Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | Apr. 29, 2016 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Cambium Learning Group, Inc. | |
Entity Central Index Key | 1,466,815 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Trading Symbol | ABCD | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 45,760,702 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Statement [Abstract] | ||
Net revenues | $ 33,674 | $ 31,471 |
Cost of revenues: | ||
Cost of revenues | 7,007 | 6,886 |
Amortization expense | 3,650 | 4,003 |
Total cost of revenues | 10,657 | 10,889 |
Research and development expense | 3,120 | 2,477 |
Sales and marketing expense | 12,311 | 10,644 |
General and administrative expense | 5,002 | 5,215 |
Shipping and handling costs | 159 | 174 |
Depreciation and amortization expense | 841 | 993 |
Total costs and expenses | 32,090 | 30,392 |
Income before interest, other income (expense) and income taxes | 1,584 | 1,079 |
Net interest expense | (1,764) | (3,674) |
Other income, net | 215 | |
Loss before income taxes | (180) | (2,380) |
Income tax benefit (expense) | 78 | (118) |
Net loss | (102) | (2,498) |
Other comprehensive loss: | ||
Amortization of net pension loss | 37 | 56 |
Comprehensive loss | $ (65) | $ (2,442) |
Net loss per common share: | ||
Basic | $ 0 | $ (0.05) |
Diluted | $ 0 | $ (0.05) |
Average number of common shares and equivalents outstanding: | ||
Basic | 45,739 | 45,479 |
Diluted | 45,739 | 45,479 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 4,900 | $ 8,645 |
Accounts receivable, net | 9,574 | 14,640 |
Inventory | 4,436 | 4,694 |
Restricted assets, current | 1,254 | 1,265 |
Other current assets | 9,383 | 9,981 |
Total current assets | 29,547 | 39,225 |
Property, equipment and software at cost | 58,182 | 55,824 |
Accumulated depreciation and amortization | (34,737) | (33,284) |
Property, equipment and software, net | 23,445 | 22,540 |
Goodwill | 47,842 | 47,842 |
Acquired curriculum and technology intangibles, net | 2,351 | 2,731 |
Acquired publishing rights, net | 1,240 | 1,459 |
Other intangible assets, net | 2,952 | 3,231 |
Pre-publication costs, net | 16,913 | 16,441 |
Restricted assets, less current portion | 2,814 | 3,099 |
Other assets | 4,695 | 4,817 |
Total assets | 131,799 | 141,385 |
Current liabilities: | ||
Accounts payable | 2,166 | 1,993 |
Accrued expenses | 8,871 | 14,224 |
Revolving credit facility | 10,500 | |
Current portion of long-term debt | 4,725 | 3,850 |
Deferred revenue, current | 61,582 | 74,107 |
Total current liabilities | 87,844 | 94,174 |
Long-term liabilities: | ||
Long-term debt | 96,269 | 97,872 |
Deferred revenue, less current portion | 10,220 | 11,481 |
Other liabilities | 11,451 | 12,027 |
Total long-term liabilities | $ 117,940 | $ 121,380 |
Commitments and contingencies (See Note 12) | ||
Stockholders' equity (deficit): | ||
Preferred stock ($.001 par value, 15,000 shares authorized, zero shares issued and outstanding at March 31, 2016 and December 31, 2015) | $ 0 | $ 0 |
Common stock ($.001 par value, 150,000 shares authorized, 52,293 and 52,268 shares issued, and 45,761 and 45,736 shares outstanding at March 31, 2016 and December 31, 2015, respectively) | 52 | 52 |
Capital surplus | 285,555 | 285,306 |
Accumulated deficit | (344,077) | (343,975) |
Treasury stock at cost (6,532 shares at March 31, 2016 and December 31, 2015) | (12,784) | (12,784) |
Accumulated other comprehensive loss: | ||
Pension and postretirement plans | (2,731) | (2,768) |
Accumulated other comprehensive loss | (2,731) | (2,768) |
Total stockholders' equity (deficit) | (73,985) | (74,169) |
Total liabilities and stockholders' equity (deficit) | $ 131,799 | $ 141,385 |
Condensed Consolidated Balance4
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2016 | Dec. 31, 2015 |
Statement Of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 15,000,000 | 15,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 52,293,000 | 52,268,000 |
Common stock, shares outstanding | 45,761,000 | 45,736,000 |
Treasury stock, shares | 6,532,000 | 6,532,000 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Statement Of Cash Flows [Abstract] | ||
Net loss | $ (102) | $ (2,498) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization expense | 4,491 | 4,996 |
Amortization of note discount and deferred financing costs | 280 | 304 |
Stock-based compensation and expense | 208 | 135 |
Other | 1 | |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 5,066 | 2,301 |
Inventory | 258 | (188) |
Other current assets | 598 | (635) |
Other assets | 77 | (257) |
Restricted assets | 296 | 306 |
Accounts payable | 173 | 1,384 |
Accrued expenses | (5,353) | (5,808) |
Deferred revenue | (13,786) | (9,448) |
Other long-term liabilities | (539) | (177) |
Net cash used in operating activities | (8,333) | (9,584) |
Investing activities: | ||
Expenditures for property, equipment, software and pre-publication costs | (4,990) | (4,783) |
Net cash used in investing activities | (4,990) | (4,783) |
Financing activities: | ||
Principal payments under capital lease obligations | (264) | |
Repayment of debt | (963) | |
Borrowings under revolving credit facility | 11,000 | |
Payment of revolving credit facility | (500) | |
Proceeds from exercise of stock options | 41 | 19 |
Net cash provided by (used in) financing activities | 9,578 | (245) |
Change in cash and cash equivalents | (3,745) | (14,612) |
Cash and cash equivalents, beginning of period | 8,645 | 34,387 |
Cash and cash equivalents, end of period | $ 4,900 | $ 19,775 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation | Note 1 — Basis of Presentation Presentation The Condensed Consolidated Financial Statements include the accounts of Cambium Learning Group, Inc. and its subsidiaries (the “Company”) and are unaudited. The condensed consolidated balance sheet as of December 31, 2015 has been derived from audited financial statements. All intercompany transactions have been eliminated. As permitted under the Securities and Exchange Commission (“SEC”) requirements for interim reporting, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) have been omitted. The Company believes that these financial statements include all necessary and recurring adjustments for the fair presentation of the interim period results. These financial statements should be read in conjunction with the Consolidated Financial Statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015. Due to seasonality, the results of operations for the three months ended March 31, 2016 are not necessarily indicative of the results to be expected for any future interim period or for the year ending December 31, 2016. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Subsequent actual results may differ from those estimates. Nature of Operations The Company is a leading educational solutions and services company that is committed to helping all students reach their full potential. The Company’s brands include: Learning A–Z, These brands comprise three reportable segments with separate management teams and infrastructures that offer various products and services. See Note 14 – Segment Reporting |
