Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 01, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | FTD Companies, Inc. | |
Entity Central Index Key | 1,575,360 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 27,221,555 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 16,192 | $ 57,892 |
Accounts receivable, net of allowances of $6,929 and $4,802 at September 30, 2016 and December 31, 2015, respectively | 26,696 | 28,177 |
Inventories | 27,517 | 25,611 |
Income taxes receivable | 2,843 | 5,450 |
Prepaid expenses and other current assets | 10,662 | 15,767 |
Total current assets | 83,910 | 132,897 |
Property and equipment, net | 58,078 | 64,753 |
Intangible assets, net | 289,727 | 340,559 |
Goodwill | 551,208 | 561,656 |
Other assets | 22,197 | 21,863 |
Total assets | 1,005,120 | 1,121,728 |
Current liabilities: | ||
Accounts payable | 40,444 | 82,448 |
Accrued liabilities | 30,632 | 54,087 |
Accrued compensation | 13,763 | 21,193 |
Deferred revenue | 6,305 | 5,421 |
Income taxes payable | 875 | 840 |
Current portion of long-term debt | 20,000 | 20,000 |
Total current liabilities | 112,019 | 183,989 |
Long term debt | 260,966 | 274,946 |
Deferred tax liabilities, net | 97,489 | 112,769 |
Other liabilities | 6,490 | 8,798 |
Total liabilities | 476,964 | 580,502 |
Commitments and contingencies (Note 14) | ||
Stockholders' equity: | ||
Preferred stock, 5,000,000 shares, par value $0.0001, authorized; no shares issued and outstanding | ||
Common stock, 60,000,000 shares, par value $0.0001, authorized; 29,652,452 and 29,427,365 shares issued at September 30, 2016 and December 31, 2015, respectively | 3 | 3 |
Treasury stock, 2,280,897 and 1,830,897 at September 30, 2016 and December 31, 2015, respectively | (62,035) | (50,000) |
Additional paid-in capital | 687,576 | 678,558 |
Accumulated deficit | (47,898) | (52,119) |
Accumulated other comprehensive loss | (49,490) | (35,216) |
Total stockholders' equity | 528,156 | 541,226 |
Total liabilities and stockholders' equity | $ 1,005,120 | $ 1,121,728 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, allowance for doubtful accounts (in dollars) | $ 6,929 | $ 4,802 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, shares authorized | 60,000,000 | 60,000,000 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares issued | 29,652,452 | 29,427,365 |
Treasury stock, shares issued | 2,280,897 | 1,830,897 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenues: | ||||
Products | $ 142,726 | $ 157,745 | $ 738,986 | $ 820,020 |
Services | 30,428 | 30,774 | 103,341 | 102,081 |
Total revenues | 173,154 | 188,519 | 842,327 | 922,101 |
Operating expenses: | ||||
Cost of revenues-products | 103,838 | 113,504 | 518,477 | 568,106 |
Cost of revenues-services | 4,405 | 4,763 | 13,757 | 14,613 |
Sales and marketing | 35,012 | 38,249 | 168,885 | 185,299 |
General and administrative | 25,745 | 30,252 | 83,378 | 92,750 |
Amortization of intangible assets | 15,240 | 15,317 | 45,873 | 46,054 |
Restructuring and other exit costs | 612 | 1,495 | 2,230 | 5,907 |
Total operating expenses | 184,852 | 203,580 | 832,600 | 912,729 |
Operating income/(loss) | (11,698) | (15,061) | 9,727 | 9,372 |
Interest income | 135 | 122 | 410 | 371 |
Interest expense | (2,429) | (2,450) | (7,273) | (7,366) |
Other income/(expense), net | (9) | 131 | 1,804 | 557 |
Income/(loss) before income taxes | (14,001) | (17,258) | 4,668 | 2,934 |
Provision/(benefit) for income taxes | (4,028) | (779) | 447 | (440) |
Net income/(loss) | $ (9,973) | $ (16,479) | $ 4,221 | $ 3,374 |
Earnings/(loss) per common share: | ||||
Basic earnings/(loss) per share (in dollars per share) | $ (0.36) | $ (0.57) | $ 0.15 | $ 0.12 |
Diluted earnings/(loss) per share (in dollars per share) | $ (0.36) | $ (0.57) | $ 0.15 | $ 0.11 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||||
Net income/(loss) | $ (9,973) | $ (16,479) | $ 4,221 | $ 3,374 |
Other comprehensive loss: | ||||
Foreign currency translation | (2,902) | (5,020) | (14,510) | (4,227) |
Cash flow hedges: | ||||
Changes in net gains on derivatives, net of tax of $54 and $37 for the quarters ended September 30, 2016 and 2015, respectively and $147 and $31 for the nine months ended September 30, 2016 and 2015, respectively | 86 | 57 | 236 | 49 |
Other comprehensive loss | (2,816) | (4,963) | (14,274) | (4,178) |
Total comprehensive income | $ (12,789) | $ (21,442) | $ (10,053) | $ (804) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||||
Changes in net gains on cash flow hedge derivatives, tax | $ 54 | $ 37 | $ 147 | $ 31 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - 9 months ended Sep. 30, 2016 - USD ($) shares in Thousands, $ in Thousands | Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total |
Balance at the beginning of the period at Dec. 31, 2015 | $ 3 | $ (50,000) | $ 678,558 | $ (35,216) | $ (52,119) | $ 541,226 |
Balance at the beginning of the period (in shares) at Dec. 31, 2015 | 29,427 | (1,831) | ||||
Increase (Decrease) in Equity | ||||||
Net income | 4,221 | 4,221 | ||||
Other comprehensive loss | (14,274) | (14,274) | ||||
Stock-based compensation | 9,767 | 9,767 | ||||
Tax shortfalls from equity awards | (408) | (408) | ||||
Vesting of restricted stock units and related repurchases of common stock | (1,645) | (1,645) | ||||
Vesting of restricted stock units (in shares) | 163 | |||||
Repurchases of common stock | $ (12,035) | (12,035) | ||||
Repurchases of common stock (in shares) | (450) | |||||
Issuance of common stock through employee stock purchase plan | 1,304 | 1,304 | ||||
Issuance of common stock through employee stock purchase plan (in shares) | 62 | |||||
Balance at the end of the period at Sep. 30, 2016 | $ 3 | $ (62,035) | $ 687,576 | $ (49,490) | $ (47,898) | $ 528,156 |
Balance at the end of the period (in shares) at Sep. 30, 2016 | 29,652 | (2,281) |
CONDENSED CONSOLIDATED STATEME8
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities: | ||
Net income | $ 4,221 | $ 3,374 |
Adjustments to reconcile net income to net cash used for operating activities: | ||
Depreciation and amortization | 63,502 | 63,265 |
Stock-based compensation | 10,803 | 8,204 |
Provision for doubtful accounts receivable | 2,936 | 1,315 |
Amortization of debt issuance costs | 1,020 | 1,020 |
Impairment of fixed assets | 398 | 1,282 |
Deferred taxes, net | (14,519) | (9,108) |
Excess tax (benefits) shortfalls from equity awards | 408 | (311) |
Gains on life insurance | (1,583) | |
Other, net | 76 | 44 |
Changes in operating assets and liabilities, net of effects of acquisition-related purchase accounting: | ||
Accounts receivable, net | (1,791) | 2,592 |
Inventories | (2,025) | (2,922) |
Prepaid expenses and other assets | 5,623 | 8,828 |
Accounts payable and accrued liabilities | (72,996) | (59,951) |
Deferred revenue | 1,037 | (2,022) |
Income taxes receivable or payable | 1,982 | (11,462) |
Other liabilities | (2,284) | (6,852) |
Net cash used for operating activities | (3,192) | (2,704) |
Cash flows from investing activities: | ||
Cash paid for acquisitions, net of cash acquired | (9,935) | |
Purchases of property and equipment | (12,018) | (10,700) |
Purchases of intangible assets | (60) | |
Proceeds from life insurance | 1,946 | |
Net cash used for investing activities | (10,072) | (20,695) |
Cash flows from financing activities: | ||
Payments on long-term debt | (15,000) | (35,000) |
Exercise of stock options and purchases from employee stock plans | 1,304 | 485 |
Repurchases of common stock | (13,680) | (22,021) |
Excess tax benefits (shortfalls) from equity awards | (408) | 311 |
Net cash used for financing activities | (27,784) | (56,225) |
Effect of foreign currency exchange rate changes on cash and cash equivalents | (652) | (872) |
Change in cash and cash equivalents | (41,700) | (80,496) |
Cash and cash equivalents, beginning of period | 57,892 | 95,595 |
Cash and cash equivalents, end of period | $ 16,192 | $ 15,099 |
DESCRIPTION OF BUSINESS, BASIS
DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION, ACCOUNTING POLICIES, AND RECENT ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Sep. 30, 2016 | |
DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION, ACCOUNTING POLICIES, AND RECENT ACCOUNTING PRONOUNCEMENTS | |
DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION, ACCOUNTING POLICIES, AND RECENT ACCOUNTING PRONOUNCEMENTS | 1. DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION, ACCOUNTING POLICIES, AND RECENT Description of Business FTD Companies, Inc. (together with its subsidiaries, “FTD” or the “Company”), is a premier floral and gifting company with a vision to be the leading and most trusted floral and gifting company in the world. Our mission is to inspire, support, and delight our customers when expressing life’s most important sentiments. We provide floral, specialty foods, gift and related products and services to consumers, retail florists, and other retail locations and companies in need of floral and gifting solutions. Our business uses the highly recognized FTD ® and Interflora ® brands, both supported by the iconic Mercury Man ® logo. While we operate primarily in the United States (“U.S.”), Canada, the United Kingdom (“U.K.”), and the Republic of Ireland, we have worldwide presence as our Mercury Man logo is displayed in approximately 40,000 floral shops in nearly 150 countries. Our diversified portfolio of brands also includes ProFlowers ® , ProPlants ® , Shari’s Berries ® , Personal Creations ® , RedEnvelope ® , Flying Flowers ® , Flowers Direct ® , Ink Cards TM , Postagram TM , and Gifts.com TM . While floral arrangements and plants are our primary offerings, we also market and sell gift items, including gourmet-dipped berries and other sweets, personalized gifts, gift baskets, wine and champagne, jewelry, and spa products. The principal operating subsidiaries of FTD Companies, Inc. are Florists’ Transworld Delivery, Inc., FTD.COM Inc. (“FTD.COM”), Provide Commerce, Inc. (“Provide Commerce”), and Interflora British Unit (“Interflora”). The operations of the Company include those of its subsidiary, Interflora, Inc., of which one‑third is owned by a third party. The Company’s corporate headquarters is located in Downers Grove, Illinois. The Company also maintains offices in San Diego and San Francisco, California; Woodridge, Illinois; Centerbrook, Connecticut; Sleaford, England; Quebec, Canada; and Hyderabad, India. The Company has distribution centers in various locations throughout the U.S. Basis of Presentation These condensed consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), including those for interim financial information, and with the instructions for Quarterly Reports on Form 10-Q and Article 10 of Regulation S-X issued by the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, such financial statements do not include all of the information and note disclosures required by GAAP for complete financial statements. All significant intercompany accounts and transactions have been eliminated in consolidation. The condensed consolidated financial statements, in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair presentation of financial position and operating results for the periods presented. The results of operations for such periods are not necessarily indicative of the results expected for any future periods. The condensed consolidated balance sheet information at December 31, 2015, was derived from the Company’s audited consolidated financial statements, included in the Company’s Annual Report on Form 10-K (“Form 10-K”) for the year ended December 31, 2015, but does not include all of the disclosures required by GAAP. The condensed consolidated financial statements reflect the historical financial position, results of operations, and cash flows of the Company. The preparation of condensed consolidated financial statements in accordance with GAAP requires management to make accounting policy elections, estimates, and assumptions that affect a number of reported amounts and related disclosures in the condensed consolidated financial statements. Management bases its estimates on historical experience and assumptions that it believes are reasonable. Actual results could differ from those estimates and assumptions. The most significant areas of the condensed consolidated financial statements that require management’s judgment include the Company’s revenue recognition, goodwill, indefinite‑lived intangible assets and other long‑lived assets, allowance for doubtful accounts, income taxes, and legal contingencies. