,741 | 9,348 | - | - | 16,089 | ||||||||||||||||
Cash and cash equivalents, beginning of period | 5,288 | 46,616 | - | - | 51,904 | ||||||||||||||||
Cash and cash equivalents, end of period | $ | 12,029 | $ | 55,964 | $ | - | $ | - | $ | 67,993 | |||||||||||
Condensed Statement of Cash Flows | |||||||||||||||||||||
Twelve Months Ended December 31, 2012 | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||
Parent Company | Subsidiary Guarantors | Non-Guarantor Subsidiary | Eliminations | Consolidated | |||||||||||||||||
Net cash provided by operating activities | $ | 2,597 | $ | 7,732 | $ | - | $ | - | $ | 10,329 | |||||||||||
Net cash used in investing activities | - | (17,881 | ) | - | - | (17,881 | ) | ||||||||||||||
Net cash used in financing activities | (2,597 | ) | (1,138 | ) | - | - | (3,735 | ) | |||||||||||||
Decrease in cash and cash equivalents | - | (11,287 | ) | - | - | (11,287 | ) | ||||||||||||||
Cash and cash equivalents, beginning of period | 5,288 | 57,903 | - | - | 63,191 | ||||||||||||||||
Cash and cash equivalents, end of period | $ | 5,288 | $ | 46,616 | $ | - | $ | - | $ | 51,904 | |||||||||||
Basis_of_Presentation_Details_
Basis of Presentation (Details Textual) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Brands | Segment | |
Segment | ||
Subsidiaries | ||
Basis of Presentation (Textual) [Abstract] | ' | ' |
Number of wholly owned subsidiaries | 2 | ' |
Number of reportable business segments | 4 | 2 |
Number of industry leading brands | 6 | ' |
Technology Education Business 1 | ' | ' |
Basis of Presentation (Textual) [Abstract] | ' | ' |
Company's industry leading brands | 'Learning AbZ | ' |
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 Sopris Learning | ' |
Significant_Accounting_Policie3
Significant Accounting Policies (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Reconciliation of the accounts receivable reserve | ' | ' |
Beginning accounts receivable reserve | $431 | $925 |
Charged to costs and expenses | 9 | 48 |
Charged to other accounts | 358 | -514 |
Write-offs | -63 | -28 |
Ending accounts receivable reserve | $735 | $431 |
Significant_Accounting_Policie4
Significant Accounting Policies (Details 1) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Summary of basic and diluted net loss per common share | ' | ' |
Basic | 47,040 | 49,395 |
Dilutive effect of awards | ' | ' |
Diluted | 47,040 | 49,395 |
Options | ' | ' |
Antidilutive securities: | ' | ' |
Antidilutive securities | 2,367 | 3,758 |
Warrants | ' | ' |
Antidilutive securities: | ' | ' |
Antidilutive securities | ' | 282 |
Restricted Stock | ' | ' |
Antidilutive securities: | ' | ' |
Antidilutive securities | 2 | 49 |
Significant_Accounting_Policie5
Significant Accounting Policies (Details 2) | 12 Months Ended |
Dec. 31, 2013 | |
Machinery and Equipment | Maximum | ' |
Estimated lives | ' |
Property, Plant and Equipment, Useful Life | '15 years |
Machinery and Equipment | Minimum | ' |
Estimated lives | ' |
Property, Plant and Equipment, Useful Life | '5 years |
Furniture and fixtures | ' |
Estimated lives | ' |
Property, Plant and Equipment, Useful Life | '8 years |
Computer Equipment and Software | Maximum | ' |
Estimated lives | ' |
Property, Plant and Equipment, Useful Life | '5 years |
Computer Equipment and Software | Minimum | ' |
Estimated lives | ' |
Property, Plant and Equipment, Useful Life | '3 years |
Leasehold improvements | ' |
Estimated lives | ' |
Leasehold improvements | 'Lesser of useful life or lease term |
Significant_Accounting_Policie6
Significant Accounting Policies (Details 3) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Depreciation and amortization | ' | ' |
Acquired publishing rights | $2,897 | $7,952 |
Acquired curriculum and technology | 3,687 | 8,315 |
Pre-publication costs | 5,115 | 4,466 |
Internally developed software related to product | 5,820 | 3,983 |
Total amortization included in cost of revenues | 17,519 | 24,716 |
Tradenames and trademarks | 492 | 1,154 |
Other intangible assets | 1,315 | 2,026 |
Property, equipment and software | 3,088 | 3,002 |
Total depreciation and amortization included in operating expenses | 4,895 | 6,182 |
Total depreciation and amortization | $22,414 | $30,898 |
Significant_Accounting_Policie7
Significant Accounting Policies (Details Textual) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Significant Accounting Policies (Additional Textual) [Abstract] | ' | ' | ' |
Telephone support and software repair services provided free in certain instances, period | '3 months | ' | ' |
Allowance for doubtful accounts and estimated sales returns | $700,000 | $400,000 | ' |
Unamortized capitalized software | 14,400,000 | 14,800,000 | ' |
Amounts of software under development | 1,100,000 | 3,500,000 | ' |
Samples cost | 1,100,000 | 1,500,000 | ' |
Advertising expenses | 1,600,000 | 2,000,000 | ' |
Significant Accounting Policies (Textual) [Abstract] | ' | ' | ' |
Total other intangibles - accumulated amortization | 57,194,000 | 49,063,000 | 121,352,000 |
Impairment of long-lived assets | 2,227,000 | 33,707,000 | ' |
Goodwill and Other Intangible Assets | ' | ' | ' |
Significant Accounting Policies (Textual) [Abstract] | ' | ' | ' |
Total other intangibles - accumulated amortization | 19,600,000 | 17,800,000 | ' |
Acquired Curriculum and Technology | ' | ' | ' |
Significant Accounting Policies (Textual) [Abstract] | ' | ' | ' |
Total other intangibles - accumulated amortization | 15,100,000 | 12,700,000 | ' |
Acquired Publishing Rights | ' | ' | ' |
Significant Accounting Policies (Textual) [Abstract] | ' | ' | ' |
Expected economic life of product | '10 years | ' | ' |
Total other intangibles - accumulated amortization | 21,500,000 | 18,600,000 | ' |
Pre-Publication Costs | ' | ' | ' |
Significant Accounting Policies (Textual) [Abstract] | ' | ' | ' |
Expected economic life of product | '5 years | ' | ' |
Total other intangibles - accumulated amortization | 18,300,000 | 13,200,000 | ' |
Interest capitalized | 300,000 | 500,000 | ' |
Impairment of long-lived assets | $600,000 | $1,500,000 | ' |
Minimum | ' | ' | ' |
Significant Accounting Policies (Textual) [Abstract] | ' | ' | ' |
Subscription period | '12 months | ' | ' |
Minimum | Goodwill and Other Intangible Assets | ' | ' | ' |
Significant Accounting Policies (Textual) [Abstract] | ' | ' | ' |
Expected economic life of product | '6 years | ' | ' |
Minimum | Software and Software Development Costs | ' | ' | ' |
Significant Accounting Policies (Textual) [Abstract] | ' | ' | ' |
Expected economic life of product | '3 years | ' | ' |
Minimum | Acquired Curriculum and Technology | ' | ' | ' |
Significant Accounting Policies (Textual) [Abstract] | ' | ' | ' |
Expected economic life of product | '6 years | ' | ' |
Maximum | ' | ' | ' |
Significant Accounting Policies (Textual) [Abstract] | ' | ' | ' |
Subscription period | '24 months | ' | ' |
Maximum | Goodwill and Other Intangible Assets | ' | ' | ' |
Significant Accounting Policies (Textual) [Abstract] | ' | ' | ' |
Expected economic life of product | '16 years | ' | ' |
Maximum | Software and Software Development Costs | ' | ' | ' |
Significant Accounting Policies (Textual) [Abstract] | ' | ' | ' |
Expected economic life of product | '5 years | ' | ' |
Maximum | Acquired Curriculum and Technology | ' | ' | ' |
Significant Accounting Policies (Textual) [Abstract] | ' | ' | ' |
Expected economic life of product | '7 years | ' | ' |
Embezzlement_Related_Expense_D
Embezzlement Related Expense (Details Textual) (USD $) | 1 Months Ended | 12 Months Ended | |
Apr. 30, 2008 | Dec. 31, 2013 | Dec. 31, 2012 | |
Embezzlement Related Expense (Textual) [Abstract] | ' | ' | ' |
Losses incurred | $14,000,000 | ' | ' |
Embezzlement internal investigation review period | ' | '3 years | ' |
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 | ' | 300,000 | ' |
Increase in shares under the warrants | ' | 17,864 | 130,490 |
Estimated liability recorded as embezzlement and related expense (recoveries) | ' | ' | 100,000 |
Assets held for sale for recovery of embezzlement | ' | ' | $380,000 |
Acquisitions_Details
Acquisitions (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | |||
Allocation of the purchase price | ' | ' | ' |
Goodwill | $47,842 | $47,404 | $114,297 |
Headsprout | ' | ' | ' |
Allocation of the purchase price | ' | ' | ' |
Accounts receivable | 268 | ' | ' |
Intangible assets | 3,859 | ' | ' |
Deferred revenue | -455 | ' | ' |
Accrued expenses | -110 | ' | ' |
Goodwill | 438 | ' | ' |
Total net assets acquired | $4,000 | ' | ' |
Acquisitions_Details_1
Acquisitions (Details 1) (Headsprout, USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 |
Curriculum and technology | ' |
Other identified Intangibles acquired | ' |
Asset Value | $3,579 |
Useful Life | '7 years |
Tradenames and trademarks | ' |
Other identified Intangibles acquired | ' |
Asset Value | $280 |
Useful Life | '15 years |
Acquisitions_Details_2
Acquisitions (Details 2) (Headsprout, USD $) | 12 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Headsprout | ' | ' |
Supplemental Pro Forma Information | ' | ' |
Net revenues | $153,122 | $151,687 |
Loss before income taxes | -16,019 | -137,969 |
Net loss | ($16,206) | ($138,250) |
Net loss per share - basic and diluted | ($0.34) | ($2.80) |
Acquisitions_Details_Textual
Acquisitions (Details Textual) (Headsprout, USD $) | 12 Months Ended | 1 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 | Jan. 31, 2014 |
Subsequent event | ||
Acquisitions (Textual) [Abstract] | ' | ' |
Assets acquired through business combination | $4 | ' |
Purchase consideration payment | ' | 3.6 |
Business combination consideration payable | $0.40 | ' |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
Current income tax expense: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
United States federal | ' | ' | ' | ' | ' | ' | ' | ' | $0 | $2 |
State and local | ' | ' | ' | ' | ' | ' | ' | ' | 218 | 376 |
Current income tax expense | ' | ' | ' | ' | ' | ' | ' | ' | 218 | 378 |
Deferred income tax expense: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
United States federal | ' | ' | ' | ' | ' | ' | ' | ' | 49 | 49 |
State and local | ' | ' | ' | ' | ' | ' | ' | ' | -102 | -155 |
Deferred income tax expense | ' | ' | ' | ' | ' | ' | ' | ' | -53 | -106 |
Income tax expense | ($132) | $127 | $102 | $68 | $14 | $104 | ($23) | $177 | $165 | $272 |
Income_Taxes_Details_1
Income Taxes (Details 1) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
Reconciliation of income tax expense and the domestic federal statutory income tax benefit | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Statutory federal income tax benefit | ' | ' | ' | ' | ' | ' | ' | ' | ($4,931) | ($46,729) |
Increase (reduction) from: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
State taxes (net of federal benefit) | ' | ' | ' | ' | ' | ' | ' | ' | 116 | 221 |