Accounts Receivable
Accounts Receivable | 3 Months Ended |
Mar. 31, 2016 | |
Receivables [Abstract] | |
Accounts Receivable | Note 2 — Accounts Receivable Accounts receivable are stated net of allowances for doubtful accounts and estimated sales returns. The allowance for doubtful accounts and estimated sales returns totaled $0.2 million at March 31, 2016 and December 31, 2015. The allowance for doubtful accounts is based on a review of outstanding balances and historical collection experience. The reserve for sales returns is based on historical rates of return as well as other factors that in the Company’s judgment, could reasonably be expected to cause sales returns to differ from historical experience. |
Stock-Based Compensation and Ex
Stock-Based Compensation and Expense | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation and Expense | Note 3 — Stock-Based Compensation and Expense Cambium Learning Group, Inc. 2009 Equity Incentive Plan In 2009, the Company adopted the Cambium Learning Inc. 2009 Equity Incentive Plan (“Incentive Plan”). Under the Incentive Plan, 5,000,000 shares of common stock were reserved for issuance of awards which may be granted in the form of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, conversion stock options, conversion stock appreciation rights, and other stock or cash awards. 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. Stock-Based Compensation and Expense The following table presents our s tock-based compensation expense resulting from stock options that are recorded in our condensed consolidated statements of operations and comprehensive loss for the periods presented: Three Months Ended March 31, (in thousands) 2016 2015 Cost of revenues $ 15 $ 8 Research and development expense 41 28 Sales and marketing expense 48 33 General and administrative expense 104 66 Total $ 208 $ 135 2016 Grants In the first quarter 2016, the Company granted 290,000 options under the Incentive Plan with an exercise price of $4.50. The options vest in equal monthly installments on the last day of the month over a four year period, with an initial vesting date of March 31, 2016. |
Net Loss per Common Share
Net Loss per Common Share | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Net Loss per Common Share | Note 4 — 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. 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 potential dilutive shares of common stock assuming the dilutive effect of outstanding stock options and restricted stock awards using the treasury stock method. Weighted-average shares from common share equivalents in the amount of 2,885,243 for the three months ended March 31, 2016, and 2,612,281 for the three months ended March 31, 2015, respectively, were excluded from the respective dilutive shares outstanding because their effect was anti-dilutive. The following table presents the calculation of basic and diluted net loss per share: Three Months Ended March 31, (in thousands, except per share data) 2016 2015 Numerator: Net loss $ (102 ) $ (2,498 ) Denominator: Basic: Weighted-average common shares used in computing basic net loss per share 45,739 45,479 Diluted: Add weighted-average effect of dilutive securities: Stock options and restricted stock awards — — Weighted-average common shares used in computing diluted net loss per share 45,739 45,479 Net loss per common share: Basic $ (0.00 ) $ (0.05 ) Diluted $ (0.00 ) $ (0.05 ) |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 5 — Fair Value Measurements Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability (exit price), in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques are based on observable or unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs have created the following fair value hierarchy: · Level 1 — Quoted prices for identical instruments in active markets. · Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant value drivers are observable. · Level 3 — Valuations derived from valuation techniques in which significant value drivers are unobservable. Applicable guidance requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. At March 31, 2016, financial instruments include $4.9 million of cash and cash equivalents, restricted assets of $4.1 million, collateral investments of $1.8 million, $10.5 million of borrowings under the Revolving Credit Facility, and Senior Secured Credit Facility term loans, net of discount and deferred financing costs, of $101.0 million. At December 31, 2015, financial instruments include $8.6 million of cash and cash equivalents, restricted assets of $4.4 million, collateral investments of $1.8 million, and Senior Secured Credit Facility term loans, net of discount and deferred financing costs, of $101.7 million. The fair market values of cash equivalents, restricted assets, and collateral investments 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. See Note 13 – Long-Term Debt At March 31, 2016 and December 31, 2015 , the carrying value of the Company’s Senior Secured Credit Facility term loans and Revolving Credit Facility approximates the fair value, as the borrowings are tied to the London Interbank Offered Rate (“LIBOR”) and are market sensitive. Assets and liabilities measured at fair value on a recurring basis are as follows: (in thousands) Fair Value at Reporting Date Using Description March 31, 2016 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 $ 4,068 $ 4,068 $ — $ — Collateral Investments: Money Market 905 905 — — Certificates of Deposit 879 879 — — (in thousands) Fair Value at Reporting Date Using Description December 31, 2015 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 $ 4,364 $ 4,364 $ — $ — Collateral Investments: Money Market 905 905 — — Certificates of Deposit 878 878 — — (in thousands) Total Gains (Losses) for the Three Months Ended March 31, Description 2016 2015 Restricted Assets: Money Market $ — $ — Collateral Investments: Money Market — — Certificates of Deposit — — Assets and liabilities measured at fair value on a non-recurring basis are listed below at their carrying values as of each reporting date: (in thousands) Fair Value at Reporting Date Using Description March 31, 2016 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, net 23,445 — — 23,445 Pre-publication costs, net 16,913 — — 16,913 Acquired curriculum and technology intangibles, net 2,351 — — 2,351 Acquired publishing rights, net 1,240 — — 1,240 Other intangible assets, net 2,952 — — 2,952 (in thousands) Fair Value at Reporting Date Using Description December 31, 2015 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, net 22,540 — — 22,540 Pre-publication costs, net 16,441 — — 16,441 Acquired curriculum and technology intangibles, net 2,731 — — 2,731 Acquired publishing rights, net 1,459 — — 1,459 Other intangible assets, net 3,231 — — 3,231 (in thousands) Total Gains (Losses) for the Three Months Ended March 31, Description 2016 2015 Goodwill $ — $ — Property, equipment and software, net — — Pre-publication costs, net — — Acquired curriculum and technology intangibles, net — — Acquired publishing rights, net — — Other intangible assets, net — — There were no significant remeasurements of these assets during the three months ended March 31, 2016 or 2015. |
