Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 16, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | FENX | |
Entity Registrant Name | Fenix Parts, Inc. | |
Entity Central Index Key | 1,615,153 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding (in shares) | 20,198,543 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 10,850,540 | $ 453,047 |
Accounts receivable, net of allowance | 4,683,594 | |
Inventories | 35,157,934 | |
Prepaid expenses and other current assets | 1,480,289 | 50,000 |
Deferred stock offering costs | 346,369 | |
Total current assets | 52,172,357 | 849,416 |
PROPERTY AND EQUIPMENT | ||
Leasehold improvements | 1,132,203 | |
Vehicles | 2,815,089 | |
Machinery and equipment | 7,108,296 | |
Office furniture and fixtures | 748,854 | |
Accumulated depreciation and amortization | (902,109) | |
Property and equipment, net | 10,902,333 | |
OTHER NON-CURRENT ASSETS | ||
Goodwill | 70,995,317 | |
Intangible assets, net | 33,210,066 | |
Indemnification receivable | 4,243,851 | |
Other non-current assets | 56,893 | |
Investment in related party | 29,793 | |
Total non-current assets | 108,535,920 | |
TOTAL ASSETS | 171,610,610 | 849,416 |
CURRENT LIABILITIES | ||
Account payable | 3,427,930 | 1,673,259 |
Accrued expenses and other current liabilities | 2,888,005 | 303,731 |
Sales return reserve | 715,060 | |
Amounts due to related parties | 3,669,696 | |
Deferred warranty revenue – current | 341,338 | |
Deferred income tax liabilities | 1,106,996 | |
Deferred rent | 323,933 | |
Contingent consideration liabilities - current | 7,854,839 | |
Current portion of long-term debt | 750,000 | |
Current portion of related party long-term debt | 100,000 | |
Total current liabilities | 21,177,797 | 1,976,990 |
NON-CURRENT LIABILITIES | ||
Deferred warranty revenue, net of current portion | 336,065 | |
Long-term related party debt, net of current portion | 100,000 | |
Long-term debt, net of current portion | 8,588,479 | |
Deferred income tax liabilities | 13,202,455 | |
Amounts due to related parties, net of current portion | 1,343,559 | |
Reserve for uncertain tax positions | 4,663,162 | |
Contingent consideration liabilities | 2,387,815 | |
Total non-current liabilities | 30,621,535 | |
TOTAL LIABILITIES | $ 51,799,332 | $ 1,976,990 |
COMMITMENTS AND CONTINGENCIES | ||
SHAREHOLDERS’ EQUITY (DEFICIT) | ||
Common stock, $0.001 par value; 30,000,000 shares authorized; 19,924,718 shares issued and outstanding at September 30, 2015; 2,429,333 shares issued and outstanding at December 31, 2014 | $ 19,925 | $ 2,429 |
Additional paid-in capital | 132,250,602 | 3,616,571 |
Accumulated other comprehensive loss | (2,960,794) | |
Accumulated deficit | (17,898,455) | (4,746,574) |
Total Fenix Parts, Inc. shareholders’ equity before noncontrolling interest | 111,411,278 | (1,127,574) |
Stockholders' Equity Attributable to Noncontrolling Interest | 8,400,000 | |
Total shareholders’ equity (deficit) | 119,811,278 | (1,127,574) |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) | $ 171,610,610 | $ 849,416 |
Unaudited Condensed Consolidat3
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 30,000,000 | 30,000,000 |
Common stock, shares issued | 19,924,718 | 2,429,333 |
Common stock, shares outstanding | 19,924,718 | 2,429,333 |
Unaudited Condensed Consolidat4
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Statement [Abstract] | ||||
Net revenues | $ 27,274,575 | $ 38,745,471 | ||
Cost of goods sold | 20,584,179 | 30,592,330 | ||
Gross profit | 6,690,396 | 8,153,141 | ||
Operating expenses | 18,209,178 | $ 2,168,879 | 29,853,217 | $ 2,796,856 |
Operating loss | (11,518,782) | (2,168,879) | (21,700,076) | (2,796,856) |
Interest expense | (77,930) | (99,800) | ||
Interest income | 22,249 | 229 | 39,353 | 528 |
Other (expense) income, net | 3,680 | 0 | (1,717,762) | 0 |
Loss before income tax expense | (11,570,783) | (2,168,650) | (23,478,285) | (2,796,328) |
Benefit for income taxes | 5,022,287 | 10,326,404 | ||
Net loss | (6,548,496) | (2,168,650) | (13,151,881) | (2,796,328) |
Foreign currency translation adjustment | (2,255,609) | (2,960,794) | ||
Net comprehensive loss | $ (8,804,105) | $ (2,168,650) | $ (16,112,675) | $ (2,796,328) |
Loss per share available to common shareholders | ||||
Basic & Diluted | $ (0.33) | $ (1.01) | $ (1.10) | $ (1.39) |
Shares used in computing earnings per share | ||||
Basic & Diluted | 19,475,046 | 2,156,400 | 11,206,390 | 2,007,028 |
Unaudited Condensed Consolidat5
Unaudited Condensed Consolidated Statements of Shareholders' Equity (Deficit) - 9 months ended Sep. 30, 2015 - USD ($) | Total | Fenix Parts, Inc. [Member] | Leesville [Member] | Fenix Parts Canada Inc [Member] | IPO [Member] | Common Stock [Member] | Common Stock [Member]Fenix Parts, Inc. [Member] | Common Stock [Member]Leesville [Member] | Common Stock [Member]IPO [Member] | Additional paid-in capital [Member] | Additional paid-in capital [Member]Fenix Parts, Inc. [Member] | Additional paid-in capital [Member]Leesville [Member] | Additional paid-in capital [Member]IPO [Member] | Accumulated other comprehensive income [Member] | Accumulated deficit [Member] | Noncontrolling interest [Member] | Noncontrolling interest [Member]Fenix Parts Canada Inc [Member] |
Balance at Dec. 31, 2014 | $ (1,127,574) | $ 2,429 | $ 3,616,571 | $ (4,746,574) | |||||||||||||
Balance, Shares at Dec. 31, 2014 | 2,429,333 | ||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Stock issued during period | 2,077,361 | $ 101,278,606 | $ 320 | $ 13,800 | 2,077,041 | $ 101,264,806 | |||||||||||
Stock issued during period (in shares) | 319,594 | 13,800,000 | |||||||||||||||
Issuance of Fenix Canada preferred shares for Combination Consideration | $ 23,587,038 | $ 8,400,000 | $ 2,935 | $ 23,584,103 | $ 8,400,000 | ||||||||||||
Issuance of Fenix shares for Combination Consideration (in shares) | 2,934,680 | ||||||||||||||||
Compensation for pre-IPO services | 216,800 | $ 20 | 216,780 | ||||||||||||||
Compensation for pre-IPO services (in shares) | 20,000 | ||||||||||||||||
Retention bonus | $ 832,007 | $ 271 | $ 831,736 | ||||||||||||||
Retention bonus(in shares) | 271,111 | ||||||||||||||||
Share based awards | 659,715 | 659,565 | |||||||||||||||
Foreign currency translation adjustment | (2,960,794) | $ (2,960,794) | |||||||||||||||
Net loss | (13,151,881) | ||||||||||||||||
Balance at Sep. 30, 2015 | $ 119,811,278 | $ 19,925 | $ 132,250,602 | $ (2,960,794) | $ (17,898,455) | $ 8,400,000 | |||||||||||
Balance, Shares at Sep. 30, 2015 | 19,924,718 |
Unaudited Condensed Consolidat6
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities | ||
Net loss | $ (13,151,881) | $ (2,796,328) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation and amortization | 2,155,692 | |
Share-based compensation expense | 1,496,295 | |
Deferred income tax benefit | (10,422,752) | |
Provision for uncertain tax positions | 56,610 | |
Amortization of inventory fair value adjustment | 6,951,891 | |
Change in fair value of contingent consideration | (193,346) | |
Make whole provision for pre-IPO investors | 1,827,085 | |
Change in assets and liabilities, net of acquired businesses | ||
Accounts receivable | (6,367,037) | |
Inventories | 270,277 | |
Prepaid expenses and other assets | (26,329) | (50,000) |
Accounts payable | (3,850,194) | 526,112 |
Accrued expenses and other liabilities | 7,721,494 | 218,652 |
Deferred warranty revenue | 665,277 | |
Due to related parties | 1,467,227 | |
Net cash used in operating activities | (11,399,691) | (2,101,564) |
Cash flows from investing activities | ||
Capital expenditures | (113,656) | |
Purchases of companies, net of cash acquired | (89,102,636) | |
Net cash used in investing activities | (89,216,292) | |
Cash flows from financing activities | ||
Proceeds from initial public offering | 102,672,000 | |
Proceeds from other issuances of common stock | 250,276 | 2,895,000 |
Stock offering costs | (1,393,394) | |
Borrowings on term loan | 10,000,000 | |
Payments on debt | (250,000) | |
Debt issuance cost | (438,000) | |
Proceeds from other debt financing | 213,306 | |
Net cash provided by financing activities | 111,054,188 | 2,895,000 |
Effect of foreign exchange fluctuations on cash and cash equivalents | (40,712) | |
Increase in cash and cash equivalents | 10,397,493 | 793,436 |
Cash and cash equivalents, beginning of period | 453,047 | |
Cash and cash equivalents, end of period | 10,850,540 | $ 793,436 |
Supplemental cash flow disclosures: | ||
Cash paid for interest | 64,000 | |
Noncash transactions: | ||
Equity issued for purchases of Founding Companies and Ocean County | 34,320,000 | |
Accrued contingent consideration to be paid in cash | $ 8,620,000 |
Description of Business and Bas
Description of Business and Basis of Presentation | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Basis of Presentation | Description of Business and Basis of Presentation Fenix Parts, Inc. (“Fenix”) was founded on January 2, 2014 (“inception”) to acquire and combine companies in the automobile recycling and resale industry. Fenix Parts Canada, Inc. (“Fenix Canada”), a wholly-owned subsidiary of Fenix, was established on September 24, 2014 primarily to facilitate the acquisition and combination of companies in the automobile recycling and resale industry in Canada. Through November 2014, Fenix and Fenix Canada (collectively, the “Company”) entered into Combination Agreements to acquire (in transactions referred to as the “Combinations”) eleven corporate entities that operate eight businesses (the “Founding Companies”), contingent upon, among other things, the closing of an initial public offering (“IPO”). On May 19, 2015, the Company completed the IPO and closed on the Combinations with the Founding Companies, including those Founding Companies that are designated as accounting co-predecessors, Beagell Group and Standard. The Company raised the cash portion of the Combination Consideration in its IPO as well as from additional funding from indebtedness. The unaudited condensed consolidated financial statements of the Company included herein reflect only Fenix’s operations and financial position before the IPO and Combinations with the Founding Companies. The operations of the Founding Companies are reflected in the consolidated statements of operations from May 19, 2015 to September 30, 2015 . The Company, subsequent to the Combinations, is in the business of auto recycling, which is the recovery and resale of original equipment manufacturer (“OEM”) and aftermarket parts, components and systems, such as engines, transmissions, radiators, trunks, lamps and seats (referred to as “products”) reclaimed from damaged, totaled or low value vehicles. The Company purchases its vehicles primarily at auto salvage auctions. Upon receipt of vehicles, the Company inventories and then dismantles the vehicles and sells the recycled components. The Company’s customers include collision repair shops (body shops), mechanical repair shops, auto dealerships and individual retail customers. The Company also generates a portion of its revenue from the sale as scrap of the unusable parts and materials, from the sale of used cars and motorcycles and from the sale of extended warranty contracts. Through September 30, 2014, the Company’s chief executive and chief financial officers were not taking salaries and no compensation expense has been recorded related to services provided by these employees through that date. Pursuant to letter arrangements that commenced on October 1, 2014, these executives’ compensation was accrued for payment after the closing of the IPO. Basis of Presentation These unaudited condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures typically included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements of Fenix Parts, Inc. and the notes thereto as of and for the period ended December 31, 2014 included in the Company’s prospectus dated May 14, 2015. The Company continues to follow the accounting policies set forth in those consolidated financial statements. Management believes that these consolidated interim financial statements include all adjustments, normal and recurring in nature, that are necessary to present fairly the financial position of the Company as of September 30, 2015 and the results of its operations and cash flows for the periods ended September 30, 2015 and 2014 . Interim results are not necessarily indicative of annual results. All significant intercompany balances and transactions have been eliminated. References below to the nine months ended September 30, 2014 refer to inception (January 2, 2014) through September 30, 2014 . |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Revenue Recognition The Company recognizes revenue from the sale of vehicle replacement products and scrap and, to a lesser extent, used cars and motorcycles, when they are shipped or picked up by the customers and ownership has transferred, subject to an allowance for estimated returns and discounts that management estimates based upon historical information. Management analyzes historical returns (often pursuant to standard warranties on the sold products) and allowances activity by comparing the items to the original invoice amounts and dates. The Company uses this information to project future returns and allowances on products sold. If actual returns and allowances deviate significantly from the Company’s historical experience, there could be an impact on its operating results in the period of occurrence. The Company has recorded a reserve for estimated returns and discounts of approximately $715,000 at September 30, 2015 . The Company presents taxes assessed by governmental authorities collected from customers on a net basis. Therefore, the taxes are excluded from revenue on the consolidated statements of operations and are shown as current liabilities on the consolidated balance sheets until remitted. Revenue also includes amounts billed to customers for shipping and handling. Revenue from the sale of separately priced extended warranty contracts is reported as deferred revenue and recognized ratably over the term of the contracts or over five years for life-time warranties. Revenue from such extended warranty contracts was approximately $235,000 and $358,000 for the three and nine month periods ended September 30, 2015 , respectively. Cost of Goods Sold Cost of goods sold primarily includes a) amounts paid for the purchase of vehicles, scrap, parts for resale and related products, b) related auction, storage and towing fees, and c) other costs of procurement and dismantling, primarily labor and overhead allocable to dismantling operations or, in the case of car and motorcycle sales, to preparing the vehicle for sale. Operating Expenses Operating expenses for the automobile recycling business are primarily comprised of a) salaries and benefits of employees that are not related to the procurement and dismantling of vehicles, b) facility costs such as rent, utilities, insurance, repairs and taxes not allocated to dismantling operations, c) selling and marketing costs, d) costs to distribute products and scrap and e) other general and administrative costs. Operating expenses for the periods presented also include corporate office costs and costs related to the business combinations. Concentrations Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents and accounts receivable. The majority of cash and cash equivalents are maintained with several major financial institutions. The Company maintains its cash in bank deposit accounts which, at times, may exceed the insurance limits of the Federal Deposit Insurance Corporation. The Company has not experienced any losses in such accounts. Concentrations of credit risk with respect to accounts receivable are limited because a large number of customers make up the Company’s customer base. The Company controls credit risk through credit approvals, credit limits and monitoring procedures. The Company primarily obtains its recycled OEM and related products from damaged, totaled or low value vehicles purchased at salvage auto auctions. Since the Combinations with the Founding Companies, substantially all of the vehicles purchased by the Company for dismantling were acquired at auctions run by two salvage auto auction companies. Accounts Receivable and Allowance for Doubtful Accounts In the normal course of business, the Company extends credit to customers after a review of each customer’s credit history. The Company maintained a reserve for uncollectible accounts of approximately $329,000 at September 30, 2015 . The reserve is based upon management’s assessment of the collectability of specific customer accounts, the aging of the accounts receivable and historical experience. Receivables are written off once collection efforts have been exhausted. Recoveries of accounts receivable previously written off are recorded when received. Inventories Inventories consist entirely of recycled OEM and aftermarket products, including car hulls and other materials that will be sold as scrap and, to a lesser extent, used cars and motorcycles for resale. Inventory costs for recycled OEM parts are established based upon the price the Company pays for a vehicle, including auction, storage and towing fees, as well as expenditures for buying and dismantling vehicles. After dismantling, the cost assigned to the salvaged parts and scrap is determined using the average cost of sales percentage at the Company and applying that percentage to the Company’s inventory at expected selling prices. The average cost to sales percentage is derived from the Company’s historical vehicle profitability for salvage vehicles purchased at auction or procured from other sources. With respect to self-service inventories, costs are established by calculating the average sales price per vehicle, including its scrap value and part value, applied to the total vehicles on-hand. Inventory costs for used cars and motorcycles for resale are established based upon the price the Company pays for these items. For all inventories, carrying value is recorded at the lower of cost or market and is reduced to reflect the age of the products and current anticipated demand. If actual demand is less than the Company’s estimates, additional reductions to inventory carrying value would be necessary in the period such determination is made. Property and Equipment Property and equipment are recorded at cost. Depreciation expense is calculated using the straight-line method over the estimated useful lives. Leasehold improvements are amortized over the shorter of the useful life of the related