Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Aug. 05, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | AP Gaming Holdco, Inc. | |
Entity Central Index Key | 1,593,548 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 15,038,127 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Current assets | ||
Cash and cash equivalents | $ 27,850 | $ 35,722 |
Restricted cash | 100 | 100 |
Accounts receivable, net of allowance of $560 and $113, respectively | 24,998 | 23,653 |
Inventories | 7,826 | 7,087 |
Prepaid expenses | 3,784 | 4,642 |
Deposits and other | 2,608 | 2,440 |
Total current assets | 67,166 | 73,644 |
Property and equipment, net | 62,146 | 66,699 |
Goodwill | 252,595 | 253,851 |
Deferred tax asset | 37 | 37 |
Intangible assets | 263,274 | 290,356 |
Other assets | 21,343 | 26,560 |
Total assets | 666,561 | 711,147 |
Current liabilities | ||
Accounts payable and accrued liabilities | 21,475 | 23,030 |
Current maturities of long-term debt | 6,991 | 6,919 |
Total current liabilities | 28,466 | 29,949 |
Long-term debt | 540,275 | 533,290 |
Deferred tax liability - noncurrent | 10,838 | 15,347 |
Other long-term liabilities | 28,279 | 32,024 |
Total liabilities | 607,858 | 610,610 |
Commitments and contingencies (Note 14) | ||
Stockholders’ equity | ||
Preferred stock at $0.01 par value; 100,000 shares authorized, no shares issued and outstanding | 0 | 0 |
Common stock at $0.01 par value; 30,000,100 shares authorized; 100 Class A Shares issued and outstanding at June 30, 2016 and December 31, 2015, and 14,931,529 Class B Shares issued and outstanding at June 30, 2016 and December 31, 2015. | 149 | 149 |
Additional paid-in capital | 177,276 | 177,276 |
Accumulated deficit | (114,982) | (75,077) |
Accumulated other comprehensive loss | (3,740) | (1,811) |
Total stockholders’ equity | 58,703 | 100,537 |
Total liabilities and stockholders’ equity | $ 666,561 | $ 711,147 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Allowance for trade accounts | $ 560 | $ 113 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 100,000 | 100,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 30,000,100 | 30,000,100 |
Common Class A [Member] | ||
Common stock, shares issued | 100 | 100 |
Common stock, shares outstanding | 100 | 100 |
Common Class B [Member] | ||
Common stock, shares issued | 14,931,529 | 14,931,529 |
Common stock, shares outstanding | 14,931,529 | 14,931,529 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | ||
Revenues | |||||
Gaming operations | $ 39,578 | $ 24,785 | $ 78,216 | $ 43,352 | |
Equipment sales | 3,040 | 1,511 | 4,637 | 1,739 | |
Total revenues | 42,618 | 26,296 | 82,853 | 45,091 | |
Operating expenses | |||||
Cost of gaming operations | [1] | 6,643 | 5,613 | 12,916 | 8,807 |
Cost of equipment sales | [1] | 3,376 | 254 | 3,546 | 339 |
Selling, general and administrative | 11,001 | 8,798 | 23,684 | 14,948 | |
Research and development | 5,179 | 3,033 | 9,842 | 4,308 | |
Write downs and other charges | 191 | 7,728 | 301 | 11,209 | |
Depreciation and amortization | 20,566 | 12,209 | 41,108 | 20,555 | |
Total operating expenses | 46,956 | 37,635 | 91,397 | 60,166 | |
Loss from operations | (4,338) | (11,339) | (8,544) | (15,075) | |
Other expense (income) | |||||
Interest expense | 14,632 | 8,006 | 29,248 | 12,278 | |
Interest income | (16) | (17) | (39) | (26) | |
Other expense | 1,500 | 523 | 5,922 | 999 | |
Loss before income taxes | (20,454) | (19,851) | (43,675) | (28,326) | |
Income tax benefit | 1,615 | 22,700 | 3,770 | 21,940 | |
Net (loss) income | (18,839) | 2,849 | (39,905) | (6,386) | |
Foreign currency translation adjustment | (2,010) | (426) | (1,929) | (183) | |
Total comprehensive (loss) income | $ (20,849) | $ 2,423 | $ (41,834) | $ (6,569) | |
Basic and diluted loss per common share: | |||||
Basic (in dollars per share) | $ (1.26) | $ 0.24 | $ (2.67) | $ (0.59) | |
Diluted (in dollars per share) | $ (1.26) | $ 0.24 | $ (2.67) | $ (0.59) | |
Weighted average common shares outstanding: | |||||
Basic (in shares) | 14,932 | 11,734 | 14,932 | 10,872 | |
Diluted (in shares) | 14,932 | 12,118 | 14,932 | 10,872 | |
[1] | Exclusive of depreciation and amortization |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Cash flows from operating activities | ||
Net loss | $ (39,905) | $ (6,386) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 41,108 | 20,555 |
Accretion of contract rights under development agreements and placement fees | 2,348 | 137 |
Amortization of deferred loan costs and discount | 1,711 | 813 |
Provision for bad debts | 504 | 21 |
Imputed interest income | 0 | (15) |
Loss on disposition of assets | 617 | 781 |
Impairment of assets | 0 | 3,047 |
Benefit for deferred income tax | (4,320) | (22,039) |
Changes in assets and liabilities that relate to operations: | ||
Accounts receivable and notes receivable | (1,555) | (182) |
Inventories | 1,989 | 1,332 |
Prepaid expenses | 854 | (555) |
Deposits and other | (125) | (308) |
Other assets, non-current | 4,298 | (726) |
Accounts payable and accrued liabilities | 8,026 | 2,542 |
Net cash provided by (used in) operating activities | 15,550 | (983) |
Cash flows from investing activities | ||
Business acquisitions, net of cash acquired | 0 | (370,280) |
Collection of notes receivable | 0 | 235 |
Purchase of intangible assets | (65) | (2,448) |
Software development and other expenditures | (3,957) | (1,831) |
Proceeds from disposition of assets | 87 | 11 |
Purchases of property and equipment | (12,415) | (7,843) |
Net cash used in investing activities | (16,350) | (382,156) |
Cash flows from financing activities | ||
Borrowings under the revolving facility | 0 | 11,500 |
Repayments under the revolving facility | 0 | (21,500) |
Proceeds from Issuance of Debt | 0 | 369,400 |
Payment of placement fee obligations | (2,525) | 0 |
Payments on debt | (3,396) | (1,910) |
Payment of previous acquisition obligation | (1,125) | (9,000) |
Repurchase of shares issued to management | 0 | (1,277) |
Proceeds from Issuance of Common Stock | 0 | 77,425 |
Proceeds from employees in advance of common stock issuance | 0 | 504 |
Payments of Deferred Loan Costs | 0 | 3,837 |
Net cash (used in) provided by financing activities | (7,046) | 421,305 |
Effect of exchange rates on cash and cash equivalents | (26) | (30) |
(Decrease) increase in cash and cash equivalents | (7,872) | 38,136 |
Cash and cash equivalents, beginning of period | 35,722 | 10,680 |
Cash and cash equivalents, end of period | 27,850 | 48,816 |
Supplemental cash flow information: | ||
Cash paid during the period for interest | 19,519 | 11,306 |
Cash paid during the period for taxes | 628 | 0 |
Non-cash investing and financing activities: | ||
Financed purchase of property and equipment | 1,250 | 2,535 |
Interest payable added to debt principal | $ 7,490 | $ 310 |
Description of the Business and
Description of the Business and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Description of the Business and Summary of Significant Accounting Policies | DESCRIPTION OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business AP Gaming Holdco, Inc. (the “Company,” “AP Gaming,” “we,” “us,” or “our”) is a leading designer and supplier of gaming products and services for the gaming industry. The Company is a leader in the Class II Native American and Mexican gaming jurisdictions and has expanded its product lines to include Class III Native American, commercial and charity jurisdictions. We supply electronic gaming machines (“slot machines”), server-based systems and back-office systems that are used by casinos and various gaming locations. Over the past two years, the Company has significantly broadened and diversified its product portfolio through both organic development and strategic acquisitions. We launched a new table products division in mid-2014 to provide live felt table games to casino operators. Through the acquisition of Cadillac Jack (defined in Note 2) on May 29, 2015, we greatly expanded our games library and slot machine offerings. The Company also acquired online developer Gamingo Limited in June 2015, further expanding its offerings to include interactive products such as social casino games, available to play on desktop and mobile devices. Basis of Presentation The accompanying condensed consolidated financial statements have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, certain disclosures required by generally accepted accounting principles (“GAAP”) are omitted or condensed in these condensed consolidated financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) that are necessary to state fairly the Company's financial position, results of operations and cash flows for the interim periods have been made. The interim results reflected in these condensed consolidated financial statements are not necessarily indicative of results to be expected for the full fiscal year. The accompanying condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015. Principles of Consolidation The accompanying condensed consolidated financial statements include the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Certain amounts in the consolidated financial statements for the previous years have been reclassified to be consistent with the current year presentation. These reclassifications had no effect on the previously reported net (loss) income. Use of Estimates The preparation of financial statements in conformity with GAAP requires the Company to make decisions based upon estimates, assumptions, and factors considered relevant to the circumstances. Such decisions include the selection of applicable accounting principles and the use of judgment in their application, the results of which impact reported amounts and disclosures. Changes in future economic conditions or other business circumstances may affect the outcomes of the estimates and assumptions. Accordingly, actual results could differ materially from those anticipated. Revenue Recognition Gaming Operations Gaming operations revenue is earned by providing customers with gaming machines, gaming machine content licenses, back-office equipment and linked progressive systems, which are collectively referred to as gaming equipment, under participation arrangements. The participation arrangements convey the right to use the equipment (i.e. gaming machines and related integral software) for a stated period of time and are accounted for as operating leases. Under these arrangements, the Company retains ownership of the gaming equipment installed at customer facilities and receives either revenue based on a percentage of the win per day generated by the gaming equipment or a daily fee. The majority of the Company’s leases require the Company to provide maintenance throughout the entire term of the lease. In some cases, a performance guarantee exists that, if not met, requires the Company to replace or remove the gaming machines from the customer’s floor. Whether contractually required or not, the Company develops and provides new gaming titles throughout the life of the lease. Certain arrangements require a portion of the facility’s win per day to be set aside to be used to fund facility-specific marketing, advertising, promotions and service. These amounts are offset against gaming revenue. Gaming operations revenue is also earned from the licensing of table game content and is earned and recognized on a fixed monthly rate. Our social gaming products earn revenue from the sale of virtual coins or chips, which is recorded when the purchased coins or chips are used by the customer. Equipment Sales Revenues from the stand-alone product sales or separate accounting units are recorded when: • Pervasive evidence of an arrangement exists; • The sales price is fixed and determinable; • Delivery has occurred and services have been rendered; and • Collectability is reasonably assured. Equipment sales are generated from the sale of gaming machines and licensing rights to game content software that is installed in the gaming machine, parts, and other ancillary equipment. Also included within the deliverables are delivery, installation and training, all of which occur within a few days of arriving at the customer location. Gaming equipment sales do not include maintenance beyond a standard warranty period. The recognition of revenue from the sale of gaming devices occurs as title and risk of loss have passed to the customer and all other revenue recognition criteria have been satisfied. As the combination of game content software and the tangible gaming device function together to deliver the product’s essential functionality, revenue from the sale of gaming devices is recognized under general revenue recognition guidance. Cash and Cash Equivalents Cash and cash equivalents consist primarily of deposits held at major banks and other marketable securities with original maturities of 90 days or less. Restricted Cash Restricted cash amounts represent funds held in escrow as collateral for the Company’s surety bonds for various gaming authorities and funds held to ensure the availability of funds to pay wide-area progressive jackpot awards. Allowance for Doubtful Accounts The Company maintains an allowance for doubtful accounts related to accounts receivable deemed to have a high risk of collectability. The Company reviews the accounts receivable on a