Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | Apr. 30, 2017 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | Sequential Brands Group, Inc. | |
Entity Central Index Key | 1,648,428 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Trading Symbol | SQBG | |
Entity Common Stock, Shares Outstanding | 62,996,280 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Current Assets: | ||
Cash | $ 21,457 | $ 19,133 |
Restricted cash | 1,521 | 1,521 |
Accounts receivable, net | 44,879 | 53,195 |
Available-for-sale securities | 6,178 | 7,673 |
Prepaid expenses and other current assets | 4,822 | 4,366 |
Total current assets | 78,857 | 85,888 |
Property and equipment, net | 6,815 | 7,674 |
Intangible assets, net | 1,030,065 | 1,030,212 |
Goodwill | 307,744 | 307,744 |
Other assets | 3,158 | 3,345 |
Total assets | 1,426,639 | 1,434,863 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 17,514 | 18,915 |
Current portion of long-term debt | 28,300 | 28,300 |
Current portion of deferred revenue | 9,535 | 10,374 |
Total current liabilities | 55,349 | 57,589 |
Long-term debt, net of current portion | 610,647 | 616,735 |
Long-term deferred revenue, net of current portion | 12,996 | 13,909 |
Deferred tax liability | 200,930 | 200,357 |
Other long-term liabilities | 8,299 | 8,705 |
Long-Term Liabilities: | ||
Total liabilities | 888,221 | 897,295 |
Commitments and Contingencies | ||
Equity: | ||
Preferred stock Series A, $0.01 par value; 10,000,000 shares authorized; none issued and outstanding at March 31, 2017 and December 31, 2016 | 0 | 0 |
Common stock, $0.01 par value; 150,000,000 shares authorized; 63,381,607 and 62,602,041 shares issued at March 31, 2017 and December 31, 2016, respectively, and 62,996,280 and 62,504,355 shares outstanding at March 31, 2017 and December 31, 2016, respectively | 632 | 624 |
Additional paid-in capital | 507,103 | 502,564 |
Accumulated other comprehensive loss | (1,623) | (144) |
Accumulated deficit | (40,831) | (39,651) |
Treasury stock, at cost; 385,327 and 97,686 shares at March 31, 2017 and December 31, 2016, respectively | (1,702) | (638) |
Total Sequential Brands Group, Inc. and Subsidiaries stockholders’ equity | 463,579 | 462,755 |
Noncontrolling interest | 74,839 | 74,813 |
Total equity | 538,418 | 537,568 |
Total liabilities and equity | $ 1,426,639 | $ 1,434,863 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
Preferred stock Series A, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock Series A, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock Series A, shares issued | 0 | 0 |
Preferred stock Series A, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 63,381,607 | 62,602,041 |
Common stock, shares outstanding | 62,996,280 | 62,504,355 |
Treasury stock, shares | 385,327 | 97,686 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Net revenue | $ 39,400 | $ 34,008 |
Operating expenses | 23,408 | 21,977 |
Income from operations | 15,992 | 12,031 |
Other income | 34 | 93 |
Interest expense, net | 14,486 | 10,690 |
Income before income taxes | 1,540 | 1,434 |
Provision for income taxes | 585 | 399 |
Net income | 955 | 1,035 |
Net income attributable to noncontrolling interest | (2,135) | (2,111) |
Net loss attributable to Sequential Brands Group, Inc. and Subsidiaries | $ (1,180) | $ (1,076) |
Loss per share attributable to Sequential Brands Group, Inc. and Subsidiaries: | ||
Basic and diluted (in dollars per share) | $ (0.02) | $ (0.02) |
Weighted-average common shares outstanding: | ||
Basic and diluted (in shares) | 62,459,711 | 61,209,868 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - 3 months ended Mar. 31, 2017 - USD ($) $ in Thousands | Total | Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Treasury Stock | Total Sequential Brands Group, Inc. and Subsidiaries Stockholders' Equity | Noncontrolling Interest |
Balance at Dec. 31, 2016 | $ 537,568 | $ 0 | $ 624 | $ 502,564 | $ (144) | $ (39,651) | $ (638) | $ 462,755 | $ 74,813 |
Balance (in shares) at Dec. 31, 2016 | 0 | 62,602,041 | (97,686) | ||||||
Stock-based compensation | 4,550 | $ 0 | $ 8 | 4,542 | 0 | 0 | $ 0 | 4,550 | 0 |
Stock-based compensation (in shares) | 779,566 | 0 | |||||||
Stock registration costs | (3) | 0 | $ 0 | (3) | 0 | 0 | $ 0 | (3) | 0 |
Unrealized gain on interest rate cap | 16 | 0 | 0 | 0 | 16 | 0 | 0 | 16 | 0 |
Repurchase of common stock | (1,064) | 0 | $ 0 | 0 | 0 | 0 | $ (1,064) | (1,064) | 0 |
Repurchase of common stock (in shares) | 0 | (287,641) | |||||||
Noncontrolling interest distribution | (2,109) | 0 | $ 0 | 0 | 0 | 0 | $ 0 | 0 | (2,109) |
Net income attributable to noncontrolling interest | 2,135 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 2,135 |
Net loss attributable to common stockholders | (1,180) | 0 | 0 | 0 | 0 | (1,180) | 0 | (1,180) | 0 |
Unrealized gain and reclassification adjustment on available-for-sale securities | (1,495) | 0 | 0 | 0 | (1,495) | 0 | 0 | (1,495) | 0 |
Balance at Mar. 31, 2017 | $ 538,418 | $ 0 | $ 632 | $ 507,103 | $ (1,623) | $ (40,831) | $ (1,702) | $ 463,579 | $ 74,839 |
Balance (in shares) at Mar. 31, 2017 | 0 | 63,381,607 | (385,327) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash Flows From Operating Activities | ||
Net income | $ 955 | $ 1,035 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision for bad debts | 38 | 75 |
Depreciation and amortization | 1,293 | 1,143 |
Stock-based compensation | 4,550 | 1,780 |
Amortization of deferred financing costs | 987 | 432 |
Income from equity method investment | (31) | 0 |
Loss on disposal of fixed assets | 2 | 501 |
Deferred income taxes | 573 | 368 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 8,278 | 7,348 |
Prepaid expenses and other assets | (222) | 1,291 |
Accounts payable and accrued expenses | (1,504) | (5,136) |
Deferred revenue | (1,752) | (1,134) |
Other liabilities | 244 | (887) |
Cash Provided By Operating Activities | 13,411 | 6,816 |
Cash Flows From Investing Activities | ||
Investments in intangible assets, including registration and renewal costs | (130) | (72) |
Purchases of property and equipment | (133) | (607) |
Proceeds from sale of property and equipment | 2 | 45 |
Cash Used In Investing Activities | (261) | (634) |
Cash Flows From Financing Activities | ||
Stock registration costs | (3) | 0 |
Payment of long-term debt | (7,075) | (4,000) |
Guaranteed payments in connection with acquisitions | (575) | (325) |
Repurchases of common stock | (1,064) | (501) |
Noncontrolling interest distributions | (2,109) | (1,537) |
Cash Used In Financing Activities | (10,826) | (6,363) |
Net Increase (Decrease) In Cash | 2,324 | (181) |
Cash Beginning of period | 19,133 | 41,560 |
Cash End of period | 21,457 | 41,379 |
Supplemental Disclosures Of Cash Flow Information | ||
Cash paid for: Interest | 13,393 | 10,000 |
Cash paid for: Taxes | 0 | 81 |
Non-cash Investing And Financing Activities | ||
Accrued purchases of property and equipment at period end | 28 | 0 |
Unrealized (loss) gain on available-for-sale securities during the period | (1,495) | 1,002 |
Unrealized gain on interest rate cap during the period | $ 16 | $ 0 |
Organization and Nature of Oper
Organization and Nature of Operations | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Operations | 1. Organization and Nature of Operations Overview Sequential Brands Group, Inc. (the “Company”) owns a portfolio of consumer brands in the fashion, active and home categories. The Company aims to maximize the strategic value of its brands by promoting, marketing and licensing its global brands through various distribution channels, including to retailers, wholesalers and distributors in the United States and in certain international territories. The Company’s core strategy is to enhance and monetize the global reach of its existing brands, and to pursue additional strategic acquisitions to grow the scope of and diversify its portfolio of brands. The Company licenses brands to both wholesale and direct-to-retail licensees. In a wholesale license, a wholesale supplier is granted rights (typically on an exclusive basis) to a single or small group of related product categories for a particular brand for sale to multiple accounts within an approved channel of distribution and territory. In a direct-to-retail license, a single retailer is granted the right (typically on an exclusive basis) to sell branded products in a broad range of product categories through its brick and mortar stores and e-commerce sites. As of March 31, 2017, the Company had more than one-hundred fifty licensees, with wholesale licensees comprising a significant majority. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Rule 10-01 of Regulation S-X of the United States Securities and Exchange Commission (the “SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all of the information and footnotes necessary for a comprehensive presentation of financial position, results of operations or cash flows. It is the Company’s opinion, however, that the accompanying unaudited condensed consolidated financial statements include all adjustments, which are of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, as filed with the SEC on March 14, 2017, which contains the audited consolidated financial statements and notes thereto, together with Management’s Discussion and Analysis of Financial Condition and Results of Operations, for the years ended December 31, 2016, 2015 and 2014. The financial information as of December 31, 2016 is derived from the audited consolidated financial statements presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. The interim results for the three months ended March 31, 2017 are not necessarily indicative of the results to be expected for the year ending December 31, 2017 or for any future interim periods. The Company has corrected an immaterial error in its consolidated statement of cash flows for the three months ended March 31, 2016. This correction is related to the payment of certain guaranteed obligations in connection with previous acquisitions and reflects an increase in cash used in operating activities of $ 0.3 0.3 The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries. All significant inter-company accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of unaudited condensed 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 unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited condensed consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from estimates. The Company has entered into various license agreements that provide revenues based on guaranteed minimum royalty payments and advertising/marketing fees with additional royalty revenues based on a percentage of defined sales. Guaranteed minimum royalty payments and advertising/marketing revenue are recognized on a straight-line basis over the term of each contract year, as defined in each license agreement. Royalty payments exceeding the guaranteed minimum royalty payments are recognized as income during the period corresponding to the licensee’s sales. Payments received as consideration for the grant of a license are recorded as deferred revenue at the time payment is received and recognized ratably as revenue over the term of the license agreement. Advanced royalty payments are recorded as deferred revenue at the time payment is received and recognized as revenue when earned. Revenue is not recognized unless collectability is reasonably assured. If license agreements are terminated prior to the original licensing period, the Company recognizes revenue in the amount of any contractual termination fees, unless such amounts are deemed non-recoverable. With respect to editorial content for books, the Company receives advance payments from the Company’s publishers and recognizes revenue when manuscripts are delivered to and accepted by the publishers. Revenue is also earned from book publishing when sales on a unit basis exceed the advanced royalty. Television sponsorship revenues are generally recorded ratably across the period when new episodes initially air. Restricted cash consists of cash deposited with a financial institution required as collateral for the Company’s cash-collateralized letter of credit facilities. Accounts receivable are recorded net of allowances for doubtful accounts, based on the Company’s ongoing discussions with its licensees and other customers and its evaluation of their creditworthiness, payment history and account aging. Accounts receivable balances deemed to be uncollectible are charged to the allowance for doubtful accounts after all means of collection have been exhausted and the potential for recovery is considered remote. The allowance for doubtful accounts was approximately $ 0.2 The Company’s accounts receivable, net amounted to $ 44.9 53.2 48 17 16 15 49 14 13 12 10 The Company has marketable securities that are classified as available-for-sale securities under ASC 320, Investments Debt and Equity Securities March 31, 2017 Gross Unrealized Historical Cost Cost Basis (1) Estimated Fair Value Gains Losses (in thousands) Available-for-sale securities $ 12,048 $ 7,673 $ 6,178 $ - $ 1,495 (1) December 31, 2016 Gross Unrealized Historical Cost Cost Basis (1) Estimated Fair Value Gains Losses (in thousands) Available-for-sale securities $ 12,048 $ 7,673 $ 7,673 $ - $ - (1) Based on an evaluation at March 31, 2017, the Company has concluded that the decline in fair value of its available-for-sale securities is not other-than-temporary. The Company believes it has the intent and ability to hold its available-for-sale securities for a period of time sufficient to allow for a recovery in fair value to the Company’s current cost basis. The available-for-sale securities have been in a loss position for less than twelve months. For investments in entities over which the Company exercises significant influence but which do not meet the requirements for consolidation, the Company uses the equity