Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 15, 2018 | Jun. 30, 2017 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | ELF | ||
Entity Registrant Name | e.l.f. Beauty, Inc. | ||
Entity Central Index Key | 1,600,033 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 46,757,524 | ||
Entity Public Float | $ 599.4 |
Consolidated balance sheets
Consolidated balance sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash | $ 10,059 | $ 15,295 |
Accounts receivable, net | 44,634 | 37,825 |
Inventory, net | 62,679 | 69,397 |
Prepaid expenses and other current assets | 6,272 | 2,387 |
Total current assets | 123,644 | 124,904 |
Property and equipment, net | 18,037 | 17,151 |
Intangible assets, net | 105,882 | 113,003 |
Goodwill | 157,264 | 157,264 |
Investments | 2,875 | 0 |
Other assets | 9,542 | 2,407 |
Total assets | 417,244 | 414,729 |
Current liabilities: | ||
Current portion of long-term debt and capital lease obligations | 8,646 | 8,650 |
Accounts payable | 26,776 | 37,944 |
Accrued expenses and other current liabilities | 15,939 | 33,676 |
Total current liabilities | 51,361 | 80,270 |
Long-term debt and capital lease obligations | 147,702 | 156,177 |
Deferred tax liabilities | 21,341 | 34,212 |
Other long-term liabilities | 2,977 | 3,208 |
Total liabilities | 223,381 | 273,867 |
Commitments and contingencies (Note 9) | ||
Stockholders' equity: | ||
Common stock, par value of $0.01 per share; 250,000,000 shares authorized as of December 31, 2017 and December 31, 2016; 46,617,830 and 45,276,137 shares issued and outstanding as of December 31, 2017 and December 31, 2016, respectively | 463 | 438 |
Additional paid-in capital | 720,372 | 700,871 |
Accumulated deficit | (526,972) | (560,447) |
Total stockholders' equity | 193,863 | 140,862 |
Total liabilities and stockholders' equity | $ 417,244 | $ 414,729 |
Consolidated balance sheets (Pa
Consolidated balance sheets (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
Common stock, shares issued (in shares) | 46,617,830 | 45,276,137 |
Common stock, shares outstanding (in shares) | 46,617,830 | 45,276,137 |
Consolidated statements of oper
Consolidated statements of operations and comprehensive income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | |||
Net sales | $ 269,888 | $ 229,567 | $ 191,413 |
Cost of sales | 105,163 | 97,332 | 91,084 |
Gross profit | 164,725 | 132,235 | 100,329 |
Selling, general, and administrative expenses | 131,446 | 109,156 | 74,758 |
Operating income | 33,279 | 23,079 | 25,571 |
Other income (expense), net | (2,035) | 3,016 | (4,172) |
Interest expense, net | (8,775) | (16,283) | (12,721) |
Income before provision for income taxes | 22,469 | 9,812 | 8,678 |
Income tax benefit (provision) | 11,006 | (4,499) | (4,321) |
Net income | 33,475 | 5,313 | 4,357 |
Comprehensive income | $ 33,475 | $ 5,313 | $ 4,357 |
Net income (loss) per share: | |||
Basic (in USD per share) | $ 0.74 | $ (39.47) | $ (1,559.81) |
Diluted (in USD per share) | $ 0.68 | $ (39.47) | $ (1,559.81) |
Weighted average shares outstanding: | |||
Basic (in shares) | 45,358,452 | 12,606,529 | 30,523 |
Diluted (in shares) | 49,374,758 | 12,606,529 | 30,523 |
Consolidated statements of conv
Consolidated statements of convertible preferred stock and stockholders' equity (deficit) - USD ($) $ in Thousands | Total | Common stock | Employee note receivable | Additional paid-in capital | Accumulated deficit |
Beginning balance at Dec. 31, 2014 | $ (13,806) | $ 0 | $ 0 | $ 5,767 | $ (19,573) |
Beginning balance (in shares) at Dec. 31, 2014 | 27,593 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 4,357 | 4,357 | |||
Convertible preferred stock accretion | (51,967) | (51,967) | |||
Compensation expense paid to seller | 489 | 489 | |||
Stock-based compensation | 503 | 503 | |||
Exercise of stock options | 25 | 25 | |||
Exercise of stock options (in shares) | 6,900 | ||||
Ending balance at Dec. 31, 2015 | (60,398) | $ 0 | 0 | 6,785 | (67,183) |
Ending balance (in shares) at Dec. 31, 2015 | 34,493 | ||||
Beginning balance at Dec. 31, 2014 | $ 145,328 | ||||
Beginning balance (in shares) at Dec. 31, 2014 | 135,041 | ||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||
Convertible preferred stock accretion | $ 51,967 | ||||
Ending balance at Dec. 31, 2015 | $ 197,295 | ||||
Ending balance (in shares) at Dec. 31, 2015 | 135,041 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | $ 5,313 | 5,313 | |||
Convertible preferred stock accretion | (436,317) | (436,317) | |||
Stock-based compensation | 7,149 | 7,149 | |||
Dividend paid | (72,060) | (9,801) | (62,259) | ||
Issuance of employee note receivable | (11,932) | (11,932) | |||
Accrued interest on employee note receivable | 0 | (39) | 39 | ||
Repayment of employee note receivable | 11,971 | 11,971 | |||
Conversion of preferred stock | 633,612 | $ 372 | 633,240 | ||
Conversion of preferred stock (in shares) | 37,271,375 | ||||
Issuance of common stock upon initial public offering | 63,240 | $ 40 | 63,200 | ||
Issuance of common stock upon initial public offering (in shares) | 4,000,000 | ||||
Vesting of early exercised stock options | 7,859 | $ 22 | 7,837 | ||
Vesting of early exercised stock options (in shares) | 2,169,003 | ||||
Exercise of stock options | 831 | $ 3 | 828 | ||
Exercise of stock options (in shares) | 278,440 | ||||
Deferred offering costs | (8,406) | (8,406) | |||
Ending balance at Dec. 31, 2016 | 140,862 | $ 438 | 0 | 700,871 | (560,447) |
Ending balance (in shares) at Dec. 31, 2016 | 43,753,311 | ||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||
Convertible preferred stock accretion | 436,317 | ||||
Conversion of preferred stock | $ (633,612) | ||||
Conversion of preferred stock (in shares) | (135,041) | ||||
Ending balance at Dec. 31, 2016 | $ 0 | ||||
Ending balance (in shares) at Dec. 31, 2016 | 0 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | $ 33,475 | 33,475 | |||
Stock-based compensation | 13,474 | 13,474 | |||
Vesting of early exercised stock options | 4,074 | $ 15 | 4,059 | ||
Vesting of early exercised stock options (in shares) | 1,522,826 | ||||
Exercise of stock options | 1,978 | $ 10 | 1,968 | ||
Exercise of stock options (in shares) | 1,039,493 | ||||
Ending balance at Dec. 31, 2017 | 193,863 | $ 463 | $ 0 | $ 720,372 | $ (526,972) |
Ending balance (in shares) at Dec. 31, 2017 | 46,315,630 | ||||
Ending balance at Dec. 31, 2017 | $ 0 | ||||
Ending balance (in shares) at Dec. 31, 2017 | 0 |
Consolidated statements of cash
Consolidated statements of cash flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | |||
Net income | $ 33,475 | $ 5,313 | $ 4,357 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 14,521 | 13,152 | 10,289 |
Stock-based compensation expense | 13,474 | 7,149 | 503 |
Amortization of debt issuance costs and discount on debt | 810 | 1,281 | 1,070 |
Deferred income taxes | (13,434) | (7,575) | (3,933) |
Debt prepayment penalty | 0 | 2,736 | 0 |
Loss on disposal of fixed assets | 536 | 260 | 571 |
Loss/(gain) on foreign currency forward contracts | 0 | (10,702) | 4,741 |
Other, net | 1,192 | (13) | 512 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (8,001) | (15,392) | 4,448 |
Inventories | 6,718 | (37,994) | (2,147) |
Prepaid expenses and other assets | (11,200) | (635) | 943 |
Accounts payable and accrued expenses | (25,483) | 43,144 | 3,532 |
Other liabilities | (230) | 1,396 | (367) |
Net cash provided by operating activities | 12,378 | 2,120 | 24,519 |
Cash flows from investing activities: | |||
Purchase of property and equipment | (7,544) | (9,223) | (10,142) |
Investment in equity securities | (2,875) | 0 | 0 |
Other, net | 0 | 84 | (100) |
Net cash used in investing activities | (10,419) | (9,139) | (10,242) |
Cash flows from financing activities: | |||
Proceeds from revolving line of credit | 25,900 | 5,500 | 27,150 |
Repayment of revolving line of credit | (25,900) | (13,200) | (29,100) |
Proceeds from long term debt | 0 | 172,749 | 0 |
Repayment of long term debt | (8,250) | (151,540) | (2,625) |
Debt issuance costs paid | (519) | (704) | 0 |
Cash received from issuance of common stock | 1,978 | 64,071 | 25 |
Proceeds from repayment of employee note receivable | 0 | 7,912 | 0 |
Deferred offering costs paid | 0 | (7,821) | (391) |
Dividend paid | 0 | (68,000) | 0 |
Other, net | (404) | (657) | 0 |
Net cash provided by (used in) financing activities | (7,195) | 8,310 | (4,941) |
Net increase (decrease) in cash | (5,236) | 1,291 | 9,336 |
Cash - beginning of period | 15,295 | 14,004 | 4,668 |
Cash - end of period | 10,059 | 15,295 | 14,004 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 8,162 | 12,170 | 11,617 |
Cash paid for income taxes, net of refunds | 5,673 | 8,466 | 7,790 |
Supplemental disclosure of noncash investing and financing activities: | |||
Accretion of preferred stock to maximum redemption value | 0 | 436,317 | 51,967 |
Deferred offering costs included in accounts payable and accrued expenses | 0 | 193 | 829 |
Property and equipment acquired under capital leases | 10 | 3,000 | 0 |
Property and equipment purchases included in accounts payable and accrued expenses | 1,143 | 491 | 200 |
Vesting of shares related to early exercise of common stock options | 4,074 | 7,859 | 0 |
Note receivable issued to finance early exercise of common stock | 0 | (11,971) | 0 |
Net repayment of note receivable with dividend proceeds | $ 0 | $ 4,060 | $ 0 |
Nature of operations
Nature of operations | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of operations | Nature of operations e.l.f. Beauty, Inc. and subsidiaries (the “Company,” “we,” “us,” “its” and “our”) was formed as a Delaware corporation on December 20, 2013 under the name J.A. Cosmetics Holdings, Inc. In April 2016, the Company changed its name to e.l.f. Beauty, Inc. The Company and its subsidiaries conduct business under the name e.l.f. Cosmetics, and offer high-quality, prestige-inspired beauty products for eyes, lips and face to consumers through its retail customers, e.l.f. stores and e-commerce channels. Initial public offering On September 27, 2016, the Company completed the initial public offering of 9,583,333 shares of its common stock, including the underwriters’ exercise of their overallotment option, at an initial offering price to the public of $17.00 per share, for aggregate gross proceeds of $162.9 million . The Company received net proceeds of $54.9 million , after deducting underwriting discounts and commissions and other offering expenses, including offering expenses paid prior to the initial public offering. The Company did not receive any proceeds from the sale of 5,583,333 shares of its common stock by the existing stockholders in the initial public offering. As part of the initial public offering, the outstanding shares of the Company’s convertible preferred stock were converted into an aggregate of 37,271,375 shares of common stock. The shares offered and sold in the initial public offering were registered under the Securities Act of 1933, as amended, pursuant to the Company’s Registration Statement on Form S-1 (Registration No. 333-213333), which was declared effective by the Securities and Exchange Commission on September 21, 2016. The common stock began trading on the New York Stock Exchange on September 22, 2016 under the symbol "ELF." |
Summary of significant accounti
Summary of significant accounting policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of significant accounting policies | Summary of significant accounting policies Basis of presentation On January 31, 2014, the Company acquired 100% of the outstanding shares of capital stock of e.l.f. Cosmetics, Inc. and its subsidiaries (the “Predecessor,” formerly known as J.A. Cosmetics, Inc., or “JACUS”), a developer and marketer of branded value-priced cosmetics, from J.A. Cosmetics Corporation, TSG5 L.P., a private equity fund, and its co-investors (together, the “Sellers”) (the “Acquisition”). The Acquisition was accounted for as a business combination in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“ASC 805”), and the resulting new basis of accounting is reflected in the Company’s consolidated financial statements for all periods beginning on or after January 31, 2014. The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and all intercompany balances and transactions have been eliminated in consolidation. Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Cash and cash equivalents Cash and cash equivalents include all cash balances and highly liquid investments purchased with maturities of three months or less. Accounts receivable Trade receivables consist of uncollateralized, non-interest bearing customer obligations from transactions with retail customers, reduced by an allowance for doubtful accounts for estimated losses resulting from the inability of customers to make payments. The allowance is based on the evaluation and aging of past due balances, specific exposures, historical trends and economic conditions. The Company writes off accounts receivable against the allowance when a balance is determined to be uncollectible. Recoveries of receivables previously written off are recorded when received. The Company recorded an allowance for doubtful accounts of $0.1 million for the years ended December 31, 2017 and 2016 . The Company recorded a sales allowance of $8.5 million and $11.9 million as of December 31, 2017 and 2016 , respectively, which is also presented as a reduction to accounts receivable. The Company grants credit terms in the normal course of business to its customers. Trade credit is extended based upon an evaluation of each customer’s ability to perform its payment obligations. Concentrations of credit risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and cash equivalents, foreign currency forward contracts prior to maturity in 2016 and trade receivables. Although the Company deposits its cash with creditworthy financial institutions, its deposits, at times, may exceed federally insured limits. To date, the Company has not experienced any losses on its cash deposits. The Company performs credit evaluations of its customers, and the risk with respect to trade receivables is further mitigated by the short duration of customer payment terms and the pedigree of the customer base. During the year ended December 31, 2017 and 2016 , two customers individually accounted for greater than 10% of the Company’s revenue. During the year ended December 31, 2015 , three customers individually accounted for greater than 10% of the Company’s net sales, as disclosed below: Year ended December 31, 2017 2016 2015 Customer A 25 % 28 % 28 % Customer B 29 % 30 % 23 % Customer C * * 10 % * Customer comprised less than 10% of net sales in the period. Three customers individually accounted for greater than 10% of the Company’s accounts receivable at the end of the periods presented : December 31, 2017 December 31, 2016 Customer A 29 % 42 % Customer B 17 % 23 % Customer C 17 % * * Customer comprised less than 10% of accounts receivable in the period. Inventory Inventory, consisting principally of finished goods, is stated at the lower of cost or market. Cost is principally determined by the first-in, first-out method. The Company also records a reserve for excess and obsolete inventory, which represents the excess of the cost of the inventory over its estimated market value. This reserve is based upon an assessment of historical trends, current market conditions and forecasted product demand. The Company recorded a reserve for excess and obsolete inventory, which is presented as a reduction to inventory, of $1.5 million and $0.1 million as of December 31, 2017 and 2016 , respectively. Property and equipment Property and equipment is stated at cost and is depreciated on a straight-line basis over the estimated useful lives of the assets. Leasehold improvements are amortized on a straight-line basis over the shorter of the lease term or the useful lives of the assets. Repairs and maintenance expenditures are expensed as incurred. Useful lives by major asset class are as follows : Estimated useful lives Machinery, equipment and software 3-5 years Leasehold improvements 5 years Furniture and fixtures 2-5 years Store fixtures 2-3 years Included in other assets as of December 31, 2017 are retail product displays of $ 5.8 million that are generally amortized over a period of three years. Amortization expense for retail product displays was $0.6 million for the year ended December 31, 2017 . The Company evaluates events and changes in circumstances that could indicate carrying amounts of long-lived assets, including property and equipment, may not be recoverable. When such events or changes in circumstances occur, the Company assesses the recoverability of long-lived assets by determining whether or not the carrying value of such assets will be recovered through undiscounted future cash flows derived from their use and eventual disposition. If the sum of the undiscounted future cash flows is less than the carrying amount of an asset, the Company records an impairment loss for the amount by which the carrying amount of the assets exceeds its fair value. The Company recorded an impairment