Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 06, 2019 | Jun. 30, 2018 | |
Document and Entity Information | |||
Entity Registrant Name | FTD Companies, Inc. | ||
Entity Central Index Key | 0001575360 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 80.9 | ||
Entity Common Stock, Shares Outstanding | 28,322,610 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 16,227 | $ 29,496 |
Accounts receivable, net of allowances of $7,067 and $4,957 at December 31, 2018 and December 31, 2017, respectively | 24,920 | 26,028 |
Inventories | 27,450 | 25,356 |
Income taxes receivable | 1,407 | 0 |
Prepaid expenses and other current assets | 12,874 | 14,911 |
Total current assets | 82,878 | 95,791 |
Property and equipment, net | 41,334 | 33,880 |
Intangible assets, net | 91,403 | 181,965 |
Goodwill | 162,316 | 277,041 |
Other assets | 9,049 | 21,648 |
Total assets | 386,980 | 610,325 |
Current liabilities: | ||
Accounts payable | 71,240 | 70,480 |
Accrued liabilities | 60,511 | 76,767 |
Accrued compensation | 18,641 | 14,261 |
Interest payable | 7,332 | 291 |
Deferred revenue | 5,146 | 5,280 |
Income taxes payable | 1,152 | 872 |
Current portion of long-term debt | 208,076 | 189,666 |
Total current liabilities | 372,098 | 357,617 |
Deferred tax liabilities, net | 6,959 | 30,854 |
Other liabilities | 9,323 | 7,330 |
Total liabilities | 388,380 | 395,801 |
Commitments and contingencies (Note 14) | ||
Stockholders' equity: | ||
Preferred stock, 5,000,000 shares, par value $0.0001, authorized; no shares issued and outstanding | 0 | 0 |
Common stock, 60,000,000 shares, par value $0.0001, authorized; 30,755,569 and 30,073,087 shares issued at December 31, 2018 and December 31, 2017, respectively | 3 | 3 |
Treasury stock, 2,430,897 shares at December 31, 2018 and December 31, 2017, respectively | (65,221) | (65,221) |
Additional paid-in capital | 720,092 | 705,388 |
Accumulated deficit | (608,961) | (384,232) |
Accumulated other comprehensive loss | (47,313) | (41,414) |
Total stockholders’ equity | (1,400) | 214,524 |
Total liabilities and stockholders’ equity | $ 386,980 | $ 610,325 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts (in dollars) | $ 7,067 | $ 4,957 |
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 | 30,755,569 | 30,073,087 |
Treasury stock, shares issued | 2,430,897 | 2,430,897 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues: | |||
Revenues | $ 1,014,244 | $ 1,084,028 | $ 1,121,999 |
Operating expenses: | |||
Sales and marketing | 249,028 | 249,565 | 229,569 |
General and administrative | 100,823 | 112,630 | 112,720 |
Amortization of intangible assets | 3,624 | 13,467 | 61,050 |
Restructuring and other exit costs | 18,247 | 2,179 | 11,758 |
Impairment of goodwill, intangible assets, and other long-lived assets | 206,704 | 300,342 | 84,000 |
Total operating expenses | 1,238,875 | 1,352,757 | 1,202,739 |
Operating loss | (224,631) | (268,729) | (80,740) |
Interest income | 468 | 478 | 519 |
Interest expense | (22,020) | (10,275) | (9,714) |
Other income, net | 2,640 | 311 | 1,678 |
Loss before income taxes | (243,543) | (278,215) | (88,257) |
Benefit from income taxes | (18,814) | (44,174) | (5,066) |
Net loss | $ (224,729) | $ (234,041) | $ (83,191) |
Loss per common share: | |||
Basic loss per share (in dollars per share) | $ (8.03) | $ (8.52) | $ (3.03) |
Diluted loss per share (in dollars per share) | $ (8.03) | $ (8.52) | $ (3.03) |
Products | |||
Revenues: | |||
Revenues | $ 891,506 | $ 950,612 | $ 984,957 |
Operating expenses: | |||
Cost of revenues | 643,242 | 657,180 | 685,176 |
Services | |||
Revenues: | |||
Revenues | 122,738 | 133,416 | 137,042 |
Operating expenses: | |||
Cost of revenues | $ 17,207 | $ 17,394 | $ 18,466 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (224,729) | $ (234,041) | $ (83,191) |
Other comprehensive income (loss): | |||
Foreign currency translation | (6,119) | 9,878 | (17,934) |
Cash flow hedges: | |||
Changes in net gains on derivatives, net of tax of $59, $214, and $196 for the years ended December 31, 2018, 2017, and 2016, respectively | 220 | 345 | 327 |
Other comprehensive income (loss) | (5,899) | 10,223 | (17,607) |
Total comprehensive loss | $ (230,628) | $ (223,818) | $ (100,798) |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Changes in net gains on cash flow hedge derivatives, tax | $ 59 | $ 214 | $ 196 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Balance at the beginning of the period at Dec. 31, 2015 | $ 527,531 | $ 3 | $ (50,000) | $ 678,558 | $ (34,030) | $ (67,000) |
Balance at the beginning of the period (in shares) at Dec. 31, 2015 | 29,427 | (1,831) | ||||
Increase (Decrease) in Equity | ||||||
Net loss | (83,191) | (83,191) | ||||
Other comprehensive income (loss) | (17,607) | (17,607) | ||||
Stock-based compensation | 16,985 | 16,985 | ||||
Tax benefits (shortfalls) from equity awards | (705) | (705) | ||||
Vesting of restricted stock units and related repurchases of common stock | (2,302) | (2,302) | ||||
Vesting of restricted stock units (in shares) | 196 | |||||
Repurchases of common stock | $ (15,221) | $ (15,221) | ||||
Repurchases of common stock (in shares) | (600) | (600) | ||||
Issuance of common stock through employee stock purchase plan | $ 2,237 | 2,237 | ||||
Issuance of common stock through employee stock purchase plan (in shares) | 108 | |||||
Balance at the end of the period at Dec. 31, 2016 | 427,727 | $ 3 | $ (65,221) | 694,773 | (51,637) | (150,191) |
Balance at the end of the period (in shares) at Dec. 31, 2016 | 29,731 | (2,431) | ||||
Increase (Decrease) in Equity | ||||||
Net loss | (234,041) | (234,041) | ||||
Other comprehensive income (loss) | 10,223 | 10,223 | ||||
Stock-based compensation | 11,098 | 11,098 | ||||
Vesting of restricted stock units and related repurchases of common stock | (1,998) | (1,998) | ||||
Vesting of restricted stock units (in shares) | 203 | |||||
Issuance of common stock through employee stock purchase plan | 1,515 | 1,515 | ||||
Issuance of common stock through employee stock purchase plan (in shares) | 139 | |||||
Balance at the end of the period at Dec. 31, 2017 | 214,524 | $ 3 | $ (65,221) | 705,388 | (41,414) | (384,232) |
Balance at the end of the period (in shares) at Dec. 31, 2017 | 30,073 | (2,431) | ||||
Increase (Decrease) in Equity | ||||||
Net loss | (224,729) | (224,729) | ||||
Other comprehensive income (loss) | (5,899) | (5,899) | ||||
Stock-based compensation | 14,684 | 14,684 | ||||
Vesting of restricted stock units and related repurchases of common stock | $ (517) | (517) | ||||
Vesting of restricted stock units (in shares) | 480 | |||||
Repurchases of common stock (in shares) | 0 | |||||
Issuance of common stock through employee stock purchase plan | $ 537 | 537 | ||||
Issuance of common stock through employee stock purchase plan (in shares) | 203 | |||||
Balance at the end of the period at Dec. 31, 2018 | $ (1,400) | $ 3 | $ (65,221) | $ 720,092 | $ (47,313) | $ (608,961) |
Balance at the end of the period (in shares) at Dec. 31, 2018 | 30,756 | (2,431) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | |||
Net loss | $ (224,729) | $ (234,041) | $ (83,191) |
Adjustments to reconcile net loss to net cash provided by/(used for) operating activities: | |||
Depreciation and amortization | 14,939 | 33,474 | 85,099 |
Impairment of goodwill, intangible assets, and other long-lived assets | 206,704 | 300,342 | 84,000 |
Stock-based compensation | 14,684 | 11,098 | 16,985 |
Provision for doubtful accounts receivable | 2,510 | 2,092 | 3,423 |
Amortization of deferred financing fees | 4,702 | 1,360 | 1,360 |
Impairment of long-lived assets related to restructuring activities | 0 | 0 | 723 |
Deferred taxes, net | (21,802) | (56,177) | (25,992) |
Gains on life insurance | 0 | 0 | (1,583) |
Gain on sale of business | (2,309) | 0 | 0 |
Other, net | (171) | (26) | 133 |
Changes in operating assets and liabilities: | |||
Accounts receivable, net | (1,485) | (1,041) | (2,371) |
Inventories | (2,146) | (116) | 461 |
Prepaid expenses and other assets | 4,306 | 2,149 | 598 |
Accounts payable and accrued liabilities | (7,834) | (4,947) | (9,286) |
Interest payable | 858 | 90 | 90 |
Deferred revenue | (24) | 226 | (308) |
Income taxes receivable or payable | (1,525) | (1,376) | 6,741 |
Other liabilities | 2,083 | (290) | (638) |
Net cash provided by/(used for) operating activities | (11,239) | 52,817 | 76,244 |
Cash flows from investing activities: | |||
Cash paid for acquisitions, net of cash acquired | 0 | (2,469) | 0 |
Purchases of property and equipment | (33,756) | (15,103) | (18,503) |
Proceeds from life insurance | 10,003 | 0 | 1,946 |
Proceeds from sale of business | 2,186 | 0 | 0 |
Net cash used for investing activities | (21,567) | (17,572) | (16,557) |
Cash flows from financing activities: | |||
Proceeds from revolving lines of credit | 283,000 | 90,000 | 0 |
Payments on term debt and revolving lines of credit | (257,346) | (178,000) | (20,000) |
Payments for debt financing fees | (5,763) | 0 | 0 |
Purchases from employee stock plans | 537 | 1,515 | 2,237 |
Repurchases of common stock withheld for taxes | (517) | (1,998) | (2,302) |
Repurchases of common stock | 0 | 0 | (15,221) |
Net cash provided by/(used for) financing activities | 19,911 | (88,483) | (35,286) |
Effect of foreign currency exchange rate changes on cash and cash equivalents | (374) | 1,732 | (1,291) |
Change in cash and cash equivalents | (13,269) | (51,506) | 23,110 |
Cash and cash equivalents, beginning of period | 29,496 | 81,002 | 57,892 |
Cash and cash equivalents, end of period | $ 16,227 | $ 29,496 | $ 81,002 |
DESCRIPTION OF BUSINESS, BASIS
DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION, ACCOUNTING POLICIES, AND RECENT ACCOUNTING PRONOUNCEMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION, ACCOUNTING POLICIES, AND RECENT ACCOUNTING PRONOUNCEMENTS | DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION, ACCOUNTING POLICIES, AND RECENT ACCOUNTING PRONOUNCEMENTS 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 world’s floral innovator and leader, creating products, brands, and technology-driven services its customers love. The Company provides 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. The business uses the highly recognized FTD ® and Interflora ® brands, both supported by the iconic Mercury Man ® logo. While the Company operates primarily in the United States (“U.S.”), Canada, the United Kingdom (“U.K.”), and the Republic of Ireland, it has worldwide presence as its Mercury Man logo is displayed in over 30,000 floral shops in more than 125 countries. The Company’s diversified portfolio of brands also includes ProFlowers ® , Shari’s Berries ® , Personal Creations ® , Flying Flowers ® , Gifts.com™, and ProPlants ® . While floral arrangements and plants are its primary offerings, the Company also markets and sells gift items, including gourmet-dipped berries and other specialty foods, 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”), Interflora British Unit (“Interflora”), and Provide Commerce, Inc. (“Provide Commerce”). 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 Chicago and Woodridge, Illinois; San Diego, California; Centerbrook, Connecticut; Sleaford, England; and Hyderabad, India; and distribution centers in various locations throughout the U.S. Separation from United Online Prior to November 1, 2013, FTD was a wholly owned subsidiary of United Online, Inc. (“United Online”). On November 1, 2013, United Online separated into two independent, publicly traded companies: FTD Companies, Inc. and United Online, Inc. (the “Separation”). The Separation was consummated through a tax free dividend involving the distribution of all shares of FTD common stock to United Online’s stockholders. Following completion of the Separation, FTD Companies, Inc. became an independent, publicly traded company on the NASDAQ Global Select Market under the symbol “FTD”. Basis of Presentation The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All intercompany accounts and transactions have been eliminated in consolidation. Unless otherwise indicated, all dollar amounts presented are in U.S. dollars. The preparation of 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 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. Going Concern The consolidated financial statements have been prepared assuming the Company will continue as a going concern. The ability to continue as a going concern is dependent on the Company generating profitable operating results, having sufficient liquidity, maintaining compliance with the revised covenants and other requirements under the Amended Credit Agreement (as defined below), and refinancing or repaying the indebtedness outstanding under the Amended Credit Agreement, including in connection with a sale or merger of the Company or other strategic transaction. In the financial statements for the year ended December 31, 2017 as well as every quarter since, management’s assessment has been that there is substantial doubt about the Company’s ability to continue as a going concern. As part of the Company’s efforts to address these issues, as previously announced, the Company’s board of directors initiated a review of strategic alternatives. The strategic alternatives under consideration include, but are not limited to, a sale or merger of the Company, the Company continuing to pursue value-enhancing initiatives as a standalone company, and potential financings or other equity transactions. The Company also announced a corporate restructuring and cost savings plan, under which opportunities to optimize operations, drive efficiency, and reduce costs have been identified. On March 13, 2019, the Company entered into the Seventh Amendment to Credit Agreement (the Credit Agreement, as previously amended and as further amended by the Seventh Amendment, the “Amended Credit Agreement”) with its lenders. The Amended Credit Agreement includes, among other terms, a minimum Consolidated Adjusted EBITDA covenant; further limitations on capital expenditures; a covenant requiring that, on or before June 1, 2019, the Company shall consummate one or more transactions (i) that would permit the Company and its subsidiaries to continue as a going concern, which must provide for the repayment in full of the obligations under the Amended Credit Agreement no later than June 1, 2019, or (ii) from which all or substantially all of the aggregate net cash proceeds are used to repay obligations and permanently reduce the commitments under the Amended Credit Agreement; and updated limits on the Company’s combined usage of the revolving credit facility portion of the Amended Credit Agreement throughout its remaining term. In addition, the consolidated net leverage ratio and fixed charge coverage ratio covenants were deleted for the period ending March 31, 2019 and subsequent periods, as was the requirement that the auditor’s report on the Company’s financial statements for the year ended December 31, 2018 not contain a going concern explanatory paragraph. For additional information regarding the Amended Credit Agreement, see Note 6—“Financing Arrangements.” The Company will need to refinance or repay the outstanding indebtedness no later than its September 2019 maturity. Based on our 2019 year-to-date results of operations and outlook for the remainder of the term of the Amended Credit Agreement, the Company currently anticipates that it will be in compliance with the Consolidated Adjusted EBITDA (as defined in the Amended Credit Agreement) covenants and will have sufficient liquidity to fund its operations into July 2019 but may not have sufficient liquidity to fund its operations beyond then. In addition, there can be no assurances that the Company will be able to complete one or more transactions that will enable it to repay all or a portion of the outstanding indebtedness by June 1, 2019 or at all. If the Company is unable to meet the revised covenants of the Amended Credit Agreement and it is unable to obtain waivers or further amendments from its lenders, the lenders could exercise remedies under the Amended Credit Agreement and repayment of the indebtedness outstanding under the Amended Credit Agreement could be accelerated. The Company may not have sufficient capital to repay the obligations due under the Amended Credit Agreement upon maturity, or earlier if called for repayment by the lenders following a failure to meet the revised covenants under the Amended Credit Agreement. As noted above, the Company will need to refinance or repay the indebtedness outstanding under the Amended Credit Agreement no later than its September 2019 maturity, or earlier if called for repayment by the lenders following a failure to meet the revised covenants under the Amended Credit Agreement. There can be no assurance that the Company will be able to affect a refinancing on acceptable terms or repay the indebtedness outstanding, when required or if at all, including as a result of the strategic alternatives review noted above. In this regard, there can be no assurance that the strategic alternatives review will result in any particular strategic alternative or strategic transaction. If the Company is not successful in its initiatives or does not have sufficient liquidity to fund its business activities, the Company may be forced to limit its business activities or be unable to continue as a going concern, which would have a material adverse effect on its results of operations and financial condition. The uncertainties identified above raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of the Company’s efforts to address these uncertainties. Accounting Policies Cash and Cash Equivalents The Company considers cash equivalents to be only those investments which are highly liquid, readily convertible to cash and which have a maturity date within three months from the date of purchase. At December 31, 2018 and 2017 , the Company’s cash and cash equivalents were maintained primarily with major U.S. and U.K. financial institutions and brokerage firms. Deposits with these institutions are generally in excess of the amount insured by the respective government on such deposits. Accounts Receivable, including Financing Receivables The Company’s accounts receivable are derived primarily from revenues earned from floral network members located in the U.S. and the U.K. The Company extends credit based upon an evaluation of the customer’s financial condition and, generally, collateral is not required. The Company maintains an allowance for doubtful accounts receivable based upon the expected collectability of accounts receivable and, to date, such losses have been within management’s expectations. The Company evaluates specific accounts receivable where information exists that the customer may have an inability to meet its financial obligations. In these cases, based on reasonably available facts and circumstances, a specific allowance is recorded for that customer against amounts due to reduce the receivable to the amount the Company believes is probable of collection. These specific allowances are re-evaluated and adjusted as additional information is received that impacts the amount of the allowance. Also, an allowance is established for all customers based on the aging of the receivables. If circumstances change (i.e., higher or lower than expected delinquencies or an unexpected material adverse change in a customer’s ability to meet its financial obligations), the estimates of the recoverability of amounts due to the Company are adjusted. The Company aggressively pursues collection of past due receivables through a number of avenues prior to writing off receivables. Past due receivables are those that remain outstanding beyond the payment due date. The Company has financing receivables related to equipment sales to floral network members. The Company records all financing receivables at fair value and amortizes such receivables to stated value. The current and noncurrent portions of financing receivables are included in accounts receivable and other assets, respectively, in the consolidated balance sheets. The Company recognizes interest income as earned. The Company assesses credit quality indicators based on whether financing receivables are current or past due. Financing receivables are placed on nonaccrual status, with interest no longer accruing, when a floral network member ceases to be a member, either due to the member terminating its membership or due to the Company terminating such member’s membership, generally as a result of delinquent payments or violations of FTD’s network standards. The Company would not expect to resume the accrual of interest income unless a member who had terminated its membership chooses to be reinstated as a member at a later date and agrees to a plan to pay its balance, if any, that remains outstanding. The Company assesses financing receivables individually for balances due from current floral network members and collectively for balances due from terminated floral network members. A financing receivable is considered to be impaired when the Company determines that it is probable that it will not be able to collect amounts due under the contractual terms. The Company does not record interest income for impaired receivables. If cash is received, the receivable balance is reduced and related credit allowance adjusted accordingly. Fair value approximates the carrying amount of financing receivables because such receivables are discounted at a rate comparable to market rates for similar receivables. Inventory The Company’s inventories, which consist primarily of products held for sale, are stated at the lower of cost and net realizable value. Inventory is valued using the first-in, first-out or weighted-average cost method. The Company regularly assesses the valuation of inventory and reviews inventory quantities on hand and, if necessary, writes down excess and obsolete inventory based primarily on the age of the inventory and forecasts of product demand, as well as markdowns for the excess of cost over the amount the Company expects to realize from the sale of certain inventory. At December 31, 2018 and 2017, inventory reserves were approximately 8% and 7% of the inventory balance, respectively. Property and Equipment Property and equipment are stated at historical cost or fair value at the acquisition date less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which is generally three years for computer software and computer equipment, five years for furniture and fixtures, ten years for equipment, and forty years for buildings. Building improvements are depreciated using the straight-line method over the shorter of the remaining building life or the life of the building improvement. Leasehold improvements, which are included in furniture and fixtures, are amortized using the straight-line method over the shorter of the lease term or ten years. Upon the sale or retirement of property or equipment, the cost and related accumulated depreciation or amortization is removed from the Company’s consolidated financial statements with the resulting gain or loss reflected in the Company’s consolidated statements of operations. Repairs and maintenance costs are expensed as incurred. See also “Goodwill, Intangible Assets, and Other Long-Lived Assets” below for the Company’s accounting policy related to the identification of and accounting for impairments of property and equipment. Derivative Instruments The Company applies the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 815, Derivatives and Hedging . Through June 2018, the Company maintained interest rate cap instruments to reduce its interest rate risk associated with future cash interest payments on a portion of its outstanding borrowings under the Credit Agreement (as defined below). In addition, at times the Company enters into forward foreign currency exchange contracts to reduce the risk that its net investments in foreign subsidiaries, cash flows and earnings will be adversely affected by foreign currency exchange rate fluctuations. The Company records derivative instruments at fair value in other current assets, other assets or accrued liabilities in the consolidated balance sheets. The Company records changes in the fair value (i.e., gains or losses) of derivative instruments as interest expense or other expense, net, in the consolidated statements of operations or in accumulated other comprehensive loss in the consolidated balance sheets. Neither the interest rate caps nor the forward foreign currency exchange contracts contained any credit risk related contingent features. The Company’s hedging program is not designed for trading or speculative purposes. There were no outstanding hedges or interest rate cap instruments at December 31, 2018. Cash Flow Hedges—The Company’s interest rate cap instruments were designated as cash flow hedges against expected future cash flows attributable to future interest payments on a portion of its outstanding borrowings under the Credit Agreement. The Company initially reported the gains or losses related to the effective portion of the hedges as a component of accumulated other comprehensive loss in the consolidated balance sheets and subsequently reclassifies the interest rate caps’ gains or losses to interest expense when the hedged expenses are recorded. The Company included the change in the time value of the interest rate caps in its assessment of their hedge effectiveness. The Company presented the cash flows from cash flow hedges in the same category in the consolidated statements of cash flows as the category for the cash flows from the hedged items. For additional information related to derivative instruments, see Note 7—“Derivative Instruments.” Fair Value Measurements ASC 820, Fair Value Measurements and Disclosures , establishes a three-tiered hierarchy that draws a distinction between market participant assumptions based on (i) quoted prices (unadjusted) in active markets for identical assets and liabilities (Level 1); (ii) inputs other than quoted prices in active markets that are observable either directly or indirectly (Level 2); and (iii) unobservable inputs that require the Company to use present value and other valuation techniques in the determination of fair value (Level 3). The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when developing fair value measurements. When available, the Company uses quoted market prices to measure fair value. If market prices are not available, fair value measurement is based upon models that use primarily market-based or independently-sourced market parameters. If market observable inputs for model-based valuation techniques are not available, the Company is required to make judgments about assumptions market participants would use in estimating the fair value of the financial instrument. Fair values of cash and cash equivalents, short-term accounts receivable, accounts payable, accrued liabilities, and short-term borrowings approximate their carrying amounts because of their short-term nature. Derivative instruments are recognized in the consolidated balance sheets at their fair values. The fair values for the interest rate caps are calculated using an option pricing model based on available forward yield curves for caplets with the same characteristics adjusted for the counterparty risk of nonperformance based on the credit spread derived from the applicable five -year default swap rates. The fair values of the forward foreign currency exchange contracts are calculated based on quoted market prices of similar instruments adjusted for counterparty risk of nonperformance. The key assumptions used in calculating the fair value of these derivative instruments are the forward rates, discount rate and implied volatility. Long-term debt is carried at amortized cost. However, the Company is required to estimate the fair value of long-term debt under ASC 825, Financial Instruments , based on the discounted cash flow method. The Company estimates the fair value of its long-term debt using Level 2 inputs based on quoted prices of comparable risk bonds using market prices and expected future interest rates based on quoted market rates from the U.S. dollar-denominated interest rate swap curve. Goodwill, Intangible Assets, and Other Long-Lived Assets Goodwill is tested for impairment at the reporting unit level. A reporting unit is a business or a group of businesses for which discrete financial information is available and is regularly reviewed by management. An operating segment is made up of one or more reporting units. The Company reports its business operations in three operating and reportable segments: U.S. Consumer, Florist, and International. Each of the Florist and International segments is a reporting unit. The U.S. Consumer segment is comprised of three reporting units: FTD.com, ProFlowers/Gourmet Foods, and Personal Creations. The ProFlowers and Gourmet Foods businesses have similar margins and share operations and business team structure, among other similarities. Therefore, these businesses meet the aggregation criteria, and, as such, the Company has aggregated these two