Other Current Assets
Other Current Assets | 3 Months Ended |
Mar. 31, 2016 | |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | |
Other Current Assets | Note 6 — Other Current Assets Other current assets at March 31, 2016 and December 31, 2015 consisted of the following: (in thousands) March 31, 2016 December 31, 2015 Deferred costs $ 7,144 $ 8,514 Prepaid expenses 2,139 1,367 Other 100 100 Other current assets $ 9,383 $ 9,981 |
Other Assets
Other Assets | 3 Months Ended |
Mar. 31, 2016 | |
Other Assets [Abstract] | |
Other Assets | Note 7 — Other Assets Other assets at March 31, 2016 and December 31, 2015 consisted of the following: (in thousands) March 31, 2016 December 31, 2015 Collateral investments $ 1,784 $ 1,783 Deferred costs, less current portion 1,311 1,479 Deferred financing costs - revolving credit facility 846 892 Other 754 663 Other assets $ 4,695 $ 4,817 Deferred Financing Costs Deferred financing costs relate to costs incurred with the issuance of the Senior Secured Credit Agreement Long-Term Debt Collateral Investments The Company maintains certificates of deposit to collateralize its outstanding letters of credit associated with credit collections and workers’ compensation activity. At March 31, 2016 and December 31, 2015, the Company had $0.9 million in certificates of deposit serving as collateral for its outstanding letters of credit. Additionally, the Company maintains a money market fund investment to serve as collateral for a travel card program. The balance of the money market fund investment was $0.9 million at March 31, 2016 and December 31, 2015. |
Accrued Expenses
Accrued Expenses | 3 Months Ended |
Mar. 31, 2016 | |
Payables And Accruals [Abstract] | |
Accrued Expenses | Note 8 — Accrued Expenses Accrued expenses at March 31, 2016 and December 31, 2015 consisted of the following: (in thousands) March 31, 2016 December 31, 2015 Salaries, bonuses and benefits $ 4,420 $ 9,383 Pension and post-retirement benefit plans 1,093 1,093 Accrued royalties 740 1,201 Accrued interest 57 — Other 2,561 2,547 Accrued expenses $ 8,871 $ 14,224 Accrued Interest Accrued interest at March 31, 2016 and December 31, 2015 relates to the Company’s Senior Secured Credit Agreement Long-Term Debt Pension and Post-Retirement Benefit Plans See Note 10 – Pension Plan |
Other Liabilities
Other Liabilities | 3 Months Ended |
Mar. 31, 2016 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | Note 9 — Other Liabilities Other liabilities at March 31, 2016 and December 31, 2015 consisted of the following: (in thousands) March 31, 2016 December 31, 2015 Pension and post-retirement benefit plans, long-term portion $ 9,723 $ 9,903 Deferred rent 830 881 Long-term income tax payable 560 896 Long-term deferred compensation 338 347 Other liabilities $ 11,451 $ 12,027 Pension and Post-Retirement Benefit Plans See Note 10 – Pension Plan |
Pension Plan
Pension Plan | 3 Months Ended |
Mar. 31, 2016 | |
Compensation And Retirement Disclosure [Abstract] | |
Pension Plan | Note 10 — Pension Plan The net pension costs of the Company’s defined benefit pension plan were comprised primarily of interest costs and totaled $0.1 million and $0.2 million, respectively, for the three months ended March 31, 2016 and 2015. The net pension costs for the three months ended March 31, 2016 and 2015 included the amortization of accumulated net loss of $37 thousand and $0.1 million, respectively. |
Uncertain Tax Positions
Uncertain Tax Positions | 3 Months Ended |
Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Uncertain Tax Positions | Note 11 — Uncertain Tax Positions The Company recognizes the financial statement impacts of a tax return position when it is more likely than not, based on technical merits, that the position will ultimately be sustained. For tax positions that meet this recognition threshold, the Company applies judgment, taking into account applicable tax laws, experience managing tax audits and relevant GAAP, to determine the amount of tax benefits to recognize in its financial statements. For each position, the difference between the benefit realized on the Company’s tax return and the benefit reflected in its financial statements is recorded to Other Liabilities in the Condensed 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. The balance of UTBs was $6.0 million at March 31, 2016 and $6.2 million at December 31, 2015. Included in the balance of unrecognized tax benefits at March 31, 2016 are approximately $ 0.6 The Company recognizes interest accrued related to its UTBs and penalties as income tax expense. Related to the UTBs noted above, the Company recognized no penalties and immaterial interest during the three months ended March 31, 2016. At March 31, 2016, the Company has liabilities of $0.1 million for penalties (gross) and $0.1 million for interest (gross). During the three months ended March 31, 2016, UTBs were decreased by $0.3 million for effectively settled tax positions. 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 Voyager Learning Company acquired entities have been audited by the Internal Revenue Service. Cambium and its subsidiaries have been examined by the Internal Revenue Service through the end of 2006. The Company has been audited by the various state tax authorities through 2007. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 12 — Commitments and Contingencies Legal Proceedings 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. Purchase Commitments 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 $ 0.5 million as of Letters of Credit The Company has letters of credit outstanding at March 31, 2016 in the amount of $0.9 million to support credit collections and workers’ compensation activity. The Company maintains certificates of deposit of $0.9 million as collateral for the letters of credit as well as an additional deposit to support Automated Clearing House processing and credit card collections. The Company also maintains a $0.9 million money market fund investment as collateral for a travel card program. The certificates of deposit and money market fund investment are included in Collateral Investments in Note 7 — Other Assets. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Note 13 — Long-Term Debt Long-term debt at March 31, 2016 and December 31, 2015 consisted of the following: (in thousands) March 31, 2016 December 31, 2015 Senior secured credit facility term loans maturing December 10, 2020 $ 104,037 $ 105,000 Less: Unamortized discount (1,725 ) (1,856 ) Less: Unamortized deferred financing costs (1,318 ) (1,422 ) Total debt 100,994 101,722 Less: current portion of long-term debt 4,725 3,850 Long-term debt $ 96,269 $ 97,872 Senior Secured Credit Facility On December 10, 2015, Cambium Learning, Inc. (the “Borrower”), a wholly-owned subsidiary of Cambium Learning Group, Inc., entered into a $135.0 million Senior Secured Credit Agreement (the “Credit Agreement”) among the Borrower, the Company, Webster Bank, N.A., as Administrative Agent, L/C Issuer and a Lender, and the other Lenders party thereto, with Webster Bank, N.A., as Joint Lead Arranger, the Governor and Company of the Bank of Ireland, as a Joint Lead Arranger and Syndication Agent, and Capital One National Association, and Babson Capital Finance, LLC, as Co-Documentation Agents (the “Senior Secured Credit Facility”). The Senior Secured Credit Facility consists of a term loan A in an initial amount of $70.0 million (“Term Loan A”), a term loan B in an initial amount of $35.0 million (“Term Loan B”) and a $30.0 million revolving credit facility (the “Revolving Credit Facility”), secured by a lien on substantially all assets and capital stock of the Company, the Borrower and the Borrower’s subsidiaries (collectively, the “Loan Parties”). The Senior Secured Credit Facility matures on December 10, 2020. Borrowings under the Senior Secured Credit Facility bear interest equal to either a Base Rate, as defined in the Credit Agreement, or the LIBOR rate (subject to a 1.0% floor), at the Borrower’s option, plus an applicable margin. The applicable margin for the Term Loan A and Revolving Credit Facility ranges between 2.75% and 3.50% for Base Rate loans and 3.75% and 4.50% for LIBOR loans. The applicable margin for the Term Loan A and Revolving Credit Facility is based on a leverage calculation; however, the highest level of margin is applicable until the Company completes its second quarter 2016 leverage calculation. The applicable margin for the Term Loan B is 4.25% for Base Rate loans and 5.25% for LIBOR loans. From the inception of the Senior Secured Credit Facility to the end of the first quarter 2016, an interest rate of 5.5% applied to the Term Loan A and Revolving Credit Facility and an interest rate of 6.25% applied to the Term Loan B. Additionally, unused borrowing capacity under the Revolving Credit Facility is subject to a commitment fee of 0.5%. Interest is payable quarterly in arrears, or earlier for loans with shorter interest periods. The Credit Agreement contains affirmative, negative and financial covenants customary for financings of this type, including, among other things, limits on the creation of liens, limits on the incurrence indebtedness, restrictions on investments and dispositions, limitations on fundamental changes to the Loan Parties, a maximum consolidated net leverage ratio, and minimum fixed charge coverage ratio. Upon an event of default, and after any applicable cure period, the Administrative Agent can accelerate the maturity of the loan. Events of default include customary items, such as failure to pay principal and interest in a timely manner and breach of covenants. At March 31, 2016, the Company was in compliance with all covenants related to the Credit Facility. The principal balances of the Senior Secured Credit Facility were issued at a discount, representing fees paid to lenders, which are amortized over the life of the debt using the effective interest rate method. Unamortized discount at March 31, 2016 and December 31, 2015 was $1.7 million and $1.9 million, respectively. The Company incurred debt issuance costs associated with the Senior Secured Credit Facility, which were deferred and are amortized over the term of the related debt using the effective interest method. Unamortized deferred financing costs related to the Term Loan A and Term Loan B totaled $1.3 million and $1.4 million at March 31, 2016 and December 31, 2015 and are presented as a reduction to Long-term Debt in the Consolidated Balance Sheets. Unamortized deferred financing costs related to the Revolving Credit Facility totaled $0.8 million and $0.9 million at March 31, 2016 and December 31, 2015, respectively, and are classified as Other Assets in the Consolidated Balance Sheets. At March 31, 2016, the Company had outstanding principal balances of $69.1 million of Term Loan A, $34.9 million of Term Loan B, and $10.5 million under the Revolving Credit Facility, and had $19.5 million borrowing availability under the Revolving Credit Facility. In February 2016, the Company paid $0.1 million to enter into interest rate cap agreements for approximately half of its outstanding Term Loan A and Term Loan B loans, less required amortization, for a three year period. Under the interest rate cap agreements, the Company will receive payments for any period that the three-month LIBOR rate exceeds 2.5%. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Segment Reporting | Note 14 — Segment Reporting The Company operates in three reportable segments with separate management teams and infrastructures that offer various products and services. Learning A-Z Segment Learning A-Z is a PreK-6 education technology provider of digitally delivered resources and tools that support instruction and student growth in reading, writing, and science. Founded in 2002, Learning A-Z believes that an enlightened approach to literacy —which starts with reading and writing, but also includes the development of key 21st century skills like communication, creativity, collaboration, and critical-thinking — is the foundation to all learning. With a robust library of incredibly effective and flexible curriculum resources, Learning A-Z provides the tools teachers need to deliver personalized instruction for a wide range of student needs, including English language learners, intervention, special education, and daily instruction. Learning A-Z’s resources are currently used in more than half the districts across the United States and Canada and in over 180 countries worldwide. Learning A-Z is committed to: · Delivering unmatched value, whereby high-quality resources are affordable for every individual classroom · Making personalized learning easier, giving teachers what they need to deliver the just-right instructional resources to every student · Empowering teachers as the foundation of student achievement, ensuring that teachers are given the support they need to be effective and efficient Learning A-Z operates seven subscription-based websites: Reading A-Z ™ , Raz-Kids ® ® ® ™ , Vocabulary A-Z ™, ReadyTest A-Z ™ Voyager Sopris Learning Segment The Voyager Sopris Learning segment includes the Company’s Voyager Sopris Learning and Kurzweil Education brands. Voyager Sopris Learning Brand The Voyager Sopris Learning brand is committed to partnering