Goodwill impairment | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 23,413 |
Change in valuation allowance | ' | ' | ' | ' | ' | ' | ' | ' | 4,773 | 24,269 |
Other | ' | ' | ' | ' | ' | ' | ' | ' | 207 | -902 |
Income tax expense | ($132) | $127 | $102 | $68 | $14 | $104 | ($23) | $177 | $165 | $272 |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Deferred tax assets are attributable to: | ' | ' |
Net operating loss carryforwards | $25,589 | $23,910 |
Tax credit carryforwards | 7,622 | 7,622 |
Reserves | 4,546 | 4,897 |
Inventory | 5,552 | 6,210 |
Deferred financing costs | 1,589 | 1,036 |
Fixed assets | 1,691 | 1,303 |
Deferred revenue | 2,959 | 1,987 |
Intangibles | 5,391 | 0 |
Other | 1,867 | 1,555 |
Total gross deferred tax assets | 56,806 | 48,520 |
Valuation allowance | -51,849 | -47,076 |
Net deferred tax assets | 4,957 | 1,444 |
Deferred tax liabilities are attributable to intangibles | -4,991 | -1,580 |
Net deferred tax liability | ($34) | ($136) |
Income_Taxes_Details_3
Income Taxes (Details 3) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Deferred tax assets liabilities net | ' | ' |
Short-term deferred tax asset | $536 | $137 |
Long-term deferred tax liability | -570 | -273 |
Net deferred tax liability | ($34) | ($136) |
Income_Taxes_Details_4
Income Taxes (Details 4) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 |
Tax credits: | ' |
Tax Credit Carryforward, Amount | $7,622 |
Minimum Tax Credit | ' |
Tax credits: | ' |
Tax Credit Carryforward, Amount | 7,444 |
Tax Credit Carryforward Expiration Date One | 'Carry forward indefinitely |
Other Tax Credits | ' |
Tax credits: | ' |
Tax Credit Carryforward, Amount | 178 |
Tax Credit Carryforward Expiration Date One | '2014 - 2021 |
Domestic Tax Authority | ' |
State net operating loss carryforward (net): | ' |
Net operating loss | 71,114 |
Operating Loss Carryforwards, Expiration Dates | '2028 |
State and Local Jurisdiction | ' |
State net operating loss carryforward (net): | ' |
Net operating loss | $2,542 |
Operating Loss Carryforwards, Expiration Dates | '2014 - 2028 |
Income_Taxes_Details_5
Income Taxes (Details 5) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2011 |
Reconciliation of change in UTB balance | ' | ' |
Balance at the beginning of the year | $7,141 | $7,141 |
Decreases for expiration of the statute of limitations | -752 | ' |
Balance at the end of the year | $6,389 | $7,141 |
Income_Taxes_Details_Textual
Income Taxes (Details Textual) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Income Taxes (Additional Textual) [Abstract] | ' | ' |
Increase in the valuation allowance | $4,800,000 | $24,300,000 |
Valuation allowance allocated to reduce goodwill | 0 | ' |
Income taxes paid, net of tax refunds | 93,000 | 459,000 |
Effective income tax reconciliation rate unrecognized tax benefit | 900,000 | ' |
Unrecognized tax benefits, penalties | 0 | ' |
Liability for interest (gross) related to UTB | 200,000 | ' |
VLCY | ' | ' |
Income Taxes (Textual) [Abstract] | ' | ' |
Net operating loss utilization limitation related to acquisition of VLCY | 7,100,000 | ' |
Domestic Tax Authority | ' | ' |
Income Taxes (Textual) [Abstract] | ' | ' |
Net operating loss | 71,114,000 | ' |
Domestic Tax Authority | VLCY | ' | ' |
Income Taxes (Textual) [Abstract] | ' | ' |
Net operating loss | $27,800,000 | ' |
Property_Equipment_and_Softwar2
Property, Equipment and Software (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Balances of major classes of assets and accumulated depreciation and amortization | ' | ' |
Total | $43,224 | $35,535 |
Less accumulated depreciation and amortization | 22,909 | 14,514 |
Property, equipment and software, net | 20,315 | 21,021 |
Software | ' | ' |
Balances of major classes of assets and accumulated depreciation and amortization | ' | ' |
Total | 30,500 | 24,395 |
Machinery, computers and equipment | ' | ' |
Balances of major classes of assets and accumulated depreciation and amortization | ' | ' |
Total | 6,870 | 5,352 |
Sublease asset | ' | ' |
Balances of major classes of assets and accumulated depreciation and amortization | ' | ' |
Total | 2,814 | 2,814 |
Leasehold improvements | ' | ' |
Balances of major classes of assets and accumulated depreciation and amortization | ' | ' |
Total | 1,546 | 1,560 |
Furniture and fixtures | ' | ' |
Balances of major classes of assets and accumulated depreciation and amortization | ' | ' |
Total | $1,494 | $1,414 |
Goodwill_and_Other_Intangible_2
Goodwill and Other Intangible Assets (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2012 | Jun. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Changes in carrying amount of goodwill | ' | ' | ' | ' | ' |
Goodwill, Opening Balance | ' | ' | $236,986 | $236,986 | ' |
Accumulated Impairment Loss, Opening Balance | ' | ' | -189,582 | -122,689 | ' |
Goodwill | 47,404 | ' | 47,842 | 47,404 | 114,297 |
Goodwill impairment | -52,200 | -14,700 | ' | -66,893 | ' |
Goodwill from acquisitions | ' | ' | 438 | ' | ' |
Goodwill, Ending Balance | 236,986 | ' | 237,424 | 236,986 | ' |
Accumulated Impairment Loss, Ending Balance | -189,582 | ' | -189,582 | -189,582 | ' |
Voyager Sopris Learning | ' | ' | ' | ' | ' |
Changes in carrying amount of goodwill | ' | ' | ' | ' | ' |
Goodwill, Opening Balance | ' | ' | 178,456 | 178,456 | ' |
Accumulated Impairment Loss, Opening Balance | ' | ' | -156,438 | -104,245 | ' |
Goodwill | 22,018 | ' | 22,018 | 22,018 | 74,211 |
Goodwill impairment | ' | ' | ' | -52,193 | ' |
Goodwill from acquisitions | ' | ' | ' | ' | ' |
Goodwill, Ending Balance | 178,456 | ' | 178,456 | 178,456 | ' |
Accumulated Impairment Loss, Ending Balance | -156,438 | ' | -156,438 | -156,438 | ' |
Learning A-Z | ' | ' | ' | ' | ' |
Changes in carrying amount of goodwill | ' | ' | ' | ' | ' |
Goodwill, Opening Balance | ' | ' | 12,777 | 12,777 | ' |
Accumulated Impairment Loss, Opening Balance | ' | ' | ' | ' | ' |
Goodwill | 12,777 | ' | 13,215 | 12,777 | 12,777 |
Goodwill impairment | ' | ' | ' | ' | ' |
Goodwill from acquisitions | ' | ' | 438 | ' | ' |
Goodwill, Ending Balance | 12,777 | ' | 13,215 | 12,777 | ' |
Explore Learning | ' | ' | ' | ' | ' |
Changes in carrying amount of goodwill | ' | ' | ' | ' | ' |
Goodwill, Opening Balance | ' | ' | 6,947 | 6,947 | ' |
Accumulated Impairment Loss, Opening Balance | ' | ' | ' | ' | ' |
Goodwill | 6,947 | ' | 6,947 | 6,947 | 6,947 |
Goodwill impairment | ' | ' | ' | ' | ' |
Goodwill from acquisitions | ' | ' | ' | ' | ' |
Goodwill, Ending Balance | 6,947 | ' | 6,947 | 6,947 | ' |
Accumulated Impairment Loss, Ending Balance | ' | ' | ' | ' | ' |
Kurzweil/ IntelliTools | ' | ' | ' | ' | ' |
Changes in carrying amount of goodwill | ' | ' | ' | ' | ' |
Goodwill, Opening Balance | ' | ' | 38,806 | 38,806 | ' |
Accumulated Impairment Loss, Opening Balance | ' | ' | -33,144 | -18,444 | ' |
Goodwill | 5,662 | ' | 5,662 | 5,662 | 20,362 |
Goodwill impairment | ' | ' | ' | -14,700 | ' |
Goodwill from acquisitions | ' | ' | ' | ' | ' |
Goodwill, Ending Balance | 38,806 | ' | 38,806 | 38,806 | ' |
Accumulated Impairment Loss, Ending Balance | ($33,144) | ' | ($33,144) | ($33,144) | ' |
Goodwill_and_Other_Intangible_3
Goodwill and Other Intangible Assets (Details 1) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Other intangible assets - gross book value: | ' | ' | ' |
Total other intangibles - gross book value | $76,869 | $73,821 | $193,320 |
Additions to total other intangibles - gross book value | 3,859 | ' | ' |
Disposals to total other intangibles - gross book value | -260 | -91,736 | ' |
Impairments of Intangible Assets - gross value | -551 | -27,763 | ' |
Other intangible assets - accumulated amortization: | ' | ' | ' |
Total other intangibles - accumulated amortization | -57,194 | -49,063 | -121,352 |
Other intangible assets, net | 19,675 | 24,758 | 71,968 |
Additions to total other intangibles - accumulated amortization | -8,391 | -19,447 | ' |
Additions to other intangible assets, net | -4,532 | -19,447 | ' |
Disposals to total other intangibles - accumulated amortization | 260 | 91,736 | ' |
Disposals to Other Intangible Assets, net | ' | ' | ' |
Impairments to total other intangibles - accumulated amortization | ' | ' | ' |
Impairments to other intangible assets, net | -551 | -27,763 | ' |
Publishing Rights | ' | ' | ' |
Other intangible assets - gross book value: | ' | ' | ' |
Total other intangibles - gross book value | 26,200 | 26,200 | 90,300 |
Additions to total other intangibles - gross book value | ' | ' | ' |
Disposals to total other intangibles - gross book value | ' | -52,793 | ' |
Impairments of Intangible Assets - gross value | ' | -11,307 | ' |
Other intangible assets - accumulated amortization: | ' | ' | ' |
Total other intangibles - accumulated amortization | -21,495 | -18,598 | -63,439 |
Additions to total other intangibles - accumulated amortization | -2,897 | -7,952 | ' |
Disposals to total other intangibles - accumulated amortization | ' | 52,793 | ' |
Impairments to total other intangibles - accumulated amortization | ' | ' | ' |
Trademarks | ' | ' | ' |
Other intangible assets - gross book value: | ' | ' | ' |
Total other intangibles - gross book value | 5,690 | 5,469 | 18,028 |
Additions to total other intangibles - gross book value | 280 | ' | ' |
Disposals to total other intangibles - gross book value | -1 | -6,286 | ' |
Impairments of Intangible Assets - gross value | -58 | -6,273 | ' |
Other intangible assets - accumulated amortization: | ' | ' | ' |
Total other intangibles - accumulated amortization | -2,066 | -1,575 | -6,707 |
Additions to total other intangibles - accumulated amortization | -492 | -1,154 | ' |
Disposals to total other intangibles - accumulated amortization | 1 | 6,286 | ' |
Impairments to total other intangibles - accumulated amortization | ' | ' | ' |
Customer Relationships | ' | ' | ' |
Other intangible assets - gross book value: | ' | ' | ' |
Total other intangibles - gross book value | 7,351 | 7,351 | 19,080 |
Additions to total other intangibles - gross book value | ' | ' | ' |
Disposals to total other intangibles - gross book value | ' | -10,907 | ' |
Impairments of Intangible Assets - gross value | ' | -822 | ' |
Other intangible assets - accumulated amortization: | ' | ' | ' |
Total other intangibles - accumulated amortization | -5,416 | -4,648 | -14,337 |
Additions to total other intangibles - accumulated amortization | -768 | -1,218 | ' |
Disposals to total other intangibles - accumulated amortization | ' | 10,907 | ' |
Impairments to total other intangibles - accumulated amortization | ' | ' | ' |
Acquired Curriculum and Technology | ' | ' | ' |
Other intangible assets - gross book value: | ' | ' | ' |
Total other intangibles - gross book value | 24,828 | 22,001 | 53,112 |
Additions to total other intangibles - gross book value | 3,579 | ' | ' |