monthly basis to determine if any receivables will potentially be uncollectible. The Company analyzes historical collection trends and changes in the customers’ payment patterns, customer concentration, and credit worthiness when evaluating the adequacy of the allowance for doubtful accounts. A large percentage of receivables are with Native American tribes, and the Company has concentrations of credit risk with several tribes. The Company includes any receivable balances that are determined to be uncollectible in the overall allowance for doubtful accounts. Changes in the assumptions or estimates reflecting the collectability of certain accounts could materially affect the allowance for accounts receivable. Inventories Inventories consist primarily of parts and supplies that are used to repair and maintain machinery and equipment. Inventories are stated at the lower of cost or market. Cost of inventories is determined using the first-in, first-out (“FIFO”) method for all components of inventory. The Company regularly reviews inventory quantities and updates estimates for the net realizable value of inventories. This process includes examining the carrying values of parts and ancillary equipment in comparison to the current fair market values for such equipment (less costs to sell or dispose). Some of the factors involved in this analysis include the overall levels of the inventories, the current and projected sales levels for such products, the projected markets for such products and the costs required to sell the products, including refurbishment costs. Changes in the assumptions or estimates could materially affect the inventory carrying value. Property and Equipment The cost of gaming equipment, consisting of fixed-base player terminals, file servers and other support equipment as well as other property and equipment, is depreciated over their estimated useful lives, using the straight-line method for financial reporting. Repairs and maintenance costs are expensed as incurred. The Company routinely evaluates the estimated lives used to depreciate assets. The estimated useful lives are as follows: Gaming equipment 3 to 6 years Other property and equipment 3 to 6 years The Company measures recoverability of assets to be held and used by comparing the carrying amount of an asset to future cash flows expected to be generated by the asset. The Company’s policy is to impair, when necessary, excess or obsolete gaming machines on hand that it does not expect to be used. Impairment is based upon several factors, including estimated forecast of gaming machine demand for placement into casinos. While the Company believes that the estimates and assumptions used in evaluating the carrying amount of these assets are reasonable, different assumptions could affect either the carrying amount or the estimated useful lives of the assets, which could have a significant impact on the results of operations and financial condition. Intangible Assets The Company reviews its identifiable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Impairment losses are recognized for identifiable intangibles, other than goodwill, when indicators of impairment are present and the estimated undiscounted cash flows are not sufficient to recover the assets’ carrying amount. When the estimated undiscounted cash flows are not sufficient to recover the intangible asset’s carrying amount, an impairment loss is measured to the extent the fair value of the asset is less than its carrying amount. Certain trade names have an indefinite useful life and the Company tests these trade names for possible impairment at least annually, on October 1, or whenever events or changes in circumstances indicate that the carrying value may be impaired. We perform a qualitative assessment to determine if it is more likely than not that the fair value of the asset is less than its carrying amount. If we believe, as a result of our qualitative assessment, that it is more likely than not that the fair value of the asset is less than its carrying amount, the quantitative impairment test is required. Costs of Computer Software Internally developed gaming software represents the Company’s internal costs to develop gaming titles to utilize on the Company’s gaming machines. Internally developed gaming software is stated at cost and amortized over the estimated useful lives of the software, using the straight-line method. Software development costs are capitalized once technological feasibility has been established and are amortized when the software is placed into service. The computer software we develop reaches technological feasibility when a working model of the computer software is available. Any subsequent software maintenance costs, such as bug fixes and subsequent testing, are expensed as incurred. Discontinued software development costs are expensed when the determination to discontinue is made. Software development costs are amortized over the expected life of the title or group of titles, if applicable, to amortization expense. On a quarterly basis, or more frequently if circumstances warrant, the Company compares the net book value of its internally developed computer software to the net realizable value on a title or group of title basis. The net realizable value is determined based upon certain assumptions, including the expected future revenues and net cash flows of the gaming titles or group of gaming titles utilizing that software, if applicable. Goodwill The excess of the purchase price of an acquired business over the estimated fair value of the assets acquired and the liabilities assumed is recorded as goodwill. The Company tests for possible impairment of goodwill at least annually, on October 1, or when circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. The Company has the option to begin with a qualitative assessment, commonly referred to as “Step 0”, to determine whether it is more likely than not that the reporting unit’s fair value of goodwill is less than its carrying value. This qualitative assessment may include, but is not limited to, reviewing factors such as the general economic environment, industry and market conditions, changes in key assumptions used since the most recently performed valuation and overall financial performance of the reporting units. If the Company determines that it is more likely than not that a reporting unit’s fair value is less than its carrying value, the Company performs a quantitative goodwill impairment analysis, and depending upon the results of that measurement, the recorded goodwill may be written down and charged to income from operations when its carrying amount exceeds its estimated fair value. As of June 30, 2016 , there were no indicators of impairment. Deferred Financing Costs Direct and incremental costs incurred and original issue discounts in connection with the issuance of long-term debt are deferred and amortized using the effective interest method over the life of the related loans. Deferred financing costs incurred in connection with the issuance of the Company's revolving credit facilities of $0.3 million at June 30, 2016 and December 31, 2015 are presented in other assets on the Condensed Consolidated Balance Sheets. All other deferred financing costs are presented as a direct reduction of long-term debt on the Condensed Consolidated Balance Sheets. See the Recently Issued Accounting Pronouncements section below for details on the presentation change of deferred financing costs. Acquisition Accounting The Company applies the provisions of ASC 805, “ Business Combinations” (ASC 805), in accounting for business acquisitions. It requires us to recognize separately from goodwill the fair value of assets acquired and liabilities assumed on the acquisition date. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. Significant estimates and assumptions are required to value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable. These estimates are inherently uncertain and subject to refinement and typically include the calculation of an appropriate discount rate and projection of the cash flows associated with each acquired asset. As a result, during the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the consolidated statements of operations. Fair Value of Financial Instruments The Company applies the provisions of ASC 820, “ Fair Value Measurements ” (ASC 820) to its financial assets and liabilities. Fair value is defined as a market-based measurement intended to estimate the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. ASC 820 also established a fair value hierarchy, which requires an entity to maximize the use of observable inputs when measuring fair value. These inputs are categorized as follows: • Level 1 - quoted prices in an active market for identical assets or liabilities; • Level 2 - quoted prices in an active market for similar assets or liabilities, inputs other than quoted prices that are observable for similar assets or liabilities, inputs derived principally from or corroborated by observable market data by correlation or other means; and • Level 3 - valuation methodology with unobservable inputs that are significant to the fair value measurement. The carrying values of the Company’s cash and cash equivalents, restricted cash, receivables and accounts payable approximate fair value because of the short term maturities of these instruments. The fair value of our long-term debt is based on the quoted market prices for similar issues (Level 2 inputs). The estimated fair value of our long-term debt as of June 30, 2016 and December 31, 2015 was $522.3 million and $529.2 million , respectfully. Accounting for Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that included the enactment date. Future tax benefits are recognized to the extent that realization of those benefits is considered more likely than not, and a valuation allowance is established for deferred tax assets which do not meet this threshold. Contingencies The Company assesses its exposures to loss contingencies including claims and legal proceedings and accrues a liability if a potential loss is considered probable and the amount can be estimated. Significant judgment is required in both the determination of probability and the determination as to whether an exposure is reasonably estimable. Because of uncertainties related to these matters, if the actual loss from a contingency differs from management’s estimate, there could be a material impact on the results of operations or financial position. Operating expenses, including legal fees, associated with contingencies are expensed when incurred. Foreign Currency Translation The financial statements of the Company’s foreign subsidiaries are translated into U.S. dollars at the period end rate of exchange for asset and liability accounts and the weighted average rate of exchange for income statement accounts. The effects of these translations are recorded as a component of other accumulated comprehensive loss in stockholders’ equity. Recently Issued Accounting Pronouncements In May 2014, the FASB issued an accounting standards update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) , which clarifies the principles for recognizing revenue from contracts with customers. The amendment outlines a single comprehensive model for entities to depict the transfer of goods or services to customers in amounts that reflect the payment to which a company expects to be entitled in exchange for those goods or services. The amendment also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which deferred the effective date of ASU 2014-09 to annual periods, and interim reporting periods within those annual periods, beginning after December 15, 2017. The ASU may be adopted using either a full retrospective transition method or a modified retrospective transition method and will be adopted by the Company on January 1, 2018. The Company is currently evaluating the provisions of the amendments and the impact on its future consolidated financial statements. In June 2014, the FASB issued ASU No. 2014-12, Compensation—Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved After the Requisite Service Period . The ASU clarifies the proper method of accounting for share-based payments when the terms of an award provide that a performance target could be achieved after the requisite service period. This ASU requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. The performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The adoption of this standard on January 1, 2016, did not have a material effect on our financial position, results of operations or cash flows. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern: Disclosure of Uncertainties About an Entity's Ability to Continue as a Going Concern . The ASU requires management to assess an entity’s ability to continue as a going concern and to provide related footnote disclosures in certain circumstances. Substantial doubt about an entity's ability to continue as a going concern exists when relevant conditions and events, consolidated in the aggregate, indicate that it is probable that an entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. Currently, there is no guidance in U.S. GAAP for management's responsibility to perform an evaluation. Under the update, management's evaluation is to be performed when preparing financial statements for each annual and interim reporting period and based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued. The amendments in this update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. The Company will adopt this standard in its Annual Report on Form 10-K for the year ended December 31, 2016 , and we do not expect it to have a material effect on our consolidated financial statements. In January 2015, the FASB issued ASU No. 2015-01, Income Statement-Extraordinary and Unusual Items: Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items . ASU 2015-01 eliminates from GAAP the concept of extraordinary items. The presentation and disclosure guidance for items that are unusual in nature or occur infrequently will be retained and will be expanded to include items that were previously classified as extraordinary. ASU 2015-01 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted using either a prospective or retrospective method. The adoption of this standard on January 1, 2016, did not have a material effect on our financial condition, results of operations or cash flows. In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs . ASU 2015-03 intends to simplify the presentation of debt issuance costs by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. In August 2015, the FASB issued ASU 2015-15 which clarifies that the guidance issued in April 2015 does not apply to line-of-credit arrangements. According to ASU 2015-15, line-of-credit arrangements will continue to present debt issuance costs as an asset and subsequently amortize the deferred debt issuance costs ratably over the term of the arrangement. ASU 2015-03 is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The Company adopted the guidance on January 1, 2016, with retrospective application in the accompanying Condensed Consolidated Balance Sheet at December 31, 2015. This change in accounting principle resulted in net deferred financing costs of $7.8 million incurred in connection with the issuance of the Company's long-term debt (excluding revolving credit facilities) at December 31, 2015 being reclassified as a direct reduction of the long-term debt balance. The presentation of the net deferred financing costs incurred in connection with the issuance of the Company's revolving credit facilities as of December 31, 2015, are not affected by the adoption of this new accounting guidance and are included in other assets in the accompanying Condensed Consolidated Balance Sheet. In July 2015, the FASB issued ASU No. 2015-11, Inventory: Simplifying the Measurement of Inventory . ASU 2015-11 changes the criteria for measuring inventory within the scope of the ASU. Inventory will now be measured at the lower of cost and net realizable value, while the concept of market value will be eliminated. The ASU defines net realizable value as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. ASU 2015-11 is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the provisions of ASU 2015-11 to have a material effect on our financial condition, results of operations or cash flows. In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments . ASU 2015-16 eliminates the requirement to retrospectively apply adjustments made to provisional amounts recognized in a business combination. It requires that an acquirer recognize and disclose adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined, which should be calculated as if the accounting had been completed at the acquisition date. ASU 2015-16 is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The amendments in this ASU 2015-16 should be applied prospectively to adjustments to provisional amounts that occur after the effective date of this ASU with earlier application permitted for financial statements that have not been issued. The adoption of this standard on January 1, 2016, did not have a material effect on our financial position, results of operations or cash flows. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . ASU 2016-02 intends to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The adoption of this guidance is expected to result in a significant portion of our operating leases, where we are the lessee, to be recognized on our Consolidated Balance Sheets. The guidance requires lessees and lessors to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years with earlier adoption permitted. The Company is currently evaluating the provisions of the amendment and the impact on its future consolidated financial statements. |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2016 | |
Business Combinations [Abstract] | |
Acquisitions | ACQUISITIONS Cadillac Jack On May 29, 2015, the Company acquired 100% of the equity of Amaya Americas Corporation (“Cadillac Jack”), a leading provider of Class II gaming machines for the North American tribal gaming market, with key regions of operation within Alabama, Mexico, and Wisconsin. This acquisition is expected to create growth opportunities in Class II and Class III jurisdictions and expands the Company’s geographic footprint. The combined management teams are complementary and possess years of combined experience that is expected to allow us to effectively grow and improve our business. We completed the allocation of the purchase price in the current quarter and the final fair value of assets acquired and liabilities assumed is the same as that disclosed in Form 10-K for the year ended December 31, 2015. We attribute the goodwill acquired to our enhanced financial scale and geographic diversification, opportunities for synergies, assembled workforce and other strategic benefits. None of the goodwill associated with the acquisition is deductible for income tax purposes and, as such, no deferred taxes have been recorded related to goodwill. The following unaudited pro forma statements of operations give effect to the Cadillac Jack acquisition as if it had been completed on January 1, 2014. The unaudited pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of what the operating results actually would have been during the periods presented had the acquisition been completed on January 1, 2014. In addition, the unaudited pro forma financial information does not purport to project future operating results. The pro forma statements of operations do not reflect: (1) any anticipated synergies (or costs to achieve synergies) or (2) the impact of non-recurring items directly related to the Cadillac Jack acquisition. Three months ended June 30, Six months ended June 30, 2015 2015 Revenue $ 39,102 $ 77,909 Net loss $ 14,468 $ 28,684 Gamingo Limited On June 15, 2015, the Company purchased 100% of the equity of Gamingo Limited (formerly known as “RocketPlay”, currently known as “AGSi”), a leading gaming company developing social casino titles for mobile devices. With primary offices in San Francisco and Tel Aviv, AGSi’s flagship product, Lucky Play Casino, gives players a casino-quality experience with slots, table games, tournaments, and live events. We completed the allocation of the purchase price in the current quarter and the final fair value of assets acquired and liabilities assumed is the same as that disclosed in Form 10-K for the year ended December 31, 2015. Intellectual Property Acquisitions During the quarter ended September 30, 2015, the Company acquired certain intangible assets related to the purchase of table games and table game related intellectual property. Some of the acquisitions were accounted for as an acquisition of a business and the assets acquired and liabilities assumed were measured based on our preliminary estimates of their fair values at the acquisition dates. In the current quarter we updated the purchase price allocation, which caused an increase to goodwill of $800,000 and a related decrease to intangible assets. The estimated fair values of assets acquired and liabilities assumed and resulting goodwill are subject to adjustment as we finalize our fair value analysis. |
Property and equipment
Property and equipment | 6 Months Ended |
Jun. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | PROPERTY AND EQUIPMENT Property and equipment consist of the following (in thousands): June 30, December 31, Gaming equipment $ 98,167 $ 89,361 Other property and equipment 12,361 14,976 Less: Accumulated depreciation (48,382 ) (37,638 ) Total property and equipment, net $ 62,146 $ 66,699 Gaming equipment and other property and equipment are depreciated over the respective useful lives of the assets ranging from three to six years. Depreciation expense was $7.3 million and $5.0 million for the three months ended June 30, 2016 and 2015 , respectively. Depreciation expense was $14.6 million and $8.9 million for the six months ended June 30, 2016 and 2015 , respectively. |
Goodwill and Intangibles
Goodwill and Intangibles | 6 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangibles | GOODWILL AND INTANGIBLES There were no accumulated impairments of goodwill as of June 30, 2016 . Changes in the carrying amount of goodwill are as follows (in thousands): Gross Carrying Amount Balance at December 31, 2015 $ 253,851 Foreign currency adjustments (2,056 ) Purchase accounting adjustment 800 Balance at June 30, 2016 $ 252,595 Intangible assets consist of the following (in thousands): June 30, 2016 December 31, 2015 Useful Life (years) Gross Value Accumulated Amortization Net Carrying Value Gross Value Accumulated Amortization Net Carrying Value Indefinite lived trade names Indefinite $ 12,126 $ 12,126 $ 12,126 $ — $ 12,126 Trade and brand names 7 13,600 (3,196 ) 10,404 13,600 (1,721 ) 11,879 Customer relationships 7 169,790 (37,997 ) 131,793 170,927 (26,676 ) 144,251 Contract rights under development and placement fees 1 - 7 16,376 (2,896 ) 13,480 16,311 (548 ) 15,763 Gaming software and technology platforms 1 - 5 120,416 (36,493 ) 83,923 116,930 (23,735 ) 93,195 Intellectual property 10 13,230 (1,682 ) 11,548 14,030 (888 ) 13,142 $ 345,538 $ (82,264 ) $ 263,274 $ 343,924 $ (53,568 ) $ 290,356 Intangible assets are amortized over their respective estimated useful lives ranging from one to ten years. Amortization expense related to intangible assets was $13.2 million and $7.2 million for the three months ended June 30, 2016 and 2015 , respectively. Amortization expense related to intangible assets was $26.5 million and $11.7 million for the six months ended June 30, 2016 and 2015 , respectively. The Company enters into development agreements and placement fee agreements with certain customers to secure floor space under lease agreements for its gaming machines. Amounts paid in connection with the development agreements are repaid to the Company in accordance with the terms of the agreement, whereas placements fees are not reimbursed. For development agreements in the form of a loan, interest income is recognized on the repayment of the notes based on the stated rate or, if not stated explicitly in the development agreement, on an imputed interest rate. If the stated interest rate is deemed to be other than a market rate or zero, a discount is recorded on the note receivable as a result of the difference between the stated and market rate and a corresponding intangible asset is recorded. The intangible asset is recognized in the financial statements as a contract right under development agreement and amortized as a reduction in revenue over the term of the agreement. Placement fees can be in the form of cash paid upfront or free lease periods and are accreted over the life of the contract and the expense is recorded as a reduction of revenue. We recorded a reduction of gaming operations revenue from the accretion of contract rights under development agreements and placement fees of $1.2 million and $0.1 million for the three months ended June 30, 2016 and 2015, respectively. We recorded a reduction of gaming operations revenue from the accretion of contract rights under development agreements and placement fees of $2.3 million and $0.1 million for the six months ended June 30, 2016 and 2015, respectively. |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 6 Months Ended |