charge of $ 0.2 million in the year ended December 31, 2017 . There were no impairment charges recorded in the years ended December 31, 2016 or 2015 . Goodwill and intangible assets Goodwill represents the excess purchase price for the Acquisition over the fair value of the net assets acquired. As part of the Acquisition, the Company also acquired finite-lived intangible assets (customer relationships and favorable leases) and an indefinite-lived intangible asset (trademark). Goodwill is not amortized but rather is reviewed annually for impairment, at the reporting unit level, or when there is evidence that events or changes in circumstances indicate that the Company’s carrying amount may not be recovered. When testing goodwill for impairment, the Company first performs an assessment of qualitative factors. If qualitative factors indicate that it is more likely than not that the fair value of the relevant reporting unit is less than its carrying amount, the Company tests goodwill for impairment at the reporting unit level using a two-step approach. In step one, the Company determines if the fair value of the reporting unit exceeds the unit’s carrying value. If step one indicates that the fair value of the reporting unit is less than its carrying value, the Company performs step two, determining the fair value of goodwill and, if the carrying value of goodwill exceeds its implied fair value, an impairment charge is recorded. We have identified a single reporting unit for purposes of impairment testing. Indefinite-lived intangible assets are not amortized but rather are tested for impairment annually, and impairment is recognized if the carrying amount exceeds the fair value of the intangible asset. We evaluate our indefinite-lived intangible asset to determine whether current events and circumstances continue to support an indefinite useful life. Amortization of intangible assets with finite useful lives is computed on a straight-line basis over periods of 3 years to 10 years . The determination of the estimated period of benefit is dependent upon the use and underlying characteristics of the intangible asset. The Company evaluates the recoverability of its intangible assets subject to amortization when facts and circumstances indicate that the carrying value of the asset may not be recoverable. If the carrying value of an intangible asset is not recoverable, impairment loss is measured as the amount by which the carrying value exceeds its estimated fair value. Debt issuance costs Debt issuance costs and lender fees were incurred for arranging the credit facilities from various financial institutions. For credit facilities consisting of both term and revolving debt, such costs are allocated to each sub-facility based upon the total borrowing capacity. For term debt, issuance costs are presented within the related long-term debt liability on the consolidated balance sheet and lender fees are presented as a direct deduction from the carrying amount. Both debt issuance costs and lender fees are amortized over the term of the related debt using the effective interest rate method. For revolving debt, issuance costs and lender fees are presented as a noncurrent asset and amortized over the term of the related debt on a straight-line basis. Fair value of financial instruments The carrying amounts of cash and cash equivalents, accounts receivable, and accounts payable and accrued expenses approximate their fair values due to the short-term nature of these items. The carrying amounts of bank debt approximate their fair values as the stated interest rates approximate market rates currently available to the Company for loans with similar terms. See Note 7—Fair value of financial instruments. Segment reporting Operating segments are components of an enterprise for which separate financial information is available that is evaluated by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Utilizing these criteria, the Company manages its business on the basis of one operating segment and one reportable segment. It is impracticable for the Company to provide revenue by product line. During the years ended December 31, 2017 , 2016 and 2015 , net sales in the United States and outside of the United States were as follows (in thousands): Year ended December 31, 2017 2016 2015 U.S. $ 243,299 $ 210,236 $ 178,817 International 26,589 19,331 12,596 Total net sales $ 269,888 $ 229,567 $ 191,413 As of December 31, 2017 and 2016 , the Company had property and equipment in the United States and outside of the United States as follows (in thousands) : December 31, 2017 December 31, 2016 U.S. $ 17,834 $ 16,757 International 203 394 Total property and equipment, net $ 18,037 $ 17,151 Revenue recognition Revenue consists of sales of beauty products through retail customers, e.l.f. stores and e-commerce channels. Sales are recognized when persuasive evidence of an arrangement exists, the product has shipped, title has passed, all risks and rewards of ownership have transferred, the sales price is fixed or determinable and collectability is reasonably assured. Delivery is considered to have occurred at the time the title and risk of loss passes to the customer. For sales to retail customers, delivery is considered to have occurred at the time of shipment or the time of delivery depending upon the specific terms of the customer arrangement. For sales to e-commerce consumers, delivery is considered to have occurred at the time of delivery of merchandise to the customer. Revenue from sales to consumers through e.l.f. stores is recognized at the time of purchase. Revenue recognized through e.l.f. store and e-commerce sales channels is recognized net of any taxes that are collected from consumers and subsequently remitted to governmental authorities, such as sales, use and value added taxes. Provision for sales discounts, product returns, markdowns, shortages and price adjustments are recorded as revenue reductions. These revenue reductions are established by the Company based upon management’s best estimates at the time of sale. The Company regularly reviews and revises, when deemed necessary, its estimates of sales returns and other required reserves based primarily upon the historical rate of actual product returns and the duration of time between the original sale and return. These revenue reductions are reflected on the consolidated balance sheet as a sales allowance against accounts receivable. A reconciliation of the beginning and ending amounts of sales allowances for the years ended December 31, 2017 , 2016 and 2015 is as follows (in thousands): Balance as of December 31, 2014 $ 1,965 Charges 13,903 Deductions (12,002 ) Balance as of December 31, 2015 3,866 Charges 24,427 Deductions (16,366 ) Balance as of December 31, 2016 11,927 Charges 25,680 Deductions (29,149 ) Balance as of December 31, 2017 $ 8,458 In the years ended December 31, 2017 , 2016 and 2015 , the Company recorded $0.7 million , $1.4 million and $3.6 million respectively, of reimbursed shipping expenses from customers within revenues. The shipping and handling costs associated with product distribution were $21.2 million , $20.4 million and $12.6 million in the years ended December 31, 2017 , 2016 and 2015 , respectively, and are included in selling, general and administrative expenses in the consolidated statements of operations. Income taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. 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 on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. Future income tax benefits are recognized to the extent that realization of such benefits is more likely than not. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in its income tax provision. Leases The Company leases office space, warehouse and retail store locations, equipment and software. At the inception of each lease, the Company determines its classification as an operating or capital lease. Assets held under capital leases are included in property and equipment. Operating leases are expensed on a straight-line basis over the life of the lease, beginning on the date the Company takes possession of the leased asset. Certain leases provide for rent abatements or scheduled increases in base rent. Rent expense is recognized on a straight-line basis over the lease term, which results in deferred rent payable being recognized on the consolidated balance sheet. As part of its lease agreements, the Company may receive construction allowances from landlords for tenant improvements. These leasehold improvements made by the Company are capitalized and amortized over the shorter of the lease term or five years. The construction allowances are recorded as deferred rent and amortized on a straight-line basis over the lease term as a reduction of rent expense. Foreign currency The functional currency of the Company’s foreign subsidiaries is the U.S. dollar. Transactions denominated in currencies other than the functional currency are recorded at exchange rates in effect on the date of the transaction. At the end of each reporting period, monetary assets and liabilities are remeasured to the functional currency using exchange rates in effect at the balance sheet date. Non-monetary assets and liabilities are remeasured at historical exchange rates. Transaction gains or losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in other income (expense), net in the consolidated statements of operations. Derivative instruments The Company is exposed to foreign exchange risk as it has contracts with suppliers in China for future purchases of inventories denominated in the Chinese renminbi (“RMB”). The Company has previously used derivative instruments, specifically forward contracts, to mitigate the impact of foreign currency fluctuations on a portion of its forecasted foreign currency exposures. These contracts are carried at their fair value either as an asset or liability on the consolidated balance sheet. The Company’s derivative contracts are not designated as hedge instruments, and changes in fair value of derivatives are recorded in other income (expense), net in the consolidated statements of operations. The Company does not enter into derivative contracts for speculative or trading purposes. Stock-based compensation Stock-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized on a straight-line basis over the requisite service period, which is generally the award’s vesting period. The Company estimates the fair value of employee stock-based payment awards subject to only a service condition on the date of grant using the Black-Scholes valuation model. The Black-Scholes model requires the use of highly subjective and complex assumptions, including the option’s expected term and the price volatility of the underlying stock. The Company estimates the fair value of employee stock-based payment awards subject to market conditions using a Monte Carlo simulation model. Compensation expense for employee stock-based awards whose vesting is subject to the fulfillment of both a market condition and the occurrence of a performance condition is recognized on a graded-vesting basis at the time the achievement of the performance condition becomes probable. Forfeitures were previously estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differed from those estimates. The Company early adopted ASU 2016-09 and beginning January 1, 2016, accounts for forfeitures as they occur. The impact of adoption was not material. Advertising costs Advertising costs, including promotions and print, are expensed as incurred or distributed. Advertising costs are included in selling, general, and administrative expenses in the accompanying consolidated statements of operations and amounted to approximately and $8.1 million , $5.6 million , $3.9 million in the years ended December 31, 2017 , 2016 and 2015 , respectively. Net income (loss) per share Basic net income (loss) per share is computed using net income (loss) available to common stockholders divided by the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share reflects the dilutive effects of stock options and restricted stock outstanding during the period, to the extent such securities would not be anti-dilutive, and is determined using the treasury stock method. Recent accounting pronouncements The following table provides a brief description of recent accounting pronouncements that could have a material effect on the Company’s financial statements: Standard Description Date of expected adoption/adoption Effect on the financial statements or other significant matters Standards that are not yet adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606) The new standard will replace all existing revenue recognition standards including industry-specific guidance and significantly expand the disclosure requirements for revenue arrangements. It may be adopted either retrospectively or on a modified retrospective basis to new contracts and existing contracts with remaining performance obligations as of the effective date. January 1, 2018 The Company expects the standard to impact the methods used to reserve for discounts, refunds and other customer incentives, which will impact the timing of revenue recognition. The Company is currently finalizing its assessment of the possible impacts of the adoption of this standard, but expects to apply the modified retrospective method of adoption and to recognize a cumulative effect adjustment to beginning retained earnings in fiscal 2018. The Company expects this adjustment to be immaterial, as the timing of recognition of sales allowances is expected to be similar under the new standard as of December 31, 2017. Standard Description Date of expected adoption/adoption Effect on the financial statements or other significant matters ASU 2016‐01, Recognition and Measurement of Financial Assets and Financial Liabilities The standard amends accounting related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. The standard also amends certain disclosure requirements associated with the fair value of financial instruments. January 1, 2018 The Company expects the standard to impact the methods used to assess and identify impairment of its investments. Additionally, the standard eliminates the requirement to disclose the methods and significant assumptions used to estimate the fair value of financial instruments that are measured at amortized cost on the balance sheet. ASU 2016-02, Leases (Topic 842) The standard will require lessees to recognize a right-of-use asset and a lease liability for virtually all of their leases (other than leases that meet the definition of a short-term lease). The liability will be equal to the January 1, 2019 The Company is currently evaluating the effect of the standard on its financial statements and related disclosures and expects the standard to result in a material increase to assets and liabilities. |
Investment in equity securities
Investment in equity securities | 12 Months Ended |
Dec. 31, 2017 | |
Investments, All Other Investments [Abstract] | |
Investment in equity securities | Investment in equity securities On April 14, 2017, the Company entered into an agreement to make a minority equity investment in a social media analytics company (“Investee”). Pursuant to this agreement, the Company invested $ 2.9 million and received 4.7 million shares of preferred stock, or approximately 15.0% of the total outstanding voting securities of the Investee. The Company’s investment is carried at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. The fair value of the shares of preferred stock of Investee, which is not publicly traded, is not readily determinable. There were no observable price changes or impairment indicators identified during the year ended December 31, 2017 . |
Goodwill and other intangible a
Goodwill and other intangible assets | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and other intangible assets | Goodwill and other intangible assets Information regarding the Company’s goodwill and intangible assets as of December 31, 2017 is as follows (in thousands): Estimated useful life Gross carrying amount Accumulated amortization Net carrying amount Customer relationships – retailers 10 years $ 68,800 $ (26,947 ) $ 41,853 Customer relationships – e-commerce 3 years 3,900 (3,875 ) 25 Favorable leases, net Varies 580 (376 ) 204 Total finite-lived intangibles 73,280 (31,198 ) 42,082 Trademarks Indefinite 63,800 — 63,800 Goodwill 157,264 — 157,264 Total goodwill and other intangibles $ 294,344 $ (31,198 ) $ 263,146 Information regarding the Company’s goodwill and intangible assets as of December 31, 2016 is as follows (in thousands): Estimated useful life Gross carrying amount Accumulated amortization Net carrying amount Customer relationships – retailers 10 years $ 68,800 $ (20,067 ) $ 48,733 Customer relationships – e-commerce 3 years 3,900 (3,736 ) 164 Favorable leases, net Varies 580 (274 ) 306 Total finite-lived intangibles 73,280 (24,077 ) 49,203 Trademarks Indefinite 63,800 — 63,800 Goodwill 157,264 — 157,264 Total goodwill and other intangibles $ 294,344 $ (24,077 ) $ 270,267 The Company has not recognized any impairment charges on its goodwill or intangible assets. Amortization expense on the finite-lived intangible assets amounted to $7.1 million , $8.3 million and $8.2 million in the years ended December 31, 2017 , 2016 and 2015 , respectively. The estimated future amortization expense related to the finite-lived intangible assets, assuming no impairment as of December 31, 2017 , is as follows (in thousands): Year ending December 31, 2018 $ 7,007 2019 6,982 2020 6,880 2021 6,880 2022 6,880 Thereafter 7,453 Total $ 42,082 |