assets or the lease term. Expenditures for maintenance and repairs are charged against operations. Renewals and betterments that materially extend the useful life of an asset are capitalized. As property and equipment are sold or retired, the applicable cost and accumulated depreciation are removed from the accounts and any resulting gain or loss thereon is recognized. Depreciation expense totaled approximately $610,000 and $914,000 for the three and nine month periods ended September 30, 2015 , respectively. Estimated useful lives of property and equipment acquired after May 19, 2015 are as follows: Vehicles 5 years Machinery and equipment 3-10 years Leasehold improvements 10-15 years or term of lease, if shorter Office furnitures and fixtures 7 years For property and equipment the Company acquired in the Combinations, the average estimated remaining useful lives are as follows: Vehicles 3-4 years Machinery and equipment 4-5 years Leasehold improvements 5-6 years or term of lease, if shorter Office furnitures and fixtures 2-3 years The Company evaluates the recoverability of the carrying amount of property and equipment and amortizable intangible assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable based on an analysis of undiscounted cash flows. There were no such events or changes in the three and nine month periods ended September 30, 2015 . Goodwill Goodwill is recorded when the purchase price paid for an acquisition exceeds the estimated fair value of the net identified tangible and intangible assets acquired. The Company is required to perform an annual impairment review, and more frequently under certain circumstances. Under the qualitative goodwill impairment assessment standard, management evaluates whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. If it is determined that it is more likely than not, the Company proceeds with the next step of the impairment test, which compares the fair value of the reporting unit to its carrying value. If the Company determines through the impairment process that goodwill has been impaired, the Company will record the impairment charge in its results of operations. The Company has elected to perform its annual evaluation of impairment as of October 1. There were no impairment charges related to goodwill during the post-Combination period ended September 30, 2015 . The following table summarizes the provisional adjustments to the initially reported goodwill balance at the Founding Company acquisition date in addition to the goodwill resulting from the Ocean County acquisition as outlined in Note 3 (in thousands): Amount Balance at May 18, 2015 $ 70,810 Ocean County goodwill 1,642 Provisional adjustments: Change in fair value of Go Pull-It Investment 367 Reimbursement of pre-acquisition charges paid by former owners to be covered by Fenix 524 Foreign currency translation adjustment (2,682 ) Revisions of working capital 334 Balance at September 30, 2015 70,995 Intangible Assets Intangible assets subject to amortization consist of tradenames, customer relationships, non-compete agreements and incremental off market lease payments. Amortization expense is calculated using the straight-line method over the estimated useful lives of the assets of: 5 years for tradenames; and 5 years for noncompete covenants. Amortization expense is calculated using the accelerated method over the estimated useful life of the asset of 15 years for customer relationships. Amortization expense for intangible assets was $931,000 and $1,216,000 , respectively, for the three and nine months periods ended September 30, 2015 . Indemnification Receivable In conjunction with the Combinations, the Company recorded an indemnification receivable, which represents recoverable amounts from the former owners of certain of the Founding Companies if the Company is required to make certain income tax or other payments as defined in the relevant Combination agreements after the Combinations. The indemnification receivable balance was $4,243,851 at the date of the Combinations and at September 30, 2015 . Refundable Purchase Price Consideration In conjunction with the Combinations, the Company entered into operating facility lease agreements with affiliates of the equity holders of the Founding Companies. Based on preliminary independent valuations of the market rental rates compared to the contractual rental rates for these properties, the excess is reflected in the intangible assets as additional Combination Consideration refundable over the term of the related lease. The effect of discounting these payments at 10% is reflected in other non-current assets. The Company amortizes these net assets over the life of the leases so that aggregate rent expense in the statements of operations reflects market rental rates as of the date of Combination; a corresponding net interest income element is also recorded to reflect the passage of time impact on the net asset. Fair Value Measurements Fair value of financial assets and liabilities are defined as the exchange price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market at the measurement date (exit price). The Company is required to classify fair value measurements in one of the following categories: • Level 1 - inputs which are defined as quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. • Level 2 - inputs which are defined as inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly or indirectly. • Level 3 - inputs are defined as unobservable inputs for the assets or liabilities. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. Certain assets and liabilities are required to be recorded at fair value on either a recurring or non-recurring basis; however, the Company had no assets or liabilities that require recurring fair value measurements at December 31, 2014 . Fair value is determined based on the exchange price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants. At September 30, 2015 , the fair value of contingent consideration recorded in the consolidated financial statements was valued using Level 3 inputs. The Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses are carried at cost, which approximates fair value due to the short-term maturity of these instruments. The Company’s debt is carried at cost and approximates fair value due to its variable or fixed interest rates, which are consistent with the interest rates in the market. The Company may be required, on a non-recurring basis, to adjust the carrying value of the Company’s property and equipment, intangible assets and goodwill. When necessary, these valuations are determined by the Company using Level 3 inputs. These assets are subject to fair value adjustments in certain circumstances, such as when there is evidence that impairment may exist. There have been no indicators of impairment during 2015 . Stock Offering Costs The Company incurred approximately $1,393,000 and $346,000 of legal, accounting, and other costs directly related to its IPO through May 19, 2015 and December 31, 2014 , respectively. The Company also incurred $7,728,000 of underwriting cost. Such costs were applied against the gross proceeds from the IPO upon its closing. Income Taxes Income taxes are accounted for under the asset and liability method where 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 the respective tax basis and for tax credit carry forwards. 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. U.S. federal income taxes are not provided on undistributed earnings of Canadian subsidiaries as it is management's intent that such earnings will remain invested in these subsidiaries. A valuation allowance is established when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company evaluates the realizability of its deferred tax assets by assessing its valuation allowance and by adjusting the amount of such allowance, if necessary. The factors used to assess the likelihood of realization include historical cumulative losses, the forecast of future taxable income and available tax planning strategies that could be implemented to realize the net deferred tax assets. Failure to achieve forecasted taxable income in applicable tax jurisdictions could affect the ultimate realization of deferred tax assets and could result in an increase in the Company’s effective tax rate on future earnings. The Company recognizes the benefits of uncertain tax positions taken or expected to be taken in tax returns in the provision for income taxes only for those positions that are more likely than not to be realized. The Company follows a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments and which may not accurately forecast actual outcomes. As of September 30, 2015 and December 31, 2014 , the Company has not identified any uncertain tax positions that relate to Fenix. The Company did assume, on an indemnifiable basis, certain uncertain tax positions reserves in the Combinations. The Company’s policy is to include interest and penalties associated with income tax obligations in income tax expense. The Company’s right to indemnification under certain Combination Agreements related to these uncertain tax positions is subject to a threshold of 1% of the purchase price and a cap of 40% of the purchase price paid in the Combinations. Foreign Currency The assets and liabilities of Fenix Canada, whose functional currency is the Canadian dollar, are translated into US dollars at period-end exchange rates. Income and expense items are translated at the average rates of exchange prevailing during the period. The adjustments resulting from translating the Canadian financial statements are reflected as a component of accumulated other comprehensive loss within shareholders’ equity (deficit). Foreign currency transaction gains and losses are recognized in net earnings based on differences between foreign exchange rates on the transaction date and the settlement or period end date. Earnings (Loss) Per Share Basic earnings (loss) per share is computed by dividing net income (loss) available to common shares by the weighted average common shares outstanding during the period using the two-class method. The Fenix Canada preferred shares are considered participating securities and therefore share in the net income (loss) of the period since being issued on May 19, 2015. Diluted earnings (loss) per share would include the impact of outstanding common share equivalents as if those equivalents were exercised or converted into common shares if such assumed exercise or conversion were dilutive. Contingently issuable shares are excluded from basic and diluted earnings per share until issuance is no longer contingent. For the three and nine months ended September 30, 2015 and 2014 , basic earnings per share is equal to diluted earnings per share because all outstanding stock awards are considered anti-dilutive during periods of net loss. The following outstanding equity instruments as of September 30, 2015 are not included in the computation of diluted loss per share as the effect of including such stock options and restricted stock awards in the computation would be anti-dilutive: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Stock options 966,297 — 1,566,297 — Restricted stock awards 150,000 — 150,000 — Leesville bonus shares 271,112 — 271,112 — The calculations of loss per share for the three and nine month periods ended September 30, 2015 and 2014, are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Basic Loss per Common Share: Net loss $ (6,548,496 ) $ (2,168,650 ) $ (13,151,881 ) $ (2,796,328 ) Net loss allocable to Fenix Canada preferred shares (167,715 ) — (861,816 ) — Net loss available to common shares $ (6,380,781 ) $ (2,168,650 ) $ (12,290,065 ) $ (2,796,328 ) Weighted-average common shares outstanding 19,475,046 2,156,400 11,206,390 2,007,028 Basic and diluted loss per Common Share $ (0.33 ) $ (1.01 ) $ (1.10 ) $ (1.39 ) The Company has 11,667 common shares and 280,000 shares of Fenix Canada preferred stock held in escrow relating to contingent consideration agreements with certain Founding Companies. These shares are not included in basic EPS or in the shares used to calculate the net loss attributable to Fenix Canada preferred shares until the issuance is no longer contingent on future events. Recent Accounting Pronouncements In September 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASC") No. 2015-16, Simplifying the Accounting for Measurement-Period Adjustments, which simplifies the accounting for adjustments made to provisional amounts recognized in business combinations. The amendments require that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments also require that the acquirer record, in the same period's financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to provisional amounts, calculated as if the accounting had been completed at the acquisition date. The ASU also requires an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. This guidance is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The Company is currently evaluating the impact of adopting the new standard. |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations Founding Companies On May 19, 2015 , the Company closed on the Combinations with the Founding Companies, all of which are engaged in the business of automobile recycling. These Combinations were accounted for under the acquisition method of accounting. The Company acquired the stock of the U.S. Founding Companies for cash or a combination of cash and shares of its common stock, and acquired substantially all of the assets of End of Lif Vehicles Inc., Goldy Metals Incorporated, Goldy Metals (Ottawa) Incorporated (collectively, "the Canadian Founding Companies") for cash or cash and shares of exchangeable preferred stock of Fenix Canada. The consideration for the Combinations was determined by arms-length negotiations between the Company and representatives of each Founding Company. The Founding Companies include Don’s Automotive Mall, Inc., Gary’s U-Pull It, Inc., Horseheads Automotive Recycling, Inc. (collectively, the “Beagell Group”); Standard Auto Wreckers Inc., End of Life Vehicles Inc., Goldy Metals Incorporated, Goldy Metals (Ottawa) Incorporated (collectively, “Standard”); and Eiss Brothers, Inc. (“Eiss Brothers”), Green Oak Investments LLC dba GO Auto Recycling (“GO Auto”), Jerry Brown, Ltd (“Jerry Brown”) and Leesville Auto Wreckers, Inc. (“Leesville” and together with Eiss Brothers, GO Auto and Jerry Brown, the “Other Founding Companies”). For accounting and reporting purposes, Fenix has been identified as the accounting acquirer and Beagell Group and Standard have been identified as accounting co-predecessors to Fenix. The following table shows the estimated calculation of the total Combination Consideration (the following dollar amounts in tables and notes are in thousands) Beagell Group Standard Eiss Brothers Go Auto Jerry Brown Leesville Total Base Fenix share consideration (a) $ 10,822 $ — $ 2,338 $ 2,667 $ 5,333 $ 1,840 $ 23,000 Base Fenix Canada share consideration (b) — 8,400 — — — — 8,400 Base cash consideration (c) 19,663 30,450 6,137 4,000 6,511 11,727 78,488 Working capital and other adjustments (c) 1,161 1,762 810 (81 ) (1,377 ) 1,132 3,407 Incremental inventory payments (d) — 450 — — 550 — 1,000 Incremental capital expenditure payments (e) — — — — 2,415 — 2,415 Nonsubstantive consulting fee payments (f) 890 50 — — 847 — 1,787 Key employee cash bonuses (g) — — — — — 2,575 2,575 Incremental off market lease payments (h) 1,980 (2,230 ) (700 ) (140 ) (170 ) (210 ) (1,470 ) Investment in Founding Company affiliate (i) — — — 450 — — 450 Contingent consideration (j) — 7,445 310 — 2,468 — 10,223 Total Combination Consideration $ 34,516 $ 46,327 $ 8,895 $ 6,896 $ 16,577 $ 17,064 $ 130,275 Of this aggregate Combination Consideration, $88,135 was paid in cash on the closing date, $33,733 represents stock consideration and $8,620 represents discounted cash payments to be made up to 15 years after the Combinations. (a) The Company issued 2,874,971 shares of Fenix common stock as Combination Consideration valued at the public offering price of $8.00 per share. (b) The Company issued 1,050,000 exchangeable preferred shares of Fenix’s subsidiary, Fenix Parts Canada, Inc. (“Exchangeable Preferred Shares”) as Combination Consideration valued at the public offering price of common stock of $8.00 per share. Because these shares do not entitle the holders to any Fenix Canada dividends or distributions, no earnings or losses of Fenix Canada are attributable to those holders. However, these shares do participate in the net income (but not in net losses) of the consolidated company for earnings (loss) per share computations. (c) The base cash component of the Combination Consideration for each Combination is still subject to certain adjustments. For each Founding Company (in some cases, other than Standard Auto Wreckers, Inc.), the cash component of the Combination Consideration was (i) reduced by the Founding Company’s indebtedness as of closing (ii) increased by the Founding Company’s cash and qualifying inventory as of closing and (iii) increased by the Founding Company’s capital expenditures during the six months prior to closing. All of these estimated adjustments are based on information provided by the Founding Companies at closing and are subject to further adjustment as additional information is obtained. Any differences in actual cash, qualifying inventory, debt or capital expenditures as of and for the six months prior to the actual closing date will have a corresponding change to total Combination Consideration and to goodwill. (d) Represents additional consideration for certain excess or specific inventories based on the applicable Founding Company inventory listings as of closing and subject to adjustment through September 30, 2015 as additional information is obtained. (e) Represents a construction reimbursement for capital expenditures in connection with a new building located on land that the Company leases subject to further adjustment through September 30, 2015 as additional information is obtained. (f) Represents contractual payments to certain equity holders of the Founding Companies and their related parties over the next 1 to 15 years . These equity holders and their related parties are not employed by us and do not provide any substantive services to us. (g) Represents cash bonuses paid at closing to key employees for past service. (h) In conjunction with the Combinations, the Company entered into operating facility lease agreements with affiliates of the