method of accounting. On July 1, 2016, the Company acquired a 49.9 The Company evaluates its equity method investment for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investment may not be recoverable. The difference between the carrying value of the equity method investment and its estimated fair value is recognized as an impairment charge when the loss in value is deemed other-than-temporary. Goodwill is tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. In evaluating goodwill for impairment, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Qualitative factors considered include, for example, macroeconomic and industry conditions, overall financial performance, and other relevant entity-specific events. If the Company bypasses the qualitative assessment, or concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying value, it then performs a goodwill impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment to be recognized, if any. The Company will compare the estimated fair value of the reporting unit with its carrying value. The Company has determined that it has a single reporting unit and considers its market capitalization (calculated as total common shares outstanding multiplied by the common equity price per share, as adjusted for a control premium factor) to represent its estimated fair value. If the estimated fair value of the reporting unit exceeds its carrying amount, no further analysis is needed. If, however, the estimated fair value of the reporting unit is less than its carrying amount, the Company will recognize an impairment charge for the amount by which the carrying value exceeds the reporting unit’s fair value. Intangible assets represent trademarks, customer agreements and patents related to the Company’s brands and a favorable lease. Finite-lived intangible assets are amortized on a straight-line basis over the estimated useful lives of the assets. Indefinite-lived intangible assets are not amortized, but instead are subject to impairment evaluation. The carrying value of intangible assets and other finite-lived assets is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Indefinite-lived intangible assets are tested for impairment on an annual basis and between annual tests if an event occurs or circumstances change that indicate that the carrying amount of the indefinite-lived intangible asset may not be recoverable. When conducting its impairment assessment, the Company initially performs a qualitative evaluation of whether it is more likely than not that the asset is impaired. If it is determined by a qualitative evaluation that it is more likely than not that the asset is impaired, the Company then tests the asset for recoverability. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the asset to its future undiscounted net cash flows. If the carrying amount of such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the recoverability of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. Treasury stock is recorded at cost as a reduction of equity in the condensed consolidated balance sheets. Compensation cost for restricted stock is measured using the quoted market price of the Company’s common stock at the date the common stock is granted. For restricted stock and restricted stock units, for which restrictions lapse with the passage of time (“time-based restricted stock”), compensation cost is recognized on a straight-line basis over the period between the issue date and the date that restrictions lapse. Time-based restricted stock is included in total shares of common stock outstanding upon the lapse of applicable restrictions. For restricted stock, for which restrictions are based on performance measures (“performance stock units” or “PSUs”), restrictions lapse when those performance measures have been deemed achieved. Compensation cost for PSUs is recognized on a straight-line basis during the period from the date on which the likelihood of the PSUs being earned is deemed probable and (x) the end of the fiscal year during which such PSUs are granted or (y) the date on which awards of such PSUs may be approved by the compensation committee of the Company’s board of directors (the “Compensation Committee”) on a discretionary basis, as applicable. PSUs are included in total shares of common stock outstanding upon the lapse of applicable restrictions. PSUs are included in total diluted shares of common stock outstanding when the performance measures have been deemed achieved but the PSUs have not yet been issued. Fair value cost for stock options and warrants is calculated using the Black-Scholes valuation model and is expensed on a straight-line basis over the requisite service period of the grant. The Company elected to early adopt the provisions of ASU 2016-09 “Simplifying the Accounting for Share-Based Payments” (“ASU 2016-09”) and will reduce compensation cost for actual forfeitures as they occur. Prior to the adoption to ASU 2016-09, the Company’s estimated forfeiture rate utilized in calculating compensation cost was zero percent based on the Company’s limited historical forfeiture experience. At each subsequent reporting period prior to the lapse of restrictions on warrants, time-based restricted stock and PSUs granted to non-employees, the Company remeasures the aggregate compensation cost of such grants using the Company’s fair value at the end of such reporting period and revises the straight-line recognition of compensation cost in line with such remeasured amount. The Company leases certain properties for office and showroom. Certain of the Company’s lease agreements contain rent escalation clauses, free rent periods and tenant inducement payments. Rent expense for noncancelable operating leases with scheduled rent increases is recognized on a straight-line basis over the expected lease term. The difference between straight-line rent expense and the scheduled payment amounts is recorded as a deferred rent asset or liability. Current income taxes are based on the respective periods’ taxable income for federal, foreign and state income tax reporting purposes. Deferred tax liabilities and assets are determined based on the difference between the financial statement and income tax bases of assets and liabilities, using statutory tax rates in effect for the year in which the differences are expected to reverse. In accordance with ASU No. 2015-17 “Balance Sheet Classification of Deferred Taxes,” all deferred income taxes are reported and classified as non-current. A valuation allowance is required if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company applies the Financial Accounting Standards Board (“FASB”) guidance on accounting for uncertainty in income taxes. The guidance clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with other authoritative GAAP and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The guidance also addresses derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Interest and penalties related to uncertain tax positions, if any, are recorded in income tax expense. Tax years that remain open for assessment for federal and state tax purposes include the years ended December 31, 2013 through December 31, 2016. Basic earnings per share (“EPS”) is computed by dividing net income (loss) attributable to Sequential Brands Group, Inc. and Subsidiaries by the weighted-average number of common shares outstanding during the reporting period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to all potentially dilutive common shares outstanding during the reporting period, including stock options, PSUs and warrants, using the treasury stock method, and convertible debt, using the if-converted method. Diluted EPS excludes all potentially dilutive shares of common stock if their effect is anti-dilutive. Three Months Ended March 31, 2017 2016 Basic weighted-average common shares outstanding 62,459,711 61,209,868 Acquisition hold back shares - - Warrants - - Stock options - - Performance based restricted stock - - Unvested restricted stock - - Diluted weighted-average common shares outstanding 62,459,711 61,209,868 Three Months Ended March 31, 2017 2016 Acquisition hold back shares - 695,055 Warrants - 330,671 Stock options - 12,796 Performance based restricted stock 263,964 408,555 Unvested restricted stock 88,941 94,236 Total 352,905 1,541,313 Financial instruments which potentially expose the Company to credit risk consist primarily of cash, restricted cash, accounts receivable and available-for-sale securities. Cash is held to meet working capital needs and future acquisitions. Restricted cash is pledged as collateral for a comparable amount of irrevocable standby letters of credit for certain of the Company’s leased properties. Substantially all of the Company’s cash, restricted cash and available-for-sale securities are deposited with high quality financial institutions. At times, however, such cash, restricted cash and available-for-sale securities may be in deposit accounts that exceed the Federal Deposit Insurance Corporation insurance limit. The Company has not experienced any losses in such accounts as of March 31, 2017. Concentration of credit risk with respect to accounts receivable is minimal due to the collection history. The Company performs annual credit evaluations of its customers’ financial condition. The allowance for doubtful accounts is based upon the expected collectability of all accounts receivable. The Company recorded net revenues of $ 39.4 34.0 10 11 10 10 10 11 The Company recognizes contingent losses that are both probable and estimable. In this context, probable means circumstances under which events are likely to occur. The Company records legal costs pertaining to contingencies as incurred. The Company recognizes the acquisition-date fair value of contingent consideration as part of the consideration transferred in exchange for the acquiree or assets of the acquiree in a business combination. The contingent consideration is classified as either a liability or equity in accordance with ASC 480-10, Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity Noncontrolling interest recorded for the three months ended March 31, 2017 and 2016 represents income allocations to Elan Polo International, Inc., a member of DVS Footwear International, LLC and With You, Inc., a member of With You LLC (the partnership between the Company and Jessica Simpson). Noncontrolling interest recorded for the three months ended March 31, 2016 represents income allocations to Elan Polo International, Inc., With You, Inc. and JALP, LLC (“JALP”), a member of FUL IP Holdings, LLC (“FUL IP”). An operating segment, in part, is a component of an enterprise whose operating results are regularly reviewed by the chief operating decision maker (the “CODM”) to make decisions about resources to be allocated to the segment and assess its performance. Operating segments may be aggregated only to a limited extent. The Company’s CODM, the Chief Executive Officer, reviews financial information presented on a consolidated basis, accompanied by disaggregated information about revenues for purposes of making operating decisions and assessing financial performance. Accordingly, the Company has determined that it has a single operating and reportable segment. In addition, the Company has no foreign operations or any assets in foreign locations. Nearly all of the Company’s operations consist of a single revenue stream, which is the licensing of its trademark portfolio, with an immaterial portion of revenues derived from television, book, café operations and certain commissions. |
Fair Value Measurement of Finan
Fair Value Measurement of Financial Instruments | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement of Financial Instruments | 3. Fair Value Measurement of Financial Instruments ASC 820-10, Fair Value Measurements and Disclosures The Company determines or calculates the fair value of financial instruments using quoted market prices in active markets when such information is available or using appropriate present value or other valuation techniques, such as discounted cash flow analyses, incorporating available market discount rate information for similar types of instruments while estimating for non-performance and liquidity risk. These techniques are significantly affected by the assumptions used, including the discount rate, credit spreads and estimates of future cash flows. Assets and liabilities typically recorded at fair value on a non-recurring basis to which ASC 820-10 applies include: · non-financial assets and liabilities initially measured at fair value in an acquisition or business combination, and · long-lived assets measured at fair value due to an impairment assessment under ASC 360-10-15, Impairment or Disposal of Long-Lived Assets This topic defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and establishes a three-level hierarchy, which encourages an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820-10 requires that assets and liabilities recorded at fair value be classified and disclosed in one of the following three categories: · Level 1 - inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. · Level 2 - inputs utilize other-than-quoted prices that are observable, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs such as interest rates and yield curves that are observable at commonly quoted intervals. · Level 3 - inputs are unobservable and are typically based on the Company’s own assumptions, including situations where there is little, if any, market activity. Both observable and unobservable inputs may be used to determine the fair value of positions that are classified within the Level 3 classification. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the Company classifies such financial assets or liabilities based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. As of March 31, 2017 and December 31, 2016, there were no assets or liabilities that are required to be measured at fair value on a recurring basis, except for the Company’s available-for-sale securities (see Note 2), interest rate cap (see Note 6), the contingent earn outs relating to the Linens ‘N Things Carrying Value Fair Value Financial Instrument Level 3/31/2017 12/31/2016 3/31/2017 12/31/2016 (in thousands) Available-for-sale securities 1 $ 6,178 $ 7,673 $ 6,178 $ 7,673 Interest rate cap 2 $ 1,120 $ 1,248 $ 1,120 $ 1,104 2016 Term Loans 3 $ 575,425 $ 582,500 $ 546,397 $ 551,324 2016 Revolving Loan 3 $ 80,500 $ 80,500 $ 61,712 $ 60,755 LNT Contingent Earn Out 3 $ - $ - $ - $ - Legacy Payments 3 $ 2,053 $ 1,995 $ 2,053 $ 1,995 The carrying amounts of the Company’s cash, restricted cash, accounts receivable and accounts payable approximate fair value due to their short-term maturities. The Company records its available-for-sale securities on the condensed consolidated balance sheets at fair value using Level 1 inputs. The fair value of the Company’s available-for-sale securities is based upon quoted market prices for identical assets in active markets. During 2016, the Company entered into interest rate cap agreements related to its 1-month London Interbank Offered Rate (“LIBOR”) rates related to the Company’s loan agreements (the “2016 Cap Agreements”) with certain financial institutions. The 2016 Cap Agreements have a $ 500 1.50 November 23, 2018 The Company’s risk management objective and strategy with respect to the 2016 Cap Agreements is to reduce its exposure to variability in expected future cash outflows (forecasted interest payments) attributable to change in 1-month LIBOR rates, the designated benchmark interest rate being hedged, relating to a portion of its outstanding floating-rate debt. The 2016 Cap Agreements protect the Company from increases in hedged cash flows on its floating-rate debt attributable to changes in 1-month LIBOR rates above the strike rate. Should 1-month LIBOR rates exceed 1.50% on a rate reset date during the terms of the 2016 Cap Agreements, the financial institutions will pay the Company for an amount equivalent to the excess interest over the strike rate. To the extent the hedging relationship is perfectly effective, changes in the fair value of the hedging instrument each period will be deferred in Accumulated other comprehensive loss in the statement of changes in equity, and the upfront hedging instrument purchase price will be reclassified to Interest expense, net in the consolidated statements of operations according to its caplet values. If hedge ineffectiveness exists, Accumulated other comprehensive loss will be adjusted to a balance that reflects the lesser of either the cumulative change in the fair value of the hedging or the cumulative change in the fair value of the hypothetically “perfect” derivative. The amount of ineffectiveness, if any, recorded in earnings would be equal to the excess of the cumulative change in the fair value of the hedging instrument over the cumulative change in the fair value of the hypothetical derivative. Notional Value Derivative Asset Derivative Liability (in thousands) LIBOR based loans $ 500,000 $ - $ 128 For purposes of this fair value disclosure, the Company based its fair value estimate for the 2016 Term Loans and 2016 Revolving Loan (each, as defined in Note 6) on its internal valuation whereby the Company applied the discounted cash flow method to its expected cash flow payments due under the loan agreements based on market interest rate quotes as of March 31, 2017 and December 31, 2016 for debt with similar risk characteristics and maturities. On the date of the acquisition of Galaxy Brand Holdings, Inc., no value was assigned to the LNT Contingent Earn Out based on the remote probability that the Linens ‘N Things In connection with the acquisition of Martha Stewart Living Omnimedia (“MSLO”), beginning with calendar years commencing on or after January 1, 2026, the Company will pay Ms. Stewart three and one-half percent ( 3.5 0.1 |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill, Impaired [Abstract] | |
Goodwill | 4. Goodwill March 31, December 31, 2017 2016 (in thousands) Balance at January 1 $ 307,744 $ 314,288 Adjustment for acquisition of Martha Stewart Living Omnimedia, Inc. - (11,249) Acquisition of Gaiam, Inc. Branded Consumer Business - 4,705 Ending balance $ 307,744 $ 307,744 Goodwill represents the excess of the purchase price over the fair value of net assets acquired under the acquisition method of accounting. Goodwill is tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. In evaluating goodwill for impairment, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Qualitative factors considered include, for example, macroeconomic and industry conditions, overall financial performance and other relevant entity-specific events. If the Company bypasses the qualitative assessment, or concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying value, it then performs a goodwill impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment to be recognized, if any. The Company will compare the estimated fair value of the reporting unit with its carrying value. The Company has determined it has a single reporting unit, and considers its market capitalization (calculated as total common shares outstanding multiplied by the common equity price per share, as adjusted for a control premium factor) to represent its estimated fair value. If the estimated fair value of the reporting unit exceeds its carrying amount, no further analysis is needed. If, however, the estimated fair value of the reporting unit is less than its carrying amount, the Company will recognize an impairment change for the amount by which the carrying value exceeds the reporting unit’s fair value. No events or circumstances indicate an impairment has been identified subsequent to the Company’s October 1, 2016 impairment testing. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2017 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Intangible Assets | 5. Intangible Assets Intangible assets are summarized as follows: March 31, 2017 Useful Lives Gross Accumulated Net (in thousands) Finite-lived intangible assets: Trademarks 15 $ 4,990 $ (1,641) $ 3,349 Customer agreements 4 2,832 (1,915) 917 Favorable lease 2 537 (537) - Patents 10 665 (247) 418 $ 9,024 $ (4,340) 4,684 Indefinite-lived intangible assets: Trademarks 1,025,381 Intangible assets, net $ 1,030,065 December 31, 2016 Useful Lives Gross Accumulated Net (in thousands) Finite-lived intangible assets: Trademarks 15 $ 4,981 $ (1,558) $ 3,423 Customer agreements 4 2,832 (1,738) 1,094 Favorable lease 2 537 (537) - Patents 10 665 (230) 435 $ 9,015 $ (4,063) 4,952 Indefinite-lived intangible assets: Trademarks 1,025,260 Intangible assets, net $ 1,030,212 Estimated future annual amortization expense for intangible assets in service as of March 31, 2017 is summarized as follows: Years ending December 31, (in thousands) Remainder of 2017 $ 638 2018 782 2019 592 2020 402 2021 399 Thereafter 1,871 $ 4,684 Amortization expense amounted to approximately $ 0.3 Finite-lived intangible assets represent trademarks, customer agreements and patents related to the Company’s brands and a favorable lease. Finite-lived assets are amortized on a straight-line basis over the estimated useful lives of the assets. Indefinite-lived intangible assets are not amortized, but instead are subject to impairment evaluation. The carrying value of finite-lived intangible assets and other long-lived assets is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Historically, indefinite-lived intangible assets have been tested for impairment on an annual basis at December 31 and between annual tests if an event occurs or circumstances change that indicate that the carrying amount of the indefinite-lived intangible asset may not be recoverable. When conducting its impairment assessment, the Company initially performs a qualitative evaluation of whether it is more likely than not that the asset is impaired. If it is determined by a qualitative evaluation that it is more likely than not that the asset is impaired, the Company then tests the asset for recoverability. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the asset to its expected future undiscounted net cash flows. If the carrying amount of such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the recoverability of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. No events or circumstances indicate an impairment has been identified subsequent to the Company’s October 1, 2016 impairment testing. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2017 | |
Long-term Debt, by Current and Noncurrent [Abstract] | |
Long-Term Debt | 6. Long-Term Debt March 31, December 31, 2017 2016 (in thousands) 2016 Term Loans $ 575,425 $ 582,500 2016 Revolving Loan 80,500 80,500 Unamortized deferred financing costs (16,978) (17,965) Total long-term debt, net of unamortized deferred financing costs 638,947 645,035 Less: current portion of long-term debt 28,300 28,300 Long-term debt $ 610,647 $ 616,735 July 2016 Debt Facilities On July 1, 2016 (the “Closing Date”), the Company and certain of its subsidiaries entered into (i) the Third Amended and Restated First Lien Credit Agreement (the “Amended BoA Credit Agreement”) with Bank of America, N.A., as administrative agent and collateral agent and the lenders party thereto and (ii) the Third Amended and Restated Credit Agreement (the “Amended GSO Credit Agreement”) with Wilmington Trust, National Association, as administrative agent and collateral agent (the “GSO Agent”) and the lenders party thereto. Such agreements amended, restated and replaced the debt facilities described below under “December 2015 Debt Facilities”, as described more fully below. The Company used a portion of the proceeds of the $ 287.5 415.0 The Amended BoA Credit Agreement provides for several five-year credit facilities, consisting of (i) Tranche A Term Loans in an aggregate principal amount of $ 133.0 44.5 110.0 258.0 133.0 44.5 80.5 The loans under the Amended BoA Credit Agreement bear interest, at the Company’s option, at a rate equal to (i) with respect to the Revolving Loans and the Tranche A Loans (a) the LIBOR rate plus 3.50% per annum or (b) the base rate plus 2.50% per annum and (ii) with respect to the Tranche A-1 Loans (a) the LIBOR rate plus 7.00% per annum or (b) the base rate plus 6.00% per annum. The undrawn portions of the commitments under the Revolving Credit Facility are subject to a commitment fee of 0.375 The Company may make voluntary prepayments of the loans outstanding under the Amended BoA Credit Agreement, subject to the payment of customary “breakage” costs with respect to LIBOR-based borrowings and, in certain cases, to the prepayment premium set forth in the Amended BoA Credit Agreement. Additionally, the Company is mandated to make prepayments (without payment of a premium or penalty) under the Amended BoA Credit Agreement amounting to: (i) the loans outstanding under the Amended BoA Credit Agreement plus, (a) where intellectual property is disposed, 50.0% of the disposed intellectual property’s orderly liquidation value, and (b) where any other assets constituting collateral are disposed or upon the receipt of certain insurance proceeds, 100% of the net proceeds thereof, subject to certain reinvestment rights; and (ii) the Tranche A-1 Loans to the extent that the outstanding principal amount thereof exceeds 10.0% of the orderly liquidation value of the registered trademarks owned by the BoA Facility Loan Parties. Commencing on September 30, 2016, the BoA Term Loans will be amortized in quarterly installments of $ 5.0 The Amended BoA Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants applicable to the BoA Facility Loan Parties and their subsidiaries. Moreover, the Amended BoA Credit Agreement contains financial covenants that require the BoA Facility Loan Parties and their subsidiaries to (i) maintain a positive net income, (ii) satisfy a maximum loan to value ratio set at 50.0% (applicable to the Revolving Loans and Tranche A Loans) and (iii) satisfy a maximum consolidated first lien leverage ratio, initially set at 2.80:1.00, decreasing over the term of the Amended BoA Credit Agreement until reaching the final maximum ratio of 2.50:1.00 for the fiscal quarter ending September 30, 2018 and thereafter. The Amended BoA Credit Agreement contains certain customary events of default, including a change of control. If an event of default occurs and is not cured within any applicable grace period or not waived, the Bank of America Agent, at the request of the lenders under the Amended BoA Credit Agreement, must take various actions, including, without limitation, the acceleration of amounts due under the Amended BoA Credit Agreement. The Company may request an increase in (i) the Revolving Credit Facility and Tranche A Loans as would not cause the consolidated first lien leverage ratio, determined on a pro forma basis after giving effect to any such increase, to exceed 2.33:1.00 and (ii) the Tranche A-1 Loans, as would not cause the consolidated first lien leverage ratio, determined on a pro forma basis after giving effect to any such increase, to exceed (a) with respect to any increase, the proceeds of which will be used solely to finance an acquisition, 2.50:100 and (b) with respect to any other increase, 2.40:1.00, subject to the satisfaction of certain conditions in the Amended BoA Credit Agreement. At December 31, 2016, the Company is in compliance with the covenants included in the Amended BoA Credit Agreement. The Amended GSO Credit Agreement provides for a six-year $415.0 million senior secured term loan facility. The Company may request one or more additional term loan facilities or the increase of term loan commitments under the Amended GSO Credit