Jun. 30, 2016 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Liabilities | ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Accounts payable and accrued liabilities consist of the following (in thousands): June 30, December 31, Trade accounts payable $ 4,519 $ 4,776 Salary and payroll tax accrual 5,008 5,851 Taxes payable 2,318 2,440 Accrued interest 5 8 C2 Gaming contingent consideration — 1,125 Placement fees payable 4,000 4,525 Accrued other 5,625 4,305 Total accounts payable and accrued liabilities $ 21,475 $ 23,030 |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | LONG-TERM DEBT Long-term debt consists of the following (in thousands): June 30, December 31, Senior secured credit facilities: Term loans, interest at LIBOR or base rate plus 8.25% (9.25% at June 30, 2016), net of unamortized discount and deferred loan costs of $16.7 million and $18.2 million at June 30, 2016 and December 31, 2015, respectively. $ 396,106 $ 396,717 Senior secured PIK notes, net of unamortized discount and deferred loan costs of $3.7 million and $3.9 million at June 30, 2016 and December 31, 2015, respectively. 125,813 118,764 Seller notes 19,496 18,902 Equipment long-term note payable and capital leases 5,851 5,826 Total debt (1) 547,266 540,209 Less: Current portion (6,991 ) (6,919 ) Long-term debt $ 540,275 $ 533,290 (1) Pursuant to the adoption of ASU 2015-03, debt issuance costs of $7.8 million were deducted from the carrying amount of related debt as of December 31, 2015. Senior Secured Credit Facilities On December 20, 2013, the Company entered into our senior secured credit facilities, which consisted of $155.0 million in term loans and a $25.0 million revolving credit facility. On May 29, 2015, the Company entered into incremental facilities for $265.0 million in term loans and on June 1, 2015, the Company entered into an incremental agreement for an additional $15.0 million of incremental revolving commitments. The proceeds of the incremental term loans were used primarily to pay the consideration for the Cadillac Jack acquisition. The term loans will mature on December 20, 2020, and the revolving credit facility will mature on December 20, 2018. The term loans require scheduled quarterly payments in amounts equal to 0.25% of the original aggregate principal amount of the term loans, with the balance due at maturity. Borrowings under the term loans bear interest at a rate equal to, at the Company’s option, either LIBOR or the base rate, subject to an interest rate floor plus an applicable margin rate. Borrowings under the revolving credit facility bear interest at a rate equal to, at the Company’s option, either LIBOR or the base rate plus an applicable margin rate. In addition, on a quarterly basis, the Company is required to pay each lender under the revolving credit facility a commitment fee in respect of any unused commitments thereunder at a rate of 0.50% per annum. The senior secured credit facilities are guaranteed by AP Gaming Holdings, LLC, the AP Gaming I, LLC’s (the “Borrower”) material, wholly owned domestic subsidiaries (subject to certain exceptions), and are secured by a pledge by AP Gaming Holdings, LLC of the Borrower’s equity interest directly held by AP Gaming Holdings, LLC and a pledge of substantially all of the existing and future property and assets of the Borrower and the subsidiary guarantors, subject to certain exceptions. The senior secured credit facilities require that the Borrower maintain a maximum net first lien leverage ratio set at a maximum of 5.5 to 1 beginning with the first quarter ending June 30, 2014. The senior secured credit facilities contain limitations on additional indebtedness, guarantees, incurrence of liens, investments and distributions, as defined. The senior secured credit facilities also contain customary events of default included in similar financing transactions, including, among others, failure to make payments when due, default under other material indebtedness, breach of covenants, breach of representations and warranties, involuntary or voluntary bankruptcy, and material judgments. The Company was in compliance with the covenants of the senior secured credit facilities at June 30, 2016 . Senior secured PIK notes On May 29, 2015, the Company entered into a note purchase agreement with AP Gaming Holdings, LLC, as subsidiary guarantor (the “Subsidiary Guarantor”), Deutsche Bank AG, London Branch, as purchaser (the “Purchaser”), and Deutsche Bank Trust Company Americas, as collateral agent. Pursuant to the agreement, the Company issued $115.0 million of its 11.25% senior secured PIK notes due 2021 (the “Notes”) at an issue price of 97% of the principal amount thereof to the Purchaser in a private placement exempt from registration under the Securities Act of 1933, as amended. The Notes are secured by the Company’s equity in its subsidiary AP Gaming, Inc., subject to certain limitations including those imposed by gaming laws, and are unconditionally guaranteed by the Subsidiary Guarantor. Interest on the Notes will accrue at a rate of 11.25% per annum. The Company may elect to pay interest due on the Notes in cash, by increasing the principal of the outstanding Notes or by issuing new Notes (“PIK interest”) for the entire amount of the interest payment or by paying interest partially in cash and partially in PIK interest. Interest on the Notes will accrue from the the date of issuance and will be payable on the dates described in more detail in the agreement. The Notes will mature on May 28, 2021. The net proceeds of the Notes were used primarily to finance the acquisition of Cadillac Jack. The Notes contain limitations on additional indebtedness, guarantees, incurrence of liens, investments and distributions, as defined. The Notes also contains customary events of default included in similar transactions, including, among others, failure to make payments when due, acceleration of other material indebtedness, breach of covenants, breach of representations and warranties, involuntary or voluntary bankruptcy, and material judgments. Seller notes On December 20, 2013, the Company issued two promissory notes (the “AGS Seller Notes”) to AGS Holdings, LLC, in the amounts of $2.2 million and $3.3 million , to satisfy the conditions set forth in the Equity Purchase Agreement entered into on September 16, 2013 (as subsequently amended and restated on December 3, 2013, the “Acquisition Agreement”). Acquisition Agreement. At June 30, 2016 , notes payable related to the AGS Seller Notes totaled $6.8 million , which includes capitalized interest of $1.3 million . The Seller Notes accrue interest on the unpaid principal balance at 8.5% per annum and shall be payable semi-annually in arrears on June 30 and December 31, commencing on June 30, 2014. Any interest accrued and payable on any interest payment date will be paid by capitalizing such interest and adding it to (and thereby increasing) the outstanding principal amount of this AGS Seller Notes. All principal and interest under the AGS Seller Notes is due and payable on June 18, 2021, the maturity date. The Company may prepay from time to time all or any portion of the outstanding principal balance due under the AGS Seller Notes. On May 29, 2015, the Company issued a promissory note to Amaya Inc. (the “Amaya Seller Note”) with an initial principal amount of $12.0 million to satisfy the conditions set forth in the Cadillac Jack Stock Purchase Agreement (the “Stock Purchase Agreement”). The Amaya Seller Note accrues interest on the unpaid principal amount at 5.0% per annum and is payable semi-annually on June 30 and December 31 (and on May 29, 2023, the maturity date of the note), commencing on June 30, 2015. All interest accrued and payable on any interest payment date will be paid by capitalizing such interest and adding it to (and thereby increasing) the outstanding principal amount of the Amaya Seller Note. All principal under the note is due and payable on May 29, 2023. The Amaya Seller Note is required to be prepaid under certain circumstances described in more detail in the note agreement. As of June 30, 2016 , there was no requirement to prepay the Amaya Seller Note. The Company may prepay from time to time all or any portion of the outstanding principal balance due under the Amaya Seller Note. The Amaya Seller Note includes certain covenants and events of default that are customary for instruments of this type. At June 30, 2016 , the Amaya Seller Note totaled $12.7 million , which includes capitalized interest of $0.7 million . Equipment Long Term Note Payable and Capital Leases The Company has entered into a financing agreement to purchase certain gaming devices, systems and related equipment and has entered into leases for servers and equipment that are accounted for as capital leases. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
Stockholders' Equity | STOCKHOLDERS’ EQUITY Common Stock The Company’s common stock consists of two classes: class A voting common stock (“Class A Shares”) and class B non-voting common stock (“Class B Shares”). The holders of the Class A Shares are entitled to one vote per share on all matters to be voted on by the stockholders of the Company. The holders of the Class A Shares have no economic rights or privileges, including rights in liquidation, and have no right to receive dividends or any other distributions. The holders of the Class B Shares have no right to vote on any matter to be voted on by the stockholders of the Company. Each holder of Class B Shares is entitled to share equally, share for share, dividends declared, as well as any distributions to the stockholders, and in the event of the Company’s liquidation, dissolution or winding up, is entitled to share ratably in any remaining assets after payment of or provision for liabilities and the liquidation on preferred stock, if any. As of June 30, 2016 , 106,498 Class B Shares issued to “Management Holders,” as defined in the Securityholders Agreement dated April 28, 2014 (the “Securityholders Agreement”) were outstanding. The Class B Shares issued to Management Holders are not considered issued for accounting purposes as they contain a substantive performance condition that must be met for the Management Holder to benefit from the ownership of the shares. As a result, shares issued to Management Holders are not considered issued for accounting purposes until such time that the performance condition is met. Class B Shares that are held by a Management Holder are subject to repurchase rights (the “Repurchase Rights”), as outlined in Section 6 of the Securityholders Agreement, that are contingent on the Management Holder’s termination. The Repurchase Rights enable the Company to recover the Class B Shares issued to Management Holders without transferring any appreciation of the fair value of the stock to the Management Holder upon certain terminations of the Management Holder’s employment prior to a “Qualified Public Offering”, as defined in the Securityholders Agreement. If a Management Holder’s employment is terminated by the Company prior to the consummation of a Qualified Public Offering for “Cause”, as defined in the Securityholders Agreement, or is terminated by such Management Holder without “Good Reason”, as defined in the Securityholders Agreement, then the Company shall have the right to repurchase all or any portion of the Class B Shares held by such Management Holder for the lesser of original cost and fair market value. If a Management Holder’s employment is terminated by the Company prior to the consummation of a Qualified Public Offering other than as described above and in the Securityholders Agreement, then the Company shall have the right to repurchase all or any portion of the Class B Shares held by such Management Holder for fair market value. |
Write Downs and Other Charges
Write Downs and Other Charges | 6 Months Ended |
Jun. 30, 2016 | |
Write Downs And Other Charges [Abstract] | |
Write Downs and Other Charges | WRITE DOWNS AND OTHER CHARGES The Condensed Consolidated Statements of Operations and Comprehensive Loss include various non-routine transactions or consulting and transaction-related fees that have been classified as write downs and other charges. During the three and six months ended June 30, 2016 , the Company recognized $0.2 million and $0.3 million in write-downs and other charges, respectively, driven by losses from the disposal of assets. During the three months ended June 30, 2015 , the Company recognized $7.7 million in write-downs and other charges driven by acquisition related charges of $4.4 million . The Company also recognized an impairment to intangible assets of $2.2 million related to game titles, write offs related to prepaid royalties of $0.6 million , losses from the disposal of assets of $0.6 million and the impairment of long-lived assets of $0.2 million , partially offset by a benefit from the partial write down of the C2 acquisition contingent consideration of $0.4 million . During the six months ended June 30, 2015 , the Company recognized $11.2 million in write-downs and other charges primarily related to acquisition charges of $7.6 million . The Company also recognized an impairment to intangible assets of $2.2 million related to game titles and write offs related to prepaid royalties of $0.6 million , losses from the disposal of assets of $0.9 million and the impairment of long-lived assets of $0.2 million offset by a benefit from the partial write-down of the C2 acquisition contingent consideration of $0.4 million . |
Basic and Diluted Income (Loss)
Basic and Diluted Income (Loss) Per Share | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Income (Loss) Per Share | BASIC AND DILUTED INCOME (LOSS) PER SHARE The Company computes net income (loss) per share in accordance with accounting guidance that requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the Condensed Consolidated Statement of Operations and Comprehensive Income (Loss). Basic EPS is computed by dividing net income (loss) for the period by the weighted average number of shares outstanding during the period. Basic EPS excludes Class B Shares issued to Management Holders until the performance condition or termination event is considered probable (see Note 7). Until such time, the Class B Shares issued to Management Holders will be included in the calculation of diluted EPS using the treasury stock method and are treated as stock options. Diluted EPS is computed by dividing net income (loss) for the period by the weighted average number of common shares outstanding during the period, increased by potentially dilutive common shares that were outstanding during the period. Diluted EPS excludes all potential dilutive shares if their effect is anti-dilutive. Potentially dilutive common shares include stock options and restricted stock (see Note 11). There were no potentially dilutive securities for the three and six months ended June 30, 2016 . Excluded from the calculation of diluted EPS for three and six months ended June 30, 2016 , are 50,000 restricted shares and 0.3 million stock options, as such securities were anti-dilutive. |