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in the Company’s Form 10‑K for the year ended December 31, 2015. Accounting Policies Refer to the Company’s audited consolidated financial statements included in the Company’s Form 10‑K for the year ended December 31, 2015, for a discussion of the Company’s accounting policies. Recent Accounting Pronouncements Recently Adopted Accounting Standards Accounting Standards Update (“ASU”) 2015-03, Interest—Imputation of Interest , became effective as of January 1, 2016. This update requires that debt issuance costs related to a debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements , also became effective as of January 1, 2016. This update clarifies that an entity may elect to present debt issuance costs related to a line-of-credit arrangement as an asset, regardless of whether or not there are any outstanding borrowings on the line-of-credit arrangement. The Company elected to present all debt issuance costs, including those associated with the Company’s revolving credit facility, consistently as a direct deduction from the carrying amount of the liability. The Company has applied the provisions of ASU 2015-03 retrospectively to all periods presented, as required by the update. This resulted in a reclassification which reduced both other assets and the related outstanding debt by $4.0 million and $5.1 million at September 30, 2016 and December 31, 2015, respectively. In March 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-04, Liabilities—Extinguishment of Liabilities—Recognition of Breakage for Certain Prepaid Stored-Value Products . The amendments in this ASU specify how a company should derecognize amounts related to expected breakage of prepaid store-value products. Breakage should be recognized in proportion to the pattern of rights expected to be exercised by the product holder to the extent that it is probable a significant reversal of the recognized breakage amount will not subsequently occur. The new standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, with early adoption permitted, and is to be applied retrospectively or using a modified retrospective approach. The Company’s accounting for breakage already follows the guidance in this ASU. Therefore, the Company considered this ASU to have been adopted upon issuance. Recently Issued Accounting Standards In May 2014, FASB issued ASU 2014-09, Revenue from Contracts with Customers . The amendments in this ASU affect any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The amendments in this ASU require an entity to recognize revenue related to the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additionally, in March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net) to clarify the implementation guidance on principal versus agent considerations. The guidance includes indicators to assist an entity in determining whether it controls a specified good or service before it is transferred to the customers. Further, in April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing to clarify identifying performance obligations and the licensing implementation guidance. This guidance includes indicators to assist an entity in evaluating whether promised goods and services are distinct along with guidance to determine whether an entity promises to grant a license to a customer with either a right to use the entity’s intellectual property at a point in time or a right to access the entity’s intellectual property over a period of time. In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients , which amends the guidance on transition, collectability, noncash consideration and the presentation of sales and other similar taxes. The guidance also clarifies that, for a contract to be considered completed at transition, all (or substantially all) of the revenue must have been recognized under legacy GAAP. In addition, ASU 2016-12 clarifies how an entity should evaluate the collectability threshold and when an entity can recognize nonrefundable consideration received as revenue if an arrangement does not meet the standard’s contract criteria. The guidance under this topic was deferred by ASU 2015-14, issued by the FASB in August 2015, and is now effective for fiscal years and interim periods beginning on or after December 15, 2017 with early adoption permitted as of the original effective date for periods beginning after December 15, 2016. The Company is currently assessing the impact of these updates on its consolidated financial statements. In July 2015, FASB issued ASU 2015-11, Inventory—Simplifying the Measurement of Inventory , which changes the measurement principle for inventory from the lower of cost or market to the lower of cost and net realizable value. The ASU defines net realizable value as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The update does not apply to inventory that is measured using last-in, first-out or the retail inventory method. The update applies to all other inventory, which includes inventory that is measured using first-in, first-out or average cost methods. The amendments in this ASU will be effective for the Company for fiscal years, and the interim periods within those years, beginning after December 15, 2016. The amendments must be applied prospectively and early adoption is permitted. The Company is currently assessing the impact of this update on its consolidated financial statements. In January 2016, FASB issued ASU 2016-01, Financial Instruments—Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. The updated guidance enhances the reporting model for financial instruments, which includes amendments to address aspects of recognition, measurement, presentation and disclosure. The amendments in this ASU will be effective for the Company for fiscal years and interim periods within those years, beginning after December 15, 2017. The amendments must be applied prospectively and early adoption is permitted for certain measurement enhancements within this amendment. Early adoption is not permitted for other aspects updated in this amendment. The Company is currently assessing the impact of this update on its consolidated financial statements. In February 2016, FASB issued ASU 2016-02, Leases . This update requires the recognition of certain lease assets and lease liabilities on the balance sheet as well as the disclosure of key information about leasing arrangements. The amendments in this ASU require the recognition and measurement of leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients which may be elected by the Company. The amendments in this ASU will be effective for the Company for fiscal years, and interim periods within those years, beginning after December 15, 2018, and early adoption is permitted. The Company is currently assessing the impact of this update on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation . The amendments in this ASU simplify several aspects of the accounting for stock-based compensation, including the income tax consequences, classification of awards as either equity or liabilities, and the classification on the statement of cash flows. The new standard is effective for fiscal years and interim periods beginning after December 15, 2016, with early adoption permitted. These amendments are to be applied on a retrospective, modified retrospective, or prospective basis, depending on the related items. The Company is currently assessing the impact of this update on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses . This update seeks to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments, including trade receivables, and other commitments to extend credit held by a reporting entity at each reporting date. The amendments require an entity to replace the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects current expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The amendments will be applied through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which guidance is effective, which is a modified-retrospective approach. The Company is currently assessing the impact of this update on its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Clarification of Certain Cash Receipts and Cash Payments. This update was issued to address the diversity in practice related to the classification of certain cash receipts and payments in the statement of cash flows by adding or clarifying guidance on eight specific cash flow issues. The amendments in this ASU will be effective for the Company for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The amendments should be applied retrospectively to all periods presented, unless deemed impracticable, in which case, prospective application is permitted. The Company is currently assessing the impact of this update on its consolidated financial statements. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2016 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | 2. SEGMENT INFORMATION The Company reports its business in four reportable segments: Consumer, Provide Commerce, Florist, and International. Below is a reconciliation of segment revenues to consolidated revenues (in thousands): Quarter Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Products revenues: Consumer $ $ $ $ Provide Commerce Florist International Segment products revenues Services revenues: Florist International Segment services revenues Intersegment eliminations Consolidated revenues $ $ $ $ Intersegment revenues represent amounts charged from one segment to the other for services provided based on order volume at a set rate per order. Intersegment revenues by segment were as follows (in thousands): Quarter Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Intersegment revenues: Consumer $ $ $ $ Provide Commerce Florist Total intersegment revenues $ $ $ $ Below is a reconciliation of segment operating income/(loss) to consolidated operating income/(loss) and income/(loss) before income taxes (in thousands): Quarter Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Segment operating income/(loss) (a) Consumer $ $ $ $ Provide Commerce Florist International Total segment operating income Unallocated expenses (b) Depreciation expense and amortization of intangible assets Operating income/(loss) Interest expense, net Other income/(expense), net Income/(loss) before income taxes $ $ $ $ (a) Segment operating income/(loss) is operating income/(loss) excluding depreciation, amortization, litigation and dispute settlement charges or gains, transaction-related costs, restructuring and other exit costs, and impairment of goodwill and intangible assets. Stock‑based compensation and general corporate expenses are not allocated to the segments. Segment operating income/(loss) is prior to intersegment eliminations and excludes other income/(expense), net. (b) Unallocated expenses include various corporate costs, such as executive management, corporate finance, legal, and certain human resources costs. In addition, unallocated expenses include stock‑based compensation for all eligible Company employees, restructuring and other exit costs, transaction-related costs, and litigation and dispute settlement charges or gains. Geographic revenues to external customers were as follows for the periods presented (in thousands): Quarter Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 U.S. $ $ $ $ U.K. Consolidated revenues $ $ $ $ |
BALANCE SHEET COMPONENTS
BALANCE SHEET COMPONENTS | 9 Months Ended |
Sep. 30, 2016 | |
BALANCE SHEET COMPONENTS | |
BALANCE SHEET COMPONENTS | 3. BALANCE SHEET COMPONENTS Financing Receivables The Company has financing receivables related to equipment sales to its floral network members. The current and noncurrent portions of financing receivables are included in accounts receivable and other assets, respectively, in the condensed consolidated balance sheets. The Company assesses financing receivables individually for balances due from current floral network members and collectively for balances due from terminated floral network members. Credit quality of financing receivables was as follows (in thousands): September 30, 2016 December 31, 2015 Current $ $ Past due Total $ $ The aging of past due financing receivables was as follows (in thousands): September 30, 2016 December 31, 2015 Current $ $ Past due: 1 - 150 days past due 151 - 364 days past due 365 - 730 days past due 731 or more days past due Total $ $ Financing receivables on nonaccrual status at September 30, 2016 and December 31, 2015, totaled $0.9 million and $0.8 million, respectively. The allowance for credit losses and the recorded investment in financing receivables were as follows (in thousands): Nine Months Ended September 30, 2016 2015 Allowance for credit losses: Balance at January 1 $ $ Provision Write-offs charged against allowance Balance at September 30 $ $ Ending balance collectively evaluated for impairment $ $ Ending balance individually evaluated for impairment $ $ Recorded investments in financing receivables: Balance collectively evaluated for impairment $ $ Balance individually evaluated for impairment $ $ Individually evaluated impaired loans, including the recorded investment in such loans, the unpaid principal balance, and the allowance related to such loans, each totaled less than $0.1 million at both September 30, 2016 and December 31, 2015. The average recorded investment in such loans was less than $0.1 million in each of the nine months ended September 30, 2016 and 2015. Interest income recognized on impaired loans was less than $0.1 million in each of the nine months ended September 30, 2016 and 2015. Property and Equipment Property and equipment consisted of the following (in thousands): September 30, 2016 December 31, 2015 Land and improvements $ $ Buildings and improvements Leasehold improvements Equipment Computer equipment Computer software Furniture and fixtures Accumulated depreciation Total $ $ Depreciation expense, including the amortization of leasehold improvements, was $5.7 million and $6.0 million for the quarters ended September 30, 2016 and 2015, respectively and $17.6 million and $17.2 million for the nine months ended September 30, 2016 and 2015, respectively. |
TRANSACTIONS WITH RELATED PARTI
TRANSACTIONS WITH RELATED PARTIES | 9 Months Ended |
Sep. 30, 2016 | |
TRANSACTIONS WITH RELATED PARTIES | |