Property and equipment
Property and equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | Property and equipment Property and equipment as of December 31, 2017 and 2016 consists of the following (in thousands): December 31, 2017 December 31, 2016 Machinery, equipment and software $ 6,733 $ 3,956 Leasehold improvements 8,673 7,620 Furniture and fixtures 2,827 2,771 Store fixtures 10,896 8,921 Property and equipment, gross 29,129 23,268 Less: Accumulated depreciation and amortization (11,092 ) (6,117 ) Property and equipment, net $ 18,037 $ 17,151 Depreciation and amortization expense on property and equipment was $6.8 million , $4.9 million and $2.0 million in the years ended December 31, 2017 , 2016 and 2015 , respectively. |
Accrued expenses and other curr
Accrued expenses and other current liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Accrued expenses and other current liabilities | Accrued expenses and other current liabilities Accrued expenses and other current liabilities as of December 31, 2017 and 2016 consists of the following (in thousands): December 31, 2017 December 31, 2016 Accrued expenses $ 9,422 $ 9,537 Other current liabilities 1,894 9,249 Accrued compensation 3,998 7,111 Early exercised option deposit liability — 4,074 Income taxes payable 625 3,705 Accrued expenses and other current liabilities $ 15,939 $ 33,676 |
Fair value of financial instrum
Fair value of financial instruments | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair value of financial instruments | Fair value of financial instruments The fair value of financial instruments are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is measured using inputs from the three levels of the fair value hierarchy, which are described as follows: Level 1 —Quoted prices in active markets for identical assets or liabilities Level 2 —Quoted prices for similar assets and liabilities in active markets or inputs that are observable Level 3 —Inputs that are unobservable (for example, cash flow modeling inputs based on management’s assumptions) The assets’ or liabilities’ fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The following table sets forth the fair value of the Company’s financial liabilities by level within the fair value hierarchy as of December 31, 2017 (in thousands): Fair value measurements using Fair value Level 1 Level 2 Level 3 Financial liabilities: Long-term debt, including current portion (1) 156,792 — 156,792 — Total financial liabilities $ 156,792 $ — $ 156,792 $ — (1) Of this amount, $8,646 is classified as current. The gross carrying amounts of the Company’s bank debt, before reduction of the debt issuance costs, approximate their fair values as the stated rates approximate market rates for loans with similar terms. The following table sets forth the fair value of the Company’s financial liabilities by level within the fair value hierarchy as of December 31, 2016 (in thousands): Fair value measurements using Fair value Level 1 Level 2 Level 3 Financial liabilities: Long-term debt, including current portion (1) 165,393 — 165,393 — Total financial liabilities $ 165,393 $ — $ 165,393 $ — (1) Of this amount, $8,650 is classified as current. The gross carrying amounts of the Company’s bank debt, before reduction of the debt issuance costs, approximate their fair values as the stated rates approximate market rates for loans with similar terms. The Company did not transfer any assets measured at fair value on a recurring basis to or from Level 2 for any of the periods presented. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Debt The following summarizes the recent significant transactions impacting the Company’s indebtedness: • On January 31, 2014, the Company entered into the 2014 Senior Secured Credit Facility, which consisted of a $20.0 million revolving line of credit and a $105.0 million term loan. Also on January 31, 2014, the Company entered into the $40.0 million Second Lien Term Loan. • On June 7, 2016, the Company incurred an incremental $64.0 million in term loan borrowings under the 2014 Senior Secured Credit Facility to fund, in part, a $72.0 million special dividend to stockholders, and increased the total availability under the revolving credit facility to $25.0 million . • On September 27, 2016, the Company used a portion of the proceeds from the initial public offering to repay the entire outstanding balance of $40.0 million from the Second Lien Term Loan. • On December 23, 2016, the Company refinanced its outstanding obligations under the 2014 Senior Secured Credit Facility, entering into a new 5 -year, $200.0 million senior secured credit agreement (the “Credit Agreement”), as further described below. • On August 25, 2017, the Company entered into a First Amendment to Credit Agreement (the “Amendment”), to increase the total availability under the revolving line of credit to $ 50.0 million . The Amendment also amended the Credit Agreement to lower the interest rates and extend the maturity date to August 25, 2022 for both the Revolving Credit Facility and the Term Loan Facility. The Company’s outstanding debt as of December 31, 2017 and 2016 consists of the following (in thousands): December 31, 2017 December 31, 2016 Debt: Term loan $ 154,418 $ 162,627 Capital lease obligations 2,374 2,766 Total debt 156,792 165,393 Less: debt issuance costs (444 ) (566 ) Total debt, net of issuance costs 156,348 164,827 Less: current portion (8,646 ) (8,650 ) Long-term portion of debt $ 147,702 $ 156,177 Senior secured credit agreement, as amended On December 23, 2016, the Company entered into a new five -year, $200.0 million Senior Secured Credit Agreement (the "Credit Agreement") with a syndicate consisting of several large financial institutions. The Credit Agreement was amended on August 25, 2017 (the "Amendment"), increasing the aggregate commitments to $ 215.0 million . The Credit Agreement, as amended, consists of a $ 50.0 million revolving line of credit (the “Revolving Credit Facility”) and a $ 165.0 million term loan (the “Term Loan Facility”). All amounts under the Revolving Credit Facility are available for draw until the maturity date on August 25, 2022. The Revolving Credit Facility is collateralized by substantially all of the Company’s assets and requires payment of an unused fee ranging from 0.35% to 0.25% (based on the Company’s consolidated total net leverage ratio) times the average daily amount of unutilized commitments under the Revolving Credit Facility. The Revolving Credit Facility also provides for sub-facilities in the form of a $7.0 million letter of credit and a $5.0 million swing line loan; however, all amounts under the Revolving Credit Facility cannot exceed $50.0 million . The unused balance of the Revolving Credit Facility as of December 31, 2017 was $49.5 million . The Term Loan Facility maturity date is also August 25, 2022 , and is collateralized by substantially all of the Company’s assets. Amortization installment payments on the Term Loan Facility are required to be made in quarterly installments of (i) $2,062,500 for fiscal quarters ending September 30, 2017 through June 30, 2019, (ii) $2,475,000 for fiscal quarters ending September 30, 2019 through June 30, 2020, (iii) $3,093,750 for fiscal quarters ending September 30, 2020 through June 30, 2021 and (iv) $4,125,000 for fiscal quarters ending September 30, 2021 through June 30, 2022. The remaining Term Loan Facility balance is due upon the maturity date. The Term Loan Facility can be prepaid at any time without penalty and is subject to mandatory prepayments when there is (i) excess cash flow, which is defined as EBITDA less certain customary deductions, (ii) non-ordinary course asset dispositions that result in net proceeds in excess of $2.5 million during a year, unless reinvested within twelve months, or (iii) issuance of additional debt. Both the Revolving Credit Facility and the Term Loan Facility bear interest, at the Company’s option, at either a rate per annum equal to either (i) a rate per annum equal to an adjusted LIBOR rate determined by reference to the cost of funds for U.S. dollar deposits for the applicable interest period (subject to a minimum floor of 0% ) plus an applicable margin ranging from 1.50% to 2.75% (amended from 2.00% to 3.50% as previously set forth in the Credit Agreement) based on the Company’s consolidated total net leverage ratio or (ii) a floating base rate plus an applicable margin ranging from 0.50% to 2.75% (amended from 1.00% to 2.50% as previously set forth in the Credit Agreement) based on the Company’s consolidated total net leverage ratio. The interest rate as of December 31, 2017 for the Term Loan was approximately 4.00% . In December 2016, the Company incurred costs directly related to the Credit Agreement of $2.3 million , consisting primarily of lender fees of $2.1 million and third-party fees of $0.2 million . These fees were allocated between the Revolving Credit Facility and the Term Loan Facility, with the portion attributable to the Term Loan Facility recorded as a reduction of the carrying amount of the debt and the portion attributable to the Revolving Credit Facility recorded as a noncurrent asset. In August 2017, the Company paid approximately $ 0.5 million in fees related to the Amendment, none of which were capitalized as the amendment was treated as a modification of the original credit facility. The Credit Agreement contains a number of covenants that, among other things, restrict the Company's ability to (subject to certain exceptions) pay dividends and distributions or repurchase the Company's capital stock, incur additional indebtedness, create liens on assets, engage in mergers or consolidations and sell or otherwise dispose of assets. The Credit Agreement also includes reporting, financial and maintenance covenants that require the Company to, among other things, comply with certain consolidated total net leverage ratios and consolidated fixed charge coverage ratios. As of December 31, 2016 and December 31, 2017, the Company was in compliance with all financial covenants. Aggregate future minimum principal payments on the Term Loan are as follows (in thousands): Year ending December 31, 2018 $ 8,250 2019 9,075 2020 11,138 2021 14,438 2022 113,850 Thereafter — Total $ 156,751 Interest expense and extinguishment of debt In September 2016, the Company used a portion of the proceeds from the initial public offering to repay the entire outstanding balance of the Second Lien Term Loan. In connection with this extinguishment of debt, the Company incurred a $0.4 million prepayment penalty and wrote off $0.5 million in unamortized debt issuance costs attributable to the Second Lien Term Loan. Additionally, as described above, in December 2016, the Company entered into a new Senior Secured Credit Facility and a portion of the debt outstanding under the 2014 Senior Secured Credit Facility was considered extinguished. In connection with this extinguishment of debt, the Company wrote off $1.7 million in unamortized debt discount and debt issuance costs, as well as approximately $0.1 million in other fees associated with the refinancing transaction. For the portion of the 2014 Senior Secured Credit Facility that was not considered extinguished, approximately $0.7 million in unamortized debt discount and $0.8 million in unamortized debt issuance costs remain on the balance sheet and are being amortized over the 5 years term of the new Senior Secured Credit Facility. The components of interest expense are as follows (in thousands) : Year ended December 31, 2017 2016 2015 Interest of term loan debt $ 7,271 $ 12,076 $ 10,988 Amortization of debt issuance costs 810 1,281 1,101 Loss on extinguishment of debt — 2,736 — Interest on revolving line of credit 526 190 700 Interest on capital leases 168 — — Other — — (68 ) Interest expense, net $ 8,775 $ 16,283 $ 12,721 |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Commitments and contingencies Operating leases The Company leases office, retail and warehouse space in New York, New Jersey, California, Texas and China from third parties under non-cancelable operating leases that provide for minimum base rental payments (excluding taxes and other charges). A number of the Company’s store leases provide for contingent rentals based upon sales. Contingent rent amounts have historically not been significant. The leases expire between 2018 and 2028 . Total rent expense was $5.1 million , $4.1 million and $3.0 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. Future minimum lease payments under the operating leases are as follows (in thousands): Year ending December 31, 2018 $ 5,271 2019 5,158 2020 4,679 2021 3,785 2022 2,832 Thereafter 10,025 Total $ 31,750 Legal Contingencies From time to time, the Company may become involved in legal proceedings, claims, and litigation arising in the ordinary course of business. The Company is not currently a party to any matters that management expects will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income taxes On December 22, 2017, H.R.1, informally known as the Tax Cuts and Jobs Act (“Tax Legislation”) was signed into law making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a reduction of the U.S. corporate income tax rate from 35% to 21% effective January 1, 2018. The Tax Legislation also imposes a one-time transition tax on previously deferred foreign earnings. For the year ended December 31, 2017 , the enactment of the Tax Legislation resulted in a one-time non-cash tax benefit of $11.6 million related to the re-measurement of U.S. deferred tax liabilities at the lower enacted corporate tax rate. The Company is not materially impacted by the one-time transition tax as most of its foreign earnings and profits have already been subject to U.S. taxation in prior years. The components of income before provision for income taxes are as follows (in thousands): Year ended December 31, 2017 2016 2015 Domestic $ 22,409 $ 9,677 $ 8,053 Foreign 60 135 625 Total $ 22,469 $ 9,812 $ 8,678 The components of the provision for income taxes are as follows (in thousands): Year ended December 31, 2017 2016 2015 Current: U.S. federal $ (2,058 ) $ (9,978 ) $ (6,837 ) State (369 ) (2,096 ) (1,026 ) Foreign — — (391 ) Total current (2,427 ) (12,074 ) (8,254 ) Deferred: U.S. federal 13,246 8,384 3,710 State (21 ) (773 ) 201 Foreign 208 (36 ) 22 Total deferred 13,433 7,575 3,933 Total (provision) benefit for income taxes $ 11,006 $ (4,499 ) $ (4,321 ) The following table presents a reconciliation of the federal statutory rate to the Company’s effective tax rate : Year ended December 31, 2017 2016 2015 Federal statutory rate 35.0 % 35.0 % 35.0 % Federal tax deferred rate change (53.8 )% — % — % State tax, net of federal benefit 0.6 % 0.7 % 2.2 % State tax deferred rate change, net of federal benefit 0.9 % 18.7 % 0.3 % U.S. subpart F income 0.1 % 0.5 % 2.5 % Nondeductible transaction-related costs — % 2.0 % — % Uncertain tax positions (1.7 )% 2.0 % 5.3 % Stock based compensation (28.1 )% (16.8 )% 0.6 % Others (2.0 )% 3.8 % 3.9 % Effective tax rate (49.0 )% 45.9 % 49.8 % The components of net deferred taxes arising from temporary differences are as follows (in thousands): December 31, 2017 December 31, 2016 Deferred tax assets: Compensation $ 1,056 $ 1,848 Inventories and receivables 2,965 6,905 Accrued expenses 663 1,996 Stock compensation 3,497 1,967 Net operating losses 210 232 Other 925 1,304 Deferred tax assets 9,316 14,252 Deferred tax liabilities: Goodwill 2,214 2,562 Fixed assets 1,923 2,699 Intangible assets 25,962 42,587 Other 313 579 Deferred tax liabilities 30,412 48,427 Net deferred tax liabilities $ 21,096 $ 34,175 The deferred tax assets and liabilities within the same jurisdiction are reported net in the accompanying balance sheets as follows (in thousands) : December 31, 2017 December 31, 2016 Deferred tax assets $ 245 $ 37 Deferred tax liabilities 21,341 34,212 Net deferred tax liabilities $ 21,096 $ 34,175 At December 31, 2017 , the Company had gross foreign net operating loss carryforwards of $0.8 million . The foreign net operating loss carryforwards will begin to expire in 2020 and have a carryforward period of 5 years . At December 31, 2017 , the Company had gross state net operating loss carryforwards of $0.2 million . The state net operating loss carryforward will begin to expire in 2036 and have a carryforward period of 20 years . A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): Year ended December 31, 2017 2016 2015 Balance at beginning of year $ 1,208 $ 1,256 $ 607 Increases for prior year tax positions 63 438 1 Increases for current year tax positions 68 103 648 Decreases for prior year tax positions (1 ) (589 ) — Decreases due to settlements (32 ) — — Decreases due to statutes lapsing (542 ) — — Balance at end of year $ 764 $ 1,208 $ 1,256 If all of the Company’s unrecognized tax benefits as of December 31, 2017 and December 31, 2016 were recognized, $0.3 million and $0.7 million of unrecognized tax benefits, respectively, would impact the effective tax rate. The Company believes it is reasonably possible that $0.1 million of unrecognized tax benefits may reverse in the next twelve months. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in the provision for income taxes. The Company had $0.1 million and $0.2 million of accrued gross interest and penalties as of December 31, 2017 and December 31, 2016 , respectively. The Company recognized net interest expense of $17,000 , $0.1 million and $ 20,000 for the years ended December 31, 2017 , 2016 and 2015 , respectively. The Company files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. As of December 31, 2017 , with few exceptions, the Company or its subsidiaries are no longer subject to examination prior to tax year 2014. Certain state returns are currently under audit by the state tax authorities. The Company does not expect the results of these audits to have a material impact on the consolidated financial statements. |