Disposals to total other intangibles - gross book value | -259 | -21,750 | ' |
Impairments of Intangible Assets - gross value | -493 | -9,361 | ' |
Other intangible assets - accumulated amortization: | ' | ' | ' |
Total other intangibles - accumulated amortization | -16,109 | -12,681 | -26,116 |
Additions to total other intangibles - accumulated amortization | -3,687 | -8,315 | ' |
Disposals to total other intangibles - accumulated amortization | 259 | 21,750 | ' |
Impairments to total other intangibles - accumulated amortization | ' | ' | ' |
Reseller Network | ' | ' | ' |
Other intangible assets - gross book value: | ' | ' | ' |
Total other intangibles - gross book value | 12,300 | 12,300 | 12,300 |
Additions to total other intangibles - gross book value | ' | ' | ' |
Disposals to total other intangibles - gross book value | ' | ' | ' |
Impairments of Intangible Assets - gross value | ' | ' | ' |
Other intangible assets - accumulated amortization: | ' | ' | ' |
Total other intangibles - accumulated amortization | -11,616 | -11,079 | -10,289 |
Additions to total other intangibles - accumulated amortization | -537 | -790 | ' |
Disposals to total other intangibles - accumulated amortization | ' | ' | ' |
Impairments to total other intangibles - accumulated amortization | ' | ' | ' |
Conference Attendees | ' | ' | ' |
Other intangible assets - gross book value: | ' | ' | ' |
Total other intangibles - gross book value | 500 | 500 | 500 |
Additions to total other intangibles - gross book value | ' | ' | ' |
Disposals to total other intangibles - gross book value | ' | ' | ' |
Impairments of Intangible Assets - gross value | ' | ' | ' |
Other intangible assets - accumulated amortization: | ' | ' | ' |
Total other intangibles - accumulated amortization | -492 | -482 | -464 |
Additions to total other intangibles - accumulated amortization | -10 | -18 | ' |
Disposals to total other intangibles - accumulated amortization | ' | ' | ' |
Impairments to total other intangibles - accumulated amortization | ' | ' | ' |
Goodwill_and_Other_Intangible_4
Goodwill and Other Intangible Assets (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | |||
Estimated aggregate amortization expense | ' | ' | ' |
2014 | $6,978 | ' | ' |
2015 | 5,086 | ' | ' |
2016 | 3,454 | ' | ' |
2017 | 1,550 | ' | ' |
2018 | 737 | ' | ' |
Thereafter | 1,870 | ' | ' |
Finite-Lived Intangible Assets, Net, Total | 19,675 | 24,758 | 71,968 |
Amortization Cost of Revenues | ' | ' | ' |
Estimated aggregate amortization expense | ' | ' | ' |
2014 | 5,454 | ' | ' |
2015 | 3,781 | ' | ' |
2016 | 2,339 | ' | ' |
2017 | 1,092 | ' | ' |
2018 | 380 | ' | ' |
Thereafter | 378 | ' | ' |
Finite-Lived Intangible Assets, Net, Total | 13,424 | ' | ' |
Amortization Operating Expense | ' | ' | ' |
Estimated aggregate amortization expense | ' | ' | ' |
2014 | 1,524 | ' | ' |
2015 | 1,305 | ' | ' |
2016 | 1,115 | ' | ' |
2017 | 458 | ' | ' |
2018 | 357 | ' | ' |
Thereafter | 1,492 | ' | ' |
Finite-Lived Intangible Assets, Net, Total | $6,251 | ' | ' |
Goodwill_and_Other_Intangible_5
Goodwill and Other Intangible Assets (Details Textual) (USD $) | 3 Months Ended | 12 Months Ended | 6 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2012 | Jun. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Jun. 30, 2012 |
Unit | Unit | Voyager | Kurzweil and IntelliTool | |||
Goodwill and Other Intangible Assets (Textual) [Abstract] | ' | ' | ' | ' | ' | ' |
Number of Reportable Units for goodwill analysis | ' | ' | 4 | 4 | ' | ' |
Excess of Fair Value Over Carrying Value Percentage | ' | ' | 10.00% | 10.00% | ' | ' |
Goodwill impairment | $52,200 | $14,700 | ' | $66,893 | $52,200 | $14,700 |
Impairments to other intangible assets, net | ' | ' | ($551) | ($27,763) | ' | ' |
Other_Current_Assets_Details
Other Current Assets (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Deferred costs | $4,968 | $4,132 |
Prepaid expenses | 1,369 | 1,599 |
Deferred taxes | 536 | 137 |
Other current assets | ' | 24 |
Total | $6,873 | $5,892 |
Other_Assets_Details
Other Assets (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Other assets | ' | ' |
Deferred financing costs | $4,541 | $6,121 |
Collateral investments | 1,971 | 1,969 |
Other | 1,776 | 1,542 |
Total | $8,288 | $9,632 |
Other_Assets_Details_Textual
Other Assets (Details Textual) (USD $) | Dec. 31, 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 $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Accrued expenses | ' | ' |
Salaries, bonuses and benefits | $9,687 | $7,593 |
Accrued interest | 6,471 | 6,490 |
Headsprout acquisition accrual | 3,600 | ' |
Accrued royalties | 1,649 | 1,399 |
Pension and post-retirement medical benefits | 1,214 | 1,218 |
Other | 2,658 | 3,830 |
Total | $25,279 | $20,530 |
Accrued_Expenses_Details_Textu
Accrued Expenses (Details Textual) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Feb. 28, 2011 |
In Millions, unless otherwise specified | |||
Headsprout | ' | ' | ' |
Accrued Expenses (Textual) [Abstract] | ' | ' | ' |
Acquisition accrual payment | 4 | ' | ' |
Senior secured notes | ' | ' | ' |
Accrued Expenses (Textual) [Abstract] | ' | ' | ' |
Senior secured notes, interest rate | 9.75% | 9.75% | 9.75% |
Other_Liabilities_Details
Other Liabilities (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Other liabilities | ' | ' |
Pension and post-retirement medical benefits, long-term portion | $10,241 | $11,392 |
Deferred rent | 1,201 | 1,457 |
Long-term income tax payable | 902 | 852 |
Long-term deferred tax liability | 570 | 273 |
Long-term deferred compensation | 491 | 503 |
Headsprout acquisition accrual | 400 | ' |
Other | 149 | 654 |
Total | $13,954 | $15,131 |
Leases_Details_Textual
Leases (Details Textual) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Periods | ||
Leases (Additional Textual) [Abstract] | ' | ' |
Original lease agreements term | '10 years | ' |
No of times lease renewed | 2 | ' |
No of lease renewable period | '5 years | ' |
Change in assets and liabilities net | $7.70 | ' |
Impairment charges of long lived assets | 1 | ' |
Monthly rental payments | 0.1 | ' |
Capital lease sublease income through 2016 | 2.5 | ' |
Lease at an interest rate | 5.54% | ' |
Certain facilities and equipment lease by the company for production, selling and administrative purposes | '10 years | ' |
Operating rent expense | 2 | 2.3 |
Sublease income for existing operating leases in 2013 | 0.1 | ' |
Expected sublease income for existing operating leases through the year 2015 | 0.1 | ' |
Leases (Textual) [Abstract] | ' | ' |
Outstanding letter of credit in the amount | 2.9 | ' |
Build to Suit Capital Lease | ' | ' |
Leases (Textual) [Abstract] | ' | ' |
Minimum monthly rent that expires on | 31-Oct-16 | ' |
Outstanding letter of credit in the amount | 1 | ' |
Gross value of assets leased | 2.8 | 2.8 |
Accumulated amortization | 1 | 0.4 |
Building | ' | ' |
Leases (Textual) [Abstract] | ' | ' |
Depreciation expense for each year presented cost of building | 0.6 | 0.4 |
Other Lease Capital Assets | ' | ' |
Leases (Textual) [Abstract] | ' | ' |
Gross value of assets leased | 1.2 | 1.2 |
Accumulated amortization | $1.10 | $0.70 |
Leases_Details
Leases (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Future minimum build-to-suit and capital lease payments under long-term non-cancelable leases | ' | ' |
2014 | $1,138 | ' |
2015 | 1,160 | ' |
2016 | 967 | ' |
Total minimum lease payments | 3,265 | ' |
Less: Amount representing interest | -251 | ' |
Present value of net minimum lease payments | 3,014 | ' |
Less: Current portion | -995 | -1,290 |
Capital lease obligations, less current portion | $2,019 | $3,014 |
Leases_Details_1
Leases (Details 1 ) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Future minimum payments under all remaining non-cancelable operating leases | ' |
2014 | $1,916 |
2015 | 1,527 |
2016 | 1,431 |
2017 | 1,465 |
2018 | 948 |
Thereafter | 20 |
Total minimum lease payments | $7,307 |
Fair_Value_of_Financial_Instru2
Fair Value of Financial Instruments (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Assets and liabilities measured at fair value on a recurring basis | ' | ' |
Restricted assets: Money market | $6,835 | $11,141 |
Collateral investments: Money market | 903 | 902 |
Collateral investments: Certificate of deposit | 1,068 | 1,067 |
Warrant | ' | 310 |
Assets held for sale: Recovered properties | ' | 380 |
CVRs | ' | 7,599 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ' | ' |
Assets and liabilities measured at fair value on a recurring basis | ' | ' |
Restricted assets: Money market | 6,835 | 11,141 |
Collateral investments: Money market | 903 | 902 |
Collateral investments: Certificate of deposit | 1,068 | 1,067 |
Warrant | ' | 0 |
Assets held for sale: Recovered properties | ' | 0 |
CVRs | ' | 0 |
Significant Other Observable Inputs (Level 2) | ' | ' |
Assets and liabilities measured at fair value on a recurring basis | ' | ' |
Restricted assets: Money market | 0 | 0 |
Collateral investments: Money market | 0 | 0 |
Collateral investments: Certificate of deposit | 0 | 0 |
Warrant | ' | 310 |
Assets held for sale: Recovered properties | ' | 380 |
CVRs | ' | 0 |
Significant Unobservable Inputs (Level 3) | ' | ' |
Assets and liabilities measured at fair value on a recurring basis | ' | ' |
Restricted assets: Money market | 0 | 0 |
Collateral investments: Money market | 0 | 0 |
Collateral investments: Certificate of deposit | 0 | 0 |
Warrant | ' | 0 |
Assets held for sale: Recovered properties | ' | 0 |
CVRs | ' | 7,599 |
Total Gains (Losses) | ' | ' |
Assets and liabilities measured at fair value on a recurring basis | ' | ' |
Restricted assets: Money market | 0 | 0 |
Collateral investments: Money market | 0 | 0 |
Collateral investments: Certificate of deposit | 0 | 0 |
Warrant | -53 | 336 |
Assets held for sale: Recovered properties | -122 | -958 |
CVRs | ($74) | ($915) |
Fair_Value_of_Financial_Instru3
Fair Value of Financial Instruments (Details 1) (USD $) | Dec. 31, 2013 | Jun. 30, 2013 | Dec. 31, 2012 | Jun. 30, 2013 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | Tax Indemnity Obligation | Other Specified Tax Related Liabilities | 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 | |||
Tax Refunds Received Before Closing Of Merger | Other Specified Tax Refunds | Tax Indemnity Obligation | Legal Receivable | Other Specified Tax Related Liabilities | Other Specified Tax Related Liabilities | Costs Incurred To Collect Tax Refunds And By Stockholder S Representative | |||||||||||
Components of CVR Total: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
CVRs | ' | ' | $7,599 | ' | ' | ' | ' | ' | ' | $7,599 | ' | ' | ' | ' | ' | ' | ' |
Accrued interest | ' | ' | ' | ' | ' | ' | ' | ' | 74 | ' | ' | ' | ' | ' | ' | ' | ' |
Payment to Holder of CVRs | ' | -7,700 | ' | -1,900 | -5,800 | -1,106 | -1,993 | -7,673 | -7,673 | ' | ' | ' | ' | ' | ' | ' | ' |