TRANSACTIONS WITH RELATED PARTIES | 4. TRANSACTIONS WITH RELATED PARTIES Transactions with Liberty As of September 30, 2016, Liberty Interactive Corporation (“Liberty”) owned approximately 37% of the issued and outstanding shares of FTD common stock. An Investor Rights Agreement governs certain rights of and restrictions on Liberty in connection with the shares of FTD common stock that Liberty owns. On December 31, 2014, in conjunction with the acquisition of Provide Commerce, Provide Commerce and Liberty entered into a services agreement (the “Services Agreement”), under which Provide Commerce, on a short-term transitional basis, provided Liberty with certain support service and other assistance after the acquisition in respect of the RedEnvelope business, an online e-commerce business that was not acquired by FTD as part of the acquisition. Fees of $0.3 million were earned in 2015 during the term of the Services Agreement. On April 1, 2015, Provide Commerce and Liberty entered into an amendment to the Services Agreement to extend the term of the Services Agreement to June 30, 2015. The Services Agreement terminated on June 30, 2015. The acquisition purchase price was subject to adjustment based upon the final closing working capital, which adjustment was determined to be $9.9 million. In April 2015, FTD made a payment to Liberty in full satisfaction of this adjustment. On April 30, 2015, the Company, through a wholly owned subsidiary, entered into a Purchase and Sale Agreement with an indirect wholly owned subsidiary of Liberty, pursuant to which the Company acquired certain residual assets previously used by Liberty in the RedEnvelope business for a cash purchase price of $0.3 million. The purchase price was allocated to the assets acquired based on their relative fair values, resulting in allocated values of $0.1 million to fixed assets, $0.1 million to inventory, and $0.1 million to the trademark and trade name. The I.S. Group Limited Interflora holds an equity investment of 20.4% in The I.S. Group Limited (“I.S. Group”). The investment was $1.5 million and $1.6 million at September 30, 2016 and December 31, 2015, respectively, and is included in other assets in the condensed consolidated balance sheets. I.S. Group supplies floral-related products to Interflora’s floral network members in both the U.K. and the Republic of Ireland as well as to other customers. Interflora derives revenues from I.S. Group from (i) the sale of products (sourced from third-party suppliers) to I.S. Group for which revenue is recognized on a gross basis, (ii) commissions on products sold by I.S. Group (sourced from third-party suppliers) to floral network members, and (iii) commissions for acting as a collection agent on behalf of I.S. Group. Revenues related to products sold to and commissions earned from I.S. Group were $0.5 million and $0.6 million in the quarters ended September 30, 2016 and 2015, and $1.8 million and $2.0 million for the nine months ended September 30, 2016 and 2015. In addition, Interflora purchases products from I.S. Group for sale to consumers. The cost of revenues related to products purchased from I.S. Group was $0.1 million and less than $0.1 million in the quarters ended September 30, 2016 and 2015, respectively, and $0.4 million and $0.3 million for the nine months ended September 30, 2016 and 2015, respectively. Amounts due from I.S. Group were $0.2 million and $0.3 million at September 30, 2016 and December 31, 2015, respectively, and amounts payable to I.S. Group were $0.9 million and $1.4 million at September 30, 2016 and December 31, 2015, respectively. |
GOODWILL, INTANGIBLE ASSETS, AN
GOODWILL, INTANGIBLE ASSETS, AND OTHER LONG-LIVED ASSETS | 9 Months Ended |
Sep. 30, 2016 | |
GOODWILL, INTANGIBLE ASSETS, AND OTHER LONG-LIVED ASSETS | |
GOODWILL, INTANGIBLE ASSETS, AND OTHER LONG-LIVED ASSETS | 5. GOODWILL, INTANGIBLE ASSETS, AND OTHER LONG‑LIVED ASSETS Goodwill The changes in the net carrying amount of goodwill for the nine months ended September 30, 2016 were as follows (in thousands): Provide Consumer Commerce Florist International Total Goodwill at December 31, 2015 $ $ $ $ $ Foreign currency translation — — — Goodwill at September 30, 2016 $ $ $ $ $ In 2015 and 2008, the Company recorded impairment charges of $85.0 million and $116.3 million, respectively. The table above reflects the Company’s goodwill balances net of the accumulated impairment charges. The gross goodwill balance was $752.5 million at September 30, 2016. Intangible Assets Intangible assets are primarily related to the acquisition of Provide Commerce in December 2014 and the acquisition of the Company by United Online in August 2008 and consist of the following (in thousands): September 30, 2016 December 31, 2015 Gross Accumulated Gross Accumulated Value Amortization Net Value Amortization Net Complete technology $ $ $ $ $ $ Customer contracts and relationships Trademarks and trade names Total $ $ $ $ $ $ Some of the Company’s trademarks and trade names are indefinite‑lived assets for which there is no associated amortization expense or accumulated amortization. At September 30, 2016 and December 31, 2015, such indefinite‑lived assets, after impairment and foreign currency translation adjustments, totaled $149.3 million and $154.2 million, respectively. As of September 30, 2016, estimated future intangible assets amortization expense for each of the next five years and thereafter, was as follows (in thousands): For the Year Ended Future Amortization Expense 2016 (remainder of year) $ 2017 2018 2019 2020 Thereafter Total $ |
FINANCING ARRANGEMENTS
FINANCING ARRANGEMENTS | 9 Months Ended |
Sep. 30, 2016 | |
FINANCING ARRANGEMENTS | |
FINANCING ARRANGEMENTS | 6. FINANCING ARRANGEMENTS Credit Agreement On July 17, 2013, FTD Companies, Inc. entered into a credit agreement (the “2013 Credit Agreement”) with Interflora, certain wholly-owned domestic subsidiaries of FTD Companies, Inc. party thereto as guarantors, the financial institutions party thereto from time to time, Bank of America Merrill Lynch and Wells Fargo Securities, LLC, as joint lead arrangers and book managers, and Bank of America, N.A., as administrative agent, which provided for a $350 million five‑year revolving credit facility. On July 17, 2013, FTD Companies, Inc. drew $220 million of the new $350 million revolving credit facility and used this, together with approximately $19 million of its existing cash balance, to repay amounts outstanding under its previous credit facility in full and to pay fees and expenses related to the 2013 Credit Agreement. On September 19, 2014, the Company entered into an amendment to the 2013 Credit Agreement which amended and restated the 2013 Credit Agreement in its entirety (as amended and restated, the “Amended Credit Agreement”). Among other things, the Amended Credit Agreement provided for a term loan in an aggregate principal amount of $200 million and provided for a revolving loan advance (the “Acquisition Advance”) to finance the cash portion of the Provide Commerce acquisition purchase price. The proceeds of the term loan were used to repay a portion of outstanding revolving loans and, on December 31, 2014, the Company borrowed $120 million under the Acquisition Advance to finance the cash portion of the acquisition purchase price of Provide Commerce. The obligations under the Amended Credit Agreement are guaranteed by certain of FTD Companies, Inc.’s wholly-owned domestic subsidiaries (together with FTD Companies, Inc., the “U.S. Loan Parties”). In addition, the obligations under the Amended Credit Agreement are secured by a lien on substantially all of the assets of the U.S. Loan Parties, including a pledge of all of the outstanding capital stock of certain direct subsidiaries of the U.S. Loan Parties (except with respect to foreign subsidiaries and certain domestic subsidiaries whose assets consist primarily of foreign subsidiary equity interests, in which case such pledge is limited to 66% of the outstanding capital stock). The interest rates applicable to borrowings under the Amended Credit Agreement are based on either LIBOR plus a margin ranging from 1.50% per annum to 2.50% per annum, or a base rate plus a margin ranging from 0.50% per annum to 1.50% per annum, calculated according to the Company’s net leverage ratio. At September 30, 2016, the base rate margin was 0.75% per annum and the LIBOR margin was 1.75% per annum. In addition, the Company pays a commitment fee ranging from 0.20% per annum to 0.40% per annum on the unused portion of the revolving credit facility. The stated interest rates (based on LIBOR) at September 30, 2016, under the term loan and the revolving credit facility were 2.59% and 2.27%, respectively. The effective interest rates at September 30, 2016, under the term loan and the revolving credit facility were 3.39% and 3.06%, respectively. The commitment fee rate at September 30, 2016, was 0.25%. The Amended Credit Agreement contains customary representations and warranties, events of default, affirmative covenants and negative covenants, that, among other things, require the Company to maintain compliance with a maximum net leverage ratio and a minimum consolidated fixed charge coverage ratio, and impose restrictions and limitations on, among other things, investments, dividends, share repurchases, and asset sales, and the Company’s ability to incur additional debt and additional liens. The term loan is subject to amortization payments of $5.0 million per quarter and customary mandatory prepayments under certain conditions. The outstanding balance of the term loan and all amounts outstanding under the revolving credit facility are due upon maturity in September 2019. At September 30, 2016, the future minimum principal payments through the maturity date of the Amended Credit Agreement were as follows for each of the next five years (in thousands): For the Year Ended Future Minimum Principal Payments 2016 (remainder of year) $ 2017 2018 2019 2020 — Total $ At September 30, 2016, the remaining borrowing capacity under the Amended Credit Agreement, which was reduced by $2.9 million in outstanding letters of credit, was $227.1 million. The carrying amounts of the term loan and revolving credit facility are net of debt issuance costs as the Company adopted ASU 2015-03 (see Note 1) during the nine months ended September 30, 2016 and applied the changes retrospectively, as required by the ASU. The changes in the Company’s debt balances for the nine months ended September 30, 2016, were as follows (in thousands): Balance at Balance at December 31, Repayments September 30, 2015 of Debt 2016 Amended Credit Agreement: Revolving Credit Facility $ $ — $ Term Loan Total Principal Outstanding $ Debt Issuance Costs Total Debt, Net of Debt Issuance Costs $ $ |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 9 Months Ended |
Sep. 30, 2016 | |
DERIVATIVE INSTRUMENTS | |
DERIVATIVE INSTRUMENTS | 7. DERIVATIVE INSTRUMENTS In March 2012, the Company purchased, for $1.9 million, forward starting interest rate cap instruments based on 3-month LIBOR, effective January 2015 through June 2018. The forward starting interest rate cap instruments have aggregated notional values totaling $130 million. The interest rate cap instruments are designated as cash flow hedges against expected future cash flows attributable to future 3-month LIBOR interest payments on a portion of the outstanding borrowings under the Company’s Amended Credit Agreement. The gains or losses on the instruments are reported in other comprehensive income/(loss) to the extent that they are effective and are reclassified into earnings when the cash flows attributable to 3-month LIBOR interest payments are recognized in earnings. The estimated fair values and notional values of outstanding derivative instruments at September 30, 2016 and December 31, 2015 were as follows (in thousands): Estimated Fair Value of Notional Value of Derivative Instruments Derivative Instruments Balance Sheet September 30, December 31, September 30, December 31, Location 2016 2015 2016 2015 Derivative Assets: Interest rate caps Other assets $ $ $ $ The Company recognized the following losses from derivatives, before tax, in other comprehensive loss (in thousands): Quarter Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Derivatives Designated as Cash Flow Hedging Instruments: Interest rate caps $ — $ $ $ The effective portion, before tax effect, of the Company’s interest rate caps designated as cash flow hedging instruments was $1.0 million and $1.4 million at September 30, 2016 and December 31, 2015, respectively. At September 30, 2016, $0.6 million of this amount was expected to be reclassified from accumulated other comprehensive loss into interest expense in the condensed consolidated statements of operations within the next twelve months. During each of the quarters ended September 30, 2016 and 2015, $0.1 million was reclassified from accumulated other comprehensive loss into interest expense in the condensed consolidated statements of operations. During each of the nine month periods ended September 30, 2016 and 2015, $0.4 million was reclassified from accumulated other comprehensive loss into interest expense in the condensed consolidated statements of operations. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2016 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 8. FAIR VALUE MEASUREMENTS The following table presents estimated fair values of financial assets and liabilities and derivative instruments that were required to be measured at fair value on a recurring basis (in thousands): September 30, 2016 December 31, 2015 Total Level 1 Level 2 Total Level 1 Level 2 Assets: Money market funds $ $ $ — $ $ $ — Derivative assets — — Total $ $ $ $ $ $ Liabilities: Non-qualified deferred compensation plan $ $ — $ $ $ — $ Total $ $ — $ $ $ — $ Provide Commerce has an executive deferred compensation plan for key management level employees under which such employees could elect to defer receipt of current compensation. This plan is intended to be an unfunded, non-qualified deferred compensation plan that complies with the provisions of section 409A of the Internal Revenue Code. At the time of the acquisition, contributions to the plan were suspended except those relating to any compensation earned but not yet paid as of the same date. The plan assets, which consist primarily of life insurance contracts recorded at their cash surrender value, were $11.6 million and $12.0 million at September 30, 2016 and December 31, 2015 and are included in other assets in the accompanying condensed consolidated balance sheets. The Company estimated the fair value of its long‑term debt using a discounted cash flow approach that incorporates a market interest yield curve with adjustments for duration and risk profile. In determining the market interest yield curve, the Company considered, among other factors, its estimated credit spread. At September 30, 2016, the Company estimated its credit spread as 1.5% and 2.1% for the term loan and revolving credit facility, respectively, resulting in yield-to-maturity estimates for the term loan and revolving credit facility of 2.4% and 3.0%, respectively. At December 31, 2015, the Company estimated its credit spread as 2.1% and 2.7% for the term loan and revolving credit facility, respectively, resulting in yield-to-maturity estimates for the term loan and revolving credit facility of 3.5% and 4.1%, respectively. The table below summarizes the carrying amounts and estimated fair values for long-term debt (in thousands): September 30, 2016 December 31, 2015 Level 2 Level 2 Carrying Estimated Carrying Estimated Amount Fair Value Amount Fair Value Long-term debt outstanding, including current portion $ $ $ $ Fair value approximates the carrying amount of financing receivables because such receivables are discounted at a rate comparable to market. Fair values of cash and cash equivalents, short‑term accounts receivable, accounts payable, and accrued liabilities approximate their carrying amounts because of their short‑term nature. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2016 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | 9. STOCKHOLDERS’ EQUITY Common Stock Repurchases On February 27, 2014, the Company’s board of directors authorized a common stock repurchase program (the “2014 Repurchase Program”) that allowed FTD Companies, Inc. to repurchase up to $50 million of its common stock in both open market and privately negotiated transactions. During the year ended December 31, 2015, the Company repurchased 1.8 million shares under the 2014 Repurchase Program at an average cost per share of $27.31, fully utilizing the $50 million authorization. On March 8, 2016, the Company’s board of directors authorized a common stock repurchase program (the “2016 Repurchase Program”) that allows FTD Companies, Inc. to repurchase up to $60 million of its common stock from time to time over a two‑year period in both open market and privately negotiated transactions. As of September 30, 2016, the company has repurchased 0.45 million shares under the 2016 Repurchase Program at an average cost per share of $26.75. In addition, during October 2016, the Company repurchased an additional 0.15 million shares under the 2016 Repurchase Program at an average cost per share of $21.24. Repurchased shares generally are held in treasury pending use for general corporate purposes, including issuances under various employee and director stock plans. Upon vesting of restricted stock units (“RSUs”) or exercise of stock options, the Company does not collect the minimum statutory withholding taxes in cash from employees. Instead, the Company automatically withholds, from the RSUs that vest or stock options that are exercised, the portion of those shares with a fair market value equal to the amount of the minimum statutory withholding taxes due. The withheld shares are accounted for as repurchases of common stock but are not counted against the limits under the 2016 Repurchase Program. The Company then pays the minimum statutory withholding taxes in cash. During the nine months ended September 30, 2016, 0.2 million RSUs vested for which 0.1 million shares were withheld to cover the minimum statutory withholding taxes of $1.6 million. |
INCENTIVE COMPENSATION PLANS
INCENTIVE COMPENSATION PLANS | 9 Months Ended |
Sep. 30, 2016 | |
INCENTIVE COMPENSATION PLANS | |
INCENTIVE COMPENSATION PLANS | 10. INCENTIVE COMPENSATION PLANS In June 2015, stockholders approved the amendment and restatement of the FTD Companies, Inc. Amended and Restated 2013 Incentive Compensation Plan (as so amended and restated, the “Plan”), which provides for the granting of awards to employees and non-employee directors, including stock options, stock appreciation rights, RSUs, and other stock based awards. Under the Plan, 5.2 million shares of FTD common stock have been reserved for issuance of awards. At September 30, 2016, the Company had 3.0 million shares available for issuance under the Plan. On March 7, 2016, the Company granted RSUs to certain employees totaling 0.3 million shares. The RSUs granted will generally vest in four equal annual installments beginning on February 15, 2017. The fair market value of the underlying stock on the grant date was $24.01. On March 7, 2016, the compensation committee of the FTD board of directors adopted the 2016 Management Bonus Plan (the “Bonus Plan”). The Bonus Plan is an annual incentive program which will pay out in cash, stock, or a combination of both, depending on level and performance of each eligible employee. During the quarter and nine months ended September 30, 2016, the Company recorded $0.1 million and $1.0 million, respectively, of stock-based compensation expense associated with the Bonus Plan which is included in accrued compensation in the condensed consolidated balance sheets. The stock‑based compensation expense incurred for both equity and liability-classified stock-based awards in the quarters ended September 30, 2016 and 2015 has been included in the condensed consolidated statements of operations as follows (in thousands): Quarter Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Cost of revenues $ $ $ $ Sales and marketing General and administrative Total stock-based compensation expense $ $ $ $ |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2016 | |
INCOME TAXES | |
INCOME TAXES | 11. INCOME TAXES During the quarter ended September 30, 2016, the Company recorded a tax benefit of $4.0 million on a pre-tax loss of $14.0 million, compared to a tax benefit of $0.8 million on pre-tax loss of $17.3 million for the quarter ended September 30, 2015. The effective tax rate increased primarily due to an expected increase in full year pre-tax income compared to the prior year. During the nine months ended September 30, 2016, the Company recorded a tax provision of $0.4 million on pre-tax income of $4.7 million, compared to a tax benefit of $0.4 million on pre-tax income of $2.9 million for the nine months ended September 30, 2015. The effective tax rate increased primarily due to an expected increase in full year pre-tax income compared to the prior year. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2016 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | 12. EARNINGS PER SHARE Certain of the Company’s RSUs are considered participating securities because they contain a non‑forfeitable right to dividends irrespective of whether dividends are actually declared or paid or whether the awards ultimately vest. Accordingly, the Company computes earnings per share pursuant to the two‑class method in accordance with ASC 260, Earnings Per Share. The following table sets forth the computation of basic and diluted earnings per common share (in thousands, except per share amounts): Quarter Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Numerator: Net income/(loss) $ $ $ $ Income allocated to participating securities — — Net income/(loss) attributable to common stockholders $ $ $ $ Denominator: Basic average common shares outstanding Add: Dilutive effect of non-participating securities — — Diluted average common shares outstanding Basic earnings/(loss) per common share $ $ $ $ Diluted earnings/(loss) per common share $ $ $ $ The diluted earnings/(loss) per common share computations exclude stock options and RSUs, which are antidilutive. Weighted‑average antidilutive shares for the quarter and nine months ended September 30, 2016 were 2.1 million and 2.3 million, respectively. |
RESTRUCTURING AND OTHER EXIT CO
RESTRUCTURING AND OTHER EXIT COSTS | 9 Months Ended |
Sep. 30, 2016 | |
RESTRUCTURING AND OTHER EXIT COSTS | |
RESTRUCTURING AND OTHER EXIT COSTS | 13. RESTRUCTURING AND OTHER EXIT COSTS Restructuring and other exit costs were as follows (in thousands): Employee Facility Asset Termination Closure Impairments/ Costs Costs Write-offs Total Accrued as of December 31, 2015 $ $ $ — $ Charges Cash paid — Other adjustments Accrued as of September 30, 2016 $ $ $ — $ During the nine months ended September 30, 2016, the Company incurred restructuring and other exit costs of $2.2 million primarily related to lease termination and exit costs. Such costs are associated primarily with the shutdown of certain Provide Commerce locations. The Company currently does not expect significant additional costs related to these actions. |
CONTINGENCIES - LEGAL MATTERS
CONTINGENCIES - LEGAL MATTERS | 9 Months Ended |
Sep. 30, 2016 | |
CONTINGENCIES - LEGAL MATTERS | |
CONTINGENCIES-LEGAL MATTERS | 14. CONTINGENCIES—LEGAL MATTERS Commencing on August 19, 2009, the first of a series of consumer class action lawsuits was brought against Provide Commerce, Inc. and co-defendant Regent Group, Inc. d/b/a Encore Marketing International (“EMI”). These cases were ultimately consolidated during the next three years into Case No. 09 CV 2094 in the United States District Court for the Southern District of California under the title In re EasySaver Rewards Litigation . Plaintiffs’ claims arise from their online enrollment in subscription based membership programs known as EasySaver Rewards, RedEnvelope Rewards, and Preferred Buyers Pass (collectively the “Membership Programs”). Plaintiffs claim that after they ordered items from certain of Provide Commerce’s websites, they were presented with an offer to enroll in one of the Membership Programs, each of which is offered and administered by EMI. Plaintiffs purport to represent a putative nationwide class of consumers allegedly damaged by Provide Commerce’s purported unauthorized or otherwise allegedly improper transferring of the putative class members’ billing information to EMI, who then posted allegedly unauthorized charges to their credit or debit card accounts for membership fees for the Membership Programs. On February 22, 2010, Provide Commerce and EMI respectively filed motions to dismiss. On August 13, 2010, the court entered an order granting in part and denying in part the motions. Between August 13, 2010 and December 2011, plaintiffs filed various amended complaints and added or dismissed certain named plaintiffs. Plaintiffs filed the fourth amended complaint on December 14, 2011. The fourth amended complaint is the operative complaint. Plaintiffs assert ten claims against Provide Commerce and EMI in the fourth amended complaint: (1) breach of contract (against Provide Commerce only); (2) breach of contract (against EMI only); (3) breach of implied covenant of good faith and fair dealing; (4) fraud; (5) violations of the California Consumers Legal Remedies Act; (6) unjust enrichment; (7) violation of the Electronic Funds Transfer Act (against EMI only); (8) invasion of privacy; (9) negligence; and (10) violations of the Unfair Competition Law. Plaintiffs assert their claims individually and on behalf of a putative nationwide class. Plaintiffs sought damages, attorneys’ fees, and costs. Provide Commerce and EMI filed motions to dismiss the claims of plaintiffs Lawler, Walters, Cox, and Dickey on January 24, 2012. The motions to dismiss were fully briefed as of February 23, 2012, but the court had not yet conducted a hearing or ruled on the motions. The parties participated in numerous settlement conferences and mediations throughout the case in an effort to resolve this matter. On April 9, 2012, the parties reached an agreement on the high level terms of a settlement, conditioned on the parties negotiating and executing a complete written agreement. In the weeks following April 9, 2012, the parties negotiated a formal written settlement agreement (“Settlement”). Upon reaching the Settlement, the hearing on the motions to dismiss was vacated, and Provide Commerce and EMI have not answered the fourth amended complaint in light of the Settlement. The court granted the plaintiffs’ unopposed motion for preliminary approval of the Settlement