businesses into one reporting unit. Goodwill represents the excess of the purchase price of an acquired entity over the fair value of the net tangible and intangible assets acquired and liabilities assumed. Indefinite-lived intangible assets acquired in a business combination are initially recorded at management’s estimate of their fair value. The Company accounts for goodwill and indefinite-lived intangible assets in accordance with ASC 350, Intangibles, Goodwill and Other . Goodwill and indefinite-lived intangible assets are not subject to amortization. The Company tests goodwill and indefinite-lived intangible assets for impairment annually during the fourth quarter of each year at the reporting unit level and on an interim basis if events or substantive changes in circumstances indicate that the carrying amount of a reporting unit or an indefinite-lived asset may exceed its fair value (i.e. that a triggering event has occurred). Additionally, the Company evaluates finite-lived intangible assets and other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset groupings may not be recoverable. Testing goodwill, intangible assets, and other long-lived assets for impairment involves comparing the fair value of the reporting unit or intangible asset to its carrying value. If the carrying amount of a reporting unit, intangible asset, or other long-lived asset exceeds its fair value, an impairment loss is recognized in an amount equal to the excess, up to the carrying value of the goodwill, intangible asset, or other long-lived asset. In calculating the fair value of the reporting units, the Company used a combination of the income approach, the market approach, and the cost approach valuation methodologies. The income approach was used primarily, as the Company believes that a discounted cash flow approach is the most reliable indicator of the fair values of the businesses. Under the market approach, the Company used the guideline company method, which focuses on comparing our risk profile and growth prospects to select reasonably similar companies based on business description, revenue size, markets served and profitability. The cost approach was used as this approach is a generally accepted valuation method when the valuation is either negative or the value of the net assets/liabilities exceeds the expected present value of the economic returns. Under the cost approach, the Company used the net asset value method, which is based on the premise that a prudent investor would pay no more for an asset than its replacement or reproduction cost. The key assumptions used in the income approach discounted cash flow valuation model included discount rates, growth rates, cash flow projections, and terminal growth rates. The cash flow projections reflect management’s forecasts, taking into account both the historical performance of each reporting unit and the expected contributions from anticipated savings related to the Company’s corporate reorganization and cost savings plan as well as the benefits of the strategic initiatives identified in the strategic planning conducted in 2017. The discount rates utilized were indicative of the return an investor would expect to receive for investing in a similar business. Considering industry and company specific historical data and internal forecasts and projections, management developed growth rates and cash flow projections for each reporting unit. In determining the terminal growth rates, the Company considered GDP growth, consumer price inflation, and the long term growth prospects of each reporting unit. The discount rate, growth rates, royalty rates, cash flow projections, and terminal growth rates are also significant estimates used in the determination of the fair value of the indefinite-lived intangible assets. The indefinite-lived intangible assets were valued using the relief from royalty method, which assumes that, in lieu of ownership, a company would be willing to pay a royalty to exploit the benefits of the asset. The Company accounts for finite-lived intangible assets and other long-lived assets in accordance with ASC 360, Property, Plant and Equipment . Intangible assets acquired in a business combination are initially recorded at management’s estimate of their fair values. The Company evaluates the recoverability of identifiable intangible assets and other long-lived assets, other than indefinite-lived intangible assets, for impairment when events occur or circumstances change that would indicate that the carrying amount of an asset may not be recoverable. Events or circumstances that may indicate that an asset is impaired include, but are not limited to, significant decreases in the market value of an asset, significant underperformance relative to expected historical or projected future operating results, a change in the extent or manner in which an asset is used, shifts in technology, significant negative industry or economic trends, changes in the Company’s operating model or strategy, and competitive forces. In determining if an impairment exists, the Company estimates the undiscounted cash flows to be generated from the use and ultimate disposition of these assets. If an impairment is indicated based on a comparison of the assets’ carrying amounts and the undiscounted cash flows, the impairment loss is measured as the amount by which the carrying amounts of the assets exceed the respective fair values of the assets. Finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives, ranging from five to fifteen years. The Company’s identifiable intangible assets were acquired primarily in connection with business combinations. Revenue Recognition The Company adopted FASB’s ASC 606, Revenue from Contracts with Customers , effective January 1, 2018, using the modified retrospective method. This method requires that the cumulative effect of the initial application is recognized as an adjustment to the opening balance of the Company’s retained earnings at January 1, 2018. However, the adoption did not have a material impact on the Company’s revenue recognition. As such, the Company did not record an adjustment to its beginning balance of retained earnings at January 1, 2018. The Company recognizes revenue from short-term contracts for the sale of various products and services to its customers, which include consumers, floral network members, and wholesale customers. Sales to consumers are generated via the Company’s websites, mobile sites and applications, or over the telephone with payment made either at the time the order is placed or upon shipment. Product revenues from these short-term contracts are single performance obligations and are considered complete upon delivery to the recipient. Amounts collected from customers upon placement of an order are recorded as deferred revenue and recognized upon delivery of the product. Products revenues, less discounts and refunds, and the related cost of revenues are recognized when control of the goods is transferred to the recipient, which is generally upon delivery. Product sales are not refundable other than as related to customer service issues. Shipping and service fees charged to customers are recognized at the time the related products revenues are recognized and are included in products revenues. Shipping and delivery costs are included in cost of revenues. Sales taxes are collected from customers and remitted to the appropriate taxing authorities and are not reflected in the Company’s consolidated statements of operations as revenues. The Company generally recognizes revenues for sales to consumers on a gross basis because the Company controls the goods before they are transferred to the recipient as the Company (i) bears primary responsibility for fulfilling the promise to the customer; (ii) bears inventory risk before and/or after the good or service is transferred to the customer; and (iii) has discretion in establishing the price for the sale of the good or service to the customer. Services revenues related to orders sent through the floral network are variable based on either the number of orders or the value of orders and are recognized in the period in which the orders are delivered. Membership and other subscription-based fees are recognized monthly as earned, on a month-to-month basis. Each service offered by the Company is separate and distinct from other services and represents an individual performance obligation. The Company also sells point-of-sale systems and related technology services to its floral network members and recognizes revenue in accordance with ASC 606. For hardware sales that include software, revenues are recognized when delivery, installation and customer acceptance have all occurred. The transaction price for point-of-sale systems is based on the equipment and the software modules ordered by the customer and include installation and training for the system. The sale of the system is considered a single performance obligation since the installation and training are a significant part of the sale in order for the floral network member to send and receive floral orders through the point-of-sale systems. The Company recognizes revenues on hardware which is sold without software at the time of delivery. Probability of collection for both products and services revenue is assessed based on a number of factors, including past transaction history with the customer and the creditworthiness of the customer. If it is determined that collectability is not reasonably assured, revenues are not recognized until collectability becomes reasonably assured. The Company incurs contract costs that are incremental costs incurred for obtaining a contract. These contract costs are short-term (less than a year) and are expensed as incurred based on the practical expedient provided in ASC 606. As such, the Company does not capitalize costs incurred for obtaining a contract. Cost of Revenues Cost of revenues primarily include product costs; shipping and delivery costs; costs associated with taking orders; printing and postage costs; systems installation, training and support costs; telecommunications and data center costs; depreciation of network computers and equipment; license fees; costs related to customer billing and billing support for the Company’s floral network members; fees associated with the storage and processing of customer credit cards and associated bank fees; and personnel and overhead-related costs associated with operating the Company’s networks. Sales and Marketing Sales and marketing expenses include expenses associated with promoting the Company’s brands, products and services. Such expenses include advertising and promotion expenses; fees paid to online and other corporate partners and to floral network members related to order volume sent through the Company’s floral network; and personnel and overhead-related expenses for marketing, merchandising, customer service and sales personnel. In addition, sales and marketing expenditures also include branding and customer acquisition campaigns consisting of television, internet, radio, public relations, sponsorships, print and outdoor advertising, and retail and other performance-based distribution relationships. Marketing and advertising costs to promote the Company’s brands, products, and services are expensed in the period incurred. Advertising expenses include media, agency, and promotion expenses. Media production costs are expensed the first time the advertisement is run. Media and agency costs are expensed over the period the advertising runs. Advertising and promotion expenses for the years ended December 31, 2018 , 2017 , and 2016 , were $192.1 million , $192.6 million , and $173.7 million , respectively. At December 31, 2018 and 2017 , $2.1 million and $2.0 million , respect |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION The Company reports its business in three reportable segments: U.S. Consumer, Florist, and International. Prior to January 1, 2018, the Company reported its business in four reportable segments. As a result of a change in the information provided to and utilized by the Company’s then-current Chief Executive Officer (who was also the Company’s Chief Operating Decision Maker (“CODM”)) to assess the performance of the business, the Company combined the previous Provide Commerce and Consumer segments into one reportable segment, U.S. Consumer. The current CODM continues to receive and utilize information provided for these three segments to assess the performance of the business. The Company follows the reporting requirements of ASC 280, Segment Reporting . Management measures and reviews the Company’s operating results by segment in accordance with the “management approach” defined in ASC 280. The reportable segments identified below were the segments of the Company for which separate financial information was available and for which segment results were regularly reviewed by the Company’s CODM to make decisions about the allocation of resources and to assess performance. The CODM uses segment operating income to evaluate the performance of the business segments and make decisions about allocating resources among segments. Segment operating income/(loss) is operating income/(loss) excluding depreciation and amortization; impairment of goodwill, intangible assets and other long-lived assets; litigation and dispute settlement charges or gains; transaction and integration costs; restructuring and other exit costs; and corporate reorganization costs. In addition, stock-based and incentive 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. Below is a reconciliation of segment revenues to consolidated revenues (in thousands): Year Ended December 31, 2018 2017 2016 Products revenues: U.S. Consumer $ 727,866 $ 789,011 $ 821,008 Florist 44,579 49,402 48,952 International 133,806 128,501 133,249 Segment products revenues 906,251 966,914 1,003,209 Services revenues: Florist 105,729 116,335 117,929 International 17,339 17,465 19,451 Segment services revenues 123,068 133,800 137,380 Intersegment eliminations (15,075 ) (16,686 ) (18,590 ) Consolidated revenues $ 1,014,244 $ 1,084,028 $ 1,121,999 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): Year Ended December 31, 2018 2017 2016 Intersegment revenues: U.S. Consumer $ (14,745 ) $ (16,302 ) $ (18,252 ) Florist (330 ) (384 ) (338 ) Total intersegment revenues $ (15,075 ) $ (16,686 ) $ (18,590 ) The U.S. Consumer segment is comprised of the FTD.com, ProFlowers, Gourmet Foods, and Personal Creations business units. The revenues for the business units were as follows: Year Ended December 31, 2018 2017 2016 U.S. Consumer revenues: FTD.com $ 227,199 $ 258,085 $ 291,275 ProFlowers 240,819 271,015 284,360 Gourmet Foods 133,583 144,048 135,796 Personal Creations 126,265 115,863 109,577 Total U.S. Consumer revenues $ 727,866 $ 789,011 $ 821,008 Geographic revenues from sales to external customers were as follows for the periods presented (in thousands): Year Ended December 31, 2018 2017 2016 U.S. $ 863,099 $ 938,062 $ 969,299 U.K. 151,145 145,966 152,700 Consolidated revenues $ 1,014,244 $ 1,084,028 $ 1,121,999 Below is a reconciliation of segment operating income to consolidated operating loss and loss before income taxes (in thousands): Year Ended December 31, 2018 2017 2016 Segment Operating income/(loss) (a) U.S. Consumer $ (4,556 ) $ 46,439 $ 70,724 Florist 42,673 46,477 48,406 International 12,994 16,770 19,128 Total segment operating income 51,111 109,686 138,258 Unallocated expenses (b) (54,099 ) (44,599 ) (49,899 ) Impairment of goodwill, intangible assets, and other long-lived assets (206,704 ) (300,342 ) (84,000 ) Depreciation expense and amortization of intangible assets (14,939 ) (33,474 ) (85,099 ) Operating loss (224,631 ) (268,729 ) (80,740 ) Interest expense, net (21,552 ) (9,797 ) (9,195 ) Other income, net 2,640 311 1,678 Loss before income taxes $ (243,543 ) $ (278,215 ) $ (88,257 ) (a) Segment operating income/(loss) is operating income/(loss) excluding depreciation and amortization; impairment of goodwill, intangible assets, and other long-lived assets; litigation and dispute settlement charges or gains; transaction and integration costs; restructuring and other exit costs, and corporate reorganization costs. In addition, stock-based and incentive 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, and legal costs. In addition, unallocated expenses include stock-based and incentive compensation, restructuring and other exit costs, corporate reorganization costs, transaction and integration costs, and litigation and dispute settlement charges or gains. Assets and liabilities are reviewed at the consolidated level by management. Segment assets are not reported to, or used by, the Company’s CODM to allocate resources to or assess performance of the segments, and therefore, total segment assets have not been disclosed. Geographic information for long-lived assets, consisting of amortizable intangible assets, property and equipment, and other non-current assets, was as follows (in thousands): December 31, 2018 2017 U.S $ 58,072 $ 118,581 U.K. 5,368 6,393 Total long-lived assets $ 63,440 $ 124,974 |
FINANCING RECEIVABLES
FINANCING RECEIVABLES | 12 Months Ended |
Dec. 31, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |
FINANCING RECEIVABLES | 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 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. The credit quality and the aging of past due financing receivables was as follows (in thousands): December 31, 2018 2017 Current $ 8,158 $ 10,571 Past due: 1 - 150 days past due 207 167 151 - 364 days past due 272 213 365 - 730 days past due 258 184 731 or more days past due 441 357 Total $ 9,336 $ 11,492 Financing receivables on nonaccrual status totaled $1.2 million at December 31, 2018 and $1.0 million at December 31, 2017 . For further information, see table below “Allowance for Credit Losses.” The allowance for credit losses and the recorded investment in financing receivables were as follows (in thousands): Year Ended December 31, 2018 2017 Allowance for credit losses: Balance at January 1 $ 912 $ 846 Provision 385 446 Write-offs charged against allowance (167 ) (382 ) Recoveries of amounts previously written off 11 2 Balance at December 31 $ 1,141 $ 912 Ending balance collectively evaluated for impairment $ 1,093 $ 865 Ending balance individually evaluated for impairment $ 48 $ 47 Recorded investments in financing receivables: Balance collectively evaluated for impairment $ 1,214 $ 1,013 Balance individually evaluated for impairment $ 8,122 $ 10,479 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 December 31, 2018 and 2017 . The average recorded investment in such loans was less than $0.1 million at both December 31, 2018 and 2017 . Interest income recognized on impaired loans was less than $0.1 million for both the years ended December 31, 2018 and 2017 . |
TRANSACTIONS WITH RELATED PARTI
TRANSACTIONS WITH RELATED PARTIES | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
TRANSACTIONS WITH RELATED PARTIES | TRANSACTIONS WITH RELATED PARTIES Transactions with Qurate As of December 31, 2018 , Qurate Retail, Inc. (“Qurate”), formerly Liberty Interactive Corporation, owned 36.0% of the issued and outstanding shares of FTD common stock. An Investor Rights Agreement governs certain rights of and restrictions on Qurate in connection with the shares of FTD common stock that Qurate owns. The I.S. Group Limited Interflora holds an equity investment of 20.7% in The I.S. Group Limited (“I.S. Group”). The investment was $1.7 million at both December 31, 2018 and 2017 , and is included in other assets in the consolidated balance sheets. Until September 2018, I.S. Group supplied 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. In September 2018, Interflora began selling floral-related products directly to its floral network members. I.S. Group continues to supply floral-related products to its other customers. Under the previous arrangement, Interflora derived revenues from I.S. Group from (i) the sale of products (sourced from third-party suppliers) to I.S. Group for which revenue was 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 $1.6 million , $2.2 million , and $2.4 million in the years ended December 31, 2018 , 2017 , and 2016 , respectively. In addition, Interflora purchased products from I.S. Group for sale to consumers. The cost of revenues related to products purchased from I.S. Group was $0.5 million , $0.3 million , and $0.4 million in the years ended December 31, 2018 , 2017 , and 2016 , respectively. In preparation for Interflora to begin selling floral-related products directly to floral network members, Interflora purchased inventory of such products from I.S. Group. The total amount of inventory purchased during the year ended December 31, 2018 was $2.8 million . Amounts due from I.S. Group were $0.2 million and $0.3 million at December 31, 2018 and 2017 , respectively, and amounts payable to I.S. Group were $0.4 million and $1.0 million at December 31, 2018 and 2017 , respectively. |
GOODWILL, INTANGIBLE ASSETS, AN
GOODWILL, INTANGIBLE ASSETS, AND OTHER LONG-LIVED ASSETS | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL, INTANGIBLE ASSETS, AND OTHER LONG-LIVED ASSETS | GOODWILL, INTANGIBLE ASSETS, AND OTHER LONG-LIVED ASSETS Goodwill is tested for impairment at the reporting unit level. A reporting unit is a business or a group of businesses for which discrete financial information is available and is regularly reviewed by management. An operating segment is made up of one or more reporting units. The Company reports its business operations in three operating and reportable segments: U.S. Consumer, Florist, and International. Each of the Florist and International segments is a reporting unit. The U.S. Consumer segment is comprised of three reporting units, ProFlowers/Gourmet Foods, and Personal Creations. The Company tests goodwill and indefinite-lived intangible assets for impairment annually during the fourth quarter of each year at the reporting unit level and on an interim basis if events or substantive changes in circumstances indicate that the carrying amount of a reporting unit may exceed its fair value (i.e. that a triggering event has occurred). Additionally, the Company evaluates finite-lived intangible assets and other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset groupings may not be recoverable. Impairment charges are included in operating expenses in the consolidated statement of operations under the caption “Impairment of goodwill, intangible assets, and other long-lived assets.” During the three months ended June 30, 2018, due to continued declines in financial results and reductions in the projected results for the remainder of 2018, the Company determined that a triggering event had occurred that required an interim impairment assessment for all of its reporting units other than the International reporting unit, as that reporting unit’s year-to-date and projected results were relatively in line with expectations. The intangible assets and other long-lived assets associated with the reporting units assessed were also reviewed for impairment. In addition, the Company experienced a sustained decline in market capitalization during the three months ended December 31, 2018 which, along with updated projections based on its long-term strategic plan finalized in the fourth quarter of 2018, was reflected in the annual impairment assessment of goodwill and indefinite-lived intangible assets. The Company also considered this a triggering event for another assessment of finite-lived intangible and other long-lived assets. Goodwill The Company performed quantitative interim and annual impairment assessments during the year ended December 31, 2018. For these assessments, the Company used a combination of the income, market, and cost approaches for determining the fair value of its reporting units. The income approach was used primarily, as management believes that a discounted cash flow method is the most reliable indicator of the fair values of the businesses. Under the market approach, the guideline company method was used, which focuses on comparing the Company’s risk profile and growth prospects to select reasonably similar companies based on business description, revenue size, markets served, and profitability. The cost approach was used as this approach is a generally accepted valuation methodology when the valuation is either negative or the value of the net assets/liabilities exceeds the expected present value of the economic returns. Under the cost approach, the Company used the net asset value method, which is based on the premise that a prudent investor would pay no more for an asset than its replacement or reproduction cost. For the interim impairment test, the Company used a combination of the income and market approaches for all reporting units tested other than the ProFlowers/Gourmet Foods reporting unit, for which the Company used the cost approach. The interim test resulted in the Company’s determination that the fair value of the Florist reporting unit exceeded its carrying value and, therefore, its goodwill was not impaired. The reporting unit’s fair value exceeded its carrying value by approximately 6% . The fair values of the FTD.com, ProFlowers/Gourmet Foods, and Personal Creations reporting units were less than their carrying values and, as such, goodwill impairment charges of $35.2 million , $14.8 million , and $12.5 million , respectively, were recorded during the second quarter of 2018 related to these reporting units. The ProFlowers/Gourmet Foods reporting unit’s goodwill was fully impaired at June 30, 2018. For the annual impairment test, the Company used a combination of the income and market approaches for all reporting units other than the Personal Creations and ProFlowers/Gourmet Foods reporting units. For Personal Creations, only the income approach was used as the near-term financial results for that business were not considered normalized. The fair value of the ProFlowers/Gourmet Foods reporting unit, which was assessed only for purposes of deriving the enterprise value as their goodwill is fully impaired, was again determined using the cost approach. The annual test resulted in the Company’s determination that the fair value of the International reporting unit exceeded its carrying value by approximately 30% and, therefore, its goodwill was not impaired. The fair values of the Florist, Personal Creations, and FTD.com reporting units were less than their carrying values and, as such, goodwill impairment charges of $21.3 million , $13.8 million , and $11.9 million , respectively, were recorded during the fourth quarter of 2018 related to these reporting units. The Personal Creations reporting unit’s goodwill was fully impaired at December 31, 2018. These goodwill impairment charges are not deductible for tax purposes. At December 31, 2018 , the remaining goodwill balances for the U.S. Consumer, Florist, and International segments are as noted in the table below. Within the U.S. Consumer segment, the remaining goodwill balance at December 31, 2018 relates to the FTD.com reporting unit. The changes in the net carrying amount of goodwill for the years ended December 31, 2018 and 2017 were as follows (in thousands): U.S. Consumer Florist International Total Goodwill at December 31, 2016 $ 280,727 $ 109,651 $ 73,087 $ 463,465 Foreign currency translation — — 6,947 6,947 BloomThat acquisition (a) 3,329 — — 3,329 Impairment of Goodwill (177,700 ) (19,000 ) — (196,700 ) Goodwill at December 31, 2017 106,356 90,651 80,034 277,041 Foreign currency translation — — (4,495 ) (4,495 ) Purchase accounting adjustment - BloomThat acquisition (792 ) — — (792 ) Impairment of Goodwill (88,138 ) (21,300 ) — (109,438 ) Goodwill at December 31, 2018 $ 17,426 $ 69,351 $ 75,539 $ 162,316 (a) On December 15, 2017, the Company acquired all of the assets and liabilities of BloomThat. During the year ended December 31, 2017, the Company also performed interim and annual impairment tests resulting in total goodwill impairment charges of $196.7 million as identified in the table above. In 2016, 2015, and 2008, the Company also recorded impairment charges of $84.0 million , $ 85.0 million , and $ 116.3 million , respectively. The table above reflects the Company’s goodwill balances net of the previously recorded impairment charges. The total accumulated goodwill impairment was $591.4 million at December 31, 2018 . On December 15, 2017, the Company acquired all of the outstanding shares of capital stock of BloomThat, a small on-demand floral delivery service. The cash purchase price was $2.5 million , excluding acquired cash on hand of $0.7 million . The purchase price was allocated to the tangible and intangible assets acquired and liabilities assumed based on management’s best estimates of their respective fair values as of the closing date of the acquisition. The fair value of the assets acquired and liabilities assumed consisted of current assets (excluding cash) of $0.4 million , furniture and equipment of $0.1 million , definite-lived intangible assets of $1.0 million , current liabilities of $1.9 million , and deferred tax liabilities of $0.4 million with the remainder of the purchase price ( $2.5 million ) allocated to goodwill. In September 2018, the Company ceased operations of BloomThat. BloomThat was included in the Company’s U.S. Consumer segment. Intangible Assets In conjunction with the interim impairment test, the Company reviewed the indefinite-lived intangible assets of the reporting units that had triggering events for potential impairment by calculating the fair values of the assets using a discounted cash flow approach and comparing the fair value to their respective carrying amounts. All indefinite-lived intangible assets were reviewed as part of the annual impairment test. The interim impairment test resulted in the determination that the fair value of the indefinite-lived intangible asset related to the trademark and trade name shared between the FTD.com and Florist reporting units was less than its carrying value and, accordingly, a pre-tax impairment charge of $20.4 million was recorded during the second quarter of 2018. The impairment evaluation of the finite-lived intangible assets indicated that the carrying amount of the ProFlowers trade name was not recoverable when compared to the expected undiscounted future cash flows. As such, a pre-tax impairment charge of $51.9 million , representing the remaining carrying value, was recorded related to the ProFlowers trade name during the second quarter of 2018. In addition, due to a management decision to cease operations of BloomThat, a pre-tax impairment charge of $0.9 million was recorded related to the remaining carrying value of the finite-lived intangible assets associated with that business. The annual impairment test resulted in the determination that the fair value of the indefinite-lived intangible asset related to the trademark and trade name shared between the FTD.com and Florist reporting units was further impaired and, accordingly, a pre-tax impairment charge of $7.7 million was recorded during the fourth quarter of 2018. This asset has a total remaining value of $46.7 million at December 31, 2018 . The fair value of the indefinite-lived intangible asset related to the International reporting unit’s trademark and trade name was also less than its carrying value and accordingly, a pre-tax impairment charge of $3.9 million was recorded during the fourth quarter of 2018, resulting in a remaining value of $31.6 million . Intangible assets are primarily related to the acquisition of the Company by United Online in 2008 and the acquisition of Provide Commerce by the Company in 2014 and consist of the following (in thousands): December 31, 2018 December 31, 2017 Gross Value (a) Accumulated Amortization Net Gross Value (a) Accumulated Amortization Net Complete technology $ 60,325 $ (60,325 ) $ — $ 61,274 $ (60,653 ) $ 621 Customer contracts and relationships 192,706 (192,706 ) — 193,775 (193,667 ) 108 Trademarks and trade names Finite-lived 41,413 (28,356 ) 13,057 93,593 (24,875 ) 68,718 Indefinite-lived (b) 78,346 — 78,346 112,518 — 112,518 Total $ 372,790 $ (281,387 ) $ 91,403 $ 461,160 $ (279,195 ) $ 181,965 (a) Gross value has been reduced by the impairments recorded as follows: Year Ended December 31, 2018 2017 Complete technology $ 561 $ 16,335 Customer contracts and relationships 90 — Trademarks and trade names: Finite-lived 52,108 27,000 Indefinite-lived 32,025 38,300 Total $ 84,784 $ 81,635 (b) As indefinite-lived assets are not amortized, the indefinite-lived trademarks and trade names have no associated amortization expense or accumulated amortization. As of December 31, 2018 , 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 2019 $ 1,253 2020 1,245 2021 1,241 2022 1,187 2023 1,162 Thereafter 6,969 Total $ 13,057 Other Long-Lived Assets As a result of the triggering events noted above in the second and fourth quarters of 2018, the Company performed impairment evaluations of its other long-lived assets by comparing the expected undiscounted future cash flows to the carrying amounts of the assets. For the interim test, the expected undiscounted future cash flows exceeded the carrying amounts of the assets for all reporting units tested, resulting in no impairment. The results of the annual test indicated that the carrying amounts of the other long-lived assets related to the Personal Creations reporting unit were not recoverable. Based on the Company’s assessment of the fair value of this asset group using a discounted cash flow analysis, the Company determined that the carrying value of this asset group exceeded its fair value. As a result, pre-tax impairment charges of $7.7 million , representing the remaining carrying value, were recorded during the fourth quarter of 2018. During the year ended December 31, 2017, the other long-lived assets related to the ProFlowers/Gourmet Foods reporting unit were fully impaired as the projected undiscounted cash flows of that reporting unit were less than the carrying amount of such assets. Additional impairment charges of $4.8 million were recorded during the year ended December 31, 2018 related to capital additions for that reporting unit as the undiscounted cash flows continue to be less than the carrying amount of the assets of that asset group. Property and equipment consisted of the following (in thousands): December 31, (a) 2018 2017 Land and improvements $ 1,571 $ 1,583 Buildings and improvements 17,145 16,375 Leasehold improvements 9,348 10,883 Equipment 8,706 13,122 Computer equipment 21,332 25,208 Computer software 73,076 58,991 Furniture and fixtures 4,494 3,215 135,672 129,377 Accumulated depreciation (94,338 ) (95,497 ) Total $ 41,334 $ 33,880 (a) The impairment charges of $12.5 million and $22.0 million recorded during the years ended December 31, 2018 and 2017, respectively, are reflected as reductions in the gross balances. Depreciation expense, including the amortization of leasehold improvements, for the years ended December 31, 2018 , 2017 , and 2016 was $11.3 million , $20.0 million , and $24.0 million , respectively. |
FINANCING ARRANGEMENTS
FINANCING ARRANGEMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
FINANCING ARRANGEMENTS | FINANCING ARRANGEMENTS Credit Agreement In 2014, FTD Companies, Inc. entered into a credit agreement (the “Credit Agreement”) with Interflora, certain wholly owned domestic subsidiaries of FTD Companies, Inc. party thereto as guarantors (collectively, the “Borrowers”), 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 for the lenders. The Credit Agreement provided for a term loan in an aggregate principal amount of $200 million , the proceeds of which were used to repay a portion of outstanding revolving loans, and also provided for a $350 million revolving credit facility. On December 31, 2014, the Company borrowed $120 million under the revolving credit facility to fund the cash portion of the Provide Commerce purchase price. The obligations under the 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 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 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 consolidated net leverage ratio and a minimum consolidated fixed charge coverage ratio, and impose restrictions and limitations on, among other things, investments, dividends, share repurchases, asset sales, and the Company’s ability to incur additional debt and additional liens. On March 30, 2018, the Company entered into a Forbearance Agreement and Second Amendment to Credit Agreement (the Credit Agreement, as previously amended and as further amended by the Second Amendment, the “Second Amendment”) with its lenders, which included an agreement by the lenders to forbear from exercising remedies available to them until May 31, 2018 with respect to defaults caused by (1) the inclusion of a going concern uncertainty explanatory paragraph in the audit opinion of the Company’s financial statements for the year ended December 31, 2017 and (2) breach of the consolidated net leverage ratio covenant for the quarter ended March 31, 2018. The Second Amendment also restricted the Company’s combined usage of the revolving credit facility portion of the Credit Agreement, which usage was further restricted by the Company’s subsequent amendments to the Credit Agreement, as discussed below. During the forbearance period, the interest rate margin applicable to Eurocurrency borrowings and letter of credit fees was increased to 4.25% per annum and the interest rate margin for base rate borrowings was increased to 3.25% . In addition, the Company paid a forbearance fee of 0.125% and commitment fees of 0.50% per annum on the unused portion of the revolving credit facility during the forbearance period. On May 31, 2018, the Company entered into the Third Amendment to Credit Agreement (the Credit Agreement, as previously amended and as further amended by the Third Amendment, the “Third Amendment”) with its lenders, which included an agreement by the lenders to waive existing defaults caused by (1) the inclusion of a going concern uncertainty explanatory paragraph in the audit opinion of the Company’s financial statements for the year ended December 31, 2017 and (2) the breach of the consolidated net leverage ratio covenant for the three months ended March 31, 2018. The Third Amendment also restricted the Company’s combined usage of the revolving credit facility portion of the Credit Agreement, which usage was further restricted by the Fourth Amendment, the Fifth Amendment, and the Sixth Amendment, as discussed below. In addition, under the Third Amendment, the consolidated net leverage ratio and fixed charge coverage ratio covenants were revised for each quarterly period through the September 19, 2019 maturity date, as were the interest rates. The Company paid an amendment fee of 0.625% times the revolver commitments and outstanding term loan ( $1.9 million ) in addition to a $0.5 million work fee related to the structuring and arranging of the amendment. On September 28, 2018, the Company entered into the Fourth Amendment to Credit Agreement (the Credit Agreement, as previously amended and as further amended by the Fourth Amendment, the “Fourth Amendment”) with its lenders. The Fourth Amendment further restricted the Company’s combined usage of the revolving credit facility portion of the Credit Agreement, which usage was further restricted by the Fifth Amendment and the Sixth Amendment, as discussed below. The Fourth Amendment also required the Company to pay a monthly fee equal to 2.50% per annum times the actual daily amount of the Aggregate Revolving B Loans (as defined in the Credit Agreement) and subjected the Company to certain additional restrictions on capital expenditures. Together, the Fourth Amendment and the Fifth Amendment, as discussed below, restrict the borrowers from borrowing any Eurocurrency loans without the consent of the lenders for the remaining term of the credit facility. The Company paid fees of $0.5 million related the Fourth Amendment. On October 31, 2018, the Company entered into the Fifth Amendment to Credit Agreement (the Credit Agreement, as previously amended and as further amended by the Fifth Amendment, the “Fifth Amendment”) with its lenders. Among other modifications, the Fifth Amendment further restricted the Company’s combined usage of the revolving credit facility portion of the Credit Agreement, which usage was further restricted by the Sixth Amendment as discussed below. In addition, the Fifth Amendment subjected the Company to certain additional restrictions on capital expenditures and certain additional events of default. On November 5, 2018, the Company entered into the Sixth Amendment to Credit Agreement (the Credit Agreement, as previously amended and as further amended by the Sixth Amendment, the “Sixth Amendment”) with its lenders. The Sixth Amendment further restricted the Company’s combined usage of the revolving credit facility portion of the Credit Agreement to amounts ranging from $90 million to $170 million based on the Company’s expected borrowing needs at various points in its business cycle, with all borrowings in excess of $150 million from and after July 6, 2019 subject to the Company’s 13-week cash forecast supporting any borrowing above such level. The Sixth Amendment also revised the consolidated net leverage ratio and fixed charge coverage ratio covenants set forth in the Fifth Amendment for each period through the September 19, 2019 maturity date of the Sixth Amendment. In connection with the Sixth Amendment, the Company incurred an amendment fee in an amount equal to 5.50% of the outstanding term loan as of the execution date of the Sixth Amendment, payable in two installments, (a) 0.50% which was paid on November 6, 2018 and (b) 5.0% upon the earliest to occur of, (x) the acceleration of the loans, (y) the maturity date and (z) the date upon which all obligations under the credit facility are satisfied, provided that if (z) occurs prior to the events in (x) or (y), the deferred portion of the fee will be prorated based on the number of days remaining until the maturity date, in addition to other fees of $0.5 million . The deferred portion of this fee was $6.2 million at December 31, 2018 and was included in interest payable on the consolidated balance sheet. At December 31, 2018, the interest rates applicable to borrowings under the Sixth Amendment were based on a base rate plus a margin ranging from 1.50% per annum to 6.50% per annum, calculated according to the Company’s net leverage ratio. In addition, the Company pays a commitment fee of 0.50% per annum on the unused portion of the revolving credit facility and a letters of credit fee ranging between 2.50% per annum to 7.50% per annum. The Company is also required to pay a monthly fee equal to 2.50% per annum times the actual daily amount of the Aggregate Revolving B Loans (as defined in the Credit Agreement). The stated interest rates (based on Prime ) at December 31, 2018 , under the term loan and the revolving credit facility were both 10.00% . The effective interest rates at December 31, 2018 , under the term loan and the revolving credit facility were 16.22% and 16.54% , respectively. The effective interest rates include interest calculated at the stated rates and the amortization of the deferred financing fees. At December 31, 2018 , the remaining borrowing capacity under the Sixth Amendment, which was reduced by $1.5 million in outstanding letters of credit, was $69.5 million . The changes in the Company’s debt balances for the years ended December 31, 2018 and 2017 were as follows for the Sixth Amendment (in thousands): Balance at December 31, 2016 Draw Down of Debt Repayments of Debt Balance at December 31, 2017 Revolving Credit Facility $ 120,000 $ 90,000 $ (158,000 ) $ 52,000 Term Loan 160,000 — (20,000 ) 140,000 Total Principal Outstanding $ 280,000 $ 90,000 $ (178,000 ) $ 192,000 Unamortized Debt Financing Fees (3,694 ) (2,334 ) Total Debt, Net of Unamortized Debt Financing Fees $ 276,306 $ 189,666 Balance at December 31, 2017 Draw Down of Debt Repayments of Debt Balance at December 31, 2018 Revolving Credit Facility $ 52,000 $ 283,000 $ (236,000 ) $ 99,000 Term Loan 140,000 — (21,346 ) 118,654 Total Principal Outstanding $ 192,000 $ 283,000 $ (257,346 ) $ 217,654 Unamortized Debt Financing Fees (2,334 ) (9,578 ) Total Debt, Net of Unamortized Debt Financing Fees $ 189,666 $ 208,076 The term loan is subject to amortization payments of $5 million per quarter and customary mandatory prepayments under certain conditions. During the year ended December 31, 2018 , the Company made payments of $21.3 million under the term loan, which includes a $1.3 million payment made from the proceeds received from the sale of a business in accordance with the Sixth Amendment. On March 13, 2019, the Company entered into the Amended Credit Agreement with our lenders. The Amended Credit Agreement includes, among other terms, a minimum Consolidated Adjusted EBITDA covenant; further limitations on capital expenditures; a covenant requiring that on or before June 1, 2019, the Company shall consummate one or more transactions (i) that would permit the Company and its subsidiaries to continue as a going concern, which must provide for the repayment in full of the obligations under the Amended Credit Agreement no later than June 1, 2019, or (ii) from which all or substantially all of the aggregate net cash proceeds are used to repay obligations and permanently reduce the commitments under the Amended Credit Agreement; and updated limits on our combined usage of the revolving credit facility portion of the Amended Credit Agreement throughout its remaining term. In addition, the consolidated net leverage ratio and fixed charge coverage ratio covenants were deleted for the period ending March 31, 2019 and subsequent periods. The Amended Credit Agreement also includes the provision of a pledge of 100% of the equity interests of certain of the Company’s subsidiaries and the Company’s use of best efforts to cause the UK Borrower to guarantee all obligations under the Amended Credit Agreement. Pursuant to the Amended Credit Agreement, the Company’s combined usage of the revolving credit facility portion of the Amended Credit Agreement is restricted to amounts ranging from $60.0 million to $167.5 million based on the Company’s expected borrowing needs at various points in its business cycle, with all borrowings in excess of $150 million from and after July 6, 2019 subject to the Company’s 13-week cash forecast supporting any borrowing above such level. The minimum Consolidated Adjusted EBITDA covenant requires that the Company maintain Consolidated Adjusted EBITDA based on specific minimums for each two to three-month period from February 1, 2019 through the September maturity date. These minimums range from negative $4.5 million to $21.8 million and were determined based on the Company’s forecasted Adjusted EBITDA for each such period. In addition, the Company will pay a fee in an amount equal to the actual daily funded amount of the Revolving A and B Commitments (as defined in the Amended Credit Agreement) in excess of $100 million times 2.5% per annum, which shall be paid quarterly in arrears and which replaces the previous 2.5% fee related to the Aggregate Revolving B Loans. In connection with the Amended Credit Agreement, the Company incurred an amendment fee of $2.9 million , which was 1.0% of the total revolving commitments and term loan as of the execution date of the Amended Credit Agreement. Such fee is payable upon the earliest to occur of (a) the September 2019 maturity date, (b) the acceleration of the loans, (c) the date upon which all obligations under the Amended Credit Agreement have been satisfied in full, or (d) at the election of the lenders, after the occurrence of a default (as defined in the Amended Credit Agreement). The Company will need to refinance or repay the outstanding indebtedness no later than its September 2019 maturity. Based on the Company’s 2019 year-to-date results of operations and outlook for the remainder of the term of the Amended Credit Agreement, it currently anticipates that it will be in compliance with the Consolidated Adjusted EBITDA requirement and will have sufficient liquidity to fund its operations into July 2019 but may not have sufficient liquidity to fund its operations beyond then. In addition, there can be no assurances that the Company will be able to complete one or more transactions that will enable it to repay all or a portion of the outstanding indebtedness by June 1, 2019 or at all. If the Company is unable to meet the revised covenants or other requirements of the Amended Credit Agreement and it is unable to obtain waivers or further amendments from its lenders, the lenders could exercise remedies under the Amended Credit Agreement and repayment of the indebtedness outstanding could be accelerated. The Company may not have sufficient capital to repay the obligations due under the Amended Credit Agreement upon maturity, or earlier if called for repayment by the lenders following a failure to meet the revised covenants under the Amended Credit Agreement. These conditions raise substantial doubt about the Company’s ability to continue as a going concern as discussed in Note 1—“Description of Business, Basis of Presentation, Accounting Policies, and Recent Accounting Pronouncements.” |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS In 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 had aggregated notional values totaling $130 million . The interest rate cap instruments were 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 Credit Agreement. The gains or losses on the instruments were reported in accumulated other comprehensive loss to the extent that they were effective and were reclassified into earnings when the cash flows attributable to 3-month LIBOR interest payments were recognized in earnings. The interest rate caps matured on June 30, 2018. The estimated fair values and notional values of outstanding derivative instruments as of December 31, 2017 were as follows (in thousands): December 31, 2017 Balance Sheet Location Estimated Fair Value of Derivative Instruments Notional Value of Derivative Instruments Derivative Assets: Interest rate caps Other assets $ — $ 130,000 The Company recognized the following losses from derivatives, before tax, in accumulated other comprehensive loss (in thousands): Year Ended December 31, 2018 2017 2016 Derivatives Designated as Cash Flow Hedging Instruments: Interest rate caps $ — $ (1 ) $ (34 ) As of December 31, 2017 and 2016, the effective portion, before tax effect, of such interest rate caps, which were designated as cash flow hedging instruments, was $0.3 million and $0.8 million , respectively. During the years ended December 31, 2018 , 2017 , and 2016, $0.3 million , $0.6 million , and $0.6 million , respectively, was reclassified from accumulated other comprehensive loss to interest expense in the consolidated statement of operations. During the year ended December 31, 2016, the Company entered into a forward foreign currency exchange contract which was not designated as a hedging instrument. Accordingly, gains and losses related to changes in the fair value of this contract are reflected in other income, net in the consolidated statement of operations for the year ended December 31, 2016. During the years ended December 31, 2018 and 2017 , the Company had no forward foreign currency exchange contracts outstanding. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 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): December 31, 2018 December 31, 2017 Total Level 1 Level 2 Total Level 1 Level 2 Assets: Cash equivalents $ 1,840 $ 1,840 $ — $ 2,705 $ 2,705 $ — Total $ 1,840 $ 1,840 $ — $ 2,705 $ 2,705 $ — Liabilities: Non-qualified deferred compensation plan $ 842 $ — $ 842 $ 1,228 $ — $ 1,228 Total $ 842 $ — $ 842 $ 1,228 $ — $ 1,228 Provide Commerce, Inc. 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 Provide Commerce acquisition, contributions to the plan were suspended except those relating to any compensation earned but not yet paid as of the date of the acquisition. The plan assets, which consist primarily of life insurance contracts recorded at their cash surrender value, totaled $1.6 million and $11.7 million at December 31, 2018 and 2017, respectively, and are included in other assets in the consolidated balance sheets. During the year ended December 31, 2018 , the Company surrendered certain of the life insurance contracts and received proceeds totaling $10.0 million . During 2018 , as a result of the triggering events in the second quarter and fourth quarter, the Company performed impairment tests of its finite-lived intangible and other long-lived assets. Based on these tests, the Company determined that the carrying value of certain finite-lived intangible assets and fixed assets exceeded their fair values as determined using the income approach based on gross cash flows. Determining fair value is judgmental in nature and requires the use of significant estimates and assumptions, considered to be Level 3 inputs, including projected cash flows over the estimated projection period and the discount rate. The resulting $97.3 million non-cash, pre-tax impairment charges (excluding goodwill impairment charges of $109.4 million ) were recorded related to certain intangible assets and other long-lived assets of the U.S. Consumer, Florist, and International segments. See Note 5—“Goodwill, Intangible Assets, and Other Long-Lived Assets” for additional information. The Company estimated the fair value of its outstanding 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 December 31, 2018 , the Company estimated its credit spread as 18.4% and 19.4% for the term loan and revolving credit facility, respectively, resulting in yield-to-maturity estimates for the term loan and revolving credit facility of 20.9% and 21.9% , respectively. At December 31, 2017 , the Company estimated its credit spread as 1.0% and 1.6% for the term loan and revolving credit facility, respectively, resulting in yield-to-maturity estimates for the term loan and revolving credit facility of 2.9% and 3.4% , respectively. The table below summarizes the carrying amounts and estimated fair values for long-term debt (in thousands): December 31, 2018 December 31, 2017 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Level 2 Level 2 Debt outstanding $ 217,654 $ 201,967 $ 192,000 $ 192,000 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 | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY Capital Stock The Company’s authorized shares of capital stock of 65.0 million are divided into 60.0 million shares of common stock, par value $0.0001 per share, and 5.0 million shares of preferred stock, par value $0.0001 per share. In connection with the Provide Commerce acquisition, the Company issued 10.2 million shares of FTD common stock to Qurate. At December 31, 2018 , Qurate held 36.0% of the outstanding shares of FTD common stock. At December 31, 2018 , none of the 5.0 million shares of preferred stock were outstanding, and the Company has no present plans to issue any shares of preferred stock. The Company’s board of directors has the authority, without action by the Company’s stockholders, to designate and issue the preferred stock in one or more series and to designate the rights, preferences, limitations and privileges of each series of preferred stock, which may be greater than the rights of the Company’s common stock. Dividends The Company has not paid any cash dividends on its common stock during the periods presented. Common Stock Repurchases In March 2016, the Company’s board of directors authorized a common stock repurchase program that allowed 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. During the year ended December 31, 2016, the Company repurchased 0.6 million shares at an average cost per share of $25.37 . The Company did not repurchase any shares during the years ended December 31, 2018 and 2017. The repurchase program expired on March 8, 2018. Repurchased shares are generally held in treasury pending use for general corporate purposes, including issuances under various employee and director stock plans. Upon vesting of RSUs or exercise of stock options, the Company does not collect withholding taxes in cash from employees. Instead, the Company automatically withholds, from the RSUs that vest or stock options 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. The Company then pays the minimum statutory withholding taxes in cash. During the year ended December 31, 2018 , 0.6 million RSUs vested for which 0.1 million shares were withheld to cover the minimum statutory withholding taxes of $0.5 million . During the year ended December 31, 2017 , 0.3 million RSUs vested for which 0.1 million shares were withheld to cover the minimum statutory withholding taxes of $2.0 million . |
INCENTIVE COMPENSATION PLANS
INCENTIVE COMPENSATION PLANS | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