Benefit Plans
Benefit Plans | 6 Months Ended |
Jun. 30, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Benefit Plans | BENEFIT PLANS The Company has established a 401(k) defined contribution plan (the “401(k) Plan”) for its employees. The 401(k) Plan allows employees to contribute up to 15% of their pretax earnings, and the Company may match a percentage of the contributions on a discretionary basis. The expense associated with the 401(k) Plan for the three months ended June 30, 2016 and 2015 , was $0.2 million and $0.1 million , respectively. The expense associated with the 401(k) Plan for the six months ended June 30, 2016 and 2015 , was $0.5 million and $0.2 million , respectively. On April 28, 2014, the Board of Directors of the Company approved the 2014 Long-Term Incentive Plan (“LTIP”). Under the LTIP, the Company is authorized to grant nonqualified stock options, rights to purchase Class B Shares, restricted stock, restricted stock units and other awards settleable in, or based upon, Class B Shares to persons who are directors and employees of and consultants to the Company or any of its subsidiaries on the date of the grant. The LTIP will terminate ten years after approval by the Board. Subject to adjustments in connection with certain changes in capitalization, the maximum number of Class B Shares that may be delivered pursuant to awards under the LTIP is 1,250,000 . As of June 30, 2016, approximately 205,000 shares remain available for issuance. |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | SHARE-BASED COMPENSATION Stock Options The Company has granted stock awards to eligible participants under the LTIP. The stock awards include options to purchase the Company’s Class B Shares. These stock options include a combination of service and market conditions, as further described below. In addition, these stock options include a performance vesting condition, a Qualified Public Offering (see Note 7), which is not considered to be probable as of June 30, 2016 . As a result, no share-based compensation expense for stock options has been recognized and none will be recognized for these stock awards until the performance condition is considered to be probable. When the performance condition is considered probable, the stock awards will vest in accordance with the underlying service and market conditions. The Company calculated the grant date fair value of stock options that vest over a service period using the Black Scholes model. For stock options that contain a market condition related to the return on investment that the Company’s stockholders achieve, the options were valued using a lattice-based option valuation model. The assumptions used in these calculations are noted in the following table. Expected volatilities are based on implied volatilities from comparable companies. The expected time to liquidity is based on management’s estimate. The risk-free rate is based on the U.S. Treasury yield curve for a term equivalent to the estimated time to liquidity. There were no options granted in the three months ended June 30, 2016. Six Months Ended Option valuation assumptions: Expected dividend yield —% Expected volatility 55% Risk-free interest rate 1.67% Expected term (in years) 6.3 A summary of the changes in stock options outstanding during the six months ended June 30, 2016 , is as follows: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contract Term (years) Aggregate Intrinsic Value Options outstanding as of December 31, 2015 765,375 $12.46 Granted 227,600 $16.98 Canceled (104,375) $15.19 Options outstanding as of June 30, 2016 888,600 $13.30 8.6 $ 3,273,755 Restricted Stock No restricted stock was granted, canceled or forfeited during the six months ended June 30, 2016 . |
Restructuring
Restructuring | 6 Months Ended |
Jun. 30, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | RESTRUCTURING We recorded no employee termination and restructuring costs during the six months ended June 30, 2016 . Employee termination and restructuring costs are classified in selling, general and administrative as well as research and development expense and have been recorded for the following restructuring plans. Cadillac Jack Integration Plan In June 2015, we took actions to reduce the staff in all of our locations and to streamline our operations and cost structure. The Company has also entered into retention agreements with certain employees that will be paid upon the completion of their service period. The following table summarizes the change in our restructuring accruals for the six months ended June 30, 2016 (in thousands), which is included in accounts payable and accrued liabilities in the Condensed Consolidated Balance Sheets: December 31, Charge to expense Cash paid June 30, Accrued severance $ 37 $ — $ 37 $ — Total $ 37 $ — $ 37 $ — |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The Company's effective income tax rate for the three months ended June 30, 2016 , was a benefit of 7.9% . The difference between the federal statutory rate of 35% and the Company's effective tax rate for the three months ended June 30, 2016 , was primarily due to changes in our valuation allowance on deferred tax assets. The Company's effective income tax rate for the three months ended June 30, 2015 , was a benefit of 114.4% . The difference between the federal statutory rate of 35% and the Company's effective tax rate for the three months ended June 30, 2015 , was primarily due to the income tax benefit recorded from the reversal of our valuation allowance on deferred tax assets as a result of the net deferred tax liabilities assumed in the Cadillac Jack acquisition. The Company’s effective income tax rate for the six months ended June 30, 2016 , was a benefit of 8.6% . The difference between the federal statutory rate of 35% and the Company’s effective tax rate for the six months ended June 30, 2016 , was primarily due to changes in our valuation allowance on deferred tax assets. The Company’s effective income tax rate for the six months ended June 30, 2015 , was a benefit of 77.5% . The difference between the federal statutory rate of 35% and the Company’s effective tax rate for the six months ended June 30, 2015 , was primarily due to the income tax benefit recorded from the reversal of our valuation allowance on deferred tax assets as a result of the net deferred tax liabilities assumed in the Cadillac Jack acquisition. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES The Company is subject to federal, state and Native American laws and regulations that affect both its general commercial relationships with its Native American tribal customers, as well as the products and services provided to them. Periodically, the Company reviews the status of each significant matter and assesses the potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount can be estimated, the Company accrues a liability for the estimated loss. If a potential loss from any claim or legal proceeding is considered reasonably possible, the Company discloses an estimate of the possible loss or range of possible loss, or a statement that such an estimate cannot be made. Significant judgment is required in both the determination of probability and the determination as to whether an exposure is reasonably estimable. Because of uncertainties related to these matters, accruals are based only on the best information available at the time. As additional information becomes available, the Company reassesses the potential liability related to their pending claims and litigation and may revise their estimates. Such revisions in the estimates of the potential liabilities could have a material impact on the results of operations and financial condition. |
Description of the Business a20
Description of the Business and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of Presentation The accompanying condensed consolidated financial statements have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, certain disclosures required by generally accepted accounting principles (“GAAP”) are omitted or condensed in these condensed consolidated financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) that are necessary to state fairly the Company's financial position, results of operations and cash flows for the interim periods have been made. The interim results reflected in these condensed consolidated financial statements are not necessarily indicative of results to be expected for the full fiscal year. The accompanying condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015. |
Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements include the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Certain amounts in the consolidated financial statements for the previous years have been reclassified to be consistent with the current year presentation. These reclassifications had no effect on the previously reported net (loss) income. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires the Company to make decisions based upon estimates, assumptions, and factors considered relevant to the circumstances. Such decisions include the selection of applicable accounting principles and the use of judgment in their application, the results of which impact reported amounts and disclosures. Changes in future economic conditions or other business circumstances may affect the outcomes of the estimates and assumptions. Accordingly, actual results could differ materially from those anticipated. |
Revenue Recognition | Revenue Recognition Gaming Operations Gaming operations revenue is earned by providing customers with gaming machines, gaming machine content licenses, back-office equipment and linked progressive systems, which are collectively referred to as gaming equipment, under participation arrangements. The participation arrangements convey the right to use the equipment (i.e. gaming machines and related integral software) for a stated period of time and are accounted for as operating leases. Under these arrangements, the Company retains ownership of the gaming equipment installed at customer facilities and receives either revenue based on a percentage of the win per day generated by the gaming equipment or a daily fee. The majority of the Company’s leases require the Company to provide maintenance throughout the entire term of the lease. In some cases, a performance guarantee exists that, if not met, requires the Company to replace or remove the gaming machines from the customer’s floor. Whether contractually required or not, the Company develops and provides new gaming titles throughout the life of the lease. Certain arrangements require a portion of the facility’s win per day to be set aside to be used to fund facility-specific marketing, advertising, promotions and service. These amounts are offset against gaming revenue. Gaming operations revenue is also earned from the licensing of table game content and is earned and recognized on a fixed monthly rate. Our social gaming products earn revenue from the sale of virtual coins or chips, which is recorded when the purchased coins or chips are used by the customer. Equipment Sales Revenues from the stand-alone product sales or separate accounting units are recorded when: • Pervasive evidence of an arrangement exists; • The sales price is fixed and determinable; • Delivery has occurred and services have been rendered; and • Collectability is reasonably assured. Equipment sales are generated from the sale of gaming machines and licensing rights to game content software that is installed in the gaming machine, parts, and other ancillary equipment. Also included within the deliverables are delivery, installation and training, all of which occur within a few days of arriving at the customer location. Gaming equipment sales do not include maintenance beyond a standard warranty period. The recognition of revenue from the sale of gaming devices occurs as title and risk of loss have passed to the customer and all other revenue recognition criteria have been satisfied. As the combination of game content software and the tangible gaming device function together to deliver the product’s essential functionality, revenue from the sale of gaming devices is recognized under general revenue recognition guidance. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist primarily of deposits held at major banks and other marketable securities with original maturities of 90 days or less. |