equity holders, generally variable interest entities that were consolidated into the Founding Companies prior to the Combinations but are not consolidated by the Company after the Combinations. Based on independent valuations of the market rental rates compared to the actual rental rates for these properties, the excess is reflected as Combination Consideration refundable over the term of the related lease. The effect of discounting these payments at 10% is reflected in the amounts presented. The related balance as of September 30, 2015 of $1,465 is reflected on the condensed consolidated balance sheet as part of Intangible asset and will be offset to cash rent expense over the life of the leases. (i) Represents the payment of $250 in cash at closing and a $200 promissory note payable over two years for a 5% membership interest in an affiliate of Go Auto. The Company also received an option to purchase the remaining 95% membership interest. (j) Represents the estimated fair value of contingent consideration arrangements with certain Founding Company equity holders. Under these arrangements, the equity holders of Standard and Eiss can earn up to an aggregate of $7,875 in cash and 11,667 shares of Fenix common stock and 280,000 Exchangeable Preferred Shares. The shareholders of Jerry Brown can earn an uncapped amount of additional cash if certain EBITDA and revenue targets are met. The fair value is based on independent valuations considering the Company’s projections for the relevant Founding Companies, the respective target levels, the relative weighting of various future scenarios and a discount rate of approximately 5.0% . The changes in the fair value of this initial liability resulted in a $1,001 and $193 decrease to operating expenses in the statement of operations for the three and nine months post-Combinations period ended September 30, 2015 , respectively. The following table summarizes the approximate fair values of the assets acquired and liabilities assumed at the date of acquisition and incorporates any provisional adjustments in measurement since they were originally reported. Beagell Group Standard Eiss Brothers Go Auto Jerry Brown Leesville Total Cash and other current assets (i) $ 10,358 $ 15,265 $ 6,637 $ 1,859 $ 6,301 $ 5,643 $ 46,063 Property and equipment (ii) 4,476 4,408 364 203 1,663 641 11,755 Other non current assets 1,983 1,445 — 30 1,746 — 5,204 Intangible assets (iii) 5,670 13,200 3,380 3,590 2,510 6,470 34,820 Current liabilities (1,770 ) (2,008 ) (255 ) (754 ) (3,368 ) (654 ) (8,809 ) Reserve for uncertain tax positions (iv) (2,017 ) (527 ) — — (1,829 ) (203 ) (4,576 ) Deferred income taxes, net (vi) (5,866 ) (6,469 ) (3,298 ) — (3,564 ) (4,297 ) (23,494 ) Non-current liabilities (563 ) — — — (767 ) — (1,330 ) Total net identifiable assets acquired 12,271 25,314 6,828 4,928 2,692 7,600 59,633 Goodwill 20,264 24,496 2,766 2,115 11,526 9,643 70,810 Total net assets acquired $ 32,535 $ 49,810 $ 9,594 $ 7,043 $ 14,218 $ 17,243 $ 130,443 Included in the preliminary allocation reflected above are the various preliminary valuations described below which are primarily based on Level 3 inputs: (i) Inventory was marked up to 90% of its estimated selling price representing the inventory’s cost and estimated related profit margin. Selling costs and related profit margin were estimated at all Founding Companies to be 10% . The acquired inventory is expected to be sold within six to nine months . (ii) Assumptions for property and equipment valuation, which are based on cost and market approaches, are primarily data from industry databases and dealers on current costs of new equipment and information about the useful lives and age of the equipment. The remaining useful life of property and equipment was determined based on historical experience using such assets, and varies from 3 - 6 years depending on the Founding Company and nature of the assets. The Company’s independent valuation specialist is assisting the Company in determining the final valuation of the property and equipment acquired on the Combination date. All property and equipment is being depreciated using the straight-line method. (iii) The table below summarizes the aggregate intangible assets acquired: Amount Trade names $ 5,670 Customer relationships 25,970 Covenants not to compete 1,710 Off market lease payments 1,470 Total 34,820 The fair value of trade names and customer relationships are based on a number of significant assumptions. Trade names are valued using a “relief from royalty” method, which models cash savings from owning intangible assets as compared to paying a third party for their use. Descriptions of the inputs into this method, and the estimates or ranges of these inputs used for all of the Combinations are as follows: Compound annual revenue growth rate over term of use 3.0%-6.2% Percentage of revenue attributable to trade name in forecast year 20%-100% Royalty rate 2.0 % Discount rate 11.5%-14.0% Tax rate 38.6%-40.9% The expected useful life of trade names is based on the Company’s planned timeframe for using the existing trade names the Company purchased in the Combinations. The Company amortizes such trade names using the straight-line method as no other method of amortization is more representative of the Company’s usage of these assets. Customer relationships are valued using an income approach called the multi-period excess earnings method, a form of discounted cash flow that estimates revenues and cash flows derived from the use of the intangible asset and then deducts portions of the cash flow that can be attributed to supporting assets, such as other intangible assets or property and equipment, that contributed to the generation of the cash flows to arrive at cash flows attributable solely to the intangible asset being valued. Descriptions of the inputs into this method, and the estimates or ranges of these inputs used for all of the Combinations are as follows: Compound annual revenue growth rate in forecast period 2.1%-3.1% Annual customer attrition rate 10.0 % Gross margin in forecast period 29.9%-48.1% Contributory asset charges as a percentage of revenue 0.0%-2.6% Discount rate 12.5%-16.0% Tax rate 38.6%-40.9% The expected useful life of customer relationships is established as 15 years , which is the period over which these assets are expected to reasonably contribute to future cash flows. The Company amortizes such customer relationships using an accelerated method that reflects a greater relative contribution to future cash flows in the earlier years of the assets’ useful lives. (iv) The Company may recover amounts from the equity holders of certain of the Founding Companies if the Company is required to make certain income tax or other payments as defined in the relevant Combination agreements after the Combinations. (v) The Combination agreement between the Company and GO Auto contains a provision pursuant to which the Company purchased a 5% ownership of Go Pull-It LLC, an entity under common control with GO Auto, and the right to purchase the remaining 95% of Go Pull-It LLC for either a fixed price through the end of 2016 or, after that, a price based on a formula that is primarily dependent on the EBITDA of Go Pull-It LLC. The amount reflected above for the purchase right is based on a business valuation of Go Pull-It LLC, which inputs include but are not limited to, revenue growth, gross margin, operating expenses, income tax rate, working capital and property and equipment requirements, and an appropriate discount rate. (vi) The Company recorded deferred income taxes relating to the difference between financial reporting and tax bases of assets and liabilities acquired in the Combinations in nontaxable transactions. The Company also eliminated historical deferred income taxes of Founding Companies acquired in taxable transactions. The preliminary allocations described above could change materially as the Company finalizes its assessment of the allocation and the fair value of the net tangible and intangible assets acquired, some of which are dependent on the completion of valuations being performed by independent valuation specialists. The Combination Agreements with the Founding Companies also included provisions for the Company to begin leasing properties from the Founding Companies’ former owners and their related parties after closing and the Company commenced these leases on May 19, 2015. Many of these properties were consolidated into the historical results of the Founding Companies but were not acquired by Fenix in the Combinations and are not consolidated by Fenix after the closing. Pro Forma Results The following table shows the pro forma revenue and earnings of Fenix Parts, Inc. as if the Combinations with the Founding Companies had occurred on January 1, 2014 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Revenues $ 27,275 $ 28,151 $ 82,375 $ 82,946 Net loss $ (7,155 ) $ (2,604 ) $ (14,784 ) $ (3,528 ) Pro forma revenues consisted of (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Recycled OEM parts $ 22,839 $ 22,330 $ 66,359 $ 65,917 Scrap, warranty and other 4,436 5,821 16,016 17,029 Total $ 27,275 $ 28,151 $ 82,375 $ 82,946 Significant adjustments to the historical revenues of the Founding Companies include the elimination of sales between Founding Companies, for which there is a corresponding decrease in pro forma cost of goods sold, and the elimination of revenue from the sale of warranties that are not recognized by Fenix in the post-Combination periods. The cost of goods sold impact of the subsequent sale of acquired inventories written-up from historic cost basis to fair value is reflected for pro forma reporting purposes in the same manner as reported in the accompanying condensed consolidated financial statements, and is not adjusted back to January 1, 2014 as it does not have a continuing impact on the Company. As a result, pro forma gross profit and net income in the periods immediately following the acquisitions are substantially lower than the pre-acquisition periods. Significant adjustments to expenses include effects of shares transferred from founding investors to later investors, incremental amortization of acquired intangible assets, rent expense associated with leases with the former owners of the Founding Companies, compensation related to certain bonuses paid to employees of a Founding Company and related income tax effects. Ocean County Auto Wreckers, Inc. On August 14, 2015, the Company completed its acquisition of 100% of the capital stock of Ocean County Auto Wreckers, Inc. ("Ocean County") in Bayville, New Jersey for a total aggregate purchase price of $3,220,000 . The purchase consideration was comprised of approximately $2,624,000 in cash and 59,709 shares of Fenix common stock. The Company also entered into a lease with the owners of Ocean County for use of the premises on which the Company will conduct its automotive recycling business. The acquisition of Ocean County complements the Company's other auto recycling operations in the Northeast United States. The Ocean County acquisition is being accounted for using the acquisition method of accounting whereby the total purchase price is allocated to tangible and intangible assets and liabilities based on their estimated fair market values on the date of acquisition. These fair value estimates of the assets acquired and liabilities assumed will be based on a third party valuation that has not yet been completed, but it is anticipated that such estimates will be made following similar methodology as that used for the Founding Companies as described above. The following table summarizes the approximate fair values of the assets acquired and liabilities assumed at the date of acquisition (in thousands). The approximate fair value of the assets and liabilities assumed, and the related tax balances, are based on preliminary estimates and assumptions. These preliminary estimates and assumptions could change significantly during the purchase price measurement period as the Company receives valuation reports and finalize the valuations of these assets and liabilities. Such changes could result in variances between the Company's future financial results and the amounts presented in the unaudited pro forma information, including variances in estimated purchase price, fair values recorded, and expenses associated with these items. Cash and other current assets $ 2,790 Property and equipment 279 Other non current assets 1 Intangible assets 870 Current liabilities (553 ) Reserve for uncertain tax positions — Deferred income taxes, net (1,808 ) Non-current liabilities (2 ) Total net identifiable assets acquired 1,577 Goodwill 1,642 Total net assets acquired $ 3,219 Pro forma financial information including Ocean County for pre-acquisition periods is not provided as the results are not significant to the consolidated results of the Company. |
Long-Term Obligations
Long-Term Obligations | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Long-Term Obligations | Long-Term Obligations Credit Facility and Term Note On May 6, 2015, the Company entered into a $35.0 million senior secured credit facility with BMO Harris Bank N.A. under which it borrowed $10.0 million and utilized $5.9 million of letters of credit on the closing date of the Combinations, May 19, 2015. The credit facility consists of $25.0 million that is available as a revolving credit facility, allocated $20.0 million in U.S. dollars, with a $7.5 million sublimit for letters of credit, and $5.0 million in either Canadian Dollars or U.S. Dollars, with a $2.5 million sublimit for letters of credit. The remaining $10.0 million is available as a term loan. The Company has the right from time to time, as long as no default is occurring, to request an increase in the amount of the revolving credit facility by up to an aggregate of $20.0 million . Proceeds of the credit facility are expected to be used for capital expenditures, working capital, permitted acquisitions, and general corporate purposes. The term of the revolving credit facility and the term loan facility is five years . As of September 30, 2015 , there was a $5.9 million letter of credit outstanding related to the Combinations and the balance due under the term loan was $9.8 million. The credit facility is secured by a first-priority perfected security interest in substantially all of the Company’s assets as well as all of the assets of its domestic subsidiaries, which also guaranty the borrowings. In addition, the Company pledged all of the stock in its domestic subsidiaries as security and 66% of the stock of its direct, Canadian subsidiary, Fenix Canada (other than its exchangeable preferred shares). The Company’s U.S. borrowings under the credit facility bear interest at fluctuating rates determined quarterly, at the Company’s election in advance for any applicable interest period, by reference to the “base rate” plus the applicable margin within the relevant range of margins provided in the term sheet. The base rate is the highest of (i) the rate BMO Harris Bank N.A. announces as its “prime rate,” (ii) 0.50% above the rate on overnight federal funds transactions or (iii) the London Interbank Offered Rate (LIBOR) for an interest period of one month plus 1.00% . The applicable margin is based on our total leverage ratio. The initial margin for interest rates on borrowings under the credit facility is 2.00% on LIBOR loans and 1.00% on base rate loans. The Canadian borrowings under the credit facility bear interest at fluctuating rates determined quarterly, at the Company’s election in advance for any applicable interest period, by reference to the “Canadian base rate” plus the applicable margin within the relevant range of margins provided in the term sheet. The Canadian base rate is the higher of (i) the rate the Bank of Montreal announces as its “reference rate,” or (ii) the Canadian Dollar Offered Rate (CDOR) for an interest period equal to the term of any applicable borrowing plus 0.50% . The applicable margin is based on our total leverage ratio. The initial margin for interest rates on borrowings under the credit facility is 1.00% on base rate loans. The credit agreement contains customary events of default, including the failure to pay any principal, interest or other amount when due, violation of certain of our affirmative covenants or any negative covenants or a breach of representations and warranties and, in certain circumstances, a change of control. Upon the occurrence of an event of default, payment of indebtedness may be accelerated and the lending commitments may be terminated. The credit agreement contains several debt covenants with which the Company must comply on a quarterly or annual basis, including a maximum Funded Debt to EBITDA Ratio (or “Leverage Ratio”, as defined in the Facilities) of 2.75 :1.00 based on the four trailing quarterly periods. Maximum funded debt as it relates to the Leverage Ratio is defined as all borrowed funds, outstanding standby letters of credit and bank guarantees as of the end of the most recent fiscal quarter. The Company must also comply with a minimum Fixed Charge Coverage Ratio of 1.20 :1.00 based on the four trailing quarterly periods. Fixed charge coverage is defined as the ratio of EBITDA less unfinanced capital expenditures for the four trailing quarterly periods, dividends, repurchases and other restricted payments, cash taxes, and cash interest. EBITDA includes after tax earnings with add backs for interest expense, income taxes, depreciation and amortization and stock compensation expenses. In addition, the credit agreement covenants include a minimum net worth of $102.6 million plus fifty percent of net income for each fiscal quarter. Net worth is defined as the total stockholder's equity, including capital stock, additional paid in capital, and retained earnings after deducting treasury stock. As of September 30, 2015 , the Company was in compliance with all financial covenants specified by the credit agreement. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 9 Months Ended |