INCENTIVE COMPENSATION PLANS | INCENTIVE COMPENSATION PLANS In June 2018, stockholders approved the First Amendment to the FTD Companies, Inc. Third Amended and Restated 2013 Incentive Compensation Plan (as so amended and restated, the “Amended Plan”), which amended and restated in its entirety the FTD Companies, Inc. Amended and Restated 2013 Incentive Compensation Plan, as previously amended June 9, 2017. The Amended Plan provides for the granting of awards to employees and non-employee directors, including stock options, stock appreciation rights, RSUs, PSUs, and other stock based awards . At December 31, 2018 , the Company had 5.1 million shares available for issuance under the Amended Plan, which includes additional shares approved by shareholders in June 2018 . Stock-Based Compensation The following table summarizes the non-cash stock-based compensation incurred under the Amended Plan that has been included in the consolidated statements of operations (in thousands): Year Ended December 31, 2018 2017 2016 Cost of revenues $ 148 $ 269 $ 135 Sales and marketing 3,108 4,169 4,128 General and administrative 5,971 6,660 9,349 Restructuring and other exit costs 5,457 — 3,373 Total stock-based compensation $ 14,684 $ 11,098 $ 16,985 Tax benefit recognized $ 3,423 $ 4,171 $ 6,240 Restricted Stock Units RSUs have been granted to certain employees and non-employee directors of the Company and represent the right to receive unrestricted shares of common stock based on service. Compensation cost is recognized over the service period. The fair value of each grant is equal to the share price at the date of grant. RSUs generally vest over a one - to four -year period under a variety of vesting schedules and are canceled upon termination of employment or board membership. The following table summarizes activity for RSUs awarded to the Company’s eligible employees and non-employee directors during the years ended December 31, 2018 , 2017 and 2016 : FTD Restricted Stock Units Weighted-Average Grant Date Fair Value (in thousands) Non-vested at December 31, 2015 649 $ 30.91 Granted 413 24.36 Vested (289 ) 28.96 Cancelled (145 ) 29.16 Non-vested at December 31, 2016 628 27.90 Granted 565 21.40 Vested (288 ) 27.95 Cancelled (167 ) 26.52 Non-vested at December 31, 2017 738 23.19 Granted 3,463 3.60 Vested (568 ) 16.60 Cancelled (313 ) 13.30 Non-vested at December 31, 2018 3,320 $ 4.82 The fair value of RSUs that vested during the years ended December 31, 2018 , 2017 , and 2016 was $9.4 million , $8.1 million , and $8.4 million , respectively. The intrinsic value of non-vested RSUs awarded to the Company’s eligible employees and non-employee directors was $4.9 million at December 31, 2018 . At December 31, 2018 , 2.4 million non-vested RSUs were expected to vest, with an intrinsic value totaling $3.6 million . At December 31, 2018 , total unrecognized compensation cost related to non-vested RSUs, net of expected forfeitures, was $12.2 million , which was expected to be recognized over a weighted-average period of 3.1 years. Performance Stock Units PSUs have been granted to certain employees and non-employee directors of the Company. Vesting of the PSUs is based on the achievement of certain performance criteria, as specified in the plan, at the end of a three -year performance period ending on December 31, 2020. The actual number of shares that will ultimately vest is dependent upon the level of achievement of the performance conditions. If the minimum targets are not achieved, none of the shares will vest and any compensation expense previously recognized will be reversed. The Company recognizes stock-based compensation expense related to performance awards based upon the Company’s estimate of the likelihood of achievement of the performance targets at each reporting date. At December 31, 2018, the Company does not expect the PSUs to vest. As such, no expense was recorded during the year ended December 31, 2018 related to these awards. The following table summarizes activity for PSUs awarded to the Company’s eligible employees and non-employee directors during the year ended December 31, 2018 : FTD Performance Stock Units Weighted-Average Grant Date Fair Value (in thousands) Non-vested at December 31, 2017 — $ — Granted 649 6.63 Vested — — Cancelled (347 ) 6.63 Non-vested at December 31, 2018 302 6.63 Stock Option Awards Stock options are granted with an exercise price equal to the market value of the underlying stock on the grant date, and generally vest over a three - or four -year period under a variety of vesting schedules and are canceled upon termination of employment. Stock option grants expire after 5 - 10 years unless canceled earlier due to termination of employment. Upon the exercise of a stock option award, shares of common stock are issued from authorized but unissued shares. Stock-based compensation is measured at fair value and expensed on a straight-line basis over the requisite service period. The following table summarizes stock option activity for the years ended December 31, 2018 , 2017 , and 2016 and stock options outstanding and exercisable at December 31, 2018 : FTD Options Outstanding Weighted-Average Exercise Price Weighted-Average Remaining Contractual Life (in thousands) (in years) Outstanding options at December 31, 2015 2,138 $ 29.98 5.4 Options granted 1,113 23.08 Options exercised — — Options forfeited (516 ) 28.53 Options expired (77 ) 30.06 Outstanding options at December 31, 2016 2,658 27.37 4.2 Options granted 1,520 18.25 Options exercised — — Options forfeited (422 ) 26.04 Options expired (382 ) 28.07 Outstanding options at December 31, 2017 3,374 23.35 4.0 Options granted 773 6.70 Options exercised — — Options forfeited (667 ) 14.60 Options expired (1,764 ) 22.52 Outstanding options at December 31, 2018 1,716 20.07 4.4 Exercisable at December 31, 2018 835 26.55 2.4 Expected to vest December 31, 2018 763 $ 14.86 6.0 The weighted-average grant date fair value of these stock options was $2.73 , $5.85 , and $5.28 for the years ended December 31, 2018 , 2017 , and 2016 , respectively. At December 31, 2018 total unrecognized compensation cost related to non-vested stock options awarded to the Company’s eligible employees, net of expected forfeitures, was $1.5 million , which was expected to be recognized over a weighted-average period of 1.5 years. There was no intrinsic value of the outstanding options, the exercisable options, or the options expected to vest at December 31, 2018. No options were exercised during the years ended December 31, 2018 , 2017 , and 2016 . For stock options granted by the Company for the years ended December 31, 2018 , 2017 , and 2016 , the fair value of stock options granted were estimated at the date of grant using the Black-Scholes option-pricing model. The table below summarizes the weighted average assumptions used by the Company to estimate the fair value of stock options at the grant date: For the Year Ended December 31, 2018 2017 2016 Risk-free interest rate 2.5 % 1.9 % 1.2 % Expected term (in years) 6.21 4.75 3.12 Dividend yield — % — % — % Expected volatility 37.8 % 33.9 % 30.6 % The risk-free interest rate assumed by the Company in valuing stock options was based on the U.S. Treasury yield curve in effect at the time of the grant. The Company used the simplified method for estimating the expected term because the Company did not have adequate historical data to estimate expected term. The Company estimated the dividend yield as 0% as the Company does not currently intend to pay dividends. The Company calculated expected stock price volatility based on a combination of the historical volatility of both the Company’s and United Online’s common stock as the Company represented a significant portion of consolidated United Online prior to the Separation and the Company does not yet have sufficient history on which to base an assumption solely on its historical volatility. Employee Stock Purchase Plan Eligible employees of the Company are able to participate in the FTD Companies, Inc. 2015 Employee Stock Purchase Plan (“ESPP Plan”), through which employees may authorize payroll deductions of up to the lower of 15% of their compensation or $25,000 to purchase up to 1,001 shares of FTD common stock on each purchase date at a purchase price per share equal to 85% of the lower of (i) the closing market price per share of FTD common stock on the employee’s entry date or (ii) the closing market price per share of FTD common stock on the purchase date. Each offering period has a six -month duration and purchase interval with a purchase date of the last business day of June and December each year. At December 31, 2018, the Company had 0.1 million shares available for purchase under the ESPP Plan. The fair value of the ESPP Plan shares was estimated using the Black-Scholes option-pricing model with the following weighted-average assumptions: For the Year Ended December 31, 2018 2017 2016 Risk-free interest rate 1.9% 0.9% 0.4% Expected term (in years) 0.5 0.5 0.5 Dividend yield —% —% —% Expected Volatility 75.0% 41.8% 32.4% The risk-free interest rate assumed by the Company in valuing the ESPP Plan shares was based on the U.S. Treasury yield curve in effect at the time of the grant. The expected term represents the amount of time remaining in the respective offering period. The Company estimated the dividend yield as 0% as the Company does not currently intend to pay dividends. Expected volatility was determined based on the Company’s historical volatility. For the years ended December 31, 2018 , 2017 , and 2016 , the Company recognized $0.2 million , $0.5 million , and $0.6 million , respectively, of stock-based compensation related to the ESPP Plan. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company files tax returns as a separate company in Federal, state and local jurisdictions, the U.K. and certain other foreign jurisdictions. Loss before income taxes was comprised of the following (in thousands): Year Ended December 31, 2018 2017 2016 Domestic $ (250,735 ) $ (289,888 ) $ (101,943 ) Foreign 7,192 11,673 13,686 Loss before income taxes $ (243,543 ) $ (278,215 ) $ (88,257 ) The benefit from income taxes was comprised of the following (in thousands): Year Ended December 31, 2018 2017 2016 Current: Federal $ 614 $ 8,657 $ 16,297 State 434 1,101 2,116 Foreign 2,271 2,361 2,709 3,319 12,119 21,122 Deferred: Federal (16,770 ) (50,837 ) (20,895 ) State (5,142 ) (5,313 ) (4,809 ) Foreign (221 ) (143 ) (484 ) (22,133 ) (56,293 ) (26,188 ) Benefit for income taxes $ (18,814 ) $ (44,174 ) $ (5,066 ) The benefit for income taxes reconciled to the amount computed by applying the statutory federal rate to loss before taxes as follows (in thousands): Year Ended December 31, 2018 2017 2016 Federal taxes at statutory rate (a) $ (51,145 ) $ (97,375 ) $ (30,890 ) State income taxes, net (4,708 ) (3,205 ) (749 ) Nondeductible goodwill 22,982 68,845 29,336 Nondeductible officer compensation 3,291 377 — Effects of foreign income 425 (1,419 ) (3,283 ) Foreign distribution 697 1,658 4,723 Foreign tax credit — (1,317 ) (2,664 ) Deferred tax adjustment - statutory rate changes 2 (13,654 ) (726 ) Change in valuation allowance 5,149 — — Stock-based compensation 4,199 1,589 7 Other items, net 294 327 (820 ) Benefit from income taxes $ (18,814 ) $ (44,174 ) $ (5,066 ) (a) The federal statutory tax rates for the Company were 21% , 35% , and 35% for the years ended December 31, 2018, 2017, and 2016, respectively. The significant components of net deferred tax balances were as follows (in thousands): December 31, 2018 2017 Deferred tax assets: Net operating loss and foreign tax credit carryforwards $ 3,030 $ 1,580 Allowances and reserves 3,266 2,985 Stock-based compensation 1,257 4,360 Deferred compensation 2,310 2,090 Deferred business interest expense 4,902 — Deferred rent 1,028 830 Depreciation and amortization 1,735 — Other, net 3,267 2,241 Total gross deferred tax assets 20,795 14,086 Less: valuation allowance (5,565 ) (416 ) Total deferred tax assets, net of valuation allowance 15,230 13,670 Deferred tax liabilities: Amortization of intangible assets (21,064 ) (39,047 ) Depreciation and amortization — (4,342 ) Other, net (1,125 ) (1,135 ) Total deferred tax liabilities (22,189 ) (44,524 ) Total net deferred tax liabilities $ (6,959 ) $ (30,854 ) In December 2017, the U.S. Congress enacted the TCJA, which resulted in a reduction of federal tax rates, thereby reducing the December 31, 2017 deferred tax balances by $14.1 million . The TCJA also resulted in the Company incurring a Transition Tax Liability of $0.3 million in 2017, which was revised to $0.1 million during 2018. During the fourth quarter of 2018 and in accordance with SEC Staff Accounting Bulletin No. 118, the Company completed its accounting for the provisional amounts recognized at December 31, 2017. The Company will be electing to pay the Transition Tax over an eight-year period, as allowed by the TCJA. The Company has analyzed the effects of the TCJA’s Global and Intangible Low-Taxed Income provision and the Base Erosion Anti-Abuse Tax provision and has determined that these provisions had no effect on the Company’s 2017 or 2018 tax provision. In evaluating the Company’s ability to recover its deferred tax assets, management considers all available positive and negative evidence, including the Company’s operating results and the existence of substantial doubt regarding the Company’s ability to continue as a going concern, ongoing tax planning, and forecasts of future taxable income on a jurisdiction-by-jurisdiction basis. The valuation allowance at December 31, 2018 relates to the Company’s expectations regarding its ability to realize its U.S. deferred tax assets in the future. The valuation allowance at December 31, 2017 relates to deferred tax assets of a business acquired in December 2017. The Company adopted ASU 2016-09 in January 2017 and recorded tax shortfalls or excess tax benefits in the provision for income taxes for the years ended December 31, 2018 and 2017 rather than in additional paid-in-capital as was previously required. The Company had gross unrecognized tax benefits totaling $0.1 million , of which $0.1 million would have an impact on the Company’s effective income tax rate, if recognized, at December 31, 2018, 2017, and 2016. A reconciliation of the beginning and ending amounts of gross unrecognized tax benefits (before federal impact of state items), excluding interest and penalties, was as follows (in thousands): Year Ended December 31, 2018 2017 2016 Beginning balance $ 124 $ 140 $ 269 Additions for prior year tax positions 120 124 115 Reductions for prior year tax positions (124 ) (115 ) (110 ) Settlements — — (78 ) Reductions due to lapse in statutes of limitations — (25 ) (56 ) Ending balance $ 120 $ 124 $ 140 In the U.S., the Company is currently under audit by certain state and local tax authorities. The examinations are in varying stages of completion. The Company evaluates its tax positions and establishes liabilities for uncertain tax positions that may be challenged by tax authorities. Uncertain tax positions are reviewed on an ongoing basis and are adjusted in light of changing facts and circumstances, including progress of tax audits, case law developments and closing of statutes of limitations. Such adjustments are reflected in the provision for income taxes, as appropriate. Tax years prior to 2013 are generally not subject to examination by the Internal Revenue Service except for items involving tax attributes that have been carried forward to tax years whose statute of limitations remains open. With few exceptions, the Company is not subject to state or local examinations for years prior to 2012. In the U.K., tax years 2014 and prior are closed to audit due to the expiration of the statute of limitations. The Company is generally not able to reliably estimate the ultimate settlement amounts until the close of the audit. While the Company does not expect material changes, it is possible that the amount of unrecognized benefit with respect to its uncertain tax positions could significantly increase or decrease within the next 12 months related to the Company’s ongoing audits. At this time, the Company is unable to make a reasonable estimate of the range of impact on the balance of uncertain tax positions or the impact on the effective income tax rate related to such positions. The Company had immaterial amounts accrued for interest and penalties relating to uncertain tax positions at December 31, 2018 and 2017 , which is included in income taxes payable. The Company recognized immaterial amounts of net interest and penalties relating to uncertain tax positions for the years ended December 31, 2018 , 2017 , and 2016 , respectively. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | 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 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 loss per common share (in thousands, except per share amounts): Year Ended December 31, 2018 2017 2016 Numerator: Net loss $ (224,729 ) $ (234,041 ) $ (83,191 ) Income allocated to participating securities — — — Net loss attributable to common stockholders $ (224,729 ) $ (234,041 ) $ (83,191 ) Denominator: Basic average common shares outstanding 27,972 27,484 27,483 Add: Dilutive effect of securities — — — Diluted average common shares outstanding 27,972 27,484 27,483 Basic loss per common share $ (8.03 ) $ (8.52 ) $ (3.03 ) Diluted loss per common share $ (8.03 ) $ (8.52 ) $ (3.03 ) The authorized shares of FTD Companies, Inc. capital stock total 65.0 million , which is divided into 60.0 million shares of common stock, par value $0.0001 per share, and 5.0 million shares of preferred stock, par value $0.0001 per share. In connection with the Provide Commerce acquisition, the Company issued 10.2 million shares of FTD common stock to Qurate. The diluted earnings per common share computations exclude antidilutive stock options, RSUs, and PSUs. Weighted-average antidilutive shares for the years ended December 31, 2018 , 2017 , and 2016 were 4.0 million , 3.8 million , and 2.3 million , respectively. |
RESTRUCTURING AND OTHER EXIT CO
RESTRUCTURING AND OTHER EXIT COSTS | 12 Months Ended |
Dec. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING AND OTHER EXIT COSTS | RESTRUCTURING AND OTHER EXIT COSTS Restructuring and other exit costs were as follows (in thousands): Employee Termination Costs Facility Closure Costs Total Accrued as of December 31, 2016 $ 8,566 $ 1,378 $ 9,944 Charges 1,834 345 2,179 Cash paid (6,842 ) (1,518 ) (8,360 ) Other non-cash adjustments (3,374 ) (12 ) (3,386 ) Accrued as of December 31, 2017 184 193 377 Charges 18,265 (18 ) 18,247 Cash paid (4,310 ) (175 ) (4,485 ) Other non-cash adjustments (5,457 ) — (5,457 ) Accrued as of December 31, 2018 $ 8,682 $ — $ 8,682 On July 18, 2018, the Company announced that its former President and Chief Executive Officer, John C. Walden, had stepped down from such positions. Under the terms of Mr. Walden’s employment agreement, he is entitled to the severance and other benefits described in such agreement, including cash severance payments, as well as accelerated vesting of a portion of his outstanding nonvested RSUs and unvested stock options. On the same day, the Company also announced a corporate restructuring plan. During the year ended December 31, 2018 , the Company recorded $18.2 million in restructuring charges, which included employee severance costs to be paid in cash of $12.7 million and non-cash stock-based compensation related to the acceleration of certain equity awards of $5.5 million , which is included as an other non-cash adjustment in the above table. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Leases Future minimum lease payments at December 31, 2018 under non-cancelable operating leases with initial lease terms in excess of one year were as follows (in thousands): Year Ending December 31, Total 2019 2020 2021 2022 2023 Thereafter Operating leases $ 51,855 $ 7,828 $ 8,245 $ 8,588 $ 7,345 $ 4,923 $ 14,926 The Company leases certain office space, data centers, distribution centers, vehicles, and office equipment under operating leases expiring at various periods through 2030. Certain of the Company’s operating leases include rent holidays, rent escalation provisions, and landlord allowances. The Company records rent expense on a straight-line basis over the lease term. Rent expense under operating leases for the years ended December 31, 2018 , 2017 , and 2016 was $10.5 million , $9.8 million , and $9.8 million , respectively. Letters of Credit Standby letters of credit are maintained by the Company to secure credit card processing activity and certain inventory purchases. The Company had $1.5 million of commitments under letters of credit at December 31, 2018 which were scheduled to expire within one year. Other Commitments In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to customers, vendors, lessors, sureties and insurance companies, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of the Company’s breach of such agreements, services to be provided by the Company, or from intellectual property infringement claims made by third parties. FTD has entered into indemnification agreements with its current and former directors and certain of its officers and employees that require FTD, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers or employees. In addition, FTD has also agreed to indemnify certain former officers, directors and employees of acquired companies in connection with the acquisition of such companies. FTD maintains director and officer insurance, which may, in certain circumstances, cover specified liabilities, including those arising from its obligation to indemnify its current and former directors, certain of its officers and employees, and certain former officers, directors and employees of acquired companies. It is not possible to determine the maximum potential amount of exposure under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Such indemnification agreements may not be subject to maximum loss clauses. Legal Matters Commencing on August 19, 2009, the first of a series of putative 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 nationwide class of consumers allegedly damaged by Provide Commerce’s purported unauthorized or otherwise allegedly improper transferring of billing information to EMI, who then posted allegedly unauthorized charges to their credit or debit card accounts for membership fees for the Membership Programs. In the operative fourth amended complaint, plaintiffs asserted ten claims against Provide Commerce and EMI: (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 seek damages, attorneys’ fees, and costs. After motion practice regarding the claims asserted and numerous settlement conferences and mediations in an effort to informally resolve the matter, the parties reached an agreement on the high level terms of a settlement on April 9, 2012, 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 (the “Settlement”), which the court preliminarily approved on June 13, 2012. After notice to the purported class and briefing by the parties, the court conducted a final approval hearing (also known as a fairness hearing) on January 28, 2013, but did not rule. On February 4, 2013, the court entered its final order approving the Settlement, granting plaintiffs’ motion for attorneys’ fees, costs, and incentive awards, and overruling objections filed by a single objector. 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 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+. 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 its opinion in Frank v. Netflix issued on February 27, 2015. The district court ordered supplemental briefing on the issue of final Settlement approval May 21, 2015. After briefing, the district court conducted a hearing on July 27, 2016 and took the matter 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. On September 6, 2016, the objector filed a notice of appeal. On November 22, 2016, plaintiffs filed a motion for summary affirmance of the district court’s judgment, to which the objector responded and filed a cross-motion for sanctions. Plaintiffs’ motion for summary affirmance temporarily stayed briefing on the appeal. On March 2, 2017, the Ninth Circuit denied plaintiffs’ motion for summary affirmance and objector’s cross-motion for sanctions, and reset the briefing schedule. The Objector filed his opening brief on May 1, 2017. Thirteen state Attorneys General filed an amicus brief in support of the Objector on May 8, 2017. The parties filed their answering briefs on June 30, 2017. Various legal aid organizations filed an amicus brief in support of no party regarding cy pres relief also on June 30, 2017. The Objector’s optional reply brief was filed on August 14, 2017 and the Ninth Circuit heard oral arguments on May 17, 2018. On October 3, 2018, the Ninth Circuit issued an opinion vacating the district court’s award of attorney’s fees, but otherwise affirmed the district court’s approval of the class action settlement. On October 10, 2018, the objector filed a motion to stay the issuance of mandate, which would return jurisdiction to the district court, and for an extension of time to file a petition for panel rehearing. The Ninth Circuit denied the objector’s motion on November 21, 2018, and issued the mandate on November 29, 2018. In March 2019, the parties completed submission of supplemental briefings to the district court regarding the amount of Plaintiffs’ counsel’s attorneys’ fees and costs award. As of the date of these financial statements, the district court has not issued a decision on the matter. On February 13, 2019, the objector filed a petition seeking Supreme Court review of the Ninth Circuit’s decision. As of the date of these financial statements, the Supreme Court has not reviewed the objector’s petition. The negotiated settlement amount has been fully reserved under ASC 450, Contingencies . There can be 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 assessment of the probability of loss or the amount of liability 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 December 31, 2018 and 2017 , the Company had reserves totaling $2.8 million and $2.5 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 | 12 Months Ended |
Dec. 31, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | SUPPLEMENTAL CASH FLOW INFORMATION The following table sets forth supplemental cash flow disclosures (in thousands): Year Ended December 31, 2018 2017 2016 Cash paid for interest $ 16,280 $ 8,215 $ 7,556 Cash paid for income taxes, net $ 4,930 $ 13,315 $ 13,972 At December 31, 2018 , non-cash investing items included $0.5 million of property and equipment purchases that were included in accounts payable and accrued liabilities in the Company’s consolidated balance sheet. The purchases will be reflected in investing activities in the consolidated statement of cash flows in the periods in which they are paid. Also at December 31, 2018, non-cash financing items included $6.2 million of deferred financing fees that were included in interest payable in the Company’s consolidated balance sheet. These deferred financing fees will be paid when the outstanding debt under the Amended Credit Agreement is repaid or refinanced and will be reflected in financing activities in the consolidated statement of cash flows in the period in which they are paid. |
QUARTERLY FINANCIAL DATA (UNAUD
QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | QUARTERLY FINANCIAL DATA (UNAUDITED) The following tables have been prepared on a basis consistent with the Company’s annual consolidated financial statements and include all adjustments necessary for the fair presentation of the unaudited quarterly data. Quarter First Second Third Fourth (in thousands, except per share data) Year Ended December 31, 2018: Revenues $ 318,170 $ 299,921 $ 148,621 $ 247,532 Operating loss (4,417 ) (127,117 ) (28,453 ) (64,644 ) Net loss (6,596 ) (118,085 ) (31,210 ) (68,838 ) Basic loss per common share (0.24 ) (4.25 ) (1.11 ) (2.44 ) Diluted loss per common share (0.24 ) (4.25 ) (1.11 ) (2.44 ) Quarter First Second Third Fourth (in thousands, except per share data) Year Ended December 31, 2017: Revenues $ 316,493 $ 328,146 $ 161,304 $ 278,085 Operating income/(loss) 17,840 17,749 (116,645 ) (187,673 ) Net income/(loss) 9,023 9,716 (99,319 ) (153,461 ) Basic earnings/(loss) per common share 0.32 0.35 (3.61 ) (5.57 ) Diluted earnings/(loss) per common share 0.32 0.35 (3.61 ) (5.57 ) During the second and fourth quarters of 2018, the Company recorded goodwill, intangible assets, and other long-lived asset impairments totaling $136.9 million and $67.1 million , respectively. In addition, during the third quarter of 2018, the Company recorded restructuring charges totaling $18.1 million related to its corporate restructuring plan. During the third and fourth quarters of 2017, the Company recorded goodwill, intangible assets, and other long-lived asset impairments totaling $105.7 million and $194.6 million , respectively. |
SCHEDULE II-VALUATION AND QUALI
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2017 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS FTD COMPANIES, INC. (in thousands) Balance at Beginning of Period Additions Charged to Expense Charged to Other Accounts Write-offs Balance at End of Period Allowance for doubtful accounts and sales allowances: Year Ended December 31, 2018 $ 4,957 $ 2,636 $ 30 $ (556 ) $ 7,067 Year Ended December 31, 2017 $ 4,962 $ 2,084 $ 513 $ (2,602 ) $ 4,957 Year Ended December 31, 2016 $ 4,802 $ 3,386 $ 744 $ (3,970 ) $ 4,962 Balance at Beginning of Period Tax Valuation Allowance Charged to Income Tax Provision (1) Charged to Other Accounts (2) Balance at End of Period Valuation allowances for deferred tax assets: Year Ended December 31, 2018 $ 416 $ 5,149 $ — $ 5,565 Year Ended December 31, 2017 $ — $ — $ 416 $ 416 Year Ended December 31, 2016 $ — $ — $ — $ — (1) Relates to the Company’s assessment of the recoverability of its deferred tax assets. (2) The valuation allowance at December 31, 2017 related to deferred tax assets of a business acquired in December 2017. |
DESCRIPTION OF BUSINESS, BASI_2
DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION, ACCOUNTING POLICIES, AND RECENT ACCOUNTING PRONOUNCEMENTS (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All intercompany accounts and transactions have been eliminated in consolidation. Unless otherwise indicated, all dollar amounts presented are in U.S. dollars. The preparation of 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 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. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers cash equivalents to be only those investments which are highly liquid, readily convertible to cash and which have a maturity date within three months from the date of purchase. At December 31, 2018 and 2017 , the Company’s cash and cash equivalents were maintained primarily with major U.S. and U.K. financial institutions and brokerage firms. Deposits with these institutions are generally in excess of the amount insured by the respective government on such deposits. |
Accounts Receivable, including Financing Receivables | Accounts Receivable, including Financing Receivables The Company’s accounts receivable are derived primarily from revenues earned from floral network members located in the U.S. and the U.K. The Company extends credit based upon an evaluation of the customer’s financial condition and, generally, collateral is not required. The Company maintains an allowance for doubtful accounts receivable based upon the expected collectability of accounts receivable and, to date, such losses have been within management’s expectations. The Company evaluates specific accounts receivable where information exists that the customer may have an inability to meet its financial obligations. In these cases, based on reasonably available facts and circumstances, a specific allowance is recorded for that customer against amounts due to reduce the receivable to the amount the Company believes is probable of collection. These specific allowances are re-evaluated and adjusted as additional information is received that impacts the amount of the allowance. Also, an allowance is established for all customers based on the aging of the receivables. If circumstances change (i.e., higher or lower than expected delinquencies or an unexpected material adverse change in a customer’s ability to meet its financial obligations), the estimates of the recoverability of amounts due to the Company are adjusted. The Company aggressively pursues collection of past due receivables through a number of avenues prior to writing off receivables. Past due receivables are those that remain outstanding beyond the payment due date. The Company has financing receivables related to equipment sales to floral network members. The Company records all financing receivables at fair value and amortizes such receivables to stated value. The current and noncurrent portions of financing receivables are included in accounts receivable and other assets, respectively, in the consolidated balance sheets. The Company recognizes interest income as earned. The Company assesses credit quality indicators based on whether financing receivables are current or past due. Financing receivables are placed on nonaccrual status, with interest no longer accruing, when a floral network member ceases to be a member, either due to the member terminating its membership or due to the Company terminating such member’s membership, generally as a result of delinquent payments or violations of FTD’s network standards. The Company would not expect to resume the accrual of interest income unless a member who had terminated its membership chooses to be reinstated as a member at a later date and agrees to a plan to pay its balance, if any, that remains outstanding. The Company assesses financing receivables individually for balances due from current floral network members and collectively for balances due from terminated floral network members. A financing receivable is considered to be impaired when the Company determines that it is probable that it will not be able to collect amounts due under the contractual terms. The Company does not record interest income for impaired receivables. If cash is received, the receivable balance is reduced and related credit allowance adjusted accordingly. Fair value approximates the carrying amount of financing receivables because such receivables are discounted at a rate comparable to market rates for similar receivables. |
Inventory | Inventory The Company’s inventories, which consist primarily of products held for sale, are stated at the lower of cost and net realizable value. Inventory is valued using the first-in, first-out or weighted-average cost method. The Company regularly assesses the valuation of inventory and reviews inventory quantities on hand and, if necessary, writes down excess and obsolete inventory based primarily on the age of the inventory and forecasts of product demand, as well as markdowns for the excess of cost over the amount the Company expects to realize from the sale of certain inventory. |
Property and Equipment | Property and Equipment Property and equipment are stated at historical cost or fair value at the acquisition date less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which is generally three years for computer software and computer equipment, five years for furniture and fixtures, ten years for equipment, and forty years for buildings. Building improvements are depreciated using the straight-line method over the shorter of the remaining building life or the life of the building improvement. Leasehold improvements, which are included in furniture and fixtures, are amortized using the straight-line method over the shorter of the lease term or ten years. Upon the sale or retirement of property or equipment, the cost and related accumulated depreciation or amortization is removed from the Company’s consolidated financial statements with the resulting gain or loss reflected in the Company’s consolidated statements of operations. Repairs and maintenance costs are expensed as incurred. See also “Goodwill, Intangible Assets, and Other Long-Lived Assets” below for the Company’s accounting policy related to the identification of and accounting for impairments of property and equipment. |
Derivative Instruments | Derivative Instruments The Company applies the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 815, Derivatives and Hedging . Through June 2018, the Company maintained interest rate cap instruments to reduce its interest rate risk associated with future cash interest payments on a portion of its outstanding borrowings under the Credit Agreement (as defined below). In addition, at times the Company enters into forward foreign currency exchange contracts to reduce the risk that its net investments in foreign subsidiaries, cash flows and earnings will be adversely affected by foreign currency exchange rate fluctuations. The Company records derivative instruments at fair value in other current assets, other assets or accrued liabilities in the consolidated balance sheets. The Company records changes in the fair value (i.e., gains or losses) of derivative instruments as interest expense or other expense, net, in the consolidated statements of operations or in accumulated other comprehensive loss in the consolidated balance sheets. Neither the interest rate caps nor the forward foreign currency exchange contracts contained any credit risk related contingent features. The Company’s hedging program is not designed for trading or speculative purposes. There were no outstanding hedges or interest rate cap instruments at December 31, 2018. Cash Flow Hedges—The Company’s interest rate cap instruments were designated as cash flow hedges against expected future cash flows attributable to future interest payments on a portion of its outstanding borrowings under the Credit Agreement. The Company initially reported the gains or losses related to the effective portion of the hedges as a component of accumulated other comprehensive loss in the consolidated balance sheets and subsequently reclassifies the interest rate caps’ gains or losses to interest expense when the hedged expenses are recorded. The Company included the change in the time value of the interest rate caps in its assessment of their hedge effectiveness. The Company presented the cash flows from cash flow hedges in the same category in the consolidated statements of cash flows as the category for the cash flows from the hedged items. For additional information related to derivative instruments, see Note 7—“Derivative Instruments.” |
Fair Value Measurements | Fair Value Measurements ASC 820, Fair Value Measurements and Disclosures , establishes a three-tiered hierarchy that draws a distinction between market participant assumptions based on (i) quoted prices (unadjusted) in active markets for identical assets and liabilities (Level 1); (ii) inputs other than quoted prices in active markets that are observable either directly or indirectly (Level 2); and (iii) unobservable inputs that require the Company to use present value and other valuation techniques in the determination of fair value (Level 3). The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when developing fair value measurements. When available, the Company uses quoted market prices to measure fair value. If market prices are not available, fair value measurement is based upon models that use primarily market-based or independently-sourced market parameters. If market observable inputs for model-based valuation techniques are not available, the Company is required to make judgments about assumptions market participants would use in estimating the fair value of the financial instrument. Fair values of cash and cash equivalents, short-term accounts receivable, accounts payable, accrued liabilities, and short-term borrowings approximate their carrying amounts because of their short-term nature. Derivative instruments are recognized in the consolidated balance sheets at their fair values. The fair values for the interest rate caps are calculated using an option pricing model based on available forward yield curves for caplets with the same characteristics adjusted for the counterparty risk of nonperformance based on the credit spread derived from the applicable five -year default swap rates. The fair values of the forward foreign currency exchange contracts are calculated based on quoted market prices of similar instruments adjusted for counterparty risk of nonperformance. The key assumptions used in calculating the fair value of these derivative instruments are the forward rates, discount rate and implied volatility. Long-term debt is carried at amortized cost. However, the Company is required to estimate the fair value of long-term debt under ASC 825, Financial Instruments , based on the discounted cash flow method. The Company estimates the fair value of its long-term debt using Level 2 inputs based on quoted prices of comparable risk bonds using market prices and expected future interest rates based on quoted market rates from the U.S. dollar-denominated interest rate swap curve. |
Goodwill and Indefinite-Lived Intangible Assets | Goodwill, Intangible Assets, and Other Long-Lived Assets Goodwill is tested for impairment at the reporting unit level. A reporting unit is a business or a group of businesses for which discrete financial information is available and is regularly reviewed by management. An operating segment is made up of one or more reporting units. The Company reports its business operations in three operating and reportable segments: U.S. Consumer, Florist, and International. Each of the Florist and International segments is a reporting unit. The U.S. Consumer segment is comprised of three reporting units: FTD.com, ProFlowers/Gourmet Foods, and Personal Creations. The ProFlowers and Gourmet Foods businesses have similar margins and share operations and business team structure, among other similarities. Therefore, these businesses meet the aggregation criteria, and, as such, the Company has aggregated these two businesses into one reporting unit. Goodwill represents the excess of the purchase price of an acquired entity over the fair value of the net tangible and intangible assets acquired and liabilities assumed. Indefinite-lived intangible assets acquired in a business combination are initially recorded at management’s estimate of their fair value. The Company accounts for goodwill and indefinite-lived intangible assets in accordance with ASC 350, Intangibles, Goodwill and Other . Goodwill and indefinite-lived intangible assets are not subject to amortization. The Company tests goodwill and indefinite-lived intangible assets for impairment annually during the fourth quarter of each year at the reporting unit level and on an interim basis if events or substantive changes in circumstances indicate that the carrying amount of a reporting unit or an indefinite-lived asset may exceed its fair value (i.e. that a triggering event has occurred). Additionally, the Company evaluates finite-lived intangible assets and other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset groupings may not be recoverable. Testing goodwill, intangible assets, and other long-lived assets for impairment involves comparing the fair value of the reporting unit or intangible asset to its carrying value. If the carrying amount of a reporting unit, intangible asset, or other long-lived asset exceeds its fair value, an impairment loss is recognized in an amount equal to the excess, up to the carrying value of the goodwill, intangible asset, or other long-lived asset. In calculating the fair value of the reporting units, the Company used a combination of the income approach, the market approach, and the cost approach valuation methodologies. The income approach was used primarily, as the Company believes that a discounted cash flow approach is the most reliable indicator of the fair values of the businesses. Under the market approach, the Company used the guideline company method, which focuses on comparing our risk profile and growth prospects to select reasonably similar companies based on business description, revenue size, markets served and profitability. The cost approach was used as this approach is a generally accepted valuation method when the valuation is either negative or the value of the net assets/liabilities exceeds the expected present value of the economic returns. Under the cost approach, the Company used the net asset value method, which is based on the premise that a prudent investor would pay no more for an asset than its replacement or reproduction cost. The key assumptions used in the income approach discounted cash flow valuation model included discount rates, growth rates, cash flow projections, and terminal growth rates. The cash flow projections reflect management’s forecasts, taking into account both the historical performance of each reporting unit and the expected contributions from anticipated savings related to the Company’s corporate reorganization and cost savings plan as well as the benefits of the strategic initiatives identified in the strategic planning conducted in 2017. The discount rates utilized were indicative of the return an investor would expect to receive for investing in a similar business. Considering industry and company specific historical data and internal forecasts and projections, management developed growth rates and cash flow projections for each reporting unit. In determining the terminal growth rates, the Company considered GDP growth, consumer price inflation, and the long term growth prospects of each reporting unit. The discount rate, growth rates, royalty rates, cash flow projections, and terminal growth rates are also significant estimates used in the determination of the fair value of the indefinite-lived intangible assets. The indefinite-lived intangible assets were valued using the relief from royalty method, which assumes that, in lieu of ownership, a company would be willing to pay a royalty to exploit the benefits of the asset. |
Finite-Lived Intangible Assets and Other Long-Lived Assets | The Company accounts for finite-lived intangible assets and other long-lived assets in accordance with ASC 360, Property, Plant and Equipment . Intangible assets acquired in a business combination are initially recorded at management’s estimate of their fair values. The Company evaluates the recoverability of identifiable intangible assets and other long-lived assets, other than indefinite-lived intangible assets, for impairment when events occur or circumstances change that would indicate that the carrying amount of an asset may not be recoverable. Events or circumstances that may indicate that an asset is impaired include, but are not limited to, significant decreases in the market value of an asset, significant underperformance relative to expected historical or projected future operating results, a change in the extent or manner in which an asset is used, shifts in technology, significant negative industry or economic trends, changes in the Company’s operating model or strategy, and competitive forces. In determining if an impairment exists, the Company estimates the undiscounted cash flows to be generated from the use and ultimate disposition of these assets. If an impairment is indicated based on a comparison of the assets’ carrying amounts and the undiscounted cash flows, the impairment loss is measured as the amount by which the carrying amounts of the assets exceed the respective fair values of the assets. Finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives, ranging from five to fifteen years. The Company’s identifiable intangible assets were acquired primarily in connection with business combinations. |
Revenue Recognition | Revenue Recognition The Company adopted FASB’s ASC 606, Revenue from Contracts with Customers , effective January 1, 2018, using the modified retrospective method. This method requires that the cumulative effect of the initial application is recognized as an adjustment to the opening balance of the Company’s retained earnings at January 1, 2018. However, the adoption did not have a material impact on the Company’s revenue recognition. As such, the Company did not record an adjustment to its beginning balance of retained earnings at January 1, 2018. The Company recognizes revenue from short-term contracts for the sale of various products and services to its customers, which include consumers, floral network members, and wholesale customers. Sales to consumers are generated via the Company’s websites, mobile sites and applications, or over the telephone with payment made either at the time the order is placed or upon shipment. Product revenues from these short-term contracts are single performance obligations and are considered complete upon delivery to the recipient. Amounts collected from customers upon placement of an order are recorded as deferred revenue and recognized upon delivery of the product. Products revenues, less discounts and refunds, and the related cost of revenues are recognized when control of the goods is transferred to the recipient, which is generally upon delivery. Product sales are not refundable other than as related to customer service issues. Shipping and service fees charged to customers are recognized at the time the related products revenues are recognized and are included in products revenues. Shipping and delivery costs are included in cost of revenues. Sales taxes are collected from customers and remitted to the appropriate taxing authorities and are not reflected in the Company’s consolidated statements of operations as revenues. The Company generally recognizes revenues for sales to consumers on a gross basis because the Company controls the goods before they are transferred to the recipient as the Company (i) bears primary responsibility for fulfilling the promise to the customer; (ii) bears inventory risk before and/or after the good or service is transferred to the customer; and (iii) has discretion in establishing the price for the sale of the good or service to the customer. Services revenues related to orders sent through the floral network are variable based on either the number of orders or the value of orders and are recognized in the period in which the orders are delivered. Membership and other subscription-based fees are recognized monthly as earned, on a month-to-month basis. Each service offered by the Company is separate and distinct from other services and represents an individual performance obligation. The Company also sells point-of-sale systems and related technology services to its floral network members and recognizes revenue in accordance with ASC 606. For hardware sales that include software, revenues are recognized when delivery, installation and customer acceptance have all occurred. The transaction price for point-of-sale systems is based on the equipment and the software modules ordered by the customer and include installation and training for the system. The sale of the system is considered a single performance obligation since the installation and training are a significant part of the sale in order for the floral network member to send and receive floral orders through the point-of-sale systems. The Company recognizes revenues on hardware which is sold without software at the time of delivery. Probability of collection for both products and services revenue is assessed based on a number of factors, including past transaction history with the customer and the creditworthiness of the customer. If it is determined that collectability is not reasonably assured, revenues are not recognized until collectability becomes reasonably assured. The Company incurs contract costs that are incremental costs incurred for obtaining a contract. These contract costs are short-term (less than a year) and are expensed as incurred based on the practical expedient provided in ASC 606. As such, the Company does not capitalize costs incurred for obtaining a contract. |
Cost of Revenues | Cost of Revenues Cost of revenues primarily include product costs; shipping and delivery costs; costs associated with taking orders; printing and postage costs; systems installation, training and support costs; telecommunications and data center costs; depreciation of network computers and equipment; license fees; costs related to customer billing and billing support for the Company’s floral network members; fees associated with the storage and processing of customer credit cards and associated bank fees; and personnel and overhead-related costs associated with operating the Company’s networks. |
Sales and Marketing | Sales and Marketing Sales and marketing expenses include expenses associated with promoting the Company’s brands, products and services. Such expenses include advertising and promotion expenses; fees paid to online and other corporate partners and to floral network members related to order volume sent through the Company’s floral network; and personnel and overhead-related expenses for marketing, merchandising, customer service and sales personnel. In addition, sales and marketing expenditures also include branding and customer acquisition campaigns consisting of television, internet, radio, public relations, sponsorships, print and outdoor advertising, and retail and other performance-based distribution relationships. Marketing and advertising costs to promote the Company’s brands, products, and services are expensed in the period incurred. Advertising expenses include media, agency, and promotion expenses. Media production costs are expensed the first time the advertisement is run. Media and agency costs are expensed over the period the advertising runs. |
Software Development Costs | Software Development Costs The Company accounts for costs incurred to develop software for internal-use in accordance with ASC 350, which requires such costs be capitalized and amortized over the estimated useful life of the software. Such capitalized costs include external direct costs incurred in developing or obtaining the applications and payroll and payroll related expenses for employees who are directly associated with developing the applications. Capitalization of such costs begins when the preliminary project stage is complete and ceases at the point in which the project is substantially complete and ready for its intended purpose. The Company capitalized costs associated with internal-use software totaling $19.5 million and $7.2 million in the years ended December 31, 2018 and 2017 , respectively. The internal-use software capitalized costs are being depreciated on a straight-line basis over each project’s estimated useful life, which is generally three to five years. All other capitalized internal use software is included in the computer software category within property and equipment, net, in the consolidated balance sheets. |
Software to be Sold, Leased, or Marketed | Software to be Sold, Leased, or Marketed The Company follows the provisions of ASC 985, Software , which requires that all costs relating to the purchase or internal development and production of computer software products to be sold, leased or otherwise marketed be expensed in the period incurred unless the requirements for technological feasibility have been established. The Company capitalizes all eligible computer software costs incurred once technological feasibility is established. The Company amortizes these costs using the straight-line method over a period of three to five years. |
General and Administrative | General and Administrative General and administrative expenses include personnel-related expenses for executive, finance, legal, human resources, technology, facilities, and internal audit. In addition, general and administrative expenses include, among other costs, maintenance of existing software, technology, and websites; development of new or improved software technology; professional fees for legal, accounting, and financial services; insurance; occupancy and other overhead-related costs; non-income taxes; bad debt expense; reserves or expenses related to litigation, investigations, or similar matters; and gains and losses on sales of assets. General and administrative expenses also include expenses resulting from actual or potential transactions such as acquisitions, spin-offs, financing transactions, and other strategic transactions. |
Restructuring and Other Exit Costs | Restructuring and Other Exit Costs Restructuring and other exit costs consist of costs associated with the realignment and reorganization of the Company’s operations and other employee termination events. Restructuring and other exit costs include employee termination costs, facility closure and relocation costs, impairments of fixed assets related to restructuring actions, and contract termination costs. The timing of associated cash payments is dependent upon the type of exit cost and can extend over a 12 -month period. The Company records restructuring and other exit costs liabilities in accrued liabilities in the consolidated balance sheets. |
Stock-Based Compensation | Stock-Based Compensation The Company’s employees and non-employee directors are generally eligible to participate in the Company’s stock-based compensation plans. Under these plans, certain employees and non-employee directors of the Company received grants of restricted stock units (“RSUs”), performance-based stock units (“PSUs”), and/or stock options for FTD common stock. For additional information related to equity awards, see Note 10—“Incentive Compensation Plans.” Stock-based compensation expense is recognized on a straight-line basis over the vesting period of the award. The fair value of RSUs is based on the closing stock price on the date of grant. The fair value of stock options is determined using the Black-Scholes option-pricing model, which utilizes various assumptions including expected volatility and expected term. For awards issued by the Company, the simplified method was used to determine the term, and the forfeiture rates were based on historical trends for the Company’s employees. Volatility is determined based on a combination of the Company’s and United Online’s historical volatility as the Company represented a significant portion of consolidated United Online prior to the Separation and the Company does not yet have sufficient history to base the assumption on solely its historical volatility. |
Comprehensive Income/(Loss) | Comprehensive Income/(Loss) The Company follows the provisions of ASC 220, Comprehensive Income , which establishes standards for reporting comprehensive income/(loss) and its components in financial statements. Comprehensive income/(loss), as defined, includes all changes in equity during a period from non-owner sources. For the Company, comprehensive income/(loss) primarily consists of its reported net income/(loss), changes in unrealized gains or losses on derivatives (net of tax), and foreign currency translation. |