Agreement as would not cause the consolidated total leverage ratio, determined on a pro forma basis after giving effect to any such addition and increase, to exceed 6.00:1.00, subject to the satisfaction of certain conditions in the Amended GSO Credit Agreement. The loans under the Amended GSO Credit Agreement bear interest, at the Company’s option, at a rate equal to either (i) the LIBOR rate plus an applicable margin of 8.25% or 9.00% per annum or (ii) the base rate plus an applicable margin of 7.25% or 8.00% per annum, in each case based upon the consolidated total leverage ratio. The Company may make voluntary prepayments of the loans outstanding under the Amended GSO Credit Agreement, subject to the payment of customary “breakage” costs with respect to LIBOR-based borrowings and, in certain cases, to the prepayment premium set forth in the Amended GSO Credit Agreement. The Company is mandated to make prepayments (without payment of a premium or penalty) of loans outstanding under the Amended GSO Credit Agreement amounting to: (i) where intellectual property is disposed, 50.0% of the disposed intellectual property’s orderly liquidation value, (ii) where any other asset constituting collateral is disposed or upon the receipt of certain insurance proceeds, 100% of the net proceeds thereof, subject to certain reinvestment rights, and (iii) any consolidated excess cash flow, in an amount equal to (a) in the event the consolidated total leverage ratio is at least 4.00:1.00, 75% thereof, (b) in the event the consolidated total leverage ratio is less than 4.00:1.00 but at least 3.00:1.00, 50% thereof and (c) in the event the consolidated total leverage ratio is less than 3.00:1.00, 0% thereof. Commencing on March 31, 2017, the Loans under the Amended GSO Credit Agreement will amortize in quarterly installments, equal to 2.00% per annum of the original aggregate principal amount thereof. The Amended GSO Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants applicable to the GSO Facility Loan Parties and their subsidiaries. Moreover, the Amended GSO Credit Agreement contains financial covenants that require the GSO Facility Loan Parties and their subsidiaries to satisfy (i) a maximum consolidated total leverage ratio, initially set at 7.25:1.00, decreasing over the term of the Amended GSO Credit Agreement until reaching the final maximum ratio of 6.50:1.00 for the fiscal quarter ending September 30, 2018 and thereafter and (ii) a maximum consolidated first lien leverage ratio, initially set at 2.80:1.00, decreasing over the term of the Amended GSO Credit Agreement until reaching the final maximum ratio of 2.50:1.00 for the fiscal quarter ending September 30, 2018 and thereafter. At March 31, 2017, the Company is in compliance with the covenants included in the Amended GSO Credit Agreement. The Amended GSO Credit Agreement contains certain customary events of default, including a change of control. If an event of default occurs and is not cured within any applicable grace period or is not waived, the GSO Agent, at the request of the lenders under the Amended GSO Credit Agreement, is required to take various actions, including, without limitation, the acceleration of amounts due thereunder. The Company may request one or more additional term loan facilities or the increase of term loan commitments under the GSO Credit Agreement as would not cause the consolidated total leverage ratio, determined on a pro forma basis after giving effect to any such addition and increase, to exceed 6.00:1.00, subject to the satisfaction of certain conditions in the GSO Credit Agreement. Interest Rate Caps During 2016, the Company entered into interest rate cap agreements related to its 1-month LIBOR rates related to the 2016 Cap Agreements with certain financial institutions. The 2016 Cap Agreements have a $ 500 1.50 November 23, 2018 The Company’s risk management objective and strategy with respect to the 2016 Cap Agreements is to reduce its exposure to variability in expected future cash outflows (forecasted interest payments) attributable to change in 1-month LIBOR rates, the designated benchmark interest rate being hedged, relating to a portion of its outstanding floating-rate debt. The 2016 Cap Agreements protect the Company from increases in hedged cash flows on its floating-rate debt attributable to changes in 1-month LIBOR rates above the strike rate. Should 1-month LIBOR rates exceed 1.50% on a rate reset date during the terms of the 2016 Cap Agreements, the financial institutions will pay the Company for an amount equivalent to the excess interest over the strike rate. To the extent the hedging relationship is perfectly effective, changes in the fair value of the hedging instrument each period will be deferred in Accumulated other comprehensive loss in the condensed consolidated statement of changes in equity, and the upfront hedging instrument purchase price will be reclassified to Interest expense, net in the unaudited condensed consolidated statements of operations according to its caplet values. If hedge ineffectiveness exists, Accumulated other comprehensive loss will be adjusted to a balance that reflects the lesser of either the cumulative change in the fair value of the hedging or the cumulative change in the fair value of the hypothetically “perfect” derivative. The amount of ineffectiveness, if any, recorded in earnings would be equal to the excess of the cumulative change in the fair value of the hedging instrument over the cumulative change in the fair value of the hypothetical derivative. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 7. Commitments and Contingencies MSLO Stockholder Complaint In connection with the merger of MSLO in December 2015, the following 13 putative stockholder class action lawsuits have been filed in the Court of Chancery of the State of Delaware: (1) David Shaev Profit Sharing Plan f/b/o David Shaev v. Martha Stewart Living Omnimedia Inc. et. al Malka Raul v. Martha Stewart Living Omnimedia Inc. et. al Daniel Lisman v. Martha Stewart Living Omnimedia Inc. et. al., Matthew Sciabacucchi v. Martha Stewart Living Omnimedia Inc. et. al Harold Litwin v. Martha Stewart Living Omnimedia Inc. et. al Richard Schiffrin v. Martha Stewart Cedric Terrell v. Martha Stewart Living Omnimedia Inc. et. al. Dorothy Moore v. Martha Stewart Living Omnimedia Inc. et. al Paul Dranove v. Pierre De Villemejane. et. al Phuc Nguyen v. Martha Stewart Living Omnimedia Inc. et. al Kenneth Steiner v. Martha Stewart Living Omnimedia Inc. et. al Karen Gordon v. Martha Stewart et. al. Anne Seader v. Martha Stewart Living Omnimedia, Inc. et. al In re Martha Stewart Living Omnimedia, Inc., et. al General Legal Matters From time to time, the Company is involved in legal matters arising in the ordinary course of business. While the Company believes that such matters are currently not material, there can be no assurance that matters arising in the ordinary course of business for which the Company is, or could be, involved in litigation, will not have a material adverse effect on its business, financial condition or results of operations. Contingent liabilities arising from potential litigation are assessed by management based on the individual analysis of these proceedings and on the opinion of the Company’s lawyers and legal consultants. |
Stock-based Compensation
Stock-based Compensation | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based Compensation | 8. Stock-based Compensation Stock Options Number of Weighted- Weighted- Aggregate (in thousands, except share and per share data) Outstanding - January 1, 2017 129,501 $ 9.65 2.3 $ - Granted - - Exercised - - Forfeited or Canceled (40,500) (12.19) Outstanding - March 31, 2017 89,001 $ 8.49 2.9 $ - Exercisable - March 31, 2017 89,001 $ 8.49 2.9 $ - A summary of the changes in the Company’s unvested stock options is as follows: Number of Weighted- Unvested - January 1, 2017 5,000 $ 1.96 Granted - - Vested (5,000) (1.96) Forfeited or Canceled - - Unvested - March 31, 2017 - $ - The Company did not grant any stock options during the three months ended March 31, 2017 and 2016. Total compensation expense related to stock options for each of the three months ended March 31, 2017 and 2016 was less than $ 0.1 Warrants Number of Weighted- Weighted- Aggregate (in thousands, except share and per share data) Outstanding - January 1, 2017 801,760 $ 7.87 3.1 $ 51 Granted - - Exercised - - Forfeited or Canceled - - Outstanding - March 31, 2017 801,760 $ 7.87 2.8 $ - Exercisable - March 31, 2017 776,760 $ 7.69 2.7 $ - A summary of the changes in the Company’s unvested warrants is as follows: Number of Weighted- Unvested - January 1, 2017 50,000 $ 6.32 Granted - - Vested (25,000) 6.32 Forfeited or Canceled - - Unvested - March 31, 2017 25,000 $ 6.32 The Company did not issue any warrants during the three months ended March 31, 2017 and 2016. Total compensation expense related to warrants for the three months ended March 31, 2017 and 2016 was less than $ 0.1 0.1 0.1 0.2 Restricted Stock Number of Weighted- Weighted- (in thousands, except share and per share data) Unvested - January 1, 2017 258,787 $ 8.45 2.1 Granted - - Vested (45,834) (5.84) Unvested - March 31, 2017 212,953 $ 9.01 2.3 The Company did not grant time-based restricted stock during the three months ended March 31, 2017 and 2016. Total compensation expense related to time-based restricted stock and time-based restricted stock unit grants for the three months ended March 31, 2017 and 2016 was $ 0.1 0.3 Restricted Stock Units Number of Weighted- Weighted- (in thousands, except share and per share data) Unvested - January 1, 2017 326,667 $ 8.52 2.5 Granted 60,000 4.89 Vested (78,333) (13.27) Unvested - March 31, 2017 308,334 $ 6.60 2.2 During the three months ended March 31, 2017, the Company accelerated the vesting of 66,667 0.7 During the three months ended March 31, 2017, the Company granted 60,000 0.3 0.1 During the three months ended March 31, 2016, the Company issued 35,000 0.3 0.1 Total compensation expense related to time-based restricted stock unit grants for the three months ended March 31, 2017 and 2016 was $ 1.0 0.1 Performance Stock Units Number of Weighted- Weighted- (in thousands, except share and per share data) Unvested - January 1, 2017 2,803,367 $ 8.18 2.4 Granted - - Vested (701,233) (10.97) Forfeited or Cancelled (437,500) (7.23) Unvested - March 31, 2017 1,664,634 $ 4.31 2.7 The Company did not grant any PSUs during the three months ended March 31, 2017. During the three months ended March 31, 2017, the Company accelerated the vesting of 200,000 2.9 On February 28, 2017, the Compensation Committee voted to approve, on a discretionary basis, an award of 164,978 60,000 36,000 0.6 During the three months ended March 31, 2016, the Company granted 30,000 0.2 On February 23, 2016, the Compensation Committee voted to approve, on a discretionary basis, an award of 69,994 20,000 12,000 0.4 Total compensation expense related to the PSUs for the three months ended March 31, 2017 and 2016 was $ 3.5 1.3 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 9. Related Party Transactions Consulting Services Agreement with Tengram Capital Partners, L.P. (f/k/a Tengram Capital Management L.P.) Pursuant to an agreement with Tengram Capital Partners, L.P., formerly known as Tengram Capital Management, L.P. (“TCP”), an affiliate of Tengram Capital Partners Gen2 Fund, L.P., which is one of the Company’s largest stockholders, the Company has engaged TCP, effective as of January 1, 2013, to provide services to the Company pertaining to (i) mergers and acquisitions, (ii) debt and equity financing and (iii) such other related areas as the Company may reasonably request from time to time (the “TCP Agreement”). TCP is entitled to receive compensation of $ 1.0 5 0.9 The Company did not pay TCP any fees during the three months ended March 31, 2017 and 2016 Additionally, in July 2013, the Company entered into a consulting arrangement with an employee of TCP (the “TCP Employee”), pursuant to which the TCP Employee provides legal and other consulting services at the request of the Company from time to time. The TCP Employee was also issued 125,000 180,000 20 20 60 200,000 33.3 33.3 33.4 0.1 Transactions with E.S. Originals, Inc. A division president of the Company maintains a passive ownership interest in one of the Company’s licensees, E.S. Originals, Inc. (“ESO”). The Company receives royalties from ESO under license agreements for certain of the Company’s brands in the footwear category. The Company recorded $ 3.8 3.7 7.0 7.1 Acquisition of FUL On November 17, 2014, the Company made a strategic investment in FUL IP. FUL IP is a collaborative investment between the Company and JALP. FUL IP was formed for the purpose of licensing the FUL FUL FUL 8.9 50.5 4.5 0.1 Investment in Available-for-Sale Securities As further discussed in Note 2, in September 2015, the Company purchased available-for-sale securities of an unaffiliated third-party publicly traded company from Tengram Capital Partners, L.P., which is an affiliate of Tengram Capital Partners Gen2 Fund, L.P., one of the Company’s largest stockholders, for an aggregate purchase price of $ 12.0 IP License Agreement and Intangible Asset Agreement In connection with the transactions contemplated by the Mergers, MSLO entered into an Amended and Restated Asset License Agreement (“Intangible Asset Agreement”) and Amended and Restated Intellectual Property License and Preservation Agreement (“IP License Agreement” and, together with the Intangible Asset Agreement, the “IP Agreements”) pursuant to which Ms. Martha Stewart licensed certain intellectual property to MSLO. The IP Agreements grant the Company the right to use of certain properties owned by Ms. Stewart. The Intangible Asset Agreement has an initial term commencing at December 4, 2015 and ending on December 31, 2020, provided that the term will automatically be renewed for five additional calendar years ending December 31, 2025 (subject to earlier termination as provided in the employment agreement) if either the aggregate gross licensing revenues (as defined in the employment agreement) for calendar years 2018 through 2020 exceed $195 million or the gross licensing revenues for calendar year 2020 equal or exceed $65 million. 1.7 0.6 During the term of the IP Agreement with the Company, Ms. Stewart will be entitled to receive a guaranteed annual payment of $ 1.3 0.3 During each of the three months ended March 31, 2017 and 2016, the Company expensed non-cash interest of $ 0.2 |