Sep. 30, 2015 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of following: September 30, December 31, Accounting, consulting and legal fees $ — $ 48,431 Accrued salaries and employee benefits 1,097,834 175,000 Other liabilities 1,790,171 80,300 Total accrued expenses and other current liabilities $ 2,888,005 $ 303,731 As described in Note 1, through May 19, 2015, Fenix had focused on arranging for the completion of an IPO and the acquisition of eight businesses. As part of that process, and as provided for in the Combination Agreements, Fenix was obligated to fund accounting, auditing and various other costs associated with the Founding Companies’ efforts to provide historical audited financial statements and to meet other requirements associated with the IPO. The majority of the Company’s operating expenses and accrued expenses and other current liabilities through the IPO date related to these activities. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes From its Inception through May 2015, the Company generated pre-tax losses. A full valuation allowance was established as of March 31, 2015 and December 31, 2014 against this potential benefit because the uncertainty of the Company’s future prospects at those balance sheet dates resulted in it being more likely than not that the deferred income tax asset relating to the benefit would not be realized. However, upon the successful closing of the Combinations in May 2015 and the concurrent recognition of significant deferred income tax liabilities, as well as the expectation of future pre-tax income from the acquired operating companies, the Company concluded that it was more likely than not that the deferred tax assets generated by prior losses will be realized, and accordingly, recorded an income tax benefit from reversing the allowance of approximately $1,800,000 upon the closing of the Combinations. The Company’s effective tax rate was (44.7)% and (40.0)% for the three and nine months periods ended September 30, 2015 , respectively. This effective rate differs from the U.S. federal statutory rate due to the effects of the state and Canadian income taxes and the reversal of the valuation allowance. The Company’s uncertain tax position reserves, including related interest and penalties of $1 million , were approximately $4.7 million as of September 30, 2015 and were all originally assumed as part of the Combinations. If any portion of the Company’s unrecognized tax benefits is recognized, it could impact the Company’s effective tax rate. The tax reserves are reviewed periodically and adjusted in light of changing facts and circumstances, such as progress of tax audits, lapse of applicable statutes of limitations, and changes in tax law. The uncertain tax positions primarily relate to the timing of certain deductions for income tax purposes by certain Founding Companies and the continued qualification of one Beagell entity for its historical Subchapter S election. Under certain conditions, any payments - including interest and penalties - made by the Company for assumed uncertain tax positions are indemnified by the previous equity holders of the Founding Companies. As such, as discussed more fully under "Income Taxes" in Note 2 above, changes in these reserves can usually be offset by similar changes in the indemnification receivable. |
Common Stock
Common Stock | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Common Stock | Common Stock Fenix was formed and initially capitalized in January 2014 by a group of investors, including the chief executive and the chief financial officers, who paid nominal cash consideration for an aggregate of 1.8 million shares of Fenix common stock. In March and April 2014, Fenix issued and sold an aggregate of 402,000 shares of common stock for a purchase price of $5.00 per share. During the period of September 2014 through April 2015, Fenix issued and sold an aggregate of 546,927 shares of common stock for an ultimate purchase price of $6.50 per share. Of these shares, 20,000 were issued to certain investors for no cash consideration in order to effectively convert their $7.50 per share investments to $6.50 per share investments. Such issuances resulted in a charge to the Company’s earnings in January 2015 of approximately $131,000 . The Company completed its IPO on May 19, 2015 and its 2,000 -for-1 common stock split immediately before the closing of the IPO. As a result, all share and per share information presented in the Company’s consolidated financial statements has been adjusted to retroactively reflect the common stock split. The Company raised approximately $110.4 million in gross proceeds from the IPO by selling 13.8 million shares at $8.00 per share and netted $101.3 million in the IPO after paying the underwriter’s discount and other offering costs. The agreements that relate to the common stock sales in March, April and September 2014 included provisions that obligated the holders of the common stock issued in January 2014 to compensate the investors in the later sales if the IPO price of Fenix common stock was less than $10.00 per share. As the IPO price was $8.00 per share, the initial investors transferred 237,231 of their shares to the later investors equal in value to the aggregate difference in value between the IPO price of $8.00 per share and $10.00 per share, resulting in a charge of $1.8 million to other expense as of the IPO date. The later investors were also granted registration rights. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The Company’s 2014 Incentive Stock Plan (“Plan”) was adopted by the Board of Directors in November 2014 and approved by the Company's shareholders in January 2015. The Plan was amended by the Board of Directors in July 2015. The Plan permits grants of stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards (in the form of equity or cash bonuses), dividend equivalents on full value awards and other awards (which may be based in whole or in part on the value of its common stock or other property). Directors, salaried employees, and consultants of the Company and its commonly-controlled affiliates are eligible to participate in the Plan, which is administered by the Compensation Committee of the Company's Board of Directors. The number of shares originally reserved for share-based awards under the Plan equaled 2,750,000 shares. As of September 30, 2015 , the Company had 1,014,000 shares available for share-based awards under the Plan. Stock-based compensation is included in operating expenses in the consolidated statements of operations. The components of stock-based compensation for the three and nine month periods ended September 30, 2015 were as follows: Three Months Ended September 30, 2015 Nine Months Ended September 30, 2015 Stock options $ 519,899 $ 582,082 Restricted stock grants 77,859 77,859 Leesville bonus shares 546,679 831,679 Other awards — 216,800 Total stock-based compensation $ 1,144,437 $ 1,708,420 Stock Options Stock options granted to employees under the Plan typically have a 10 -year life and vest in equal installments on each of the first four anniversary dates of the grant, although certain awards have been made with a shorter vesting period. The Company calculates stock compensation expense for employee option awards based on the grant date fair value of the award, less expected annual forfeitures, and recognizes expense on a straight-line basis over the service period of the award. Stock options granted to non-executive board members vest on the first anniversary of the award date . Stock compensation expense for these awards to non-executive directors is based on the grant date fair value of the award and is recognized on a straight-line basis over the one -year service period of the award. The Company uses the Black-Scholes option pricing model to estimate the grant date fair value of employee and director stock options. The principal variable assumptions utilized in valuing options and the methodology for estimating such model inputs include: (1) risk-free interest rate – an estimate based on the yield of zero–coupon treasury securities with a maturity equal to the expected life of the option; (2) expected volatility – an estimate based on the historical volatility of similar companies’ Common Stock for a period equal to the expected life of the option; and (3) expected life of the option – an estimate based on industry historical experience including the effect of employee terminations. Based on the results of the model, the fair value of the stock options granted during the nine months ended September 30, 2015 was $2.47 - $3.33 per share using the following assumptions: Expected dividend yield — % Risk-free interest rate 1.57 - 1.85% Expected volatility 30.0 % Expected life of option 5.3 - 6.3 years Stock option activity for the nine months ended September 30, 2015 was as follows: Number of Options Weighted- Average Exercise Price Per Share Weighted- Average Remaining Contractual Term in Years Aggregate Intrinsic Value Outstanding on January 1, 2015 — $ — Granted 1,556,297 9.10 Exercised — — Expired or forfeited — — Outstanding on September 30, 2015 1,556,297 $ 9.10 8.7 $ — Exercisable on September 30, 2015 — $ — $ — At September 30, 2015 , there is $3,650,000 of unrecognized compensation costs related to stock option awards to be recognized over a weighted average period of 3.3 years . Restricted Stock Awards Restricted stock awards (RSAs) granted to employees vest over time based on continued service (typically vesting over a four or five year period in equal annual installments). Such time-vested RSAs are valued at fair value based on the closing price of Fenix common stock on the date of grant. Compensation cost, adjusted for estimated forfeitures, is amortized on a straight-line basis over the requisite service period. A summary of restricted stock award activity for the nine months ended September 30, 2015 is as follows: Number of Awards Weighted- Average Grant Date Fair Value Per Share Unvested restricted stock awards at January 1, 2015 — $ — Granted 150,000 9.66 Forfeited — — Vested — — Unvested restricted stock awards at September 30, 2015 150,000 $ 9.66 At September 30, 2015 , there is $1,189,000 of unrecognized compensation costs related to restricted stock awards to be recognized over a weighted average period of 4.4 years . Leesville Bonus Shares The Company issued 271,112 restricted shares of common stock at the closing of the Leesville acquisition. The shares vest twelve months after the grant date. Compensation expense of approximately $546,000 and $832,000 was recorded in the three and nine months ended September 30, 2015 , respectively. Other Awards During June 2015, the Company issued a total of 20,000 unregistered common shares to two current employees in payment of their fees for pre-Combination services when they were consultants of the Company. Compensation expense of approximately $217,000 has been recorded in the nine months ended September 30, 2015 for these awards based on the share price on the date of grant. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Environmental and Related Contingencies The Company is subject to a variety of environmental and pollution control laws and regulations incident to the ordinary course of business. The Company currently expects that the resolution of any potential contingencies arising from compliance with these laws and regulations will not materially affect the Company’s financial position, results of operations or cash flows. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Operating Leases As described in Note 3, the Company has operating leases with legal entities that are controlled by former owners of the Founding Companies and Ocean County, who are also shareholders in Fenix and Fenix Canada and in certain cases are also in management at Fenix. One of the lessors is controlled by a Board member of Fenix. These leases, which generally have a term of 15 years with renewal options, relate to 17 distinct properties as of September 30, 2015, on which the Company conducts its automobile recycling business in the United States and Canada. These leases commenced on the closing of the Combinations on May 19, 2015 for the Founding Companies and on August 14, 2015 for Ocean County. The scheduled payments under these leases over their original terms total approximately $35.8 million . The Company records rent expense in the statements of operations based on market rental rates, which totaled approximately $1,032,000 and $1,231,000 for the three and nine months ended September 30, 2015 , respectively. Because these leases were entered into upon the closing of the acquisitions, any difference between their contractual payments and then-current market rental rates is accounted for as a net refundable purchase price which served to reduce the aggregate Combinations Consideration by $1,470,000 . This net asset is being amortized over the terms of the leases as additional rent expense so that the amount in the statements of operations reflects the market rental expense. Investment in GO Pull-It LLC Also as described in Note 3, the Company holds a 5% investment, and an option to purchase the remaining 95% , interest in Go Pull-It LLC, an entity in which certain Fenix management also hold an equity investment. Go Pull-It LLC is a variable interest entity (“VIE”) and the Company is not the primary beneficiary of that VIE because it does not have the power to direct the significant activities of the VIE. That power is held by the former owners of Go Auto. The Company has not and does not expect to provide any financial support to the VIE outside of the 5% investment. The 5% investment and option have been valued at $30,000 in the consolidated balance sheet as part of the purchase price allocation as described in Note 3 above. Other The Company leases computer equipment from a company that is 50% owned by a member of management and $3,000 was paid for this lease in the post-Combination period ended September 30, 2015 . The Company also sells inventory to related parties. Net revenues for these sales were approximately $26,000 in the post-Combination period ended September 30, 2015 . |
Employee Benefit Plans
Employee Benefit Plans | 9 Months Ended |
Sep. 30, 2015 | |
Postemployment Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans The Founding Companies provide defined contribution plans covering eligible employees, which includes matching and discretionary profit sharing contributions. The Company made contributions to the plans of approximately $219,200 and $281,000 during the three and nine month periods ended September 30, 2015 , respectively. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events In October 2015, the Company completed its acquisitions of the stock of Butler Auto Sales and Parts, Inc. ("Butler") based in Forest City, North Carolina, and substantially all of the assets of Tri-City Auto Salvage ("Tri-City") based in Greensboro, North Carolina. The aggregated purchase price consisted of $14,900,000 in cash and 149,281 shares of Fenix common stock. The cash portion of the purchase price was financed through a combination of cash on hand and utilization of $8,700,000 of the Company's credit facility. In both acquisitions, the purchase price is subject to working capital adjustments, and the Company entered into a long-term lease with the former owners for use of the premises on which the Company will conduct its automotive recycling business. Butler is a full-service auto recycling facility servicing Charlotte and the surrounding markets, and Tri-City is a full-service recycling facility servicing Greensboro and the surrounding markets. These acquisitions represent the Company's initial locations in North Carolina, complementing the Company's other auto recycling operations in the Eastern United States. For the twelve months ended June 30, 2015, Butler and Tri-City had combined revenues of approximately $17,000,000 . As of the filing date of these financial statements, the Company has not completed a preliminary allocation of the purchase price to the fair market values of acquired tangible and intangible assets and liabilities assumed. |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue from the sale of vehicle replacement products and scrap and, to a lesser extent, used cars and motorcycles, when they are shipped or picked up by the customers and ownership has transferred, subject to an allowance for estimated returns and discounts that management estimates based upon historical information. Management analyzes historical returns (often pursuant to standard warranties on the sold products) and allowances activity by comparing the items to the original invoice amounts and dates. The Company uses this information to project future returns and allowances on products sold. If actual returns and allowances deviate significantly from the Company’s historical experience, there could be an impact on its operating results in the period of occurrence. |
Cost of Goods Sold | Cost of Goods Sold Cost of goods sold primarily includes a) amounts paid for the purchase of vehicles, scrap, parts for resale and related products, b) related auction, storage and towing fees, and c) other costs of procurement and dismantling, primarily labor and overhead allocable to dismantling operations or, in the case of car and motorcycle sales, to preparing the vehicle for sale. |
Operating Expenses | Operating Expenses Operating expenses for the automobile recycling business are primarily comprised of a) salaries and benefits of employees that are not related to the procurement and dismantling of vehicles, b) facility costs such as rent, utilities, insurance, repairs and taxes not allocated to dismantling operations, c) selling and marketing costs, d) costs to distribute products and scrap and e) other general and administrative costs. Operating expenses for the periods presented also include corporate office costs and costs related to the business combinations. |
Concentrations | Concentrations Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents and accounts receivable. The majority of cash and cash equivalents are maintained with several major financial institutions. The Company maintains its cash in bank deposit accounts which, at times, may exceed the insurance limits of the Federal Deposit Insurance Corporation. The Company has not experienced any losses in such accounts. Concentrations of credit risk with respect to accounts receivable are limited because a large number of customers make up the Company’s customer base. The Company controls credit risk through credit approvals, credit limits and monitoring procedures. The Company primarily obtains its recycled OEM and related products from damaged, totaled or low value vehicles purchased at salvage auto auctions. Since the Combinations with the Founding Companies, substantially all of the vehicles purchased by the Company for dismantling were acquired at auctions run by two salvage auto auction companies. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts In the normal course of business, the Company extends credit to customers after a review of each customer’s credit history. The Company maintained a reserve for uncollectible accounts of approximately $329,000 at September 30, 2015 . The reserve is based upon management’s assessment of the collectability of specific customer accounts, the aging of the accounts receivable and historical experience. Receivables are written off once collection efforts have been exhausted. Recoveries of accounts receivable previously written off are recorded when received. |