Estimated Fair Value as of December 31, 2013 | ' | ' | ' | ' | ' | ' | ' | ' | 10,772 | ' | 1,583 | 4,797 | 1,868 | 2,400 | 607 | -53 | -430 |
Remaining CVR liability | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair_Value_of_Financial_Instru4
Fair Value of Financial Instruments (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Assets and liabilities measured at fair value on a non-recurring basis | ' | ' |
Goodwill | $47,842 | $47,404 |
Property, equipment and software | 20,315 | 21,021 |
Pre-publication costs, net | 13,401 | 11,660 |
Acquired curriculum and technology intangibles, net | 8,719 | 9,320 |
Acquired publishing rights, net | 4,705 | 7,602 |
Other intangible assets, net | 6,251 | 7,836 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ' | ' |
Assets and liabilities measured at fair value on a non-recurring basis | ' | ' |
Goodwill | 0 | 0 |
Property, equipment and software | 0 | 0 |
Pre-publication costs, net | 0 | 0 |
Acquired curriculum and technology intangibles, net | 0 | 0 |
Acquired publishing rights, net | 0 | 0 |
Other intangible assets, net | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ' | ' |
Assets and liabilities measured at fair value on a non-recurring basis | ' | ' |
Goodwill | 0 | 0 |
Property, equipment and software | 0 | 0 |
Pre-publication costs, net | 0 | 0 |
Acquired curriculum and technology intangibles, net | 0 | 0 |
Acquired publishing rights, net | 0 | 0 |
Other intangible assets, net | 0 | 0 |
Significant Unobservable Inputs (Level 3) | ' | ' |
Assets and liabilities measured at fair value on a non-recurring basis | ' | ' |
Goodwill | 47,842 | 47,404 |
Property, equipment and software | 20,315 | 21,021 |
Pre-publication costs, net | 13,401 | 11,660 |
Acquired curriculum and technology intangibles, net | 8,719 | 9,320 |
Acquired publishing rights, net | 4,705 | 7,602 |
Other intangible assets, net | 6,251 | 7,836 |
Total Gains (Losses) | ' | ' |
Assets and liabilities measured at fair value on a non-recurring basis | ' | ' |
Goodwill | ' | -66,893 |
Property, equipment and software | -319 | -4,448 |
Pre-publication costs, net | -633 | -1,496 |
Acquired curriculum and technology intangibles, net | -493 | -9,361 |
Acquired publishing rights, net | ' | -11,307 |
Other intangible assets, net | ($58) | ($7,095) |
Fair_Value_of_Financial_Instru5
Fair Value of Financial Instruments (Details 3) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Impaired Long Lived Assets Held And Used [Line Items] | ' | ' |
Property, equipment and software | ' | ($4,400) |
Impairments to other intangible assets, net | -551 | -27,763 |
Total | -2,227 | -33,707 |
Class Com Product Line | ' | ' |
Impaired Long Lived Assets Held And Used [Line Items] | ' | ' |
Property, equipment and software | -319 | ' |
Pre-publication costs, net | -230 | ' |
Acquired curriculum and technology intangibles, net | -493 | ' |
Impairments to other intangible assets, net | -58 | ' |
Other assets | -89 | ' |
Total | ($1,189) | ' |
Fair_Value_of_Financial_Instru6
Fair Value of Financial Instruments (Details Textual) (USD $) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2011 | Sep. 30, 2010 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2013 | Dec. 31, 2011 | |
Fair Value Measurements (Additional Textual) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash and cash equivalents | ' | ' | $68,000,000 | $51,900,000 | ' | $68,000,000 | $51,900,000 | ' | ' |
Restricted assets | ' | ' | 6,800,000 | 11,100,000 | ' | 6,800,000 | 11,100,000 | ' | ' |
Collateral investments | ' | ' | 1,971,000 | 1,969,000 | ' | 1,971,000 | 1,969,000 | ' | ' |
Long-term debt | ' | ' | 174,491,000 | 174,328,000 | ' | 174,491,000 | 174,328,000 | ' | ' |
Warrants | ' | ' | ' | 300,000 | ' | ' | 300,000 | ' | ' |
Assets held for sale | ' | ' | ' | 380,000 | ' | ' | 380,000 | ' | ' |
Liability for the remaining CVR payments | ' | ' | ' | 7,600,000 | ' | ' | 7,600,000 | ' | ' |
Fair value of senior secured notes | ' | ' | 166,500,000 | ' | ' | 166,500,000 | ' | ' | ' |
First CVR payment | ' | 1,100,000 | ' | ' | ' | ' | ' | ' | ' |
Second CVR payment | 2,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Impairment of long-lived assets | ' | ' | ' | ' | ' | 2,227,000 | 33,707,000 | ' | ' |
Asset Impairment Charges | ' | ' | 400,000 | ' | ' | ' | 1,500,000 | ' | ' |
Goodwill | ' | ' | 47,842,000 | 47,404,000 | ' | 47,842,000 | 47,404,000 | ' | 114,297,000 |
Goodwill impairment | ' | ' | ' | 52,200,000 | 14,700,000 | ' | 66,893,000 | ' | ' |
Long lived assets | ' | ' | ' | ' | ' | ' | 4,400,000 | ' | ' |
Impairment of leased capital assets | ' | ' | ' | ' | ' | ' | 1,000,000 | ' | ' |
Impairment of other warehouse equipment | ' | ' | ' | ' | ' | ' | 2,000,000 | ' | ' |
Additional assets impairment charges | ' | ' | ' | ' | ' | ' | 1,400,000 | ' | ' |
Increase in estimated fair value of CVR liability | ' | ' | ' | ' | ' | 100,000 | 900,000 | ' | ' |
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 | ' |
Class Com Product Line | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair Value Measurements (Additional Textual) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Impairment of long-lived assets | ' | ' | ' | ' | ' | 1,189,000 | ' | ' | ' |
Long lived assets | ' | ' | ' | ' | ' | 319,000 | ' | ' | ' |
Termination Of Development Agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair Value Measurements (Additional Textual) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Prepaid royalties impaired | ' | ' | 500,000 | ' | ' | ' | ' | ' | ' |
Impairment of long-lived assets | ' | ' | 100,000 | ' | ' | ' | ' | ' | ' |
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 | ' |
Debt_Details
Debt (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Feb. 28, 2011 |
In Thousands, unless otherwise specified | |||
Summary Long-term debt | ' | ' | ' |
Issuance of senior secured notes | $175,000 | ' | $175,000 |
Total long-term debt | 174,491 | 174,328 | ' |
Senior secured notes | ' | ' | ' |
Summary Long-term debt | ' | ' | ' |
Issuance of senior secured notes | 175,000 | 175,000 | ' |
Less: Unamortized discount | -509 | -672 | ' |
Total long-term debt | $174,491 | $174,328 | ' |
Debt_Details_Textual
Debt (Details Textual) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Feb. 28, 2011 | |
Debt (Textual) [Abstract] | ' | ' | ' |
Asset-based revolving credit facility | $40,000,000 | ' | ' |
Inventory | 9,221,000 | 16,620,000 | ' |
Fixed charge coverage ratio | '1.1 to 1.0 | ' | ' |
Debt (Additional Textual) [Abstract] | ' | ' | ' |
Senior secured notes | 175,000,000 | ' | 175,000,000 |
Senior secured notes, maturity year | '2017 | ' | ' |
Unamortized capitalized deferred financing cost | 4,500,000 | 6,100,000 | ' |
Interest on notes from date of original issuance | 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 | 8,700,000 | ' | ' |
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 | ' | ' | ' |
Debt (Textual) [Abstract] | ' | ' | ' |
Unused line fee | 0.38% | ' | ' |
Fixed charges coverage ratio | 1 | ' | ' |
Maximum | ' | ' | ' |
Debt (Textual) [Abstract] | ' | ' | ' |
Unused line fee | 0.50% | ' | ' |
Fixed charges coverage ratio | 1.1 | ' | ' |
ABL Credit Facility | ' | ' | ' |
Debt (Textual) [Abstract] | ' | ' | ' |
Duration of ABL facility | '4 years | ' | ' |
Accounts receivable collateralizing the ABL Facility | 15,800,000 | ' | ' |
Inventory | 9,200,000 | ' | ' |
Revolving Credit Facility | ABL Credit Facility | ' | ' | ' |
Debt (Textual) [Abstract] | ' | ' | ' |
Asset-based revolving credit facility | 40,000,000 | ' | ' |
Senior secured notes | ' | ' | ' |
Debt (Additional Textual) [Abstract] | ' | ' | ' |
Senior secured notes | $175,000,000 | $175,000,000 | ' |
Senior secured notes, interest rate | 9.75% | 9.75% | 9.75% |
LIBOR | ' | ' | ' |
Debt (Textual) [Abstract] | ' | ' | ' |
Interest rate on the Senior Facility in percentage | 1.00% | ' | ' |
LIBOR | Minimum | ' | ' | ' |
Debt (Textual) [Abstract] | ' | ' | ' |
Interest rate on the Senior Facility in percentage | 2.75% | ' | ' |
LIBOR | Maximum | ' | ' | ' |
Debt (Textual) [Abstract] | ' | ' | ' |
Interest rate on the Senior Facility in percentage | 3.25% | ' | ' |
Base Rate | Minimum | ' | ' | ' |
Debt (Textual) [Abstract] | ' | ' | ' |
Interest rate on the Senior Facility in percentage | 1.75% | ' | ' |
Base Rate | Maximum | ' | ' | ' |
Debt (Textual) [Abstract] | ' | ' | ' |
Interest rate on the Senior Facility in percentage | 2.25% | ' | ' |
Federal Funds Rate | ' | ' | ' |
Debt (Textual) [Abstract] | ' | ' | ' |
Interest rate on the Senior Facility in percentage | 0.50% | ' | ' |
ProfitSharing_Pension_and_Othe2
Profit-Sharing, Pension, and Other Postretirement Benefit Plans (Details Textual) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Profit-Sharing, Pension, and Other Postretirement Benefit Plans (Additional Textual) [Abstract] | ' | ' |
401(k) discretionary contributions | $0 | $0 |
Measurement date for pension plan | 'December 31 | ' |
Recognized net actuarial (gain) loss | -384,000 | 979,000 |
Component of net pension cost (Income) | 120,000 | 35,000 |
Component of net pension cost (Income) in next year | 100,000 | ' |
Payments expected to be paid under U.S. retirement plan for fiscal 2014 | 1,200,000 | ' |
Expected payments under Retirement Benefit Plan | 100,000 | ' |
Other Postretirement Benefit Plans, Defined Benefit | ' | ' |
Profit-Sharing, Pension, and Other Postretirement Benefit Plans (Textual) [Abstract] | ' | ' |
Matching employee compensation contribution | 6.00% | ' |
Matching employee compensation contributions, percent of match | 50.00% | ' |
Discretionary contributions exceeding performance targets | 2.00% | ' |
401(k) matching contribution expense | 1,100,000 | 1,100,000 |
Replacement Benefit Plan | ' | ' |
Profit-Sharing, Pension, and Other Postretirement Benefit Plans (Textual) [Abstract] | ' | ' |
RBP accrued liability | 500,000 | 600,000 |
Current portion of the RBP liability | 100,000 | 100,000 |
Long-term portion of the RBP liability | 400,000 | 500,000 |
United States Pension Plan of US Entity, Defined Benefit | ' | ' |
Profit-Sharing, Pension, and Other Postretirement Benefit Plans (Additional Textual) [Abstract] | ' | ' |
Expected payments under U.S. Defined Benefit Plan | $1,200,000 | ' |
ProfitSharing_Pension_and_Othe3
Profit-Sharing, Pension, and Other Postretirement Benefit Plans (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Schedule of net cost benefit pension plan | ' | ' |
Interest cost | $419 | $497 |
Recognized net actuarial (gain) loss | -384 | 979 |
Net pension and other postretirement benefit cost | $35 | $1,476 |
ProfitSharing_Pension_and_Othe4
Profit-Sharing, Pension, and Other Postretirement Benefit Plans (Details 1) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Change in Benefit Obligation | ' | ' |