on June 13, 2012. After notice to the class and briefing by the parties, the court conducted a final approval hearing (also known as a fairness hearing) on January 28, 2013, and took the matter under submission at the conclusion of the hearing. On February 4, 2013, the court entered its final order approving class action settlement, granting plaintiffs’ motion for attorneys’ fees, costs, and incentive awards, and overruling objections filed by a single objector to the Settlement. The court entered judgment on the Settlement on February 21, 2013. The objector filed a notice of appeal with the Ninth Circuit Court of Appeals on March 4, 2013. After the completion of briefing, the Ninth Circuit set oral argument on the appeal for February 2, 2015. But on January 29, 2015, the Ninth Circuit entered an order deferring argument and resolution of the appeal pending the Ninth Circuit’s decision in a matter captioned Frank v . Netflix , No. 12 15705+. The Ninth Circuit issued its opinion in Frank v . Netflix , No. 12 15705+ on February 27, 2015, affirming the district court’s approval of a settlement between Walmart and a class of Netflix DVD subscribers. On March 19, 2015, the Ninth Circuit entered an order vacating the judgment in this matter and remanding it to the district court for further proceedings consistent with Frank v. Netflix . The Ninth Circuit’s mandate issued on April 14, 2015, and the matter is now pending before the district court to consider final approval of the Settlement in light of Frank v. Netflix . On April 23, 2015, the district court entered an order reopening the case and ordering the parties to jointly submit a memorandum summarizing the import of the Frank v. Netflix decision and stating their intentions going forward. On May 4, 2015, such memorandum was filed by the parties, and the objector also filed his own memorandum regarding these same topics on such date. After receiving the parties, and objector’s memoranda, the district court ordered supplemental briefing on the issue of final Settlement approval on May 21, 2015. The parties filed their respective opening supplemental briefs on June 18, 2015, the objector filed his opposition supplemental brief on July 2, 2015, and the parties filed their respective reply supplemental briefs on July 16, 2015. The pending final settlement approval motion was heard by the district court on July 27, 2016 and taken under submission. On August 9, 2016, the district court entered an order reapproving the Settlement without any changes, and accordingly entered judgment and dismissed the case with prejudice. The objector filed a notice of appeal on September 6, 2016. The date for oral argument on the appeal has not yet been set. There are no assurances that other legal actions or governmental investigations will not be instituted in connection with the Company’s current or former business practices. The Company cannot predict the outcome of governmental investigations or other legal actions or their potential implications for its business. The Company records a liability when it believes that it is both probable that a loss has been incurred, and the amount of loss can be reasonably estimated. The Company evaluates, at least quarterly, developments in its legal matters that could affect the amount of liability that has been previously accrued, and makes adjustments as appropriate. Significant judgment is required to determine both probability and the estimated amount. The Company may be unable to estimate a possible loss or range of possible loss due to various reasons, including, among others: (i) if the damages sought are indeterminate, (ii) if the proceedings are in early stages, (iii) if there is uncertainty as to the outcome of pending appeals, motions or settlements, (iv) if there are significant factual issues to be determined or resolved, and (v) if there are novel or unsettled legal theories presented. In such instances, there is considerable uncertainty regarding the ultimate resolution of such matters, including a possible eventual loss, if any. At September 30, 2016 and December 31, 2015, the Company had reserves totaling $3.8 million and $2.6 million, respectively, for estimated losses related to certain legal matters. With respect to other legal matters, the Company has determined, based on its current knowledge, that the amount of possible loss or range of loss, including any reasonably possible losses in excess of amounts already accrued, is not reasonably estimable. However, legal matters are inherently unpredictable and subject to significant uncertainties, some of which are beyond the Company’s control. As such, there can be no assurance that the final outcome of these matters will not materially and adversely affect the Company’s business, financial condition, results of operations, or cash flows. |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 9 Months Ended |
Sep. 30, 2016 | |
SUPPLEMENTAL CASH FLOW INFORMATION | |
SUPPLEMENTAL CASH FLOW INFORMATION | 15. SUPPLEMENTAL CASH FLOW INFORMATION The following table sets forth supplemental cash flow disclosures (in thousands): Nine Months Ended September 30, 2016 2015 Cash paid for interest $ $ Cash paid for income taxes, net $ $ |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 9 Months Ended |
Sep. 30, 2016 | |
SUBSEQUENT EVENT | |
SUBSEQUENT EVENT | 16. SUBSEQUENT EVENT On November 3, 2016, Christopher W. Shean, one of the Directors of FTD Companies, Inc., was appointed interim President and Chief Executive Officer of the Company, effective immediately. Mr. Shean succeeds Robert S. Apatoff, who has stepped down from these positions and from the FTD Board of Directors. Mr. Apatoff will continue in a transitional advisory role with the Company through December 31, 2016. Under the terms of Mr. Apatoff’s employment agreement, he is entitled to the severance and other benefits described in such agreement, including estimated cash severance payments totaling approximately $4.6 million as well as full and accelerated vesting of all of his outstanding nonvested restricted stock units and unvested stock options, subject in each case to his compliance with certain covenants in the employment agreement. Mr. Apatoff’s employment agreement has previously been filed with the SEC. |
DESCRIPTION OF BUSINESS, BASI25
DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION, ACCOUNTING POLICIES, AND RECENT ACCOUNTING PRONOUNCEMENTS (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION, ACCOUNTING POLICIES, AND RECENT ACCOUNTING PRONOUNCEMENTS | |
Basis of Presentation | Basis of Presentation These condensed consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), including those for interim financial information, and with the instructions for Quarterly Reports on Form 10-Q and Article 10 of Regulation S-X issued by the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, such financial statements do not include all of the information and note disclosures required by GAAP for complete financial statements. All significant intercompany accounts and transactions have been eliminated in consolidation. The condensed consolidated financial statements, in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair presentation of financial position and operating results for the periods presented. The results of operations for such periods are not necessarily indicative of the results expected for any future periods. The condensed consolidated balance sheet information at December 31, 2015, was derived from the Company’s audited consolidated financial statements, included in the Company’s Annual Report on Form 10-K (“Form 10-K”) for the year ended December 31, 2015, but does not include all of the disclosures required by GAAP. The condensed consolidated financial statements reflect the historical financial position, results of operations, and cash flows of the Company. The preparation of condensed consolidated financial statements in accordance with GAAP requires management to make accounting policy elections, estimates, and assumptions that affect a number of reported amounts and related disclosures in the condensed consolidated financial statements. Management bases its estimates on historical experience and assumptions that it believes are reasonable. Actual results could differ from those estimates and assumptions. The most significant areas of the condensed consolidated financial statements that require management’s judgment include the Company’s revenue recognition, goodwill, indefinite‑lived intangible assets and other long‑lived assets, allowance for doubtful accounts, income taxes, and legal contingencies. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in the Company’s Form 10‑K for the year ended December 31, 2015. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Accounting Standards Accounting Standards Update (“ASU”) 2015-03, Interest—Imputation of Interest , became effective as of January 1, 2016. This update requires that debt issuance costs related to a debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements , also became effective as of January 1, 2016. This update clarifies that an entity may elect to present debt issuance costs related to a line-of-credit arrangement as an asset, regardless of whether or not there are any outstanding borrowings on the line-of-credit arrangement. The Company elected to present all debt issuance costs, including those associated with the Company’s revolving credit facility, consistently as a direct deduction from the carrying amount of the liability. The Company has applied the provisions of ASU 2015-03 retrospectively to all periods presented, as required by the update. This resulted in a reclassification which reduced both other assets and the related outstanding debt by $4.0 million and $5.1 million at September 30, 2016 and December 31, 2015, respectively. In March 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-04, Liabilities—Extinguishment of Liabilities—Recognition of Breakage for Certain Prepaid Stored-Value Products . The amendments in this ASU specify how a company should derecognize amounts related to expected breakage of prepaid store-value products. Breakage should be recognized in proportion to the pattern of rights expected to be exercised by the product holder to the extent that it is probable a significant reversal of the recognized breakage amount will not subsequently occur. The new standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, with early adoption permitted, and is to be applied retrospectively or using a modified retrospective approach. The Company’s accounting for breakage already follows the guidance in this ASU. Therefore, the Company considered this ASU to have been adopted upon issuance. Recently Issued Accounting Standards In May 2014, FASB issued ASU 2014-09, Revenue from Contracts with Customers . The amendments in this ASU affect any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The amendments in this ASU require an entity to recognize revenue related to the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additionally, in March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net) to clarify the implementation guidance on principal versus agent considerations. The guidance includes indicators to assist an entity in determining whether it controls a specified good or service before it is transferred to the customers. Further, in April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing to clarify identifying performance obligations and the licensing implementation guidance. This guidance includes indicators to assist an entity in evaluating whether promised goods and services are distinct along with guidance to determine whether an entity promises to grant a license to a customer with either a right to use the entity’s intellectual property at a point in time or a right to access the entity’s intellectual property over a period of time. In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients , which amends the guidance on transition, collectability, noncash consideration and the presentation of sales and other similar taxes. The guidance also clarifies that, for a contract to be considered completed at transition, all (or substantially all) of the revenue must have been recognized under legacy GAAP. In addition, ASU 2016-12 clarifies how an entity should evaluate the collectability threshold and when an entity can recognize nonrefundable consideration received as revenue if an arrangement does not meet the standard’s contract criteria. The guidance under this topic was deferred by ASU 2015-14, issued by the FASB in August 2015, and is now effective for fiscal years and interim periods beginning on or after December 15, 2017 with early adoption permitted as of the original effective date for periods beginning after December 15, 2016. The Company is currently assessing the impact of these updates on its consolidated financial statements. In July 2015, FASB issued ASU 2015-11, Inventory—Simplifying the Measurement of Inventory , which changes the measurement principle for inventory from the lower of cost or market to the lower of cost and net realizable value. The ASU defines net realizable value as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The update does not apply to inventory that is measured using last-in, first-out or the retail inventory method. The update applies to all other inventory, which includes inventory