Restructuring
Restructuring | 3 Months Ended |
Mar. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | 10. Restructuring The Company did not incur restructuring charges during the three months ended March 31, 2017. During the three months ended March 31, 2016, the Company recorded $ 2.5 1.2 0.5 0.4 0.4 On a cumulative basis, the Company has recorded $ 11.9 65 A restructuring accrual of $ 1.5 9.0 Severance & Related Contract Termination Professional Fees Total Accrual (in thousands) Balance at January 1, 2017 $ - $ 1,500 $ - $ 1,500 Charges to expense - - - - Amounts paid - - - - Balance at March 31, 2017 $ - $ 1,500 $ - $ 1,500 The majority of the remaining contract termination costs are expected to be paid by the end of fiscal 2017. |
New Accounting Pronouncements
New Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
New Accounting Pronouncements | 11. New Accounting Pronouncements ASU No. 2017-04, “Simplifying the Test for Goodwill Impairment” In January 2017, the FASB issued ASU No. 2017-04, “Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”). ASU 2017-04 removes the requirement to compare the implied fair value of goodwill with its carrying amount as part of step 2 of the goodwill impairment test. As a result, under ASU 2017-04, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. ASU 2017-04 is effective prospectively for annual and interim periods beginning on or after December 15, 2019, and early adoption is permitted on testing dates after January 1, 2017. The Company adopted the provisions of ASU 2017-04 during the first quarter of 2017. The adoption of ASU 2017-04 did not have a material impact on the Company’s consolidated financial statements. ASU No. 2017-01, “FASB Clarifies the Definition of a Business” In January 2017, the FASB issued ASU No. 2017-01, “FASB Clarifies the Definition of a Business” (“ASU 2017-01”). ASU 2017-01 clarifies the definition of a business in ASC 805. The amendments in ASU 2017-01 are intended to make application of the guidance more consistent and cost-efficient. ASU 2017-01 is effective for annual and interim periods beginning after December 15, 2017, with early adoption permitted for transactions that occurred before the issuance date or effective date of the standard if the transactions were not reported in financial statements that have been issued or made available for issuance. The Company does not expect the adoption of ASU 2017-01 to have a material impact on the Company’s consolidated financial statements. |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Rule 10-01 of Regulation S-X of the United States Securities and Exchange Commission (the “SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all of the information and footnotes necessary for a comprehensive presentation of financial position, results of operations or cash flows. It is the Company’s opinion, however, that the accompanying unaudited condensed consolidated financial statements include all adjustments, which are of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, as filed with the SEC on March 14, 2017, which contains the audited consolidated financial statements and notes thereto, together with Management’s Discussion and Analysis of Financial Condition and Results of Operations, for the years ended December 31, 2016, 2015 and 2014. The financial information as of December 31, 2016 is derived from the audited consolidated financial statements presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. The interim results for the three months ended March 31, 2017 are not necessarily indicative of the results to be expected for the year ending December 31, 2017 or for any future interim periods. |
Correction of Immaterial Error | Correction of Immaterial Error The Company has corrected an immaterial error in its consolidated statement of cash flows for the three months ended March 31, 2016. This correction is related to the payment of certain guaranteed obligations in connection with previous acquisitions and reflects an increase in cash used in operating activities of $ 0.3 0.3 |
Principles of Consolidation | The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries. All significant inter-company accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of unaudited condensed 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 unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited condensed consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from estimates. |
Revenue Recognition | Revenue Recognition The Company has entered into various license agreements that provide revenues based on guaranteed minimum royalty payments and advertising/marketing fees with additional royalty revenues based on a percentage of defined sales. Guaranteed minimum royalty payments and advertising/marketing revenue are recognized on a straight-line basis over the term of each contract year, as defined in each license agreement. Royalty payments exceeding the guaranteed minimum royalty payments are recognized as income during the period corresponding to the licensee’s sales. Payments received as consideration for the grant of a license are recorded as deferred revenue at the time payment is received and recognized ratably as revenue over the term of the license agreement. Advanced royalty payments are recorded as deferred revenue at the time payment is received and recognized as revenue when earned. Revenue is not recognized unless collectability is reasonably assured. If license agreements are terminated prior to the original licensing period, the Company recognizes revenue in the amount of any contractual termination fees, unless such amounts are deemed non-recoverable. With respect to editorial content for books, the Company receives advance payments from the Company’s publishers and recognizes revenue when manuscripts are delivered to and accepted by the publishers. Revenue is also earned from book publishing when sales on a unit basis exceed the advanced royalty. Television sponsorship revenues are generally recorded ratably across the period when new episodes initially air. |
Restricted Cash | Restricted Cash Restricted cash consists of cash deposited with a financial institution required as collateral for the Company’s cash-collateralized letter of credit facilities. |
Accounts Receivable | Accounts Receivable Accounts receivable are recorded net of allowances for doubtful accounts, based on the Company’s ongoing discussions with its licensees and other customers and its evaluation of their creditworthiness, payment history and account aging. Accounts receivable balances deemed to be uncollectible are charged to the allowance for doubtful accounts after all means of collection have been exhausted and the potential for recovery is considered remote. The allowance for doubtful accounts was approximately $ 0.2 The Company’s accounts receivable, net amounted to $ 44.9 53.2 48 17 16 15 49 14 13 12 10 |
Investments | The Company has marketable securities that are classified as available-for-sale securities under ASC 320, Investments Debt and Equity Securities March 31, 2017 Gross Unrealized Historical Cost Cost Basis (1) Estimated Fair Value Gains Losses (in thousands) Available-for-sale securities $ 12,048 $ 7,673 $ 6,178 $ - $ 1,495 (1) December 31, 2016 Gross Unrealized Historical Cost Cost Basis (1) Estimated Fair Value Gains Losses (in thousands) Available-for-sale securities $ 12,048 $ 7,673 $ 7,673 $ - $ - (1) Based on an evaluation at March 31, 2017, the Company has concluded that the decline in fair value of its available-for-sale securities is not other-than-temporary. The Company believes it has the intent and ability to hold its available-for-sale securities for a period of time sufficient to allow for a recovery in fair value to the Company’s current cost basis. The available-for-sale securities have been in a loss position for less than twelve months. |
Equity Method Investment | Equity Method Investment For investments in entities over which the Company exercises significant influence but which do not meet the requirements for consolidation, the Company uses the equity method of accounting. On July 1, 2016, the Company acquired a 49.9 The Company evaluates its equity method investment for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investment may not be recoverable. The difference between the carrying value of the equity method investment and its estimated fair value is recognized as an impairment charge when the loss in value is deemed other-than-temporary. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill is tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. In evaluating goodwill for impairment, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Qualitative factors considered include, for example, macroeconomic and industry conditions, overall financial performance, and other relevant entity-specific events. If the Company bypasses the qualitative assessment, or concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying value, it then performs a goodwill impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment to be recognized, if any. The Company will compare the estimated fair value of the reporting unit with its carrying value. The Company has determined that it has a single reporting unit and considers its market capitalization (calculated as total common shares outstanding multiplied by the common equity price per share, as adjusted for a control premium factor) to represent its estimated fair value. If the estimated fair value of the reporting unit exceeds its carrying amount, no further analysis is needed. If, however, the estimated fair value of the reporting unit is less than its carrying amount, the Company will recognize an impairment charge for the amount by which the carrying value exceeds the reporting unit’s fair value. |
Treasury Stock | Treasury Stock Treasury stock is recorded at cost as a reduction of equity in the condensed consolidated balance sheets. |
Stock-Based Compensation | Stock-Based Compensation Compensation cost for restricted stock is measured using the quoted market price of the Company’s common stock at the date the common stock is granted. For restricted stock and restricted stock units, for which restrictions lapse with the passage of time (“time-based restricted stock”), compensation cost is recognized on a straight-line basis over the period between the issue date and the date that restrictions lapse. Time-based restricted stock is included in total shares of common stock outstanding upon the lapse of applicable restrictions. For restricted stock, for which restrictions are based on performance measures (“performance stock units” or “PSUs”), restrictions lapse when those performance measures have been deemed achieved. Compensation cost for PSUs is recognized on a straight-line basis during the period from the date on which the likelihood of the PSUs being earned is deemed probable and (x) the end of the fiscal year during which such PSUs are granted or (y) the date on which awards of such PSUs may be approved by the compensation committee of the Company’s board of directors (the “Compensation Committee”) on a discretionary basis, as applicable. PSUs are included in total shares of common stock outstanding upon the lapse of applicable restrictions. PSUs are included in total diluted shares of common stock outstanding when the performance measures have been deemed achieved but the PSUs have not yet been issued. Fair value cost for stock options and warrants is calculated using the Black-Scholes valuation model and is expensed on a straight-line basis over the requisite service period of the grant. The Company elected to early adopt the provisions of ASU 2016-09 “Simplifying the Accounting for Share-Based Payments” (“ASU 2016-09”) and will reduce compensation cost for actual forfeitures as they occur. Prior to the adoption to ASU 2016-09, the Company’s estimated forfeiture rate utilized in calculating compensation cost was zero percent based on the Company’s limited historical forfeiture experience. At each subsequent reporting period prior to the lapse of restrictions on warrants, time-based restricted stock and PSUs granted to non-employees, the Company remeasures the aggregate compensation cost of such grants using the Company’s fair value at the end of such reporting period and revises the straight-line recognition of compensation cost in line with such remeasured amount. |
Leases | Leases The Company leases certain properties for office and showroom. Certain of the Company’s lease agreements contain rent escalation clauses, free rent periods and tenant inducement payments. Rent expense for noncancelable operating leases with scheduled rent increases is recognized on a straight-line basis over the expected lease term. The difference between straight-line rent expense and the scheduled payment amounts is recorded as a deferred rent asset or liability. |