Benefit obligation, beginning of period | $12,571 | $12,291 |
Service cost | ' | ' |
Interest cost | 419 | 497 |
Actuarial (gain) loss | -384 | 979 |
Benefits paid | -1,193 | -1,196 |
Benefit obligation, end of year | 11,413 | 12,571 |
Change in Plan Assets | ' | ' |
Fair value, beginning of period | ' | ' |
Company contributions | 1,193 | 1,196 |
Benefits paid | -1,193 | -1,196 |
Fair value, end of year | ' | ' |
Unfunded status | -11,413 | -12,571 |
Accrued benefit cost | -11,413 | -12,571 |
Amounts recognized in the Consolidated Balance Sheets | ' | ' |
Current accrued benefit liability | -1,172 | -1,179 |
Non-current accrued benefit liability | -10,241 | -11,392 |
Net amount recognized | ($11,413) | ($12,571) |
ProfitSharing_Pension_and_Othe5
Profit-Sharing, Pension, and Other Postretirement Benefit Plans (Details 2) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Recognized component of net pension cost | ' | ' |
Discount rate | 4.25% | 3.50% |
ProfitSharing_Pension_and_Othe6
Profit-Sharing, Pension, and Other Postretirement Benefit Plans (Details 3) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | |||
Projected benefit obligation and accumulated benefit obligation of pension plan | ' | ' | ' |
Projected benefit obligation | $11,413 | $12,571 | $12,291 |
Accumulated benefit obligation | $11,413 | $12,571 | ' |
ProfitSharing_Pension_and_Othe7
Profit-Sharing, Pension, and Other Postretirement Benefit Plans (Details 4) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Gross benefit payment obligations | ' |
2014 | $1,200 |
U.S. Retirement Plans (Pension Plan and RBP) | ' |
Gross benefit payment obligations | ' |
2014 | 1,193 |
2015 | 1,152 |
2016 | 1,109 |
2017 | 1,061 |
2018 | 1,016 |
2019 - 2023 | $4,366 |
Stockholders_Equity_Deficit_De
Stockholders' Equity (Deficit) (Details Textual) (USD $) | 12 Months Ended | 24 Months Ended | 1 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2009 | Mar. 06, 2014 | Dec. 31, 2013 | |
Subsequent event | 2009 Equity Incentive Plan | |||||
Stockholders' Equity (Textual) [Abstract] | ' | ' | ' | ' | ' | ' |
Common stock, shares authorized | 150,000,000 | 150,000,000 | 150,000,000 | ' | ' | 150,000,000 |
Common stock, par value | $0.00 | $0.00 | $0.00 | ' | ' | $0.00 |
Common stock, shares issued | 51,208,000 | 51,208,000 | 51,208,000 | ' | ' | 51,208,331 |
Common stock, shares outstanding | 45,042,000 | 47,098,000 | 45,042,000 | ' | ' | 45,042,401 |
Common stock, additional shares | ' | ' | ' | 5,000,000 | ' | 4,896,721 |
Percentage of outstanding shares of common stock related to preemptive right | 25.00% | ' | ' | ' | ' | ' |
Stockholders' Equity (Additional Textual) [Abstract] | ' | ' | ' | ' | ' | ' |
Stock Repurchase Program, Authorized Shares Amount | $5,000,000 | $5,000,000 | ' | ' | ' | ' |
Preferred stock, shares authorized | 15,000,000 | 15,000,000 | 15,000,000 | ' | ' | ' |
Preferred stock, par value | $0.00 | $0.00 | $0.00 | ' | ' | ' |
Preferred stock, shares issued | 0 | 0 | 0 | ' | ' | ' |
Preferred stock, shares outstanding | 0 | 0 | 0 | ' | ' | ' |
Cost of shares repurchased under the Program | 4,619,000 | 2,597,000 | 7,216,000 | ' | 300,000 | ' |
Stock repurchase, remaining repurchase amount | ' | ' | ' | ' | $300,000 | ' |
Stockholders_Equity_Deficit_De1
Stockholders' Equity (Deficit) (Details) (USD $) | 12 Months Ended | 24 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 |
Equity Class Of Treasury Stock [Line Items] | ' | ' | ' |
Cost of shares repurchased under the Program | $4,619 | $2,597 | $7,216 |
Investor | ' | ' | ' |
Equity Class Of Treasury Stock [Line Items] | ' | ' | ' |
Repurchase of treasury stock | 1,861,969 | 1,864,622 | 3,726,591 |
Rule 10b5-1 plan | ' | ' | ' |
Equity Class Of Treasury Stock [Line Items] | ' | ' | ' |
Repurchase of treasury stock | 193,858 | 601,974 | 795,832 |
Share Repurchase Program | ' | ' | ' |
Equity Class Of Treasury Stock [Line Items] | ' | ' | ' |
Repurchase of treasury stock | 2,055,827 | 2,466,596 | 4,522,423 |
StockBased_Compensation_and_Ex2
Stock-Based Compensation and Expense (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Expense for stock based compensation | ' | ' |
Stock-based compensation expense | $890 | $874 |
Cost of Revenues | ' | ' |
Expense for stock based compensation | ' | ' |
Stock-based compensation expense | 65 | 51 |
Research and Development Expense | ' | ' |
Expense for stock based compensation | ' | ' |
Stock-based compensation expense | 132 | 122 |
Sales and Marketing Expense | ' | ' |
Expense for stock based compensation | ' | ' |
Stock-based compensation expense | 124 | 114 |
General and Administrative Expense | ' | ' |
Expense for stock based compensation | ' | ' |
Stock-based compensation expense | $569 | $587 |
StockBased_Compensation_and_Ex3
Stock-Based Compensation and Expense (Details Textual) (USD $) | 1 Months Ended | 12 Months Ended | 12 Months Ended | 1 Months Ended | 1 Months Ended | 12 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | |||||||||||||
Nov. 18, 2013 | Oct. 28, 2013 | Sep. 19, 2013 | Jul. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2009 | Dec. 31, 2013 | Dec. 31, 2012 | Jul. 30, 2013 | Sep. 30, 2013 | Jul. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2013 | Aug. 31, 2009 | Dec. 31, 2013 | Dec. 31, 2013 | |
Option_Holder | Asset_Recoupment | General and Administrative Expense | General and Administrative Expense | 2009 Equity Incentive Plan | 2009 Equity Incentive Plan | New options | New options | Restricted Stock | Restricted Stock | Restricted Stock | Restricted Stock | Exercise Price Range One | VLCY | Warrants | Warrants | Warrants | ||||||
General and Administrative Expense | General and Administrative Expense | VLCY | ||||||||||||||||||||
Stock-Based Compensation and Expense (Textual) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, additional shares | ' | ' | ' | ' | ' | ' | 5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Recoveries net with respect to employee embezzlement matter | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $4,300,000 | ' |
Common stock, shares outstanding | ' | ' | ' | ' | 45,042,000 | 47,098,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 29,874,145 | ' | ' | ' |
Shares in excess of outstanding shares surrendered | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 29,999 |
Equity cure payment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,000,000 | ' | ' |
Issue of shares under SAR as conversion | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200,000 | ' | ' | ' |
Related restrictions lapsed on restricted common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 47,795 | 46,234 | ' | ' | ' | ' | ' | ' | ' |
Stock-based compensation expense | ' | ' | ' | ' | 890,000 | 874,000 | ' | 569,000 | 587,000 | ' | ' | ' | ' | ' | ' | 100,000 | 200,000 | ' | ' | ' | ' | ' |
Grant date fair value of restricted stock awards granted | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 200,000 | ' | ' | ' | ' | ' | ' | ' |
Stock-Based Compensation and Expense (Additional Textual) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total income tax expense recognized for book purposes | ' | ' | ' | ' | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Tax benefit realized | ' | ' | ' | ' | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock exercisable share | ' | ' | ' | ' | 755,077 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock exercisable price per share | ' | ' | ' | ' | $0.01 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock exercisable share under warrants | ' | ' | ' | ' | 299,847 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock exercisable share under warrants | ' | ' | ' | ' | 455,230 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Asset recoupment amount multiple | ' | ' | ' | ' | 0.45 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Denominator amount for calculating quotient aggregate net recoveries | ' | ' | ' | ' | $6.50 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Time period of merge | ' | ' | ' | ' | '2 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Denominator amount for calculating formula amount | ' | ' | ' | ' | $6.50 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Granted, Shares | 15,000 | 40,000 | 30,000 | 377,500 | 2,365,000 | 235,000 | ' | ' | ' | ' | ' | 1,902,500 | 2,365,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise price per option | $1.43 | $1.33 | $1.51 | $1.30 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $4.50 | ' | ' | ' | ' |
Share based award spread over vesting period | '4 years | '4 years | '4 years | '4 years | ' | '4 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term of options | '10 years | '10 years | '10 years | '10 years | ' | '10 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, par value | ' | ' | ' | ' | $0.00 | $0.00 | ' | ' | ' | ' | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options cancelled | ' | ' | ' | ' | 3,756,389 | 544,557 | ' | ' | ' | 1,757,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options, Net of forfeitures | ' | 29,000 | 25,000 | 300,000 | ' | 200,000 | ' | ' | ' | ' | ' | 1,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Incremental compensation cost | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unamortized compensation cost | ' | ' | ' | 300,000 | 1,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of eligible option holders | ' | ' | ' | 40 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options, Net of forfeitures | 12,000 | ' | ' | ' | 1,600,000 | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Restricted common stock awards | ' | ' | ' | ' | ' | 46,295 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of lapse Period | ' | ' | ' | ' | ' | '1 year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Company's common stock closing price | ' | ' | ' | ' | $1.66 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Future compensation cost related to unvested stock options 2014 | ' | ' | ' | ' | 400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Future compensation cost related to unvested stock options 2015 | ' | ' | ' | ' | 400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Future compensation cost related to unvested stock options 2016 | ' | ' | ' | ' | 300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Intrinsic value of options and SARs outstanding | ' | ' | ' | ' | 800,000 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Intrinsic value of options and SARs exercisable | ' | ' | ' | ' | $200,000 | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
StockBased_Compensation_and_Ex4
Stock-Based Compensation and Expense (Details 1) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 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_Ex5
Stock-Based Compensation and Expense (Details 2) | 1 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||||||||||||||||||