Inventories | Inventories Inventories consist entirely of recycled OEM and aftermarket products, including car hulls and other materials that will be sold as scrap and, to a lesser extent, used cars and motorcycles for resale. Inventory costs for recycled OEM parts are established based upon the price the Company pays for a vehicle, including auction, storage and towing fees, as well as expenditures for buying and dismantling vehicles. After dismantling, the cost assigned to the salvaged parts and scrap is determined using the average cost of sales percentage at the Company and applying that percentage to the Company’s inventory at expected selling prices. The average cost to sales percentage is derived from the Company’s historical vehicle profitability for salvage vehicles purchased at auction or procured from other sources. With respect to self-service inventories, costs are established by calculating the average sales price per vehicle, including its scrap value and part value, applied to the total vehicles on-hand. Inventory costs for used cars and motorcycles for resale are established based upon the price the Company pays for these items. For all inventories, carrying value is recorded at the lower of cost or market and is reduced to reflect the age of the products and current anticipated demand. If actual demand is less than the Company’s estimates, additional reductions to inventory carrying value would be necessary in the period such determination is made. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost. Depreciation expense is calculated using the straight-line method over the estimated useful lives. Leasehold improvements are amortized over the shorter of the useful life of the related assets or the lease term. Expenditures for maintenance and repairs are charged against operations. Renewals and betterments that materially extend the useful life of an asset are capitalized. As property and equipment are sold or retired, the applicable cost and accumulated depreciation are removed from the accounts and any resulting gain or loss thereon is recognized. Depreciation expense totaled approximately $610,000 and $914,000 for the three and nine month periods ended September 30, 2015 , respectively. Estimated useful lives of property and equipment acquired after May 19, 2015 are as follows: Vehicles 5 years Machinery and equipment 3-10 years Leasehold improvements 10-15 years or term of lease, if shorter Office furnitures and fixtures 7 years For property and equipment the Company acquired in the Combinations, the average estimated remaining useful lives are as follows: Vehicles 3-4 years Machinery and equipment 4-5 years Leasehold improvements 5-6 years or term of lease, if shorter Office furnitures and fixtures 2-3 years The Company evaluates the recoverability of the carrying amount of property and equipment and amortizable intangible assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable based on an analysis of undiscounted cash flows. There were no such events or changes in the three and nine month periods ended September 30, 2015 . |
Goodwill | Goodwill Goodwill is recorded when the purchase price paid for an acquisition exceeds the estimated fair value of the net identified tangible and intangible assets acquired. The Company is required to perform an annual impairment review, and more frequently under certain circumstances. Under the qualitative goodwill impairment assessment standard, management evaluates whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. If it is determined that it is more likely than not, the Company proceeds with the next step of the impairment test, which compares the fair value of the reporting unit to its carrying value. If the Company determines through the impairment process that goodwill has been impaired, the Company will record the impairment charge in its results of operations. The Company has elected to perform its annual evaluation of impairment as of October 1. There were no impairment charges related to goodwill during the post-Combination period ended September 30, 2015 . |
Intangible Assets | Intangible Assets Intangible assets subject to amortization consist of tradenames, customer relationships, non-compete agreements and incremental off market lease payments. Amortization expense is calculated using the straight-line method over the estimated useful lives of the assets of: 5 years for tradenames; and 5 years for noncompete covenants. Amortization expense is calculated using the accelerated method over the estimated useful life of the asset of 15 years for customer relationships. Amortization expense for intangible assets was $931,000 and $1,216,000 , respectively, for the three and nine months periods ended September 30, 2015 . |
Indemnification Receivable | Indemnification Receivable In conjunction with the Combinations, the Company recorded an indemnification receivable, which represents recoverable amounts from the former owners of certain of the Founding Companies if the Company is required to make certain income tax or other payments as defined in the relevant Combination agreements after the Combinations. |
Refundable Purchase Price Consideration | Refundable Purchase Price Consideration In conjunction with the Combinations, the Company entered into operating facility lease agreements with affiliates of the equity holders of the Founding Companies. Based on preliminary independent valuations of the market rental rates compared to the contractual rental rates for these properties, the excess is reflected in the intangible assets as additional Combination Consideration refundable over the term of the related lease. The effect of discounting these payments at 10% is reflected in other non-current assets. The Company amortizes these net assets over the life of the leases so that aggregate rent expense in the statements of operations reflects market rental rates as of the date of Combination; a corresponding net interest income element is also recorded to reflect the passage of time impact on the net asset. |
Fair Value Measurements | Fair Value Measurements Fair value of financial assets and liabilities are defined as the exchange price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market at the measurement date (exit price). The Company is required to classify fair value measurements in one of the following categories: • Level 1 - inputs which are defined as quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. • Level 2 - inputs which are defined as inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly or indirectly. • Level 3 - inputs are defined as unobservable inputs for the assets or liabilities. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. Certain assets and liabilities are required to be recorded at fair value on either a recurring or non-recurring basis; however, the Company had no assets or liabilities that require recurring fair value measurements at December 31, 2014 . Fair value is determined based on the exchange price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants. At September 30, 2015 , the fair value of contingent consideration recorded in the consolidated financial statements was valued using Level 3 inputs. The Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses are carried at cost, which approximates fair value due to the short-term maturity of these instruments. The Company’s debt is carried at cost and approximates fair value due to its variable or fixed interest rates, which are consistent with the interest rates in the market. The Company may be required, on a non-recurring basis, to adjust the carrying value of the Company’s property and equipment, intangible assets and goodwill. When necessary, these valuations are determined by the Company using Level 3 inputs. These assets are subject to fair value adjustments in certain circumstances, such as when there is evidence that impairment may exist. There have been no indicators of impairment during 2015 . |
Stock Offering Costs | Stock Offering Costs The Company incurred approximately $1,393,000 and $346,000 of legal, accounting, and other costs directly related to its IPO through May 19, 2015 and December 31, 2014 , respectively. The Company also incurred $7,728,000 of underwriting cost. Such costs were applied against the gross proceeds from the IPO upon its closing. |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method where 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 the respective tax basis and for tax credit carry forwards. 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. U.S. federal income taxes are not provided on undistributed earnings of Canadian subsidiaries as it is management's intent that such earnings will remain invested in these subsidiaries. A valuation allowance is established when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company evaluates the realizability of its deferred tax assets by assessing its valuation allowance and by adjusting the amount of such allowance, if necessary. The factors used to assess the likelihood of realization include historical cumulative losses, the forecast of future taxable income and available tax planning strategies that could be implemented to realize the net deferred tax assets. Failure to achieve forecasted taxable income in applicable tax jurisdictions could affect the ultimate realization of deferred tax assets and could result in an increase in the Company’s effective tax rate on future earnings. The Company recognizes the benefits of uncertain tax positions taken or expected to be taken in tax returns in the provision for income taxes only for those positions that are more likely than not to be realized. The Company follows a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments and which may not accurately forecast actual outcomes. As of September 30, 2015 and December 31, 2014 , the Company has not identified any uncertain tax positions that relate to Fenix. The Company did assume, on an indemnifiable basis, certain uncertain tax positions reserves in the Combinations. The Company’s policy is to include interest and penalties associated with income tax obligations in income tax expense. The Company’s right to indemnification under certain Combination Agreements related to these uncertain tax positions is subject to a threshold of 1% of the purchase price and a cap of 40% of the purchase price paid in the Combinations. |
Foreign Currency | Foreign Currency The assets and liabilities of Fenix Canada, whose functional currency is the Canadian dollar, are translated into US dollars at period-end exchange rates. Income and expense items are translated at the average rates of exchange prevailing during the period. The adjustments resulting from translating the Canadian financial statements are reflected as a component of accumulated other comprehensive loss within shareholders’ equity (deficit). Foreign currency transaction gains and losses are recognized in net earnings based on differences between foreign exchange rates on the transaction date and the settlement or period end date. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic earnings (loss) per share is computed by dividing net income (loss) available to common shares by the weighted average common shares outstanding during the period using the two-class method. The Fenix Canada preferred shares are considered participating securities and therefore share in the net income (loss) of the period since being issued on May 19, 2015. Diluted earnings (loss) per share would include the impact of outstanding common share equivalents as if those equivalents were exercised or converted into common shares if such assumed exercise or conversion were dilutive. Contingently issuable shares are excluded from basic and diluted earnings per share until issuance is no longer contingent. For the three and nine months ended September 30, 2015 and 2014 , basic earnings per share is equal to diluted earnings per share because all outstanding stock awards are considered anti-dilutive during periods of net loss. The following outstanding equity instruments as of September 30, 2015 are not included in the computation of diluted loss per share as the effect of including such stock options and restricted stock awards in the computation would be anti-dilutive: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Stock options 966,297 — 1,566,297 — Restricted stock awards 150,000 — 150,000 — Leesville bonus shares 271,112 — 271,112 — The calculations of loss per share for the three and nine month periods ended September 30, 2015 and 2014, are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Basic Loss per Common Share: Net loss $ (6,548,496 ) $ (2,168,650 ) $ (13,151,881 ) $ (2,796,328 ) Net loss allocable to Fenix Canada preferred shares (167,715 ) — (861,816 ) — Net loss available to common shares $ (6,380,781 ) $ (2,168,650 ) $ (12,290,065 ) $ (2,796,328 ) Weighted-average common shares outstanding 19,475,046 2,156,400 11,206,390 2,007,028 Basic and diluted loss per Common Share $ (0.33 ) $ (1.01 ) $ (1.10 ) $ (1.39 ) The Company has 11,667 common shares and 280,000 shares of Fenix Canada preferred stock held in escrow relating to contingent consideration agreements with certain Founding Companies. These shares are not included in basic EPS or in the shares used to calculate the net loss attributable to Fenix Canada preferred shares until the issuance is no longer contingent on future events. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In September 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASC") No. 2015-16, Simplifying the Accounting for Measurement-Period Adjustments, which simplifies the accounting for adjustments made to provisional amounts recognized in business combinations. The amendments require that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments also require that the acquirer record, in the same period's financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to provisional amounts, calculated as if the accounting had been completed at the acquisition date. The ASU also requires an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. This guidance is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The Company is currently evaluating the impact of adopting the new standard. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Useful Lives | Estimated useful lives of property and equipment acquired after May 19, 2015 are as follows: Vehicles 5 years Machinery and equipment 3-10 years Leasehold improvements 10-15 years or term of lease, if shorter Office furnitures and fixtures 7 years For property and equipment the Company acquired in the Combinations, the average estimated remaining useful lives are as follows: Vehicles 3-4 years Machinery and equipment 4-5 years Leasehold improvements 5-6 years or term of lease, if shorter Office furnitures and fixtures 2-3 years |
Schedule of Goodwill | The following table summarizes the provisional adjustments to the initially reported goodwill balance at the Founding Company acquisition date in addition to the goodwill resulting from the Ocean County acquisition as outlined in Note 3 (in thousands): Amount Balance at May 18, 2015 $ 70,810 Ocean County goodwill 1,642 Provisional adjustments: Change in fair value of Go Pull-It Investment 367 Reimbursement of pre-acquisition charges paid by former owners to be covered by Fenix 524 Foreign currency translation adjustment (2,682 ) Revisions of working capital 334 Balance at September 30, 2015 70,995 |
Schedule of Anti-dilutive Securities | The following outstanding equity instruments as of September 30, 2015 are not included in the computation of diluted loss per share as the effect of including such stock options and restricted stock awards in the computation would be anti-dilutive: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Stock options 966,297 — 1,566,297 — Restricted stock awards 150,000 — 150,000 — Leesville bonus shares 271,112 — 271,112 — |