Income Taxes | Income Taxes Current income taxes are based on the respective periods’ taxable income for federal, foreign and state income tax reporting purposes. Deferred tax liabilities and assets are determined based on the difference between the financial statement and income tax bases of assets and liabilities, using statutory tax rates in effect for the year in which the differences are expected to reverse. In accordance with ASU No. 2015-17 “Balance Sheet Classification of Deferred Taxes,” all deferred income taxes are reported and classified as non-current. A valuation allowance is required if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company applies the Financial Accounting Standards Board (“FASB”) guidance on accounting for uncertainty in income taxes. The guidance clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with other authoritative GAAP and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The guidance also addresses derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Interest and penalties related to uncertain tax positions, if any, are recorded in income tax expense. Tax years that remain open for assessment for federal and state tax purposes include the years ended December 31, 2013 through December 31, 2016. |
Earnings Per Share | Earnings Per Share Basic earnings per share (“EPS”) is computed by dividing net income (loss) attributable to Sequential Brands Group, Inc. and Subsidiaries by the weighted-average number of common shares outstanding during the reporting period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to all potentially dilutive common shares outstanding during the reporting period, including stock options, PSUs and warrants, using the treasury stock method, and convertible debt, using the if-converted method. Diluted EPS excludes all potentially dilutive shares of common stock if their effect is anti-dilutive. Three Months Ended March 31, 2017 2016 Basic weighted-average common shares outstanding 62,459,711 61,209,868 Acquisition hold back shares - - Warrants - - Stock options - - Performance based restricted stock - - Unvested restricted stock - - Diluted weighted-average common shares outstanding 62,459,711 61,209,868 Three Months Ended March 31, 2017 2016 Acquisition hold back shares - 695,055 Warrants - 330,671 Stock options - 12,796 Performance based restricted stock 263,964 408,555 Unvested restricted stock 88,941 94,236 Total 352,905 1,541,313 |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments which potentially expose the Company to credit risk consist primarily of cash, restricted cash, accounts receivable and available-for-sale securities. Cash is held to meet working capital needs and future acquisitions. Restricted cash is pledged as collateral for a comparable amount of irrevocable standby letters of credit for certain of the Company’s leased properties. Substantially all of the Company’s cash, restricted cash and available-for-sale securities are deposited with high quality financial institutions. At times, however, such cash, restricted cash and available-for-sale securities may be in deposit accounts that exceed the Federal Deposit Insurance Corporation insurance limit. The Company has not experienced any losses in such accounts as of March 31, 2017. Concentration of credit risk with respect to accounts receivable is minimal due to the collection history. The Company performs annual credit evaluations of its customers’ financial condition. The allowance for doubtful accounts is based upon the expected collectability of all accounts receivable. |
Customer Concentrations | Customer Concentrations The Company recorded net revenues of $ 39.4 34.0 10 11 10 10 10 11 |
Loss Contingencies | Loss Contingencies The Company recognizes contingent losses that are both probable and estimable. In this context, probable means circumstances under which events are likely to occur. The Company records legal costs pertaining to contingencies as incurred. |
Contingent Consideration | Contingent Consideration The Company recognizes the acquisition-date fair value of contingent consideration as part of the consideration transferred in exchange for the acquiree or assets of the acquiree in a business combination. The contingent consideration is classified as either a liability or equity in accordance with ASC 480-10, Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity |
Noncontrolling Interest | Noncontrolling Interest Noncontrolling interest recorded for the three months ended March 31, 2017 and 2016 represents income allocations to Elan Polo International, Inc., a member of DVS Footwear International, LLC and With You, Inc., a member of With You LLC (the partnership between the Company and Jessica Simpson). Noncontrolling interest recorded for the three months ended March 31, 2016 represents income allocations to Elan Polo International, Inc., With You, Inc. and JALP, LLC (“JALP”), a member of FUL IP Holdings, LLC (“FUL IP”). |
Reportable Segment | Reportable Segment An operating segment, in part, is a component of an enterprise whose operating results are regularly reviewed by the chief operating decision maker (the “CODM”) to make decisions about resources to be allocated to the segment and assess its performance. Operating segments may be aggregated only to a limited extent. The Company’s CODM, the Chief Executive Officer, reviews financial information presented on a consolidated basis, accompanied by disaggregated information about revenues for purposes of making operating decisions and assessing financial performance. Accordingly, the Company has determined that it has a single operating and reportable segment. In addition, the Company has no foreign operations or any assets in foreign locations. Nearly all of the Company’s operations consist of a single revenue stream, which is the licensing of its trademark portfolio, with an immaterial portion of revenues derived from television, book, café operations and certain commissions. |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Investment | March 31, 2017 Gross Unrealized Historical Cost Cost Basis (1) Estimated Fair Value Gains Losses (in thousands) Available-for-sale securities $ 12,048 $ 7,673 $ 6,178 $ - $ 1,495 (1) December 31, 2016 Gross Unrealized Historical Cost Cost Basis (1) Estimated Fair Value Gains Losses (in thousands) Available-for-sale securities $ 12,048 $ 7,673 $ 7,673 $ - $ - (1) |
Basic And Diluted Earnings (Loss) Per Common Share | The shares used to calculate basic and diluted EPS consist of the following: Three Months Ended March 31, 2017 2016 Basic weighted-average common shares outstanding 62,459,711 61,209,868 Acquisition hold back shares - - Warrants - - Stock options - - Performance based restricted stock - - Unvested restricted stock - - Diluted weighted-average common shares outstanding 62,459,711 61,209,868 |
Earnings Per Share, Basic and Diluted | The computation of diluted EPS for the three months ended March 31, 2017 and 2016 excludes the common stock equivalents of the following potentially dilutive securities because their inclusion would be anti-dilutive: Three Months Ended March 31, 2017 2016 Acquisition hold back shares - 695,055 Warrants - 330,671 Stock options - 12,796 Performance based restricted stock 263,964 408,555 Unvested restricted stock 88,941 94,236 Total 352,905 1,541,313 |
Fair Value Measurement of Fin20
Fair Value Measurement of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table sets forth the carrying value and the fair value of the Company’s financial assets and liabilities required to be disclosed at March 31, 2017 and December 31, 2016: Carrying Value Fair Value Financial Instrument Level 3/31/2017 12/31/2016 3/31/2017 12/31/2016 (in thousands) Available-for-sale securities 1 $ 6,178 $ 7,673 $ 6,178 $ 7,673 Interest rate cap 2 $ 1,120 $ 1,248 $ 1,120 $ 1,104 2016 Term Loans 3 $ 575,425 $ 582,500 $ 546,397 $ 551,324 2016 Revolving Loan 3 $ 80,500 $ 80,500 $ 61,712 $ 60,755 LNT Contingent Earn Out 3 $ - $ - $ - $ - Legacy Payments 3 $ 2,053 $ 1,995 $ 2,053 $ 1,995 |
Schedule of Notional Amounts of Outstanding Derivative Positions | The components of the 2016 Cap Agreements as of March 31, 2017 are as follows: Notional Value Derivative Asset Derivative Liability (in thousands) LIBOR based loans $ 500,000 $ - $ 128 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill, Impaired [Abstract] | |
Schedule of Goodwill | Goodwill is summarized as follows: March 31, December 31, 2017 2016 (in thousands) Balance at January 1 $ 307,744 $ 314,288 Adjustment for acquisition of Martha Stewart Living Omnimedia, Inc. - (11,249) Acquisition of Gaiam, Inc. Branded Consumer Business - 4,705 Ending balance $ 307,744 $ 307,744 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Summary of intangible assets | Intangible assets are summarized as follows: March 31, 2017 Useful Lives Gross Accumulated Net (in thousands) Finite-lived intangible assets: Trademarks 15 $ 4,990 $ (1,641) $ 3,349 Customer agreements 4 2,832 (1,915) 917 Favorable lease 2 537 (537) - Patents 10 665 (247) 418 $ 9,024 $ (4,340) 4,684 Indefinite-lived intangible assets: Trademarks 1,025,381 Intangible assets, net $ 1,030,065 December 31, 2016 Useful Lives Gross Accumulated Net (in thousands) Finite-lived intangible assets: Trademarks 15 $ 4,981 $ (1,558) $ 3,423 Customer agreements 4 2,832 (1,738) 1,094 Favorable lease 2 537 (537) - Patents 10 665 (230) 435 $ 9,015 $ (4,063) 4,952 Indefinite-lived intangible assets: Trademarks 1,025,260 Intangible assets, net $ 1,030,212 |
Summary of future annual estimated amortization expense | Estimated future annual amortization expense for intangible assets in service as of March 31, 2017 is summarized as follows: Years ending December 31, (in thousands) Remainder of 2017 $ 638 2018 782 2019 592 2020 402 2021 399 Thereafter 1,871 $ 4,684 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure Long Term Debt [Abstract] | |
Schedule of long term debt | The components of long-term debt are as follows: March 31, December 31, 2017 2016 (in thousands) 2016 Term Loans $ 575,425 $ 582,500 2016 Revolving Loan 80,500 80,500 Unamortized deferred financing costs (16,978) (17,965) Total long-term debt, net of unamortized deferred financing costs 638,947 645,035 Less: current portion of long-term debt 28,300 28,300 Long-term debt $ 610,647 $ 616,735 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Option Activity | The following table summarizes the Company’s stock option activity for the three months ended March 31, 2017: Number of Weighted- Weighted- Aggregate (in thousands, except share and per share data) Outstanding - January 1, 2017 129,501 $ 9.65 2.3 $ - Granted - - Exercised - - Forfeited or Canceled (40,500) (12.19) Outstanding - March 31, 2017 89,001 $ 8.49 2.9 $ - Exercisable - March 31, 2017 89,001 $ 8.49 2.9 $ - A summary of the changes in the Company’s unvested stock options is as follows: Number of Weighted- Unvested - January 1, 2017 5,000 $ 1.96 Granted - - Vested (5,000) (1.96) Forfeited or Canceled - - Unvested - March 31, 2017 - $ - |
Schedule of Warrants Activity | The following table summarizes the Company’s outstanding warrants for the three months ended March 31, 2017: Number of Weighted- Weighted- Aggregate (in thousands, except share and per share data) Outstanding - January 1, 2017 801,760 $ 7.87 3.1 $ 51 Granted - - Exercised - - Forfeited or Canceled - - Outstanding - March 31, 2017 801,760 $ 7.87 2.8 $ - Exercisable - March 31, 2017 776,760 $ 7.69 2.7 $ - A summary of the changes in the Company’s unvested warrants is as follows: Number of Weighted- Unvested - January 1, 2017 50,000 $ 6.32 Granted - - Vested (25,000) 6.32 Forfeited or Canceled - - Unvested - March 31, 2017 25,000 $ 6.32 |
Schedule of Restricted Stock Activity | A summary of the time-based restricted stock activity for the three months ended March 31, 2017 is as follows: Number of Weighted- Weighted- (in thousands, except share and per share data) Unvested - January 1, 2017 258,787 $ 8.45 2.1 Granted - - Vested (45,834) (5.84) Unvested - March 31, 2017 212,953 $ 9.01 2.3 A summary of the time-based restricted stock units activity for the three months ended March 31, 2017 is as follows: Number of Weighted- Weighted- (in thousands, except share and per share data) Unvested - January 1, 2017 326,667 $ 8.52 2.5 Granted 60,000 4.89 Vested (78,333) (13.27) Unvested - March 31, 2017 308,334 $ 6.60 2.2 |
Schedule Of Performance Stock Units Activity | A summary of the PSUs activity for the three months ended March 31, 2017 is as follows: Number of Weighted- Weighted- (in thousands, except share and per share data) Unvested - January 1, 2017 2,803,367 $ 8.18 2.4 Granted - - Vested (701,233) (10.97) Forfeited or Cancelled (437,500) (7.23) Unvested - March 31, 2017 1,664,634 $ 4.31 2.7 |
Restructuring (Tables)
Restructuring (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | Changes in the restructuring accruals during the three months ended March 31, 2017 were as follows: Severance & Related Contract Termination Professional Fees Total Accrual (in thousands) Balance at January 1, 2017 $ - $ 1,500 $ - $ 1,500 Charges to expense - - - - Amounts paid - - - - Balance at March 31, 2017 $ - $ 1,500 $ - $ 1,500 |
Summary of Significant Accoun26
Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | Jul. 01, 2016 | |
Significant Accounting Policies [Line Items] | ||||
Allowance for doubtful accounts receivable | $ 200 | $ 200 | ||
Accounts Receivable, Net, Current, Total | 44,879 | $ 53,195 | ||
Revenue, Net, Total | 39,400 | $ 34,008 | ||
Net Cash Provided by (Used in) Financing Activities | $ (10,826) | (6,363) | ||
Gaiam Brand Holdco, LLC [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Business Acquisition, Percentage of Voting Interests Acquired | 49.90% | |||
Restatement Adjustment [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Net Cash Provided by (Used in) Operating Activities | 300 | |||
Net Cash Provided by (Used in) Financing Activities | $ 300 | |||
Accounts Receivable [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Concentration Risk, Percentage | 48.00% | 49.00% | ||
Accounts Receivable [Member] | License One [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Concentration Risk, Percentage | 17.00% | 14.00% | ||