Nov. 18, 2013 | Oct. 28, 2013 | Sep. 19, 2013 | Jul. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
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 | 1-Dec-11 | 1-Dec-11 | 8-Feb-12 | 8-Feb-12 | 16-Apr-12 | 16-Apr-12 | 14-May-12 | 14-May-12 | 30-Jul-13 | 19-Sep-13 | 28-Oct-13 | 18-Nov-13 | 11-Aug-11 | |||||||
Disclosure - Stock-Based Compensation and Expense (Details 1) [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Beginning Outstanding | ' | ' | ' | ' | 3,758,089 | 4,067,646 | 1,550,000 | 1,853,080 | 1,065,398 | 1,255,926 | 92,401 | 100,000 | 165,290 | 198,640 | 150,000 | 150,000 | 500,000 | 500,000 | 195,000 | ' | 15,000 | ' | 25,000 | ' | ' | ' | ' | ' | 10,000 |
Granted | 15,000 | 40,000 | 30,000 | 377,500 | 2,365,000 | 235,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 195,000 | ' | 15,000 | ' | 25,000 | 2,280,000 | 30,000 | 40,000 | 15,000 | ' |
Cancelled/Forfeited | ' | ' | ' | ' | 3,756,389 | 544,557 | 1,550,000 | 303,080 | 1,060,398 | 190,528 | 92,401 | 7,599 | 165,290 | 33,350 | 70,842 | ' | 500,000 | ' | 195,000 | ' | 15,000 | ' | 14,802 | ' | 92,656 | ' | ' | ' | 10,000 |
Ending Outstanding | ' | ' | ' | ' | 2,366,700 | 3,758,089 | ' | 1,550,000 | 5,000 | 1,065,398 | ' | 92,401 | ' | 165,290 | 79,158 | 150,000 | ' | 500,000 | ' | 195,000 | ' | 15,000 | 10,198 | 25,000 | 2,187,344 | 30,000 | 40,000 | 15,000 | ' |
StockBased_Compensation_and_Ex6
Stock-Based Compensation and Expense (Details 3) (USD $) | 1 Months Ended | 12 Months Ended | ||||
Nov. 18, 2013 | Oct. 28, 2013 | Sep. 19, 2013 | Jul. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
Summary of stock option, stock appreciation right and restricted stock transactions | ' | ' | ' | ' | ' | ' |
Beginning Outstanding | ' | ' | ' | ' | 3,758,089 | 4,067,646 |
Granted, Shares | 15,000 | 40,000 | 30,000 | 377,500 | 2,365,000 | 235,000 |
Ending Outstanding | ' | ' | ' | ' | 2,366,700 | 3,758,089 |
Stock Option Grantees | ' | ' | ' | ' | ' | ' |
Summary of stock option, stock appreciation right and restricted stock transactions | ' | ' | ' | ' | ' | ' |
Beginning Outstanding | ' | ' | ' | ' | 3,758,000 | ' |
Granted, Shares | ' | ' | ' | 1,902,500 | 2,365,000 | ' |
Exercised/Restricted Stock Vested, Shares | ' | ' | ' | ' | ' | ' |
Forfeited/cancelled, Shares | ' | ' | ' | ' | 3,756,000 | ' |
Ending Outstanding | ' | ' | ' | ' | 2,367,000 | ' |
Awards exercisable, Shares | ' | ' | ' | ' | 653,000 | ' |
Weighted Average Fair Value of awards granted during the year | ' | ' | ' | ' | 0.67 | ' |
Weighted Average Exercise Price, Beginning Balance | ' | ' | ' | ' | 4.89 | ' |
Weighted Average Exercise Price, Granted | ' | ' | ' | ' | 1.3 | ' |
Weighted Average Exercise Price, Exercised/Restricted Stock Vested | ' | ' | ' | ' | ' | ' |
Weighted Average Exercise Price, Forfeited/cancelled | ' | ' | ' | ' | 4.81 | ' |
Weighted Average Exercise Price, Ending Balance | ' | ' | ' | ' | 1.43 | ' |
Weighted Average Exercise Price, Awards exercisable | ' | ' | ' | ' | 1.77 | ' |
Restricted Stock | ' | ' | ' | ' | ' | ' |
Summary of stock option, stock appreciation right and restricted stock transactions | ' | ' | ' | ' | ' | ' |
Awards outstanding, Beginning Balance, Restricted Stock | ' | ' | ' | ' | 50,000 | ' |
Granted, Restricted Stock | ' | ' | ' | ' | 0 | ' |
Exercised/Restricted Stock Vested, Restricted Stock | ' | ' | ' | ' | 48,000 | ' |
Forfeited/cancelled, Restricted Stock | ' | ' | ' | ' | ' | ' |
Awards outstanding, Ending Balance, Restricted Stock | ' | ' | ' | ' | 2,000 | ' |
Grant date fair value, Beginning Balance, Restricted Stock | ' | ' | ' | ' | 3.23 | ' |
Grant date fair value of restricted stock awards granted | ' | ' | ' | ' | 0 | ' |
Weighted Average Grant Date Fair Value, Exercised/Restricted Stock Vested, Restricted Stock | ' | ' | ' | ' | 3.25 | ' |
Weighted Average Grant Date Fair Value, Forfeited/cancelled, Restricted Stock | ' | ' | ' | ' | ' | ' |
Grant date fair value, Ending Balance, Restricted Stock | ' | ' | ' | ' | 3 | ' |
StockBased_Compensation_and_Ex7
Stock-Based Compensation and Expense (Details 4) (USD $) | 1 Months Ended | 12 Months Ended | ||||
Nov. 18, 2013 | Oct. 28, 2013 | Sep. 19, 2013 | Jul. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
Summary of nonvested stock option transactions | ' | ' | ' | ' | ' | ' |
Granted, Shares | 15,000 | 40,000 | 30,000 | 377,500 | 2,365,000 | 235,000 |
Nonvested Stock Option | ' | ' | ' | ' | ' | ' |
Summary of nonvested stock option transactions | ' | ' | ' | ' | ' | ' |
Awards outstanding, Beginning Balance, Shares | ' | ' | ' | ' | 1,498,000 | ' |
Granted, Shares | ' | ' | ' | ' | 2,365,000 | ' |
Vested, Shares | ' | ' | ' | ' | 856,000 | ' |
Forfeited/cancelled, Shares | ' | ' | ' | ' | 1,293,000 | ' |
Awards outstanding, Ending Balance, Shares | ' | ' | ' | ' | 1,714,000 | ' |
Weighted Average Grant Date Fair Value, Beginning Balance | ' | ' | ' | ' | 0.98 | ' |
Weighted Average Fair Value of awards granted during the year | ' | ' | ' | ' | 0.67 | ' |
Weighted Average Grant Date Fair Value, Vested | ' | ' | ' | ' | 0.77 | ' |
Weighted Average Grant Date Fair Value, Forfeited/cancelled | ' | ' | ' | ' | 0.96 | ' |
Weighted Average Grant Date Fair Value, Ending Balance | ' | ' | ' | ' | 0.67 | ' |
StockBased_Compensation_and_Ex8
Stock-Based Compensation and Expense (Details 5) (USD $) | 12 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 |
Additional information on stock options and stock appreciation rights outstanding | ' |
Awards outstanding, number | 2,367 |
Awards outstanding, weighted average contractual life (Years) | '6 years 10 months 24 days |
Awards outstanding, weighted average exercise price | $1.43 |
Awards exercisable, number | 653 |
Awards exercisable, weighted average contractual life (Years) | '6 years 10 months 24 days |
Awards exercisable, weighted average exercise price | $1.77 |
Range One | ' |
Additional information on stock options and stock appreciation rights outstanding | ' |
Lower range of exercise price | $0 |
Upper range of exercise price | $1.51 |
Awards outstanding, number | 2,273 |
Awards outstanding, weighted average contractual life (Years) | '6 years 10 months 24 days |
Awards outstanding, weighted average exercise price | $1.30 |
Awards exercisable, number | 559 |
Awards exercisable, weighted average contractual life (Years) | '6 years 9 months 18 days |
Awards exercisable, weighted average exercise price | $1.30 |
Range Two | ' |
Additional information on stock options and stock appreciation rights outstanding | ' |
Lower range of exercise price | $1.52 |
Upper range of exercise price | $6.50 |
Awards outstanding, number | 94 |
Awards outstanding, weighted average contractual life (Years) | '7 years 9 months 18 days |
Awards outstanding, weighted average exercise price | $4.53 |
Awards exercisable, number | 94 |
Awards exercisable, weighted average contractual life (Years) | '7 years 9 months 18 days |
Awards exercisable, weighted average exercise price | $4.53 |
StockBased_Compensation_and_Ex9
Stock-Based Compensation and Expense (Details 6) (USD $) | Dec. 31, 2013 |
In Thousands, except Per Share data, unless otherwise specified | |
Securities authorized for issuance under equity compensation plans | ' |
Number of securities to be issued upon exercise of outstanding options and rights | 2,367 |
Weighted average exercise price of outstanding options and rights | $1.43 |
Number of securities remaining available for future issuance under equity incentive plan | 2,530 |
Equity compensation plans approved by security holders | ' |
Securities authorized for issuance under equity compensation plans | ' |
Number of securities to be issued upon exercise of outstanding options and rights | 2,367 |
Weighted average exercise price of outstanding options and rights | $1.43 |
Number of securities remaining available for future issuance under equity incentive plan | 2,530 |
Equity compensation plans not approved by security holders | ' |
Securities authorized for issuance under equity compensation plans | ' |
Number of securities to be issued upon exercise of outstanding options and rights | ' |
Weighted average exercise price of outstanding options and rights | ' |
Number of securities remaining available for future issuance under equity incentive plan | ' |
Restructuring_Details
Restructuring (Details) (USD $) | 12 Months Ended | 15 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2012 |
Amounts incurred and expected to be incurred in connection with the reengineering and restructuring initiative | ' | ' |
Incurred During Period | $8,370 | $9,559 |
Total Amount Incurred Under the Plan | 9,559 | 9,600 |
One-time termination benefits | ' | ' |
Amounts incurred and expected to be incurred in connection with the reengineering and restructuring initiative | ' | ' |
Incurred During Period | 2,507 | 3,696 |
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 | 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 | 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 | 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 | 203 |
Total Amount Incurred Under the Plan | $203 | ' |
Restructuring_Details_1
Restructuring (Details 1) (One-time termination benefits, USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
One-time termination benefits | ' | ' |
Change in the reengineering and restructuring accrual | ' | ' |
Beginning Accrual | $828 | $1,133 |
Accrual changes | -18 | 2,507 |
Payments made | -810 | -2,812 |
Ending Accrual | $0 | $828 |
Restructuring_Details_Textual
Restructuring (Details Textual) (USD $) | 12 Months Ended | 15 Months Ended |
Dec. 31, 2012 | Dec. 31, 2012 | |
Reengineering and Restructuring (Additional Textual) [Abstract] | ' | ' |
Total Amount Incurred Under the Plan | $9,559,000 | $9,600,000 |
Expected Capital expenditures | ' | 700,000 |
Impairment of long-lived assets | ' | ' |
Reengineering and Restructuring (Additional Textual) [Abstract] | ' | ' |
Total Amount Incurred Under the Plan | 4,448,000 | ' |
Reengineering and Restructuring (Textual) [Abstract] | ' | ' |
Reengineering and restructuring charges | 4,400,000 | ' |
Cost of Revenues | ' | ' |
Reengineering and Restructuring (Textual) [Abstract] | ' | ' |
Reengineering and restructuring charges | 1,600,000 | ' |
Research and Development Expense | ' | ' |
Reengineering and Restructuring (Textual) [Abstract] | ' | ' |
Reengineering and restructuring charges | 400,000 | ' |
Sales and Marketing Expense | ' | ' |
Reengineering and Restructuring (Textual) [Abstract] | ' | ' |
Reengineering and restructuring charges | 1,000,000 | ' |
General and Administrative Expense | ' | ' |
Reengineering and Restructuring (Textual) [Abstract] | ' | ' |
Reengineering and restructuring charges | 600,000 | ' |
Shipping and Handling Costs | ' | ' |
Reengineering and Restructuring (Textual) [Abstract] | ' | ' |
