Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 06, 2017 | |
Entity Registrant Name | HEMISPHERE MEDIA GROUP, INC. | |
Entity Central Index Key | 1,567,345 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Common Class A | ||
Entity Common Stock, Shares Outstanding | 20,327,636 | |
Common Class B | ||
Entity Common Stock, Shares Outstanding | 20,800,998 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current Assets | ||
Cash | $ 140,321 | $ 163,090 |
Accounts receivable, net of allowance for doubtful accounts of $1,737 and $1,711, respectively | 25,243 | 25,566 |
Due from related parties | 1,889 | 1,505 |
Programming rights | 7,922 | 5,450 |
Prepaids and other current assets | 8,686 | 7,904 |
Total current assets | 184,061 | 203,515 |
Programming rights | 11,852 | 10,450 |
Property and equipment, net | 24,603 | 25,501 |
Broadcast license | 41,356 | 41,356 |
Goodwill | 164,887 | 164,887 |
Other intangibles, net | 54,967 | 64,849 |
Deferred taxes | 18,830 | 18,638 |
Equity method investments | 24,406 | |
Other assets | 808 | 1,245 |
Total Assets | 525,770 | 530,441 |
Current Liabilities | ||
Accounts payable | 5,034 | 3,525 |
Due to related parties | 1,236 | 413 |
Accrued agency commissions | 3,116 | 6,725 |
Accrued compensation and benefits | 4,258 | 4,488 |
Accrued marketing | 5,183 | 6,378 |
Taxes payable | 36 | 1,619 |
Other accrued expenses | 3,434 | 3,610 |
Programming rights payable | 3,971 | 3,293 |
Current portion of long-term debt | 2,133 | |
Total current liabilities | 28,401 | 30,051 |
Programming rights payable | 805 | 107 |
Long-term debt, net of current portion | 205,897 | 210,270 |
Deferred taxes | 17,829 | 17,829 |
Swap liability | 208 | |
Defined benefit pension obligation | 2,595 | 2,844 |
Total Liabilities | 255,735 | 261,101 |
Stockholders' Equity | ||
Preferred stock, $0.0001 par value; 50,000,000 shares authorized; 0 shares issued and outstanding at September 30, 2017 and December 31, 2016 | ||
Additional paid-in capital | 264,366 | 261,051 |
Treasury stock, at cost 3,631,770 and 3,606,696 at September 30, 2017 and December 31, 2016, respectively | (46,089) | (35,069) |
Retained earnings | 52,445 | 43,837 |
Accumulated other comprehensive loss | (691) | (483) |
Total Stockholders' Equity | 270,035 | 269,340 |
Total Liabilities and Stockholders' Equity | 525,770 | 530,441 |
Common Class A | ||
Stockholders' Equity | ||
Common stock | 2 | 2 |
Common Class B | ||
Stockholders' Equity | ||
Common stock | $ 2 | $ 2 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Accounts receivable, allowance for doubtful accounts | $ 1,746 | $ 1,711 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Treasury stock, shares | 4,481,439 | 3,606,696 |
Common Class A | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 25,171,432 | 24,944,913 |
Common Class B | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 33,000,000 | 33,000,000 |
Common stock, shares issued | 20,800,998 | 20,800,998 |
Common stock, shares outstanding | 20,800,998 | 20,800,998 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Condensed Consolidated Statements of Operations | ||||
Net revenues | $ 32,173 | $ 33,116 | $ 100,512 | $ 99,118 |
Operating Expenses: | ||||
Cost of revenues | 9,883 | 9,826 | 30,426 | 30,647 |
Selling, general and administrative | 9,510 | 8,999 | 28,845 | 27,775 |
Depreciation and amortization | 4,041 | 4,083 | 12,223 | 12,500 |
Other expenses | 332 | 638 | 3,056 | 770 |
(Gain) loss on disposition of assets | (9) | 2 | 6 | |
Total operating expenses | 23,766 | 23,537 | 74,552 | 71,698 |
Operating income | 8,407 | 9,579 | 25,960 | 27,420 |
Other : | ||||
Interest expense, net | (2,863) | (2,954) | (8,089) | (8,779) |
Loss on equity method investments, net | (2,571) | (2,450) | ||
Loss on impairment of fixed assets | (533) | (533) | ||
Total other expenses, net | (5,967) | (2,954) | (11,072) | (8,779) |
Income before income taxes | 2,440 | 6,625 | 14,888 | 18,641 |
Income tax expense | (1,758) | (2,276) | (6,280) | (6,563) |
Net income | $ 682 | $ 4,349 | $ 8,608 | $ 12,078 |
Earnings per share: | ||||
Basic (in dollars per share) | $ 0.02 | $ 0.11 | $ 0.21 | $ 0.29 |
Diluted (in dollars per share) | $ 0.02 | $ 0.11 | $ 0.21 | $ 0.28 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 40,398 | 40,499 | 40,515 | 42,057 |
Diluted (in shares) | 40,925 | 41,035 | 40,831 | 42,764 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Condensed Consolidated Statement of Comprehensive Income | ||||
Net income | $ 682 | $ 4,349 | $ 8,608 | $ 12,078 |
Net change in fair value of cash flow hedge | 132 | (208) | ||
Other comprehensive loss | (8) | |||
Comprehensive income | $ 814 | $ 4,349 | $ 8,400 | $ 12,070 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Changes in Stockholders' Equity - 9 months ended Sep. 30, 2017 - USD ($) shares in Thousands, $ in Thousands | Common StockCommon Class A | Common StockCommon Class B | Additional Paid-In Capital | Treasury StockCommon Class A | Retained Earnings | Accumulated Other Comprehensive Loss | Total |
Balance at the beginning of the period at Dec. 31, 2016 | $ 2 | $ 2 | $ 261,051 | $ (35,069) | $ 43,837 | $ (483) | $ 269,340 |
Balance at the beginning of the period (in shares) at Dec. 31, 2016 | 24,944 | 20,801 | |||||
Consolidated Statements of Changes in Stockholders' Equity | |||||||
Net income | 8,608 | 8,608 | |||||
Vesting of restricted stock | (324) | (324) | |||||
Vesting of restricted stock (in shares) | 204 | ||||||
Stock-based compensation | 3,104 | 3,104 | |||||
Repurchase of Class A common stock | (10,696) | (10,696) | |||||
Exercise of warrants | 211 | 211 | |||||
Exercise of warrants (in shares) | 23 | ||||||
Other comprehensive loss | (208) | (208) | |||||
Balance at the end of the period at Sep. 30, 2017 | $ 2 | $ 2 | $ 264,366 | $ (46,089) | $ 52,445 | $ (691) | $ 270,035 |
Balance at the end of the period (in shares) at Sep. 30, 2017 | 25,171 | 20,801 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Reconciliation of Net Income to Net Cash Provided by Operating Activities: | ||
Net income | $ 8,608 | $ 12,078 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 12,223 | 12,500 |
Program amortization | 9,572 | 9,010 |
Amortization of deferred financing costs | 217 | 375 |
Amortization of original issue discount | 258 | 284 |
Stock-based compensation | 3,104 | 2,522 |
Provision for bad debts | 48 | 262 |
Loss on disposition of assets | 2 | 6 |
Deferred tax expense | (192) | (2,781) |
Loss on equity method investments, net | 2,450 | |
Loss on impairment of fixed assets | 533 | |
Excess tax benefits | 209 | |
Decrease (increase) in: | ||
Accounts receivable | 275 | 879 |
Programming Rights | (13,446) | (12,754) |
Due from related parties | (384) | 423 |
Prepaids and other assets | (345) | (3,496) |
(Decrease) increase in: | ||
Accounts payable | 1,509 | (126) |
Due to related parties | 823 | (851) |
Accrued expenses | (5,210) | (2,432) |
Programming rights payable | 1,376 | (123) |
Taxes payable | (1,583) | (1,665) |
Other liabilities | (249) | 150 |
Net cash provided by operating activities | 19,589 | 14,470 |
Cash Flows From Investing Activities: | ||
Funding of equity investments | (26,856) | |
Proceeds from sale of assets | 10 | |
Capital expenditures | (1,979) | (2,927) |
Net cash used in investing activities | (28,835) | (2,917) |
Cash Flows From Financing Activities: | ||
Repayments of long-term debt | (1,600) | (8,278) |
Purchase of common stock | (11,020) | (31,846) |
Financing fees | (1,114) | |
Warrant repurchase | (976) | |
Warrant exercise | 211 | 420 |
Exercise of stock options | 155 | |
Net cash used in financing activities | (13,523) | (40,525) |
Net decrease in cash | (22,769) | (28,972) |
Cash: | ||
Beginning | 163,090 | 179,532 |
Ending | 140,321 | 150,560 |
Cash payments for: | ||
Interest | 7,654 | 8,215 |
Income taxes | $ 8,268 | $ 11,230 |
Nature of business
Nature of business | 9 Months Ended |
Sep. 30, 2017 | |
Nature of business | |
Nature of business | Note 1. Nature of business Nature of business: The accompanying unaudited condensed consolidated financial statements include the accounts of Hemisphere Media Group, Inc. (“Hemisphere” or the “Company”), the parent holding company of Cine Latino, Inc. (“Cinelatino”), WAPA Holdings, LLC (formerly known as InterMedia Español Holdings, LLC) (“WAPA Holdings”), HMTV Cable, Inc., the parent company of the entities for the acquired networks consisting of Pasiones, TV Dominicana, and Centroamerica TV (see below) and HMTV Uno, S.A.S. Hemisphere was incorporated in Delaware on January 16, 2013 and consummated its initial public offering on April 4, 2013. In these notes, the terms “Company,” “we,” “us” or “our” mean Hemisphere and all subsidiaries included in our consolidated financial statements. We also consider for consolidation entities in which we have certain interests, where the controlling financial interest may be achieved through arrangements that do not involve voting interests. Such an entity, known as a variable interest entity (“VIE”), is required to be consolidated by its primary beneficiary. The primary beneficiary is the entity that possesses the power to direct the activities of the VIE that most significantly impact its economic performance and has the obligation to absorb losses or the right to receive benefits from the VIE that are significant to it. We have no consolidating variable interests as of September 30, 2017. Refer to Note 5, “Equity method investments,” of Notes to unaudited condensed consolidated financial statements, included in this Quarterly Report on Form 10-Q for further information. Basis of presentation: The accompanying unaudited condensed consolidated financial statements for Hemisphere and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations, although we believe that the disclosures made are adequate to make the information not misleading. In our opinion, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement have been included. Our financial condition as of, and operating results, for the three and nine months ended September 30, 2017 are not necessarily indicative of the financial condition or results that may be expected for any future interim period or for the year ending December 31, 2017. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2016. Net earnings per common share: Basic earnings per share (“EPS”) are computed by dividing income attributable to common stockholders by the number of weighted-average outstanding shares of common stock. Diluted EPS reflects the effect of the assumed exercise of stock options and vesting of restricted shares only in the periods in which such effect would have been dilutive. The following table sets forth the computation of the common shares outstanding used in determining basic and diluted EPS ( amounts in thousands, except per share amounts): Three Months Ended Nine Months Ended 2017 2016 2017 2016 Numerator for earnings per common share calculation: Net income $ $ $ $ Denominator for earnings per common share calculation: Weighted-average common shares, basic Effect of dilutive securities Stock options, restricted stock and warrants Weighted-average common shares, diluted EPS Basic $ $ $ $ Diluted $ $ $ $ On June 20, 2017, the Company announced that its Board of Directors authorized the repurchase of up to $25 million of the Company’s Class A common stock, par value $0.0001 per share (“Class A common stock”). Under the Company’s stock repurchase program, management is authorized to purchase shares of the Company’s common stock from time to time through open market purchases at prevailing prices, subject to stock price, business and market conditions and other factors. As of September 30, 2017, the Company had $14.3 million of remaining authorization for future repurchases under the existing stock repurchase program, which will expire on July 17, 2018. All common stock repurchases have been made through open market transactions and have been recorded as treasury stock on the condensed consolidated balance sheet. As of September 30, 2017, the Company had repurchased 0.8 million shares of Class A common stock under the repurchase program for an aggregate purchase price of $10.7 million. We apply the treasury stock method to measure the dilutive effect of our outstanding stock options and restricted stock awards and include the respective common share equivalents in the denominator of our diluted income per common share calculation. Potentially dilutive securities representing 1.9 million and 2.0 million shares of common stock for the three and nine months ended September 30, 2017, respectively, were excluded from the computation of diluted income per common share for this period because their effect would have been anti-dilutive. The net income per share amounts are the same for our Class A common stock and Class B common stock, par value $0.0001 per share (“Class B common stock”), because the holders of each class are legally entitled to equal per share distributions whether through dividends or in liquidation. Use of estimates: In preparing these financial statements, management had to make estimates and assumptions that affected the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities as of the balance sheet dates, and the reported revenues and expenses for the three and nine months ended September 30, 2017 and 2016. Such estimates are based on historical experience and other assumptions that are considered appropriate in the circumstances. However, actual results could differ from those estimates. Recent accounting pronouncements: In August 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU” or “Update”) 2017-12 — Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities . The amendments in this Update apply to any entity that elects to apply hedge accounting and is intended to better align an entity’s risk management activities and financial reporting for hedging relationships. The Update amends effectiveness testing requirements, income statement presentation and disclosures and permits additional risk management strategies to qualify for hedge accounting. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019. Early application is permitted; the effect of the adoption should be reflected as of the beginning of the fiscal year of adoption. We are currently evaluating the impact of this Update on our consolidated financial statements. In May 2017, the FASB issued ASU 2017-09 — Compensation - Stock Compensation (Topic 718) Scope of Modification Accounting . The amendments in this Update affect any entity that changes the terms or conditions of a share-based payment award and provides guidance on which changes to terms or conditions of an award require an entity to apply modification accounting. The amendments in this ASU are effective for all entities for annual periods, and all interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted. Our consolidated financial statements would only be impacted if we were to make changes to share-based payment awards. In March 2016, the FASB issued ASU 2016-09 — Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 includes provisions intended to simplify various aspects related to how share-based payments are accounted for and presented in the financial statements, such as requiring all income tax effects of awards to be recognized in the income statement when the awards vest or are settled and allowing a policy election to account for forfeitures as they occur. In addition, all related cash flows resulting from share-based payments will be reported as operating activities on the statement of cash flows. The guidance is effective for annual periods beginning after December 15, 2016, and has been adopted by the Company. In May 2014, the FASB issued ASU 2014-09 — Revenue from Contracts with Customers , a comprehensive revenue recognition model that supersedes the current revenue recognition requirements and most industry-specific guidance. Subsequent accounting standard updates have also been issued which amend and/or clarify the application of ASU 2014-09. The guidance provides a five-step framework to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services. The guidance will be effective for the first interim period of our 2018 fiscal year and allows adoption either under a full retrospective or a modified retrospective approach. The Company has identified retransmission/subscriber fees and advertising sales as significant and has substantially completed its review of each of these revenue streams in accordance with the new guidance. The Company has determined that it will use the prospective method of transition in adopting the new standard. |
Related party transactions
Related party transactions | 9 Months Ended |
Sep. 30, 2017 | |
Related party transactions | |
Related party transactions | Note 2. Related party transactions The Company has various agreements with MVS, a Mexican media and television conglomerate, which has directors and stockholders in common with the Company as follows: · An agreement through August 1, 2017, pursuant to which MVS provides Cinelatino with satellite and support services including origination, uplinking and satellite delivery of two feeds of Cinelatino’s channel (for U.S. and Latin America), master control and monitoring, dubbing, subtitling and close captioning, and other support services (the “Satellite and Support Services Agreement”). This agreement was amended on May 20, 2015, to expand the services MVS provides to Cinelatino to include commercial insertion and editing services to support advertising sales on Cinelatino’s U.S. feed. Expenses incurred under this agreement are included in cost of revenues in the accompanying unaudited condensed consolidated statements of operations. Total expenses incurred were $0.6 million for each of the three months ended September 30, 2017 and 2016, and $1.9 million for each of the nine months ended September 30, 2017 and 2016. · A ten-year master license agreement through July 2017, which grants MVS the non-exclusive right (except with respect to pre-existing distribution arrangements between MVS and third party distributors in effect at the time of the consummation of our initial public offering) to duplicate, distribute and exhibit Cinelatino’s service via cable, satellite or by any other means in Latin America and in Mexico to the extent that Mexico distribution is not owned by MVS. In February 2016, MVS terminated the agreement. We continued to operate under the terms of the agreement through December 31, 2016. As of January 1, 2017, we assumed the management of all the rights for Latin American third party distributors, and MVS retained the non-exclusive right in Mexico. Pursuant to the agreement, Cinelatino receives revenue net of MVS’s distribution fee, which is presently equal to 13.5% of all license fees collected by MVS from third party distributors. Total revenues recognized were $0.3 million and $0.8 million for each of the three months ended September 30, 2017 and 2016, respectively, and $1.4 million and $3.1 million for the nine months ended September 30, 2017 and 2016, respectively. · An affiliation agreement through August 1, 2017, for the distribution and exhibition of Cinelatino’s programming service through Dish Mexico (d/b/a Comercializadora de Frecuencias Satelitales, S. de R.L. de C.V.), an MVS affiliate that transmits television programming services throughout Mexico. We continue to operate under the terms of this agreement while we negotiate the renewal. Total revenues recognized were $0.5 million and $0.6 million for the three months ended September 30, 2017 and 2016, respectively, and $1.6 million and $1.7 million for of the nine months ended September 30, 2017 and 2016, respectively. Amounts due from MVS pursuant to the agreements noted above amounted to $1.9 million and $1.3 million at September 30, 2017 and December 31, 2016, respectively, and are remitted monthly. Amounts due to MVS pursuant to the agreements noted above amounted to $1.3 million and $0.5 million at September 30, 2017 and December 31, 2016, respectively, and are remitted monthly. We renewed the three-year consulting agreement effective April 9, 2016 with James M. McNamara, a member of the Company’s Board of Directors, to provide the development, production and maintenance of programming, affiliate relations, identification and negotiation of carriage opportunities, and the development, identification and negotiation of new business initiatives including sponsorship, new channels, direct-to-consumer programs and other interactive initiatives. Total expenses incurred under these agreements are included in selling, general and administrative expenses and amounted to $0.1 million for each of the