Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 28, 2019 | Jun. 30, 2018 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | Sequential Brands Group, Inc. | ||
Entity Central Index Key | 0001648428 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Trading Symbol | sqbg | ||
Entity Public Float | $ 77,062,393 | ||
Entity Common Stock, Shares Outstanding | 64,462,765 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current Assets: | ||
Cash | $ 14,106 | $ 18,902 |
Restricted cash | 2,032 | 1,531 |
Accounts receivable, net | 66,202 | 60,102 |
Prepaid expenses and other current assets | 11,224 | 8,635 |
Total current assets | 93,564 | 89,170 |
Property and equipment, net | 8,971 | 7,035 |
Intangible assets, net | 964,911 | 995,170 |
Other assets | 11,222 | 5,836 |
Total assets | 1,078,668 | 1,097,211 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 23,527 | 19,126 |
Current portion of long-term debt | 28,300 | 28,300 |
Current portion of deferred revenue | 11,695 | 8,102 |
Total current liabilities | 63,522 | 55,528 |
Long-term debt, net of current portion | 582,487 | 602,297 |
Long-term deferred revenue, net of current portion | 8,224 | 11,845 |
Deferred income taxes | 67,002 | 67,799 |
Other long-term liabilities | 12,789 | 6,204 |
Total liabilities | 734,024 | 743,673 |
Commitments and Contingencies | ||
Equity: | ||
Preferred stock Series A, $0.01 par value; 10,000,000 shares authorized; none issued and outstanding at December 31, 2018 and December 31, 2017 | ||
Common stock, $0.01 par value; 150,000,000 shares authorized; 65,990,179 and 63,652,721 shares issued at December 31, 2018 and December 31, 2017, respectively, and 64,327,582 and 63,227,727 shares outstanding at December 31, 2018 and December 31, 2017, respectively | 657 | 635 |
Additional paid-in capital | 513,764 | 508,444 |
Accumulated other comprehensive (loss) income | (1,554) | 80 |
Accumulated deficit | (234,723) | (225,369) |
Treasury stock, at cost; 1,662,597 and 424,994 shares at December 31, 2018 and December 31, 2017, respectively | (4,226) | (1,799) |
Total Sequential Brands Group, Inc. and Subsidiaries stockholders' equity | 273,918 | 281,991 |
Noncontrolling interest | 70,726 | 71,547 |
Total equity | 344,644 | 353,538 |
Total liabilities and equity | $ 1,078,668 | $ 1,097,211 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement Of Financial Position [Abstract] | ||
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 | 65,990,179 | 63,652,721 |
Common stock, shares outstanding | 64,327,582 | 63,227,727 |
Treasury stock, shares | 1,662,597 | 424,994 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | |||||||||||
Net revenue | $ 169,956 | $ 167,464 | $ 155,528 | ||||||||
Operating expenses | 87,767 | 79,443 | 85,392 | ||||||||
Impairment charges | 17,899 | 340,628 | |||||||||
Loss on sale of assets | 7,117 | ||||||||||
Income (loss) from operations | $ 21,121 | $ (643) | $ 21,783 | $ 14,912 | $ (279,292) | $ (13,551) | $ 24,244 | $ 15,992 | 57,173 | (252,607) | 70,136 |
Other expense | (693) | (1,583) | (3,810) | ||||||||
Interest expense, net | 62,152 | 59,891 | 50,538 | ||||||||
(Loss) income before income taxes | 4,815 | (16,247) | 6,105 | (345) | (294,613) | (28,574) | 7,566 | 1,540 | (5,672) | (314,081) | 15,788 |
(Benefit from) provision for income taxes | (694) | (132,535) | 9,157 | ||||||||
Net (loss) income | (1,329) | (8,034) | 4,689 | (304) | (162,220) | (24,732) | 4,451 | 955 | (4,978) | (181,546) | 6,631 |
Net income attributable to noncontrolling interest | (863) | (1,581) | (1,102) | (1,960) | (668) | 552 | (1,921) | (2,135) | (5,506) | (4,172) | (7,452) |
Net loss attributable to Sequential Brands Group, Inc. and Subsidiaries | $ (2,192) | $ (9,615) | $ 3,587 | $ (2,264) | $ (162,888) | $ (24,180) | $ 2,530 | $ (1,180) | $ (10,484) | $ (185,718) | $ (821) |