with school districts to meet and surpass their goals for student achievement. The Voyager Sopris Learning suite of instructional and service solutions is not only research based, but also evidence based — proven to increase student achievement and educator effectiveness. Voyager Sopris Learning’s solutions have been fully tested in the classroom, ensuring that they are easy to implement and teacher friendly. They are innovative, both in overall instructional approach and in the strategic use of technology in blended and 100% online solutions and are supported by an unparalleled commitment to build local capacity for sustained success. With a comprehensive suite of instructional resources, the Voyager Sopris Learning brand provides assessments, professional development and school improvement services, literacy and math instructional tools — both comprehensive intervention and supplemental — and resources to build a positive school climate. Kurzweil Education Brand The Kurzweil Education ™ ExploreLearning Segment ExploreLearning develops online solutions to improve student learning in math and science. ExploreLearning has two products: Gizmos Reflex Other Other consists of unallocated shared services, such as accounting, legal, human resources and corporate related items, as well as depreciation and amortization expense, other income and expense, and income taxes. The Company does not allocate any of these costs to its segments, and the chief operating decision maker evaluates performance of operating segments excluding these items. The following tables present the net revenues, operating expenses, income (loss) from operations, and capital expenditures which are used by the Company’s chief operating decision maker to measure the segments’ 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. Three Months Ended March 31, 2016 (in thousands) Learning A-Z Voyager Sopris Learning ExploreLearning Other Consolidated Net revenues $ 15,728 $ 12,336 $ 5,610 $ — $ 33,674 Cost of revenues 635 5,359 1,013 — 7,007 Amortization expense — — — 3,650 3,650 Total cost of revenues 635 5,359 1,013 3,650 10,657 Other operating expenses 7,168 7,026 2,772 3,626 20,592 Depreciation and amortization expense — — — 841 841 Total costs and expenses 7,803 12,385 3,785 8,117 32,090 Income (loss) before interest, other income (expense) and income taxes 7,925 (49 ) 1,825 (8,117 ) 1,584 Net interest expense — — — (1,764 ) (1,764 ) Income tax benefit — — — 78 78 Segment net income (loss) $ 7,925 $ (49 ) $ 1,825 $ (9,803 ) $ (102 ) Expenditures for property, equipment, software and pre-publication costs 2,095 $ 2,159 610 126 $ 4,990 Three Months Ended March 31, 2015 (in thousands) Learning A-Z Voyager Sopris Learning ExploreLearning Other Consolidated Net revenues $ 12,935 $ 13,746 $ 4,790 $ — $ 31,471 Cost of revenues 466 5,742 678 — 6,886 Amortization expense — — — 4,003 4,003 Total cost of revenues 466 5,742 678 4,003 10,889 Other operating expenses 5,596 6,648 2,597 3,669 18,510 Depreciation and amortization expense — — — 993 993 Total costs and expenses 6,062 12,390 3,275 8,665 30,392 Income (loss) before interest, other income (expense) and income taxes 6,873 1,356 1,515 (8,665 ) 1,079 Net interest expense — — — (3,674 ) (3,674 ) Other income, net — — — 215 215 Income tax expense — — — (118 ) (118 ) Segment net income (loss) $ 6,873 $ 1,356 $ 1,515 $ (12,242 ) $ (2,498 ) Expenditures for property, equipment, software and pre-publication costs $ 1,812 $ 2,285 $ 614 $ 72 $ 4,783 |
Stock-Based Compensation and 20
Stock-Based Compensation and Expense (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-based Compensation Expense Resulting From Stock Options | The following table presents our s tock-based compensation expense resulting from stock options that are recorded in our condensed consolidated statements of operations and comprehensive loss for the periods presented: Three Months Ended March 31, (in thousands) 2016 2015 Cost of revenues $ 15 $ 8 Research and development expense 41 28 Sales and marketing expense 48 33 General and administrative expense 104 66 Total $ 208 $ 135 |
Net Loss per Common Share (Tabl
Net Loss per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Calculation of Basic and Diluted Net Loss Per Share | The following table presents the calculation of basic and diluted net loss per share: Three Months Ended March 31, (in thousands, except per share data) 2016 2015 Numerator: Net loss $ (102 ) $ (2,498 ) Denominator: Basic: Weighted-average common shares used in computing basic net loss per share 45,739 45,479 Diluted: Add weighted-average effect of dilutive securities: Stock options and restricted stock awards — — Weighted-average common shares used in computing diluted net loss per share 45,739 45,479 Net loss per common share: Basic $ (0.00 ) $ (0.05 ) Diluted $ (0.00 ) $ (0.05 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
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 March 31, 2016 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 $ 4,068 $ 4,068 $ — $ — Collateral Investments: Money Market 905 905 — — Certificates of Deposit 879 879 — — (in thousands) Fair Value at Reporting Date Using Description December 31, 2015 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 $ 4,364 $ 4,364 $ — $ — Collateral Investments: Money Market 905 905 — — Certificates of Deposit 878 878 — — (in thousands) Total Gains (Losses) for the Three Months Ended March 31, Description 2016 2015 Restricted Assets: Money Market $ — $ — Collateral Investments: Money Market — — Certificates of Deposit — — |
Assets and Liabilities Measured at Fair Value on a Non-recurring Basis | Assets and liabilities measured at fair value on a non-recurring basis are listed below at their carrying values as of each reporting date: (in thousands) Fair Value at Reporting Date Using Description March 31, 2016 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, net 23,445 — — 23,445 Pre-publication costs, net 16,913 — — 16,913 Acquired curriculum and technology intangibles, net 2,351 — — 2,351 Acquired publishing rights, net 1,240 — — 1,240 Other intangible assets, net 2,952 — — 2,952 (in thousands) Fair Value at Reporting Date Using Description December 31, 2015 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, net 22,540 — — 22,540 Pre-publication costs, net 16,441 — — 16,441 Acquired curriculum and technology intangibles, net 2,731 — — 2,731 Acquired publishing rights, net 1,459 — — 1,459 Other intangible assets, net 3,231 — — 3,231 (in thousands) Total Gains (Losses) for the Three Months Ended March 31, Description 2016 2015 Goodwill $ — $ — Property, equipment and software, net — — Pre-publication costs, net — — Acquired curriculum and technology intangibles, net — — Acquired publishing rights, net — — Other intangible assets, net — — |
Other Current Assets (Tables)
Other Current Assets (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | |
Other Current Assets | Other current assets at March 31, 2016 and December 31, 2015 consisted of the following: (in thousands) March 31, 2016 December 31, 2015 Deferred costs $ 7,144 $ 8,514 Prepaid expenses 2,139 1,367 Other 100 100 Other current assets $ 9,383 $ 9,981 |
Other Assets (Tables)
Other Assets (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Other Assets [Abstract] | |
Other Assets | Other assets at March 31, 2016 and December 31, 2015 consisted of the following: (in thousands) March 31, 2016 December 31, 2015 Collateral investments $ 1,784 $ 1,783 Deferred costs, less current portion 1,311 1,479 Deferred financing costs - revolving credit facility 846 892 Other 754 663 Other assets $ 4,695 $ 4,817 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Payables And Accruals [Abstract] | |
Accrued Expenses | Accrued expenses at March 31, 2016 and December 31, 2015 consisted of the following: (in thousands) March 31, 2016 December 31, 2015 Salaries, bonuses and benefits $ 4,420 $ 9,383 Pension and post-retirement benefit plans 1,093 1,093 Accrued royalties 740 1,201 Accrued interest 57 — Other 2,561 2,547 Accrued expenses $ 8,871 $ 14,224 |
Other Liabilities (Tables)
Other Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | Other liabilities at March 31, 2016 and December 31, 2015 consisted of the following: (in thousands) March 31, 2016 December 31, 2015 Pension and post-retirement benefit plans, long-term portion $ 9,723 $ 9,903 Deferred rent 830 881 Long-term income tax payable 560 896 Long-term deferred compensation 338 347 Other liabilities $ 11,451 $ 12,027 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-term debt at March 31, 2016 and December 31, 2015 consisted of the following: (in thousands) March 31, 2016 December 31, 2015 Senior secured credit facility term loans maturing December 10, 2020 $ 104,037 $ 105,000 Less: Unamortized discount (1,725 ) (1,856 ) Less: Unamortized deferred financing costs (1,318 ) (1,422 ) Total debt 100,994 101,722 Less: current portion of long-term debt 4,725 3,850 Long-term debt $ 96,269 $ 97,872 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Revenue, Operating Expenses and Income (Loss) from Operations | The following tables present the net revenues, operating expenses, income (loss) from operations, and capital expenditures which are used by the Company’s chief operating decision maker to measure the segments’ 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. Three Months Ended March 31, 2016 (in thousands) Learning A-Z Voyager Sopris Learning ExploreLearning Other Consolidated Net revenues $ 15,728 $ 12,336 $ 5,610 $ — $ 33,674 Cost of revenues 635 5,359 1,013 — 7,007 Amortization expense — — — 3,650 3,650 Total cost of revenues 635 5,359 1,013 3,650 10,657 Other operating expenses 7,168 7,026 2,772 3,626 20,592 Depreciation and amortization expense — — — 841 841 Total costs and expenses 7,803 12,385 3,785 8,117 32,090 Income (loss) before interest, other income (expense) and income taxes 7,925 (49 ) 1,825 (8,117 ) 1,584 Net interest expense — — — (1,764 ) (1,764 ) Income tax benefit — — — 78 78 Segment net income (loss) $ 7,925 $ (49 ) $ 1,825 $ (9,803 ) $ (102 ) Expenditures for property, equipment, software and pre-publication costs 2,095 $ 2,159 610 126 $ 4,990 Three Months Ended March 31, 2015 (in thousands) Learning A-Z Voyager Sopris Learning ExploreLearning Other Consolidated Net revenues $ 12,935 $ 13,746 $ 4,790 $ — $ 31,471 Cost of revenues 466 5,742 678 — 6,886 Amortization expense — — — 4,003 4,003 Total cost of revenues 466 5,742 678 4,003 10,889 Other operating expenses 5,596 6,648 2,597 3,669 18,510 Depreciation and amortization expense — — — 993 993 Total costs and expenses 6,062 12,390 3,275 8,665 30,392 Income (loss) before interest, other income (expense) and income taxes 6,873 1,356 1,515 (8,665 ) 1,079 Net interest expense — — — (3,674 ) (3,674 ) Other income, net — — — 215 215 Income tax expense — — — (118 ) (118 ) Segment net income (loss) $ 6,873 $ 1,356 $ 1,515 $ (12,242 ) $ (2,498 ) Expenditures for property, equipment, software and pre-publication costs $ 1,812 $ 2,285 $ 614 $ 72 $ 4,783 |
Basis of Presentation (Details
Basis of Presentation (Details Textual) | 3 Months Ended |
Mar. 31, 2016Segment | |
Product Information [Line Items] | |
Number of reportable business segments | 3 |
Technology Education Business 1 | |
Product Information [Line Items] | |
Company's industry leading brands | Learning A–Z |
Technology Education Business 2 | |
Product Information [Line Items] | |
Company's industry leading brands | ExploreLearning |
Technology Education Business 3 | |
Product Information [Line Items] | |
Company's industry leading brands | Kurzweil Education |
Technology Education Business 4 | |
Product Information [Line Items] | |
Company's industry leading brands | Voyager Sopris Learning |
Accounts Receivable (Details Te
Accounts Receivable (Details Textual) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Receivables [Abstract] | ||
Allowance for doubtful accounts and estimated sales returns | $ 0.2 | $ 0.2 |
Stock-Based Compensation and 31
Stock-Based Compensation and Expense (Details Textual) - $ / shares | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2009 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Common stock, additional shares | 5,000,000 | |
Granted, Shares | 290,000 | |
Exercise price of options granted | $ 4.50 | |
Employee Stock Option | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share based award spread over vesting period | 4 years | |
Stock option initial vesting date | Mar. 31, 2016 |
Stock-Based Compensation and 32
Stock-Based Compensation and Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | $ 208 | $ 135 |
Cost of Revenues | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 15 | 8 |
Research and Development Expense | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 41 | 28 |
Sales and Marketing Expense | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 48 | 33 |
General and Administrative Expense | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | $ 104 | $ 66 |
Net Loss per Common Share (Deta
Net Loss per Common Share (Details Textual) - shares | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Earnings Per Share [Abstract] | ||
Weighted average common shares excluded from dilutive shares outstanding | 2,885,243 | 2,612,281 |
Net Loss per Common Share (De34
Net Loss per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Numerator: | ||
Net loss | $ (102) | $ (2,498) |
Basic: | ||
Weighted-average common shares used in computing basic net loss per share | 45,739 | 45,479 |
Add weighted-average effect of dilutive securities: | ||
Weighted-average common shares used in computing diluted net loss per share | 45,739 | 45,479 |
Net loss per common share: | ||
Basic | $ 0 | $ (0.05) |
Diluted | $ 0 | $ (0.05) |
Fair Value Measurements (Detail