three months ended September 30, 2017 and 2016, and $0.4 million and $0.2 million for the nine months ended September 30, 2017 and 2016, respectively. No amounts were due to this related party at September 30, 2017 and December 31, 2016. We have entered into programming agreements with Panamax Films, LLC (“Panamax”), an entity owned by James M. McNamara, for the licensing of three specific movie titles. Expenses incurred under this agreement are included in cost of revenues and amounted to $0.0 million for each of the three and nine months ended September 30, 2017 and 2016. At September 30, 2017 and December 31, 2016, $0.1 million is included in programming rights related to these agreements. We entered into agreements to license the rights to motion pictures from Lionsgate for a total license fee of $1.0 million. Some of the titles are owned or controlled by Pantelion Films, LLC (“Pantelion”), for which Lionsgate acts as Pantelion’s exclusive licensing agent. Pantelion is a joint venture made up of several organizations, including Panamax (an entity owned by James M. McNamara), Lionsgate and Grupo Televisa. Fees paid by Cinelatino to Lionsgate may be remunerated to Pantelion in accordance with their financial arrangements. Expenses incurred under this agreement are included in cost of revenues and amounted to $0.1 million and $0.0 million for the three months ended September 30, 2017 and 2016, respectively, and $0.2 million and $0.1 million for the nine months ended September 30, 2017 and 2016, respectively. At September 30, 2017 and December 31, 2016, $0.1 million and $0.3 million, respectively, is included in programming rights. We entered into an agreement to purchase the rights to motion pictures from Frontera Productions, LLC. One of our former Board members, Gabriel Brenner, holds an equity stake in this entity. The total license fee is $0.1 million. No expenses have been incurred as of September 30, 2017. Refer to Note 12 , “ Commitments”, of Notes to unaudited condensed consolidated financial statements. We entered into a services agreement with InterMedia Advisors, LLC (“IMA”) which has officers, directors and stockholders in common with the Company for services including, without limitation, office space and operational support pursuant to a reimbursement agreement with IMA’s affiliate, InterMedia Partners VII, L.P. Expenses incurred under this agreement are included in selling, general and administrative expenses and amounted to $0.0 million for each of the three and nine month periods ended September 30, 2017 and amounted to $0.0 million and $0.1 million for the three and nine month periods ended September 30, 2016. The amounts due from this related party totaled $0.0 million as of September 30, 2017 and December 31, 2016. |
Property Plant and Equipment
Property Plant and Equipment | 9 Months Ended |
Sep. 30, 2017 | |
Property plant and equipment | |
Property plant and equipment | Note 3. Property Plant and Equipment On September 20, 2017, Hurricane Maria made landfall in Puerto Rico, causing damage to WAPA’s infrastructure. WAPA suffered limited damage to its studios and headquarters and to two of its three broadcast transmission towers, but the third transmission tower was completely destroyed. Accordingly, based on our assessment, we have recorded a $0.5 million fixed asset impairment charge related to the net book value of the identified damaged assets in the quarter ended September 30, 2017. A significant portion of the damaged assets have been in service for more than 10 years and, as such, are largely fully depreciated. We anticipate the replacement cost will be well in excess of the net book value, though we expect insurance will cover most of the replacement costs, subject to deductibles and other costs. There can be no assurances of the timing and amount of proceeds we may recover under our insurance policies. We have not recognized any potential insurance recoveries related to these assets. |
Goodwill and intangible assets
Goodwill and intangible assets | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and intangible assets | |
Goodwill and intangible assets | Note 4. Goodwill and intangible assets Goodwill and intangible assets consist of the following at September 30, 2017 and December 31, 2016 ( amounts in thousands ): September 30, December 31, 2017 2016 Broadcast license $ $ Goodwill Other intangibles Total intangible assets $ $ A summary of changes in the Company’s goodwill and other indefinite-lived intangible assets, on a net basis, for the nine months ended September 30, 2017 is as follows (amounts in thousands) : Net Balance at Additions Impairment Net Balance at Broadcast license $ $ — $ — $ Goodwill — — Brands — — Other intangibles — — Total indefinite-lived intangibles $ $ — $ — $ A summary of the changes in the Company’s other amortizable intangible assets for the nine months ended September 30, 2017 is as follows (amounts in thousands) : Net Balance at Additions Amortization Net Balance at Affiliate relationships $ $ — $ ) $ Advertiser relationships — ) Non-compete agreement — ) Other intangibles ) Total finite-lived intangibles $ $ $ ) $ The aggregate amortization expense of the Company’s amortizable intangible assets was $3.3 million and $3.4 million for the three months ended September 30, 2017 and 2016, respectively, and $10.0 million and $10.1 million for the nine months ended September 30, 2017 and 2016, respectively. The weighted average remaining amortization period is 3.6 years at September 30, 2017. Future estimated amortization expense is as follows (amounts in thousands): Year Ending December 31, Amount Remainder of 2017 $ 2018 2019 2020 2021 and thereafter $ |
Equity method investments
Equity method investments | 9 Months Ended |
Sep. 30, 2017 | |
Equity method investments | |
Equity method investments | Note 5. Equity method investments The Company makes investments that support its underlying business strategy and enable it to enter new markets. The carrying values of the Company’s equity method investments are consistent with its ownership in the underlying net assets of the investees. Certain of the Company’s equity investments are variable interest entities, for which the Company is not the primary beneficiary. On November 3, 2016, we acquired a 25% interest in PANTAYA, a newly formed joint venture with Lionsgate, to launch a Spanish-language OTT movie service. The service launched on August 1, 2017. The investment is deemed a VIE that is accounted for under the equity method. As of September 30, 2017, we have not funded any capital contributions to PANTAYA. We record income/loss on investment on a one quarter lag. For the three and nine month periods ended September 30, 2017, we have recorded $0.4 million in Loss on equity method investments related to this investment. On November 30, 2016, we, in partnership with Colombian content producers, Radio Television Interamericana S.A., Compania de Medios de Informacion S.A.S. and NTC Nacional de Television y Comunicaciones S.A., were awarded a ten (10) year renewable television broadcast concession license for Canal 1 in Colombia the (“Canal 1 Partnership”). Canal 1 is one of only three national broadcast television networks in Colombia. The Canal 1 Partnership began operations of the network through a newly formed joint venture vehicle on May 1, 2017. The Company has a 20% interest in the JV, which is deemed a VIE that is accounted for under the equity method. Additionally, we earn a preferred return on the capital funded, which is recorded quarterly as an offset to the loss on the investment. For the period ended September 30, 2017, we have recorded $21.7 million in Equity method investments, related to Canal 1. We record the income/loss on investment on a one quarter lag. For the three and nine month periods ended September 30, 2017, we recorded $2.3 million and $2.2 million, net of preferred return, in Loss on equity method investments, respectively. The Canal 1 Partnership losses to date have exceeded the capital contributions of the common equity partners. In accordance with equity method accounting, equity losses in excess of the common equity have been recorded against the next layer of the capital structure, in this case, preferred equity. Accordingly, in the quarter, the Company recorded 100% of the losses in excess of the common equity, which is greater than the Company’s 20% ownership interest in the Partnership. For the three and nine month periods ended September 30, 2017, we recorded $0.6 million and $0.8 million of income, respectively as an offset to losses incurred in Loss on equity method investments. On April 28, 2017, we acquired a 25.5% interest in REMEZCLA, an influential digital media company targeting English speaking and bilingual U.S. Hispanics aged 18-35 through innovative content. For the nine months ended September 30, 2017, we have recorded $5.0 million in Equity method investments related to REMEZCLA. The Company records the income/loss on investment on a one quarter lag. For the three and nine month periods ended September 30, 2017, we have recorded $0.1 million in loss in Loss on equity method investments related to this investment. Additionally, we earned a preferred return on capital funded. For the three and nine month periods ended September 30, 2017, we recorded $0.3 million of income as an offset to the loss incurred in Loss on equity method investments. |
Income taxes
Income taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income taxes | |
Income taxes | Note 6. Income taxes For the nine months ended September 30, 2017 and 2016, our income tax expense has been computed utilizing the estimated annual effective rates of 36.1% and 35.8%, respectively. The difference between the annual effective rate of 36.1% and the statutory Federal income tax rate of 35% in the nine months ended September 30, 2017, was driven by foreign withholding taxes and foreign permanent differences, which were offset by foreign tax credits. The difference between the annual effective rate of 35.8% and the statutory Federal income tax rate of 35% in the nine month period ended September 30, 2016, was primarily due to state and foreign income taxes. Income tax expense for the three and nine months ended September 30, 2017, was $1.8 million and $6.3 million, respectively. Income tax expense for the three and nine months ended September 30, 2016, was $2.3 million and $6.6 million, respectively. |