Foreign Currency Translation | Foreign Currency Translation The Company accounts for foreign currency translation in accordance with ASC 830, Foreign Currency Matters . The functional currency of each of the Company’s international subsidiaries is its respective local currency, with the exception of India for which it is the U.S. dollar. The financial statements of these subsidiaries are translated to U.S. Dollars using period-end rates of exchange for assets and liabilities, and average rates of exchange for the period for revenues and expenses. Translation gains and losses are recorded in accumulated other comprehensive loss as a component of equity in the consolidated balance sheets. |
Income Taxes | Income Taxes The Company applies the provisions of ASC 740, Income Taxes, under which deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce its deferred tax assets to the amount that is more-likely-than-not to be realized. In evaluating the Company’s ability to recover its deferred tax assets, management considers all available positive and negative evidence, including the Company’s operating results, ongoing tax planning, and forecasts of future taxable income on a jurisdiction-by-jurisdiction basis. In accordance with ASC 740, the Company recognizes, in its consolidated financial statements, the impact of its tax positions that are more-likely-than-not to be sustained upon examination based on the technical merits of the positions. The Company recognizes interest and penalties for uncertain tax positions in income tax expense. The Company’s U.S. businesses were in a cumulative three year net loss position, adjusted for permanent items, at December 31, 2018. Given the cumulative losses, which are negative evidence that was considered in assessing the realizability of the U.S. deferred tax assets, the Company did not consider future taxable income exclusive of reversing temporary differences and carryforwards nor did it consider tax planning strategies related to those businesses. The Company did consider the future reversal of existing taxable temporary differences as positive evidence that was considered in assessing the need for a valuation allowance. |
Earnings/(Loss) Per Share | Earnings/(Loss) Per Share The Company computes earnings/(loss) per share in accordance with ASC 260, Earnings Per Share, which provides that unvested share-based payment awards that contain non-forfeitable rights to dividends are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. The two-class method of computing earnings per share is an earnings allocation formula that determines earnings per share for common stock and any participating securities according to dividends declared (whether paid or unpaid) and participation rights in undistributed earnings. Certain of the Company’s RSUs are considered participating securities because they contain non-forfeitable rights to dividends irrespective of whether dividends are actually declared or paid or the awards ultimately vest. |
Legal Contingencies | Legal Contingencies The Company is currently involved in certain legal proceedings and investigations. 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 assessment of the probability of loss or the amount of liability, 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. The Company continually assesses the potential liability related to such pending matters. |
Operating Leases | Operating Leases The Company leases space for warehouses, call center facilities, offices, distribution facilities, technology development and support, and data centers, and leases certain vehicles and office equipment under operating lease agreements with original lease periods of up to thirteen years. Certain of the lease agreements contain rent holidays, rent escalation provisions, and landlord allowances which are considered in determining straight-line rent expense to be recorded over the lease term. The lease term begins on the date of initial possession of the leased property for purposes of recognizing lease expense on a straight-line basis over the term of the lease. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Accounting Standards In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) and issued subsequent amendments to the initial guidance between August 2015 and December 2016, (collectively, “Topic 606”). Topic 606 supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of Topic 606 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The Company adopted the guidance under this topic as of January 1, 2018 with no material impact to its consolidated financial statements. See Accounting Policies— Revenue Recognition above. In January 2016, the FASB issued ASU 2016-01, Financial Instruments—Overall: Recognition and Measurement of Financial Assets and Financial Liabilities (Subtopic 825-10). The updated guidance enhances the reporting model for financial instruments, and includes amendments to address aspects of recognition, measurement, presentation and disclosure. The Company adopted the guidance under this topic as of January 1, 2018 with no impact to its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification 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 Company adopted the guidance under this topic as of January 1, 2018 with no impact to its consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting . This update was issued to provide clarity and reduce diversity in practice as well as cost and complexity when applying the guidance in Topic 718 to the modification of terms or conditions of a share-based payment award. The amendments provide guidance on determining which changes to the terms and conditions of share-based payment awards would require an entity to apply modification accounting under Topic 718. The Company adopted the guidance under this topic as of January 1, 2018 with no impact to its consolidated financial statements. In March 2018, the FASB issued ASU 2018-05, Income Taxes (Topic 740)—Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 , which provides guidance from the SEC allowing for the recognition of provisional amounts in the financial statements for the year ended December 31, 2017 as a result of the U.S. Tax Cuts and Jobs Act (“TCJA”) that was signed into law in December 2017. The guidance allows for a measurement period of up to one year from the enactment date to finalize the accounting related to the TCJA. The Company has applied the guidance in this update in its financial statements for the year ended December 31, 2017 and recorded adjustments related to the TCJA, which were not material, during 2018. Recently Issued Accounting Standards In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . 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. ASU 2016-02 includes a number of optional practical expedients which may be elected by the Company. In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842 (Leases) , which provides narrow amendments to clarify how to apply certain aspects of the new lease standard, and ASU 2018-11, Targeted Improvements to Topic 842 (Leases) , which provides an additional, optional transition method that allows entities to initially apply the requirements by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. An entity that adopts this method must report comparative periods in accordance with current guidance ( Topic 840 ). The amendments will be effective for the Company for fiscal years, and the interim periods within those years, beginning after December 15, 2018. The Company will adopt these ASUs beginning January 1, 2019 using the optional transition method and plans to elect certain practical expedients which permit it to not reassess whether existing contracts are or contain leases, to not reassess the lease classification of any existing leases, to not reassess initial direct costs for any existing leases, and to not separate lease components for all classes of underlying assets. The Company also plans to make an accounting policy election to keep leases with an initial term of 12 months or less off of the balance sheet for all classes of underlying assets. These ASUs also require companies to determine whether impairment indicators for the right-of-use asset at that asset or asset-group level exist as of the January 1, 2019 adoption date. On the date of adoption, the Company will recognize a cumulative-effect adjustment in retained earnings due to impairment of certain right-of-use assets as of the effective date. As a result of adopting the guidance under this topic, the Company will recognize on its balance sheet lease liabilities of approximately $33 million to $38 million associated with in-scope operating leases, based on the present value of the remaining minimum rental payments using incremental borrowing rates as of the effective date. The Company expects to record corresponding right-of-use assets, based upon the operating lease liabilities, adjusted for impairment of right-of-use assets recorded in retained earnings at adoption, and prepaid and deferred rent. The Company does not believe that this update will have a material impact on its consolidated statements of operations or on its consolidated statements of cash flows. The Company has implemented a new lease accounting system to support the new accounting requirements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326) . 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 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 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities . This update seeks to improve the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements and make certain targeted improvements to simplify the application of the hedge accounting guidance in current GAAP. The amendments in this update better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and presentation of hedge results. For cash flow and net investment hedges as of the adoption date, this ASU requires a modified retrospective approach. The amended presentation and disclosure guidance is required only prospectively. The amendments in this ASU are effective for the Company’s fiscal year beginning after December 31, 2018, with early adoption permitted. The adoption of this update will not have a material impact on the Company’s consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . This update allows for a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the TCJA. This update also requires certain disclosures about stranded tax effects. 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, 2018, with early adoption permitted. The Company does not anticipate that the adoption of this update will have a material impact on its consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting . This update allows existing employee guidance to apply to nonemployee share-based transactions (as long as the transaction is not effectively a form of financing), with the exception of specific guidance related to the attribution of compensation cost. The cost of nonemployee awards will continue to be recorded as if the grantor had paid cash for the goods or services. 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, 2018, with early adoption permitted. The Company does not anticipate that the adoption of this update will have a material effect on its consolidated financial statements. I n July 2018, the FASB issued ASU 2018-09, Codification Improvements. This update facilitates technical corrections, clarifications and other minor improvements and should eliminate the need for periodic agenda requests for narrow and incremental items. The FASB does not expect these changes to have a significant administrative cost to most entities. Some of the amendments in this ASU do not require transition guidance and were effective upon issuance. However, many of the amendments do have transition guidance effective for the Company for annual periods beginning after December 15, 2018. The Company does not anticipate that the adoption of this update will have a material effect on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement . This update eliminates, amends and adds disclosure requirements for fair value measurement. Entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but public companies will be required to disclose the range and the weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The amendments in this ASU are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company is currently assessing the impact of this update on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. This update aligns the requirements for capitalizing implementation costs incurred in a cloud computing arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The amendments in this ASU are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company is currently assessing the impact of this update on its consolidated financial statements. In October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities. This update requires entities to consider interests held through related parties under common control on a proportional basis, rather than as the equivalent of a direct interest in its entirety when determining whether a decision-making fee is a variable interest. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. The Company is currently assessing the impact of this update on its consolidated financial statements. In November 2018, the FASB issued ASU 2018-18, Collaborative Agreements (Topic (808): Clarifying the Interaction between Topic 808 and Topic 606 which (1) clarifies that transactions between participants in a collaborative agreement should be accounted for under Topic 606 and (2) adds unit-of-account guidance in Topic 808 to align with Topic 606. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. The Company is currently assessing the impact of this update on its consolidated financial statements. |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of reconciliation of segment revenues to consolidated revenues | Year Ended December 31, 2018 2017 2016 Products revenues: U.S. Consumer $ 727,866 $ 789,011 $ 821,008 Florist 44,579 49,402 48,952 International 133,806 128,501 133,249 Segment products revenues 906,251 966,914 1,003,209 Services revenues: Florist 105,729 116,335 117,929 International 17,339 17,465 19,451 Segment services revenues 123,068 133,800 137,380 Intersegment eliminations (15,075 ) (16,686 ) (18,590 ) Consolidated revenues $ 1,014,244 $ 1,084,028 $ 1,121,999 |
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): Year Ended December 31, 2018 2017 2016 Intersegment revenues: U.S. Consumer $ (14,745 ) $ (16,302 ) $ (18,252 ) Florist (330 ) (384 ) (338 ) Total intersegment revenues $ (15,075 ) $ (16,686 ) $ (18,590 ) |
Schedule of revenue by segment reporting unit | The U.S. Consumer segment is comprised of the FTD.com, ProFlowers, Gourmet Foods, and Personal Creations business units. The revenues for the business units were as follows: Year Ended December 31, 2018 2017 2016 U.S. Consumer revenues: FTD.com $ 227,199 $ 258,085 $ 291,275 ProFlowers 240,819 271,015 284,360 Gourmet Foods 133,583 144,048 135,796 Personal Creations 126,265 115,863 109,577 Total U.S. Consumer revenues $ 727,866 $ 789,011 $ 821,008 |
Schedule of geographic revenues to external customers | Geographic revenues from sales to external customers were as follows for the periods presented (in thousands): Year Ended December 31, 2018 2017 2016 U.S. $ 863,099 $ 938,062 $ 969,299 U.K. 151,145 145,966 152,700 Consolidated revenues $ 1,014,244 $ 1,084,028 $ 1,121,999 |
Schedule of reconciliation of segment operating income to consolidated operating income/(loss) and income/(loss) before income taxes | Below is a reconciliation of segment operating income to consolidated operating loss and loss before income taxes (in thousands): Year Ended December 31, 2018 2017 2016 Segment Operating income/(loss) (a) U.S. Consumer $ (4,556 ) $ 46,439 $ 70,724 Florist 42,673 46,477 48,406 International 12,994 16,770 19,128 Total segment operating income 51,111 109,686 138,258 Unallocated expenses (b) (54,099 ) (44,599 ) (49,899 ) Impairment of goodwill, intangible assets, and other long-lived assets (206,704 ) (300,342 ) (84,000 ) Depreciation expense and amortization of intangible assets (14,939 ) (33,474 ) (85,099 ) Operating loss (224,631 ) (268,729 ) (80,740 ) Interest expense, net (21,552 ) (9,797 ) (9,195 ) Other income, net 2,640 311 1,678 Loss before income taxes $ (243,543 ) $ (278,215 ) $ (88,257 ) (a) Segment operating income/(loss) is operating income/(loss) excluding depreciation and amortization; impairment of goodwill, intangible assets, and other long-lived assets; litigation and dispute settlement charges or gains; transaction and integration costs; restructuring and other exit costs, and corporate reorganization costs. In addition, stock-based and incentive 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, and legal costs. In addition, unallocated expenses include stock-based and incentive compensation, restructuring and other exit costs, corporate reorganization costs, transaction and integration costs, and litigation and dispute settlement charges or gains. |
Schedule of geographic information for long-lived assets | Geographic information for long-lived assets, consisting of amortizable intangible assets, property and equipment, and other non-current assets, was as follows (in thousands): December 31, 2018 2017 U.S $ 58,072 $ 118,581 U.K. 5,368 6,393 Total long-lived assets $ 63,440 $ 124,974 |
FINANCING RECEIVABLES (Tables)
FINANCING RECEIVABLES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of aging of past due financing receivables | The credit quality and the aging of past due financing receivables was as follows (in thousands): December 31, 2018 2017 Current $ 8,158 $ 10,571 Past due: 1 - 150 days past due 207 167 151 - 364 days past due 272 213 365 - 730 days past due 258 184 731 or more days past due 441 357 Total $ 9,336 $ 11,492 |
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): Year Ended December 31, 2018 2017 Allowance for credit losses: Balance at January 1 $ 912 $ 846 Provision 385 446 Write-offs charged against allowance (167 ) (382 ) Recoveries of amounts previously written off 11 2 Balance at December 31 $ 1,141 $ 912 Ending balance collectively evaluated for impairment $ 1,093 $ 865 Ending balance individually evaluated for impairment $ 48 $ 47 Recorded investments in financing receivables: Balance collectively evaluated for impairment $ 1,214 $ 1,013 Balance individually evaluated for impairment $ 8,122 $ 10,479 |
GOODWILL, INTANGIBLE ASSETS, _2
GOODWILL, INTANGIBLE ASSETS, AND OTHER LONG-LIVED ASSETS (Tables) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Schedule of changes in the net carrying amount of goodwill | The changes in the net carrying amount of goodwill for the years ended December 31, 2018 and 2017 were as follows (in thousands): U.S. Consumer Florist International Total Goodwill at December 31, 2016 $ 280,727 $ 109,651 $ 73,087 $ 463,465 Foreign currency translation — — 6,947 6,947 BloomThat acquisition (a) 3,329 — — 3,329 Impairment of Goodwill (177,700 ) (19,000 ) — (196,700 ) Goodwill at December 31, 2017 106,356 90,651 80,034 277,041 Foreign currency translation — — (4,495 ) (4,495 ) Purchase accounting adjustment - BloomThat acquisition (792 ) — — (792 ) Impairment of Goodwill (88,138 ) (21,300 ) — (109,438 ) Goodwill at December 31, 2018 $ 17,426 $ 69,351 $ 75,539 $ 162,316 (a) On December 15, 2017, the Company acquired all of the assets and liabilities of BloomThat | |
Schedule of intangible assets | Intangible assets are primarily related to the acquisition of the Company by United Online in 2008 and the acquisition of Provide Commerce by the Company in 2014 and consist of the following (in thousands): December 31, 2018 December 31, 2017 Gross Value (a) Accumulated Amortization Net Gross Value (a) Accumulated Amortization Net Complete technology $ 60,325 $ (60,325 ) $ — $ 61,274 $ (60,653 ) $ 621 Customer contracts and relationships 192,706 (192,706 ) — 193,775 (193,667 ) 108 Trademarks and trade names Finite-lived 41,413 (28,356 ) 13,057 93,593 (24,875 ) 68,718 Indefinite-lived (b) 78,346 — 78,346 112,518 — 112,518 Total $ 372,790 $ (281,387 ) $ 91,403 $ 461,160 $ (279,195 ) $ 181,965 (a) Gross value has been reduced by the impairments recorded as follows: Year Ended December 31, 2018 2017 Complete technology $ 561 $ 16,335 Customer contracts and relationships 90 — Trademarks and trade names: Finite-lived 52,108 27,000 Indefinite-lived 32,025 38,300 Total $ 84,784 $ 81,635 (b) As indefinite-lived assets are not amortized, the indefinite-lived trademarks and trade names have no associated amortization expense or accumulated amortization. | |
Schedule of estimated future intangible assets amortization expense | As of December 31, 2018 , 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 2019 $ 1,253 2020 1,245 2021 1,241 2022 1,187 2023 1,162 Thereafter 6,969 Total $ 13,057 | |
Schedule of property and equipment | Property and equipment consisted of the following (in thousands): December 31, (a) 2018 2017 Land and improvements $ 1,571 $ 1,583 Buildings and improvements 17,145 16,375 Leasehold improvements 9,348 10,883 Equipment 8,706 13,122 Computer equipment 21,332 25,208 Computer software 73,076 58,991 Furniture and fixtures 4,494 3,215 135,672 129,377 Accumulated depreciation (94,338 ) (95,497 ) Total $ 41,334 $ 33,880 (a) The impairment charges of $12.5 million and $22.0 million recorded during the years ended December 31, 2018 and 2017, respectively, are reflected as reductions in the gross balances. |
FINANCING ARRANGEMENTS (Tables)
FINANCING ARRANGEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of changes in debt balances | The changes in the Company’s debt balances for the years ended December 31, 2018 and 2017 were as follows for the Sixth Amendment (in thousands): Balance at December 31, 2016 Draw Down of Debt Repayments of Debt Balance at December 31, 2017 Revolving Credit Facility $ 120,000 $ 90,000 $ (158,000 ) $ 52,000 Term Loan 160,000 — (20,000 ) 140,000 Total Principal Outstanding $ 280,000 $ 90,000 $ (178,000 ) $ 192,000 Unamortized Debt Financing Fees (3,694 ) (2,334 ) Total Debt, Net of Unamortized Debt Financing Fees $ 276,306 $ 189,666 Balance at December 31, 2017 Draw Down of Debt Repayments of Debt Balance at December 31, 2018 Revolving Credit Facility $ 52,000 $ 283,000 $ (236,000 ) $ 99,000 Term Loan 140,000 — (21,346 ) 118,654 Total Principal Outstanding $ 192,000 $ 283,000 $ (257,346 ) $ 217,654 Unamortized Debt Financing Fees (2,334 ) (9,578 ) Total Debt, Net of Unamortized Debt Financing Fees $ 189,666 $ 208,076 |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of estimated fair values and notional values of outstanding derivative instruments | The estimated fair values and notional values of outstanding derivative instruments as of December 31, 2017 were as follows (in thousands): December 31, 2017 Balance Sheet Location Estimated Fair Value of Derivative Instruments Notional Value of Derivative Instruments Derivative Assets: Interest rate caps Other assets $ — $ 130,000 |
Schedule of gains/(losses) from derivatives, before tax, recognized in other comprehensive income/(loss) | The Company recognized the following losses from derivatives, before tax, in accumulated other comprehensive loss (in thousands): Year Ended December 31, 2018 2017 2016 Derivatives Designated as Cash Flow Hedging Instruments: Interest rate caps $ — $ (1 ) $ (34 ) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
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): December 31, 2018 December 31, 2017 Total Level 1 Level 2 Total Level 1 Level 2 Assets: Cash equivalents $ 1,840 $ 1,840 $ — $ 2,705 $ 2,705 $ — Total $ 1,840 $ 1,840 $ — $ 2,705 $ 2,705 $ — Liabilities: Non-qualified deferred compensation plan $ 842 $ — $ 842 $ 1,228 $ — $ 1,228 Total $ 842 $ — $ 842 $ 1,228 $ — $ 1,228 |
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): December 31, 2018 December 31, 2017 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Level 2 Level 2 Debt outstanding $ 217,654 $ 201,967 $ 192,000 $ 192,000 |
INCENTIVE COMPENSATION PLANS (T
INCENTIVE COMPENSATION PLANS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of the stock-based compensation, incurred under the Plans | The following table summarizes the non-cash stock-based compensation incurred under the Amended Plan that has been included in the consolidated statements of operations (in thousands): Year Ended December 31, 2018 2017 2016 Cost of revenues $ 148 $ 269 $ 135 Sales and marketing 3,108 4,169 4,128 General and administrative 5,971 6,660 9,349 Restructuring and other exit costs 5,457 — 3,373 Total stock-based compensation $ 14,684 $ 11,098 $ 16,985 Tax benefit recognized $ 3,423 $ 4,171 $ 6,240 |
Summary of RSU and PSU balances and activity | The following table summarizes activity for RSUs awarded to the Company’s eligible employees and non-employee directors during the years ended December 31, 2018 , 2017 and 2016 : FTD Restricted Stock Units Weighted-Average Grant Date Fair Value (in thousands) Non-vested at December 31, 2015 649 $ 30.91 Granted 413 24.36 Vested (289 ) 28.96 Cancelled (145 ) 29.16 Non-vested at December 31, 2016 628 27.90 Granted 565 21.40 Vested (288 ) 27.95 Cancelled (167 ) 26.52 Non-vested at December 31, 2017 738 23.19 Granted 3,463 3.60 Vested (568 ) 16.60 Cancelled (313 ) 13.30 Non-vested at December 31, 2018 3,320 $ 4.82 The following table summarizes activity for PSUs awarded to the Company’s eligible employees and non-employee directors during the year ended December 31, 2018 : FTD Performance Stock Units Weighted-Average Grant Date Fair Value (in thousands) Non-vested at December 31, 2017 — $ — Granted 649 6.63 Vested — — Cancelled (347 ) 6.63 Non-vested at December 31, 2018 302 6.63 |
Summary of stock option activity and stock options outstanding and exercisable | The following table summarizes stock option activity for the years ended December 31, 2018 , 2017 , and 2016 and stock options outstanding and exercisable at December 31, 2018 : FTD Options Outstanding Weighted-Average Exercise Price Weighted-Average Remaining Contractual Life (in thousands) (in years) Outstanding options at December 31, 2015 2,138 $ 29.98 5.4 Options granted 1,113 23.08 Options exercised — — Options forfeited (516 ) 28.53 Options expired (77 ) 30.06 Outstanding options at December 31, 2016 2,658 27.37 4.2 Options granted 1,520 18.25 Options exercised — — Options forfeited (422 ) 26.04 Options expired (382 ) 28.07 Outstanding options at December 31, 2017 3,374 23.35 4.0 Options granted 773 6.70 Options exercised — — Options forfeited (667 ) 14.60 Options expired (1,764 ) 22.52 Outstanding options at December 31, 2018 1,716 20.07 4.4 Exercisable at December 31, 2018 835 26.55 2.4 Expected to vest December 31, 2018 763 $ 14.86 6.0 |
Schedule of assumptions used to estimate the fair value of stock options granted | The table below summarizes the weighted average assumptions used by the Company to estimate the fair value of stock options at the grant date: For the Year Ended December 31, 2018 2017 2016 Risk-free interest rate 2.5 % 1.9 % 1.2 % Expected term (in years) 6.21 4.75 3.12 Dividend yield — % — % — % Expected volatility 37.8 % 33.9 % 30.6 % |
Schedule of weighted-average assumptions used to estimate the fair value of employee stock purchase plan shares using the Black-Scholes option pricing model | The fair value of the ESPP Plan shares was estimated using the Black-Scholes option-pricing model with the following weighted-average assumptions: For the Year Ended December 31, 2018 2017 2016 Risk-free interest rate 1.9% 0.9% 0.4% Expected term (in years) 0.5 0.5 0.5 Dividend yield —% —% —% Expected Volatility 75.0% 41.8% 32.4% |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of income before income taxes | Loss before income taxes was comprised of the following (in thousands): Year Ended December 31, 2018 2017 2016 Domestic $ (250,735 ) $ (289,888 ) $ (101,943 ) Foreign 7,192 11,673 13,686 Loss before income taxes $ (243,543 ) $ (278,215 ) $ (88,257 ) |
Schedule of provision for income taxes | The benefit from income taxes was comprised of the following (in thousands): Year Ended December 31, 2018 2017 2016 Current: Federal $ 614 $ 8,657 $ 16,297 State 434 1,101 2,116 Foreign 2,271 2,361 2,709 3,319 12,119 21,122 Deferred: Federal (16,770 ) (50,837 ) (20,895 ) State (5,142 ) (5,313 ) (4,809 ) Foreign (221 ) (143 ) (484 ) (22,133 ) (56,293 ) (26,188 ) Benefit for income taxes $ (18,814 ) $ (44,174 ) $ (5,066 ) |
Schedule of reconciliation of provision for income taxes to the amount computed by applying the statutory federal rate to income before taxes | The benefit for income taxes reconciled to the amount computed by applying the statutory federal rate to loss before taxes as follows (in thousands): Year Ended December 31, 2018 2017 2016 Federal taxes at statutory rate (a) $ (51,145 ) $ (97,375 ) $ (30,890 ) State income taxes, net (4,708 ) (3,205 ) (749 ) Nondeductible goodwill 22,982 68,845 29,336 Nondeductible officer compensation 3,291 377 — Effects of foreign income 425 (1,419 ) (3,283 ) Foreign distribution 697 1,658 4,723 Foreign tax credit — (1,317 ) (2,664 ) Deferred tax adjustment - statutory rate changes 2 (13,654 ) (726 ) Change in valuation allowance 5,149 — — Stock-based compensation 4,199 1,589 7 Other items, net 294 327 (820 ) Benefit from income taxes $ (18,814 ) $ (44,174 ) $ (5,066 ) |