Fair Value Measurements (Details Textual) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Cash and cash equivalents | $ 4,900 | $ 8,645 | $ 19,775 | $ 34,387 |
Restricted assets | 4,100 | 4,400 | ||
Collateral investments | 1,784 | 1,783 | ||
Revolving credit facility | 10,500 | |||
Long-term debt | 100,994 | 101,722 | ||
Senior Secured Credit Facility Term Loans Due December 10, 2020, Net | ||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Long-term debt | 101,000 | $ 101,700 | ||
Revolving Credit Facility | ||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Revolving credit facility | $ 10,500 |
Fair Value Measurements (Deta36
Fair Value Measurements (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Assets and liabilities measured at fair value on a recurring basis | ||
Restricted assets | $ 4,100 | $ 4,400 |
Collateral investments | 1,784 | 1,783 |
Money Market | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Collateral investments | 900 | 900 |
Certificates of Deposit | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Collateral investments | 900 | 900 |
Fair value recurring | Money Market | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Restricted assets | 4,068 | 4,364 |
Collateral investments | 905 | 905 |
Fair value recurring | Certificates of Deposit | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Collateral investments | 879 | 878 |
Fair value recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Money Market | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Restricted assets | 4,068 | 4,364 |
Collateral investments | 905 | 905 |
Fair value recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Certificates of Deposit | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Collateral investments | $ 879 | $ 878 |
Fair Value Measurements (Deta37
Fair Value Measurements (Details 1) - Fair Value Non-recurring - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Assets and liabilities measured at fair value on a non-recurring basis | ||
Goodwill | $ 47,842 | $ 47,842 |
Property, equipment and software, net | 23,445 | 22,540 |
Pre-publication costs, net | 16,913 | 16,441 |
Other intangible assets, net | 2,952 | 3,231 |
Curriculum and Technology | ||
Assets and liabilities measured at fair value on a non-recurring basis | ||
Acquired intangible assets, net | 2,351 | 2,731 |
Publishing Rights | ||
Assets and liabilities measured at fair value on a non-recurring basis | ||
Acquired intangible assets, net | 1,240 | 1,459 |
Significant Unobservable Inputs (Level 3) | ||
Assets and liabilities measured at fair value on a non-recurring basis | ||
Goodwill | 47,842 | 47,842 |
Property, equipment and software, net | 23,445 | 22,540 |
Pre-publication costs, net | 16,913 | 16,441 |
Other intangible assets, net | 2,952 | 3,231 |
Significant Unobservable Inputs (Level 3) | Curriculum and Technology | ||
Assets and liabilities measured at fair value on a non-recurring basis | ||
Acquired intangible assets, net | 2,351 | 2,731 |
Significant Unobservable Inputs (Level 3) | Publishing Rights | ||
Assets and liabilities measured at fair value on a non-recurring basis | ||
Acquired intangible assets, net | $ 1,240 | $ 1,459 |
Other Current Assets (Details)
Other Current Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Deferred costs | $ 7,144 | $ 8,514 |
Prepaid expenses | 2,139 | 1,367 |
Other | 100 | 100 |
Other current assets | $ 9,383 | $ 9,981 |
Other Assets (Details)
Other Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Other Assets | ||
Collateral investments | $ 1,784 | $ 1,783 |
Deferred costs, less current portion | 1,311 | 1,479 |
Deferred financing costs - revolving credit facility | 846 | 892 |
Other | 754 | 663 |
Other assets | $ 4,695 | $ 4,817 |
Other Assets (Details Textual)
Other Assets (Details Textual) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Other Assets Non Current [Line Items] | ||
Collateral investments | $ 1,784 | $ 1,783 |
Certificates of Deposit | ||
Other Assets Non Current [Line Items] | ||
Collateral investments | 900 | 900 |
Money Market | ||
Other Assets Non Current [Line Items] | ||
Collateral investments | $ 900 | $ 900 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Accrued expenses | ||
Salaries, bonuses and benefits | $ 4,420 | $ 9,383 |
Pension and post-retirement benefit plans | 1,093 | 1,093 |
Accrued royalties | 740 | 1,201 |
Accrued interest | 57 | |
Other | 2,561 | 2,547 |
Accrued expenses | $ 8,871 | $ 14,224 |
Other Liabilities (Details)
Other Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Long-term liabilities: | ||
Pension and post-retirement benefit plans, long-term portion | $ 9,723 | $ 9,903 |
Deferred rent | 830 | 881 |
Long-term income tax payable | 560 | 896 |
Long-term deferred compensation | 338 | 347 |
Other liabilities | $ 11,451 | $ 12,027 |
Pension Plan (Details Textual)
Pension Plan (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Compensation And Retirement Disclosure [Abstract] | ||
Net pension costs | $ 100 | $ 200 |
Amortization of accumulated net loss | $ 37 | $ 100 |
Uncertain Tax Positions (Detail
Uncertain Tax Positions (Details Textual) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Income Tax Uncertainties [Abstract] | ||
Unrecognized tax benefits | $ 6,000,000 | $ 6,200,000 |
Unrecognized tax benefits that would affect effective tax rate | 600,000 | |
Company recognized penalties | 0 | |
Unrecognized tax benefits, penalties | 100,000 | |
Liability for interest (gross) related to UTB | 100,000 | |
Unrecognized tax benefits, decreases for effectively settled tax positions | $ 300,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Commitments And Contingencies [Line Items] | ||
Purchase commitments | $ 500 | |
Letters of credit outstanding | 900 | |
Certificate of deposit | 900 | |
Collateral investments | 1,784 | $ 1,783 |
Money Market | ||
Commitments And Contingencies [Line Items] | ||
Collateral investments | $ 900 | $ 900 |
Maximum | ||
Commitments And Contingencies [Line Items] | ||
Term of purchase commitment | 1 year |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Summary Long-term debt | ||
Less: Unamortized discount | $ (1,725) | $ (1,856) |
Less: Unamortized deferred financing costs | (1,318) | (1,422) |
Total debt | 100,994 | 101,722 |
Current portion of long-term debt | 4,725 | 3,850 |
Long-term debt | 96,269 | 97,872 |
Senior Secured Credit Facility Term Loans Due December 10, 2020 | ||
Summary Long-term debt | ||
Long term debt, gross | $ 104,037 | $ 105,000 |
Long-Term Debt (Details) (Paren
Long-Term Debt (Details) (Parenthetical) | 3 Months Ended |
Mar. 31, 2016 | |
Senior Secured Credit Facility Term Loans Due December 10, 2020 | |
Debt Instrument [Line Items] | |
Debt instrument, maturity date | Dec. 10, 2020 |
Long-Term Debt (Details Textual
Long-Term Debt (Details Textual) - USD ($) | 1 Months Ended | 3 Months Ended | 4 Months Ended | ||
Feb. 29, 2016 | Mar. 31, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Dec. 10, 2015 | |