Restricted Cash | Restricted Cash Restricted cash amounts represent funds held in escrow as collateral for the Company’s surety bonds for various gaming authorities and funds held to ensure the availability of funds to pay wide-area progressive jackpot awards. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The Company maintains an allowance for doubtful accounts related to accounts receivable deemed to have a high risk of collectability. The Company reviews the accounts receivable on a monthly basis to determine if any receivables will potentially be uncollectible. The Company analyzes historical collection trends and changes in the customers’ payment patterns, customer concentration, and credit worthiness when evaluating the adequacy of the allowance for doubtful accounts. A large percentage of receivables are with Native American tribes, and the Company has concentrations of credit risk with several tribes. The Company includes any receivable balances that are determined to be uncollectible in the overall allowance for doubtful accounts. Changes in the assumptions or estimates reflecting the collectability of certain accounts could materially affect the allowance for accounts receivable. |
Inventories | Inventories Inventories consist primarily of parts and supplies that are used to repair and maintain machinery and equipment. Inventories are stated at the lower of cost or market. Cost of inventories is determined using the first-in, first-out (“FIFO”) method for all components of inventory. The Company regularly reviews inventory quantities and updates estimates for the net realizable value of inventories. This process includes examining the carrying values of parts and ancillary equipment in comparison to the current fair market values for such equipment (less costs to sell or dispose). Some of the factors involved in this analysis include the overall levels of the inventories, the current and projected sales levels for such products, the projected markets for such products and the costs required to sell the products, including refurbishment costs. Changes in the assumptions or estimates could materially affect the inventory carrying value. |
Property and Equipment | Property and Equipment The cost of gaming equipment, consisting of fixed-base player terminals, file servers and other support equipment as well as other property and equipment, is depreciated over their estimated useful lives, using the straight-line method for financial reporting. Repairs and maintenance costs are expensed as incurred. The Company routinely evaluates the estimated lives used to depreciate assets. The estimated useful lives are as follows: Gaming equipment 3 to 6 years Other property and equipment 3 to 6 years The Company measures recoverability of assets to be held and used by comparing the carrying amount of an asset to future cash flows expected to be generated by the asset. The Company’s policy is to impair, when necessary, excess or obsolete gaming machines on hand that it does not expect to be used. Impairment is based upon several factors, including estimated forecast of gaming machine demand for placement into casinos. While the Company believes that the estimates and assumptions used in evaluating the carrying amount of these assets are reasonable, different assumptions could affect either the carrying amount or the estimated useful lives of the assets, which could have a significant impact on the results of operations and financial condition. |
Intangible Assets | Intangible Assets The Company reviews its identifiable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Impairment losses are recognized for identifiable intangibles, other than goodwill, when indicators of impairment are present and the estimated undiscounted cash flows are not sufficient to recover the assets’ carrying amount. When the estimated undiscounted cash flows are not sufficient to recover the intangible asset’s carrying amount, an impairment loss is measured to the extent the fair value of the asset is less than its carrying amount. Certain trade names have an indefinite useful life and the Company tests these trade names for possible impairment at least annually, on October 1, or whenever events or changes in circumstances indicate that the carrying value may be impaired. We perform a qualitative assessment to determine if it is more likely than not that the fair value of the asset is less than its carrying amount. If we believe, as a result of our qualitative assessment, that it is more likely than not that the fair value of the asset is less than its carrying amount, the quantitative impairment test is required. |
Costs of Computer Software | Costs of Computer Software Internally developed gaming software represents the Company’s internal costs to develop gaming titles to utilize on the Company’s gaming machines. Internally developed gaming software is stated at cost and amortized over the estimated useful lives of the software, using the straight-line method. Software development costs are capitalized once technological feasibility has been established and are amortized when the software is placed into service. The computer software we develop reaches technological feasibility when a working model of the computer software is available. Any subsequent software maintenance costs, such as bug fixes and subsequent testing, are expensed as incurred. Discontinued software development costs are expensed when the determination to discontinue is made. Software development costs are amortized over the expected life of the title or group of titles, if applicable, to amortization expense. On a quarterly basis, or more frequently if circumstances warrant, the Company compares the net book value of its internally developed computer software to the net realizable value on a title or group of title basis. The net realizable value is determined based upon certain assumptions, including the expected future revenues and net cash flows of the gaming titles or group of gaming titles utilizing that software, if applicable. |
Goodwill | Goodwill The excess of the purchase price of an acquired business over the estimated fair value of the assets acquired and the liabilities assumed is recorded as goodwill. The Company tests for possible impairment of goodwill at least annually, on October 1, or when circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. The Company has the option to begin with a qualitative assessment, commonly referred to as “Step 0”, to determine whether it is more likely than not that the reporting unit’s fair value of goodwill is less than its carrying value. This qualitative assessment may include, but is not limited to, reviewing factors such as the general economic environment, industry and market conditions, changes in key assumptions used since the most recently performed valuation and overall financial performance of the reporting units. If the Company determines that it is more likely than not that a reporting unit’s fair value is less than its carrying value, the Company performs a quantitative goodwill impairment analysis, and depending upon the results of that measurement, the recorded goodwill may be written down and charged to income from operations when its carrying amount exceeds its estimated fair value. |
Deferred Financing Costs | Deferred Financing Costs Direct and incremental costs incurred and original issue discounts in connection with the issuance of long-term debt are deferred and amortized using the effective interest method over the life of the related loans. Deferred financing costs incurred in connection with the issuance of the Company's revolving credit facilities of $0.3 million at June 30, 2016 and December 31, 2015 are presented in other assets on the Condensed Consolidated Balance Sheets. All other deferred financing costs are presented as a direct reduction of long-term debt on the Condensed Consolidated Balance Sheets. See the Recently Issued Accounting Pronouncements section below for details on the presentation change of deferred financing costs. |
Acquisition Accounting | Acquisition Accounting The Company applies the provisions of ASC 805, “ Business Combinations” (ASC 805), in accounting for business acquisitions. It requires us to recognize separately from goodwill the fair value of assets acquired and liabilities assumed on the acquisition date. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. Significant estimates and assumptions are required to value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable. These estimates are inherently uncertain and subject to refinement and typically include the calculation of an appropriate discount rate and projection of the cash flows associated with each acquired asset. As a result, during the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the consolidated statements of operations. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company applies the provisions of ASC 820, “ Fair Value Measurements ” (ASC 820) to its financial assets and liabilities. Fair value is defined as a market-based measurement intended to estimate the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. ASC 820 also established a fair value hierarchy, which requires an entity to maximize the use of observable inputs when measuring fair value. These inputs are categorized as follows: • Level 1 - quoted prices in an active market for identical assets or liabilities; • Level 2 - quoted prices in an active market for similar assets or liabilities, inputs other than quoted prices that are observable for similar assets or liabilities, inputs derived principally from or corroborated by observable market data by correlation or other means; and • Level 3 - valuation methodology with unobservable inputs that are significant to the fair value measurement. The carrying values of the Company’s cash and cash equivalents, restricted cash, receivables and accounts payable approximate fair value because of the short term maturities of these instruments. The fair value of our long-term debt is based on the quoted market prices for similar issues (Level 2 inputs). |
Accounting for Income Taxes | Accounting for Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that included the enactment date. Future tax benefits are recognized to the extent that realization of those benefits is considered more likely than not, and a valuation allowance is established for deferred tax assets which do not meet this threshold. |
Contingencies | Contingencies The Company assesses its exposures to loss contingencies including claims and legal proceedings and accrues a liability if a potential loss is considered probable and the amount can be estimated. Significant judgment is required in both the determination of probability and the determination as to whether an exposure is reasonably estimable. Because of uncertainties related to these matters, if the actual loss from a contingency differs from management’s estimate, there could be a material impact on the results of operations or financial position. Operating expenses, including legal fees, associated with contingencies are expensed when incurred. |
Foreign Currency Translation | Foreign Currency Translation The financial statements of the Company’s foreign subsidiaries are translated into U.S. dollars at the period end rate of exchange for asset and liability accounts and the weighted average rate of exchange for income statement accounts. The effects of these translations are recorded as a component of other accumulated comprehensive loss in stockholders’ equity. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the FASB issued an accounting standards update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) , which clarifies the principles for recognizing revenue from contracts with customers. The amendment outlines a single comprehensive model for entities to depict the transfer of goods or services to customers in amounts that reflect the payment to which a company expects to be entitled in exchange for those goods or services. The amendment also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which deferred the effective date of ASU 2014-09 to annual periods, and interim reporting periods within those annual periods, beginning after December 15, 2017. The ASU may be adopted using either a full retrospective transition method or a modified retrospective transition method and will be adopted by the Company on January 1, 2018. The Company is currently evaluating the provisions of the amendments and the impact on its future consolidated financial statements. In June 2014, the FASB issued ASU No. 2014-12, Compensation—Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved After the Requisite Service Period . The ASU clarifies the proper method of accounting for share-based payments when the terms of an award provide that a performance target could be achieved after the requisite service period. This ASU requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. The performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The adoption of this standard on January 1, 2016, did not have a material effect on our financial position, results of operations or cash flows. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern: Disclosure of Uncertainties About an Entity's Ability to Continue as a Going Concern . The ASU requires management to assess an entity’s ability to continue as a going concern and to provide related footnote disclosures in certain circumstances. Substantial doubt about an entity's ability to continue as a going concern exists when relevant conditions and events, consolidated in the aggregate, indicate that it is probable that an entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. Currently, there is no guidance in U.S. GAAP for management's responsibility to perform an evaluation. Under the update, management's evaluation is to be performed when preparing financial statements for each annual and interim reporting period and based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued. The amendments in this update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. The Company will adopt this standard in its Annual Report on Form 10-K for the year ended December 31, 2016 , and we do not expect it to have a material effect on our consolidated financial statements. In January 2015, the FASB issued ASU No. 2015-01, Income Statement-Extraordinary and Unusual Items: Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items . ASU 2015-01 eliminates from GAAP the concept of extraordinary items. The presentation and disclosure guidance for items that are unusual in nature or occur infrequently will be retained and will be expanded to include items that were previously classified as extraordinary. ASU 2015-01 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted using either a prospective or retrospective method. The adoption of this standard on January 1, 2016, did not have a material effect on our financial condition, results of operations or cash flows. In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs . ASU 2015-03 intends to simplify the presentation of debt issuance costs by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. In August 2015, the FASB issued ASU 2015-15 which clarifies that the guidance issued in April 2015 does not apply to line-of-credit arrangements. According to ASU 2015-15, line-of-credit arrangements will continue to present debt issuance costs as an asset and subsequently amortize the deferred debt issuance costs ratably over the term of the arrangement. ASU 2015-03 is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The Company adopted the guidance on January 1, 2016, with retrospective application in the accompanying Condensed Consolidated Balance Sheet at December 31, 2015. This change in accounting principle resulted in net deferred financing costs of $7.8 million incurred in connection with the issuance of the Company's long-term debt (excluding revolving credit facilities) at December 31, 2015 being reclassified as a direct reduction of the long-term debt balance. The presentation of the net deferred financing costs incurred in connection with the issuance of the Company's revolving credit facilities as of December 31, 2015, are not affected by the adoption of this new accounting guidance and are included in other assets in the accompanying Condensed Consolidated Balance Sheet. In July 2015, the FASB issued ASU No. 2015-11, Inventory: Simplifying the Measurement of Inventory . ASU 2015-11 changes the criteria for measuring inventory within the scope of the ASU. Inventory will now be measured at the lower of cost and net realizable value, while the concept of market value will be eliminated. The ASU defines net realizable value as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. ASU 2015-11 is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the provisions of ASU 2015-11 to have a material effect on our financial condition, results of operations or cash flows. In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments . ASU 2015-16 eliminates the requirement to retrospectively apply adjustments made to provisional amounts recognized in a business combination. It requires that an acquirer recognize and disclose adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined, which should be calculated as if the accounting had been completed at the acquisition date. ASU 2015-16 is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The amendments in this ASU 2015-16 should be applied prospectively to adjustments to provisional amounts that occur after the effective date of this ASU with earlier application permitted for financial statements that have not been issued. The adoption of this standard on January 1, 2016, did not have a material effect on our financial position, results of operations or cash flows. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . ASU 2016-02 intends to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The adoption of this guidance is expected to result in a significant portion of our operating leases, where we are the lessee, to be recognized on our Consolidated Balance Sheets. The guidance requires lessees and lessors to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years with earlier adoption permitted. The Company is currently evaluating the provisions of the amendment and the impact on its future consolidated financial statements. |
Description of the Business a21
Description of the Business and Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Property, Plant and Equipment | The estimated useful lives are as follows: Gaming equipment 3 to 6 years Other property and equipment 3 to 6 years Property and equipment consist of the following (in thousands): June 30, December 31, Gaming equipment $ 98,167 $ 89,361 Other property and equipment 12,361 14,976 Less: Accumulated depreciation (48,382 ) (37,638 ) Total property and equipment, net $ 62,146 $ 66,699 |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Cadillac Jack [Member] | |
Business Acquisition [Line Items] | |
Business Acquisition, Pro Forma Information | The following unaudited pro forma statements of operations give effect to the Cadillac Jack acquisition as if it had been completed on January 1, 2014. The unaudited pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of what the operating results actually would have been during the periods presented had the acquisition been completed on January 1, 2014. In addition, the unaudited pro forma financial information does not purport to project future operating results. The pro forma statements of operations do not reflect: (1) any anticipated synergies (or costs to achieve synergies) or (2) the impact of non-recurring items directly related to the Cadillac Jack acquisition. Three months ended June 30, Six months ended June 30, 2015 2015 Revenue $ 39,102 $ 77,909 Net loss $ 14,468 $ 28,684 |
Property and equipment (Tables)
Property and equipment (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | The estimated useful lives are as follows: Gaming equipment 3 to 6 years Other property and equipment 3 to 6 years Property and equipment consist of the following (in thousands): June 30, December 31, Gaming equipment $ 98,167 $ 89,361 Other property and equipment 12,361 14,976 Less: Accumulated depreciation (48,382 ) (37,638 ) Total property and equipment, net $ 62,146 $ 66,699 |
Goodwill and Intangibles (Table
Goodwill and Intangibles (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in the carrying amount of goodwill | Changes in the carrying amount of goodwill are as follows (in thousands): Gross Carrying Amount Balance at December 31, 2015 $ 253,851 Foreign currency adjustments (2,056 ) Purchase accounting adjustment 800 Balance at June 30, 2016 $ 252,595 |
Schedule of intangible assets (indefinite-lived) | Intangible assets consist of the following (in thousands): June 30, 2016 December 31, 2015 Useful Life (years) Gross Value Accumulated Amortization Net Carrying Value Gross Value Accumulated Amortization Net Carrying Value Indefinite lived trade names Indefinite $ 12,126 $ 12,126 $ 12,126 $ — $ 12,126 Trade and brand names 7 13,600 (3,196 ) 10,404 13,600 (1,721 ) 11,879 Customer relationships 7 169,790 (37,997 ) 131,793 170,927 (26,676 ) 144,251 Contract rights under development and placement fees 1 - 7 16,376 (2,896 ) 13,480 16,311 (548 ) 15,763 Gaming software and technology platforms 1 - 5 120,416 (36,493 ) 83,923 116,930 (23,735 ) 93,195 Intellectual property 10 13,230 (1,682 ) 11,548 14,030 (888 ) 13,142 $ 345,538 $ (82,264 ) $ 263,274 $ 343,924 $ (53,568 ) $ 290,356 |
Accounts Payable and Accrued 25
Accounts Payable and Accrued Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Payables and Accruals [Abstract] | |
Schedule of accounts payable and accrued liabilities | Accounts payable and accrued liabilities consist of the following (in thousands): June 30, December 31, Trade accounts payable $ 4,519 $ 4,776 Salary and payroll tax accrual 5,008 5,851 Taxes payable 2,318 2,440 Accrued interest 5 8 C2 Gaming contingent consideration — 1,125 Placement fees payable 4,000 4,525 Accrued other 5,625 4,305 Total accounts payable and accrued liabilities $ 21,475 $ 23,030 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | Long-term debt consists of the following (in thousands): June 30, December 31, Senior secured credit facilities: Term loans, interest at LIBOR or base rate plus 8.25% (9.25% at June 30, 2016), net of unamortized discount and deferred loan costs of $16.7 million and $18.2 million at June 30, 2016 and December 31, 2015, respectively. $ 396,106 $ 396,717 Senior secured PIK notes, net of unamortized discount and deferred loan costs of $3.7 million and $3.9 million at June 30, 2016 and December 31, 2015, respectively. 125,813 118,764 Seller notes 19,496 18,902 Equipment long-term note payable and capital leases 5,851 5,826 Total debt (1) 547,266 540,209 Less: Current portion (6,991 ) (6,919 ) Long-term debt $ 540,275 $ 533,290 (1) Pursuant to the adoption of ASU 2015-03, debt issuance costs of $7.8 million were deducted from the carrying amount of related debt as of December 31, 2015. |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of grant date fair value and related assumptions of Options granted | The assumptions used in these calculations are noted in the following table. Expected volatilities are based on implied volatilities from comparable companies. The expected time to liquidity is based on management’s estimate. The risk-free rate is based on the U.S. Treasury yield curve for a term equivalent to the estimated time to liquidity. There were no options granted in the three months ended June 30, 2016. Six Months Ended Option valuation assumptions: Expected dividend yield —% Expected volatility 55% Risk-free interest rate 1.67% Expected term (in years) 6.3 |
Schedule of Share-based Compensation, Stock Options, Activity | A summary of the changes in stock options outstanding during the six months ended June 30, 2016 , is as follows: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contract Term (years) Aggregate Intrinsic Value Options outstanding as of December 31, 2015 765,375 $12.46 Granted 227,600 $16.98 Canceled (104,375) $15.19 Options outstanding as of June 30, 2016 888,600 $13.30 8.6 $ 3,273,755 |
Restructuring (Tables)
Restructuring (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Restructuring and Related Activities [Abstract] | |
Schedule of restructuring liabilities | The following table summarizes the change in our restructuring accruals for the six months ended June 30, 2016 (in thousands), which is included in accounts payable and accrued liabilities in the Condensed Consolidated Balance Sheets: December 31, Charge to expense Cash paid June 30, Accrued severance $ 37 $ — $ 37 $ — Total $ 37 $ — $ 37 $ — |
Description of the Business a29
Description of the Business and Summary of Significant Accounting Policies - Property and Equipment (Details) | 6 Months Ended |
Jun. 30, 2016 | |
Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 6 years |
Gaming Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Gaming Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 6 years |
Other Property and Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Other Property and Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 6 years |
Description of the Business a30
Description of the Business and Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 |
Deferred Loan Costs [Line Items] | ||
Fair value of long-term debt | $ 522.3 | $ 529.2 |
Accounting Standards Update 2015-03 [Member] | Long-term Debt [Member] | ||
Deferred Loan Costs [Line Items] | ||
Deferred financing costs, net | 7.8 | |
Revolving Credit Facility [Member] | Line of Credit [Member] | Other Assets [Member] | ||
Deferred Loan Costs [Line Items] | ||
Deferred financing costs, net | $ 0.3 | $ 0.3 |
Acquisitions - Narrative (Deta
Acquisitions - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2016 | Jun. 15, 2015 | May 29, 2015 | |
Business Acquisition [Line Items] | ||||
Increase to goodwill due to purchase price allocation update | $ 800 | |||
Cadillac Jack [Member] | ||||
Business Acquisition [Line Items] | ||||
Business acquisition, percentage of equity interests acquired | 100.00% | |||
Gamingo [Member] | ||||
Business Acquisition [Line Items] | ||||
Business acquisition, percentage of equity interests acquired | 100.00% | |||
Intellectual Property Acquisitions [Member] | ||||
Business Acquisition [Line Items] | ||||
Increase to goodwill due to purchase price allocation update | $ 800 |
Acquisitions - Pro Forma Result
Acquisitions - Pro Forma Results (Details) - Cadillac Jack [Member] - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2015 | Jun. 30, 2015 | |