Long-term debt
Long-term debt | 9 Months Ended |
Sep. 30, 2017 | |
Long-term debt | |
Long-term debt | Note 7. Long-term debt Long-term debt at September 30, 2017 and December 31, 2016 consists of the following (amounts in thousands) : September 30, 2017 December 31, 2016 Senior Notes due February 2024 $ $ — Senior Notes due July 2020 — Less: Current portion — $ $ On July 31, 2014, certain of our subsidiaries (the “Borrowers”) entered into an amended credit agreement providing for a $225.0 million senior secured term loan B facility (the “Term Loan Facility”), which was due to mature on July 30, 2020. Pricing on the Term Loan Facility was set at LIBOR plus 400 basis points (subject to a LIBOR floor of 1.00%). On February 14, 2017 (the “Closing Date”), the Borrowers amended the Term Loan Facility (the “Second Amended Term Loan Facility”). The Second Amended Term Loan Facility provides for a $213.3 million senior secured term loan B facility, which matures on February 14, 2024. The Second Amended Term Loan Facility, bears interest at the Borrowers’ option of either (i) LIBOR plus a margin of 3.50% (decreased from a margin of 4.00% under the Term Loan Facility) or (ii) or an Alternate Base Rate (“ABR”) plus a margin of 2.50% (decreased from a margin of 3.00% under the Term Loan Facility). There is no LIBOR floor (a decrease from a LIBOR floor of 1.00% under the Term Loan Facility). The Second Amended Term Loan Facility, among other terms, provides for an uncommitted incremental loan option (the “Incremental Facility”) allowing for increases for borrowings under the Second Amended Term Loan Facility and borrowing of new tranches of term loans, up to an aggregate principal amount equal to (i) $65.0 million plus (ii) an additional amount (the “Incremental Facility Increase”) provided, that after giving effect to such Incremental Facility Increase (as well as any other additional term loans), on a pro forma basis, the First Lien Net Leverage Ratio (as defined in the Second Amended Term Loan Facility) for the most recent four consecutive fiscal quarters does not exceed 4.00:1.00 and the Total Net Leverage Ratio (as defined in the Second Amended Term Loan Facility) for the most recent four consecutive fiscal quarters does not exceed 6.00:1.00. The First Lien Net Leverage Ratio and the Total Net Leverage Ratio each cap the cash netted against debt up to a maximum amount of $60.0 million (increased from $45.0 million under the Term Loan Facility). Additionally, the Second Amended Term Loan Facility also provides for an uncommitted incremental revolving loan option (the “Incremental Revolving Facility”) allowing for an aggregate principal amount of up to $30.0 million, which will be secured on a pari passu basis by the collateral securing the Second Amended Term Loan Facility. The Second Amended Term Loan Facility requires the Borrowers to make amortization payments (in quarterly installments) equal to 1.00% per annum with respect to the Second Amended Term Loan Facility with any remaining amount due at final maturity. The Second Amended Term Loan Facility principal payments commenced on March 31, 2017, with a final installment due on February 14, 2024. Voluntary prepayments are permitted, in whole or in part, subject to certain minimum prepayment requirements. In addition, pursuant to the terms of the Second Amended Term Loan Facility, within 90 days after the end of each fiscal year, the Borrowers are required to make a prepayment of the loan principal in an amount equal to a percentage of the excess cash flow of the most recently completed fiscal year. Excess cash flow is generally defined as net income plus depreciation and amortization expense, less mandatory prepayments of the term loan, interest charges, income taxes and capital expenditures, and adjusted for the change in working capital. The percentage of the excess cash flow used to determine the amount of the prepayment of the loan declines from 50% to 25%, and again to 0% at lower leverage ratios. Pursuant to the terms of the Second Amended Term Loan Facility, our net leverage ratio was 2.6x at December 31, 2016, resulting in an excess cash flow percentage of 0% and therefore, no excess cash flow payment was required to be paid in 2017. In accordance with Accounting Standards Codification (“ASC”) 470 - Debt , the refinancing arrangement was deemed a modification of the Term Loan Facility and as such, an additional $1.1 million of original issue discount (“OID”) incurred in connection with the Second Amended Term Loan Facility was added to the existing OID. As of September 30, 2017, the OID balance was $2.1 million, net of accumulated amortization of $1.4 million and was recorded as a reduction to the principal amount of the Second Amended Term Loan Facility outstanding as presented on the unaudited condensed consolidated balance sheet and will be amortized as a component of interest expense over the term of the Second Amended Term Loan Facility. Financing costs of $1.4 million incurred in connection with the Second Amended Term Loan Facility were expensed in the period in accordance with ASC 470 — Debt and are included in Other expenses in the unaudited condensed consolidated statement of operations at September 30, 2017. In accordance with ASU 2015-15 Interest — Imputation of Interest (Subtopic 835-30) Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line of Credit Arrangements, deferred financing fees of $1.6 million, net of accumulated amortization of $2.3 million, are presented as a reduction to the Second Amended Term Loan Facility outstanding at September 30, 2017 as presented on the unaudited condensed consolidated balance sheet, and will be amortized as a component of interest expense over the term of the Second Amended Term Loan Facility. The carrying value of the long-term debt approximates fair value at September 30, 2017 and December 31, 2016, and was derived from quoted market prices by independent dealers (Level 2 in the fair value hierarchy under ASC 820, Fair Value Measurements and Disclosures ). The following are the maturities of our long-term debt as of September 30, 2017 ( amounts in thousands ): Year Ending December 31, Amount Remainder of 2017 $ 2018 2019 2020 2021 and thereafter $ |
Derivative instruments
Derivative instruments | 9 Months Ended |
Sep. 30, 2017 | |
Derivative instruments | |
Derivative instruments | Note 8. Derivative instruments We use derivative financial instruments in the management of our exposure to interest rate. Our strategy is to eliminate the cash flow risk on a portion of the variable rate debt caused by changes in the designated benchmark interest rate, LIBOR. The Company does not enter into or hold derivative financial instruments for speculative trading purposes. At May 4, 2017, we entered into two identical pay-fixed, receive-variable, interest rate swaps with two different counter parties, to hedge the variability in the LIBOR interest payments on an aggregate notional value of $100.0 million of our Second Amended Term Loan Facility beginning May 31, 2017, through the expiration of the swaps on March 31, 2022. At inception, these interest rate swaps were designated as cash flow hedges of interest rate risk, and as such, the effective portion of unrealized changes in market value is recorded in Accumulated other comprehensive income (“AOCI”). Any losses from hedge ineffectiveness will be recognized in current earnings. The change in the fair value of the interest rate swap agreements in the three month period ended September 30, 2017 was a gain of $0.1 million, and was included in AOCI. For the nine month period ended September 30, 2017, we have recorded a loss of $0.2 million related to the interest rate swap agreements. The Company paid $0.2 million of net interest on the settlement of the interest rate swap agreements for the three month period ended September 30, 2017. As of September 30, 2017, the Company estimates that none of the unrealized loss included in AOCI related to these interest rate swap agreements will be realized and reported in earnings within the next twelve months. No gain or loss was recorded in earnings for the three and nine months ended September 30, 2017. The fair value of the interest rate swaps as of September 30, 2017 was $0.2 million and was recorded in Swap liability in non-current liabilities on the unaudited condensed consolidated balance sheets. By entering into derivative instrument contracts, we are exposed to counterparty credit risk. Counterparty credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is in an asset position, the counterparty has a liability to us, which creates credit risk for us. We attempt to minimize this risk by selecting counterparties with investment grade credit ratings and regularly monitoring our market position with each counterparty. Our derivative instruments do not contain any credit-risk related contingent features. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Measurements | |
Fair Value Measurements | Note 9. Fair Value Measurements Our derivatives are valued using a discounted cash flow analysis that incorporates observable market parameters, such as interest rate yield curves, classified as Level 2 within the valuation hierarchy. Derivative valuations incorporate credit risk adjustments that are necessary to reflect the probability of default by us or the counterparty. The following table presents our assets and liabilities measured at fair value on a recurring basis and the levels of inputs used to measure fair value, which include derivatives designated as cash flow hedging instruments, as well as their location on our unaudited condensed consolidated balance sheets as of September 30, 2017 ( amounts in thousands ): Estimated Fair Value September 30, 2017 Category Balance Sheet Location Level 1 Level 2 Level 3 Total Cash flow hedges: Swap Liability Other non-current liabilities — $ — $ Certain non-financial assets and liabilities are measured at fair value on a nonrecurring basis. These assets and liabilities are not measured at fair value on an ongoing basis but are subject to periodic impairment tests. These items primarily include long-lived assets, goodwill and other intangible assets. The carrying amounts of cash, accounts receivable and accounts payable approximate fair value because of the short maturity of these items. The carrying value of the long-term debt approximates fair value because this instrument bears interest at a variable rate, is pre-payable, and is at terms currently available to the Company. |