Schedule of significant components of net deferred tax balances | The significant components of net deferred tax balances were as follows (in thousands): December 31, 2018 2017 Deferred tax assets: Net operating loss and foreign tax credit carryforwards $ 3,030 $ 1,580 Allowances and reserves 3,266 2,985 Stock-based compensation 1,257 4,360 Deferred compensation 2,310 2,090 Deferred business interest expense 4,902 — Deferred rent 1,028 830 Depreciation and amortization 1,735 — Other, net 3,267 2,241 Total gross deferred tax assets 20,795 14,086 Less: valuation allowance (5,565 ) (416 ) Total deferred tax assets, net of valuation allowance 15,230 13,670 Deferred tax liabilities: Amortization of intangible assets (21,064 ) (39,047 ) Depreciation and amortization — (4,342 ) Other, net (1,125 ) (1,135 ) Total deferred tax liabilities (22,189 ) (44,524 ) Total net deferred tax liabilities $ (6,959 ) $ (30,854 ) |
Schedule of reconciliation of the beginning and ending amounts of gross unrecognized tax benefits (before federal impact of state items), excluding interest and penalties | A reconciliation of the beginning and ending amounts of gross unrecognized tax benefits (before federal impact of state items), excluding interest and penalties, was as follows (in thousands): Year Ended December 31, 2018 2017 2016 Beginning balance $ 124 $ 140 $ 269 Additions for prior year tax positions 120 124 115 Reductions for prior year tax positions (124 ) (115 ) (110 ) Settlements — — (78 ) Reductions due to lapse in statutes of limitations — (25 ) (56 ) Ending balance $ 120 $ 124 $ 140 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of computation of basic and diluted earnings per common share | The following table sets forth the computation of basic and diluted loss per common share (in thousands, except per share amounts): Year Ended December 31, 2018 2017 2016 Numerator: Net loss $ (224,729 ) $ (234,041 ) $ (83,191 ) Income allocated to participating securities — — — Net loss attributable to common stockholders $ (224,729 ) $ (234,041 ) $ (83,191 ) Denominator: Basic average common shares outstanding 27,972 27,484 27,483 Add: Dilutive effect of securities — — — Diluted average common shares outstanding 27,972 27,484 27,483 Basic loss per common share $ (8.03 ) $ (8.52 ) $ (3.03 ) Diluted loss per common share $ (8.03 ) $ (8.52 ) $ (3.03 ) |
RESTRUCTURING AND OTHER EXIT _2
RESTRUCTURING AND OTHER EXIT COSTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Schedule of restructuring and other exit costs | Restructuring and other exit costs were as follows (in thousands): Employee Termination Costs Facility Closure Costs Total Accrued as of December 31, 2016 $ 8,566 $ 1,378 $ 9,944 Charges 1,834 345 2,179 Cash paid (6,842 ) (1,518 ) (8,360 ) Other non-cash adjustments (3,374 ) (12 ) (3,386 ) Accrued as of December 31, 2017 184 193 377 Charges 18,265 (18 ) 18,247 Cash paid (4,310 ) (175 ) (4,485 ) Other non-cash adjustments (5,457 ) — (5,457 ) Accrued as of December 31, 2018 $ 8,682 $ — $ 8,682 On July 18, 2018, the Company announced that its former President and Chief Executive Officer, John C. Walden, had stepped down from such positions. Under the terms of Mr. Walden’s employment agreement, he is entitled to the severance and other benefits described in such agreement, including cash severance payments, as well as accelerated vesting of a portion of his outstanding nonvested RSUs and unvested stock options. On the same day, the Company also announced a corporate restructuring plan. During the year ended December 31, 2018 , the Company recorded $18.2 million in restructuring charges, which included employee severance costs to be paid in cash of $12.7 million and non-cash stock-based compensation related to the acceleration of certain equity awards of $5.5 million , which is included as an other non-cash adjustment in the above table. |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease payments under non-cancelable operating leases with initial lease terms in excess of one year | Future minimum lease payments at December 31, 2018 under non-cancelable operating leases with initial lease terms in excess of one year were as follows (in thousands): Year Ending December 31, Total 2019 2020 2021 2022 2023 Thereafter Operating leases $ 51,855 $ 7,828 $ 8,245 $ 8,588 $ 7,345 $ 4,923 $ 14,926 |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of supplemental cash flow disclosures | The following table sets forth supplemental cash flow disclosures (in thousands): Year Ended December 31, 2018 2017 2016 Cash paid for interest $ 16,280 $ 8,215 $ 7,556 Cash paid for income taxes, net $ 4,930 $ 13,315 $ 13,972 |
QUARTERLY FINANCIAL DATA (UNA_2
QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of quarterly financial data | Quarter First Second Third Fourth (in thousands, except per share data) Year Ended December 31, 2018: Revenues $ 318,170 $ 299,921 $ 148,621 $ 247,532 Operating loss (4,417 ) (127,117 ) (28,453 ) (64,644 ) Net loss (6,596 ) (118,085 ) (31,210 ) (68,838 ) Basic loss per common share (0.24 ) (4.25 ) (1.11 ) (2.44 ) Diluted loss per common share (0.24 ) (4.25 ) (1.11 ) (2.44 ) Quarter First Second Third Fourth (in thousands, except per share data) Year Ended December 31, 2017: Revenues $ 316,493 $ 328,146 $ 161,304 $ 278,085 Operating income/(loss) 17,840 17,749 (116,645 ) (187,673 ) Net income/(loss) 9,023 9,716 (99,319 ) (153,461 ) Basic earnings/(loss) per common share 0.32 0.35 (3.61 ) (5.57 ) Diluted earnings/(loss) per common share 0.32 0.35 (3.61 ) (5.57 ) During the second and fourth quarters of 2018, the Company recorded goodwill, intangible assets, and other long-lived asset impairments totaling $136.9 million and $67.1 million , respectively. In addition, during the third quarter of 2018, the Company recorded restructuring charges totaling $18.1 million related to its corporate restructuring plan. During the third and fourth quarters of 2017, the Company recorded goodwill, intangible assets, and other long-lived asset impairments totaling $105.7 million and $194.6 million , respectively. |
DESCRIPTION OF BUSINESS, BASI_3
DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION, ACCOUNTING POLICIES, AND RECENT ACCOUNTING PRONOUNCEMENTS (Details) floral_shop in Thousands, $ in Thousands | Nov. 01, 2013company | Dec. 31, 2018USD ($)countryfloral_shop | Jan. 01, 2019USD ($) | Dec. 31, 2017USD ($) |
Description of business | ||||
Number of floral shops (over) | floral_shop | 30 | |||
Number of countries in which floral shops are located (more than) | country | 125 | |||
Inventories | ||||
Inventory reserves as a percentage of inventory | 8.00% | 7.00% | ||
Property and equipment, net | $ 41,334 | $ 33,880 | ||
Valuation allowance | $ 5,565 | $ 416 | ||
Minimum | Subsequent Event | Forecast | ||||
Inventories | ||||
Lease liabilities | $ 33,000 | |||
Maximum | Subsequent Event | Forecast | ||||
Inventories | ||||
Lease liabilities | $ 38,000 | |||
United Online | ||||
Description of business | ||||
Number of independent publicly traded companies | company | 2 | |||
Interflora, Inc. | ||||
Description of business | ||||
Proportion of operation of subsidiary owned by third party | 33.00% |
DESCRIPTION OF BUSINESS, BASI_4
DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION, ACCOUNTING POLICIES, AND RECENT ACCOUNTING PRONOUNCEMENTS - Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Computer Software and Computer Equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 10 years |
Buildings | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 40 years |
Leasehold improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 10 years |
DESCRIPTION OF BUSINESS, BASI_5
DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION, ACCOUNTING POLICIES, AND RECENT ACCOUNTING PRONOUNCEMENTS - Goodwill and Intangibles (Details) | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2018reportable_segment | Dec. 31, 2018 | Dec. 31, 2018reporting_unit | Dec. 31, 2017reportable_segment | |
Finite lived intangible assets | |||||
Number of reportable segments | 3 | 3 | 4 | ||
Fair Value of Financial Instruments | |||||
Period of default swap rate contracts | 5 years | ||||
U.S. Consumer Segment | |||||
Goodwill and Indefinite-Lived Intangible Assets | |||||
Number of reporting units | 3 | 3 | |||
Number of businesses included in a reporting unit | 2 | ||||
Minimum | |||||
Finite Lived Intangible Assets and Other Long-Lived Assets | |||||
Estimated useful lives | 5 years | ||||
Maximum | |||||
Finite Lived Intangible Assets and Other Long-Lived Assets | |||||
Estimated useful lives | 15 years |
DESCRIPTION OF BUSINESS, BASI_6
DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION, ACCOUNTING POLICIES, AND RECENT ACCOUNTING PRONOUNCEMENTS - Sales and Marketing, Restructuring, and Operating Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Sales and Marketing | |||
Advertising and promotion expenses | $ 192,100 | $ 192,600 | $ 173,700 |
Prepaid advertising and promotion expense | 2,100 | 2,000 | |
Carrying value of depreciable assets | $ 41,334 | 33,880 | |
Restructuring and Other Exit Costs | |||
Period over which cash payments associated with exit costs can be extended | 12 months | ||
Maximum | |||
Operating Leases | |||
Original lease periods | 13 years | ||
Internal-use software | |||
Sales and Marketing | |||
Additions to capitalized costs | $ 19,500 | 7,200 | |
Internal-use software | Minimum | |||
Sales and Marketing | |||
Estimated useful lives | 3 years | ||
Internal-use software | Maximum | |||
Sales and Marketing | |||
Estimated useful lives | 5 years | ||
Computer software internally developed and produced to be sold, leased or otherwise marketed | |||
Sales and Marketing | |||
Carrying value of depreciable assets | $ 900 | 1,000 | |
Depreciation expense | $ 200 | $ 300 | $ 400 |
Computer software internally developed and produced to be sold, leased or otherwise marketed | Minimum | |||
Sales and Marketing | |||
Estimated useful lives | 3 years | ||
Computer software internally developed and produced to be sold, leased or otherwise marketed | Maximum | |||
Sales and Marketing | |||
Estimated useful lives | 5 years |
SEGMENT INFORMATION - Segment R
SEGMENT INFORMATION - Segment Revenues (Details) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2018reportable_segment | Dec. 31, 2018USD ($) | Dec. 31, 2018 | Dec. 31, 2017USD ($)reportable_segment | Dec. 31, 2016USD ($) | |
Segment revenues | |||||
Revenues | $ 1,014,244 | $ 1,084,028 | $ 1,121,999 | ||
Number of reportable segments | 3 | 3 | 4 | ||
Intersegment eliminations | |||||
Segment revenues | |||||
Revenues | (15,075) | $ (16,686) | (18,590) | ||
Products | |||||
Segment revenues | |||||
Revenues | 891,506 | 950,612 | 984,957 | ||
Products | Operating Segments | |||||
Segment revenues | |||||
Revenues | 906,251 | 966,914 | 1,003,209 | ||
Services | |||||
Segment revenues | |||||
Revenues | 122,738 | 133,416 | 137,042 | ||
Services | Operating Segments | |||||
Segment revenues | |||||
Revenues | 123,068 | 133,800 | 137,380 | ||
U.S. Consumer Segment | Operating Segments | |||||
Segment revenues | |||||
Revenues | 727,866 | 789,011 | 821,008 | ||
U.S. Consumer Segment | Intersegment eliminations | |||||
Segment revenues | |||||
Revenues | (14,745) | (16,302) | (18,252) | ||
U.S. Consumer Segment | FTD.com | Operating Segments | |||||
Segment revenues | |||||
Revenues | 227,199 | 258,085 | 291,275 | ||
U.S. Consumer Segment | ProFlowers | Operating Segments | |||||
Segment revenues | |||||
Revenues | 240,819 | 271,015 | 284,360 | ||
U.S. Consumer Segment | Gourmet Foods | Operating Segments | |||||
Segment revenues | |||||
Revenues | 133,583 | 144,048 | 135,796 | ||
U.S. Consumer Segment | Personal Creations | Operating Segments | |||||
Segment revenues | |||||
Revenues | 126,265 | 115,863 | 109,577 | ||
U.S. Consumer Segment | Products | Operating Segments | |||||
Segment revenues | |||||
Revenues | 727,866 | 789,011 | 821,008 | ||
Florist | Intersegment eliminations | |||||
Segment revenues | |||||
Revenues | (330) | (384) | (338) | ||
Florist | Products | Operating Segments | |||||
Segment revenues | |||||
Revenues | 44,579 | 49,402 | 48,952 | ||
Florist | Services | Operating Segments | |||||
Segment revenues | |||||
Revenues | 105,729 | 116,335 | 117,929 | ||
International | Products | Operating Segments | |||||
Segment revenues | |||||
Revenues | 133,806 | 128,501 | 133,249 | ||
International | Services | Operating Segments | |||||
Segment revenues | |||||
Revenues | $ 17,339 | $ 17,465 | $ 19,451 |
SEGMENT INFORMATION - Operating
SEGMENT INFORMATION - Operating income reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment operating income/(loss) before income taxes | |||||||||||
Operating income/(loss) | $ (64,644) | $ (28,453) | $ (127,117) | $ (4,417) | $ (187,673) | $ (116,645) | $ 17,749 | $ 17,840 | $ (224,631) | $ (268,729) | $ (80,740) |
Impairment of goodwill, intangible assets, and other long-lived assets | 206,704 | 300,342 | 84,000 | ||||||||
Depreciation expense and amortization of intangible assets | (14,939) | (33,474) | (85,099) | ||||||||
Interest expense, net | (21,552) | (9,797) | (9,195) | ||||||||
Other income, net | 2,640 | 311 | 1,678 | ||||||||
Loss before income taxes | (243,543) | (278,215) | (88,257) | ||||||||
Operating Segments | |||||||||||
Segment operating income/(loss) before income taxes | |||||||||||
Operating income/(loss) | 51,111 | 109,686 | 138,258 | ||||||||
Operating Segments | U.S. Consumer Segment | |||||||||||
Segment operating income/(loss) before income taxes | |||||||||||
Operating income/(loss) | (4,556) | 46,439 | 70,724 | ||||||||
Operating Segments | Florist | |||||||||||
Segment operating income/(loss) before income taxes | |||||||||||
Operating income/(loss) | 42,673 | 46,477 | 48,406 | ||||||||
Operating Segments | International | |||||||||||
Segment operating income/(loss) before income taxes | |||||||||||
Operating income/(loss) | 12,994 | 16,770 | 19,128 | ||||||||
Corporate, Non-Segment | |||||||||||
Segment operating income/(loss) before income taxes | |||||||||||
Unallocated expenses | 54,099 | 44,599 | 49,899 | ||||||||
Segment Reconciling Items | |||||||||||
Segment operating income/(loss) before income taxes | |||||||||||
Impairment of goodwill, intangible assets, and other long-lived assets | (206,704) | (300,342) | (84,000) | ||||||||
Depreciation expense and amortization of intangible assets | $ (14,939) | $ (33,474) | $ (85,099) |
SEGMENT INFORMATION - Geographi
SEGMENT INFORMATION - Geographic revenues and asset (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment information | |||
Revenues | $ 1,014,244 | $ 1,084,028 | $ 1,121,999 |
Long-lived assets | 63,440 | 124,974 | |
U.S. | |||
Segment information | |||
Revenues | 863,099 | 938,062 | 969,299 |
Long-lived assets | 58,072 | 118,581 | |
U.K. | |||
Segment information | |||
Revenues | 151,145 | 145,966 | $ 152,700 |
Long-lived assets | $ 5,368 | $ 6,393 |
FINANCING RECEIVABLES FINANCING
FINANCING RECEIVABLES FINANCING RECEIVABLES - Credit quality of financing receivables (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Credit quality of financing receivables | ||
Current | $ 8,158 | $ 10,571 |
Total | $ 9,336 | $ 11,492 |
FINANCING RECEIVABLES - Financi
FINANCING RECEIVABLES - Financing receivables (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Aging of past due financing receivables | ||
Current | $ 8,158 | $ 10,571 |
Past due: | ||
Total | 9,336 | 11,492 |
Financing receivables on nonaccrual status | 1,200 | 1,000 |
1 - 150 days past due | ||
Past due: | ||
Past due | 207 | 167 |
151 - 364 days past due | ||
Past due: | ||
Past due | 272 | 213 |
365 - 730 days past due | ||
Past due: | ||
Past due | 258 | 184 |
731 or more days past due | ||
Past due: | ||
Past due | $ 441 | $ 357 |
FINANCING RECEIVABLES - Allowan
FINANCING RECEIVABLES - Allowance for credit losses and recorded investment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Allowance for credit losses: | ||
Balance at the beginning of the period | $ 912 | $ 846 |
Provision | 385 | 446 |
Write-offs charged against allowance | (167) | (382) |
Recoveries of amounts previously written off | 11 | 2 |
Balance at the end of the period | 1,141 | 912 |
Ending balance collectively evaluated for impairment | 1,093 | 865 |
Ending balance individually evaluated for impairment | 48 | 47 |
Recorded investments in financing receivables: | ||
Balance collectively evaluated for impairment | 1,214 | 1,013 |
Balance individually evaluated for impairment | $ 8,122 | $ 10,479 |
FINANCING RECEIVABLES - Impaire
FINANCING RECEIVABLES - Impaired receivables (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Individually evaluated impaired loans | ||
Financing receivables on nonaccrual status | $ 1,200 | $ 1,000 |
Allowance related to individually evaluated impaired loans | 48 | 47 |
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 |
Average recorded investment in individually evaluated impaired loans | 100 | 100 |
Interest income recognized on impaired loans | $ 100 | $ 100 |
TRANSACTIONS WITH RELATED PAR_2
TRANSACTIONS WITH RELATED PARTIES - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Qurate | |||
Transactions with related parties | |||
Ownership percentage | 36.00% | ||
Interflora | I.S. Group | |||
Transactions with related parties | |||
Ownership percentage | 20.70% | ||
Amount of investment in related party | $ 1.7 | ||
I.S. Group | Interflora | |||
Transactions with related parties | |||
Revenues from related party | 1.6 | $ 2.2 | $ 2.4 |
Costs of revenues related to products purchased from related parties | 0.5 | 0.3 | $ 0.4 |
Inventory purchased from related parties | 2.8 | ||
Amounts due from related party | 0.2 | 0.3 | |
Amounts payable to related party | $ 0.4 | $ 1 |
GOODWILL, INTANGIBLE ASSETS, _3
GOODWILL, INTANGIBLE ASSETS, AND OTHER LONG-LIVED ASSETS - Goodwill, Narrative (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2018USD ($) | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($)reportable_segment | Dec. 31, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2018USD ($)reporting_unit | Dec. 31, 2017USD ($)reportable_segment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2008USD ($) | |
Goodwill [Line Items] | ||||||||||
Number of reportable segments | 3 | 3 | 4 | |||||||
Goodwill impairment loss | $ 109,438 | $ 196,700 | $ 84,000 | $ 85,000 | $ 116,300 | |||||
Goodwill | $ 162,316 | $ 162,316 | 162,316 | $ 162,316 | $ 162,316 | 277,041 | 463,465 | |||
Accumulated total goodwill impairment | 591,400 | 591,400 | 591,400 | 591,400 | 591,400 | |||||
Cash paid for acquisitions, net of cash acquired | 0 | 2,469 | 0 | |||||||
Florist | ||||||||||
Goodwill [Line Items] | ||||||||||
Percent by which fair value exceeds carrying amount | 6.00% | |||||||||
Goodwill impairment loss | 21,300 | 21,300 | 19,000 | |||||||
Goodwill | 69,351 | 69,351 | 69,351 | $ 69,351 | $ 69,351 | 90,651 | 109,651 | |||
U.S. Consumer Segment | ||||||||||
Goodwill [Line Items] | ||||||||||
Number of reporting units | 3 | 3 | ||||||||
Goodwill impairment loss | 88,138 | 177,700 | ||||||||
Goodwill | 17,426 | $ 17,426 | 17,426 | $ 17,426 | $ 17,426 | 106,356 | 280,727 | |||
U.S. Consumer Segment | FTD.com | ||||||||||
Goodwill [Line Items] | ||||||||||
Goodwill impairment loss | $ 35,200 | |||||||||
U.S. Consumer Segment | ProFlowers/Gourmet Foods reporting unit | ||||||||||
Goodwill [Line Items] | ||||||||||
Goodwill impairment loss | 14,800 | |||||||||
U.S. Consumer Segment | Personal Creations reporting unit | ||||||||||
Goodwill [Line Items] | ||||||||||
Goodwill impairment loss | $ 12,500 | $ 11,900 | ||||||||
U.S. Consumer Segment | Personal Creations Reporting Unit [Member] | ||||||||||
Goodwill [Line Items] | ||||||||||
Goodwill impairment loss | $ 13,800 | |||||||||
International | ||||||||||
Goodwill [Line Items] | ||||||||||
Percent by which fair value exceeds carrying amount | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | |||||
Goodwill impairment loss | $ 0 | 0 | ||||||||
Goodwill | $ 75,539 | $ 75,539 | 75,539 | $ 75,539 | $ 75,539 | $ 80,034 | $ 73,087 | |||
BloomThat, Inc. | ||||||||||
Goodwill [Line Items] | ||||||||||
Cash paid for acquisitions, net of cash acquired | 2,500 | |||||||||
Cash acquired from acquisition | 700 | |||||||||
Current assets, excluding cash | 400 | 400 | 400 | 400 | 400 | |||||
Property and equipment | 100 | 100 | 100 | 100 | 100 | |||||
Acquired finite-lived intangible assets | 1,000 | |||||||||
Current liabilities | 1,900 | 1,900 | 1,900 | 1,900 | 1,900 | |||||
Deferred tax liabilities, net | $ 400 | $ 400 | 400 | $ 400 | $ 400 | |||||
Payments to acquire businesses, gross | $ 2,500 |
GOODWILL, INTANGIBLE ASSETS, _4
GOODWILL, INTANGIBLE ASSETS, AND OTHER LONG-LIVED ASSETS GOODWILL, INTANGIBLE ASSETS, AND OTHER LONG-LIVED ASSETS - Schedule of Changes in Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2008 | |
Goodwill [Roll Forward] | ||||||
Goodwill at the beginning of the period | $ 277,041 | $ 463,465 | ||||
Foreign currency translation | (4,495) | 6,947 | ||||
BloomThat acquisition | 3,329 | |||||
Purchase accounting adjustment - BloomThat acquisition | (792) | |||||
Impairment of Goodwill | (109,438) | (196,700) | $ (84,000) | $ (85,000) | $ (116,300) | |
Goodwill at the end of the period | $ 162,316 | 162,316 | 277,041 | 463,465 | ||
Florist | ||||||
Goodwill [Roll Forward] | ||||||
Goodwill at the beginning of the period | 90,651 | 109,651 | ||||
Foreign currency translation | 0 | 0 | ||||
BloomThat acquisition | 0 | |||||
Purchase accounting adjustment - BloomThat acquisition | 0 | |||||
Impairment of Goodwill | (21,300) | (21,300) | (19,000) | |||
Goodwill at the end of the period | 69,351 | 69,351 | 90,651 | 109,651 | ||
International | ||||||
Goodwill [Roll Forward] | ||||||
Goodwill at the beginning of the period | 80,034 | 73,087 | ||||
Foreign currency translation | (4,495) | 6,947 | ||||
BloomThat acquisition | 0 | |||||
Purchase accounting adjustment - BloomThat acquisition | 0 | |||||
Impairment of Goodwill | 0 | 0 | ||||
Goodwill at the end of the period | 75,539 | 75,539 | 80,034 | 73,087 | ||
U.S. Consumer Segment | ||||||
Goodwill [Roll Forward] | ||||||
Goodwill at the beginning of the period | 106,356 | 280,727 | ||||
Foreign currency translation | 0 | 0 | ||||
BloomThat acquisition | 3,329 | |||||
Purchase accounting adjustment - BloomThat acquisition | (792) | |||||
Impairment of Goodwill | (88,138) | (177,700) | ||||
Goodwill at the end of the period | $ 17,426 | $ 17,426 | $ 106,356 | $ 280,727 |
GOODWILL, INTANGIBLE ASSETS, _5
GOODWILL, INTANGIBLE ASSETS, AND OTHER LONG-LIVED ASSETS - Intangible Assets, Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Intangible assets | ||||
Intangible assets, net | $ 91,403 | $ 91,403 | $ 181,965 | |
BloomThat, Inc. | ||||
Intangible assets | ||||
Acquired finite-lived intangible assets | 1,000 | |||
Trademarks and trade names | ||||
Intangible assets | ||||
Impairment of intangible assets, indefinite-lived (excluding goodwill) | 32,025 | 38,300 | ||
FTD.com and Florist | Trademarks and trade names | ||||
Intangible assets | ||||
Intangible assets, net | 46,700 | 46,700 | ||
International | Trademarks and trade names | ||||
Intangible assets | ||||
Impairment of intangible assets, indefinite-lived (excluding goodwill) | 3,900 | |||
Intangible assets, net | 31,600 | 31,600 | ||
ProFlowers | Trademarks and trade names | ||||
Intangible assets | ||||
Impairment of intangible assets, finite-lived | $ 51,900 | |||
FTD.com and Florist | Trademarks and trade names | ||||
Intangible assets | ||||
Impairment of intangible assets, indefinite-lived (excluding goodwill) | 7,700 | 20,400 | ||
Trademarks and trade names | ||||
Intangible assets | ||||
Impairment of intangible assets, finite-lived | 52,108 | 27,000 | ||
Intangible assets, net | 13,057 | 13,057 | 68,718 | |
Trademarks and trade names | ProFlowers/Gourmet Foods reporting unit | ||||
Intangible assets | ||||
Impairment of intangible assets, indefinite-lived (excluding goodwill) | $ 900 | |||
Customer contracts and relationships | ||||
Intangible assets | ||||
Impairment of intangible assets, finite-lived | 90 | 0 | ||
Intangible assets, net | $ 0 | $ 0 | $ 108 |
GOODWILL, INTANGIBLE ASSETS, _6
GOODWILL, INTANGIBLE ASSETS, AND OTHER LONG-LIVED ASSETS - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Acquired indefinite-lived intangible assets | ||||
Gross Value(a) | $ 372,790 | $ 461,160 | ||
Accumulated Amortization | 281,387 | 279,195 | ||
Net | 91,403 | 181,965 | ||
Amortization of intangible assets | 3,624 | 13,467 | $ 61,050 | |
Trademarks and trade names | ||||
Acquired indefinite-lived intangible assets | ||||
Indefinite-lived | 78,346 | 112,518 | ||
Impairment of intangible assets, indefinite-lived (excluding goodwill) | 32,025 | 38,300 | ||
Complete technology | ||||
Acquired indefinite-lived intangible assets | ||||
Gross Value(a) | 60,325 | 61,274 | ||
Accumulated Amortization | 60,325 | 60,653 | ||
Net | 0 | 621 | ||
Impairment of intangible assets, finite-lived | 561 | 16,335 | ||
Total | 84,784 | 81,635 | ||
Customer contracts and relationships | ||||
Acquired indefinite-lived intangible assets | ||||
Gross Value(a) | 192,706 | 193,775 | ||
Accumulated Amortization | 192,706 | 193,667 | ||
Net | 0 | 108 | ||
Impairment of intangible assets, finite-lived | 90 | 0 | ||
Trademarks and trade names | ||||
Acquired indefinite-lived intangible assets | ||||
Gross Value(a) | 41,413 | 93,593 | ||
Accumulated Amortization | 28,356 | 24,875 | ||
Net | 13,057 | 68,718 | ||
Impairment of intangible assets, finite-lived | $ 52,108 | $ 27,000 | ||
Trademarks and trade names | ProFlowers/Gourmet Foods reporting unit | ||||
Acquired indefinite-lived intangible assets | ||||
Impairment of intangible assets, indefinite-lived (excluding goodwill) | $ 900 |
GOODWILL, INTANGIBLE ASSETS, _7
GOODWILL, INTANGIBLE ASSETS, AND OTHER LONG-LIVED ASSETS - Intangible Assets Future Amortization (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Estimated future intangible assets amortization expense | |
2018 | $ 1,253 |
2019 | 1,245 |
2020 | 1,241 |
2021 | 1,187 |
2022 | 1,162 |
Thereafter | 6,969 |
Total | $ 13,057 |
GOODWILL, INTANGIBLE ASSETS, _8
GOODWILL, INTANGIBLE ASSETS, AND OTHER LONG-LIVED ASSETS GOODWILL, INTANGIBLE ASSETS, AND OTHER LONG-LIVED ASSETS - Schedule of Other Long-Lived Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | $ 135,672 | $ 135,672 | $ 129,377 | |
Accumulated depreciation | (94,338) | (94,338) | (95,497) | |
Total | 41,334 | 41,334 | 33,880 | |
Impairment of long-lived assets related to restructuring activities | 0 | 0 | $ 723 | |
Depreciation | 11,300 | 20,000 | $ 24,000 | |
Land and improvements | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | 1,571 | 1,571 | 1,583 | |
Buildings and improvements | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | 17,145 | 17,145 | 16,375 | |
Leasehold improvements | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | 9,348 | 9,348 | 10,883 | |
Equipment | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | 8,706 | 8,706 | 13,122 | |
Computer equipment | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | 21,332 | 21,332 | 25,208 | |
Computer software | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | 73,076 | 73,076 | 58,991 | |
Furniture and fixtures | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | 4,494 | 4,494 | 3,215 | |
U.S. Consumer Segment | ||||
Property, Plant and Equipment [Line Items] | ||||
Impairment of long-lived assets related to restructuring activities | 12,500 | $ 22,000 | ||
ProFlowers/Gourmet Foods reporting unit | ||||
Property, Plant and Equipment [Line Items] | ||||
Impairment of long-lived assets related to restructuring activities | $ 4,800 | |||
Personal Creations reporting unit | ||||
Property, Plant and Equipment [Line Items] | ||||
Impairment of long-lived assets related to restructuring activities | $ 7,700 |
FINANCING ARRANGEMENTS - Narrat
FINANCING ARRANGEMENTS - Narrative (Details) - USD ($) | Mar. 13, 2019 | Nov. 05, 2018 | Sep. 28, 2018 | May 31, 2018 | Mar. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2014 | Nov. 06, 2018 | Sep. 19, 2014 |
Financing arrangements | |||||||||||
Draw Down of Debt | $ 283,000,000 | $ 90,000,000 | $ 0 | ||||||||
Repayments of debt | 257,346,000 | 178,000,000 | $ 20,000,000 | ||||||||
Credit Agreement | |||||||||||
Financing arrangements | |||||||||||
Letters of credit outstanding | 1,500,000 | ||||||||||
Remaining borrowing capacity | $ 69,500,000 | ||||||||||
Credit Agreement | Minimum | |||||||||||
Financing arrangements | |||||||||||
Monthly fee rate | 2.50% | ||||||||||
Letter of credit fee rate | 2.50% | ||||||||||
Credit Agreement | Maximum | |||||||||||
Financing arrangements | |||||||||||
Percentage of outstanding capital stock of foreign subsidiaries that is pledged as collateral for borrowings | 66.00% | ||||||||||
Letter of credit fee rate | 7.50% | ||||||||||
Credit Agreement | Base rate | Minimum | |||||||||||