Business Acquisition [Line Items] | ||
Revenue | $ 39,102 | $ 77,909 |
Net loss | $ 14,468 | $ 28,684 |
Property and equipment (Details
Property and equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Less: Accumulated depreciation | $ (48,382) | $ (37,638) |
Total property and equipment, net | 62,146 | 66,699 |
Gaming Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 98,167 | 89,361 |
Other Property and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 12,361 | $ 14,976 |
Property and equipment - Narra
Property and equipment - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Property, Plant and Equipment [Line Items] | ||||
Depreciation expense | $ 7.3 | $ 5 | $ 14.6 | $ 8.9 |
Minimum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful lives of gaming equipment and other equipment | 3 years | |||
Maximum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful lives of gaming equipment and other equipment | 6 years |
Goodwill and Intangibles - Cha
Goodwill and Intangibles - Changes in Carrying Amount of Goodwill (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Changes in carrying amount of goodwill | |
Balance at December 31, 2015 | $ 253,851 |
Foreign currency adjustments | (2,056) |
Purchase accounting adjustment | 800 |
Balance at June 30, 2016 | $ 252,595 |
Goodwill and Intangibles - Sch
Goodwill and Intangibles - Schedule of Intangibles Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, accumulated amortization | $ (82,264) | $ (53,568) |
Intangible assets, gross value | 345,538 | 343,924 |
Intangible assets, net carrying value | $ 263,274 | 290,356 |
Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful life (years) | 1 year | |
Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful life (years) | 10 years | |
Trade Names [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | $ 12,126 | 12,126 |
Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful life (years) | 7 years | |
Finite-lived intangible assets, gross value | $ 13,600 | 13,600 |
Finite-lived intangible assets, accumulated amortization | (3,196) | (1,721) |
Finite-lived intangible assets, net carrying value | $ 10,404 | 11,879 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful life (years) | 7 years | |
Finite-lived intangible assets, gross value | $ 169,790 | 170,927 |
Finite-lived intangible assets, accumulated amortization | (37,997) | (26,676) |
Finite-lived intangible assets, net carrying value | 131,793 | 144,251 |
Contract Rights Under Development and Placement Fees [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross value | 16,376 | 16,311 |
Finite-lived intangible assets, accumulated amortization | (2,896) | (548) |
Finite-lived intangible assets, net carrying value | $ 13,480 | 15,763 |
Contract Rights Under Development and Placement Fees [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful life (years) | 1 year | |
Contract Rights Under Development and Placement Fees [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful life (years) | 7 years | |
Gaming Software and Technology Platforms [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross value | $ 120,416 | 116,930 |
Finite-lived intangible assets, accumulated amortization | (36,493) | (23,735) |
Finite-lived intangible assets, net carrying value | $ 83,923 | 93,195 |
Gaming Software and Technology Platforms [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful life (years) | 1 year | |
Gaming Software and Technology Platforms [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful life (years) | 5 years | |
Intellectual Property [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful life (years) | 10 years | |
Finite-lived intangible assets, gross value | $ 13,230 | 14,030 |
Finite-lived intangible assets, accumulated amortization | (1,682) | (888) |
Finite-lived intangible assets, net carrying value | $ 11,548 | $ 13,142 |
Goodwill and Intangibles - Nar
Goodwill and Intangibles - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense related to intangible assets | $ 13,200 | $ 7,200 | $ 26,500 | $ 11,700 |
Accretion of contract rights under development agreements and placement fees | $ 1,178 | $ 84 | $ 2,348 | $ 137 |
Minimum [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived intangible assets, useful life (years) | 1 year | |||
Maximum [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived intangible assets, useful life (years) | 10 years |
Accounts Payable and Accrued 38
Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Schedule of accounts payable and accrued liabilities | ||
Trade accounts payable | $ 4,519 | $ 4,776 |
Salary and payroll tax accrual | 5,008 | 5,851 |
Taxes payable | 2,318 | 2,440 |
Accrued interest | 5 | 8 |
C2 Gaming contingent consideration | 0 | 1,125 |
Placement fees payable | 4,000 | 4,525 |
Accrued other | 5,625 | 4,305 |
Total accounts payable and accrued liabilities | $ 21,475 | $ 23,030 |
Long-Term Debt - Schedule of L
Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2015 | May 29, 2015 | |
Debt Instrument [Line Items] | |||
Total debt | $ 547,266 | $ 540,209 | |
Less: Current portion | (6,991) | (6,919) | |
Long-term debt | 540,275 | 533,290 | |
Payment in Kind (PIK) Note [Member] | |||
Debt Instrument [Line Items] | |||
Total debt | 125,813 | 118,764 | $ 115,000 |
Unamortized discount and deferred loan costs | 3,700 | 3,900 | |
Senior Secured Credit Facilities [Member] | Term Loans [Member] | |||
Debt Instrument [Line Items] | |||
Total debt | 396,106 | 396,717 | |
Unamortized discount and deferred loan costs | 16,700 | 18,200 | |
Seller Notes [Member] | Notes Payable [Member] | |||
Debt Instrument [Line Items] | |||
Total debt | 19,496 | 18,902 | |
Equipment Long-Term Note Payable and Capital Leases [Member] | Notes Payable [Member] | |||
Debt Instrument [Line Items] | |||
Total debt | $ 5,851 | $ 5,826 | |
LIBOR Variable Rate [Member] | Senior Secured Credit Facilities [Member] | Term Loans [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate (as a percent) | 8.25% | 8.25% | |
Base Rate [Member] | Senior Secured Credit Facilities [Member] | Term Loans [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate (as a percent) | 8.25% | 8.25% | |
Effective interest rate at end of period (as a percent) | 9.25% |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) | 6 Months Ended | ||||
Jun. 30, 2016USD ($) | Dec. 31, 2015USD ($) | Jun. 01, 2015USD ($) | May 29, 2015USD ($) | Dec. 20, 2013USD ($)note | |
Debt Instrument [Line Items] | |||||
Long-term debt | $ 547,266,000 | $ 540,209,000 | |||
Senior Secured Credit Facilities [Member] | |||||
Debt Instrument [Line Items] | |||||
Maximum net first lien leverage ratio | 5.50% | ||||
Term Loans [Member] | Senior Secured Credit Facilities [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 265,000,000 | $ 155,000,000 | |||
Periodic payment, percent of outstanding principal balance | 0.25% | ||||
Long-term debt | $ 396,106,000 | 396,717,000 | |||
Payment in Kind (PIK) Note [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | $ 125,813,000 | 118,764,000 | $ 115,000,000 | ||
Debt instrument, stated interest rate (as a percent) | 11.25% | 11.25% | |||
Debt instrument, issue price (as a percentage of principle amount) | 97.00% | ||||
Notes Payable, Other Payables [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, stated interest rate (as a percent) | 8.50% | ||||
Notes Payable, Other Payables [Member] | Promissory Note 2.2 Million [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | $ 2,200,000 | ||||
Notes Payable, Other Payables [Member] | Promissory Note 3.3 Million [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | $ 3,300,000 | ||||
Notes Payable, Other Payables [Member] | AGS Seller Notes [Domain] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | $ 6,800,000 | ||||
Number of promissory notes issued | note | 2 | ||||
Notes payable, capitalized interest | 1,300,000 | ||||
Notes Payable, Other Payables [Member] | Promissory Note 12.0 Million Amaya [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | 12,700,000 | $ 12,000,000 | |||
Debt instrument, stated interest rate (as a percent) | 5.00% | ||||
Notes payable, capitalized interest | $ 700,000 | ||||
Revolving Credit Facility [Member] | Line of Credit [Member] | Senior Secured Credit Facilities [Member] | |||||
Debt Instrument [Line Items] | |||||
Credit facility, maximum borrowing capacity | $ 15,000,000 | $ 25,000,000 | |||
Commitment fee (as a percent) | 0.50% | ||||
Long-term Debt [Member] | Accounting Standards Update 2015-03 [Member] | |||||
Debt Instrument [Line Items] | |||||
Deferred financing costs, net | $ 7,800,000 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) | Jun. 30, 2016classvoteshares |
Class of Stock [Line Items] | |
Number of classes of common stock | class | 2 |
Number of votes per share of common stock | vote | 1 |
Class B common stock issued to management holders [Member] | |
Class of Stock [Line Items] | |
Common stock, shares issued | shares | 106,498 |
Write Downs and Other Charges -
Write Downs and Other Charges - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Write Downs And Other Charges [Abstract] | ||||
Write downs and other charges | $ 191 | $ 7,728 | $ 301 | $ 11,209 |
Acquisition related charges | 4,400 | 7,600 | ||
Impairment of intangible assets | 2,200 | 2,200 | ||
Write offs related to prepaid royalties | 600 | 600 | ||
Loss on disposal of assets | 600 | 900 | ||
Impairment of long-lived assets | 200 | 200 | ||
Write down of contingent consideration | $ 400 | $ 400 |
Basic and Diluted Income (Los43
Basic and Diluted Income (Loss) Per Share - Narrative (Details) | 6 Months Ended |
Jun. 30, 2016shares | |
Earnings Per Share [Abstract] | |
Potentially dilutive securities (in shares) | 0 |
Restricted Stock [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Anti-dilutive securities excluded from computation of earnings per share (in shares) | 50,000 |
Stock Option [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Anti-dilutive securities excluded from computation of earnings per share (in shares) | 300,000 |
Benefit Plans (Details)
Benefit Plans (Details) - USD ($) $ in Millions | Apr. 28, 2014 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Maximum percentage of pretax earnings employee is eligible to contribute under defined contribution plan | 15.00% | ||||
401(k) defined contribution plan expense | $ 0.2 | $ 0.1 | $ 0.5 | $ 0.2 | |
Long-Term Incentive Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Incentive plan period | 10 years | ||||
Long-Term Incentive Plan [Member] | Common Class B [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares authorized under incentive plan | 1,250,000 | ||||
Number of shares available for issuance | 205,000 | 205,000 |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2016 | Jun. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in shares) | 0 | 227,600 |
Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted during period (in shares) | 0 | |
Forfeited during period (in shares) | 0 | |
Canceled during period (in shares) | 0 | |
Long-Term Incentive Plan [Member] | Stock Option [Member] | Common Class B [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 0 |
Share-Based Compensation - Assu
Share-Based Compensation - Assumptions (Details) - Class B common stock issued to management holders [Member] - Stock Option [Member] | 6 Months Ended |
Jun. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected dividend yield (as a percent) | 0.00% |
Expected volatility (as a percent) | 55.00% |
Risk-free interest rate (as a percent) | 1.67% |
Expected term | 6 years 3 months |
Share-Based Compensation - Stoc
Share-Based Compensation - Stock Activity (Details) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2016USD ($)$ / sharesshares | Jun. 30, 2016USD ($)$ / sharesshares | |
Number of Options | ||
Options outstanding at beginning of period (in shares) | shares | 765,375 | |
Granted (in shares) | shares | 0 | 227,600 |
Canceled (in shares) | shares | (104,375) | |
Options outstanding at end of period (in shares) | shares | 888,600 | 888,600 |
Weighted Average Exercise Price | ||
Options outstanding at beginning of period (in dollars per share) | $ / shares | $ 12.46 | |
Granted (in dollars per share) | $ / shares | 16.98 | |
Canceled (in dollars per share) | $ / shares | 15.19 | |
Options outstanding at end of period (in dollars per share) | $ / shares | $ 13.30 | $ 13.30 |
Weighted Average Remaining Contract Term | 8 years 7 months 20 days | |
Aggregate Intrinsic Value | $ | $ 3,273,755 | $ 3,273,755 |
Restructuring - Narrative (Deta
Restructuring - Narrative (Details) | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Restructuring and Related Activities [Abstract] | |
Restructuring Costs | $ 0 |
Restructuring (Details)
Restructuring (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Restructuring Reserve [Roll Forward] | |
December 31, 2015 | $ 37 |
Charge to expense | 0 |
Cash paid | 37 |
June 30, 2016 | 0 |
Accrued Severance [Member] | |
Restructuring Reserve [Roll Forward] | |
December 31, 2015 | 37 |
Charge to expense | 0 |
Cash paid | 37 |
June 30, 2016 | $ 0 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | (7.90%) | (114.40%) | (8.60%) | (77.50%) |
Federal statutory income tax rate | 35.00% | 35.00% | 35.00% | 35.00% |