Debt Instrument [Line Items] | |||||
Unamortized discount | $ 1,725,000 | $ 1,725,000 | $ 1,856,000 | ||
Unamortized deferred financing costs | 1,318,000 | 1,318,000 | 1,422,000 | ||
Outstanding principal balances under term loan | 100,994,000 | 100,994,000 | 101,722,000 | ||
Outstanding principal balances under credit facility | 10,500,000 | 10,500,000 | |||
Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Outstanding principal balances under credit facility | $ 10,500,000 | 10,500,000 | |||
Term Loan A and Term Loan B | Interest Rate Cap Agreements | |||||
Debt Instrument [Line Items] | |||||
Payment to enter into interest rate cap agreements | $ 100,000 | ||||
Interest rate cap agreements period | 3 years | ||||
Interest rate cap agreements, LIBOR rate description | three-month LIBOR rate exceeds 2.5%. | ||||
Term Loan A and Term Loan B | LIBOR loans | Interest Rate Cap Agreements | |||||
Debt Instrument [Line Items] | |||||
Interest rate cap | 2.50% | ||||
Senior Secured Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Outstanding borrowings | $ 135,000,000 | ||||
Debt instrument, maturity date | Dec. 10, 2020 | ||||
Unamortized discount | $ 1,700,000 | $ 1,700,000 | 1,900,000 | ||
Senior Secured Credit Facility | LIBOR loans | |||||
Debt Instrument [Line Items] | |||||
Percentage of floor on variable interest rate | 1.00% | ||||
Senior Secured Credit Facility | Term Loan A | |||||
Debt Instrument [Line Items] | |||||
Outstanding borrowings | 70,000,000 | ||||
Interest rate applied | 5.50% | ||||
Outstanding principal balances under term loan | $ 69,100,000 | $ 69,100,000 | |||
Senior Secured Credit Facility | Term Loan A | LIBOR loans | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, interest rate, applicable margin | 3.75% | ||||
Senior Secured Credit Facility | Term Loan A | Base Rate loans | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, interest rate, applicable margin | 2.75% | ||||
Senior Secured Credit Facility | Term Loan B | |||||
Debt Instrument [Line Items] | |||||
Outstanding borrowings | 35,000,000 | ||||
Interest rate applied | 5.50% | ||||
Outstanding principal balances under term loan | $ 34,900,000 | $ 34,900,000 | |||
Senior Secured Credit Facility | Term Loan B | LIBOR loans | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, interest rate, applicable margin | 5.25% | ||||
Senior Secured Credit Facility | Term Loan B | Base Rate loans | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, interest rate, applicable margin | 4.25% | ||||
Senior Secured Credit Facility | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Outstanding borrowings | $ 30,000,000 | ||||
Interest rate applied | 6.25% | ||||
Unused line fee | 0.50% | ||||
Unamortized deferred financing costs | $ 800,000 | $ 800,000 | 900,000 | ||
Outstanding principal balances under credit facility | 10,500,000 | 10,500,000 | |||
Borrowing available under credit facility | $ 19,500,000 | 19,500,000 | |||
Senior Secured Credit Facility | Revolving Credit Facility | LIBOR loans | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, interest rate, applicable margin | 4.50% | ||||
Senior Secured Credit Facility | Revolving Credit Facility | Base Rate loans | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, interest rate, applicable margin | 3.50% | ||||
Senior Secured Credit Facility | Term Loan A and Term Loan B | |||||
Debt Instrument [Line Items] | |||||
Unamortized deferred financing costs | $ 1,300,000 | $ 1,300,000 | $ 1,400,000 |
Segment Reporting (Details Text
Segment Reporting (Details Textual) | 3 Months Ended |
Mar. 31, 2016SegmentCountriesProduct | |
Segment Reporting Information [Line Items] | |
Number of reportable business segments | Segment | 3 |
Learning A-Z Segment | |
Segment Reporting Information [Line Items] | |
Number of countries in which product is used | Countries | 180 |
ExploreLearning Segment | |
Segment Reporting Information [Line Items] | |
Number of products under ExploreLearning | Product | 2 |
Segment Reporting (Details)
Segment Reporting (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Revenue, operating expenses and income (loss) from operations | ||
Net revenues | $ 33,674 | $ 31,471 |
Cost of revenues | 7,007 | 6,886 |
Amortization expense | 3,650 | 4,003 |
Total cost of revenues | 10,657 | 10,889 |
Other operating expenses | 20,592 | 18,510 |
Depreciation and amortization expense | 841 | 993 |
Total costs and expenses | 32,090 | 30,392 |
Income before interest, other income (expense) and income taxes | 1,584 | 1,079 |
Net interest expense | (1,764) | (3,674) |
Other income, net | 215 | |
Income tax benefit (expense) | 78 | (118) |
Net loss | (102) | (2,498) |
Expenditures for property, equipment, software and pre-publication costs | 4,990 | 4,783 |
Operating Segments | Learning A-Z Segment | ||
Revenue, operating expenses and income (loss) from operations | ||
Net revenues | 15,728 | 12,935 |
Cost of revenues | 635 | 466 |
Total cost of revenues | 635 | 466 |
Other operating expenses | 7,168 | 5,596 |
Total costs and expenses | 7,803 | 6,062 |
Income before interest, other income (expense) and income taxes | 7,925 | 6,873 |
Net loss | 7,925 | 6,873 |
Expenditures for property, equipment, software and pre-publication costs | 2,095 | 1,812 |
Operating Segments | Voyager Sopris Learning Segment | ||
Revenue, operating expenses and income (loss) from operations | ||
Net revenues | 12,336 | 13,746 |
Cost of revenues | 5,359 | 5,742 |
Total cost of revenues | 5,359 | 5,742 |
Other operating expenses | 7,026 | 6,648 |
Total costs and expenses | 12,385 | 12,390 |
Income before interest, other income (expense) and income taxes | (49) | 1,356 |
Net loss | (49) | 1,356 |
Expenditures for property, equipment, software and pre-publication costs | 2,159 | 2,285 |
Operating Segments | ExploreLearning Segment | ||
Revenue, operating expenses and income (loss) from operations | ||
Net revenues | 5,610 | 4,790 |
Cost of revenues | 1,013 | 678 |
Total cost of revenues | 1,013 | 678 |
Other operating expenses | 2,772 | 2,597 |
Total costs and expenses | 3,785 | 3,275 |
Income before interest, other income (expense) and income taxes | 1,825 | 1,515 |
Net loss | 1,825 | 1,515 |
Expenditures for property, equipment, software and pre-publication costs | 610 | 614 |
Other | ||
Revenue, operating expenses and income (loss) from operations | ||
Amortization expense | 3,650 | 4,003 |
Total cost of revenues | 3,650 | 4,003 |
Other operating expenses | 3,626 | 3,669 |
Depreciation and amortization expense | 841 | 993 |
Total costs and expenses | 8,117 | 8,665 |
Income before interest, other income (expense) and income taxes | (8,117) | (8,665) |
Net interest expense | (1,764) | (3,674) |
Other income, net | 215 | |
Income tax benefit (expense) | 78 | (118) |
Net loss | (9,803) | (12,242) |
Expenditures for property, equipment, software and pre-publication costs | $ 126 | $ 72 |