that is measured using first-in, first-out or average cost methods. The amendments in this ASU will be effective for the Company for fiscal years, and the interim periods within those years, beginning after December 15, 2016. The amendments must be applied prospectively and early adoption is permitted. The Company is currently assessing the impact of this update on its consolidated financial statements. In January 2016, FASB issued ASU 2016-01, Financial Instruments—Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. The updated guidance enhances the reporting model for financial instruments, which includes amendments to address aspects of recognition, measurement, presentation and disclosure. The amendments in this ASU will be effective for the Company for fiscal years and interim periods within those years, beginning after December 15, 2017. The amendments must be applied prospectively and early adoption is permitted for certain measurement enhancements within this amendment. Early adoption is not permitted for other aspects updated in this amendment. The Company is currently assessing the impact of this update on its consolidated financial statements. In February 2016, FASB issued ASU 2016-02, Leases . This update requires the recognition of certain lease assets and lease liabilities on the balance sheet as well as the disclosure of key information about leasing arrangements. The amendments in this ASU require the recognition and measurement of leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients which may be elected by the Company. The amendments in this ASU will be effective for the Company for fiscal years, and interim periods within those years, beginning after December 15, 2018, and early adoption is permitted. The Company is currently assessing the impact of this update on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation . The amendments in this ASU simplify several aspects of the accounting for stock-based compensation, including the income tax consequences, classification of awards as either equity or liabilities, and the classification on the statement of cash flows. The new standard is effective for fiscal years and interim periods beginning after December 15, 2016, with early adoption permitted. These amendments are to be applied on a retrospective, modified retrospective, or prospective basis, depending on the related items. The Company is currently assessing the impact of this update on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses . This update seeks to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments, including trade receivables, and other commitments to extend credit held by a reporting entity at each reporting date. The amendments require an entity to replace the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects current expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The amendments will be applied through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which guidance is effective, which is a modified-retrospective approach. The Company is currently assessing the impact of this update on its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Clarification of Certain Cash Receipts and Cash Payments. This update was issued to address the diversity in practice related to the classification of certain cash receipts and payments in the statement of cash flows by adding or clarifying guidance on eight specific cash flow issues. The amendments in this ASU will be effective for the Company for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The amendments should be applied retrospectively to all periods presented, unless deemed impracticable, in which case, prospective application is permitted. The Company is currently assessing the impact of this update on its consolidated financial statements. |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
SEGMENT INFORMATION | |
Schedule of reconciliation of segment revenues to consolidated revenues | Below is a reconciliation of segment revenues to consolidated revenues (in thousands): Quarter Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Products revenues: Consumer $ $ $ $ Provide Commerce Florist International Segment products revenues Services revenues: Florist International Segment services revenues Intersegment eliminations Consolidated revenues $ $ $ $ |
Schedule of intersegment revenues by segment | Intersegment revenues represent amounts charged from one segment to the other for services provided based on order volume at a set rate per order. Intersegment revenues by segment were as follows (in thousands): Quarter Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Intersegment revenues: Consumer $ $ $ $ Provide Commerce Florist Total intersegment revenues $ $ $ $ |
Schedule of reconciliation of segment operating income/(loss) to consolidated operating income/(loss) and income/(loss) before income taxes | Below is a reconciliation of segment operating income/(loss) to consolidated operating income/(loss) and income/(loss) before income taxes (in thousands): Quarter Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Segment operating income/(loss) (a) Consumer $ $ $ $ Provide Commerce Florist International Total segment operating income Unallocated expenses (b) Depreciation expense and amortization of intangible assets Operating income/(loss) Interest expense, net Other income/(expense), net Income/(loss) before income taxes $ $ $ $ (a) Segment operating income/(loss) is operating income/(loss) excluding depreciation, amortization, litigation and dispute settlement charges or gains, transaction-related costs, restructuring and other exit costs, and impairment of goodwill and intangible assets. Stock‑based compensation and general corporate expenses are not allocated to the segments. Segment operating income/(loss) is prior to intersegment eliminations and excludes other income/(expense), net. (b) Unallocated expenses include various corporate costs, such as executive management, corporate finance, legal, and certain human resources costs. In addition, unallocated expenses include stock‑based compensation for all eligible Company employees, restructuring and other exit costs, transaction-related costs, and litigation and dispute settlement charges or gains. |
Schedule of geographic revenues to external customers | Geographic revenues to external customers were as follows for the periods presented (in thousands): Quarter Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 U.S. $ $ $ $ U.K. Consolidated revenues $ $ $ $ |
BALANCE SHEET COMPONENTS (Table
BALANCE SHEET COMPONENTS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
BALANCE SHEET COMPONENTS | |
Schedule of credit quality of financing receivables | Credit quality of financing receivables was as follows (in thousands): September 30, 2016 December 31, 2015 Current $ $ Past due Total $ $ |
Schedule of aging of past due financing receivables | The aging of past due financing receivables was as follows (in thousands): September 30, 2016 December 31, 2015 Current $ $ Past due: 1 - 150 days past due 151 - 364 days past due 365 - 730 days past due 731 or more days past due Total $ $ |
Schedule of allowance for credit losses and the recorded investment in financing receivables | The allowance for credit losses and the recorded investment in financing receivables were as follows (in thousands): Nine Months Ended September 30, 2016 2015 Allowance for credit losses: Balance at January 1 $ $ Provision Write-offs charged against allowance Balance at September 30 $ $ Ending balance collectively evaluated for impairment $ $ Ending balance individually evaluated for impairment $ $ Recorded investments in financing receivables: Balance collectively evaluated for impairment $ $ Balance individually evaluated for impairment $ $ |
Schedule of property and equipment | Property and equipment consisted of the following (in thousands): September 30, 2016 December 31, 2015 Land and improvements $ $ Buildings and improvements Leasehold improvements Equipment Computer equipment Computer software Furniture and fixtures Accumulated depreciation Total $ $ |
GOODWILL, INTANGIBLE ASSETS, 28
GOODWILL, INTANGIBLE ASSETS, AND OTHER LONG-LIVED ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
GOODWILL, INTANGIBLE ASSETS, AND OTHER LONG-LIVED ASSETS | |
Schedule of changes in the net carrying amount of goodwill | The changes in the net carrying amount of goodwill for the nine months ended September 30, 2016 were as follows (in thousands): Provide Consumer Commerce Florist International Total Goodwill at December 31, 2015 $ $ $ $ $ Foreign currency translation — — — Goodwill at September 30, 2016 $ $ $ $ $ |
Schedule of intangible assets | Intangible assets are primarily related to the acquisition of Provide Commerce in December 2014 and the acquisition of the Company by United Online in August 2008 and consist of the following (in thousands): September 30, 2016 December 31, 2015 Gross Accumulated Gross Accumulated Value Amortization Net Value Amortization Net Complete technology $ $ $ $ $ $ Customer contracts and relationships Trademarks and trade names Total $ $ $ $ $ $ |
Schedule of estimated future intangible assets amortization expense | As of September 30, 2016, estimated future intangible assets amortization expense for each of the next five years and thereafter, was as follows (in thousands): For the Year Ended Future Amortization Expense 2016 (remainder of year) $ 2017 2018 2019 2020 Thereafter Total $ |
FINANCING ARRANGEMENTS (Tables)
FINANCING ARRANGEMENTS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
FINANCING ARRANGEMENTS | |
Schedule of future minimum principal payments | At September 30, 2016, the future minimum principal payments through the maturity date of the Amended Credit Agreement were as follows for each of the next five years (in thousands): For the Year Ended Future Minimum Principal Payments 2016 (remainder of year) $ 2017 2018 2019 2020 — Total $ |
Schedule of changes in debt balances | The changes in the Company’s debt balances for the nine months ended September 30, 2016, were as follows (in thousands): Balance at Balance at December 31, Repayments September 30, 2015 of Debt 2016 Amended Credit Agreement: Revolving Credit Facility $ $ — $ Term Loan Total Principal Outstanding $ Debt Issuance Costs Total Debt, Net of Debt Issuance Costs $ $ |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
DERIVATIVE INSTRUMENTS | |
Schedule of estimated fair values and notional values of outstanding derivative instruments | The estimated fair values and notional values of outstanding derivative instruments at September 30, 2016 and December 31, 2015 were as follows (in thousands): Estimated Fair Value of Notional Value of Derivative Instruments Derivative Instruments Balance Sheet September 30, December 31, September 30, December 31, Location 2016 2015 2016 2015 Derivative Assets: Interest rate caps Other assets $ $ $ $ |
Schedule of losses from derivatives, before tax, recognized in other comprehensive loss | The Company recognized the following losses from derivatives, before tax, in other comprehensive loss (in thousands): Quarter Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Derivatives Designated as Cash Flow Hedging Instruments: Interest rate caps $ — $ $ $ |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
FAIR VALUE MEASUREMENTS | |
Schedule of estimated fair values of financial assets and derivative instruments measured at fair value on a recurring basis | The following table presents estimated fair values of financial assets and liabilities and derivative instruments that were required to be measured at fair value on a recurring basis (in thousands): September 30, 2016 December 31, 2015 Total Level 1 Level 2 Total Level 1 Level 2 Assets: Money market funds $ $ $ — $ $ $ — Derivative assets — — Total $ $ $ $ $ $ Liabilities: Non-qualified deferred compensation plan $ $ — $ $ $ — $ Total $ $ — $ $ $ — $ |
Summary of the carrying amount and estimated fair values for long-term debt | The table below summarizes the carrying amounts and estimated fair values for long-term debt (in thousands): September 30, 2016 December 31, 2015 Level 2 Level 2 Carrying Estimated Carrying Estimated Amount Fair Value Amount Fair Value Long-term debt outstanding, including current portion $ $ $ $ |
INCENTIVE COMPENSATION PLANS (T
INCENTIVE COMPENSATION PLANS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
INCENTIVE COMPENSATION PLANS | |
Summary of the stock-based compensation incurred | The stock‑based compensation expense incurred for both equity and liability-classified stock-based awards in the quarters ended September 30, 2016 and 2015 has been included in the condensed consolidated statements of operations as follows (in thousands): Quarter Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Cost of revenues $ $ $ $ Sales and marketing General and administrative Total stock-based compensation expense $ $ $ $ |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
EARNINGS PER SHARE | |
Schedule of computation of basic and diluted earnings per common share | The following table sets forth the computation of basic and diluted earnings per common share (in thousands, except per share amounts): Quarter Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Numerator: Net income/(loss) $ $ $ $ Income allocated to participating securities — — Net income/(loss) attributable to common stockholders $ $ $ $ Denominator: Basic average common shares outstanding Add: Dilutive effect of non-participating securities — — Diluted average common shares outstanding Basic earnings/(loss) per common share $ $ $ $ Diluted earnings/(loss) per common share $ $ $ $ |