Stockholders' equity
Stockholders' equity | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders' equity | |
Stockholders' equity | Note 10. Stockholders’ equity Equity incentive plans Effective May 16, 2016, the stockholders of all classes of capital stock of the Company approved at the annual stockholder meeting the Hemisphere Media Group, Inc. Amended and Restated 2013 Equity Incentive Plan (the “2013 Equity Incentive Plan”) to increase the number of shares of Class A common stock that may be delivered under the 2013 Equity Incentive Plan to an aggregate of 7.2 million shares of our Class A common stock. At September 30, 2017, 2.9 million shares remained available for issuance of stock options or other stock-based awards under our 2013 Equity Incentive Plan (including shares of restricted Class A common stock surrendered to the Company in payment of taxes required to be withheld in respect of vested shares of restricted Class A common stock, which are available for re-issuance). The expiration date of the 2013 Equity Incentive Plan, on and after which date no awards may be granted, is April 4, 2023. The Company’s Board of Directors, or a committee thereof, administers the 2013 Equity Incentive Plan and has the sole and plenary authority to, among other things: (i) designate participants; (ii) determine the type, size, and terms and conditions of awards to be granted; and (iii) determine the method by which an award may be settled, exercised, canceled, forfeited or suspended. The Company’s time-based restricted stock awards and option awards generally vest in three equal annual installments beginning on the first anniversary of the grant date, subject to the grantee’s continued employment or service with the Company. The Company’s event-based restricted stock awards and option awards generally vest upon the Company’s Class A common stock attaining a $15.00 closing price per share, as quoted on the NASDAQ Global Market, on at least 10 trading days, subject to the grantee’s continued employment or service with the Company. Other event-based restricted stock awards granted to certain members of our Board vest on the day preceding the Company’s annual stockholder meeting. Stock-based compensation Stock-based compensation expense related to stock options and restricted stock was $1.0 million and $0.5 million for the three months ended September 30, 2017 and 2016, respectively, and $3.1 million and $2.5 million for the nine months ended September 30, 2017 and 2016, respectively. At September 30, 2017, there was $2.1 million of total unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted-average period of 1.5 years. At September 30, 2017, there was $2.5 million of total unrecognized compensation cost related to unvested restricted stock, which is expected to be recognized over a weighted-average period of 1.3 years. Stock options The fair value of stock options granted is estimated at the date of grant using the Black-Scholes option pricing model for time-based options and the Monte Carlo simulation model for event-based options. The expected term of options granted is derived using the simplified method under ASC 718-10-S99-1/SEC Topic 14.D for “plain vanilla” options and the Monte Carlo simulation for event-based options. Expected volatility is based on the historical volatility of the Company’s competitors given its lack of trading history. The risk-free interest rate is based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. The Company has estimated forfeitures of 1.5%, as the awards are granted to management for which the Company expects lower turnover, and has assumed no dividend yield, as dividends have never been paid to stock or option holders and will not be paid for the foreseeable future. Black-Scholes Option Valuation Assumptions Nine Months Ended Year Ended Risk-free interest rate — 1.6%-2.4% Dividend yield — — Volatility — 26.4%-32.4% Weighted-average expected term (years)t — The following table summarizes stock option activity for the nine months ended September 30, 2017 (shares and intrinsic value in thousands) : Number of shares Weighted-average Weighted-average Aggregate intrinsic Outstanding at December 31, 2016 $ $ Granted — — — — Exercised — — — — Forfeited ) — — Expired ) — — Outstanding at September 30, 2017 $ $ Vested at September 30, 2017 $ $ Exercisable at September 30, 2017 $ $ No options were granted during the nine months ended September 30, 2017. At September 30, 2017, 0.3 million options granted are unvested, event-based options. Restricted stock Certain employees and directors have been awarded restricted stock under the 2013 Equity Incentive Plan. The time-based restricted stock grants vest primarily over a period of three years. The fair value and expected term of event-based restricted stock grants is estimated at the grant date using the Monte Carlo simulation model. The following table summarizes restricted share activity for the nine months ended September 30, 2017 ( shares in thousands ): Number of shares Weighted-average Outstanding at December 31, 2016 $ Granted Vested ) Forfeited ) Outstanding at September 30, 2017 $ At September 30, 2017, 0.2 million shares of restricted stock issued were unvested, event-based shares. Warrants At September 30, 2017, 12.1 million warrants, exercisable into 6.0 million shares of our Class A common stock, were issued and outstanding. Each warrant entitles the holder to purchase one-half of one share of our Class A common stock at a price of $6.00 per half share. Warrants may be exercised only through the date of expiration and are only exercisable for a whole number of shares of common stock (i.e. only an even number of warrants may be exercised at any given time by a registered holder). As a result, a holder must exercise a least two warrants at an effective exercise price of $12.00 per share. At the option of the Company, 7.6 million warrants may be called for redemption, provided that the last sale price of our Class A common stock reported has been at least $18.00 per share on each of 20 trading days within the 30-day period ending on the third business day prior to the date on which notice of redemption is given. The warrants expire on April 4, 2018. During the nine months ended September 30, 2017, no warrants were repurchased. There were 190,749 warrants exercised during the nine months ended September 30, 2017, in connection with such exercises 23,911 shares of Class A common stock were issued and the Company received $0.2 million in cash proceeds, as some of the warrant exercises were done on a cashless basis. |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Contingencies | |
Contingencies | Note 11. Contingencies We are involved in various legal actions, generally related to our operations. Management believes, based on advice from legal counsel, that the outcomes of such legal actions will not adversely affect our financial condition. |
Commitments
Commitments | 9 Months Ended |
Sep. 30, 2017 | |
Commitments | |
Commitments | Note 12. Commitments We have entered into certain rental property contracts with third parties, which are accounted for as operating leases. Rental expense was $0.2 million for each of the three months ended September 30, 2017 and 2016, and $0.6 million and $0.5 million for the nine months ended September 30, 2017 and 2016, respectively. We have certain commitments including various operating leases and funding obligations for certain equity investments. Future minimum payments for these commitments and other commitments, primarily programming, are as follows (amounts in thousands) : Nine months Ending September 30, Operating Leases Other Total Remainder of 2017 $ $ $ 2018 2019 2020 2021 and thereafter Total $ $ $ |
Nature of business (Policies)
Nature of business (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Nature of business | |
Basis of presentation: | Basis of presentation: The accompanying unaudited condensed consolidated financial statements for Hemisphere and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations, although we believe that the disclosures made are adequate to make the information not misleading. In our opinion, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement have been included. Our financial condition as of, and operating results, for the three and nine months ended September 30, 2017 are not necessarily indicative of the financial condition or results that may be expected for any future interim period or for the year ending December 31, 2017. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2016. |
Net earnings per common share: | Net earnings per common share: Basic earnings per share (“EPS”) are computed by dividing income attributable to common stockholders by the number of weighted-average outstanding shares of common stock. Diluted EPS reflects the effect of the assumed exercise of stock options and vesting of restricted shares only in the periods in which such effect would have been dilutive. The following table sets forth the computation of the common shares outstanding used in determining basic and diluted EPS ( amounts in thousands, except per share amounts): Three Months Ended Nine Months Ended 2017 2016 2017 2016 Numerator for earnings per common share calculation: Net income $ $ $ $ Denominator for earnings per common share calculation: Weighted-average common shares, basic Effect of dilutive securities Stock options, restricted stock and warrants Weighted-average common shares, diluted EPS Basic $ $ $ $ Diluted $ $ $ $ On June 20, 2017, the Company announced that its Board of Directors authorized the repurchase of up to $25 million of the Company’s Class A common stock, par value $0.0001 per share (“Class A common stock”). Under the Company’s stock repurchase program, management is authorized to purchase shares of the Company’s common stock from time to time through open market purchases at prevailing prices, subject to stock price, business and market conditions and other factors. As of September 30, 2017, the Company had $14.3 million of remaining authorization for future repurchases under the existing stock repurchase program, which will expire on July 17, 2018. All common stock repurchases have been made through open market transactions and have been recorded as treasury stock on the condensed consolidated balance sheet. As of September 30, 2017, the Company had repurchased 0.8 million shares of Class A common stock under the repurchase program for an aggregate purchase price of $10.7 million. We apply the treasury stock method to measure the dilutive effect of our outstanding stock options and restricted stock awards and include the respective common share equivalents in the denominator of our diluted income per common share calculation. Potentially dilutive securities representing 1.9 million and 2.0 million shares of common stock for the three and nine months ended September 30, 2017, respectively, were excluded from the computation of diluted income per common share for this period because their effect would have been anti-dilutive. The net income per share amounts are the same for our Class A common stock and Class B common stock, par value $0.0001 per share (“Class B common stock”), because the holders of each class are legally entitled to equal per share distributions whether through dividends or in liquidation. |