Reengineering and restructuring charges | $400,000 | ' |
Contingent_Liabilities_Details
Contingent Liabilities (Details Textual) (USD $) | 3 Months Ended | 12 Months Ended | ||||
In Millions, unless otherwise specified | Sep. 30, 2010 | Dec. 31, 2013 | Jun. 30, 2013 | Aug. 27, 2010 | Jun. 20, 2009 | Dec. 31, 2013 |
Maximum | ||||||
Commitment Liabilities (Additional Textual) [Abstract] | ' | ' | ' | ' | ' | ' |
Michigan taxes assessed | ' | ' | ' | $10.40 | ' | ' |
Amount paid or due and payable with respect to each agreed contingency attributable to contingent value rights | ' | ' | ' | ' | 50.00% | ' |
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 | ' | ' | ' | ' |
Payment of tax indemnity obligation | ' | ' | 1.9 | ' | ' | ' |
Tax refund | ' | 0.6 | ' | ' | ' | ' |
Purchase commitments | ' | 0.1 | ' | ' | ' | ' |
Letters of credit outstanding | ' | 2.9 | ' | ' | ' | ' |
Certificate of deposit | ' | 1.1 | ' | ' | ' | ' |
Money market fund investment | ' | $0.90 | ' | ' | ' | ' |
Commitment Liabilities (Textual) [Abstract] | ' | ' | ' | ' | ' | ' |
Term of purchase commitment | ' | ' | ' | ' | ' | '1 year |
Related_Party_Transactions_Det
Related Party Transactions (Details Textual) (USD $) | 12 Months Ended | 3 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2009 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2013 | |
Directors | Board of Directors Chairman | Board of Directors Chairman | Board of Directors Chairman | VSS | VSS | Director | Director | Richard Surratt | Richard Surratt | Common Stock | ||
Related Party Transactions (Textual) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of outstanding common stock held by the company's majority shareholder | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 70.00% |
Percentage of fees equal to debt or equity financing | ' | ' | ' | ' | ' | 1.00% | ' | ' | ' | ' | ' | ' |
Percentage of fees equal to enterprise value of entities acquired or disposed | ' | ' | ' | ' | ' | 1.00% | ' | ' | ' | ' | ' | ' |
Percentage of Minimum Beneficial Interest | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% |
Annual retainer fees | ' | ' | ' | $70,000 | $70,000 | ' | $65,000 | ' | ' | ' | ' | ' |
Total Fees paid to VSS related to services of directors | ' | ' | ' | ' | ' | ' | ' | 200,000 | 200,000 | ' | ' | ' |
Chairman's compensation | ' | ' | 300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Consulting fees paid to board of directors | ' | ' | ' | ' | ' | ' | ' | ' | ' | 35,000 | 100,000 | ' |
Related Party Transactions (Additional Textual) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage outstanding shares common stock | 25.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Authorized amount of share repurchase | 5,000,000 | 5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of share repurchase | ' | 1,042,979 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cost of stock repurchase | ' | $1,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Size of board of directors | 9 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment_Reporting_Details
Segment Reporting (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenue, operating expenses and income (loss) from operations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Product revenues | ' | ' | ' | ' | ' | ' | ' | ' | $127,799 | $130,160 |
Service revenues | ' | ' | ' | ' | ' | ' | ' | ' | 22,721 | 18,399 |
Net revenues | 33,348 | 42,957 | 42,786 | 31,429 | 34,317 | 45,958 | 40,429 | 27,855 | 150,520 | 148,559 |
Cost of product revenues | ' | ' | ' | ' | ' | ' | ' | ' | 29,167 | 33,284 |
Cost of service revenues | ' | ' | ' | ' | ' | ' | ' | ' | 17,521 | 17,679 |
Amortization | ' | ' | ' | ' | ' | ' | ' | ' | 17,519 | 24,716 |
Total cost of revenues | ' | ' | ' | ' | ' | ' | ' | ' | 64,207 | 75,679 |
Other operating expenses | ' | ' | ' | ' | ' | ' | ' | ' | 75,106 | 81,535 |
Embezzlement-related expense | ' | ' | ' | ' | ' | ' | ' | ' | 118 | 516 |
Depreciation and amortization expense | ' | ' | ' | ' | ' | ' | ' | ' | 4,895 | 6,182 |
Impairment of long-lived assets | ' | ' | ' | ' | ' | ' | ' | ' | 2,227 | 33,707 |
Net interest expense | ' | ' | ' | ' | ' | ' | ' | ' | 18,819 | 18,683 |
Other income, net | ' | ' | ' | ' | ' | ' | ' | ' | -764 | -1,125 |
Income tax expense | -132 | 127 | 102 | 68 | 14 | 104 | -23 | 177 | 165 | 272 |
Segment net income (loss) | -5,734 | 128 | 431 | -9,078 | -88,807 | -2,235 | -22,477 | -20,264 | -14,253 | -133,783 |
Capital expenditures | ' | ' | ' | ' | ' | ' | ' | ' | 16,115 | 18,145 |
Goodwill impairment | ' | ' | ' | ' | 52,200 | ' | 14,700 | ' | ' | 66,893 |
Learning A-Z | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue, operating expenses and income (loss) from operations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill impairment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Explore Learning | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue, operating expenses and income (loss) from operations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill impairment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating Segments | Voyager Sopris Learning | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue, operating expenses and income (loss) from operations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Product revenues | ' | ' | ' | ' | ' | ' | ' | ' | 67,619 | 78,463 |
Service revenues | ' | ' | ' | ' | ' | ' | ' | ' | 22,721 | 18,399 |
Net revenues | ' | ' | ' | ' | ' | ' | ' | ' | 90,340 | 96,862 |
Cost of product revenues | ' | ' | ' | ' | ' | ' | ' | ' | 23,720 | 26,406 |
Cost of service revenues | ' | ' | ' | ' | ' | ' | ' | ' | 17,521 | 17,679 |
Amortization | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total cost of revenues | ' | ' | ' | ' | ' | ' | ' | ' | 41,241 | 44,085 |
Other operating expenses | ' | ' | ' | ' | ' | ' | ' | ' | 31,115 | 38,551 |
Embezzlement-related expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Depreciation and amortization expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Impairment of long-lived assets | ' | ' | ' | ' | ' | ' | ' | ' | 1,038 | 1,496 |
Net interest expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other income, net | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Income tax expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment net income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | 16,946 | 12,730 |
Capital expenditures | ' | ' | ' | ' | ' | ' | ' | ' | 7,110 | 9,618 |
Operating Segments | Learning A-Z | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue, operating expenses and income (loss) from operations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Product revenues | ' | ' | ' | ' | ' | ' | ' | ' | 33,483 | 26,189 |
Service revenues | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net revenues | ' | ' | ' | ' | ' | ' | ' | ' | 33,483 | 26,189 |
Cost of product revenues | ' | ' | ' | ' | ' | ' | ' | ' | 908 | 659 |
Cost of service revenues | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total cost of revenues | ' | ' | ' | ' | ' | ' | ' | ' | 908 | 659 |
Other operating expenses | ' | ' | ' | ' | ' | ' | ' | ' | 13,607 | 10,920 |
Embezzlement-related expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Depreciation and amortization expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Impairment of long-lived assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net interest expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other income, net | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Income tax expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment net income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | 18,968 | 14,610 |
Capital expenditures | ' | ' | ' | ' | ' | ' | ' | ' | 4,401 | 4,039 |
Operating Segments | Explore Learning | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue, operating expenses and income (loss) from operations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Product revenues | ' | ' | ' | ' | ' | ' | ' | ' | 16,279 | 14,283 |
Service revenues | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net revenues | ' | ' | ' | ' | ' | ' | ' | ' | 16,279 | 14,283 |
Cost of product revenues | ' | ' | ' | ' | ' | ' | ' | ' | 2,249 | 1,929 |
Cost of service revenues | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total cost of revenues | ' | ' | ' | ' | ' | ' | ' | ' | 2,249 | 1,929 |
Other operating expenses | ' | ' | ' | ' | ' | ' | ' | ' | 9,152 | 7,747 |
Embezzlement-related expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Depreciation and amortization expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Impairment of long-lived assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net interest expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other income, net | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Income tax expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment net income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | 4,878 | 4,607 |
Capital expenditures | ' | ' | ' | ' | ' | ' | ' | ' | 1,462 | 1,090 |
Operating Segments | Kurzweil/IntelliTools | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue, operating expenses and income (loss) from operations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Product revenues | ' | ' | ' | ' | ' | ' | ' | ' | 10,418 | 11,225 |
Service revenues | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net revenues | ' | ' | ' | ' | ' | ' | ' | ' | 10,418 | 11,225 |
Cost of product revenues | ' | ' | ' | ' | ' | ' | ' | ' | 2,290 | 2,712 |
Cost of service revenues | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total cost of revenues | ' | ' | ' | ' | ' | ' | ' | ' | 2,290 | 2,712 |
Other operating expenses | ' | ' | ' | ' | ' | ' | ' | ' | 4,486 | 5,646 |
Embezzlement-related expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Depreciation and amortization expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Impairment of long-lived assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net interest expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other income, net | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Income tax expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment net income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | 3,642 | 2,867 |
Capital expenditures | ' | ' | ' | ' | ' | ' | ' | ' | 418 | 365 |
Other | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue, operating expenses and income (loss) from operations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Product revenues | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Service revenues | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net revenues | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cost of product revenues | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,578 |