Preferred stock
Preferred stock | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Preferred stock | Preferred stock The Company has authorized 30,000,000 shares of preferred stock for issuance with a par value of $0.01 per share. There were no shares of preferred stock outstanding as of December 31, 2017 or December 31, 2016 . |
Stock-based compensation
Stock-based compensation | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based compensation | Stock-based compensation Stock plans The Company grants stock-based awards under its 2016 Equity Incentive Award Plan (the “2016 Plan”), which replaced its 2014 Equity Incentive Plan (the “2014 Plan”) and became effective immediately prior to the effectiveness of the Company’s registration statement on Form S-1 in September 2016. Immediately prior to the initial public offering, the 2014 Plan terminated and no further awards will be granted thereunder. The 2016 Plan permits the grant of incentive stock options, non-statutory stock options, restricted stock and other stock- or cash-based awards to employees, officers, directors, advisors and consultants. The 2016 Plan allows for option grants of the Company’s common stock based on service, performance and market conditions. A total of 5,430,690 shares were initially reserved for grant under the 2016 Plan. Additionally, any awards outstanding under the 2014 Equity Plan that are forfeited or lapse unexercised will be added to the shares reserved and available for grant under the 2016 Plan, up to a maximum of 4,341,200 shares. As of December 31, 2017 , a total of 7,370,075 shares were reserved for grant under the 2016 Plan, including 128,340 shares forfeited from the 2014 Plan, and 4,270,397 shares remained available for future issuance. Early exercise of stock options Stock options granted pursuant to the 2014 Plan permitted certain management-level option holders and directors to elect to exercise unvested options prior to vesting (“early exercise”). In the event of termination of the option holder’s employment or directorship, all unvested shares issued upon the early exercise, so long as they remain unvested, are subject to repurchase by the Company at the lower of the original exercise price or the fair market value of a share of common stock on the date of termination. Consistent with authoritative guidance, early exercises are not considered substantive exercises for accounting purposes. Cash received for the exercise of unvested options is recorded as a liability, which is released to additional paid-in capital at each reporting date as the shares vest. A total of 1,522,826 shares subject to early exercised options vested during the year ended December 31, 2017 and the associated deposit liability of $ 4.1 million was reclassified to additional paid-in capital. As of December 31, 2017 , no early exercised options remain unvested. Service-based vesting stock options The following table summarizes the activity for options that vest solely based upon the satisfaction of a service condition as follows: Options outstanding Weighted-average exercise price Weighted-average remaining contractual life (in years) Aggregate intrinsic values (in thousands) (1) Balance as of December 31, 2016 3,168,967 $ 8.55 Granted 209,400 26.38 Exercised (547,722 ) 2.04 Forfeited (233,351 ) 16.44 Balance as of December 31, 2017 2,597,294 $ 10.66 8.1 years $ 30,924 Exercisable, December 31, 2017 1,078,229 $ 6.18 7.2 years $ 17,391 (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the Company's closing stock price of $22.31 , as reported on the New York Stock Exchange on December 31, 2017 . Additional information relating to service-based options is as follows (in thousands, except per share data): Year ended December 31, 2017 2016 2015 Stock-based compensation expense $ 2,435 $ 4,286 $ 503 Intrinsic value of options exercised $ 12,841 $ 2,486 $ 12 Weighted-average grant date fair value of options granted (per share) $ 9.51 $ 5.07 $ 0.99 As of December 31, 2017 , there was $7.2 million of total unrecognized compensation cost related to service-based stock options, which is expected to be recognized over the remaining weighted-average vesting period of 3.0 years . The fair value of service-based stock options granted were calculated using the following weighted-average assumptions: Year ended December 31, 2017 2016 2015 Expected term (in years) 6.2 5.9 4.1 Expected volatility 32.42 % 36.50 % 40.92 % Risk-free interest rate 2.14 % 1.34 % 1.51 % Expected dividend yield — % — % — % The determination of the fair value of stock options on the date of grant using a Black-Scholes option-pricing model is affected by the fair value of the underlying common stock, as well as assumptions regarding a number of variables that are complex, subjective and generally require significant judgment. The assumptions used in the Black-Scholes option-pricing model to calculate the fair value of stock options were: Fair value of common stock Prior to the initial public offering, the fair value of shares of common stock underlying stock options was the responsibility of, and determined by, the Company’s board of directors, with input from management. There was no public market for the Company’s common stock and the board of directors determined the fair value of common stock at the time of grant of the option by considering a number of objective and subjective factors including independent third-party valuations of the Company’s common stock, operating and financial performance, the lack of liquidity of capital stock and general and industry specific economic outlook, among other factors. After the initial public offering, the fair value of shares of common stock underlying stock options is based on the closing stock price on the date of grant. Expected term The expected term of the options represents the period of time that the options are expected to be outstanding. Options granted have a maximum contractual life of 10 years . Prior to the initial public offering, the Company estimated the expected term of the option based on the estimated timing of potential liquidity events. For grants upon or after the initial public offering, the Company estimated the expected term based upon the simplified method described in Staff Accounting Bulletin No. 107, as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term due to the limited period of time its equity shares have been publicly traded. Expected volatility As the Company does not have sufficient trading history for its common stock, the expected stock price volatility for the common stock was estimated by taking the average historic price volatility for industry peers based on daily price observations over a period equivalent to the expected term of the stock option grants. Industry peers consist of several public companies within the same industry, which are of similar size, complexity and stage of development. The Company intends to continue to consistently apply this process using the same or similar public companies until a sufficient amount of historical information regarding the volatility of its own share price becomes available, or unless circumstances change such that the identified companies are no longer similar to the Company, in which case, more suitable companies whose share prices are publicly available would be used in the calculation. Risk-free interest rate The risk-free interest rate was based on the U.S. Treasury rate, with maturities similar to the expected term of the options. Expected dividend yield The Company does not anticipate paying any dividends in the foreseeable future. As such, the Company uses an expected dividend yield of zero . Performance-based and market-based vesting stock options The following table summarizes the activity for options that vest based upon the satisfaction of performance or market conditions as follows: Options outstanding Weighted-average exercise price Weighted-average remaining contractual life (in years) Aggregate intrinsic values (in thousands) (1) Balance as of December 31, 2016 3,836,107 $ 2.46 Granted 463,200 27.02 Exercised (1,849,420 ) 2.67 Forfeited (43,350 ) 27.29 Balance as of December 31, 2017 2,406,537 $ 6.58 7.4 $ 39,779 (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the Company's closing stock price of $22.31 , as reported on the New York Stock Exchange on December 31, 2017 . As of December 31, 2017 , there was $1.3 million of total unrecognized compensation cost related to performance-based and market-based vesting stock options, which is expected to be recognized over the remaining weighted-average vesting period of 0.7 years . Additional information relating to options that vest based upon the satisfaction of performance or market conditions is as follows (in thousands, except per share data): Year ended December 31, 2017 2016 2015 Stock-based compensation expense $ 3,489 $ 1,813 $ — Intrinsic value of options exercised $ 42,874 $ — $ — Weighted-average grant date fair value of options granted (per share) $ 10.65 $ 1.52 $ 0.50 Prior to the initial public offering, the Company granted options that vested based upon the achievement of both a performance and market condition. The performance condition was based on the occurrence of a liquidity event, and was satisfied in connection with the initial public offering in September 2016. The market condition was based upon the achievement of a minimum rate of return from the liquidity event, and was satisfied in March 2017. Accordingly, all such outstanding options vested in March 2017. In February 2017, the Company granted options that vest based upon the achievement of specified stock prices. The fair values and derived service periods were determined using a Monte Carlo simulation model. If the awards vest prior to the end of the derived service period, the remaining unamortized compensation cost will be recognized in the period of vesting. Restricted stock The following table summarizes the activities for restricted stock awards (“RSAs”) and restricted stock units (“RSUs”) as follows: Restricted stock units outstanding Weighted-average grant date fair value Balance as of December 31, 2016 586,224 $ 17.00 Granted 1,023,811 26.01 Vested (165,177 ) 18.05 Forfeited (196,034 ) 22.60 Balance as of December 31, 2017 1,248,824 $ 23.37 As of December 31, 2017 , there were 302,200 unvested shares subject to RSAs outstanding. Additional information relating to RSAs and RSUs is as follows (in thousands): Year ended December 31, 2017 2016 Stock-based compensation expense 7,550 700 Intrinsic value of RSUs released 3,398 — As of December 31, 2017 , there was $23.9 million of total unrecognized compensation cost related to unvested RSAs and RSUs, which is expected to be recognized over the remaining weighted-average vesting period of 2.9 years . Phantom shares The Company previously issued phantom equity to certain employees, which represented a contractual right to payment of compensation in the future based on the amounts distributable to a holder of the Company’s common stock in connection with a sale of the Company, less the exercise price. The phantom shares did not represent shares of the Company’s common stock and a recipient of phantom shares did not receive an ownership interest in the Company, stockholder voting rights or other incidents of ownership to the Company’s common stock. In December 2017, the Company cancelled all outstanding phantom shares. At the time of cancellation, the phantom shares were worthless, and no stock-based compensation was recorded. |
Employee benefit plan
Employee benefit plan | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Employee benefit plan | Employee benefit plan The Company maintains a defined contribution 401(k) profit-sharing plan (the “401(k) Plan”) for eligible employees. Participants may make voluntary contributions up to the maximum amount allowable by law. The Company may make contributions to the 401(k) Plan on a discretionary basis which vest to the participants 100% . The Company made $0.2 million , $0.1 million and $18,000 of matching contributions to the 401(k) Plan during the year ended December 31, 2017 , 2016 and 2015 , respectively. |
Related-party transactions
Related-party transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related-party transactions | Related-party transactions In the years ended December 31, 2016 and 2015, the Company incurred $0.9 million in management and consulting fees to its majority stockholder, TPG Growth II Management, LLC ("TPG Growth"). Amounts owed were included in due to related parties in the consolidated balance sheet. Subsequent to the initial public offering, the Company ceased paying management and consulting fees to TPG Growth and there were no amounts due to TPG Growth as of December 31, 2016 or December 31, 2017 . During the year ended December 31, 2016, the Company extended loans to certain key management personnel totaling $12.0 million , which were repaid in full in August 31, 2016. There were no loans outstanding as of December 31, 2017 . On October 11, 2016, the Company entered into a sublease agreement with Fit for Life, LLC pursuant to which, the Company subleased certain office and showroom space in New York, New York. Joseph A. Shamah, a former member of the Company’s Board of Directors and a director and stockholder of J.A. Cosmetics Corp., the holder of approximately 10.0% of the Company’s outstanding common stock, is the Chief Executive Officer of Fit for Life, LLC. The annual base rent for the sublease is approximately $ 0.3 million per year and the sublease has a term of 39 months. The Company recognized $ 0.3 million in sublease income from Fit for Life, LLC during the year ended December 31, 2017 . The Company did not recognize any sublease income during the year ended December 31, 2016 . The estimated future sublease income as of December 31, 2017 is $0.6 million and has been recorded as a reduction to the accrual of all remaining operating lease payments recognized on the date the previous facility was vacated. |
Net income (loss) per share
Net income (loss) per share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Net income (loss) per share | Net income (loss) per share The following is a reconciliation of the numerator and denominator in the basic and diluted net income (loss) per common share computations (in thousands, except share and per share data): Year ended December 31, 2017 2016 2015 Numerator: Net income $ 33,475 $ 5,313 $ 4,357 Adjustments to numerator: Dividend paid to preferred stockholders — (66,531 ) — Accretion of convertible preferred stock to maximum redemption value — (436,317 ) (51,967 ) Net income (loss) attributable to common stockholders $ 33,475 $ (497,535 ) $ (47,610 ) Denominator: Weighted average common shares outstanding - basic 45,358,452 12,606,529 30,523 Diluted common equivalents from stock options 1,477,215 — — Diluted common equivalents from restricted stock units 2,309,687 — — Diluted common equivalents from restricted stock awards 229,404 — — Weighted average common shares outstanding - diluted 49,374,758 12,606,529 30,523 Net income (loss) per share: Basic $ 0.74 $ (39.47 ) $ (1,559.81 ) Diluted $ 0.68 $ (39.47 ) $ (1,559.81 ) Anti-dilutive securities excluded from diluted EPS: Service-based vesting stock options 424,087 3,168,967 3,997,503 Common shares underlying convertible preferred stock — — 37,271,375 Performance-based and market-based vesting stock options 377,437 3,836,107 4,848,869 Restricted stock 375,263 586,224 — Total 1,176,787 7,591,298 46,117,747 |
Quarterly financial summary (un