Calculations of Earnings (Loss) Per Share | The calculations of loss per share for the three and nine month periods ended September 30, 2015 and 2014, are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Basic Loss per Common Share: Net loss $ (6,548,496 ) $ (2,168,650 ) $ (13,151,881 ) $ (2,796,328 ) Net loss allocable to Fenix Canada preferred shares (167,715 ) — (861,816 ) — Net loss available to common shares $ (6,380,781 ) $ (2,168,650 ) $ (12,290,065 ) $ (2,796,328 ) Weighted-average common shares outstanding 19,475,046 2,156,400 11,206,390 2,007,028 Basic and diluted loss per Common Share $ (0.33 ) $ (1.01 ) $ (1.10 ) $ (1.39 ) |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Estimated Calculation of Total Combination Consideration | The following table shows the estimated calculation of the total Combination Consideration (the following dollar amounts in tables and notes are in thousands) Beagell Group Standard Eiss Brothers Go Auto Jerry Brown Leesville Total Base Fenix share consideration (a) $ 10,822 $ — $ 2,338 $ 2,667 $ 5,333 $ 1,840 $ 23,000 Base Fenix Canada share consideration (b) — 8,400 — — — — 8,400 Base cash consideration (c) 19,663 30,450 6,137 4,000 6,511 11,727 78,488 Working capital and other adjustments (c) 1,161 1,762 810 (81 ) (1,377 ) 1,132 3,407 Incremental inventory payments (d) — 450 — — 550 — 1,000 Incremental capital expenditure payments (e) — — — — 2,415 — 2,415 Nonsubstantive consulting fee payments (f) 890 50 — — 847 — 1,787 Key employee cash bonuses (g) — — — — — 2,575 2,575 Incremental off market lease payments (h) 1,980 (2,230 ) (700 ) (140 ) (170 ) (210 ) (1,470 ) Investment in Founding Company affiliate (i) — — — 450 — — 450 Contingent consideration (j) — 7,445 310 — 2,468 — 10,223 Total Combination Consideration $ 34,516 $ 46,327 $ 8,895 $ 6,896 $ 16,577 $ 17,064 $ 130,275 Of this aggregate Combination Consideration, $88,135 was paid in cash on the closing date, $33,733 represents stock consideration and $8,620 represents discounted cash payments to be made up to 15 years after the Combinations. (a) The Company issued 2,874,971 shares of Fenix common stock as Combination Consideration valued at the public offering price of $8.00 per share. (b) The Company issued 1,050,000 exchangeable preferred shares of Fenix’s subsidiary, Fenix Parts Canada, Inc. (“Exchangeable Preferred Shares”) as Combination Consideration valued at the public offering price of common stock of $8.00 per share. Because these shares do not entitle the holders to any Fenix Canada dividends or distributions, no earnings or losses of Fenix Canada are attributable to those holders. However, these shares do participate in the net income (but not in net losses) of the consolidated company for earnings (loss) per share computations. (c) The base cash component of the Combination Consideration for each Combination is still subject to certain adjustments. For each Founding Company (in some cases, other than Standard Auto Wreckers, Inc.), the cash component of the Combination Consideration was (i) reduced by the Founding Company’s indebtedness as of closing (ii) increased by the Founding Company’s cash and qualifying inventory as of closing and (iii) increased by the Founding Company’s capital expenditures during the six months prior to closing. All of these estimated adjustments are based on information provided by the Founding Companies at closing and are subject to further adjustment as additional information is obtained. Any differences in actual cash, qualifying inventory, debt or capital expenditures as of and for the six months prior to the actual closing date will have a corresponding change to total Combination Consideration and to goodwill. (d) Represents additional consideration for certain excess or specific inventories based on the applicable Founding Company inventory listings as of closing and subject to adjustment through September 30, 2015 as additional information is obtained. (e) Represents a construction reimbursement for capital expenditures in connection with a new building located on land that the Company leases subject to further adjustment through September 30, 2015 as additional information is obtained. (f) Represents contractual payments to certain equity holders of the Founding Companies and their related parties over the next 1 to 15 years . These equity holders and their related parties are not employed by us and do not provide any substantive services to us. (g) Represents cash bonuses paid at closing to key employees for past service. (h) In conjunction with the Combinations, the Company entered into operating facility lease agreements with affiliates of the equity holders, generally variable interest entities that were consolidated into the Founding Companies prior to the Combinations but are not consolidated by the Company after the Combinations. Based on independent valuations of the market rental rates compared to the actual rental rates for these properties, the excess is reflected as Combination Consideration refundable over the term of the related lease. The effect of discounting these payments at 10% is reflected in the amounts presented. The related balance as of September 30, 2015 of $1,465 is reflected on the condensed consolidated balance sheet as part of Intangible asset and will be offset to cash rent expense over the life of the leases. (i) Represents the payment of $250 in cash at closing and a $200 promissory note payable over two years for a 5% membership interest in an affiliate of Go Auto. The Company also received an option to purchase the remaining 95% membership interest. (j) Represents the estimated fair value of contingent consideration arrangements with certain Founding Company equity holders. Under these arrangements, the equity holders of Standard and Eiss can earn up to an aggregate of $7,875 in cash and 11,667 shares of Fenix common stock and 280,000 Exchangeable Preferred Shares. The shareholders of Jerry Brown can earn an uncapped amount of additional cash if certain EBITDA and revenue targets are met. The fair value is based on independent valuations considering the Company’s projections for the relevant Founding Companies, the respective target levels, the relative weighting of various future scenarios and a discount rate of approximately 5.0% . The changes in the fair value of this initial liability resulted in a $1,001 and $193 decrease to operating expenses in the statement of operations for the three and nine months post-Combinations period ended September 30, 2015 , respectively. |
Schedule of Pro Forma Results of Operations | The following table shows the pro forma revenue and earnings of Fenix Parts, Inc. as if the Combinations with the Founding Companies had occurred on January 1, 2014 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Revenues $ 27,275 $ 28,151 $ 82,375 $ 82,946 Net loss $ (7,155 ) $ (2,604 ) $ (14,784 ) $ (3,528 ) Pro forma revenues consisted of (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Recycled OEM parts $ 22,839 $ 22,330 $ 66,359 $ 65,917 Scrap, warranty and other 4,436 5,821 16,016 17,029 Total $ 27,275 $ 28,151 $ 82,375 $ 82,946 |
Schedule of Preliminary Amounts Recognized as of Acquisition Date for Each Major Class of Assets Acquired and Liabilities Assumed | Beagell Group Standard Eiss Brothers Go Auto Jerry Brown Leesville Total Cash and other current assets (i) $ 10,358 $ 15,265 $ 6,637 $ 1,859 $ 6,301 $ 5,643 $ 46,063 Property and equipment (ii) 4,476 4,408 364 203 1,663 641 11,755 Other non current assets 1,983 1,445 — 30 1,746 — 5,204 Intangible assets (iii) 5,670 13,200 3,380 3,590 2,510 6,470 34,820 Current liabilities (1,770 ) (2,008 ) (255 ) (754 ) (3,368 ) (654 ) (8,809 ) Reserve for uncertain tax positions (iv) (2,017 ) (527 ) — — (1,829 ) (203 ) (4,576 ) Deferred income taxes, net (vi) (5,866 ) (6,469 ) (3,298 ) — (3,564 ) (4,297 ) (23,494 ) Non-current liabilities (563 ) — — — (767 ) — (1,330 ) Total net identifiable assets acquired 12,271 25,314 6,828 4,928 2,692 7,600 59,633 Goodwill 20,264 24,496 2,766 2,115 11,526 9,643 70,810 Total net assets acquired $ 32,535 $ 49,810 $ 9,594 $ 7,043 $ 14,218 $ 17,243 $ 130,443 Included in the preliminary allocation reflected above are the various preliminary valuations described below which are primarily based on Level 3 inputs: (i) Inventory was marked up to 90% of its estimated selling price representing the inventory’s cost and estimated related profit margin. Selling costs and related profit margin were estimated at all Founding Companies to be 10% . The acquired inventory is expected to be sold within six to nine months . (ii) Assumptions for property and equipment valuation, which are based on cost and market approaches, are primarily data from industry databases and dealers on current costs of new equipment and information about the useful lives and age of the equipment. The remaining useful life of property and equipment was determined based on historical experience using such assets, and varies from 3 - 6 years depending on the Founding Company and nature of the assets. The Company’s independent valuation specialist is assisting the Company in determining the final valuation of the property and equipment acquired on the Combination date. All property and equipment is being depreciated using the straight-line method. (iii) The table below summarizes the aggregate intangible assets acquired: Amount Trade names $ 5,670 Customer relationships 25,970 Covenants not to compete 1,710 Off market lease payments 1,470 Total 34,820 The fair value of trade names and customer relationships are based on a number of significant assumptions. Trade names are valued using a “relief from royalty” method, which models cash savings from owning intangible assets as compared to paying a third party for their use. Descriptions of the inputs into this method, and the estimates or ranges of these inputs used for all of the Combinations are as follows: Compound annual revenue growth rate over term of use 3.0%-6.2% Percentage of revenue attributable to trade name in forecast year 20%-100% Royalty rate 2.0 % Discount rate 11.5%-14.0% Tax rate 38.6%-40.9% The expected useful life of trade names is based on the Company’s planned timeframe for using the existing trade names the Company purchased in the Combinations. The Company amortizes such trade names using the straight-line method as no other method of amortization is more representative of the Company’s usage of these assets. Customer relationships are valued using an income approach called the multi-period excess earnings method, a form of discounted cash flow that estimates revenues and cash flows derived from the use of the intangible asset and then deducts portions of the cash flow that can be attributed to supporting assets, such as other intangible assets or property and equipment, that contributed to the generation of the cash flows to arrive at cash flows attributable solely to the intangible asset being valued. Descriptions of the inputs into this method, and the estimates or ranges of these inputs used for all of the Combinations are as follows: Compound annual revenue growth rate in forecast period 2.1%-3.1% Annual customer attrition rate 10.0 % Gross margin in forecast period 29.9%-48.1% Contributory asset charges as a percentage of revenue 0.0%-2.6% Discount rate 12.5%-16.0% Tax rate 38.6%-40.9% The expected useful life of customer relationships is established as 15 years , which is the period over which these assets are expected to reasonably contribute to future cash flows. The Company amortizes such customer relationships using an accelerated method that reflects a greater relative contribution to future cash flows in the earlier years of the assets’ useful lives. (iv) The Company may recover amounts from the equity holders of certain of the Founding Companies if the Company is required to make certain income tax or other payments as defined in the relevant Combination agreements after the Combinations. (v) The Combination agreement between the Company and GO Auto contains a provision pursuant to which the Company purchased a 5% ownership of Go Pull-It LLC, an entity under common control with GO Auto, and the right to purchase the remaining 95% of Go Pull-It LLC for either a fixed price through the end of 2016 or, after that, a price based on a formula that is primarily dependent on the EBITDA of Go Pull-It LLC. The amount reflected above for the purchase right is based on a business valuation of Go Pull-It LLC, which inputs include but are not limited to, revenue growth, gross margin, operating expenses, income tax rate, working capital and property and equipment requirements, and an appropriate discount rate. (vi) The Company recorded deferred income taxes relating to the difference between financial reporting and tax bases of assets and liabilities acquired in the Combinations in nontaxable transactions. The Company also eliminated historical deferred income taxes of Founding Companies acquired in taxable transactions. Cash and other current assets $ 2,790 Property and equipment 279 Other non current assets 1 Intangible assets 870 Current liabilities (553 ) Reserve for uncertain tax positions — Deferred income taxes, net (1,808 ) Non-current liabilities (2 ) Total net identifiable assets acquired 1,577 Goodwill 1,642 Total net assets acquired $ 3,219 |
Long-Term Obligations (Tables)
Long-Term Obligations (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Obligations | The term of the revolving credit facility and the term loan facility is five years . |
Schedule of Long-term Debt Instruments | The following is a summary of the components of the Company's long term obligations and amounts outstanding at September 30, 2015 (in thousands): Obligations: Term loan $ 9,338 Go Pull-It note 200 9,538 Less current maturities 750 $ 8,788 |
Accrued Expenses and Other Cu23
Accrued Expenses and Other Current Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Payables and Accruals [Abstract] | |
Accrued expenses and other current liabilities | Accrued expenses and other current liabilities consisted of following: September 30, December 31, Accounting, consulting and legal fees $ — $ 48,431 Accrued salaries and employee benefits 1,097,834 175,000 Other liabilities 1,790,171 80,300 Total accrued expenses and other current liabilities $ 2,888,005 $ 303,731 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Compensation Costs Recognized During Period | The components of stock-based compensation for the three and nine month periods ended September 30, 2015 were as follows: Three Months Ended September 30, 2015 Nine Months Ended September 30, 2015 Stock options $ 519,899 $ 582,082 Restricted stock grants 77,859 77,859 Leesville bonus shares 546,679 831,679 Other awards — 216,800 Total stock-based compensation $ 1,144,437 $ 1,708,420 |
Assumptions of Weighted Average Fair Value of Stock Options Granted | Based on the results of the model, the fair value of the stock options granted during the nine months ended September 30, 2015 was $2.47 - $3.33 per share using the following assumptions: Expected dividend yield — % Risk-free interest rate 1.57 - 1.85% Expected volatility 30.0 % Expected life of option 5.3 - 6.3 years |
Summary of Stock Option Activity | Stock option activity for the nine months ended September 30, 2015 was as follows: Number of Options Weighted- Average Exercise Price Per Share Weighted- Average Remaining Contractual Term in Years Aggregate Intrinsic Value Outstanding on January 1, 2015 — $ — Granted 1,556,297 9.10 Exercised — — Expired or forfeited — — Outstanding on September 30, 2015 1,556,297 $ 9.10 8.7 $ — Exercisable on September 30, 2015 — $ — $ — |
Restricted Stock Unit Activity | A summary of restricted stock award activity for the nine months ended September 30, 2015 is as follows: Number of Awards Weighted- Average Grant Date Fair Value Per Share Unvested restricted stock awards at January 1, 2015 — $ — Granted 150,000 9.66 Forfeited — — Vested — — Unvested restricted stock awards at September 30, 2015 150,000 $ 9.66 |
Description of Business and B25
Description of Business and Basis of Presentation - Additional Information (Detail) | Jan. 02, 2014Entity | Sep. 30, 2014USD ($) | May. 19, 2015Entity |
Product Information [Line Items] | |||
Number of corporate entities acquired | 11 | ||
Number of businesses acquired | 8 | 8 | |
Chief Executive Officer And Chief Financial Officer [Member] | |||
Product Information [Line Items] | |||
Compensation expense | $ | $ 0 |
Summary of Significant Accoun26
Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) | May. 19, 2015 | Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2015 | Dec. 31, 2014 |
Significant Accounting Policies [Line Items] | |||||
Depreciation | $ 610,000 | $ 914,000 | |||
Reserve for estimated returns and discounts | $ 715,000 | ||||
Warranty recognition period | 5 years | ||||
Deferred revenue recognized | 235,000 | $ 358,000 | |||
Reserve for uncollectible accounts | 329,000 | $ 329,000 | 329,000 | ||
Depreciation and amortization expense | 2,155,692 | ||||
Goodwill, impairment charges | 0 | ||||
Amortization expense for intangible assets | 931,000 | 1,216,000 | |||
Indemnification receivable | $ 4,243,851 | $ 4,243,851 | 4,243,851 | ||
Leasing Arrangements, Operating Leases | The effect of discounting these payments at 10% is reflected in other non-current assets. | ||||
Deferred stock offering costs | $ 346,369 | ||||
Underwriting costs | $ 7,728,000 | ||||
Indemnification related to uncertain tax positions | The indemnification under certain Combination Agreements related to these uncertain tax positions is subject to a threshold of 1% of the purchase price and a cap of 40% of the purchase price paid. | ||||
Total maximum purchase price | 40.00% | ||||
Common Stock [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Contingent consideration arrangement shares | 11,667 | ||||
Exchangeable Preferred Stock [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Contingent consideration arrangement shares | 280,000 | ||||
Exchangeable Preferred Stock [Member] | Fenix Parts Canada Inc [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Contingent consideration arrangement shares | 280,000 | ||||
Minimum [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Estimated useful lives of intangible assets | 1 year | ||||
Percentage Indemnification related to uncertain tax positions | 1.00% | ||||
IPO [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Deferred stock offering costs | $ 1,393,000 | $ 346,000 | |||
Trade Names [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Estimated useful lives of intangible assets | 5 years | ||||
Customer Relationships [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Estimated useful lives of intangible assets | 15 years | ||||
Noncompete Agreements [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Estimated useful lives of intangible assets | 5 years |
Summary of Significant Accoun27
Summary of Significant Accounting Policies - Schedule of Estimated Useful Lives (Detail) | May. 19, 2015 | Sep. 30, 2015 |
Property, Plant and Equipment [Line Items] | ||
Lease expiration period with option to renew | 15 years | |
Payment discount percentage | 10.00% | |
Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 3 years | |
Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 6 years | |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 5 years | |
Vehicles [Member] | Minimum [Member] | Combination Agreements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 3 years | |
Vehicles [Member] | Maximum [Member] | Combination Agreements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 4 years | |
Machinery and Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 3 years | |
Machinery and Equipment [Member] | Minimum [Member] | Combination Agreements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 4 years | |
Machinery and Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 10 years | |
Machinery and Equipment [Member] | Maximum [Member] | Combination Agreements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 5 years | |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 10-15 years or term of lease, if shorter | |
Leasehold Improvements [Member] | Combination Agreements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 5-6 years or term of lease, if shorter | |
Leasehold Improvements [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Lease expiration period with option to renew | 10 years | |
Leasehold Improvements [Member] | Minimum [Member] | Combination Agreements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Lease expiration period with option to renew | 5 years | |