Use of estimates: | Use of estimates: In preparing these financial statements, management had to make estimates and assumptions that affected the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities as of the balance sheet dates, and the reported revenues and expenses for the three and nine months ended September 30, 2017 and 2016. Such estimates are based on historical experience and other assumptions that are considered appropriate in the circumstances. However, actual results could differ from those estimates. |
Recent accounting pronouncements: | Recent accounting pronouncements: In August 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU” or “Update”) 2017-12 — Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities . The amendments in this Update apply to any entity that elects to apply hedge accounting and is intended to better align an entity’s risk management activities and financial reporting for hedging relationships. The Update amends effectiveness testing requirements, income statement presentation and disclosures and permits additional risk management strategies to qualify for hedge accounting. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019. Early application is permitted; the effect of the adoption should be reflected as of the beginning of the fiscal year of adoption. We are currently evaluating the impact of this Update on our consolidated financial statements. In May 2017, the FASB issued ASU 2017-09 — Compensation - Stock Compensation (Topic 718) Scope of Modification Accounting . The amendments in this Update affect any entity that changes the terms or conditions of a share-based payment award and provides guidance on which changes to terms or conditions of an award require an entity to apply modification accounting. The amendments in this ASU are effective for all entities for annual periods, and all interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted. Our consolidated financial statements would only be impacted if we were to make changes to share-based payment awards. In March 2016, the FASB issued ASU 2016-09 — Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 includes provisions intended to simplify various aspects related to how share-based payments are accounted for and presented in the financial statements, such as requiring all income tax effects of awards to be recognized in the income statement when the awards vest or are settled and allowing a policy election to account for forfeitures as they occur. In addition, all related cash flows resulting from share-based payments will be reported as operating activities on the statement of cash flows. The guidance is effective for annual periods beginning after December 15, 2016, and has been adopted by the Company. In May 2014, the FASB issued ASU 2014-09 — Revenue from Contracts with Customers , a comprehensive revenue recognition model that supersedes the current revenue recognition requirements and most industry-specific guidance. Subsequent accounting standard updates have also been issued which amend and/or clarify the application of ASU 2014-09. The guidance provides a five-step framework to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services. The guidance will be effective for the first interim period of our 2018 fiscal year and allows adoption either under a full retrospective or a modified retrospective approach. The Company has identified retransmission/subscriber fees and advertising sales as significant and has substantially completed its review of each of these revenue streams in accordance with the new guidance. The Company has determined that it will use the prospective method of transition in adopting the new standard. |
Nature of business (Tables)
Nature of business (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Nature of business | |
Schedule of the computation of the common shares outstanding used in determining basic and diluted EPS | The following table sets forth the computation of the common shares outstanding used in determining basic and diluted EPS ( amounts in thousands, except per share amounts): Three Months Ended Nine Months Ended 2017 2016 2017 2016 Numerator for earnings per common share calculation: Net income $ $ $ $ Denominator for earnings per common share calculation: Weighted-average common shares, basic Effect of dilutive securities Stock options, restricted stock and warrants Weighted-average common shares, diluted EPS Basic $ $ $ $ Diluted $ $ $ $ |
Goodwill and intangible assets
Goodwill and intangible assets (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and intangible assets | |
Schedule of goodwill and intangible assets | Goodwill and intangible assets consist of the following at September 30, 2017 and December 31, 2016 ( amounts in thousands ): September 30, December 31, 2017 2016 Broadcast license $ $ Goodwill Other intangibles Total intangible assets $ $ |
Summary of the changes in goodwill and other indefinite lived intangible assets | A summary of changes in the Company’s goodwill and other indefinite-lived intangible assets, on a net basis, for the nine months ended September 30, 2017 is as follows (amounts in thousands) : Net Balance at Additions Impairment Net Balance at Broadcast license $ $ — $ — $ Goodwill — — Brands — — Other intangibles — — Total indefinite-lived intangibles $ $ — $ — $ |
Summary of the changes in other amortizable intangible assets | A summary of the changes in the Company’s other amortizable intangible assets for the nine months ended September 30, 2017 is as follows (amounts in thousands) : Net Balance at Additions Amortization Net Balance at Affiliate relationships $ $ — $ ) $ Advertiser relationships — ) Non-compete agreement — ) Other intangibles ) Total finite-lived intangibles $ $ $ ) $ |
Schedule of future estimated amortization expense | Future estimated amortization expense is as follows (amounts in thousands): Year Ending December 31, Amount Remainder of 2017 $ 2018 2019 2020 2021 and thereafter $ |
Long-term debt (Tables)
Long-term debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Long-term debt | |
Schedule of long-term debt | Long-term debt at September 30, 2017 and December 31, 2016 consists of the following (amounts in thousands) : September 30, 2017 December 31, 2016 Senior Notes due February 2024 $ $ — Senior Notes due July 2020 — Less: Current portion — $ $ |
Schedule of maturities of long-term debt | The following are the maturities of our long-term debt as of September 30, 2017 ( amounts in thousands ): Year Ending December 31, Amount Remainder of 2017 $ 2018 2019 2020 2021 and thereafter $ |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Measurements | |
Schedule of assets and Liabilities that are Measured at Fair Value on a Recurring Basis | The following table presents our assets and liabilities measured at fair value on a recurring basis and the levels of inputs used to measure fair value, which include derivatives designated as cash flow hedging instruments, as well as their location on our unaudited condensed consolidated balance sheets as of September 30, 2017 ( amounts in thousands ): Estimated Fair Value September 30, 2017 Category Balance Sheet Location Level 1 Level 2 Level 3 Total Cash flow hedges: Swap Liability Other non-current liabilities — $ — $ |
Stockholders' equity (Tables)
Stockholders' equity (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Equity incentive plans | |
Summary of stock option activity | The following table summarizes stock option activity for the nine months ended September 30, 2017 (shares and intrinsic value in thousands) : Number of shares Weighted-average Weighted-average Aggregate intrinsic Outstanding at December 31, 2016 $ $ Granted — — — — Exercised — — — — Forfeited ) — — Expired ) — — Outstanding at September 30, 2017 $ $ Vested at September 30, 2017 $ $ Exercisable at September 30, 2017 $ $ |
Summary of restricted share activity | The following table summarizes restricted share activity for the nine months ended September 30, 2017 ( shares in thousands ): Number of shares Weighted-average Outstanding at December 31, 2016 $ Granted Vested ) Forfeited ) Outstanding at September 30, 2017 $ |
Time Based Stock Option | Black Scholes Pricing Model | |
Equity incentive plans | |
Schedule of valuation assumptions | Black-Scholes Option Valuation Assumptions Nine Months Ended Year Ended Risk-free interest rate — 1.6%-2.4% Dividend yield — — Volatility — 26.4%-32.4% Weighted-average expected term (years)t — |
Commitments (Tables)
Commitments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Commitments | |
Schedule of future minimum payments for operating leases and other commitments, primarily programming | Future minimum payments for these commitments and other commitments, primarily programming, are as follows (amounts in thousands) : Nine months Ending September 30, Operating Leases Other Total Remainder of 2017 $ $ $ 2018 2019 2020 2021 and thereafter Total $ $ $ |
Nature of business (Details)
Nature of business (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Nature of business | |||||