Quarterly financial summary (unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly financial summary (unaudited) | Quarterly financial summary (unaudited) Unaudited quarterly results for the last two years were as follows (in thousands, except per share data): Q1 Q2 Q3 Q4 2017 Net sales $ 60,574 $ 55,856 $ 71,865 $ 81,593 Gross profit $ 38,228 $ 35,890 $ 42,913 $ 47,694 Net income $ 2,160 $ 3,970 $ 5,865 $ 21,480 Net income attributable to common stockholders $ 2,160 $ 3,970 $ 5,865 $ 21,480 Net income per share: Basic $ 0.05 $ 0.09 $ 0.13 $ 0.47 Diluted $ 0.04 $ 0.08 $ 0.12 $ 0.44 2016 Net sales $ 52,673 $ 44,147 $ 56,312 $ 76,436 Gross profit $ 29,300 $ 25,137 $ 32,478 $ 45,320 Net income (loss) $ 3,804 $ (2,715 ) $ (2,377 ) $ 6,601 Net income (loss) attributable to common stockholders $ (34,143 ) $ (96,389 ) $ (373,605 ) $ 6,378 Net income (loss) per share: Basic $ (69.57 ) $ (117.31 ) $ (73.13 ) $ 0.15 Diluted $ (69.57 ) $ (117.31 ) $ (73.13 ) $ 0.13 |
Summary of significant accoun23
Summary of significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation On January 31, 2014, the Company acquired 100% of the outstanding shares of capital stock of e.l.f. Cosmetics, Inc. and its subsidiaries (the “Predecessor,” formerly known as J.A. Cosmetics, Inc., or “JACUS”), a developer and marketer of branded value-priced cosmetics, from J.A. Cosmetics Corporation, TSG5 L.P., a private equity fund, and its co-investors (together, the “Sellers”) (the “Acquisition”). The Acquisition was accounted for as a business combination in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“ASC 805”), and the resulting new basis of accounting is reflected in the Company’s consolidated financial statements for all periods beginning on or after January 31, 2014. The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and all intercompany balances and transactions have been eliminated in consolidation. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents include all cash balances and highly liquid investments purchased with maturities of three months or less. |
Accounts receivable | Accounts receivable Trade receivables consist of uncollateralized, non-interest bearing customer obligations from transactions with retail customers, reduced by an allowance for doubtful accounts for estimated losses resulting from the inability of customers to make payments. The allowance is based on the evaluation and aging of past due balances, specific exposures, historical trends and economic conditions. The Company writes off accounts receivable against the allowance when a balance is determined to be uncollectible. Recoveries of receivables previously written off are recorded when received. The Company recorded an allowance for doubtful accounts of $0.1 million for the years ended December 31, 2017 and 2016 . The Company recorded a sales allowance of $8.5 million and $11.9 million as of December 31, 2017 and 2016 , respectively, which is also presented as a reduction to accounts receivable. The Company grants credit terms in the normal course of business to its customers. Trade credit is extended based upon an evaluation of each customer’s ability to perform its payment obligations. |
Concentrations of credit risk | Concentrations of credit risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and cash equivalents, foreign currency forward contracts prior to maturity in 2016 and trade receivables. Although the Company deposits its cash with creditworthy financial institutions, its deposits, at times, may exceed federally insured limits. To date, the Company has not experienced any losses on its cash deposits. The Company performs credit evaluations of its customers, and the risk with respect to trade receivables is further mitigated by the short duration of customer payment terms and the pedigree of the customer base. |
Inventory | Inventory Inventory, consisting principally of finished goods, is stated at the lower of cost or market. Cost is principally determined by the first-in, first-out method. The Company also records a reserve for excess and obsolete inventory, which represents the excess of the cost of the inventory over its estimated market value. This reserve is based upon an assessment of historical trends, current market conditions and forecasted product demand. |
Property and equipment | Property and equipment Property and equipment is stated at cost and is depreciated on a straight-line basis over the estimated useful lives of the assets. Leasehold improvements are amortized on a straight-line basis over the shorter of the lease term or the useful lives of the assets. Repairs and maintenance expenditures are expensed as incurred. Useful lives by major asset class are as follows : Estimated useful lives Machinery, equipment and software 3-5 years Leasehold improvements 5 years Furniture and fixtures 2-5 years Store fixtures 2-3 years Included in other assets as of December 31, 2017 are retail product displays of $ 5.8 million that are generally amortized over a period of three years. Amortization expense for retail product displays was $0.6 million for the year ended December 31, 2017 . The Company evaluates events and changes in circumstances that could indicate carrying amounts of long-lived assets, including property and equipment, may not be recoverable. When such events or changes in circumstances occur, the Company assesses the recoverability of long-lived assets by determining whether or not the carrying value of such assets will be recovered through undiscounted future cash flows derived from their use and eventual disposition. If the sum of the undiscounted future cash flows is less than the carrying amount of an asset, the Company records an impairment loss for the amount by which the carrying amount of the assets exceeds its fair value. |
Goodwill and intangible assets | Goodwill and intangible assets Goodwill represents the excess purchase price for the Acquisition over the fair value of the net assets acquired. As part of the Acquisition, the Company also acquired finite-lived intangible assets (customer relationships and favorable leases) and an indefinite-lived intangible asset (trademark). Goodwill is not amortized but rather is reviewed annually for impairment, at the reporting unit level, or when there is evidence that events or changes in circumstances indicate that the Company’s carrying amount may not be recovered. When testing goodwill for impairment, the Company first performs an assessment of qualitative factors. If qualitative factors indicate that it is more likely than not that the fair value of the relevant reporting unit is less than its carrying amount, the Company tests goodwill for impairment at the reporting unit level using a two-step approach. In step one, the Company determines if the fair value of the reporting unit exceeds the unit’s carrying value. If step one indicates that the fair value of the reporting unit is less than its carrying value, the Company performs step two, determining the fair value of goodwill and, if the carrying value of goodwill exceeds its implied fair value, an impairment charge is recorded. We have identified a single reporting unit for purposes of impairment testing. Indefinite-lived intangible assets are not amortized but rather are tested for impairment annually, and impairment is recognized if the carrying amount exceeds the fair value of the intangible asset. We evaluate our indefinite-lived intangible asset to determine whether current events and circumstances continue to support an indefinite useful life. Amortization of intangible assets with finite useful lives is computed on a straight-line basis over periods of 3 years to 10 years . The determination of the estimated period of benefit is dependent upon the use and underlying characteristics of the intangible asset. The Company evaluates the recoverability of its intangible assets subject to amortization when facts and circumstances indicate that the carrying value of the asset may not be recoverable. If the carrying value of an intangible asset is not recoverable, impairment loss is measured as the amount by which the carrying value exceeds its estimated fair value. |
Debt issuance costs | Debt issuance costs Debt issuance costs and lender fees were incurred for arranging the credit facilities from various financial institutions. For credit facilities consisting of both term and revolving debt, such costs are allocated to each sub-facility based upon the total borrowing capacity. For term debt, issuance costs are presented within the related long-term debt liability on the consolidated balance sheet and lender fees are presented as a direct deduction from the carrying amount. Both debt issuance costs and lender fees are amortized over the term of the related debt using the effective interest rate method. For revolving debt, issuance costs and lender fees are presented as a noncurrent asset and amortized over the term of the related debt on a straight-line basis. |
Fair value of financial instruments | Fair value of financial instruments The carrying amounts of cash and cash equivalents, accounts receivable, and accounts payable and accrued expenses approximate their fair values due to the short-term nature of these items. The carrying amounts of bank debt approximate their fair values as the stated interest rates approximate market rates currently available to the Company for loans with similar terms. |
Segment reporting | Segment reporting Operating segments are components of an enterprise for which separate financial information is available that is evaluated by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Utilizing these criteria, the Company manages its business on the basis of one operating segment and one reportable segment. It is impracticable for the Company to provide revenue by product line. |
Revenue recognition | Revenue recognition Revenue consists of sales of beauty products through retail customers, e.l.f. stores and e-commerce channels. Sales are recognized when persuasive evidence of an arrangement exists, the product has shipped, title has passed, all risks and rewards of ownership have transferred, the sales price is fixed or determinable and collectability is reasonably assured. Delivery is considered to have occurred at the time the title and risk of loss passes to the customer. For sales to retail customers, delivery is considered to have occurred at the time of shipment or the time of delivery depending upon the specific terms of the customer arrangement. For sales to e-commerce consumers, delivery is considered to have occurred at the time of delivery of merchandise to the customer. Revenue from sales to consumers through e.l.f. stores is recognized at the time of purchase. Revenue recognized through e.l.f. store and e-commerce sales channels is recognized net of any taxes that are collected from consumers and subsequently remitted to governmental authorities, such as sales, use and value added taxes. Provision for sales discounts, product returns, markdowns, shortages and price adjustments are recorded as revenue reductions. These revenue reductions are established by the Company based upon management’s best estimates at the time of sale. The Company regularly reviews and revises, when deemed necessary, its estimates of sales returns and other required reserves based primarily upon the historical rate of actual product returns and the duration of time between the original sale and return. These revenue reductions are reflected on the consolidated balance sheet as a sales allowance against accounts receivable. |
Income taxes | Income taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. 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 on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. Future income tax benefits are recognized to the extent that realization of such benefits is more likely than not. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in its income tax provision. |
Leases | Leases The Company leases office space, warehouse and retail store locations, equipment and software. At the inception of each lease, the Company determines its classification as an operating or capital lease. Assets held under capital leases are included in property and equipment. Operating leases are expensed on a straight-line basis over the life of the lease, beginning on the date the Company takes possession of the leased asset. Certain leases provide for rent abatements or scheduled increases in base rent. Rent expense is recognized on a straight-line basis over the lease term, which results in deferred rent payable being recognized on the consolidated balance sheet. As part of its lease agreements, the Company may receive construction allowances from landlords for tenant improvements. These leasehold improvements made by the Company are capitalized and amortized over the shorter of the lease term or five years. The construction allowances are recorded as deferred rent and amortized on a straight-line basis over the lease term as a reduction of rent expense. |
Foreign currency | Foreign currency The functional currency of the Company’s foreign subsidiaries is the U.S. dollar. Transactions denominated in currencies other than the functional currency are recorded at exchange rates in effect on the date of the transaction. At the end of each reporting period, monetary assets and liabilities are remeasured to the functional currency using exchange rates in effect at the balance sheet date. Non-monetary assets and liabilities are remeasured at historical exchange rates. Transaction gains or losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in other income (expense), net in the consolidated statements of operations. |
Derivative instruments | Derivative instruments The Company is exposed to foreign exchange risk as it has contracts with suppliers in China for future purchases of inventories denominated in the Chinese renminbi (“RMB”). The Company has previously used derivative instruments, specifically forward contracts, to mitigate the impact of foreign currency fluctuations on a portion of its forecasted foreign currency exposures. These contracts are carried at their fair value either as an asset or liability on the consolidated balance sheet. The Company’s derivative contracts are not designated as hedge instruments, and changes in fair value of derivatives are recorded in other income (expense), net in the consolidated statements of operations. The Company does not enter into derivative contracts for speculative or trading purposes. |
Stock-based compensation | Stock-based compensation Stock-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized on a straight-line basis over the requisite service period, which is generally the award’s vesting period. The Company estimates the fair value of employee stock-based payment awards subject to only a service condition on the date of grant using the Black-Scholes valuation model. The Black-Scholes model requires the use of highly subjective and complex assumptions, including the option’s expected term and the price volatility of the underlying stock. The Company estimates the fair value of employee stock-based payment awards subject to market conditions using a Monte Carlo simulation model. Compensation expense for employee stock-based awards whose vesting is subject to the fulfillment of both a market condition and the occurrence of a performance condition is recognized on a graded-vesting basis at the time the achievement of the performance condition becomes probable. Forfeitures were previously estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differed from those estimates. The Company early adopted ASU 2016-09 and beginning January 1, 2016, accounts for forfeitures as they occur. The impact of adoption was not material. |
Advertising costs | Advertising costs Advertising costs, including promotions and print, are expensed as incurred or distributed. Advertising costs are included in selling, general, and administrative expenses in the accompanying consolidated statements of operations and amounted to approximately and $8.1 million , $5.6 million , $3.9 million in the years ended December 31, 2017 , 2016 and 2015 , respectively. |
Net income (loss) per common share | Net income (loss) per share Basic net income (loss) per share is computed using net income (loss) available to common stockholders divided by the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share reflects the dilutive effects of stock options and restricted stock outstanding during the period, to the extent such securities would not be anti-dilutive, and is determined using the treasury stock method. |