Accounts Receivable [Member] | License Two [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Concentration Risk, Percentage | 16.00% | 13.00% | ||
Accounts Receivable [Member] | License Three [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Concentration Risk, Percentage | 15.00% | 12.00% | ||
Accounts Receivable [Member] | License Four [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Concentration Risk, Percentage | 10.00% | |||
Sales Revenue, Services, Net [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Concentration Risk, Percentage | 10.00% | 10.00% | ||
Sales Revenue, Services, Net [Member] | License One [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Concentration Risk, Percentage | 11.00% | 11.00% | ||
Sales Revenue, Services, Net [Member] | License Two [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Concentration Risk, Percentage | 10.00% | |||
Sales Revenue, Services, Net [Member] | License Three [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Concentration Risk, Percentage | 10.00% |
Unrealized Gains And Losses On
Unrealized Gains And Losses On Available-For-Sale Securities Held (Detail) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 | |
Historical Cost | $ 12,048 | $ 12,048 | |
Cost Basis | [1] | 7,673 | 7,673 |
Estimated Fair Value | 6,178 | 7,673 | |
Gross Unrealized Gains | 0 | 0 | |
Gross Unrealized Losses | $ 1,495 | $ 0 | |
[1] | The cost basis is historical cost less other-than-temporary impairment. |
Basic and Diluted Weighted Aver
Basic and Diluted Weighted Average Common Shares Outstanding (Detail) - shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Basic weighted-average common shares outstanding | 62,459,711 | 61,209,868 |
Acquisition hold back shares | 0 | 0 |
Warrants | 0 | 0 |
Stock options | 0 | 0 |
Performance based restricted stock | 0 | 0 |
Unvested restricted stock | 0 | 0 |
Diluted weighted-average common shares outstanding | 62,459,711 | 61,209,868 |
Computation of Diluted EPS (Det
Computation of Diluted EPS (Detail) - shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Common stock, value, outstanding | 352,905 | 1,541,313 |
Warrants | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Common stock, value, outstanding | 0 | 330,671 |
Performance based restricted stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Common stock, value, outstanding | 263,964 | 408,555 |
Acquisition hold back shares | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Common stock, value, outstanding | 0 | 695,055 |
Unvested restricted stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Common stock, value, outstanding | 88,941 | 94,236 |
Stock options | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Common stock, value, outstanding | 0 | 12,796 |
Fair Value Measurement of Fin30
Fair Value Measurement of Financial Instruments -Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Gross Licensing Revenue Payable, Percentage | 3.50% | ||
Licensing Revenue Payment Period | 5 years | ||
Interest Rate Cap [Member] | |||
Derivative, Notional Amount | $ 500,000 | $ 500,000 | |
Derivative, Cap Interest Rate | 1.50% | ||
Derivative, Maturity Date | Nov. 23, 2018 | ||
Interest Expense [Member] | |||
Accretion Expense | $ 100 | $ 100 |
Fair Value Assets and Liabiliti
Fair Value Assets and Liabilities Measured on Recurring Basis (Detail) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | $ 6,178 | $ 7,673 |
Long-term debt, Carrying Value | 610,647 | 616,735 |
Financial Instrument | Interest rate cap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, Carrying Value | 1,120 | 1,248 |
Long-term debt, Fair Value | 1,120 | 1,104 |
Financial Instrument | 2016 Term Loans | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, Carrying Value | 575,425 | 582,500 |
Long-term debt, Fair Value | 546,397 | 551,324 |
Financial Instrument | 2016 Revolving Loan | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, Carrying Value | 80,500 | 80,500 |
Long-term debt, Fair Value | 61,712 | 60,755 |
Financial Instrument | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 6,178 | 7,673 |
LNT Contingent Earn outs | 0 | 0 |
Legacy Payments | 2,053 | 1,995 |
Financial Instrument | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 6,178 | 7,673 |
LNT Contingent Earn outs | 0 | 0 |
Legacy Payments | $ 2,053 | $ 1,995 |
Components of the 2016 Cap Agre
Components of the 2016 Cap Agreement (Detail) - Interest Rate Cap [Member] - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Derivatives, Fair Value [Line Items] | ||
Notional Value | $ 500,000 | $ 500,000 |
Derivative Asset | 0 | |
Derivative Liability | $ 128 |
Summary of Goodwill (Detail)
Summary of Goodwill (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Schedule Of Goodwill [Line Items] | ||
Beginning Balance | $ 307,744 | $ 314,288 |
Ending Balance | 307,744 | 307,744 |
Acquisition of Martha Stewart Living Omnimedia, Inc. [Member] | ||
Schedule Of Goodwill [Line Items] | ||
Acquisitions | 0 | (11,249) |
Acquisition of Gaiam, Inc. Branded Consumer Business [Member] | ||
Schedule Of Goodwill [Line Items] | ||
Acquisitions | $ 0 | $ 4,705 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Intangible Assets Disclosure [Line Items] | ||
Amortization expense | $ 0.3 | $ 0.3 |
Summary of Intangible Assets (D
Summary of Intangible Assets (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Schedule Of Finite Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, Gross Carrying Amount | $ 9,024 | $ 9,015 |
Finite-lived intangible asset, Accumulated Amortization | (4,340) | (4,063) |
Finite-lived intangible asset, Net Carrying Amount | 4,684 | 4,952 |
Intangible assets, net | $ 1,030,065 | $ 1,030,212 |
Trademarks | ||
Schedule Of Finite Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, Useful Lives | 15 years | 15 years |
Finite-lived intangible asset, Gross Carrying Amount | $ 4,990 | $ 4,981 |
Finite-lived intangible asset, Accumulated Amortization | (1,641) | (1,558) |
Finite-lived intangible asset, Net Carrying Amount | 3,349 | 3,423 |
Indefinite lived intangible assets | $ 1,025,381 | $ 1,025,260 |
Customer agreements | ||
Schedule Of Finite Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, Useful Lives | 4 years | 4 years |
Finite-lived intangible asset, Gross Carrying Amount | $ 2,832 | $ 2,832 |
Finite-lived intangible asset, Accumulated Amortization | (1,915) | (1,738) |
Finite-lived intangible asset, Net Carrying Amount | $ 917 | $ 1,094 |
Favorable lease | ||
Schedule Of Finite Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, Useful Lives | 2 years | 2 years |
Finite-lived intangible asset, Gross Carrying Amount | $ 537 | $ 537 |
Finite-lived intangible asset, Accumulated Amortization | (537) | (537) |
Finite-lived intangible asset, Net Carrying Amount | $ 0 | $ 0 |
Patents | ||
Schedule Of Finite Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, Useful Lives | 10 years | 10 years |
Finite-lived intangible asset, Gross Carrying Amount | $ 665 | $ 665 |
Finite-lived intangible asset, Accumulated Amortization | (247) | (230) |
Finite-lived intangible asset, Net Carrying Amount | $ 418 | $ 435 |
Future Annual Estimated Amortiz
Future Annual Estimated Amortization Expense (Detail) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Future Annual Estimated Amortization Expense [Line Items] | ||
Remainder of 2017 | $ 638 | |
2,018 | 782 | |
2,019 | 592 | |
2,020 | 402 | |
2,021 | 399 | |
Thereafter | 1,871 | |
Total | $ 4,684 | $ 4,952 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Detail) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended |
Jul. 31, 2016 | Mar. 31, 2017 | Dec. 31, 2016 | |
Disclosure Long Term Debt Additional Information [Line Items] | |||
Long-term Debt | $ 610,647 | $ 616,735 | |
Interest Rate Cap [Member] | |||
Disclosure Long Term Debt Additional Information [Line Items] | |||
Derivative, Notional Amount | 500,000 | $ 500,000 | |
Derivative, Cap Interest Rate | 1.50% | ||
Derivative, Maturity Date | Nov. 23, 2018 | ||
BoA Credit Agreement [Member] | |||
Disclosure Long Term Debt Additional Information [Line Items] | |||
Repayments of Debt | $ 5,000 | ||
BoA Credit Agreement [Member] | July 2016 Debt Facilities [Member] | |||
Disclosure Long Term Debt Additional Information [Line Items] | |||
Debt Instrument, Covenant Description | (i) maintain a positive net income, (ii) satisfy a maximum loan to value ratio set at 50.0% (applicable to the Revolving Loans and Tranche A Loans) and (iii) satisfy a maximum consolidated first lien leverage ratio, initially set at 2.80:1.00, decreasing over the term of the Amended BoA Credit Agreement until reaching the final maximum ratio of 2.50:1.00 for the fiscal quarter ending September 30, 2018 and thereafter. | ||
Long-term Debt | $ 258,000 | ||
Debt Instrument, Description | amounting to: (i) the loans outstanding under the Amended BoA Credit Agreement plus, (a) where intellectual property is disposed, 50.0% of the disposed intellectual property’s orderly liquidation value, and (b) where any other assets constituting collateral are disposed or upon the receipt of certain insurance proceeds, 100% of the net proceeds thereof, subject to certain reinvestment rights; and (ii) the Tranche A-1 Loans to the extent that the outstanding principal amount thereof exceeds 10.0% of the orderly liquidation value of the registered trademarks owned by the BoA Facility Loan Parties. | ||
Proceeds from Issuance of Long-term Debt | $ 287,500 | ||
GSO Term Loan Agreement [Member] | July 2016 Debt Facilities [Member] | |||
Disclosure Long Term Debt Additional Information [Line Items] | |||
Line of Credit Facility, Interest Rate Description | (i) the LIBOR rate plus an applicable margin of 8.25% or 9.00% per annum or (ii) the base rate plus an applicable margin of 7.25% or 8.00% per annum, in each case based upon the consolidated total leverage ratio. | ||
Debt Instrument, Covenant Description | (a) in the event the consolidated total leverage ratio is at least 4.00:1.00, 75% thereof, (b) in the event the consolidated total leverage ratio is less than 4.00:1.00 but at least 3.00:1.00, 50% thereof and (c) in the event the consolidated total leverage ratio is less than 3.00:1.00, 0% thereof. Commencing on March 31, 2017, the Loans under the Amended GSO Credit Agreement will amortize in quarterly installments, equal to 2.00% per annum | ||
Line of Credit Facility, Covenant Terms | The Company may request one or more additional term loan facilities or the increase of term loan commitments under the Amended GSO Credit Agreement as would not cause the consolidated total leverage ratio, determined on a pro forma basis after giving effect to any such addition and increase, to exceed 6.00:1.00, subject to the satisfaction of certain conditions in the Amended GSO Credit Agreement. | ||
Debt Instrument, Covenant Compliance | (i) a maximum consolidated total leverage ratio, initially set at 7.25:1.00, decreasing over the term of the Amended GSO Credit Agreement until reaching the final maximum ratio of 6.50:1.00 for the fiscal quarter ending September 30, 2018 and thereafter and (ii) a maximum consolidated first lien leverage ratio, initially set at 2.80:1.00, decreasing over the term of the Amended GSO Credit Agreement until reaching the final maximum ratio of 2.50:1.00 for the fiscal quarter ending September 30, 2018 and thereafter. | ||
Tranche A [Member] | BoA Credit Agreement [Member] | July 2016 Debt Facilities [Member] | |||
Disclosure Long Term Debt Additional Information [Line Items] | |||
Debt instrument, Face amount | $ 133,000 | ||
Long-term Debt | 133,000 | ||
Tranche A -1 Term Loans [Member] | BoA Credit Agreement [Member] | |||
Disclosure Long Term Debt Additional Information [Line Items] | |||
Debt instrument, Face amount | 44,500 | ||
Tranche A -1 Term Loans [Member] | BoA Credit Agreement [Member] | July 2016 Debt Facilities [Member] | |||
Disclosure Long Term Debt Additional Information [Line Items] | |||
Long-term Debt | $ 44,500 | ||
Revolving Credit Facility [Member] | BoA Credit Agreement [Member] | |||
Disclosure Long Term Debt Additional Information [Line Items] | |||
Line of Credit Facility, Commitment Fee Percentage | 0.375% | ||
Revolving Credit Facility [Member] | BoA Credit Agreement [Member] | July 2016 Debt Facilities [Member] | |||
Disclosure Long Term Debt Additional Information [Line Items] | |||
Line of credit facility, Maximum borrowing capacity | $ 110,000 | ||
Long-term Line of Credit | $ 80,500 | ||
Revolving Credit Facility [Member] | Tranche A [Member] | BoA Credit Agreement [Member] | July 2016 Debt Facilities [Member] | |||
Disclosure Long Term Debt Additional Information [Line Items] | |||
Debt Instrument, Interest Rate, Basis for Effective Rate | (a) the LIBOR rate plus 3.50% per annum or (b) the base rate plus 2.50% per annum | ||
Revolving Credit Facility [Member] | Tranche A -1 Term Loans [Member] | |||
Disclosure Long Term Debt Additional Information [Line Items] | |||
Line of Credit Facility, Covenant Terms | (i) the Revolving Credit Facility and Tranche A Loans as would not cause the consolidated first lien leverage ratio, determined on a pro forma basis after giving effect to any such increase, to exceed 2.33:1.00 and (ii) the Tranche A-1 Loans, as would not cause the consolidated first lien leverage ratio, determined on a pro forma basis after giving effect to any such increase, to exceed (a) with respect to any increase, the proceeds of which will be used solely to finance an acquisition, 2.50:100 and (b) with respect to any other increase, 2.40:1.00, subject to the satisfaction of certain conditions in the Amended BoA Credit Agreement. | ||
Revolving Credit Facility [Member] | Tranche A -1 Term Loans [Member] | BoA Credit Agreement [Member] | |||
Disclosure Long Term Debt Additional Information [Line Items] | |||