Equity method investments | $ 24,406 | $ 24,406 | |||
Numerator for earnings per common share calculation: | |||||
Net income | $ 682 | $ 4,349 | $ 8,608 | $ 12,078 | |
Denominator for earnings per common share calculation: | |||||
Weighted-average common shares, basic | 40,398 | 40,499 | 40,515 | 42,057 | |
Effect of dilutive securities: | |||||
Stock options, restricted stock and warrants | 527 | 536 | 316 | 707 | |
Weighted-average common shares, diluted | 40,925 | 41,035 | 40,831 | 42,764 | |
EPS | |||||
Basic (in dollars per share) | $ 0.02 | $ 0.11 | $ 0.21 | $ 0.29 | |
Diluted (in dollars per share) | $ 0.02 | 0.11 | $ 0.21 | 0.28 | |
Aggregate purchase price of Class A common stock | $ 10,696 | ||||
Shares excluded from the computation of diluted income per common share | 1,900 | 2,000 | |||
Variable Interest Entity | |||||
Nature of business | |||||
Equity method investments | $ 0 | $ 0 | |||
Common Class A | |||||
EPS | |||||
Authorized repurchase amount | $ 25,000 | $ 25,000 | |||
Par value of common stock (in dollars per share) | $ 0.0001 | 0.0001 | $ 0.0001 | 0.0001 | $ 0.0001 |
Remaining authorization for future repurchases | $ 14,300 | $ 14,300 | |||
Number of shares repurchased | 800 | ||||
Common Class B | |||||
EPS | |||||
Par value of common stock (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Related party transactions (Det
Related party transactions (Details) $ in Thousands | Apr. 09, 2016 | Sep. 30, 2017USD ($)item | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)item | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) |
MVS Multivision Digital Sde RLde CV and Affiliates | ||||||
Related party transactions | ||||||
Due from related parties, net of allowance for doubtful accounts | $ 1,900 | $ 1,900 | $ 1,300 | |||
Due to related parties | $ 1,300 | 1,300 | 500 | |||
MVS Multivision Digital Sde RLde CV and Affiliates | Satellite and Support Services Agreement | Cinelatino | ||||||
Related party transactions | ||||||
Number of channel feeds delivered through satellite | item | 2 | |||||
Total expense | $ 600 | $ 600 | 1,900 | $ 1,900 | ||
MVS Multivision Digital Sde RLde CV and Affiliates | Master License Agreement | Cinelatino | ||||||
Related party transactions | ||||||
Term of agreement | 10 years | |||||
Revenue as a percentage of license fees collected from distributors in Latin America and Mexico | 13.50% | |||||
Revenue recognized from related party | $ 300 | 800 | 1,400 | 3,100 | ||
MVS Multivision Digital Sde RLde CV and Affiliates | Affiliation Agreement | ||||||
Related party transactions | ||||||
Revenue recognized from related party | 500 | 600 | 1,600 | 1,700 | ||
MVS Multivision Digital Sde RLde CV and Affiliates | Affiliation Agreement | Cinelatino | ||||||
Related party transactions | ||||||
Revenue recognized from related party | 500 | 1,600 | 1,600 | |||
Director | Consulting Agreement with Director | ||||||
Related party transactions | ||||||
Total expense | 100 | 100 | 400 | 200 | ||
Term of agreement | 3 years | |||||
Due to related parties | 0 | 0 | 0 | |||
Panamax Films, LLC | Programming Agreements | ||||||
Related party transactions | ||||||
Total expense | 0 | 0 | $ 0 | 0 | ||
Number of specific movie titles to be distributed | item | 3 | |||||
Programming rights | 100 | $ 100 | 100 | |||
Lionsgate | Movie License Agreement | Cinelatino | ||||||
Related party transactions | ||||||
Total expense | 100 | 0 | 200 | 100 | ||
Programming rights | 100 | 100 | 300 | |||
License fee under agreement with related party | 1,000 | 1,000 | ||||
Inter Media Advisors LLC | Services Agreement | ||||||
Related party transactions | ||||||
Total expense | 0 | $ 0 | 0 | $ 100 | ||
Due from related parties, net of allowance for doubtful accounts | 0 | 0 | $ 0 | |||
Frontera Productions LLC | Movie License Agreement | ||||||
Related party transactions | ||||||
Total expense | 0 | |||||
License fee under agreement with related party | $ 100 | $ 100 |
Property Plant and Equipment (D
Property Plant and Equipment (Details) - WAPA $ in Millions | 3 Months Ended |
Sep. 30, 2017USD ($) | |
Property Plant and Equipment | |
Fixed asset impairment charge | $ 0.5 |
Minimum period of significant portion of damaged assets have been in service | 10 years |
Goodwill and intangible asset30
Goodwill and intangible assets (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Goodwill and intangible assets | ||
Broadcast license | $ 41,356 | $ 41,356 |
Goodwill | 164,887 | 164,887 |
Other intangibles | 54,967 | 64,849 |
Total intangible assets | $ 261,210 | $ 271,092 |
Goodwill and intangible Asset31
Goodwill and intangible Assets - Indefinite Lived Net Balance (Details) $ in Thousands | Sep. 30, 2017USD ($) |
Changes in the goodwill | |
Net balance at the beginning of the period | $ 164,887 |
Net balance at the end of the period | 164,887 |
Changes in the goodwill and other indefinite lived intangible assets, on a net basis | |
Net balance at the beginning of the period | 222,929 |
Net balance at the end of the period | 222,929 |
Broadcast license | |
Changes in other indefinite-lived intangible assets | |
Net balance at the beginning of the period | 41,356 |
Net balance at the end of the period | 41,356 |
Brands | |
Changes in other indefinite-lived intangible assets | |
Net balance at the beginning of the period | 15,986 |
Net balance at the end of the period | 15,986 |
Other intangibles | |
Changes in other indefinite-lived intangible assets | |
Net balance at the beginning of the period | 700 |
Net balance at the end of the period | $ 700 |
Goodwill and intangible asset32
Goodwill and intangible assets - Other Amortizable Intangible (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | |
Changes in other amortizable intangible assets | |||||
Balance at the beginning of the period | $ 38,281 | $ 48,163 | |||
Additions | 85 | ||||
Amortization | (3,300) | $ (3,400) | (9,967) | $ (10,100) | |
Net balance at the end of the period | 38,281 | 38,281 | |||
Future estimated amortization expense | |||||
Remainder of 2017 | $ 3,318 | ||||
2,018 | 13,234 | ||||
2,019 | 8,483 | ||||
2,020 | 6,057 | ||||
2021 and thereafter | 7,189 | ||||
Total | 38,281 | $ 48,163 | 38,281 | ||
Weighted Average | |||||
Future estimated amortization expense | |||||
Remaining amortization period | 3 years 7 months 6 days | ||||
Affiliate relationships | |||||
Changes in other amortizable intangible assets | |||||
Balance at the beginning of the period | $ 44,468 | ||||
Amortization | (9,109) | ||||
Net balance at the end of the period | 35,359 | 35,359 | |||
Future estimated amortization expense | |||||
Total | 35,359 | 44,468 | 35,359 | ||
Advertiser relationships | |||||
Changes in other amortizable intangible assets | |||||
Balance at the beginning of the period | 1,792 | ||||
Amortization | (414) | ||||
Net balance at the end of the period | 1,378 | 1,378 | |||
Future estimated amortization expense | |||||
Total | 1,378 | 1,792 | 1,378 | ||
Non-compete agreement | |||||
Changes in other amortizable intangible assets | |||||
Balance at the beginning of the period | 1,784 | ||||
Amortization | (412) | ||||
Net balance at the end of the period | 1,372 | 1,372 | |||
Future estimated amortization expense | |||||
Total | 1,372 | 1,784 | 1,372 | ||
Other intangibles | |||||
Changes in other amortizable intangible assets | |||||
Balance at the beginning of the period | 119 | ||||
Additions | 85 | ||||
Amortization | (32) | ||||
Net balance at the end of the period | 172 | 172 | |||
Future estimated amortization expense | |||||
Total | $ 172 | $ 119 | $ 172 |
Equity method investments - (De
Equity method investments - (Details) $ in Thousands | Apr. 28, 2017 | Nov. 30, 2016item | Sep. 30, 2017USD ($) | Sep. 30, 2017USD ($) | May 01, 2017 | Nov. 03, 2016 |
Schedule of Equity Method Investments [Line Items] | ||||||
Loss from equity method investments | $ 2,571 | $ 2,450 | ||||
Equity method investments | 24,406 | 24,406 | ||||
PANTAYA | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership Percentage | 25.00% | |||||
Loss from equity method investments | 400 | 400 | ||||
Colombian content producers, Radio television and NTC nacional | Television broadcast license | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership Percentage | 20.00% | |||||
License life (in years) | 10 years | |||||
Number of national broadcast television networks | item | 3 | |||||
Loss from equity method investments | $ 2,300 | 2,200 | ||||
Losses in excess of the common equity (as a percent) | 100.00% | |||||
Equity method investments | $ 21,700 | 21,700 | ||||
Return on capital equity investment | 600 | 800 | ||||
REMEZCLA | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership Percentage | 25.50% | |||||
Loss from equity method investments | 100 | 100 | ||||
Equity method investments | 5,000 | 5,000 | ||||
Return on capital equity investment | $ 300 | $ 300 | ||||
REMEZCLA | Minimum | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Target age of people English speaking and bilingual U.S. Hispanics | 18 years | |||||
REMEZCLA | Maximum | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Target age of people English speaking and bilingual U.S. Hispanics | 35 years |
Income taxes (Details)
Income taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income taxes | ||||
Income tax expense | $ 1,758 | $ 2,276 | $ 6,280 | $ 6,563 |
Effective tax rates reconciliation | ||||
Annual income tax rate (as a percent) | 36.10% | 35.80% | ||
Statutory federal income tax rate (as a percent) | 35.00% | 35.00% |
Long-term debt (Details)
Long-term debt (Details) $ in Thousands | Feb. 14, 2017USD ($)item | Jul. 31, 2014USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2016USD ($)item |
Long-term debt | ||||
Current portion of long-term debt | $ 2,133 | |||
Long-term debt less current portion | $ 205,897 | $ 210,270 | ||
Maximum period after each fiscal year for prepayment of debt | 90 days | |||
Payment of excess cash flow | $ 0 | |||
Financing costs | 1,114 | |||
Maturities of long-term debt | ||||
Remainder of 2017 | 533 | |||
2,018 | 2,133 | |||
2,019 | 2,133 | |||
2,020 | 2,133 | |||
2,021 | 204,815 | |||
Total maturities | 211,747 | |||
Second Amended Term Loan Facility | ||||
Long-term debt | ||||
Long-term Debt | 208,030 | |||
Amount of term loan | $ 213,300 | |||
Uncommitted accordion option base amount | 65,000 | |||
Borrowing capacity | $ 30,000 | |||