Leasehold Improvements [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Lease expiration period with option to renew | 15 years | |
Leasehold Improvements [Member] | Maximum [Member] | Combination Agreements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Lease expiration period with option to renew | 6 years | |
Office Furniture And Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 7 years | |
Office Furniture And Fixtures [Member] | Minimum [Member] | Combination Agreements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 2 years | |
Office Furniture And Fixtures [Member] | Maximum [Member] | Combination Agreements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 3 years |
Summary of Significant Accoun28
Summary of Significant Accounting Policies - Calculations of Earnings (Loss) Per Share (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2014 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Net loss | $ (6,548,496) | $ (2,168,650) | $ (13,151,881) | $ (2,796,328) | |
Net loss allocable to Fenix Canada preferred shares | (167,715) | (861,816) | |||
Net loss available to common shares | $ (6,380,781) | $ (2,168,650) | $ (12,290,065) | $ (2,796,328) | |
Weighted-average common shares outstanding | 19,475,046 | 2,156,400 | 11,206,390 | 2,007,028 | |
Basic & Diluted | $ (0.33) | $ (1.01) | $ (1.10) | $ (1.39) | $ (1.39) |
Accumulated deficit [Member] | |||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Net loss | $ (2,796,328) |
Summary of Significant Accoun29
Summary of Significant Accounting Policies Antidilutive Securities Excluded From Calculation (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Employee Stock Option [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Antidilutive securities excluded from computation | 966,297 | 0 | 1,566,297 | 0 |
Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Antidilutive securities excluded from computation | 150,000 | 0 | 150,000 | 0 |
Leesville [Member] | Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Antidilutive securities excluded from computation | 271,112 | 0 | 271,112 | 0 |
Summary of Significant Accoun30
Summary of Significant Accounting Policies Goodwill Rollforward (Details) | 4 Months Ended |
Sep. 30, 2015USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, Purchase Accounting Adjustments | $ 367,000 |
Goodwill Reimbursement of Pre Acquisition Charges | 524,000 |
Goodwill, Translation Adjustments | (2,682,000) |
Goodwill Revisions of Working Capital Adjustment | 334,000 |
Goodwill | $ 70,995,317 |
Estimated Calculation of Total
Estimated Calculation of Total Combination Consideration (Detail) - USD ($) $ in Thousands | May. 19, 2015 | Sep. 30, 2015 |
Business Acquisition [Line Items] | ||
Base Fenix Canada share consideration | $ 33,733 | |
Cash and other current | 78,488 | |
Working capital and other adjustments | 3,407 | |
Incremental inventory payments | 1,000 | |
Property and equipment | 2,415 | $ 11,755 |
Nonsubstantive consulting fee payments | 1,787 | |
Key employee cash bonuses | 2,575 | |
Incremental off market lease payments | (1,470) | |
Other non current assets | 450 | 5,204 |
Contingent consideration | 10,223 | |
Total Combination Consideration | 130,275 | |
Aggregate business combination consideration, paid in cash | 88,135 | |
Business combination, discounted cash payment | $ 8,620 | |
Business combination, discounted cash payment projection period | 15 years | |
United States [Member] | ||
Business Acquisition [Line Items] | ||
Base Fenix Canada share consideration | $ 23,000 | |
Canada [Member] | ||
Business Acquisition [Line Items] | ||
Base Fenix Canada share consideration | 8,400 | |
Go Auto [Member] | ||
Business Acquisition [Line Items] | ||
Cash and other current | 4,000 | |
Working capital and other adjustments | (81) | |
Property and equipment | 203 | |
Incremental off market lease payments | (140) | |
Other non current assets | 450 | 30 |
Total Combination Consideration | 6,896 | |
Go Auto [Member] | United States [Member] | ||
Business Acquisition [Line Items] | ||
Base Fenix Canada share consideration | 2,667 | |
Beagell [Member] | ||
Business Acquisition [Line Items] | ||
Cash and other current | 19,663 | |
Working capital and other adjustments | 1,161 | |
Property and equipment | 4,476 | |
Nonsubstantive consulting fee payments | 890 | |
Incremental off market lease payments | 1,980 | |
Other non current assets | 1,983 | |
Total Combination Consideration | 34,516 | |
Beagell [Member] | United States [Member] | ||
Business Acquisition [Line Items] | ||
Base Fenix Canada share consideration | 10,822 | |
Standard [Member] | ||
Business Acquisition [Line Items] | ||
Cash and other current | 30,450 | |
Working capital and other adjustments | 1,762 | |
Incremental inventory payments | 450 | |
Property and equipment | 4,408 | |
Nonsubstantive consulting fee payments | 50 | |
Incremental off market lease payments | (2,230) | |
Other non current assets | 1,445 | |
Contingent consideration | 7,445 | |
Total Combination Consideration | 46,327 | |
Standard [Member] | Canada [Member] | ||
Business Acquisition [Line Items] | ||
Base Fenix Canada share consideration | 8,400 | |
Eiss Brothers [Member] | ||
Business Acquisition [Line Items] | ||
Cash and other current | 6,137 | |
Working capital and other adjustments | 810 | |
Property and equipment | 364 | |
Incremental off market lease payments | (700) | |
Other non current assets | 0 | 0 |
Contingent consideration | 310 | |
Total Combination Consideration | 8,895 | |
Eiss Brothers [Member] | United States [Member] | ||
Business Acquisition [Line Items] | ||
Base Fenix Canada share consideration | 2,338 | |
Jerry Brown [Member] | ||
Business Acquisition [Line Items] | ||
Cash and other current | 6,511 | |
Working capital and other adjustments | (1,377) | |
Incremental inventory payments | 550 | |
Property and equipment | 2,415 | 1,663 |
Nonsubstantive consulting fee payments | 847 | |
Incremental off market lease payments | (170) | |
Other non current assets | 1,746 | |
Contingent consideration | 2,468 | |
Total Combination Consideration | 16,577 | |
Jerry Brown [Member] | United States [Member] | ||
Business Acquisition [Line Items] | ||
Base Fenix Canada share consideration | 5,333 | |
Leesville [Member] | ||
Business Acquisition [Line Items] | ||
Cash and other current | 11,727 | |
Working capital and other adjustments | 1,132 | |
Property and equipment | 641 | |
Key employee cash bonuses | 2,575 | |
Incremental off market lease payments | (210) | |
Other non current assets | $ 0 | |
Total Combination Consideration | 17,064 | |
Leesville [Member] | United States [Member] | ||
Business Acquisition [Line Items] | ||
Base Fenix Canada share consideration | $ 1,840 |
Estimated Calculation of Tota32
Estimated Calculation of Total Combination Consideration (Footnote) (Detail) - USD ($) | May. 19, 2015 | Sep. 30, 2015 | Sep. 30, 2015 |
Business Acquisition [Line Items] | |||
Leasing Arrangements, Operating Leases | The effect of discounting these payments at 10% is reflected in other non-current assets. | ||
Business combination refundable consideration reflected in Intangible asset | $ 1,465,000 | $ 1,465,000 | |
Discount rate | 5.00% | ||
Change in fair value of contingent consideration | $ 1,001,000 | $ 193,346 | |
Go Auto [Member] | |||
Business Acquisition [Line Items] | |||
Payments to acquire interest in affiliates, cash | $ 250,000 | ||
Payments to acquire interest in affiliates, promissory note | $ 200,000 | ||
Promissory notes, maturity term (Years) | 2 years | ||
Membership interest in affiliate | 5.00% | ||
Membership interest in affiliate, remaining | 95.00% | ||
Minimum [Member] | |||
Business Acquisition [Line Items] | |||
Useful Life | 1 year | ||
Maximum [Member] | |||
Business Acquisition [Line Items] | |||
Useful Life | 15 years | ||
Contingent consideration arrangement cash to be earned | $ 7,875 | ||
Common Stock [Member] | |||
Business Acquisition [Line Items] | |||
Business combination, stock issued as consideration | 2,874,971 | ||
Business combination, public offering price per share | $ 8 | ||
Contingent consideration arrangement shares | 11,667 | ||
Exchangeable Preferred Stock [Member] | |||
Business Acquisition [Line Items] | |||
Contingent consideration arrangement shares | 280,000 | ||
Exchangeable Preferred Stock [Member] | Fenix Parts Canada Inc [Member] | |||
Business Acquisition [Line Items] | |||
Business combination, stock issued as consideration | 1,050,000 | ||
Business combination, public offering price per share | $ 8 | ||
Contingent consideration arrangement shares | 280,000 |
Schedule of Preliminary Amounts
Schedule of Preliminary Amounts Recognized as of Acquisition Date for Each Major Class of Assets Acquired and Liabilities Assumed (Detail) - USD ($) | Sep. 30, 2015 | Aug. 14, 2015 | May. 19, 2015 | May. 18, 2015 |
Business Combination, Separately Recognized Transactions [Line Items] | ||||
Cash and other current assets | $ 46,063,000 | |||
Property and equipment | 11,755,000 | $ 2,415,000 | ||
Other non current assets | 5,204,000 | 450,000 | ||
Intangible assets | 34,820,000 | |||
Current liabilities | (8,809,000) | |||
Reserve for uncertain tax positions | (4,576,000) | |||
Deferred income taxes, net | (23,494,000) | |||
Non-current liabilities | (1,330,000) | |||
Total net identifiable assets acquired | 59,633,000 | |||
Goodwill | 70,995,317 | $ 70,810,000 | ||
Total net assets acquired | 130,443,000 | |||
Beagell [Member] | ||||
Business Combination, Separately Recognized Transactions [Line Items] | ||||
Cash and other current assets | 10,358,000 | |||
Property and equipment | 4,476,000 | |||
Other non current assets | 1,983,000 | |||
Intangible assets | 5,670,000 | |||
Current liabilities | (1,770,000) | |||
Reserve for uncertain tax positions | (2,017,000) | |||
Deferred income taxes, net | (5,866,000) | |||
Non-current liabilities | (563,000) | |||
Total net identifiable assets acquired | 12,271,000 | |||
Goodwill | 20,264,000 | |||
Total net assets acquired | 32,535,000 | |||
Standard [Member] | ||||
Business Combination, Separately Recognized Transactions [Line Items] | ||||
Cash and other current assets | 15,265,000 | |||
Property and equipment | 4,408,000 | |||
Other non current assets | 1,445,000 | |||
Intangible assets | 13,200,000 | |||
Current liabilities | (2,008,000) | |||
Reserve for uncertain tax positions | (527,000) | |||
Deferred income taxes, net | (6,469,000) | |||
Non-current liabilities | 0 | |||
Total net identifiable assets acquired | 25,314,000 | |||
Goodwill | 24,496,000 | |||
Total net assets acquired | 49,810,000 | |||
Eiss Brothers [Member] | ||||
Business Combination, Separately Recognized Transactions [Line Items] | ||||
Cash and other current assets | 6,637,000 | |||
Property and equipment | 364,000 | |||
Other non current assets | 0 | 0 | ||
Intangible assets | 3,380,000 | |||
Current liabilities | (255,000) | |||
Reserve for uncertain tax positions | 0 | |||
Deferred income taxes, net | (3,298,000) | |||
Non-current liabilities | 0 | |||
Total net identifiable assets acquired | 6,828,000 | |||
Goodwill | 2,766,000 | |||
Total net assets acquired | 9,594,000 | |||
Go Auto [Member] | ||||
Business Combination, Separately Recognized Transactions [Line Items] | ||||
Cash and other current assets | 1,859,000 | |||
Property and equipment | 203,000 | |||
Other non current assets | 30,000 | 450,000 | ||
Intangible assets | 3,590,000 | |||
Current liabilities | (754,000) | |||
Reserve for uncertain tax positions | 0 | |||
Deferred income taxes, net | 0 | |||
Non-current liabilities | 0 | |||
Total net identifiable assets acquired | 4,928,000 | |||
Goodwill | 2,115,000 | |||
Total net assets acquired | 7,043,000 | |||
Jerry Brown [Member] | ||||
Business Combination, Separately Recognized Transactions [Line Items] | ||||
Cash and other current assets | 6,301,000 | |||
Property and equipment | 1,663,000 | $ 2,415,000 | ||
Other non current assets | 1,746,000 | |||
Intangible assets | 2,510,000 | |||
Current liabilities | (3,368,000) | |||
Reserve for uncertain tax positions | (1,829,000) | |||
Deferred income taxes, net | (3,564,000) | |||
Non-current liabilities | (767,000) | |||
Total net identifiable assets acquired | 2,692,000 | |||
Goodwill | 11,526,000 | |||
Total net assets acquired | 14,218,000 | |||
Leesville [Member] | ||||
Business Combination, Separately Recognized Transactions [Line Items] | ||||
Cash and other current assets | 5,643,000 | |||
Property and equipment | 641,000 | |||
Other non current assets | 0 | |||
Intangible assets | 6,470,000 | |||
Current liabilities | (654,000) | |||
Reserve for uncertain tax positions | (203,000) | |||
Deferred income taxes, net | (4,297,000) | |||
Non-current liabilities | 0 | |||
Total net identifiable assets acquired | 7,600,000 | |||
Goodwill | 9,643,000 | |||
Total net assets acquired | 17,243,000 | |||
Founding Companies [Member] | ||||
Business Combination, Separately Recognized Transactions [Line Items] | ||||
Goodwill | $ 70,810,000 | |||
Ocean County Auto Wreckers Inc [Member] | ||||
Business Combination, Separately Recognized Transactions [Line Items] | ||||
Property and equipment | $ 279,000 | |||
Other non current assets | 1,000 | |||
Intangible assets | 870,000 | |||
Current liabilities | (553,000) | |||
Reserve for uncertain tax positions | (1,808,000) | |||
Deferred income taxes, net | 0 | |||
Non-current liabilities | (2,000) | |||
Total net identifiable assets acquired | 1,577,000 | |||
Goodwill | 1,642,000 | $ 1,642,000 | ||
Total net assets acquired | $ 3,219,000 |
Schedule of Preliminary Amoun34
Schedule of Preliminary Amounts Recognized as of Acquisition Date for Each Major Class of Assets Acquired and Liabilities Assumed (Footnote) (Detail) | May. 19, 2015 | Sep. 30, 2015 |
Business Combination, Separately Recognized Transactions [Line Items] | ||
Inventory mark up percentage | 90.00% | |
Selling cost and profit margin percentage | 10.00% | |
Minimum [Member] | ||
Business Combination, Separately Recognized Transactions [Line Items] | ||
Expected sale period of acquired inventory | 6 months | |
Remaining useful life | 3 years | |
Estimated useful lives of intangible assets | 1 year | |
Maximum [Member] | ||
Business Combination, Separately Recognized Transactions [Line Items] | ||
Expected sale period of acquired inventory | 9 months | |
Remaining useful life | 6 years | |
Estimated useful lives of intangible assets | 15 years | |
Customer Relationships [Member] | ||
Business Combination, Separately Recognized Transactions [Line Items] | ||
Estimated useful lives of intangible assets | 15 years | |
Go Pull-It LLC [Member] | ||
Business Combination, Separately Recognized Transactions [Line Items] | ||
Ownership percentage | 5.00% | |
Minority interest ownership percentage | 95.00% |
Schedule of Preliminary Amoun35
Schedule of Preliminary Amounts Recognized as of Acquisition Date for Each Major Class of Assets Acquired and Liabilities Assumed (Allocation of Intangible Assets) (Detail) $ in Thousands | Sep. 30, 2015USD ($) |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets | $ 34,820 |
Trade Names [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets | 5,670 |
Customer Relationships [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets | 25,970 |
Noncompete Agreements [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets | 1,710 |
Off-Market Favorable Lease [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets | $ 1,470 |
Schedule of Preliminary Amoun36
Schedule of Preliminary Amounts Recognized as of Acquisition Date for Each Major Class of Assets Acquired and Liabilities Assumed (Description of Estimates or Ranges of Inputs) (Non-printing) (Detail) | 9 Months Ended |
Sep. 30, 2015 | |
Multi Period Excess Earnings Method [Member] | Customer Relationships [Member] | |
Business Combination, Separately Recognized Transactions [Line Items] | |
Annual customer attrition rate | 10.00% |
Multi Period Excess Earnings Method [Member] | Customer Relationships [Member] | Minimum [Member] | |
Business Combination, Separately Recognized Transactions [Line Items] | |
Compound annual revenue growth rate in forecast period | 2.10% |
Gross margin in forecast period | 29.90% |
Contributory asset charges as a percentage of revenue | 0.00% |
Discount rate | 12.50% |
Tax rate | 38.60% |
Multi Period Excess Earnings Method [Member] | Customer Relationships [Member] | Maximum [Member] | |
Business Combination, Separately Recognized Transactions [Line Items] | |
Compound annual revenue growth rate in forecast period | 3.10% |
Gross margin in forecast period | 48.10% |
Contributory asset charges as a percentage of revenue | 2.60% |
Discount rate | 16.00% |
Tax rate | 40.90% |
Relief from Royalty Method [Member] | Trade Names [Member] | |
Business Combination, Separately Recognized Transactions [Line Items] | |
Royalty rate | 2.00% |
Relief from Royalty Method [Member] | Trade Names [Member] | Minimum [Member] | |
Business Combination, Separately Recognized Transactions [Line Items] | |
Compound annual revenue growth rate in forecast period | 3.00% |
Percentage of revenue attributable to trade name in forecast year | 20.00% |
Discount rate | 11.50% |
Tax rate | 38.60% |
Relief from Royalty Method [Member] | Trade Names [Member] | Maximum [Member] | |
Business Combination, Separately Recognized Transactions [Line Items] | |
Compound annual revenue growth rate in forecast period | 6.20% |
Percentage of revenue attributable to trade name in forecast year | 100.00% |
Discount rate | 14.00% |
Tax rate | 40.90% |
Business Combinations Schedule
Business Combinations Schedule of approximate fair values of assets acquired and liabilities assumed at the date of acquisition (Details) - USD ($) | Aug. 14, 2015 | May. 19, 2015 | Sep. 30, 2015 | May. 18, 2015 |
Business Acquisition [Line Items] | ||||
Total Combination Consideration | $ 130,275,000 | |||
Aggregate business combination consideration, paid in cash | 88,135,000 | |||
Property and equipment | 2,415,000 | $ 11,755,000 | ||
Other non current assets | $ 450,000 | 5,204,000 | ||
Intangible assets | 34,820,000 | |||
Current liabilities | (8,809,000) | |||
Reserve for uncertain tax positions | (23,494,000) | |||
Deferred income taxes, net | (4,576,000) | |||
Non-current liabilities | (1,330,000) | |||
Total net identifiable assets acquired | 59,633,000 | |||
Goodwill | 70,995,317 | $ 70,810,000 | ||
Total net assets acquired | $ 130,443,000 | |||
Ocean County Auto Wreckers Inc [Member] | ||||
Business Acquisition [Line Items] | ||||
Percentage acquired | 100.00% | |||