Recent accounting pronouncements | Recent accounting pronouncements The following table provides a brief description of recent accounting pronouncements that could have a material effect on the Company’s financial statements: Standard Description Date of expected adoption/adoption Effect on the financial statements or other significant matters Standards that are not yet adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606) The new standard will replace all existing revenue recognition standards including industry-specific guidance and significantly expand the disclosure requirements for revenue arrangements. It may be adopted either retrospectively or on a modified retrospective basis to new contracts and existing contracts with remaining performance obligations as of the effective date. January 1, 2018 The Company expects the standard to impact the methods used to reserve for discounts, refunds and other customer incentives, which will impact the timing of revenue recognition. The Company is currently finalizing its assessment of the possible impacts of the adoption of this standard, but expects to apply the modified retrospective method of adoption and to recognize a cumulative effect adjustment to beginning retained earnings in fiscal 2018. The Company expects this adjustment to be immaterial, as the timing of recognition of sales allowances is expected to be similar under the new standard as of December 31, 2017. Standard Description Date of expected adoption/adoption Effect on the financial statements or other significant matters ASU 2016‐01, Recognition and Measurement of Financial Assets and Financial Liabilities The standard amends accounting related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. The standard also amends certain disclosure requirements associated with the fair value of financial instruments. January 1, 2018 The Company expects the standard to impact the methods used to assess and identify impairment of its investments. Additionally, the standard eliminates the requirement to disclose the methods and significant assumptions used to estimate the fair value of financial instruments that are measured at amortized cost on the balance sheet. ASU 2016-02, Leases (Topic 842) The standard will require lessees to recognize a right-of-use asset and a lease liability for virtually all of their leases (other than leases that meet the definition of a short-term lease). The liability will be equal to the January 1, 2019 The Company is currently evaluating the effect of the standard on its financial statements and related disclosures and expects the standard to result in a material increase to assets and liabilities. |
Summary of significant accoun24
Summary of significant accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Schedule of Concentrations of Risk | During the year ended December 31, 2017 and 2016 , two customers individually accounted for greater than 10% of the Company’s revenue. During the year ended December 31, 2015 , three customers individually accounted for greater than 10% of the Company’s net sales, as disclosed below: Year ended December 31, 2017 2016 2015 Customer A 25 % 28 % 28 % Customer B 29 % 30 % 23 % Customer C * * 10 % * Customer comprised less than 10% of net sales in the period. Three customers individually accounted for greater than 10% of the Company’s accounts receivable at the end of the periods presented : December 31, 2017 December 31, 2016 Customer A 29 % 42 % Customer B 17 % 23 % Customer C 17 % * |
Schedule of Useful Lives by Major Asset Class | Useful lives by major asset class are as follows : Estimated useful lives Machinery, equipment and software 3-5 years Leasehold improvements 5 years Furniture and fixtures 2-5 years Store fixtures 2-3 years |
Net Sales in United States and Outside of United States | During the years ended December 31, 2017 , 2016 and 2015 , net sales in the United States and outside of the United States were as follows (in thousands): Year ended December 31, 2017 2016 2015 U.S. $ 243,299 $ 210,236 $ 178,817 International 26,589 19,331 12,596 Total net sales $ 269,888 $ 229,567 $ 191,413 |
Property and Equipment in United States and Outside of United States | As of December 31, 2017 and 2016 , the Company had property and equipment in the United States and outside of the United States as follows (in thousands) : December 31, 2017 December 31, 2016 U.S. $ 17,834 $ 16,757 International 203 394 Total property and equipment, net $ 18,037 $ 17,151 |
Reconciliation of Sales Allowances | A reconciliation of the beginning and ending amounts of sales allowances for the years ended December 31, 2017 , 2016 and 2015 is as follows (in thousands): Balance as of December 31, 2014 $ 1,965 Charges 13,903 Deductions (12,002 ) Balance as of December 31, 2015 3,866 Charges 24,427 Deductions (16,366 ) Balance as of December 31, 2016 11,927 Charges 25,680 Deductions (29,149 ) Balance as of December 31, 2017 $ 8,458 |
Goodwill and other intangible25
Goodwill and other intangible assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Information Regarding Company's Goodwill and Intangible Assets | Information regarding the Company’s goodwill and intangible assets as of December 31, 2017 is as follows (in thousands): Estimated useful life Gross carrying amount Accumulated amortization Net carrying amount Customer relationships – retailers 10 years $ 68,800 $ (26,947 ) $ 41,853 Customer relationships – e-commerce 3 years 3,900 (3,875 ) 25 Favorable leases, net Varies 580 (376 ) 204 Total finite-lived intangibles 73,280 (31,198 ) 42,082 Trademarks Indefinite 63,800 — 63,800 Goodwill 157,264 — 157,264 Total goodwill and other intangibles $ 294,344 $ (31,198 ) $ 263,146 Information regarding the Company’s goodwill and intangible assets as of December 31, 2016 is as follows (in thousands): Estimated useful life Gross carrying amount Accumulated amortization Net carrying amount Customer relationships – retailers 10 years $ 68,800 $ (20,067 ) $ 48,733 Customer relationships – e-commerce 3 years 3,900 (3,736 ) 164 Favorable leases, net Varies 580 (274 ) 306 Total finite-lived intangibles 73,280 (24,077 ) 49,203 Trademarks Indefinite 63,800 — 63,800 Goodwill 157,264 — 157,264 Total goodwill and other intangibles $ 294,344 $ (24,077 ) $ 270,267 |
Estimated Future Amortization Expense Related to Finite-lived Intangible Assets | The estimated future amortization expense related to the finite-lived intangible assets, assuming no impairment as of December 31, 2017 , is as follows (in thousands): Year ending December 31, 2018 $ 7,007 2019 6,982 2020 6,880 2021 6,880 2022 6,880 Thereafter 7,453 Total $ 42,082 |
Property and equipment (Tables)
Property and equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment | Property and equipment as of December 31, 2017 and 2016 consists of the following (in thousands): December 31, 2017 December 31, 2016 Machinery, equipment and software $ 6,733 $ 3,956 Leasehold improvements 8,673 7,620 Furniture and fixtures 2,827 2,771 Store fixtures 10,896 8,921 Property and equipment, gross 29,129 23,268 Less: Accumulated depreciation and amortization (11,092 ) (6,117 ) Property and equipment, net $ 18,037 $ 17,151 |
Accrued expenses and other cu27
Accrued expenses and other current liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Summary of Accrued Expenses | Accrued expenses and other current liabilities as of December 31, 2017 and 2016 consists of the following (in thousands): December 31, 2017 December 31, 2016 Accrued expenses $ 9,422 $ 9,537 Other current liabilities 1,894 9,249 Accrued compensation 3,998 7,111 Early exercised option deposit liability — 4,074 Income taxes payable 625 3,705 Accrued expenses and other current liabilities $ 15,939 $ 33,676 |
Fair value of financial instr28
Fair value of financial instruments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Value of Financial Liabilities | The following table sets forth the fair value of the Company’s financial liabilities by level within the fair value hierarchy as of December 31, 2017 (in thousands): Fair value measurements using Fair value Level 1 Level 2 Level 3 Financial liabilities: Long-term debt, including current portion (1) 156,792 — 156,792 — Total financial liabilities $ 156,792 $ — $ 156,792 $ — (1) Of this amount, $8,646 is classified as current. The gross carrying amounts of the Company’s bank debt, before reduction of the debt issuance costs, approximate their fair values as the stated rates approximate market rates for loans with similar terms. The following table sets forth the fair value of the Company’s financial liabilities by level within the fair value hierarchy as of December 31, 2016 (in thousands): Fair value measurements using Fair value Level 1 Level 2 Level 3 Financial liabilities: Long-term debt, including current portion (1) 165,393 — 165,393 — Total financial liabilities $ 165,393 $ — $ 165,393 $ — (1) Of this amount, $8,650 is classified as current. The gross carrying amounts of the Company’s bank debt, before reduction of the debt issuance costs, approximate their fair values as the stated rates approximate market rates for loans with similar terms. |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Debt | The Company’s outstanding debt as of December 31, 2017 and 2016 consists of the following (in thousands): December 31, 2017 December 31, 2016 Debt: Term loan $ 154,418 $ 162,627 Capital lease obligations 2,374 2,766 Total debt 156,792 165,393 Less: debt issuance costs (444 ) (566 ) Total debt, net of issuance costs 156,348 164,827 Less: current portion (8,646 ) (8,650 ) Long-term portion of debt $ 147,702 $ 156,177 |
Schedule of Aggregate Future Minimum Principal Payments on the Term Loan | Aggregate future minimum principal payments on the Term Loan are as follows (in thousands): Year ending December 31, 2018 $ 8,250 2019 9,075 2020 11,138 2021 14,438 2022 113,850 Thereafter — Total $ 156,751 |
Schedule of Components of Interest Expense | The components of interest expense are as follows (in thousands) : Year ended December 31, 2017 2016 2015 Interest of term loan debt $ 7,271 $ 12,076 $ 10,988 Amortization of debt issuance costs 810 1,281 1,101 Loss on extinguishment of debt — 2,736 — Interest on revolving line of credit 526 190 700 Interest on capital leases 168 — — Other — — (68 ) Interest expense, net $ 8,775 $ 16,283 $ 12,721 |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments under Operating Leases | Future minimum lease payments under the operating leases are as follows (in thousands): Year ending December 31, 2018 $ 5,271 2019 5,158 2020 4,679 2021 3,785 2022 2,832 Thereafter 10,025 Total $ 31,750 |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income (Loss) Before Income Taxes | The components of income before provision for income taxes are as follows (in thousands): Year ended December 31, 2017 2016 2015 Domestic $ 22,409 $ 9,677 $ 8,053 Foreign 60 135 625 Total $ 22,469 $ 9,812 $ 8,678 |
Schedule of Components of (Provision) Benefit for Income Taxes | The components of the provision for income taxes are as follows (in thousands): Year ended December 31, 2017 2016 2015 Current: U.S. federal $ (2,058 ) $ (9,978 ) $ (6,837 ) State (369 ) (2,096 ) (1,026 ) Foreign — — (391 ) Total current (2,427 ) (12,074 ) (8,254 ) Deferred: U.S. federal 13,246 8,384 3,710 State (21 ) (773 ) 201 Foreign 208 (36 ) 22 Total deferred 13,433 7,575 3,933 Total (provision) benefit for income taxes $ 11,006 $ (4,499 ) $ (4,321 ) |
Schedule of Reconciliation of Federal Statutory Rate to Company's Effective Tax Rate | The following table presents a reconciliation of the federal statutory rate to the Company’s effective tax rate : Year ended December 31, 2017 2016 2015 Federal statutory rate 35.0 % 35.0 % 35.0 % Federal tax deferred rate change (53.8 )% — % — % State tax, net of federal benefit 0.6 % 0.7 % 2.2 % State tax deferred rate change, net of federal benefit 0.9 % 18.7 % 0.3 % U.S. subpart F income 0.1 % 0.5 % 2.5 % Nondeductible transaction-related costs — % 2.0 % — % Uncertain tax positions (1.7 )% 2.0 % 5.3 % Stock based compensation (28.1 )% (16.8 )% 0.6 % Others (2.0 )% 3.8 % 3.9 % Effective tax rate (49.0 )% 45.9 % 49.8 % |
Schedule of Components of Net Deferred Taxes | The deferred tax assets and liabilities within the same jurisdiction are reported net in the accompanying balance sheets as follows (in thousands) : December 31, 2017 December 31, 2016 Deferred tax assets $ 245 $ 37 Deferred tax liabilities 21,341 34,212 Net deferred tax liabilities $ 21,096 $ 34,175 The components of net deferred taxes arising from temporary differences are as follows (in thousands): December 31, 2017 December 31, 2016 Deferred tax assets: Compensation $ 1,056 $ 1,848 Inventories and receivables 2,965 6,905 Accrued expenses 663 1,996 Stock compensation 3,497 1,967 Net operating losses 210 232 Other 925 1,304 Deferred tax assets 9,316 14,252 Deferred tax liabilities: Goodwill 2,214 2,562 Fixed assets 1,923 2,699 Intangible assets 25,962 42,587 Other 313 579 Deferred tax liabilities 30,412 48,427 Net deferred tax liabilities $ 21,096 $ 34,175 |
Schedule of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): Year ended December 31, 2017 2016 2015 Balance at beginning of year $ 1,208 $ 1,256 $ 607 Increases for prior year tax positions 63 438 1 Increases for current year tax positions 68 103 648 Decreases for prior year tax positions (1 ) (589 ) — Decreases due to settlements (32 ) — — Decreases due to statutes lapsing (542 ) — — Balance at end of year $ 764 $ 1,208 $ 1,256 |
Stock-based compensation (Table
Stock-based compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Stock Option Activity and Related Information | The following table summarizes the activity for options that vest solely based upon the satisfaction of a service condition as follows: Options outstanding Weighted-average exercise price Weighted-average remaining contractual life (in years) Aggregate intrinsic values (in thousands) (1) Balance as of December 31, 2016 3,168,967 $ 8.55 Granted 209,400 26.38 Exercised (547,722 ) 2.04 Forfeited (233,351 ) 16.44 Balance as of December 31, 2017 2,597,294 $ 10.66 8.1 years $ 30,924 Exercisable, December 31, 2017 1,078,229 $ 6.18 7.2 years $ 17,391 (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the Company's closing stock price of $22.31 , as reported on the New York Stock Exchange on December 31, 2017 . Options outstanding Weighted-average exercise price Weighted-average remaining contractual life (in years) Aggregate intrinsic values (in thousands) (1) Balance as of December 31, 2016 3,836,107 $ 2.46 Granted 463,200 27.02 Exercised (1,849,420 ) 2.67 Forfeited (43,350 ) 27.29 Balance as of December 31, 2017 2,406,537 $ 6.58 7.4 $ 39,779 (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the Company's closing stock price of $22.31 , as reported on the New York Stock Exchange on December 31, 2017 . |
Summary of Additional Information Relating to Stock Options Activity | Additional information relating to options that vest based upon the satisfaction of performance or market conditions is as follows (in thousands, except per share data): Year ended December 31, 2017 2016 2015 Stock-based compensation expense $ 3,489 $ 1,813 $ — Intrinsic value of options exercised $ 42,874 $ — $ — Weighted-average grant date fair value of options granted (per share) $ 10.65 $ 1.52 $ 0.50 Additional information relating to service-based options is as follows (in thousands, except per share data): Year ended December 31, 2017 2016 2015 Stock-based compensation expense $ 2,435 $ 4,286 $ 503 Intrinsic value of options exercised $ 12,841 $ 2,486 $ 12 Weighted-average grant date fair value of options granted (per share) $ 9.51 $ 5.07 $ 0.99 |
Summary of Weighted-Average Assumptions | The fair value of service-based stock options granted were calculated using the following weighted-average assumptions: Year ended December 31, 2017 2016 2015 Expected term (in years) 6.2 5.9 4.1 Expected volatility 32.42 % 36.50 % 40.92 % Risk-free interest rate 2.14 % 1.34 % 1.51 % Expected dividend yield — % — % — % |
Summary of Restricted Stock Unit Activity and Related Information | The following table summarizes the activities for restricted stock awards (“RSAs”) and restricted stock units (“RSUs”) as follows: Restricted stock units outstanding Weighted-average grant date fair value Balance as of December 31, 2016 586,224 $ 17.00 Granted 1,023,811 26.01 Vested (165,177 ) 18.05 Forfeited (196,034 ) 22.60 Balance as of December 31, 2017 1,248,824 $ 23.37 |
Disclosure of Additional Information | Additional information relating to RSAs and RSUs is as follows (in thousands): Year ended December 31, 2017 2016 Stock-based compensation expense 7,550 700 Intrinsic value of RSUs released 3,398 — |
Net income (loss) per share (Ta
Net income (loss) per share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Reconciliation of Numerator and Denominator in Basic and Diluted Net Income (Loss) Per Common Share Computations | The following is a reconciliation of the numerator and denominator in the basic and diluted net income (loss) per common share computations (in thousands, except share and per share data): Year ended December 31, 2017 2016 2015 Numerator: Net income $ 33,475 $ 5,313 $ 4,357 Adjustments to numerator: Dividend paid to preferred stockholders — (66,531 ) — Accretion of convertible preferred stock to maximum redemption value — (436,317 ) (51,967 ) Net income (loss) attributable to common stockholders $ 33,475 $ (497,535 ) $ (47,610 ) Denominator: Weighted average common shares outstanding - basic 45,358,452 12,606,529 30,523 Diluted common equivalents from stock options 1,477,215 — — Diluted common equivalents from restricted stock units 2,309,687 — — Diluted common equivalents from restricted stock awards 229,404 — — Weighted average common shares outstanding - diluted 49,374,758 12,606,529 30,523 Net income (loss) per share: Basic $ 0.74 $ (39.47 ) $ (1,559.81 ) Diluted $ 0.68 $ (39.47 ) $ (1,559.81 ) Anti-dilutive securities excluded from diluted EPS: Service-based vesting stock options 424,087 3,168,967 3,997,503 Common shares underlying convertible preferred stock — — 37,271,375 Performance-based and market-based vesting stock options 377,437 3,836,107 4,848,869 Restricted stock 375,263 586,224 — Total 1,176,787 7,591,298 46,117,747 |