Cost of service revenues | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization | ' | ' | ' | ' | ' | ' | ' | ' | 17,519 | 24,716 |
Total cost of revenues | ' | ' | ' | ' | ' | ' | ' | ' | 17,519 | 26,294 |
Other operating expenses | ' | ' | ' | ' | ' | ' | ' | ' | 16,746 | 18,671 |
Embezzlement-related expense | ' | ' | ' | ' | ' | ' | ' | ' | 118 | 516 |
Depreciation and amortization expense | ' | ' | ' | ' | ' | ' | ' | ' | 4,895 | 6,182 |
Impairment of long-lived assets | ' | ' | ' | ' | ' | ' | ' | ' | 1,189 | 32,211 |
Net interest expense | ' | ' | ' | ' | ' | ' | ' | ' | 18,819 | 18,683 |
Other income, net | ' | ' | ' | ' | ' | ' | ' | ' | -764 | -1,125 |
Income tax expense | ' | ' | ' | ' | ' | ' | ' | ' | 165 | 272 |
Segment net income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | -58,687 | -168,597 |
Capital expenditures | ' | ' | ' | ' | ' | ' | ' | ' | 2,724 | 3,033 |
Goodwill impairment | ' | ' | ' | ' | ' | ' | ' | ' | ' | $66,893 |
Segment_Reporting_Details_Text
Segment Reporting (Details Textual) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Customer | Segment | |
Segment | Customer | |
Segment Reporting Textual [Abstract] | ' | ' |
Total revenues percentage | 6.00% | 6.00% |
Total sales shipped to Canada | 5.00% | 4.00% |
Number of customers accounts for more than 10% of consolidated net revenues | 0 | 0 |
Number of customers accounts for more than 10% of consolidated Account receivable | 0 | ' |
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 | 177 | ' |
Operating Segments | Explore Learning | ' | ' |
Segment Reporting Textual [Abstract] | ' | ' |
Number of Products under Explore Learning | 2 | ' |
Interim_Financial_Information_2
Interim Financial Information (Unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
Net revenues | $33,348 | $42,957 | $42,786 | $31,429 | $34,317 | $45,958 | $40,429 | $27,855 | $150,520 | $148,559 |
Cost of revenues | 9,688 | 12,950 | 12,647 | 11,403 | 11,126 | 14,274 | 14,397 | 11,166 | 46,688 | 50,963 |
Other operating expenses | 24,854 | 25,194 | 25,138 | 24,679 | 108,222 | 29,350 | 43,942 | 32,035 | 99,865 | 213,549 |
Earnings (loss) before income taxes | -5,866 | 255 | 533 | -9,010 | -88,793 | -2,131 | -22,500 | -20,087 | -14,088 | -133,511 |
Income tax expense | 132 | -127 | -102 | -68 | -14 | -104 | 23 | -177 | -165 | -272 |
Net loss | ($5,734) | $128 | $431 | ($9,078) | ($88,807) | ($2,235) | ($22,477) | ($20,264) | ($14,253) | ($133,783) |
Basic income (loss) per share | ($0.13) | $0 | $0.01 | ($0.19) | ($1.83) | ($0.05) | ($0.45) | ($0.41) | ($0.30) | ($2.71) |
Diluted income (loss) per share | ($0.13) | $0 | $0.01 | ($0.19) | ($1.83) | ($0.05) | ($0.45) | ($0.41) | ($0.30) | ($2.71) |
Interim_Financial_Information_3
Interim Financial Information (Unaudited) (Details Textual) (USD $) | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | |
Interim Financial Information (Textual) [Abstract] | ' | ' | ' | ' | ' | ' | ' |
Goodwill impairment charge | ' | $52,200,000 | ' | $14,700,000 | ' | ' | $66,893,000 |
Impairment of long lived assets | $2,200,000 | $30,400,000 | $200,000 | $300,000 | $2,800,000 | ' | ' |
Subsidiary_Guarantor_Financial2
Subsidiary Guarantor Financial Statements (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
Condensed Consolidated Statements of Operations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net revenues | $33,348 | $42,957 | $42,786 | $31,429 | $34,317 | $45,958 | $40,429 | $27,855 | $150,520 | $148,559 |
Total costs and expenses | ' | ' | ' | ' | ' | ' | ' | ' | 146,553 | 264,512 |
Income (loss) before interest, other income and income taxes | ' | ' | ' | ' | ' | ' | ' | ' | 3,967 | -115,953 |
Net interest expense | ' | ' | ' | ' | ' | ' | ' | ' | -18,819 | -18,683 |
Other income, net | ' | ' | ' | ' | ' | ' | ' | ' | 764 | 1,125 |
Income tax expense | 132 | -127 | -102 | -68 | -14 | -104 | 23 | -177 | -165 | -272 |
Net loss | -5,734 | 128 | 431 | -9,078 | -88,807 | -2,235 | -22,477 | -20,264 | -14,253 | -133,783 |
Parent Company | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Condensed Consolidated Statements of Operations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net revenues | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 |
Total costs and expenses | ' | ' | ' | ' | ' | ' | ' | ' | 1,444 | 2,094 |
Income (loss) before interest, other income and income taxes | ' | ' | ' | ' | ' | ' | ' | ' | -1,444 | -2,094 |
Net interest expense | ' | ' | ' | ' | ' | ' | ' | ' | -18,604 | -18,608 |
Other income, net | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 |
Income tax expense | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 |
Net loss | ' | ' | ' | ' | ' | ' | ' | ' | -20,048 | -20,702 |
Subsidiary Guarantors | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Condensed Consolidated Statements of Operations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net revenues | ' | ' | ' | ' | ' | ' | ' | ' | 150,520 | 148,559 |
Total costs and expenses | ' | ' | ' | ' | ' | ' | ' | ' | 144,484 | 261,754 |
Income (loss) before interest, other income and income taxes | ' | ' | ' | ' | ' | ' | ' | ' | 6,036 | -113,195 |
Net interest expense | ' | ' | ' | ' | ' | ' | ' | ' | -209 | -65 |
Other income, net | ' | ' | ' | ' | ' | ' | ' | ' | 764 | 1,125 |
Income tax expense | ' | ' | ' | ' | ' | ' | ' | ' | -165 | -272 |
Net loss | ' | ' | ' | ' | ' | ' | ' | ' | 6,426 | -112,407 |
Non-Guarantor Subsidiary | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Condensed Consolidated Statements of Operations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net revenues | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 |
Total costs and expenses | ' | ' | ' | ' | ' | ' | ' | ' | 625 | 664 |
Income (loss) before interest, other income and income taxes | ' | ' | ' | ' | ' | ' | ' | ' | -625 | -664 |
Net interest expense | ' | ' | ' | ' | ' | ' | ' | ' | -6 | -10 |
Other income, net | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 |
Income tax expense | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 |
Net loss | ' | ' | ' | ' | ' | ' | ' | ' | -631 | -674 |
Eliminations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Condensed Consolidated Statements of Operations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net revenues | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 |
Total costs and expenses | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 |
Income (loss) before interest, other income and income taxes | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 |
Net interest expense | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 |
Other income, net | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 |
Income tax expense | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 |
Net loss | ' | ' | ' | ' | ' | ' | ' | ' | $0 | $0 |
Subsidiary_Guarantor_Financial3
Subsidiary Guarantor Financial Statements (Details 1) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Condensed Consolidated Balance Sheet | ' | ' |
Investment in subsidiaries | $0 | $0 |
Other assets | 216,210 | 230,459 |
Total assets | 216,210 | 230,459 |
Total liabilities | 279,400 | 276,504 |
Total stockholders' equity | -63,190 | -46,045 |
Total liabilities and stockholders' equity | 216,210 | 230,459 |
Parent Company | ' | ' |
Condensed Consolidated Balance Sheet | ' | ' |
Investment in subsidiaries | 252,333 | 252,333 |
Other assets | 211,805 | 209,034 |
Total assets | 464,138 | 461,367 |
Total liabilities | 253,322 | 227,107 |
Total stockholders' equity | 210,816 | 234,260 |
Total liabilities and stockholders' equity | 464,138 | 461,367 |
Subsidiary Guarantors | ' | ' |
Condensed Consolidated Balance Sheet | ' | ' |
Investment in subsidiaries | 0 | 0 |
Other assets | 259,776 | 241,827 |
Total assets | 259,776 | 241,827 |
Total liabilities | 279,346 | 267,823 |
Total stockholders' equity | -19,570 | -25,996 |
Total liabilities and stockholders' equity | 259,776 | 241,827 |
Non-Guarantor Subsidiary | ' | ' |
Condensed Consolidated Balance Sheet | ' | ' |
Investment in subsidiaries | 0 | 0 |
Other assets | 19,022 | 20,314 |
Total assets | 19,022 | 20,314 |
Total liabilities | 21,125 | 22,290 |
Total stockholders' equity | -2,103 | -1,976 |
Total liabilities and stockholders' equity | 19,022 | 20,314 |
Eliminations | ' | ' |
Condensed Consolidated Balance Sheet | ' | ' |
Investment in subsidiaries | -252,333 | -252,333 |
Other assets | -274,393 | -240,716 |
Total assets | -526,726 | -493,049 |
Total liabilities | -274,393 | -240,716 |
Total stockholders' equity | -252,333 | -252,333 |
Total liabilities and stockholders' equity | ($526,726) | ($493,049) |
Subsidiary_Guarantor_Financial4
Subsidiary Guarantor Financial Statements (Details 2) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Condensed Statement of Cash Flows | ' | ' |
Net cash provided by operating activities | $45,786 | $10,329 |
Net cash used in investing activities | -23,788 | -17,881 |
Net cash used in financing activities | -5,909 | -3,735 |
Increase (decrease) in cash and cash equivalents | 16,089 | -11,287 |
Cash and cash equivalents, beginning of year | 51,904 | 63,191 |
Cash and cash equivalents, end of year | 67,993 | 51,904 |
Parent Company | ' | ' |
Condensed Statement of Cash Flows | ' | ' |
Net cash provided by operating activities | 19,033 | 2,597 |
Net cash used in investing activities | -7,673 | 0 |
Net cash used in financing activities | -4,619 | -2,597 |
Increase (decrease) in cash and cash equivalents | 6,741 | 0 |
Cash and cash equivalents, beginning of year | 5,288 | 5,288 |
Cash and cash equivalents, end of year | 12,029 | 5,288 |
Subsidiary Guarantors | ' | ' |
Condensed Statement of Cash Flows | ' | ' |
Net cash provided by operating activities | 26,753 | 7,732 |
Net cash used in investing activities | -16,115 | -17,881 |
Net cash used in financing activities | -1,290 | -1,138 |
Increase (decrease) in cash and cash equivalents | 9,348 | -11,287 |
Cash and cash equivalents, beginning of year | 46,616 | 57,903 |
Cash and cash equivalents, end of year | 55,964 | 46,616 |
Non-Guarantor Subsidiary | ' | ' |
Condensed Statement of Cash Flows | ' | ' |
Net cash provided by operating activities | 0 | 0 |
Net cash used in investing activities | 0 | 0 |
Net cash used in financing activities | 0 | 0 |
Increase (decrease) in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents, beginning of year | 0 | 0 |
Cash and cash equivalents, end of year | 0 | 0 |
Eliminations | ' | ' |
Condensed Statement of Cash Flows | ' | ' |
Net cash provided by operating activities | 0 | 0 |
Net cash used in investing activities | 0 | 0 |
Net cash used in financing activities | 0 | 0 |
Increase (decrease) in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents, beginning of year | 0 | 0 |
Cash and cash equivalents, end of year | $0 | $0 |