Debt Instrument, Interest Rate, Basis for Effective Rate | (a) the LIBOR rate plus 7.00% per annum or (b) the base rate plus 6.00% per annum. | ||
GSO Credit Agreement [Member] | July 2016 Debt Facilities [Member] | |||
Disclosure Long Term Debt Additional Information [Line Items] | |||
Line of credit facility, Maximum borrowing capacity | $ 415,000 |
Components of Long-Term Debt (D
Components of Long-Term Debt (Detail) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Schedule Of Long Term Debt [Line Items] | ||
2016 Term Loans | $ 575,425 | $ 582,500 |
2016 Revolving Loan | 80,500 | 80,500 |
Unamortized deferred financing costs | (16,978) | (17,965) |
Total long-term debt, net of unamortized deferred financing costs | 638,947 | 645,035 |
Less: current portion of long-term debt | 28,300 | 28,300 |
Long-term debt | $ 610,647 | $ 616,735 |
Stock-based Compensation - Addi
Stock-based Compensation - Additional Information (Detail) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | ||
Feb. 28, 2017 | Feb. 23, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Employees [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total unrecognized compensation expense | $ 0.1 | $ 0.1 | ||
Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted, Number of Options | 0 | |||
Total unrecognized compensation expense | $ 0.1 | 0.3 | ||
Deferred Compensation Arrangement with Individual, Fair Value of Shares Issued | $ 0.3 | |||
Restricted Stock | Chief Executive Officer | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted shares granted | 66,667 | |||
Total unrecognized compensation expense | $ 0.7 | |||
Restricted Stock | Chief Financial Officer | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted shares granted | 60,000 | |||
Total unrecognized compensation expense | $ 0.1 | |||
Share-based compensation arrangement by share-based payment award, award vesting period | 2 years | |||
Deferred Compensation Arrangement with Individual, Fair Value of Shares Issued | $ 0.3 | |||
Restricted Stock | Employees [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted shares granted | 35,000 | |||
Share-based compensation arrangement by share-based payment award, award vesting period | 3 years | |||
Performance Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock awards, granted in period | 164,978 | 69,994 | ||
Total unrecognized compensation expense | $ 3.5 | $ 1.3 | ||
Share Based Compensation Arrangement By Share Based Payment Award Options Vested Value | $ 0.2 | |||
Performance Stock Units | Chief Executive Officer | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted shares granted | 200,000 | |||
Restricted stock awards, granted in period | 60,000 | 20,000 | ||
Granted, Number of Options | 30,000 | |||
Total unrecognized compensation expense | $ 2.9 | |||
Performance Stock Units | Chief Financial Officer | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock awards, granted in period | 36,000 | 12,000 | ||
Total unrecognized compensation expense | $ 0.6 | $ 0.4 | ||
Warrants | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock awards, granted in period | 0 | |||
Total unrecognized compensation expense | $ 0.1 | |||
Term Of Class Of Warrants Or Rights | 2 months 12 days | |||
Deferred Compensation Arrangement with Individual, Allocated Share-based Compensation Expense | $ 0.1 | 0.1 | ||
Employee Stock Option [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total unrecognized compensation expense | $ 0.1 | $ 0.1 |
Summary of Stock Option Activit
Summary of Stock Option Activity and Changes in Unvested Stock Options (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Changes in nonvested stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding, Number of Options | 5,000 | |
Granted, Number of Options | 0 | |
Vested, Number of Options | (5,000) | |
Forfeited or Canceled, Number of Options | 0 | |
Outstanding, Number of Options | 0 | 5,000 |
Outstanding, Weighted Average Exercise Price | $ 1.96 | |
Granted, Weighted Average Exercise Price | 0 | |
Vested, Weighted Average Exercise Price | (1.96) | |
Forfeited or Canceled, Weighted Average Exercise Price | 0 | |
Outstanding, Weighted Average Exercise Price | $ 0 | $ 1.96 |
Stock Option | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding, Number of Options | 129,501 | |
Granted, Number of Options | 0 | |
Exercised, Number of Options | 0 | |
Forfeited or Canceled, Number of Options | (40,500) | |
Outstanding, Number of Options | 89,001 | 129,501 |
Exercisable, Number of Options | 89,001 | |
Outstanding, Weighted Average Exercise Price | $ 9.65 | |
Granted, Weighted Average Exercise Price | 0 | |
Exercised, Weighted Average Exercise Price | 0 | |
Forfeited or Canceled, Weighted Average Exercise Price | (12.19) | |
Outstanding, Weighted Average Exercise Price | 8.49 | $ 9.65 |
Exercisable, Weighted Average Exercise Price | $ 8.49 | |
Weighted Average Remaining Contractual Life (in years) | 2 years 10 months 24 days | 2 years 3 months 18 days |
Exercisable, Weighted Average Remaining Contractual Life (in years) | 2 years 10 months 24 days | |
Outstanding, Aggregate Intrinsic Value | $ 0 | |
Outstanding, Aggregate Intrinsic Value | 0 | $ 0 |
Exercisable, Aggregate Intrinsic Value | $ 0 |
Summary of Company's Outstandin
Summary of Company's Outstanding Warrant and Changes in Unvested Warrants (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Changes In Unvested Warrants | ||
Summary Of Company Outstanding Warrant and Changes In Unvested Warrants [Line Items] | ||
Outstanding, Number of Warrants | 50,000 | |
Granted, Number of Warrants | 0 | |
Vested, Number of Warrants | (25,000) | |
Forfeited or Canceled, Number of Warrants | 0 | |
Outstanding, Number of Warrants | 25,000 | 50,000 |
Outstanding, Weighted Average Exercise Price | $ 6.32 | |
Granted, Weighted Average Exercise Price | 0 | |
Vested, Weighted Average Grant Date Fair Value | 6.32 | |
Forfeited or Canceled, Weighted Average Exercise Price | 0 | |
Outstanding, Weighted Average Exercise Price | $ 6.32 | $ 6.32 |
Warrants | ||
Summary Of Company Outstanding Warrant and Changes In Unvested Warrants [Line Items] | ||
Outstanding, Number of Warrants | 801,760 | |
Granted, Number of Warrants | 0 | |
Exercised, Number of Warrants | 0 | |
Forfeited or Canceled, Number of Warrants | 0 | |
Outstanding, Number of Warrants | 801,760 | 801,760 |
Exercisable, Number of Warrants | 776,760 | |
Outstanding, Weighted Average Exercise Price | $ 7.87 | |
Granted, Weighted Average Exercise Price | 0 | |
Exercised, Weighted Average Exercise Price | 0 | |
Forfeited or Canceled, Weighted Average Exercise Price | 0 | |
Outstanding, Weighted Average Exercise Price | 7.87 | $ 7.87 |
Exercisable, Weighted Average Exercise Price | $ 7.69 | |
Outstanding, Weighted Average Remaining Contractual Life (in Years) | 2 years 9 months 18 days | 3 years 1 month 6 days |
Exercisable, Weighted Average Remaining Contractual Life (in Years) | 2 years 8 months 12 days | |
Outstanding, Aggregate Intrinsic Value | $ 0 | $ 51 |
Exercisable, Aggregate Intrinsic Value | $ 0 |
Summary of Restricted Stock Act
Summary of Restricted Stock Activity and Performance Stock Units (Detail) - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Restricted Stock | ||
Summary Of Restricted Stock Activity [Line Items] | ||
Outstanding, Number of Options | 258,787 | |
Granted, Number of Options | 0 | |
Vested, Number of Options | (45,834) | |
Outstanding, Number of Options | 212,953 | 258,787 |
Weighted Average Grant Date Fair Value | $ 8.45 | |
Granted, Weighted Average Grant Date Fair Value | 0 | |
Vested, Weighted Average Grant Date Fair Value | (5.84) | |
Weighted Average Grant Date Fair Value | $ 9.01 | $ 8.45 |
Unvested, Weighted Average Remaining Contractual Life (in years) | 2 years 3 months 18 days | 2 years 1 month 6 days |
Performance Stock Units (PSUs) | ||
Summary Of Restricted Stock Activity [Line Items] | ||
Outstanding, Number of Options | 2,803,367 | |
Granted, Number of Options | 0 | |
Vested, Number of Options | (701,233) | |
Forfeited or Cancelled, Number of Options | (437,500) | |
Outstanding, Number of Options | 1,664,634 | 2,803,367 |
Weighted Average Grant Date Fair Value | $ 8.18 | |
Granted, Weighted Average Grant Date Fair Value | 0 | |
Vested, Weighted Average Grant Date Fair Value | (10.97) | |
Forfeited or Cancelled, Weighted Average Grant Date Fair Value | (7.23) | |
Weighted Average Grant Date Fair Value | $ 4.31 | $ 8.18 |
Unvested, Weighted Average Remaining Contractual Life (in years) | 2 years 8 months 12 days | 2 years 4 months 24 days |
Restricted Stock Units (RSUs) [Member] | ||
Summary Of Restricted Stock Activity [Line Items] | ||
Outstanding, Number of Options | 326,667 | |
Granted, Number of Options | 60,000 | |
Vested, Number of Options | (78,333) | |
Outstanding, Number of Options | 308,334 | 326,667 |
Weighted Average Grant Date Fair Value | $ 8.52 | |
Granted, Weighted Average Grant Date Fair Value | 4.89 | |
Vested, Weighted Average Grant Date Fair Value | (13.27) | |
Weighted Average Grant Date Fair Value | $ 6.60 | $ 8.52 |
Unvested, Weighted Average Remaining Contractual Life (in years) | 2 years 2 months 12 days | 2 years 6 months |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - USD ($) $ in Millions | Jan. 01, 2013 | Nov. 17, 2014 | Jul. 30, 2013 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2016 | Aug. 15, 2014 |
Related Party [Line Items] | ||||||||||||
Intangible Asset Agreement Annual Payment | $ 1.7 | |||||||||||
License Agreement Annual Payment | 1.3 | |||||||||||
License Agreement Payments During Period | 0.6 | $ 2,016 | ||||||||||
Tengram Capital Partners Gen2 Fund Lp | ||||||||||||
Related Party [Line Items] | ||||||||||||
Percentage of beneficially owned of outstanding common stock | 5.00% | |||||||||||
FUL | ||||||||||||
Related Party [Line Items] | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | $ 8.9 | |||||||||||
Business Acquisition, Percentage of Voting Interests Acquired | 50.50% | |||||||||||
Income (Loss) Attributable to Noncontrolling Interest | 0.1 | |||||||||||
ES Originals Inc | ||||||||||||
Related Party [Line Items] | ||||||||||||
Royalty Revenue | $ 4.5 | 3.8 | 3.7 | |||||||||
Accrued Royalties | $ 7 | $ 7.1 | ||||||||||
TCM Employee | ||||||||||||
Related Party [Line Items] | ||||||||||||
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Grants In Period, Gross | 125,000 | |||||||||||
Share-Based Compensation Arrangement By Share-Based Payment Award, Equity Instruments Other Than Options, Grants In Period | 180,000 | |||||||||||
TCP Employee | ||||||||||||
Related Party [Line Items] | ||||||||||||
Share-Based Compensation Arrangement By Share-Based Payment Award, Equity Instruments Other Than Options, Grants In Period | 200,000 | |||||||||||
Payment For Consulting Services | $ 0.1 | 0.1 | ||||||||||
TCP Employee | Vesting Over Three Years [Member] | ||||||||||||
Related Party [Line Items] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 60.00% | 20.00% | 20.00% | |||||||||
TCP Employee | Scenario, Forecast [Member] | Vesting Over Three Years [Member] | ||||||||||||
Related Party [Line Items] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 33.40% | 33.30% | 33.30% | |||||||||
IP License Agreement And Intangible Asset Agreement [Member] | ||||||||||||
Related Party [Line Items] | ||||||||||||
Terms Of Agreement | for calendar years 2018 through 2020 exceed $195 million or the gross licensing revenues for calendar year 2020 equal or exceed $65 million. | |||||||||||
Accretion Expense | $ 0.2 | 0.2 | ||||||||||
License Agreement Payments During Period | 0.3 | $ 0.3 | ||||||||||
TCP Agreement | ||||||||||||
Related Party [Line Items] | ||||||||||||
Receivables From Series Rendered For Merger And Acquisition | $ 1 | |||||||||||
License Agreement Annual Payment | $ 0.9 | |||||||||||
Acquisition of Transaction Fee | $ 12 |
Restructuring - Additional Info
Restructuring - Additional Information (Detail) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($) | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Charges, Total | $ 2,500 | ||
Restructuring Reserve, Current | $ 1,500 | ||
Restructuring Reserve | $ 1,500 | ||
Payments for Restructuring | 9,000 | ||
Restructuring and Related Cost, Number of Positions Eliminated | 65 | ||
Other Restructuring Costs | $ 11,900 | ||
Professional Fees [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Charges, Total | 0 | 500 | |
Restructuring Reserve | 0 | 0 | |
Payments for Restructuring | 0 | ||
Asset Write-Offs [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Charges, Total | 400 | ||
Employee Severance [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Charges, Total | 0 | 1,200 | |
Restructuring Reserve | 0 | 0 | |
Payments for Restructuring | 0 | ||
Contract Termination [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Charges, Total | 0 | $ 400 | |
Restructuring Reserve | 1,500 | $ 1,500 | |
Payments for Restructuring | $ 0 |
Restructuring (Detail)
Restructuring (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Reserves and allowance deducted from asset accounts: | ||
Charges to expense | $ 2,500 | |
Amounts paid | $ (9,000) | |
Ending Balance | 1,500 | |
Severance & Related Benefits [Member] | ||
Reserves and allowance deducted from asset accounts: | ||
Beginning Balance | 0 | |
Charges to expense | 0 | 1,200 |
Amounts paid | 0 | |
Ending Balance | 0 | |
Contract Termination Costs [Member] | ||
Reserves and allowance deducted from asset accounts: | ||
Beginning Balance | 1,500 | |
Charges to expense | 0 | 400 |
Amounts paid | 0 | |
Ending Balance | 1,500 | |
Professional Fees [Member] | ||
Reserves and allowance deducted from asset accounts: | ||
Beginning Balance | 0 | |
Charges to expense | 0 | $ 500 |
Amounts paid | 0 | |
Ending Balance | 0 | |
Total Accrual [Member] | ||
Reserves and allowance deducted from asset accounts: | ||
Beginning Balance | 1,500 | |
Charges to expense | 0 | |
Amounts paid | 0 | |
Ending Balance | $ 1,500 |