RESTRUCTURING AND OTHER EXIT 34
RESTRUCTURING AND OTHER EXIT COSTS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
RESTRUCTURING AND OTHER EXIT COSTS | |
Schedule of restructuring and other exit costs | Restructuring and other exit costs were as follows (in thousands): Employee Facility Asset Termination Closure Impairments/ Costs Costs Write-offs Total Accrued as of December 31, 2015 $ $ $ — $ Charges Cash paid — Other adjustments Accrued as of September 30, 2016 $ $ $ — $ |
SUPPLEMENTAL CASH FLOW INFORM35
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
SUPPLEMENTAL CASH FLOW INFORMATION | |
Schedule of supplemental cash flow disclosures | The following table sets forth supplemental cash flow disclosures (in thousands): Nine Months Ended September 30, 2016 2015 Cash paid for interest $ $ Cash paid for income taxes, net $ $ |
DESCRIPTION OF BUSINESS, BASI36
DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION, ACCOUNTING POLICIES, AND RECENT ACCOUNTING PRONOUNCEMENTS (Details) | 9 Months Ended |
Sep. 30, 2016item | |
Description of business | |
Number of floral shops | 40,000 |
Number of countries in which floral shops are located | 150 |
Interflora, Inc. | |
Description of business | |
Portion of operation of subsidiary owned by third party (as a percent) | 33.00% |
DESCRIPTION OF BUSINESS, BASI37
DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION, ACCOUNTING POLICIES, AND RECENT ACCOUNTING PRONOUNCEMENTS - Recent Accounting Pronouncements (Details) - Accounting Standards Update 2015-03: Simplifying the Presentation of Debt Issuance Costs - Adjustment - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Recent accounting pronouncements | ||
Reduction of other assets | $ 4 | $ 5.1 |
Reduction of outstanding debt | $ 4 | $ 5.1 |
SEGMENT INFORMATION - Segment R
SEGMENT INFORMATION - Segment Revenues (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016USD ($)segment | Sep. 30, 2015USD ($)segment | Sep. 30, 2016USD ($)segment | Sep. 30, 2015USD ($)segment | |
Segment revenues | ||||
Number of reportable segments | segment | 4 | 4 | 4 | 4 |
Products revenues | $ 142,726 | $ 157,745 | $ 738,986 | $ 820,020 |
Services revenues | 30,428 | 30,774 | 103,341 | 102,081 |
Total revenues | 173,154 | 188,519 | 842,327 | 922,101 |
Operating segments | ||||
Segment revenues | ||||
Products revenues | 146,117 | 161,495 | 752,715 | 833,863 |
Services revenues | 30,499 | 30,834 | 103,575 | 102,303 |
Operating segments | Consumer | ||||
Segment revenues | ||||
Products revenues | 51,298 | 59,573 | 220,887 | 245,295 |
Operating segments | Provide Commerce | ||||
Segment revenues | ||||
Products revenues | 57,112 | 60,465 | 390,751 | 440,249 |
Operating segments | Florist | ||||
Segment revenues | ||||
Products revenues | 10,328 | 10,692 | 38,417 | 39,510 |
Services revenues | 26,277 | 26,061 | 88,538 | 86,412 |
Operating segments | International | ||||
Segment revenues | ||||
Products revenues | 27,379 | 30,765 | 102,660 | 108,809 |
Services revenues | 4,222 | 4,773 | 15,037 | 15,891 |
Intersegment eliminations | ||||
Segment revenues | ||||
Total revenues | (3,462) | (3,810) | (13,963) | (14,065) |
Intersegment eliminations | Consumer | ||||
Segment revenues | ||||
Total revenues | (2,951) | (3,160) | (12,022) | (13,182) |
Intersegment eliminations | Provide Commerce | ||||
Segment revenues | ||||
Total revenues | (440) | (590) | (1,707) | (661) |
Intersegment eliminations | Florist | ||||
Segment revenues | ||||
Total revenues | $ (71) | $ (60) | $ (234) | $ (222) |
SEGMENT INFORMATION - Operating
SEGMENT INFORMATION - Operating income reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Segment operating income/(loss) before income taxes | ||||
Operating income/(loss) | $ (11,698) | $ (15,061) | $ 9,727 | $ 9,372 |
Depreciation expense and amortization of intangible assets | (63,502) | (63,265) | ||
Interest expense, net | (2,294) | (2,328) | (6,863) | (6,995) |
Other income/(expense), net | (9) | 131 | 1,804 | 557 |
Income/(loss) before income taxes | (14,001) | (17,258) | 4,668 | 2,934 |
Operating segments | ||||
Segment operating income/(loss) before income taxes | ||||
Operating income/(loss) | 18,704 | 17,489 | 102,743 | 108,889 |
Operating segments | Consumer | ||||
Segment operating income/(loss) before income taxes | ||||
Operating income/(loss) | 5,059 | 9,641 | 22,457 | 27,995 |
Operating segments | Provide Commerce | ||||
Segment operating income/(loss) before income taxes | ||||
Operating income/(loss) | (1,847) | (5,679) | 27,406 | 29,307 |
Operating segments | Florist | ||||
Segment operating income/(loss) before income taxes | ||||
Operating income/(loss) | 11,362 | 10,067 | 36,722 | 36,327 |
Operating segments | International | ||||
Segment operating income/(loss) before income taxes | ||||
Operating income/(loss) | 4,130 | 3,460 | 16,158 | 15,260 |
Unallocated amounts | ||||
Segment operating income/(loss) before income taxes | ||||
Unallocated expenses | (9,416) | (11,198) | (29,514) | (36,252) |
Reconciling items | ||||
Segment operating income/(loss) before income taxes | ||||
Depreciation expense and amortization of intangible assets | $ (20,986) | $ (21,352) | $ (63,502) | $ (63,265) |
SEGMENT INFORMATION - Geographi
SEGMENT INFORMATION - Geographic revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Segment information | ||||
Revenues | $ 173,154 | $ 188,519 | $ 842,327 | $ 922,101 |
U.S. | ||||
Segment information | ||||
Revenues | 141,553 | 152,981 | 724,630 | 797,401 |
U.K. | ||||
Segment information | ||||
Revenues | $ 31,601 | $ 35,538 | $ 117,697 | $ 124,700 |
BALANCE SHEET COMPONENTS - Fina
BALANCE SHEET COMPONENTS - Financing receivables (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Credit quality of financing receivables | ||
Current | $ 11,594 | $ 11,102 |
Past due | 838 | 746 |
Total | 12,432 | 11,848 |
Aging of past due financing receivables | ||
Current | 11,594 | 11,102 |
Past due: | ||
1-150 days past due | 110 | 152 |
151-364 days past due | 155 | 175 |
365-730 days past due | 236 | 242 |
731 or more days past due | 337 | 177 |
Total | 12,432 | 11,848 |
Financing receivables on nonaccrual status | $ 900 | $ 800 |
BALANCE SHEET COMPONENTS - Fi42
BALANCE SHEET COMPONENTS - Financing receivables - Credit losses and Recorded investment (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Allowance for credit losses: | ||
Balance at the beginning of the period | $ 706 | $ 3,200 |
Provision | 131 | 233 |
Write-offs charged against allowance | (66) | (2,799) |
Balance at the end of the period | 771 | 634 |
Ending balance collectively evaluated for impairment | 767 | 588 |
Ending balance individually evaluated for impairment | 4 | 46 |
Recorded investments in financing receivables: | ||
Balance collectively evaluated for impairment | 861 | 693 |
Balance individually evaluated for impairment | $ 11,571 | $ 11,044 |
BALANCE SHEET COMPONENTS - Impa
BALANCE SHEET COMPONENTS - Impaired receivables (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 |
Individually evaluated impaired loans | |||
Allowance related to individually evaluated impaired loans | $ 4 | $ 46 | |
Maximum | |||
Individually evaluated impaired loans | |||
Recorded investment in individually evaluated impaired loans | 100 | $ 100 | |
Unpaid principal balance related to individually evaluated impaired loans | 100 | 100 | |
Allowance related to individually evaluated impaired loans | $ 100 | $ 100 |
BALANCE SHEET COMPONENTS - Im44
BALANCE SHEET COMPONENTS - Impaired receivables - Average recorded investment and Interest income (Details) - Maximum - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Individually evaluated impaired loans | ||
Average recorded investment in individually evaluated impaired loans | $ 0.1 | $ 0.1 |
Interest income recognized on impaired loans | $ 0.1 | $ 0.1 |
BALANCE SHEET COMPONENTS - Prop
BALANCE SHEET COMPONENTS - Property and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Property and equipment | ||
Property and equipment, gross | $ 137,923 | $ 129,834 |
Accumulated depreciation | (79,845) | (65,081) |
Total | 58,078 | 64,753 |
Land and improvements | ||
Property and equipment | ||
Property and equipment, gross | 1,575 | 1,601 |
Buildings and improvements | ||
Property and equipment | ||
Property and equipment, gross | 16,195 | 16,303 |
Leasehold improvements | ||
Property and equipment | ||
Property and equipment, gross | 16,691 | 16,691 |
Equipment | ||
Property and equipment | ||
Property and equipment, gross | 13,996 | 13,711 |
Computer equipment | ||
Property and equipment | ||
Property and equipment, gross | 27,556 | 27,067 |
Computer software | ||
Property and equipment | ||
Property and equipment, gross | 58,504 | 50,897 |
Furniture and fixtures | ||
Property and equipment | ||
Property and equipment, gross | $ 3,406 | $ 3,564 |
BALANCE SHEET COMPONENTS - Pr46
BALANCE SHEET COMPONENTS - Property and Equipment Depreciation (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
BALANCE SHEET COMPONENTS | ||||
Depreciation expense | $ 5.7 | $ 6 | $ 17.6 | $ 17.2 |
TRANSACTIONS WITH RELATED PAR47
TRANSACTIONS WITH RELATED PARTIES (Details) - USD ($) $ in Millions | Apr. 30, 2015 | Apr. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 |
Liberty | |||||||
Transactions with related parties | |||||||
Ownership percentage | 37.00% | 37.00% | |||||
Interflora | I.S. Group | |||||||
Transactions with related parties | |||||||
Ownership percentage | 20.40% | 20.40% | |||||
Amount of investment in related party | $ 1.5 | $ 1.5 | $ 1.6 | ||||
Provide Commerce | |||||||
Transactions with related parties | |||||||
Post-closing working capital adjustment | $ 9.9 | ||||||
RedEnvelope | |||||||
Transactions with related parties | |||||||
Cash purchase price | $ 0.3 | ||||||
Fixed assets acquired | 0.1 | 0.1 | |||||
Inventory acquired | 0.1 | 0.1 | |||||
Trademark and trade name acquired | $ 0.1 | $ 0.1 | |||||
I.S. Group | Interflora | |||||||
Transactions with related parties | |||||||
Revenues from related party | 0.5 | $ 0.6 | 1.8 | $ 2 | |||
Cost of revenues related to products purchased | $ 0.1 | $ 0.4 | 0.3 | ||||
I.S. Group | Maximum | Interflora | |||||||
Transactions with related parties | |||||||
Cost of revenues related to products purchased | $ 0.1 | ||||||
Liberty | Provide Commerce | Services Agreement | |||||||
Transactions with related parties | |||||||
Revenues from related party | $ 0.3 |
TRANSACTIONS WITH RELATED PAR48
TRANSACTIONS WITH RELATED PARTIES - Receivable and Payable (Details) - I.S. Group - Interflora - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Transactions with related parties | ||
Amounts due from related party | $ 0.2 | $ 0.3 |
Amounts payable to related party | $ 0.9 | $ 1.4 |
GOODWILL, INTANGIBLE ASSETS, 49
GOODWILL, INTANGIBLE ASSETS, AND OTHER LONG-LIVED ASSETS - Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Changes in the net carrying amount of goodwill | |
Balance at the beginning of the period | $ 561,656 |
Foreign currency translation | (10,448) |
Balance at the end of the period | 551,208 |
Consumer | |
Changes in the net carrying amount of goodwill | |
Balance at the beginning of the period | 133,226 |
Balance at the end of the period | 133,226 |
Provide Commerce | |
Changes in the net carrying amount of goodwill | |
Balance at the beginning of the period | 231,501 |
Balance at the end of the period | 231,501 |
Florist | |
Changes in the net carrying amount of goodwill | |
Balance at the beginning of the period | 109,651 |
Balance at the end of the period | 109,651 |
International | |
Changes in the net carrying amount of goodwill | |
Balance at the beginning of the period | 87,278 |
Foreign currency translation | (10,448) |
Balance at the end of the period | $ 76,830 |
GOODWILL, INTANGIBLE ASSETS, 50
GOODWILL, INTANGIBLE ASSETS, AND OTHER LONG-LIVED ASSETS - Gross Goodwill and Impairment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2008 | Sep. 30, 2016 | |
GOODWILL, INTANGIBLE ASSETS, AND OTHER LONG-LIVED ASSETS | |||
Impairment of Goodwill | $ 85 | $ 116.3 | |
Gross goodwill | $ 752.5 |
GOODWILL, INTANGIBLE ASSETS, 51
GOODWILL, INTANGIBLE ASSETS, AND OTHER LONG-LIVED ASSETS - Indefinite-lived intangibles (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Acquired indefinite-lived intangible assets | |||||
Amortization expense | $ 15,240 | $ 15,317 | $ 45,873 | $ 46,054 | |
Trademarks and trade names | |||||
Acquired indefinite-lived intangible assets | |||||
Amortization expense | 0 | ||||
Acquired indefinite-lived intangible assets, net of impairment and foreign currency translation adjustments | $ 149,300 | $ 149,300 | $ 154,200 |
GOODWILL, INTANGIBLE ASSETS, 52
GOODWILL, INTANGIBLE ASSETS, AND OTHER LONG-LIVED ASSETS - Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Intangible assets | ||
Gross Value | $ 539,306 | $ 547,309 |
Accumulated Amortization | (249,579) | (206,750) |
Net | 289,727 | 340,559 |
Complete technology | ||
Intangible assets | ||
Gross Value | 76,752 | 77,494 |
Accumulated Amortization | (53,153) | (48,438) |
Net | 23,599 | 29,056 |
Customer contracts and relationships | ||
Intangible assets | ||
Gross Value | 192,982 | 195,209 |
Accumulated Amortization | (181,594) | (149,636) |