Financing arrangements | |||||||||||
Percentage points added to the reference rate | 1.50% | ||||||||||
Credit Agreement | Base rate | Maximum | |||||||||||
Financing arrangements | |||||||||||
Percentage points added to the reference rate | 6.50% | ||||||||||
Credit Agreement | Revolving credit facility | |||||||||||
Financing arrangements | |||||||||||
Face amount of debt | $ 350,000,000 | ||||||||||
Draw Down of Debt | $ 283,000,000 | 90,000,000 | $ 120,000,000 | ||||||||
Commitment fee (as a percent) | 0.50% | ||||||||||
Forbearance fee (as a percent) | 0.125% | ||||||||||
Amendment fee rate | 5.50% | 0.625% | |||||||||
Amendment fee | $ 1,900,000 | ||||||||||
Arrangement fee | $ 500,000 | $ 500,000 | |||||||||
Threshold amount for additional borrowings requiring supporting cash flows | $ 150,000,000 | ||||||||||
Other fees | $ 500,000 | ||||||||||
Deferred portion of other fees | 6,200,000 | ||||||||||
Repayments of debt | $ 236,000,000 | 158,000,000 | |||||||||
Credit Agreement | Revolving credit facility | Minimum | |||||||||||
Financing arrangements | |||||||||||
Commitment fee (as a percent) | 0.50% | ||||||||||
Current borrowing capacity | 90,000,000 | ||||||||||
Credit Agreement | Revolving credit facility | Maximum | |||||||||||
Financing arrangements | |||||||||||
Current borrowing capacity | $ 170,000,000 | ||||||||||
Credit Agreement | Revolving credit facility | Base rate | |||||||||||
Financing arrangements | |||||||||||
Percentage points added to the reference rate | 3.25% | ||||||||||
Credit Agreement | Revolving credit facility | LIBOR | |||||||||||
Financing arrangements | |||||||||||
Reference rate for variable interest rate | Prime | ||||||||||
Stated interest rate (as a percent) | 10.00% | ||||||||||
Effective interest rate (as a percent) | 16.54% | ||||||||||
Credit Agreement | Revolving credit facility | Eurodollar | |||||||||||
Financing arrangements | |||||||||||
Percentage points added to the reference rate | 4.25% | ||||||||||
Aggregate Revolving B Loans | Revolving credit facility | |||||||||||
Financing arrangements | |||||||||||
Monthly fee rate | 2.50% | ||||||||||
Term Loan | Credit Agreement | |||||||||||
Financing arrangements | |||||||||||
Face amount of debt | $ 200,000,000 | ||||||||||
Draw Down of Debt | $ 0 | 0 | |||||||||
Periodic payment, principal (per quarter) | 5,000,000 | ||||||||||
Repayments of debt | 21,346,000 | $ 20,000,000 | |||||||||
Proceeds from sale of business used to repay term loan | $ 1,300,000 | ||||||||||
Term Loan | Credit Agreement | LIBOR | |||||||||||
Financing arrangements | |||||||||||
Reference rate for variable interest rate | PRIME | ||||||||||
Stated interest rate (as a percent) | 10.00% | ||||||||||
Effective interest rate (as a percent) | 16.22% | ||||||||||
Revolving credit facility | Aggregate Revolving B Loans | |||||||||||
Financing arrangements | |||||||||||
Monthly fee rate | 2.50% | ||||||||||
Subsequent Event | Revolving credit facility | Credit Agreement | |||||||||||
Financing arrangements | |||||||||||
Amendment fee rate | 1.00% | ||||||||||
Amendment fee | $ 2,900,000 | ||||||||||
Threshold amount for additional borrowings requiring supporting cash flows | $ 150,000,000 | ||||||||||
Equity interests of certain of the Company’s subsidiaries pledged | 100.00% | ||||||||||
Subsequent Event | Revolving credit facility | Credit Agreement | Minimum | |||||||||||
Financing arrangements | |||||||||||
Current borrowing capacity | $ 60,000,000 | ||||||||||
Minimum adjusted EBITDA required | (4,500,000) | ||||||||||
Subsequent Event | Revolving credit facility | Credit Agreement | Maximum | |||||||||||
Financing arrangements | |||||||||||
Current borrowing capacity | 167,500,000 | ||||||||||
Minimum adjusted EBITDA required | 21,800,000 | ||||||||||
Subsequent Event | Revolving credit facility | Revolving A & B Commitments | |||||||||||
Financing arrangements | |||||||||||
Base amount for quarterly fees | $ 100,000,000 | ||||||||||
Quarterly fee rate | 2.50% | ||||||||||
Amendment Fee - Tranche 1 | Credit Agreement | Revolving credit facility | |||||||||||
Financing arrangements | |||||||||||
Amendment fee rate | 0.50% | ||||||||||
Amendment Fee - Tranche 2 | Credit Agreement | Revolving credit facility | |||||||||||
Financing arrangements | |||||||||||
Amendment fee rate | 5.00% |
FINANCING ARRANGEMENTS - Change
FINANCING ARRANGEMENTS - Change in the Company's debt balances, net of discounts (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2014 | |
Changes in debt balances, net of discounts | ||||
Long-term debt, gross | $ 217,654 | $ 192,000 | $ 280,000 | |
Draw Down of Debt | 283,000 | 90,000 | 0 | |
Repayments of Debt | (257,346) | (178,000) | (20,000) | |
Debt issuance costs | (9,578) | (2,334) | (3,694) | |
Total | 208,076 | 189,666 | 276,306 | |
Term Loan | Credit Agreement | ||||
Changes in debt balances, net of discounts | ||||
Long-term debt, gross | 118,654 | 140,000 | 160,000 | |
Draw Down of Debt | 0 | 0 | ||
Repayments of Debt | (21,346) | (20,000) | ||
Revolving credit facility | Credit Agreement | ||||
Changes in debt balances, net of discounts | ||||
Long-term debt, gross | 99,000 | 52,000 | $ 120,000 | |
Draw Down of Debt | 283,000 | 90,000 | $ 120,000 | |
Repayments of Debt | $ (236,000) | $ (158,000) |
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 | Dec. 31, 2017 | |
Estimated fair values and notional values of outstanding derivative instruments | ||
Purchase of derivative instruments | $ 1,900 | |
Notional Value of Derivative Instruments | $ 130,000 | |
Other assets | ||
Estimated fair values and notional values of outstanding derivative instruments | ||
December 31, 2017 | $ 0 | |
Notional Value of Derivative Instruments | $ 130,000 |
DERIVATIVE INSTRUMENTS - Cash f
DERIVATIVE INSTRUMENTS - Cash flow hedge disclosures (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($)instrument | Dec. 31, 2016USD ($)instrument | |
Derivatives designated as hedging instruments | Cash flow hedging instruments | Interest rate caps | |||
Effect of derivative instruments | |||
Effective portion, before tax effect, of the derivative instruments | $ (300) | $ (800) | |
Gains (losses) from derivatives, before tax, recognized in other comprehensive income (loss) | $ 0 | (1) | (34) |
Derivatives designated as hedging instruments | Cash flow hedging instruments | Interest rate caps | Reclassification out of Accumulated Other Comprehensive Income | |||
Effect of derivative instruments | |||
Gains (losses) from derivatives, before tax, recognized in other comprehensive income (loss) | $ 300 | $ 600 | $ 600 |
Not Designated as Hedging Instrument | Forward foreign currency exchange contracts | |||
Effect of derivative instruments | |||
Number of contracts | instrument | 1 | 0 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - Recurring basis - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Assets: | ||
Money market funds | $ 1,840 | $ 2,705 |
Total | 1,840 | 2,705 |
Liabilities: | ||
Non-qualified deferred compensation plan | 842 | 1,228 |
Total | 842 | 1,228 |
Level 1 | ||
Assets: | ||
Money market funds | 1,840 | 2,705 |
Total | 1,840 | 2,705 |
Liabilities: | ||
Non-qualified deferred compensation plan | 0 | 0 |
Total | 0 | 0 |
Level 2 | ||
Assets: | ||
Money market funds | 0 | 0 |
Total | 0 | 0 |
Liabilities: | ||
Non-qualified deferred compensation plan | 842 | 1,228 |
Total | $ 842 | $ 1,228 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2008 | |
Assets measured at fair value | |||||
Proceeds from life insurance cash surrender values | $ 10,003 | $ 0 | $ 1,946 | ||
Impairment of intangible assets (excluding goodwill) and tangible asset impairment charges | 97,300 | ||||
Goodwill impairment loss | 109,438 | 196,700 | $ 84,000 | $ 85,000 | $ 116,300 |
Other assets | |||||
Assets measured at fair value | |||||
Deferred compensation plan assets | $ 1,600 | $ 11,700 | |||
Term Loan | |||||
Assets measured at fair value | |||||
Credit spread (as a percent) | 18.40% | 1.00% | |||
Estimated yield-to maturity (as a percent) | 20.90% | 2.90% | |||
Revolving credit facility | |||||
Assets measured at fair value | |||||
Credit spread (as a percent) | 19.40% | 1.60% | |||
Estimated yield-to maturity (as a percent) | 21.90% | 3.40% |
FAIR VALUE MEASUREMENTS - Long
FAIR VALUE MEASUREMENTS - Long Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Assets measured at fair value | |||
Long-term debt, including current portion, Carrying Amount | $ 208,076 | $ 189,666 | $ 276,306 |
Carrying Amount | |||
Assets measured at fair value | |||
Long-term debt, including current portion, Carrying Amount | 217,654 | 192,000 | |
Estimated Fair Value | Level 2 | |||
Assets measured at fair value | |||
Long-term debt, including current portion, Estimated Fair Value | $ 201,967 | $ 192,000 |
STOCKHOLDERS' EQUITY - Narrativ
STOCKHOLDERS' EQUITY - Narrative (Details) - USD ($) | Mar. 08, 2016 | Dec. 31, 2014 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Oct. 31, 2013 |
Stockholders' equity | ||||||
Aggregate number of shares authorized | 65,000,000 | |||||
Common shares authorized | 60,000,000 | 60,000,000 | 60,000,000 | |||
Common shares, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||
Preferred stock | ||||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 | |||
Preferred shares, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||
Preferred stock, shares outstanding | 0 | 0 | ||||
Cash dividends | $ 0 | $ 0 | $ 0 | |||
Common Stock Repurchases | ||||||
Amount authorized under stock repurchase program | $ 60,000,000 | |||||
Period under share repurchase programs | 2 years | |||||
Repurchases of common stock | 0 | 600,000 | ||||
Average repurchase cost (in dollars per share) | $ 25.37 | |||||
Provide Commerce | ||||||
Preferred stock | ||||||
Number of shares issued as consideration to Liberty | 10,200,000 | |||||
Qurate | ||||||
Preferred stock | ||||||
Ownership percentage | 36.00% | |||||
RSUs | ||||||
Restricted Stock Units Vesting and Tax Withholdings | ||||||
Awards vested during the period (in shares) | 568,000 | 288,000 | 289,000 | |||
Shares withheld to pay employee tax withholding | 100,000 | 100,000 | ||||
Value of shares withheld to pay employee tax withholding | $ 500,000 | $ 2,000,000 |
INCENTIVE COMPENSATION PLANS -
INCENTIVE COMPENSATION PLANS - Stock options and fair value assumptions (Details) shares in Millions | Dec. 31, 2018shares |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Shares available for issuance | 5.1 |
INCENTIVE COMPENSATION PLANS _2
INCENTIVE COMPENSATION PLANS - Allocation of stock-based compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Stock-Based Compensation | |||
Total stock-based compensation | $ 14,684 | $ 11,098 | $ 16,985 |
Tax benefit recognized | 3,423 | 4,171 | 6,240 |
Cost of revenues | |||
Stock-Based Compensation | |||
Total stock-based compensation | 148 | 269 | 135 |
Sales and marketing | |||
Stock-Based Compensation | |||
Total stock-based compensation | 3,108 | 4,169 | 4,128 |
General and administrative | |||
Stock-Based Compensation | |||
Total stock-based compensation | 5,971 | 6,660 | 9,349 |
Restructuring and other exit costs | |||
Stock-Based Compensation | |||
Total stock-based compensation | $ 5,457 | $ 0 | $ 3,373 |
INCENTIVE COMPENSATION PLANS _3
INCENTIVE COMPENSATION PLANS - RSUs and PSUs (Details) - USD ($) $ / shares in Units, shares in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Restricted Stock Units | |||
Stock-based compensation expense | $ 14,684,000 | $ 11,098,000 | $ 16,985,000 |
RSUs | |||
Restricted Stock Units | |||
Nonvested at the beginning of the period (in shares) | 738 | 628 | 649 |
Granted (in shares) | 3,463 | 565 | 413 |
Vested (in shares) | (568) | (288) | (289) |
Cancelled (in shares) | (313) | (167) | (145) |
Nonvested at the end of the period (in shares) | 3,320 | 738 | 628 |
Weighted-Average Grant Date Fair Value | |||
Nonvested at the beginning of the period (in dollars per share) | $ 23.19 | $ 27.90 | $ 30.91 |
Granted (in dollars per share) | 3.60 | 21.40 | 24.36 |
Vested (in dollars per share) | 16.60 | 27.95 | 28.96 |
Cancelled (in dollars per share) | 13.30 | 26.52 | 29.16 |
Nonvested at the end of the period (in dollars per share) | $ 4.82 | $ 23.19 | $ 27.90 |
Additional disclosures | |||
Fair value of units vested | $ 9,400,000 | $ 8,100,000 | $ 8,400,000 |
Intrinsic value of nonvested units | $ 4,900,000 | ||
Nonvested units expected to vest (in shares) | 2,400 | ||
Intrinsic value of unvested units expected to vest | $ 3,600,000 | ||
Total unrecognized compensation cost related to nonvested units, net of expected forfeitures | $ 12,200,000 | ||
Weighted-average recognition period | 3 years 1 month 6 days | ||
RSUs | Minimum | |||
Restricted Stock Units | |||
Vesting period | 1 year | ||
RSUs | Maximum | |||
Restricted Stock Units | |||
Vesting period | 4 years | ||
PSUs | |||
Restricted Stock Units | |||
Vesting period | 3 years | ||
Stock-based compensation expense | $ 0 | ||
Restricted Stock Units | |||
Nonvested at the beginning of the period (in shares) | 0 | ||
Granted (in shares) | 649 | ||
Vested (in shares) | 0 | ||
Cancelled (in shares) | (347) | ||
Nonvested at the end of the period (in shares) | 302 | 0 | |
Weighted-Average Grant Date Fair Value | |||
Nonvested at the beginning of the period (in dollars per share) | $ 0 | ||
Granted (in dollars per share) | 6.63 | ||
Vested (in dollars per share) | 0 | ||
Cancelled (in dollars per share) | 6.63 | ||
Nonvested at the end of the period (in dollars per share) | $ 6.63 | $ 0 |
INCENTIVE COMPENSATION PLANS _4
INCENTIVE COMPENSATION PLANS - Options (Details) - Stock options - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
FTD Options Outstanding | ||||
Outstanding options at the beginning of the period (in shares) | 3,374 | 2,658 | 2,138 | |
Options granted (in shares) | 773 | 1,520 | 1,113 | |
Options exercised (in shares) | 0 | 0 | 0 | |
Options forfeited (in shares) | (667) | (422) | (516) | |
Options expired (in shares) | (1,764) | (382) | (77) | |
Outstanding options at the end of the period (in shares) | 1,716 | 3,374 | 2,658 | 2,138 |
Exercisable at the end of the period (in shares) | 835 | |||
Expected to vest at the end of the period (in shares) | 763 | |||
Weighted-Average Exercise Price | ||||
Outstanding options at the beginning of the period (in dollars per share) | $ 23.35 | $ 27.37 | $ 29.98 | |
Options granted (in dollars per share) | 6.70 | 18.25 | 23.08 | |
Options exercised (in dollars per share) | 0 | 0 | 0 | |
Options forfeited (in dollars per share) | 14.60 | 26.04 | 28.53 | |
Options expired (in dollars per share) | 22.52 | 28.07 | 30.06 | |
Outstanding options at the end of the period (in dollars per share) | 20.07 | $ 23.35 | $ 27.37 | $ 29.98 |
Exercisable at the end of the period (in dollars per share) | 26.55 | |||
Expected to vest at the end of the period (in dollars per share) | $ 14.86 | |||
Weighted-Average Remaining Contractual Life | ||||
Outstanding at the end of the period | 4 years 4 months 24 days | 4 years | 4 years 2 months 12 days | 5 years 4 months 24 days |
Exercisable at the end of the period | 2 years 4 months 24 days | |||
Expected to vest at the end of the period | 6 years | |||
Additional disclosures | ||||
Weighted-average grant date fair value (in dollars per share) | $ 2.73 | $ 5.85 | $ 5.28 | |
Total unrecognized compensation cost related to nonvested options, net of expected forfeitures | $ 1.5 | |||
Weighted-average recognition period | 1 year 6 months | |||
Minimum | ||||
Incentive Compensation Plan | ||||
Vesting period | 3 years | |||
Expiration period | 5 years | |||
Maximum | ||||
Incentive Compensation Plan | ||||
Vesting period | 4 years | |||
Expiration period | 10 years | |||
Additional disclosures | ||||
Expected to vest at the end of the period | $ 0.1 | |||
Cash received from the exercise of options | $ 0.1 |
INCENTIVE COMPENSATION PLANS _5
INCENTIVE COMPENSATION PLANS - Weighted-average assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Stock options | |||
Assumptions used to estimate the fair value of stock options granted at the grant date | |||
Risk-free interest rate (as a percent) | 2.50% | 1.90% | 1.20% |
Expected terms (in years) | 6 years 2 months 16 days | 4 years 9 months | 3 years 1 month 13 days |
Dividend yield (as a percent) | 0.00% | 0.00% | 0.00% |
Volatility (as a percent) | 37.80% | 33.90% | 30.60% |
Employee Stock Purchase Plan | |||
Assumptions used to estimate the fair value of stock options granted at the grant date | |||
Risk-free interest rate (as a percent) | 1.90% | 0.90% | |
Expected terms (in years) | 6 months | 6 months | 6 months |
Dividend yield (as a percent) | 0.00% | 0.00% | |
Volatility (as a percent) | 75.00% | 41.80% | |
United Online | Employee Stock Purchase Plan | |||
Assumptions used to estimate the fair value of stock options granted at the grant date | |||
Risk-free interest rate (as a percent) | 0.40% | ||
Dividend yield (as a percent) | 0.00% | ||
Volatility (as a percent) | 32.40% | ||
Minimum | United Online | Employee Stock Purchase Plan | |||
Assumptions used to estimate the fair value of stock options granted at the grant date | |||
Expected terms (in years) | 6 months | ||
Maximum | United Online | Employee Stock Purchase Plan | |||
Assumptions used to estimate the fair value of stock options granted at the grant date | |||
Expected terms (in years) | 6 months |
INCENTIVE COMPENSATION PLANS _6
INCENTIVE COMPENSATION PLANS - ESPP (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Jul. 31, 2015 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Incentive Compensation Plan | ||||
Change in valuation allowance | $ 5,149,000 | $ 0 | $ 0 | |
Additional disclosures | ||||
Allocated stock-based compensation | $ 14,684,000 | $ 11,098,000 | $ 16,985,000 | |
Employee Stock Purchase Plan | ||||
Incentive Compensation Plan | ||||
Expected terms (in years) | 6 months | 6 months | 6 months | |
Dividend yield (as a percent) | 0.00% | 0.00% | ||
Employees contribution on earnings, percent | 15.00% | |||
Employees contribution on earnings, amount | $ 25,000 | |||
Maximum number of shares per employee (in shares) | 1,001 | |||
Shares available for purchase under ESPP (in shares) | 100,000 | |||
Length of purchase intervals | 6 months | |||
Percentage of purchase price per share | 85.00% | |||
Additional disclosures | ||||
Allocated stock-based compensation | $ 200,000 | $ 500,000 | ||
Employee Stock Purchase Plan | United Online | ||||
Incentive Compensation Plan | ||||
Dividend yield (as a percent) | 0.00% | |||
Additional disclosures | ||||
Allocated stock-based compensation | $ 600,000 |
INCOME TAXES - Income before In
INCOME TAXES - Income before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income before income taxes | |||
Domestic | $ (250,735) | $ (289,888) | $ (101,943) |
Foreign | 7,192 | 11,673 | 13,686 |
Loss before income taxes | $ (243,543) | $ (278,215) | $ (88,257) |
INCOME TAXES - Provision for in
INCOME TAXES - Provision for income taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current: | |||
Federal | $ 614 | $ 8,657 | $ 16,297 |
State | 434 | 1,101 | 2,116 |
Foreign | 2,271 | 2,361 | 2,709 |
Current tax expense | 3,319 | 12,119 | 21,122 |
Deferred: | |||
Federal | (16,770) | (50,837) | (20,895) |
State | (5,142) | (5,313) | (4,809) |
Foreign | (221) | (143) | (484) |
Deferred tax expense | (22,133) | (56,293) | (26,188) |
Benefit from income taxes | $ (18,814) | $ (44,174) | $ (5,066) |
INCOME TAXES - Provision for _2
INCOME TAXES - Provision for income taxes reconciled to the amount computed by applying the statutory federal rate (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of provision for income taxes to the amount computed by applying the statutory federal rate to income before taxes | |||
Federal taxes at statutory rate of 35% | $ (51,145) | $ (97,375) | $ (30,890) |
State income taxes, net | (4,708) | (3,205) | (749) |
Nondeductible goodwill | 22,982 | 68,845 | 29,336 |
Nondeductible officer compensation | 3,291 | 377 | 0 |
Effects of foreign income | 425 | (1,419) | (3,283) |
Foreign distribution | 697 | 1,658 | 4,723 |
Foreign tax credit | 0 | (1,317) | (2,664) |
Deferred tax adjustment - statutory rate changes | 2 | (13,654) | (726) |
Change in valuation allowance | 5,149 | 0 | 0 |
Transaction-related costs | 4,199 | 1,589 | 7 |
Other items, net | 294 | 327 | (820) |
Provision/(benefit) for income taxes | $ (18,814) | $ (44,174) | $ (5,066) |
Federal taxes at statutory rate (as a percent) | 21.00% | 35.00% | 35.00% |
INCOME TAXES - Significant comp
INCOME TAXES - Significant components of net deferred tax balances (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Net operating loss and foreign tax credit carryforwards | $ 3,030 | $ 1,580 |
Allowances and reserves | 3,266 | 2,985 |
Stock-based compensation | 1,257 | 4,360 |
Deferred compensation | 2,310 | 2,090 |
Deferred business interest expense | 4,902 | 0 |
Deferred rent | 1,028 | 830 |
Depreciation and amortization | 1,735 | 0 |
Other, net | 3,267 | 2,241 |
Total gross deferred tax assets | 20,795 | 14,086 |
Less: valuation allowance | (5,565) | (416) |
Total deferred tax assets, net of valuation allowance | 15,230 | 13,670 |
Deferred tax liabilities: | ||
Amortization of intangible assets | (21,064) | (39,047) |
Depreciation and amortization | 0 | (4,342) |
Other, net | (1,125) | (1,135) |
Total deferred tax liabilities | (22,189) | (44,524) |
Total net deferred tax liabilities | $ (6,959) | $ (30,854) |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Adjustment of deferred tax (asset) liability | $ 14,100 | ||
Transition tax liability | 100 | $ 300 | |
Uncertain tax positions | |||
Gross unrecognized tax benefits | 100 | ||
Gross unrecognized tax benefits, all of which, if recognized, would have an impact on effective income tax rate | 100 | ||
Income tax penalties and interest accrued | 0 | 0 | |
Income tax penalties and interest expense | $ 0 | $ 0 | $ 0 |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of gross unrecognized tax benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of the beginning and ending amounts of gross unrecognized tax benefits (before federal impact of state items), excluding interest and penalties | |||
Beginning balance | $ 124 | $ 140 | $ 269 |
Additions for prior year tax positions | 120 | 124 | 115 |
Reductions for prior year tax positions | (124) | (115) | (110) |
Settlements | 0 | 0 | (78) |
Reductions due to lapse in statutes of limitations | 0 | (25) | (56) |
Ending balance | $ 120 | $ 124 | $ 140 |
EARNINGS PER SHARE - Basic and
EARNINGS PER SHARE - Basic and Diluted Earnings per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Numerator: | |||||||||||
Net loss | $ (68,838) | $ (31,210) | $ (118,085) | $ (6,596) | $ (153,461) | $ (99,319) | $ 9,716 | $ 9,023 | $ (224,729) | $ (234,041) | $ (83,191) |
Income allocated to participating securities | 0 | 0 | 0 | ||||||||
Net loss attributable to common stockholders | $ (224,729) | $ (234,041) | $ (83,191) | ||||||||
Denominator: | |||||||||||
Basic average common shares outstanding | 27,972 | 27,484 | 27,483 | ||||||||
Add: Dilutive effect of non-participating securities (in shares) | 0 | 0 | 0 | ||||||||
Diluted average common shares outstanding | 27,972 | 27,484 | 27,483 | ||||||||
Basic loss per share (in dollars per share) | $ (2.44) | $ (1.11) | $ (4.25) | $ (0.24) | $ (5.57) | $ (3.61) | $ 0.35 | $ 0.32 | $ (8.03) | $ (8.52) | $ (3.03) |
Diluted loss per share (in dollars per share) | $ (2.44) | $ (1.11) | $ (4.25) | $ (0.24) | $ (5.57) | $ (3.61) | $ 0.35 | $ 0.32 | $ (8.03) | $ (8.52) | $ (3.03) |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - $ / shares | Dec. 31, 2014 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Oct. 31, 2013 |
Earnings per share | |||||
Aggregate number of shares authorized | 65,000,000 | ||||
Common shares authorized | 60,000,000 | 60,000,000 | 60,000,000 | ||
Common shares, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 | ||
Preferred shares, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Weighted-average antidilutive shares | 4,000,000 | 3,800,000 | 2,300,000 | ||
Provide Commerce | |||||
Earnings per share | |||||
Number of shares issued as consideration to Liberty | 10,200,000 |
RESTRUCTURING AND OTHER EXIT _3
RESTRUCTURING AND OTHER EXIT COSTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Changes in restructuring and other exit costs | ||||
Accrued restructuring at the beginning of the period | $ 377 | $ 9,944 | ||
Charges | $ (18,100) | (18,247) | (2,179) | $ (11,758) |
Cash paid | (4,485) | (8,360) | ||
Other adjustments | (5,457) | (3,386) | ||
Accrued restructuring at the end of the period | 8,682 | 377 | 9,944 | |
Employee Termination Costs | ||||
Changes in restructuring and other exit costs | ||||
Accrued restructuring at the beginning of the period | 184 | 8,566 | ||
Charges | (18,265) | (1,834) | ||
Cash paid | (4,310) | (6,842) | ||
Other adjustments | (5,457) | (3,374) | ||
Accrued restructuring at the end of the period | 8,682 | 184 | 8,566 | |
Facility Closure Termination Costs | ||||
Changes in restructuring and other exit costs | ||||
Accrued restructuring at the beginning of the period | 193 | 1,378 | ||
Charges | 18 | (345) | ||
Cash paid | (175) | (1,518) | ||
Other adjustments | 0 | (12) | ||
Accrued restructuring at the end of the period | $ 0 | $ 193 | $ 1,378 |
RESTRUCTURING AND OTHER EXIT _4
RESTRUCTURING AND OTHER EXIT COSTS RESTRUCTURING AND OTHER EXIT COSTS - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Restructuring and Related Activities [Abstract] | ||||
Restructuring charges | $ 18,100 | $ 18,247 | $ 2,179 | $ 11,758 |
Employee severance costs | 12,700 | |||
Non-cash stock-based compensation related to acceleration of equity awards | $ 5,457 | $ 3,386 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Leases and Other Commitments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Future minimum lease payments under non-cancelable operating leases with initial lease terms in excess of one year | |||
Total | $ 51,855 | ||
2019 | 7,828 | ||
2020 | 8,245 | ||
2021 | 8,588 | ||
2022 | 7,345 | ||
2023 | 4,923 | ||
Thereafter | 14,926 | ||
Rent expense under operating leases | |||
Rent expense | 10,500 | $ 9,800 | $ 9,800 |
Letters of Credit | |||
Commitments and Contingencies | |||
Commitments | $ 1,500 | ||
Expiration period of commitments | 1 year |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Legal Matters (Details) $ in Millions | Dec. 14, 2011claim_filed | Aug. 19, 2009 | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Contingencies-legal matters | ||||
Reserve for estimated losses related to certain of the matters | $ | $ 2.8 | $ 2.5 | ||
Provide Commerce | ||||
Contingencies-legal matters | ||||
Period for consolidation of cases filed since the original August 19, 2009 lawsuit | 3 years | |||
Number of claims | claim_filed | 10 |
SUPPLEMENTAL CASH FLOW INFORM_3
SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Supplemental Cash Flow Elements [Abstract] | |||
Cash paid for interest | $ 16,280 | $ 8,215 | $ 7,556 |
Cash paid for income taxes, net | 4,930 | $ 13,315 | $ 13,972 |
Purchases of property and equipment included in accounts payable and other liabilities | 500 | ||
Deferred financing fees included in interest payable | $ 6,200 |
QUARTERLY FINANCIAL DATA (UNA_3
QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2008 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||
Revenues | $ 247,532 | $ 148,621 | $ 299,921 | $ 318,170 | $ 278,085 | $ 161,304 | $ 328,146 | $ 316,493 | |||||
Operating income/(loss) | (64,644) | (28,453) | (127,117) | (4,417) | (187,673) | (116,645) | 17,749 | 17,840 | $ (224,631) | $ (268,729) | $ (80,740) | ||
Net loss | $ (68,838) | $ (31,210) | $ (118,085) | $ (6,596) | $ (153,461) | $ (99,319) | $ 9,716 | $ 9,023 | $ (224,729) | $ (234,041) | $ (83,191) | ||
Basic loss per share (in dollars per share) | $ (2.44) | $ (1.11) | $ (4.25) | $ (0.24) | $ (5.57) | $ (3.61) | $ 0.35 | $ 0.32 | $ (8.03) | $ (8.52) | $ (3.03) | ||
Diluted loss per share (in dollars per share) | $ (2.44) | $ (1.11) | $ (4.25) | $ (0.24) | $ (5.57) | $ (3.61) | $ 0.35 | $ 0.32 | $ (8.03) | $ (8.52) | $ (3.03) | ||
Impairment of goodwill, intangible assets, and other long-lived assets | $ 67,100 | $ 136,900 | $ 194,600 | $ 105,700 | $ 206,704 | $ 300,342 | $ 84,000 | ||||||
Restructuring and other exit costs | $ 18,100 | 18,247 | 2,179 | 11,758 | |||||||||
Goodwill impairment loss | $ 109,438 | $ 196,700 | $ 84,000 | $ 85,000 | $ 116,300 |
SCHEDULE II-VALUATION AND QUA_2
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Allowance for doubtful accounts and sales allowances | |||
Valuation allowance | |||
Balance at Beginning of Period | $ 4,957 | $ 4,962 | $ 4,802 |
Additions Charged to Expense | 2,636 | 2,084 | 3,386 |
Charged to Other Accounts | 30 | 513 | 744 |
Write-offs | (556) | (2,602) | (3,970) |
Balance at End of Period | 7,067 | 4,957 | 4,962 |
Valuation Allowance of Deferred Tax Assets | |||
Valuation allowance | |||
Balance at Beginning of Period | 416 | 0 | 0 |
Additions Charged to Expense | 5,149 | 0 | 0 |
Charged to Other Accounts | 0 | 416 | 0 |
Balance at End of Period | $ 5,565 | $ 416 | $ 0 |