Quarterly financial summary (34
Quarterly financial summary (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly financial summary | Unaudited quarterly results for the last two years were as follows (in thousands, except per share data): Q1 Q2 Q3 Q4 2017 Net sales $ 60,574 $ 55,856 $ 71,865 $ 81,593 Gross profit $ 38,228 $ 35,890 $ 42,913 $ 47,694 Net income $ 2,160 $ 3,970 $ 5,865 $ 21,480 Net income attributable to common stockholders $ 2,160 $ 3,970 $ 5,865 $ 21,480 Net income per share: Basic $ 0.05 $ 0.09 $ 0.13 $ 0.47 Diluted $ 0.04 $ 0.08 $ 0.12 $ 0.44 2016 Net sales $ 52,673 $ 44,147 $ 56,312 $ 76,436 Gross profit $ 29,300 $ 25,137 $ 32,478 $ 45,320 Net income (loss) $ 3,804 $ (2,715 ) $ (2,377 ) $ 6,601 Net income (loss) attributable to common stockholders $ (34,143 ) $ (96,389 ) $ (373,605 ) $ 6,378 Net income (loss) per share: Basic $ (69.57 ) $ (117.31 ) $ (73.13 ) $ 0.15 Diluted $ (69.57 ) $ (117.31 ) $ (73.13 ) $ 0.13 |
Nature of operations - Addition
Nature of operations - Additional Information (Details) - Initial Public Offering $ / shares in Units, $ in Millions | Sep. 27, 2016USD ($)$ / sharesshares |
Nature of Operations [Line Items] | |
Common stock issued including underwriter's overallotment option (in shares) | 9,583,333 |
Initial offering price (in USD per share) | $ / shares | $ 17 |
Gross proceeds from issuance of initial public offering | $ | $ 162.9 |
Net proceeds excluding underwriting discounts and commissions and other offering expenses including offering expenses paid prior to the initial public offering | $ | $ 54.9 |
Conversion of preferred stock into common stock (in shares) | 37,271,375 |
Existing Stockholders | |
Nature of Operations [Line Items] | |
Common stock issued including underwriter's overallotment option (in shares) | 5,583,333 |
Summary of significant accoun36
Summary of significant accounting policies - Additional Information (Details) | 12 Months Ended | |||
Dec. 31, 2017USD ($)segmentcustomerreporting_unit | Dec. 31, 2016USD ($)customer | Dec. 31, 2015USD ($)customer | Jan. 31, 2014 | |
Summary Of Significant Accounting Policies [Line Items] | ||||
Allowance for doubtful accounts | $ 100,000 | $ 100,000 | ||
Sales allowances | 8,500,000 | 11,900,000 | ||
Reserve for excess and obsolete inventory | 1,500,000 | 100,000 | ||
Property and equipment, net | 18,037,000 | 17,151,000 | ||
Impairment charges | $ 200,000 | 0 | $ 0 | |
Number of reporting segments | segment | 1 | |||
Number of operating segments | segment | 1 | |||
Number of reporting units | reporting_unit | 1,000 | |||
Reimbursed shipping expenses | $ 700,000 | 1,400,000 | 3,600,000 | |
Shipping and handling costs | 21,200,000 | 20,400,000 | 12,600,000 | |
Advertising costs | 8,100,000 | $ 5,600,000 | $ 3,900,000 | |
Retail Product Displays | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Property and equipment, net | $ 5,800,000 | |||
Estimated useful lives | 3 years | |||
Amortization expense | $ 600,000 | |||
Leasehold improvements | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Estimated useful lives | 5 years | |||
Minimum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Finite-lived intangibles, estimated useful life | 3 years | |||
Maximum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Finite-lived intangibles, estimated useful life | 10 years | |||
Revenue | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Number of customers | customer | 2 | 2 | 3 | |
Accounts Receivable | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Number of customers | customer | 3 | 3 | ||
Predecessor | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Percentage of outstanding shares acquired | 100.00% |
Summary of significant accoun37
Summary of significant accounting policies - Schedule of Concentrations of Risk (Details) - Customer Concentration Risk | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue | Customer A | |||
Product Information [Line Items] | |||
Concentration risk percentage | 25.00% | 28.00% | 28.00% |
Revenue | Customer B | |||
Product Information [Line Items] | |||
Concentration risk percentage | 29.00% | 30.00% | 23.00% |
Revenue | Customer C | |||
Product Information [Line Items] | |||
Concentration risk percentage | 10.00% | ||
Accounts Receivable | Customer A | |||
Product Information [Line Items] | |||
Concentration risk percentage | 29.00% | 42.00% | |
Accounts Receivable | Customer B | |||
Product Information [Line Items] | |||
Concentration risk percentage | 17.00% | 23.00% | |
Accounts Receivable | Customer C | |||
Product Information [Line Items] | |||
Concentration risk percentage | 17.00% |
Summary of significant accoun38
Summary of significant accounting policies - Schedule of Useful Lives by Major Asset Class (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Machinery, equipment and software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Machinery, equipment and software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Furniture and fixtures | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 2 years |
Furniture and fixtures | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Store fixtures | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 2 years |
Store fixtures | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Summary of significant accoun39
Summary of significant accounting policies - Net Sales in United States and Outside of United States (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | $ 81,593 | $ 71,865 | $ 55,856 | $ 60,574 | $ 76,436 | $ 56,312 | $ 44,147 | $ 52,673 | $ 269,888 | $ 229,567 | $ 191,413 |
U.S. | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 243,299 | 210,236 | 178,817 | ||||||||
International | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | $ 26,589 | $ 19,331 | $ 12,596 |
Summary of significant accoun40
Summary of significant accounting policies - Long-Lived Assets in United States and Outside of United States (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | $ 18,037 | $ 17,151 |
U.S. | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | 17,834 | 16,757 |
International | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | $ 203 | $ 394 |
Summary of significant accoun41
Summary of significant accounting policies - Reconciliation of Sales Allowances (Details) - Sales Allowances - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance beginning | $ 11,927 | $ 3,866 | $ 1,965 |
Charges | 25,680 | 24,427 | 13,903 |
Deductions | (29,149) | (16,366) | (12,002) |
Balance ending | $ 8,458 | $ 11,927 | $ 3,866 |
Investment in equity securiti42
Investment in equity securities - Additional Information (Details) - Social Media Analytics Company shares in Millions, $ in Millions | Apr. 14, 2017USD ($)shares |
Schedule of Cost-method Investments [Line Items] | |
Amount invested | $ | $ 2.9 |
Number of shares acquired (in shares) | shares | 4.7 |
Ownership interest | 15.00% |
Goodwill and other intangible43
Goodwill and other intangible assets - Information Regarding Company's Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule Of Intangible Assets And Goodwill [Line Items] | ||
Finite-lived intangibles, Gross carrying amount | $ 73,280 | $ 73,280 |
Finite-lived intangibles, Accumulated amortization | (31,198) | (24,077) |
Total | 42,082 | 49,203 |
Goodwill, Gross carrying amount | 157,264 | 157,264 |
Goodwill, Accumulated amortization | 0 | 0 |
Goodwill, Net carrying amount | 157,264 | 157,264 |
Goodwill and other intangibles, Gross carrying amount | 294,344 | 294,344 |
Goodwill and other intangibles, Accumulated amortization | (31,198) | (24,077) |
Goodwill and other intangibles, Net carrying amount | 263,146 | 270,267 |
Trademark | ||
Schedule Of Intangible Assets And Goodwill [Line Items] | ||
Indefinite lived intangibles, Net carrying amount | 63,800 | 63,800 |
Customer Relationships, Retailers | ||
Schedule Of Intangible Assets And Goodwill [Line Items] | ||
Finite-lived intangibles, Gross carrying amount | 68,800 | 68,800 |
Finite-lived intangibles, Accumulated amortization | (26,947) | (20,067) |
Total | $ 41,853 | $ 48,733 |
Finite-lived intangibles, estimated useful life | 10 years | 10 years |
Customer Relationships, E-Commerce | ||
Schedule Of Intangible Assets And Goodwill [Line Items] | ||
Finite-lived intangibles, Gross carrying amount | $ 3,900 | $ 3,900 |
Finite-lived intangibles, Accumulated amortization | (3,875) | (3,736) |
Total | $ 25 | $ 164 |
Finite-lived intangibles, estimated useful life | 3 years | 3 years |
Favorable Leases, Net | ||
Schedule Of Intangible Assets And Goodwill [Line Items] | ||
Finite-lived intangibles, Gross carrying amount | $ 580 | $ 580 |
Finite-lived intangibles, Accumulated amortization | (376) | (274) |
Total | $ 204 | $ 306 |
Goodwill and other intangible44
Goodwill and other intangible assets - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Depreciation and amortization | $ 7,100,000 | $ 8,300,000 | $ 8,200,000 |
Impairment of finite-lived intangible assets | $ 0 |
Goodwill and other intangible45
Goodwill and other intangible assets - Estimated Future Amortization Expense Related to Finite-lived Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2,018 | $ 7,007 | |
2,019 | 6,982 | |
2,020 | 6,880 | |
2,021 | 6,880 | |
2,022 | 6,880 | |
Thereafter | 7,453 | |
Total | $ 42,082 | $ 49,203 |
Property and equipment - Summa
Property and equipment - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Abstract] | ||
Machinery, equipment and software | $ 6,733 | $ 3,956 |
Leasehold improvements | 8,673 | 7,620 |
Furniture and fixtures | 2,827 | 2,771 |
Store fixtures | 10,896 | 8,921 |
Property and equipment, gross | 29,129 | 23,268 |
Less: Accumulated depreciation and amortization | (11,092) | (6,117) |
Property and equipment, net | $ 18,037 | $ 17,151 |
Property and equipment - Addit
Property and equipment - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation and amortization expense | $ 6.8 | $ 4.9 | $ 2 |
Accrued expenses and other cu48
Accrued expenses and other current liabilities - Summary of Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Accrued expenses | $ 9,422 | $ 9,537 |
Other current liabilities | 1,894 | 9,249 |
Accrued compensation | 3,998 | 7,111 |
Early exercised option deposit liability | 0 | 4,074 |
Income taxes payable | 625 | 3,705 |
Accrued expenses and other current liabilities | $ 15,939 | $ 33,676 |
Fair value of financial instr49
Fair value of financial instruments - Summary of Fair Value of Financial Liabilities (Details) - Fair Value Measurements, Recurring Basis - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Financial liabilities: | ||
Long-term debt, including current portion | $ 156,792 | $ 165,393 |
Total financial liabilities | 156,792 | 165,393 |
Current portion of long-term debt | 8,646 | 8,650 |
Level 1 | ||
Financial liabilities: | ||
Long-term debt, including current portion | 0 | 0 |
Total financial liabilities | 0 | 0 |
Level 2 | ||
Financial liabilities: | ||
Long-term debt, including current portion | 156,792 | 165,393 |
Total financial liabilities | 156,792 | 165,393 |
Level 3 | ||
Financial liabilities: | ||
Long-term debt, including current portion | 0 | 0 |
Total financial liabilities | $ 0 | $ 0 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) | Sep. 27, 2017 | Dec. 23, 2016 | Jun. 07, 2016 | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Aug. 25, 2017 | Jan. 31, 2014 |
Debt Instrument [Line Items] | ||||||||||
Payment of special dividend | $ 72,000,000 | $ 0 | $ 68,000,000 | $ 0 | ||||||
Repayment of senior secured credit facility | 25,900,000 | 13,200,000 | $ 29,100,000 | |||||||
Term loan | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Net proceeds in excess of term loan | 2,500,000 | |||||||||
Term loan | Fiscal Quarters Ending September 30, 2017 through June 30, 2019 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility, periodic payment | 2,062,500 | |||||||||
Term loan | Fiscal Quarters Ending September 30, 2019 through June 30, 2020 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility, periodic payment | 2,475,000 | |||||||||
Term loan | Fiscal Quarters Ending September 30, 2020 through June 30, 2021 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility, periodic payment | 3,093,750 | |||||||||
Term loan | Fiscal Quarters Ending September 30, 2021 through June 30, 2022 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility, periodic payment | 4,125,000 | |||||||||
2014 Senior Secured Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Write off of unamortized debt discount and debt issuance costs | $ 1,700,000 | |||||||||
Write off of other fees associated with refinancing transaction | 100,000 | |||||||||
Unamortized debt discount | 700,000 | |||||||||
Unamortized debt issuance costs | $ 800,000 | |||||||||
2014 Senior Secured Credit Facility | Revolving credit facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Amounts available under senior secured credit facility | 25,000,000 | $ 20,000,000 | ||||||||
2014 Senior Secured Credit Facility | Term loan | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Amounts available under senior secured credit facility | 105,000,000 | |||||||||
Borrowings outstanding under senior secured credit facility | $ 64,000,000 | |||||||||
2014 Senior Secured Credit Facility | Second lien term loan | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Amounts available under senior secured credit facility | $ 40,000,000 | |||||||||
Repayment of senior secured credit facility | $ 40,000,000 | |||||||||
Debt prepayment penalty | $ 400,000 | |||||||||
Write off of unamortized debt issuance costs | $ 500,000 | |||||||||
Senior Secured Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Amounts available under senior secured credit facility | $ 200,000,000 | $ 215,000,000 | ||||||||
Facility term | 5 years | |||||||||
Cost incurred related to credit facility | 2,300,000 | 2,300,000 | 500,000 | |||||||
Amortization period | 5 years | |||||||||
Senior Secured Credit Facility | Lender Fees | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Cost incurred related to credit facility | 2,100,000 | 2,100,000 | ||||||||
Senior Secured Credit Facility | Third-Party Fees | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Cost incurred related to credit facility | $ 200,000 | $ 200,000 | ||||||||
Senior Secured Credit Facility | LIBOR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate floor | 0.00% | |||||||||
Senior Secured Credit Facility | Minimum | LIBOR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Basis spread on interest rate | 1.50% | 2.00% | ||||||||
Senior Secured Credit Facility | Minimum | Base Rate | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Basis spread on interest rate | 0.50% | 1.00% | ||||||||
Senior Secured Credit Facility | Maximum | LIBOR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Basis spread on interest rate | 2.75% | 3.50% | ||||||||
Senior Secured Credit Facility | Maximum | Base Rate | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Basis spread on interest rate | 2.75% | 2.50% | ||||||||
Senior Secured Credit Facility | Revolving credit facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Amounts available under senior secured credit facility | $ 50,000,000 | 50,000,000 | ||||||||
Revolving credit facility, unused amount | $ 49,500,000 | |||||||||
Senior Secured Credit Facility | Revolving credit facility | Minimum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Revolving credit facility, commitment fee | 0.25% | |||||||||
Senior Secured Credit Facility | Revolving credit facility | Maximum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Revolving credit facility, commitment fee | 0.35% | |||||||||
Senior Secured Credit Facility | Term loan | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Amounts available under senior secured credit facility | $ 165,000,000 | |||||||||
Credit facility, interest rate | 4.00% | |||||||||
Senior Secured Credit Facility | Letter of Credit | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Amounts available under senior secured credit facility | $ 7,000,000 | |||||||||
Senior Secured Credit Facility | Swing Line Loan | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Amounts available under senior secured credit facility | $ 5,000,000 |
Debt - Schedule of Outstanding
Debt - Schedule of Outstanding Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Total debt | $ 156,792 | $ 165,393 |
Less: debt issuance costs | (444) | (566) |
Total debt, net of issuance costs | 156,348 | 164,827 |
Less: current portion | (8,646) | (8,650) |