Total Combination Consideration | $ 3,220,000 | |||
Aggregate business combination consideration, paid in cash | 2,624,000 | |||
Cash and other current assets | 2,790,000 | |||
Property and equipment | 279,000 | |||
Other non current assets | 1,000 | |||
Intangible assets | 870,000 | |||
Current liabilities | (553,000) | |||
Reserve for uncertain tax positions | 0 | |||
Deferred income taxes, net | (1,808,000) | |||
Non-current liabilities | (2,000) | |||
Total net identifiable assets acquired | 1,577,000 | |||
Goodwill | 1,642,000 | $ 1,642,000 | ||
Total net assets acquired | $ 3,219,000 | |||
Business combination, stock issued as consideration | 59,709 |
Combinations with Founding Comp
Combinations with Founding Companies - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Combination agreement date | May 19, 2015 |
Schedule of Pro Forma Results o
Schedule of Pro Forma Results of Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Product Information [Line Items] | ||||||
Revenue | $ 27,275 | $ 28,151 | $ 28,151 | $ 82,375 | $ 82,946 | $ 82,946 |
Net loss | (7,155) | $ (2,604) | (14,784) | $ (3,528) | ||
Recycled OEM Parts [Member] | ||||||
Product Information [Line Items] | ||||||
Revenue | 22,839 | 22,330 | 66,359 | 65,917 | ||
Scrap, Warranty And Other [Member] | ||||||
Product Information [Line Items] | ||||||
Revenue | $ 4,436 | $ 5,821 | $ 16,016 | $ 17,029 |
Long-Term Obligations - Additio
Long-Term Obligations - Additional Information (Detail) | May. 19, 2015USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2015USD ($)payment | May. 06, 2015USD ($) |
Debt Instrument [Line Items] | ||||
Letter of credit | $ 5,900,000 | $ 5,900,000 | ||
Amortized debt issuance costs | 16,000 | 26,000 | ||
Unamortized debt issuance expense | $ 412,000 | $ 412,000 | $ 438,000 | |
Obligations [Member] | Secured Debt [Member] | ||||
Debt Instrument [Line Items] | ||||
Senior secured credit facility | 35,000,000 | |||
Line of credit | $ 10,000,000 | |||
Letter of credit | $ 5,900,000 | |||
Additional borrowing capacity | $ 20,000,000 | |||
Term of revolving credit facility | 5 years | |||
Securities owned and pledged as collateral, description | the Company pledged all of the stock in its domestic subsidiaries as security and 66% of the stock of its direct, Canadian subsidiary, Fenix Canada (other than its exchangeable preferred shares). | |||
Debt covenant, percentage of net income added to tangible net worth | 50.00% | |||
Obligations [Member] | Secured Debt [Member] | Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Senior secured credit facility | $ 25,000,000 | |||
Obligations [Member] | Secured Debt [Member] | Revolving Credit Facility [Member] | United States of America, Dollars [Member] | ||||
Debt Instrument [Line Items] | ||||
Senior secured credit facility | 20,000,000 | |||
Obligations [Member] | Secured Debt [Member] | Revolving Credit Facility [Member] | United States of America, Dollars [Member] | Letter of Credit [Member] | ||||
Debt Instrument [Line Items] | ||||
Senior secured credit facility | 7,500,000 | |||
Obligations [Member] | Secured Debt [Member] | Revolving Credit Facility [Member] | Canadian Dollar and US Dollar [Member] | ||||
Debt Instrument [Line Items] | ||||
Senior secured credit facility | 5,000,000 | |||
Obligations [Member] | Secured Debt [Member] | Revolving Credit Facility [Member] | Canadian Dollar and US Dollar [Member] | Letter of Credit [Member] | ||||
Debt Instrument [Line Items] | ||||
Senior secured credit facility | 2,500,000 | |||
Obligations [Member] | Secured Debt [Member] | Term Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Senior secured credit facility | $ 10,000,000 | |||
Obligations [Member] | Secured Debt [Member] | Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt covenant, leverage ratio | 2.75 | |||
Obligations [Member] | Secured Debt [Member] | Minimum [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt covenant, fixed charge coverage ratio | 1.2 | |||
Debt covenant, tangible net worth | $ 102,600,000 | |||
Obligations [Member] | Secured Debt [Member] | United States [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, description of variable rate basis | The base rate is the highest of (i) the rate BMO Harris Bank N.A. announces as its “prime rate,” (ii) 0.50% above the rate on overnight federal funds transactions or (iii) the London Interbank Offered Rate (LIBOR) for an interest period of one month plus 1.00%. The applicable margin is based on our total leverage ratio. The initial margin for interest rates on borrowings under the credit facility is 2.00% on LIBOR loans and 1.00% on base rate loans. | |||
Obligations [Member] | Secured Debt [Member] | United States [Member] | Overnight Federal Funds Rate Base [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, basis spread on variable rate | 0.50% | |||
Obligations [Member] | Secured Debt [Member] | United States [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, basis spread on variable rate | 1.00% | |||
Initial margin of interest | 2.00% | 2.00% | ||
Obligations [Member] | Secured Debt [Member] | United States [Member] | Base Rate [Member] | ||||
Debt Instrument [Line Items] | ||||
Initial margin of interest | 1.00% | 1.00% | ||
Obligations [Member] | Secured Debt [Member] | Canada [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, description of variable rate basis | The Canadian Dollar Offered Rate (CDOR) for an interest period equal to the term of any applicable borrowing plus 0.50%. The applicable margin is based on our total leverage ratio. The initial margin for interest rates on borrowings under the credit facility is 1.00% on base rate loans. | |||
Obligations [Member] | Secured Debt [Member] | Canada [Member] | Base Rate [Member] | ||||
Debt Instrument [Line Items] | ||||
Initial margin of interest | 1.00% | 1.00% | ||
Obligations [Member] | Secured Debt [Member] | Canada [Member] | Canadian Dollar Offered Rate [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, basis spread on variable rate | 0.50% | |||
Go Pull-It Promissory Note [Member] | Notes Payable, Other Payables [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument | $ 200,000 | $ 200,000 | ||
Number of payments | payment | 2 | |||
Go Pull-It LLC [Member] | ||||
Debt Instrument [Line Items] | ||||
Ownership percentage | 5.00% | |||
Investments | 450,000 | $ 450,000 | ||
Total consideration | $ 250,000 |
Schedule of Long-Term Obligatio
Schedule of Long-Term Obligations (Detail) $ in Thousands | Sep. 30, 2015USD ($) |
Line of Credit Facility [Line Items] | |
Term loan | $ 9,338 |
Go Pull-It note | 200 |
Notes and loans, noncurrent | 9,538 |
Less current maturities | 750 |
Long-term debt noncurrent | $ 8,788 |
Accrued Expenses and Other Cu42
Accrued Expenses and Other Current Liabilities (Detail) | Jan. 02, 2014Entity | May. 19, 2015Entity | Sep. 30, 2015USD ($) | Dec. 31, 2014USD ($) |
Payables and Accruals [Abstract] | ||||
Accounting, consulting and legal fees | $ 0 | $ 48,431 | ||
Accrued salaries and employee benefits | 1,097,834 | 175,000 | ||
Other liabilities | 1,790,171 | 80,300 | ||
Total accrued expenses and other current liabilities | $ 2,888,005 | $ 303,731 | ||
Number of businesses acquired | Entity | 8 | 8 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2015USD ($) | Sep. 30, 2015USD ($) | |
Income Tax Disclosure [Abstract] | ||
Valuation allowance | $ 1,800,000 | |
Effective tax rate | (44.70%) | (40.00%) |
Tax position, interest and penalties | $ 1,000,000 | |
Reserve for uncertain tax positions | $ 4,663,162 | $ 4,663,162 |
Common Stock - Additional Infor
Common Stock - Additional Information (Detail) | May. 19, 2015USD ($)$ / sharesshares | Jan. 31, 2015USD ($) | Jan. 31, 2014shares | Apr. 30, 2014$ / sharesshares | Apr. 30, 2015$ / sharesshares | Sep. 30, 2015USD ($)$ / sharesshares | Jan. 02, 2014$ / shares |
Class of Stock [Line Items] | |||||||
Common stock issued in public offering, shares | 13,800,000 | 1,800,000 | 402,000 | 546,927 | |||
Shares issued, price per share | $ / shares | $ 5 | $ 6.50 | |||||
Shares issued for no cash consideration to convert investments | 20,000 | ||||||
Shares issued, issuance cost | $ | $ 131,000 | ||||||
Gross proceeds from common stock issued in public offering | $ | $ 102,672,000 | ||||||
Net proceeds from IPO | $ | $ 101,300,000 | ||||||
Agreements that relate to the common stock sales | The agreements that relate to the common stock sales in March, April and September 2014 included provisions that obligated the holders of the common stock issued in January 2014 to compensate the investors in the later sales if the IPO price of Fenix common stock was less than $10.00 per share. | ||||||
Share price threshold | $ / shares | $ 10 | ||||||
IPO [Member] | |||||||
Class of Stock [Line Items] | |||||||
Shares issued, price per share | $ / shares | $ 8 | $ 8 | |||||
Common stock split ratio | 2,000 | ||||||
Gross proceeds from common stock issued in public offering | $ | $ 110,400,000 | ||||||
Shares transferred from initial investors to later investors | 237,231 | ||||||
Over-Allotment Option [Member] | |||||||
Class of Stock [Line Items] | |||||||
Common stock issued in public offering, shares | 1,800,000 | ||||||
Converted Investment [Member] | |||||||
Class of Stock [Line Items] | |||||||
Shares issued, price per share | $ / shares | $ 7.50 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-Based Compensation - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | 9 Months Ended |
Jun. 30, 2015Employeeshares | Sep. 30, 2015USD ($)shares | Sep. 30, 2015USD ($)shares | |
Board Members [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options, service period | 1 year | ||
Stock options, vesting period description | on the first anniversary of the award date | ||
Employee Stock Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options, life | 10 years | ||
Vesting period | 4 years | ||
Unrecognized compensation costs related to stock option awards | $ | $ 3,650,000 | $ 3,650,000 | |
Unrecognized compensation costs related to stock option awards weighted average period | 3 years 3 months 18 days | ||
Restricted Stock Units (RSUs) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares issued | 150,000 | ||
Number of shares vested | 0 | ||
Bonus Shares [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation costs related to restricted stock | $ | 1,189,000 | $ 1,189,000 | |
Unrecognized compensation costs related to stock option awards weighted average period | 4 years 4 months 24 days | ||
Other Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation expense | $ | $ 217,000 | ||
Common stock issued upon vesting | 20,000 | ||
Number of employees | Employee | 2 | ||
Leesville Bonus Shares [Member] | Bonus Shares [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation expense | $ | $ 546,000 | $ 832,000 | |
Vesting period | 12 months | ||
Number of shares issued | 271,112 | ||
2014 Incentive Stock Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares reserved for share-based awards | 2,750,000 | 2,750,000 | |
Number of shares available for share based awards | 1,014,000 | 1,014,000 | |
Minimum [Member] | Restricted Stock Units (RSUs) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 4 years | ||
Maximum [Member] | Restricted Stock Units (RSUs) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 5 years |
Stock-Based Compensation - Assu
Stock-Based Compensation - Assumptions of Weighted Average Fair Value of Stock Options Granted (Detail) | 9 Months Ended |
Sep. 30, 2015$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted average exercise price, shares granted (USD per share) | $ 9.10 |
May 13, 2015 Management Grant [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected dividend yield | 0.00% |
Expected volatility | 30.00% |
Minimum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted average exercise price, shares granted (USD per share) | $ 2.47 |
Minimum [Member] | May 13, 2015 Management Grant [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate | 1.57% |
Expected life of option | 5 years 3 months 18 days |
Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted average exercise price, shares granted (USD per share) | $ 3.33 |
Maximum [Member] | May 13, 2015 Management Grant [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate | 1.85% |
Expected life of option | 6 years 3 months 18 days |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Option Activity (Detail) $ / shares in Units, $ in Thousands | 9 Months Ended |
Sep. 30, 2015USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Number of Options, Outstanding beginning balance (in shares) | 0 |
Number of Options, Granted (in shares) | 1,556,297 |
Number of Options, Exercised (in shares) | 0 |
Number of Options, Expired or forfeited (in shares) | 0 |
Number of Options, Outstanding ending balance (in shares) | 1,556,297 |
Number of Options, Exercisable ending balance (in shares) | 0 |
Weighted-Average Exercise Price Per Share, Outstanding beginning balance (USD per share) | $ / shares | $ 0 |
Weighted average exercise price, shares granted (USD per share) | $ / shares | 9.10 |
Weighted-Average Exercise Price Per Share, Exercised (USD per share) | $ / shares | 0 |
Weighted-Average Exercise Price Per Share, Expired or forfeited (USD per share) | $ / shares | 0 |
Weighted-Average Exercise Price Per Share, Outstanding ending balance (USD per share) | $ / shares | 9.10 |
Weighted-Average Exercise Price Per Share, Exercisable Ending Balance | $ / shares | $ 0 |
Weighted-Average Remaining Contractual Term in Years, Outstanding | 8 years 8 months 18 days |
Weighted-Average Remaining Contractual Term in Years, Exercisable | |
Aggregate Intrinsic Value Outstanding, Ending Balance | $ | $ 0 |
Aggregate Intrinsic Value Exercisable, Ending Balance | $ | $ 0 |
Stock-Based Compensation - Shar
Stock-Based Compensation - Share-Based Compensation Costs (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2015 | Sep. 30, 2015 | |
Operating Expense [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Compensation expense | $ 1,144,437 | $ 1,708,420 |
Employee Stock Option [Member] | Operating Expense [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Compensation expense | 519,899 | 582,082 |
Restricted Stock Units (RSUs) [Member] | Operating Expense [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Compensation expense | 77,859 | 77,859 |
Leesville Bonus Shares [Member] | Operating Expense [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Compensation expense | 546,679 | 831,679 |
Other Awards [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Compensation expense | 217,000 | |
Other Awards [Member] | Operating Expense [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Compensation expense | $ 0 | $ 216,800 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Unit Activity (Details) - Restricted Stock Units (RSUs) [Member] - $ / shares | 9 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Unvested restricted stock units, beginning balance (Shares) | 150,000 | 0 |
Unvested restricted stock units, granted (Shares) | 150,000 | |
Unvested restricted stock units, forfeited (shares) | 0 | |
Unvested restricted stock units, vested (Shares) | 0 | |
Unvested restricted stock units, ending balance (Shares) | 150,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||
Unvested restricted stock units, weighted average grant date fair value, beginning balance (USD per shares) | $ 9.66 | $ 0 |
Unvested restricted stock units, weighted average grant date fair value, grants (USD per share) | 9.66 | |
Unvested restricted stock units, weighted average grant date fair value, forfeited (USD per share) | 0 | |
Unvested restricted stock units, weighted average grant date fair value, vested (USD per share) | 0 | |
Unvested restricted stock units, weighted average grant date fair value, ending balance (USD per shares) | $ 9.66 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) | May. 19, 2015Property | Sep. 30, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) |
Variable Interest Entity [Line Items] | ||||
Lease expiration period with option to renew | 15 years | |||
Number of properties leased | Property | 17 | |||
Scheduled payments under operating lease | $ 35,800,000 | $ 35,800,000 | ||
Rent expense | $ 1,032,000 | 1,231,000 | ||
Difference between contractual payments of lease and then-current market rental rates which served to reduce combinations consideration | $ 1,470,000 | |||
Remaining Investment ownership Percentage | 95.00% | 95.00% | ||
Investment in affiliate | $ 29,793 | $ 29,793 | ||
Ownership percentage by member of management | 50.00% | 50.00% | ||
Lease payment in post combination period | $ 3,000 | |||
Related party revenue | $ 26,000 | |||
Go Pull-It LLC [Member] | ||||
Variable Interest Entity [Line Items] | ||||
Ownership percentage | 5.00% | |||
Investment in affiliate | $ 30,000 | |||
Option to purchase VIE non-cash impairment charge | $ 367,000 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2015 | Sep. 30, 2015 | |
Postemployment Benefits [Abstract] | ||
Employer discretionary contribution amount to defined contribution plan | $ 219 | $ 281 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - USD ($) $ in Thousands | May. 19, 2015 | Oct. 31, 2015 | Jun. 30, 2015 |
Subsequent Event [Line Items] | |||
Aggregate purchase consideration in cash | $ 88,135 | ||
Butler And Tri-City [Member] | |||
Subsequent Event [Line Items] | |||
Combined revenues of acquisitions | $ 17,000 | ||
Subsequent Event [Member] | Butler And Tri-City [Member] | |||
Subsequent Event [Line Items] | |||
Aggregate purchase consideration in cash | $ 14,900 | ||
Line of credit borrowed for acquisition | $ 8,700 | ||
Common Stock [Member] | Subsequent Event [Member] | Butler And Tri-City [Member] | |||
Subsequent Event [Line Items] | |||
Aggregate purchase consideration in shares | 149,281 |
Uncategorized Items - fenx-2015
Label | Element | Value |
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | $ 2,895,000 |
Additional Paid-in Capital [Member] | ||
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | 2,892,914 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest | 2,892,914 |
Common Stock [Member] | ||
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | 2,086 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest | $ 2,086 |
Shares, Outstanding | us-gaap_SharesOutstanding | 2,086,000 |
Stock Issued During Period, Shares, New Issues | us-gaap_StockIssuedDuringPeriodSharesNewIssues | 2,086,000 |
Retained Earnings [Member] | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest | $ (2,796,328) |