Net | 11,388 | 45,573 |
Trademarks and trade names | ||
Intangible assets | ||
Gross Value | 269,572 | 274,606 |
Accumulated Amortization | (14,832) | (8,676) |
Net | $ 254,740 | $ 265,930 |
GOODWILL, INTANGIBLE ASSETS, 53
GOODWILL, INTANGIBLE ASSETS, AND OTHER LONG-LIVED ASSETS - Intangible Assets Future Amortization (Details) $ in Thousands | Sep. 30, 2016USD ($) |
Estimated future intangible assets amortization expense | |
2016 (remainder of the year) | $ 15,209 |
2,017 | 15,273 |
2,018 | 15,273 |
2,019 | 15,273 |
2,020 | 8,004 |
Thereafter | 71,387 |
Total | $ 140,419 |
FINANCING ARRANGEMENTS (Details
FINANCING ARRANGEMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2014 | Jul. 17, 2013 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 19, 2014 |
Future minimum principal payments, excluding required prepayments based on excess cash flows | |||||||
2016 (remainder of year) | $ 5,000 | ||||||
2,017 | 20,000 | ||||||
2,018 | 20,000 | ||||||
2,019 | 240,000 | ||||||
Total | $ 300,000 | 285,000 | $ 300,000 | ||||
Changes in debt balances, net of discounts | |||||||
Total Principal Outstanding, beginning balance | 300,000 | ||||||
Repayments of Debt | (15,000) | $ (35,000) | |||||
Total Principal Outstanding, ending balance | $ 285,000 | ||||||
Debt Issuance Costs | (4,034) | (5,054) | |||||
Total Debt, Net of Debt Issuance Costs | 280,966 | 294,946 | |||||
2013 Credit Agreement | Revolving credit facility | |||||||
Financing arrangements | |||||||
Maximum borrowing capacity | $ 350,000 | ||||||
Term of debt instrument | 5 years | ||||||
Amount borrowed under the Revolving Credit Facility | $ 220,000 | ||||||
Repayments of previously outstanding credit facilities in full and fees and expenses | $ 19,000 | ||||||
Amended Credit Agreement | |||||||
Changes in debt balances, net of discounts | |||||||
Draw Down of Debt | $ 120,000 | ||||||
Letters of credit outstanding | 2,900 | ||||||
Remaining borrowing capacity | 227,100 | ||||||
Amended Credit Agreement | Maximum | |||||||
Financing arrangements | |||||||
Percentage of outstanding capital stock of foreign subsidiaries that is pledged as collateral for borrowings | 66.00% | ||||||
Amended Credit Agreement | Base rate | |||||||
Financing arrangements | |||||||
Reference rate for variable interest rate | base rate | ||||||
Percentage points added to the reference rate | 0.75% | ||||||
Amended Credit Agreement | Base rate | Minimum | |||||||
Financing arrangements | |||||||
Percentage points added to the reference rate | 0.50% | ||||||
Amended Credit Agreement | Base rate | Maximum | |||||||
Financing arrangements | |||||||
Percentage points added to the reference rate | 1.50% | ||||||
Amended Credit Agreement | LIBOR | |||||||
Financing arrangements | |||||||
Reference rate for variable interest rate | LIBOR | ||||||
Percentage points added to the reference rate | 1.75% | ||||||
Amended Credit Agreement | LIBOR | Minimum | |||||||
Financing arrangements | |||||||
Percentage points added to the reference rate | 1.50% | ||||||
Amended Credit Agreement | LIBOR | Maximum | |||||||
Financing arrangements | |||||||
Percentage points added to the reference rate | 2.50% | ||||||
Amended Credit Agreement | Revolving credit facility | |||||||
Financing arrangements | |||||||
Commitment fee (as a percent) | 0.25% | ||||||
Future minimum principal payments, excluding required prepayments based on excess cash flows | |||||||
Total | $ 120,000 | $ 120,000 | 120,000 | ||||
Changes in debt balances, net of discounts | |||||||
Total Principal Outstanding, beginning balance | 120,000 | ||||||
Total Principal Outstanding, ending balance | $ 120,000 | ||||||
Amended Credit Agreement | Revolving credit facility | Minimum | |||||||
Financing arrangements | |||||||
Commitment fee (as a percent) | 0.20% | ||||||
Amended Credit Agreement | Revolving credit facility | Maximum | |||||||
Financing arrangements | |||||||
Commitment fee (as a percent) | 0.40% | ||||||
Amended Credit Agreement | Revolving credit facility | LIBOR | |||||||
Financing arrangements | |||||||
Reference rate for variable interest rate | LIBOR | ||||||
Interest rate (as a percent) | 2.27% | ||||||
Effective interest rate (as a percent) | 3.06% | ||||||
Term Loan | Amended Credit Agreement | |||||||
Financing arrangements | |||||||
Face amount of debt | $ 200,000 | ||||||
Quarterly Payment | $ 5,000 | ||||||
Future minimum principal payments, excluding required prepayments based on excess cash flows | |||||||
Total | 180,000 | $ 165,000 | $ 180,000 | ||||
Changes in debt balances, net of discounts | |||||||
Total Principal Outstanding, beginning balance | 180,000 | ||||||
Repayments of Debt | (15,000) | ||||||
Total Principal Outstanding, ending balance | $ 165,000 | ||||||
Term Loan | Amended Credit Agreement | LIBOR | |||||||
Financing arrangements | |||||||
Reference rate for variable interest rate | LIBOR | ||||||
Interest rate (as a percent) | 2.59% | ||||||
Effective interest rate (as a percent) | 3.39% |
DERIVATIVE INSTRUMENTS - Fair v
DERIVATIVE INSTRUMENTS - Fair value and notional amounts (Details) - Derivatives designated as hedging instruments - Cash flow hedging instruments - Interest rate caps - USD ($) $ in Thousands | 1 Months Ended | ||
Mar. 31, 2012 | Sep. 30, 2016 | Dec. 31, 2015 | |
Estimated fair values and notional values of outstanding derivative instruments | |||
Purchase of derivative instruments | $ 1,900 | ||
Notional Value of Derivative Instruments, Derivative Assets | $ 130,000 | ||
Other assets. | |||
Estimated fair values and notional values of outstanding derivative instruments | |||
Estimated Fair Value of Derivative Instruments, Derivative Assets | $ 1 | $ 35 | |
Notional Value of Derivative Instruments, Derivative Assets | $ 130,000 | $ 130,000 |
DERIVATIVE INSTRUMENTS - Cash f
DERIVATIVE INSTRUMENTS - Cash flow hedge disclosures (Details) - Derivatives designated as hedging instruments - Cash flow hedging instruments - Interest rate caps - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Effect of derivative instruments | |||||
Gains (losses) from derivatives, before tax, recognized in other comprehensive income (loss) | $ (38) | $ (34) | $ (296) | ||
Effective loss portion, before tax effect, of the derivative instruments | 1,000 | $ 1,400 | |||
Losses expected to be reclassified from accumulated other comprehensive loss to interest expense within next 12 months | (600) | ||||
Reclassifications out of accumulated other comprehensive loss | |||||
Effect of derivative instruments | |||||
Gains (losses) from derivatives, before tax, recognized in other comprehensive income (loss) | $ (100) | $ (100) | $ (400) | $ (400) |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Other assets. | ||
Liabilities: | ||
Deferred compensation plan assets | $ 11,600 | $ 12,000 |
Term Loan | ||
Liabilities: | ||
Credit spread (as a percent) | 1.50% | 2.10% |
Estimated yield-to maturity (as a percent) | 2.40% | 3.50% |
Revolving credit facility | ||
Liabilities: | ||
Credit spread (as a percent) | 2.10% | 2.70% |
Estimated yield-to maturity (as a percent) | 3.00% | 4.10% |
Carrying Amount | ||
Liabilities: | ||
Long-term debt outstanding, including current portion | $ 285,000 | $ 300,000 |
Level 2 | Estimated Fair Value | ||
Liabilities: | ||
Long-term debt outstanding, including current portion | 285,000 | 297,876 |
Recurring basis | ||
Assets: | ||
Money market funds | 1,747 | 7,024 |
Derivative assets | 1 | 35 |
Total | 1,748 | 7,059 |
Liabilities: | ||
Non-qualified deferred compensation plan | 2,437 | 3,950 |
Total | 2,437 | 3,950 |
Recurring basis | Level 1 | ||
Assets: | ||
Money market funds | 1,747 | 7,024 |
Total | 1,747 | 7,024 |
Recurring basis | Level 2 | ||
Assets: | ||
Derivative assets | 1 | 35 |
Total | 1 | 35 |
Liabilities: | ||
Non-qualified deferred compensation plan | 2,437 | 3,950 |
Total | $ 2,437 | $ 3,950 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | Mar. 08, 2016 | Oct. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | Feb. 27, 2014 |
2014 Repurchase Program | |||||
Common Stock Repurchases | |||||
Repurchases of common stock | 1,800 | ||||
Average repurchase cost (in dollars per share) | $ 27.31 | ||||
2016 Repurchase Program | |||||
Common Stock Repurchases | |||||
Period under share repurchase programs | 2 years | ||||
Repurchases of common stock | 150 | 450 | |||
Average repurchase cost (in dollars per share) | $ 21.24 | $ 26.75 | |||
Maximum | 2014 Repurchase Program | |||||
Common Stock Repurchases | |||||
Amount authorized under stock repurchase program | $ 50 | ||||
Maximum | 2016 Repurchase Program | |||||
Common Stock Repurchases | |||||
Amount authorized under stock repurchase program | $ 60 | ||||
RSUs | |||||
Restricted Stock Units Vesting and Tax Withholdings | |||||
Awards vested during the period (in shares) | 200 | ||||
Shares withheld to pay employee tax withholding | 100 | ||||
Value of shares withheld to pay employee tax withholding | $ 1.6 |
INCENTIVE COMPENSATION PLANS -
INCENTIVE COMPENSATION PLANS - Incentive Compensation Plans (Details) - Amended and Restated 2013 Plan - $ / shares shares in Millions | Mar. 07, 2016 | Sep. 30, 2016 |
Incentive Compensation Plan | ||
Shares reserved for issuance | 5.2 | |
Shares available for issuance | 3 | |
RSUs | ||
Incentive Compensation Plan | ||
RSUs granted to certain employees (in shares) | 0.3 | |
Vesting period (four equal annual installments) | 4 years | |
RSUs grant price (in dollars per share) | $ 24.01 |
INCENTIVE COMPENSATION PLANS 60
INCENTIVE COMPENSATION PLANS - Allocation of stock-based compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Stock-Based Compensation | ||||
Total stock-based compensation expense | $ 3,323 | $ 3,864 | $ 10,803 | $ 8,204 |
Bonus Plan | ||||
Stock-Based Compensation | ||||
Total stock-based compensation expense | 100 | 1,000 | ||
Cost of revenues | ||||
Stock-Based Compensation | ||||
Total stock-based compensation expense | 45 | 36 | 111 | 65 |
Sales and marketing | ||||
Stock-Based Compensation | ||||
Total stock-based compensation expense | 870 | 1,014 | 3,251 | 2,151 |
General and administrative | ||||
Stock-Based Compensation | ||||
Total stock-based compensation expense | $ 2,408 | $ 2,814 | $ 7,441 | $ 5,988 |
INCOME TAXES - Provision (Detai
INCOME TAXES - Provision (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income before income taxes | ||||
Provision/(benefit) for income taxes | $ (4,028) | $ (779) | $ 447 | $ (440) |
Income (loss) before income taxes | $ (14,001) | $ (17,258) | $ 4,668 | $ 2,934 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Numerator: | ||||
Net income/(loss) | $ (9,973) | $ (16,479) | $ 4,221 | $ 3,374 |
Income allocated to participating securities | (85) | (52) | ||
Net income/(loss) attributable to common stockholders | $ (9,973) | $ (16,479) | $ 4,136 | $ 3,322 |
Denominator: | ||||
Basic average common shares outstanding | 27,386 | 28,667 | 27,560 | 28,857 |
Add: Dilutive effect of non-participating securities (in shares) | 52 | 52 | ||
Diluted average common shares outstanding | 27,386 | 28,667 | 27,612 | 28,909 |
Basic earnings/(loss) per share (in dollars per share) | $ (0.36) | $ (0.57) | $ 0.15 | $ 0.12 |
Diluted earnings/(loss) per share (in dollars per share) | $ (0.36) | $ (0.57) | $ 0.15 | $ 0.11 |
Weighted-average antidilutive shares | 2,100 | 2,300 |
RESTRUCTURING AND OTHER EXIT 63
RESTRUCTURING AND OTHER EXIT COSTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Changes in restructuring and other exit costs | ||||
Accrued restructuring at the beginning of the period | $ 1,492 | |||
Charges | $ 612 | $ 1,495 | 2,230 | $ 5,907 |
Cash paid | (1,994) | |||
Other adjustments | (608) | |||
Accrued restructuring at the end of the period | 1,120 | 1,120 | ||
Employee Termination Costs | ||||
Changes in restructuring and other exit costs | ||||
Accrued restructuring at the beginning of the period | 40 | |||
Charges | 596 | |||
Cash paid | (302) | |||
Other adjustments | 12 | |||
Accrued restructuring at the end of the period | 346 | 346 | ||
Facility Closure Termination Costs | ||||
Changes in restructuring and other exit costs | ||||
Accrued restructuring at the beginning of the period | 1,452 | |||
Charges | 1,060 | |||
Cash paid | (1,692) | |||
Other adjustments | (46) | |||
Accrued restructuring at the end of the period | $ 774 | 774 | ||
Asset Impairments/Write-offs | ||||
Changes in restructuring and other exit costs | ||||
Charges | 574 | |||
Other adjustments | $ (574) |
CONTINGENCIES - Legal Matters (
CONTINGENCIES - Legal Matters (Details) $ in Millions | Dec. 14, 2011claim | Aug. 19, 2009 | Sep. 30, 2016USD ($) | Dec. 31, 2015USD ($) |
Contingencies-legal matters | ||||
Reserve for estimated losses related to certain of the matters | $ | $ 3.8 | $ 2.6 | ||
Provide Commerce | ||||
Contingencies-legal matters | ||||
Period for consolidation of cases filed since the original August 19, 2009 lawsuit | 3 years | |||
Number of claims | claim | 10 |
SUPPLEMENTAL CASH FLOW INFORM65
SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Supplemental cash flow disclosures: | ||
Cash paid for interest | $ 5,764 | $ 6,088 |
Cash paid for income taxes, net | $ 12,688 | $ 20,696 |
SUBSEQUENT EVENT (Details)
SUBSEQUENT EVENT (Details) $ in Millions | Nov. 03, 2016USD ($) |
Subsequent event | Chief Executive Officer and President | |
Subsequent event | |
Estimated total cash severance payments, to be paid over time, per employee agreement | $ 4.6 |