Long-term portion of debt | 147,702 | 156,177 |
Capital lease obligations | ||
Debt Instrument [Line Items] | ||
Total debt | 2,374 | 2,766 |
Term loan | ||
Debt Instrument [Line Items] | ||
Total debt | $ 154,418 | $ 162,627 |
Debt - Schedule of Aggregate Fu
Debt - Schedule of Aggregate Future Minimum Principal Payments on the Term Loan (Details) - Term loan $ in Thousands | Dec. 31, 2017USD ($) |
Debt Instrument [Line Items] | |
2,018 | $ 8,250 |
2,019 | 9,075 |
2,020 | 11,138 |
2,021 | 14,438 |
2,022 | 113,850 |
Thereafter | 0 |
Total | $ 156,751 |
Debt - Schedule of Components o
Debt - Schedule of Components of Interest Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | |||
Amortization of debt issuance costs | $ 810 | $ 1,281 | $ 1,101 |
Loss on extinguishment of debt | 0 | 2,736 | 0 |
Other | 0 | 0 | (68) |
Interest expense, net | 8,775 | 16,283 | 12,721 |
Capital lease obligations | |||
Debt Instrument [Line Items] | |||
Interest | 168 | 0 | 0 |
Term loan | |||
Debt Instrument [Line Items] | |||
Interest | 7,271 | 12,076 | 10,988 |
Revolving credit facility | |||
Debt Instrument [Line Items] | |||
Interest | $ 526 | $ 190 | $ 700 |
Commitments and contingencies -
Commitments and contingencies - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Total rent expense | $ 5.1 | $ 4.1 | $ 3 |
Commitments and contingencies55
Commitments and contingencies - Schedule of Future Minimum Lease Payments under Operating Leases (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,018 | $ 5,271 |
2,019 | 5,158 |
2,020 | 4,679 |
2,021 | 3,785 |
2,022 | 2,832 |
Thereafter | 10,025 |
Total | $ 31,750 |
Income taxes - Additional Infor
Income taxes - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax [Line Items] | |||
Tax benefit from enactment of tax legislation | $ 11,600,000 | ||
Foreign net operating loss carryforwards | 800,000 | ||
State net operating loss carryforwards | 200,000 | ||
Unrecognized tax benefits that would impact effective tax rate | 300,000 | $ 700,000 | |
Unrecognized tax benefits expected to reverse in next twelve months | 100,000 | ||
Accrued gross interest and penalties | 100,000 | 200,000 | |
Recognized net interest expense | $ 17,000 | $ 100,000 | $ 20,000 |
Foreign | |||
Income Tax [Line Items] | |||
Net operating loss carryforwards period | 5 years | ||
State | |||
Income Tax [Line Items] | |||
Net operating loss carryforwards period | 20 years |
Income taxes - Schedule of Com
Income taxes - Schedule of Components of Income (Loss) Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ 22,409 | $ 9,677 | $ 8,053 |
Foreign | 60 | 135 | 625 |
Income before provision for income taxes | $ 22,469 | $ 9,812 | $ 8,678 |
Income taxes - Schedule of Comp
Income taxes - Schedule of Components of (Provision) Benefit for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current: | |||
U.S. federal | $ (2,058) | $ (9,978) | $ (6,837) |
State | (369) | (2,096) | (1,026) |
Foreign | 0 | 0 | (391) |
Total current | (2,427) | (12,074) | (8,254) |
Deferred: | |||
U.S. federal | 13,246 | 8,384 | 3,710 |
State | (21) | (773) | 201 |
Foreign | 208 | (36) | 22 |
Total deferred | 13,433 | 7,575 | 3,933 |
Total (provision) benefit for income taxes | $ 11,006 | $ (4,499) | $ (4,321) |
Income taxes - Schedule of Reco
Income taxes - Schedule of Reconciliation of Federal Statutory Rate to Company's Effective Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory rate | 35.00% | 35.00% | 35.00% |
Federal tax deferred rate change | (53.80%) | 0.00% | 0.00% |
State tax, net of federal benefit | 0.60% | 0.70% | 2.20% |
State tax deferred rate change, net of federal benefit | 0.90% | 18.70% | 0.30% |
U.S. subpart F income | 0.10% | 0.50% | 2.50% |
Nondeductible transaction-related costs | 0.00% | 2.00% | 0.00% |
Uncertain tax positions | (1.70%) | 2.00% | 5.30% |
Stock based compensation | (28.10%) | (16.80%) | 0.60% |
Others | (2.00%) | 3.80% | 3.90% |
Effective tax rate | (49.00%) | 45.90% | 49.80% |
Income taxes - Schedule of Co60
Income taxes - Schedule of Components of Net Deferred Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Compensation | $ 1,056 | $ 1,848 |
Inventories and receivables | 2,965 | 6,905 |
Accrued expenses | 663 | 1,996 |
Stock compensation | 3,497 | 1,967 |
Net operating losses | 210 | 232 |
Other | 925 | 1,304 |
Deferred tax assets | 9,316 | 14,252 |
Deferred tax liabilities: | ||
Goodwill | 2,214 | 2,562 |
Fixed assets | 1,923 | 2,699 |
Intangible assets | 25,962 | 42,587 |
Other | 313 | 579 |
Deferred tax liabilities | 30,412 | 48,427 |
Net deferred tax liabilities | $ 21,096 | $ 34,175 |
Income taxes - Schedule of Defe
Income taxes - Schedule of Deferred Tax Assets and Liabilities Within the Same Jurisdiction (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Income Tax Disclosure [Abstract] | ||
Deferred tax assets | $ 245 | $ 37 |
Deferred tax liabilities | 21,341 | 34,212 |
Net deferred tax liabilities | $ (21,096) | $ (34,175) |
Income taxes - Schedule of Unre
Income taxes - Schedule of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance at beginning of year | $ 1,208 | $ 1,256 | $ 607 |
Increases for prior year tax positions | 63 | 438 | 1 |
Increases for current year tax positions | 68 | 103 | 648 |
Decreases for prior year tax positions | (1) | (589) | 0 |
Decreases due to settlements | (32) | 0 | 0 |
Decreases due to statutes lapsing | (542) | 0 | 0 |
Balance at end of year | $ 764 | $ 1,208 | $ 1,256 |
Preferred stock - Additional In
Preferred stock - Additional Information (Details) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Equity [Abstract] | ||
Preferred stock, shares authorized (in shares) | 30,000,000 | |
Preferred stock, par value (in USD per share) | $ 0.01 | |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Stock-based compensation - Addi
Stock-based compensation - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2016 | |
Early Exercise Of Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options vested (in shares) | 1,522,826 | |||
Deposit liability reclassified to additional paid-in capital | $ 4.1 | |||
Options remaining unvested (in shares) | 0 | |||
RSA | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unvested shares outstanding (in shares) | 302,200 | |||
RSAs and RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unvested shares outstanding (in shares) | 1,248,824 | 586,224 | ||
Unrecognized stock-based compensation cost, expected weighted-average period of recognition | 2 years 10 months 25 days | |||
Unrecognized stock-based compensation cost | $ 23.9 | |||
Service-based Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized stock-based compensation cost | $ 7.2 | |||
Unrecognized stock-based compensation cost, expected weighted-average period of recognition | 3 years | |||
Maximum contractual life | 10 years | |||
Expected dividend yield | 0.00% | 0.00% | 0.00% | |
Performance-based and Market-based Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized stock-based compensation cost | $ 1.3 | |||
Unrecognized stock-based compensation cost, expected weighted-average period of recognition | 8 months 12 days | |||
2014 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares forfeited (in shares) | 128,340 | |||
2016 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares reserved for grant (in shares) | 7,370,075 | 5,430,690 | ||
Shares available for future issuance (in shares) | 4,270,397 | |||
Maximum | 2016 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Additional shares reserved for issuance (in shares) | 4,341,200 |
Stock-based compensation - Summ
Stock-based compensation - Summary of Service-based Stock Option Activity and Related Information (Details) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
Weighted-average exercise price | |
Closing stock price (in USD per share) | $ 22.31 |
Service-based Stock Options | |
Options outstanding | |
Beginning balance (in shares) | shares | 3,168,967 |
Granted (in shares) | shares | 209,400 |
Exercised (in shares) | shares | (547,722) |
Forfeited (in shares) | shares | (233,351) |
Ending balance (in shares) | shares | 2,597,294 |
Options outstanding, Exercisable (in shares) | shares | 1,078,229 |
Weighted-average exercise price | |
Beginning balance (in USD per share) | $ 8.55 |
Granted (in USD per share) | 26.38 |
Exercised (in USD per share) | 2.04 |
Forfeited (in USD per share) | 16.44 |
Ending balance (in USD per share) | 10.66 |
Weighted-average exercise price, Exercisable (in USD per share) | $ 6.18 |
Weighted-average remaining contractual life (in years), Outstanding | 8 years 19 days |
Weighted-average remaining contractual life (in years), Exercisable | 7 years 2 months 19 days |
Aggregate intrinsic values, Outstanding | $ | $ 30,924 |
Aggregate intrinsic values, Exercisable | $ | $ 17,391 |
Stock-based compensation - Su66
Stock-based compensation - Summary of Additional Information Relating to Service-based Options (Details) - Service-based Stock Options - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 2,435 | $ 4,286 | $ 503 |
Intrinsic value of options exercised | $ 12,841 | $ 2,486 | $ 12 |
Weighted-average grant date fair value of options granted (in USD per share) | $ 9.51 | $ 5.07 | $ 0.99 |
Stock-based compensation - Su67
Stock-based compensation - Summary of Weighted-average Assumptions (Details) - Service-based Stock Options | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 6 years 2 months | 5 years 11 months | 4 years 1 month |
Expected volatility | 32.42% | 36.50% | 40.92% |
Risk-free interest rate | 2.14% | 1.34% | 1.51% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Stock-based compensation - Su68
Stock-based compensation - Summary of Performance-based and Market-based Stock Option Activity and Related Information (Details) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
Weighted-average exercise price | |
Closing stock price (in USD per share) | $ 22.31 |
Performance-based and Market-based Stock Options | |
Options outstanding | |
Beginning balance (in shares) | shares | 3,836,107 |
Granted (in shares) | shares | 463,200 |
Exercised (in shares) | shares | (1,849,420) |
Forfeited (in shares) | shares | (43,350) |
Ending balance (in shares) | shares | 2,406,537 |
Weighted-average exercise price | |
Beginning balance (in USD per share) | $ 2.46 |
Granted (in USD per share) | 27.02 |
Exercised (in USD per share) | 2.67 |
Forfeited (in USD per share) | 27.29 |
Ending balance (in USD per share) | $ 6.58 |
Weighted-average remaining contractual life (in years), Outstanding | 7 years 5 months 9 days |
Aggregate intrinsic values, Outstanding | $ | $ 39,779 |
Stock-based compensation - Su69
Stock-based compensation - Summary of Additional Information Relating to Performance-based and Market-based Stock Options (Details) - Performance-based and Market-based Stock Options - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 3,489 | $ 1,813 | $ 0 |
Intrinsic value of options exercised | $ 42,874 | $ 0 | $ 0 |
Weighted-average grant date fair value of options granted (in USD per share) | $ 10.65 | $ 1.52 | $ 0.50 |
Stock-based compensation - Su70
Stock-based compensation - Summary of Restricted Stock Unit Activity and Related Information (Details) - RSAs and RSUs | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Restricted stock units outstanding | |
Beginning balance (in shares) | shares | 586,224 |
Granted (in shares) | shares | 1,023,811 |
Vested (in shares) | shares | (165,177) |
Forfeited (in shares) | shares | (196,034) |
Ending balance (in shares) | shares | 1,248,824 |
Weighted-average grant date fair value | |
Beginning balance (in USD per share) | $ / shares | $ 17 |
Granted (in USD per share) | $ / shares | 26.01 |
Vested (in USD per share) | $ / shares | 18.05 |
Forfeited (in USD per share) | $ / shares | 22.60 |
Ending balance (in USD per share) | $ / shares | $ 23.37 |
Stock-based compensation - Ad71
Stock-based compensation - Additional Information Related to RSAs and RSUs (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
RSAs and RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 7,550 | $ 700 |
RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Intrinsic value of RSUs released | $ 3,398 | $ 0 |
Employee benefit plan - Additi
Employee benefit plan - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Retirement Benefits [Abstract] | |||
Defined contribution plan, vest percentage | 100.00% | ||
Company contributions to 401 (k) plan | $ 200 | $ 100 | $ 18 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) $ in Thousands | Oct. 11, 2016 | Aug. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Related Party Transaction [Line Items] | |||||
Loan repaid by debtors | $ 0 | $ 7,912 | $ 0 | ||
Estimated future sublease income | 600 | ||||
TPG | |||||
Related Party Transaction [Line Items] | |||||
Management and consulting fees incurred | $ 900 | $ 900 | |||
Key Management Personnel | |||||
Related Party Transaction [Line Items] | |||||
Loan repaid by debtors | $ 12,000 | ||||
Fit For Life Limited Liability Company | |||||
Related Party Transaction [Line Items] | |||||
Annual base rent of sublease | $ 300 | ||||
Term of sublease contract | 39 months | ||||
Sublease income | $ 300 | ||||
Chief Executive Officer | Fit For Life Limited Liability Company | |||||
Related Party Transaction [Line Items] | |||||
Ownership percentage of company's outstanding common stock | 10.00% |
Net income (loss) per share - R
Net income (loss) per share - Reconciliation of Numerator and Denominator in Basic and Diluted Net Income (Loss) Per Common Share Computations (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Numerator: | |||||||||||
Net income | $ 6,601 | $ (2,377) | $ (2,715) | $ 3,804 | $ 33,475 | $ 5,313 | $ 4,357 | ||||
Adjustments to numerator: | |||||||||||
Dividend paid to preferred stockholders | 0 | (66,531) | 0 | ||||||||
Accretion of convertible preferred stock to maximum redemption value | 0 | (436,317) | (51,967) | ||||||||
Net income (loss) attributable to common stockholders | $ 21,480 | $ 5,865 | $ 3,970 | $ 2,160 | $ 6,378 | $ (373,605) | $ (96,389) | $ (34,143) | $ 33,475 | $ (497,535) | $ (47,610) |
Denominator: | |||||||||||
Weighted average common shares outstanding - basic (in shares) | 45,358,452 | 12,606,529 | 30,523 | ||||||||
Weighted average common shares outstanding - diluted (in shares) | 49,374,758 | 12,606,529 | 30,523 | ||||||||
Net income (loss) per share: | |||||||||||
Basic (in USD per share) | $ 0.47 | $ 0.13 | $ 0.09 | $ 0.05 | $ 0.15 | $ (73.13) | $ (117.31) | $ (69.57) | $ 0.74 | $ (39.47) | $ (1,559.81) |
Diluted (in USD per share) | $ 0.44 | $ 0.12 | $ 0.08 | $ 0.04 | $ 0.13 | $ (73.13) | $ (117.31) | $ (69.57) | $ 0.68 | $ (39.47) | $ (1,559.81) |
Anti-dilutive securities excluded from diluted EPS: | |||||||||||
Anti-dilutive securities excluded from diluted EPS, Total (in shares) | 1,176,787 | 7,591,298 | 46,117,747 | ||||||||
Common shares underlying convertible preferred stock | |||||||||||
Anti-dilutive securities excluded from diluted EPS: | |||||||||||
Anti-dilutive securities excluded from diluted EPS, Total (in shares) | 0 | 0 | 37,271,375 | ||||||||
Service-based vesting stock options | |||||||||||
Anti-dilutive securities excluded from diluted EPS: | |||||||||||
Anti-dilutive securities excluded from diluted EPS, Total (in shares) | 424,087 | 3,168,967 | 3,997,503 | ||||||||
Performance-based and market-based vesting stock options | |||||||||||
Anti-dilutive securities excluded from diluted EPS: | |||||||||||
Anti-dilutive securities excluded from diluted EPS, Total (in shares) | 377,437 | 3,836,107 | 4,848,869 | ||||||||
Restricted stock | |||||||||||
Anti-dilutive securities excluded from diluted EPS: | |||||||||||
Anti-dilutive securities excluded from diluted EPS, Total (in shares) | 375,263 | 586,224 | 0 | ||||||||
Stock Options | |||||||||||
Denominator: | |||||||||||
Diluted common equivalents (in shares) | 1,477,215 | 0 | 0 | ||||||||
Restricted Stock Units | |||||||||||
Denominator: | |||||||||||
Diluted common equivalents (in shares) | 2,309,687 | 0 | 0 | ||||||||
Restricted stock | |||||||||||
Denominator: | |||||||||||
Diluted common equivalents (in shares) | 229,404 | 0 | 0 |
Quarterly financial summary (75
Quarterly financial summary (unaudited) - Schedule of Unaudited Quarterly Results (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net sales | $ 81,593 | $ 71,865 | $ 55,856 | $ 60,574 | $ 76,436 | $ 56,312 | $ 44,147 | $ 52,673 | $ 269,888 | $ 229,567 | $ 191,413 |
Gross profit | 47,694 | 42,913 | 35,890 | 38,228 | 45,320 | 32,478 | 25,137 | 29,300 | 164,725 | 132,235 | 100,329 |
Net income (loss) | 6,601 | (2,377) | (2,715) | 3,804 | 33,475 | 5,313 | 4,357 | ||||
Net income (loss) attributable to common stockholders | $ 21,480 | $ 5,865 | $ 3,970 | $ 2,160 | $ 6,378 | $ (373,605) | $ (96,389) | $ (34,143) | $ 33,475 | $ (497,535) | $ (47,610) |
Net income (loss) per share: | |||||||||||
Basic (in USD per share) | $ 0.47 | $ 0.13 | $ 0.09 | $ 0.05 | $ 0.15 | $ (73.13) | $ (117.31) | $ (69.57) | $ 0.74 | $ (39.47) | $ (1,559.81) |
Diluted (in USD per share) | $ 0.44 | $ 0.12 | $ 0.08 | $ 0.04 | $ 0.13 | $ (73.13) | $ (117.31) | $ (69.57) | $ 0.68 | $ (39.47) | $ (1,559.81) |