Amortization payments (in percentage) | 1.00% | |||
OID | $ 1,100 | 2,100 | ||
Accumulated amortization of original issue discount | 1,400 | |||
Deferred financing costs | 1,600 | |||
Accumulated amortization | 2,300 | |||
Second Amended Term Loan Facility | Other expenses | ||||
Long-term debt | ||||
Financing costs | $ 1,400 | |||
Second Amended Term Loan Facility | First Lien Net Leverage Ratio | ||||
Long-term debt | ||||
Number of consecutive fiscal quarters | item | 4 | |||
Uncommitted accordion option multiplier of net leverage ratio | item | 4 | |||
Second Amended Term Loan Facility | Total Net Leverage Ratio | ||||
Long-term debt | ||||
Number of consecutive fiscal quarters | item | 4 | |||
Uncommitted accordion option multiplier of net leverage ratio | item | 6 | |||
Second Amended Term Loan Facility | First Lien and Total Net Leverage Ratio | ||||
Long-term debt | ||||
Debt caps amount | $ 60,000 | |||
Second Amended Term Loan Facility | LIBOR | ||||
Long-term debt | ||||
Interest rate margin (as a percent) | 3.50% | |||
Interest rate floor (as a percent) | 0.00% | |||
Second Amended Term Loan Facility | Alternate Base Rate (ABR) | ||||
Long-term debt | ||||
Interest rate margin (as a percent) | 2.50% | |||
Existing Senior Secured Term Loan B Facility | ||||
Long-term debt | ||||
Long-term Debt | $ 210,270 | |||
Amount of term loan | $ 225,000 | |||
Interest rate margin (as a percent) | 4.00% | |||
Uncommitted accordion option multiplier of net leverage ratio | item | 2.6 | |||
First prepayment of debt as a percentage of excess cash flow, if lower leverage ratio is maintained | 25.00% | |||
Second prepayment of debt as a percentage of excess cash flow, if lower leverage ratio is maintained | 0.00% | |||
Existing Senior Secured Term Loan B Facility | First Lien and Total Net Leverage Ratio | ||||
Long-term debt | ||||
Debt caps amount | $ 45,000 | |||
Existing Senior Secured Term Loan B Facility | LIBOR | ||||
Long-term debt | ||||
Reference rate basis | LIBOR | |||
Interest rate margin (as a percent) | 4.00% | |||
Interest rate floor (as a percent) | 1.00% | |||
Existing Senior Secured Term Loan B Facility | LIBOR | Minimum | ||||
Long-term debt | ||||
Interest rate floor (as a percent) | 1.00% | |||
Existing Senior Secured Term Loan B Facility | Alternate Base Rate (ABR) | ||||
Long-term debt | ||||
Interest rate margin (as a percent) | 3.00% |
Derivative instruments (Details
Derivative instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2017 | May 31, 2017 | |
Derivative | |||
Net change in fair value of cash flow hedge | $ 132 | $ (208) | |
Gain loss in fair value | 0 | 0 | |
Swap liability | 208 | $ 208 | |
Interest Rate Swap | |||
Derivative | |||
Interest rate expense | $ 200 | ||
LIBOR | Nondesignated | Interest Rate Swap | |||
Derivative | |||
Notional amount | $ 100,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) $ in Thousands | Sep. 30, 2017USD ($) |
Fair Value Measurements | |
Swap liability | $ 208 |
Cash flow hedges | Other non-current liabilities | |
Fair Value Measurements | |
Swap liability | 208 |
Cash flow hedges | Other non-current liabilities | Level 2 | |
Fair Value Measurements | |
Swap liability | $ 208 |
Stockholders' equity - (Details
Stockholders' equity - (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017USD ($)item$ / sharesshares | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)item$ / sharesshares | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($)$ / sharesshares | May 16, 2016shares | |
Stock-based compensation | ||||||
Stock-based compensation expense (in dollars) | $ | $ 1,000 | $ 500 | $ 3,100 | $ 2,500 | ||
Common Class A | ||||||
Equity incentive plans | ||||||
Shares authorized for issuance | 7,200 | |||||
Employee and Directors Stock Options | ||||||
Stock-based compensation | ||||||
Unrecognized compensation cost related to unvested stock options (in dollars) | $ | $ 2,100 | $ 2,100 | ||||
Weighted-average periods over which unrecognized compensation cost recognized | 1 year 6 months | |||||
Estimated forfeitures (as a percent) | 1.50% | 1.50% | ||||
Number of shares | ||||||
Outstanding at the beginning of the period (in shares) | 2,920 | |||||
Outstanding at the end of the period (in shares) | 2,843 | 2,843 | 2,920 | |||
Vested at the end of the period (in shares) | 1,875 | 1,875 | ||||
Exercisable at the end of the period (in shares) | 1,875 | 1,875 | ||||
Forfeited (in shares) | 37 | |||||
Expired (in shares) | (40) | |||||
Weighted-average exercise price | ||||||
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 11.64 | |||||
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 11.62 | 11.62 | $ 11.64 | |||
Vested at the end of the period (in dollars per share) | $ / shares | 11.67 | 11.67 | ||||
Exercisable at the end of the period (in dollars per share) | $ / shares | $ 11.67 | 11.67 | ||||
Forfeited (in dollars per share) | $ / shares | 13.26 | |||||
Expired (in dollars per share) | $ / shares | $ 11.51 | |||||
Weighted-average remaining contractual term | ||||||
Outstanding | 6 years 8 months 12 days | 7 years 7 months 6 days | ||||
Outstanding at the end of the period | 6 years 8 months 12 days | 7 years 7 months 6 days | ||||
Vested at the end of the period | 6 years | |||||
Exercisable at the end of the period | 6 years | |||||
Aggregate intrinsic value | ||||||
Outstanding at the beginning of the period (in dollars) | $ | $ 1,274 | |||||
Outstanding at the end of the period (in dollars) | $ | $ 2,311 | 2,311 | $ 1,274 | |||
Vested at the end of the period (in dollars) | $ | 1,760 | 1,760 | ||||
Exercisable at the end of the period (in dollars) | $ | 1,760 | $ 1,760 | ||||
Valuation assumptions | ||||||
Dividend yield (as a percent) | 0.00% | |||||
Restricted Stock | ||||||
Stock-based compensation | ||||||
Unrecognized compensation cost related to unvested restricted stock (in dollars) | $ | $ 2,500 | $ 2,500 | ||||
Weighted-average periods over which unrecognized compensation cost recognized | 1 year 3 months 18 days | |||||
Number of shares | ||||||
Outstanding at the beginning of the period (in shares) | 561 | |||||
Granted (in shares) | 99 | |||||
Vested (in shares) | (204) | |||||
Forfeited (in shares) | (8) | |||||
Outstanding at the end of the period (in shares) | 448 | 448 | 561 | |||
Weighted-average grant date fair value | ||||||
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 10.58 | |||||
Granted (in dollars per share) | $ / shares | 11.10 | |||||
Vested (in dollars per share) | $ / shares | 11.80 | |||||
Forfeited (in dollars per share) | $ / shares | 13.38 | |||||
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 10.09 | $ 10.09 | $ 10.58 | |||
Restricted Stock | Common Class A | ||||||
Equity incentive plans | ||||||
Shares available for issuance | 2,900 | 2,900 | ||||
Time Based Restricted Stock and Stock Option | ||||||
Equity incentive plans | ||||||
Number of equal annual installments for vesting of awards | item | 3 | 3 | ||||
Time Based Stock Option | Black Scholes Pricing Model | ||||||
Valuation assumptions | ||||||
Risk-free interest rate, minimum (as a percent) | 1.60% | |||||
Risk-free interest rate, maximum (as a percent) | 2.40% | |||||
Volatility, minimum (as a percent) | 26.40% | |||||
Volatility, maximum (as a percent) | 32.40% | |||||
Weighted-average expected term | 6 years 2 months 12 days | |||||
Time Based Restricted Stock | ||||||
Valuation assumptions | ||||||
Vesting period | 3 years | |||||
Event Based Restricted Stock and Stock Option | Common Class A | ||||||
Equity incentive plans | ||||||
Closing price per share to be attained for vesting of awards to begin (in dollars per share) | $ / shares | $ 15 | |||||
Event Based Restricted Stock and Stock Option | Common Class A | Minimum | ||||||
Equity incentive plans | ||||||
Number of trading days on which the closing price per share should attain the specified price per share for vesting of awards to begin | item | 10 | 10 | ||||
Event Based Stock Option | ||||||
Aggregate intrinsic value | ||||||
Unvested options | 300 | 300 | ||||
Event Based Restricted Stock | ||||||
Number of shares | ||||||
Outstanding at the end of the period (in shares) | 200 | 200 |
Stockholders' equity - Warrants
Stockholders' equity - Warrants (Details) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Sep. 30, 2017USD ($)item$ / shares$ / itemshares | Sep. 30, 2016USD ($) | |
Warrants | ||
Exercise price of warrants per half share | $ / item | 6 | |
Minimum number of warrants exercisable by holder (in shares) | 2 | |
Exercise price of warrants (in dollars per share) | $ / shares | $ 12 | |
Number of warrants that may be called for redemption (in shares) | 7,600,000 | |
Number of warrants repurchased | 0 | |
Number of warrants exercised | 190,749 | |
Proceeds from exercise of warrant for Class A common stock | $ | $ 211 | $ 420 |
Common Class A | ||
Warrants | ||
Issued (in shares) | 12,100,000 | |
Outstanding (in shares) | 6,100,000 | |
Number of shares entitled to warrant holders (as a percent) | 0.5 | |
Warrants exercisable into number of shares | 6,000,000 | |
Trigger price of stock in order to provide for redemption of warrants at option of the Company (in dollars per share) | $ / shares | $ 18 | |
Number of trading days through which last sales price of common stock is reported for warrant redemption | item | 20 | |
Period of aggregate number of trading days through which last sales price of common stock is reported for warrant redemption | 30 days | |
Shares issued upon exercise of warrants | 23,911 |
Commitments (Details)
Commitments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Commitments | ||||
Rental expense | $ 200 | $ 200 | $ 600 | $ 500 |
Future minimum payments for operating leases | ||||
Remainder of 2017 | 235 | 235 | ||
2,018 | 503 | 503 | ||
2,019 | 449 | 449 | ||
2,020 | 358 | 358 | ||
2021 and thereafter | 997 | 997 | ||
Total | 2,542 | 2,542 | ||
Future minimum payments for other commitments | ||||
Remainder of 2017 | 4,734 | 4,734 | ||
2,018 | 9,325 | 9,325 | ||
2,019 | 5,833 | 5,833 | ||
2,020 | 2,118 | 2,118 | ||
2021 and thereafter | 1,242 | 1,242 | ||
Total | 23,252 | 23,252 | ||
Future minimum payments for operating leases and other commitments | ||||
Remainder of 2017 | 4,969 | 4,969 | ||
2,018 | 9,828 | 9,828 | ||
2,019 | 6,282 | 6,282 | ||
2,020 | 2,476 | 2,476 | ||
2021 and thereafter | 2,239 | 2,239 | ||
Total | $ 25,794 | $ 25,794 |