Loss per share attributable to Sequential Brands Group, Inc. and Subsidiaries: | |||||||||||
Basic and diluted (in dollars per share) | $ (0.16) | $ (2.95) | $ (0.01) | ||||||||
Weighted-average common shares outstanding: | |||||||||||
Basic and diluted ( in shares) | 63,700,081 | 62,861,743 | 61,912,410 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net (loss) income | $ (4,978) | $ (181,546) | $ 6,631 |
Other comprehensive (loss) income: | |||
Unrealized gain on available-for-sale securities | 2,062 | ||
Reclassification adjustment related to impairment of available-for-sale securities | 4,375 | ||
Unrealized (loss) gain on interest rate caps | (80) | 224 | (144) |
Unrealized (loss) gain on interest rate hedging transactions | (1,554) | 29 | |
Other comprehensive (loss) income | (1,634) | 224 | 6,322 |
Comprehensive (loss) income | (6,612) | (181,322) | 12,953 |
Comprehensive income attributable to noncontrolling interest | (5,506) | (4,172) | (7,452) |
Comprehensive (loss) income attributable to Sequential Brands Group, Inc. and Subsidiaries | $ (12,118) | $ (185,494) | $ 5,501 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Total Sequential Brands Group, Inc. and Subsidiaries Stockholders' EquityInterest Rate Cap [Member] | Total Sequential Brands Group, Inc. and Subsidiaries Stockholders' EquityInterest Rate Swap [Member] | Total Sequential Brands Group, Inc. and Subsidiaries Stockholders' EquityInterest Rate Hedging Member | Total Sequential Brands Group, Inc. and Subsidiaries Stockholders' Equity | Common Stock [Member]Galaxy Brand Holdings, Inc. [Member] | Common Stock [Member] | Additional Paid-In Capital [Member]Galaxy Brand Holdings, Inc. [Member] | Additional Paid-In Capital [Member] | Accumulated Other Comprehensive Loss [Member]Interest Rate Cap [Member] | Accumulated Other Comprehensive Loss [Member]Interest Rate Swap [Member] | Accumulated Other Comprehensive Loss [Member]Interest Rate Hedging Member | Accumulated Other Comprehensive Loss [Member] | Accumulated Deficit [Member] | Treasury Stock [Member] | Noncontrolling Interest [Member] | Interest Rate Cap [Member] | Interest Rate Swap [Member] | Interest Rate Hedging Member | Total |
Balance at Dec. 31, 2015 | $ 451,488 | $ 605 | $ 496,179 | $ (6,466) | $ (38,830) | $ 74,161 | $ 525,649 | ||||||||||||
Balance (in shares) at Dec. 31, 2015 | 60,480,474 | ||||||||||||||||||
Stock-based compensation | 6,404 | $ 5 | 6,399 | 6,404 | |||||||||||||||
Stock-based compensation (in shares) | 746,567 | ||||||||||||||||||
Issuance of common stock in connection with warrant exercise | $ 14 | $ (14) | |||||||||||||||||
Issuance of common stock in connection with warrant exercise (in shares) | 1,375,000 | ||||||||||||||||||
Unrealized gain on available-for-sale securities | 2,062 | ||||||||||||||||||
Unrealized gain and reclassification adjustment on available-for-sale securities | 6,437 | 6,437 | 6,437 | ||||||||||||||||
Unrealized gain ( loss) on interest rate | $ (144) | $ 29 | $ (144) | $ 29 | $ (144) | $ 29 | |||||||||||||
Repurchase of common stock | (638) | $ (638) | (638) | ||||||||||||||||
Repurchase of common stock (in shares) | (97,686) | ||||||||||||||||||
Noncontrolling interest distribution | (6,800) | (6,800) | |||||||||||||||||
Net income attributable to noncontrolling interest | 7,452 | 7,452 | |||||||||||||||||
Net loss attributable to common stockholders | (821) | (821) | (821) | ||||||||||||||||
Balance at Dec. 31, 2016 | 462,755 | $ 624 | 502,564 | (144) | (39,651) | $ (638) | 74,813 | 537,568 | |||||||||||
Balance (in shares) at Dec. 31, 2016 | 62,602,041 | ||||||||||||||||||
Treasury stock, shares | (97,686) | ||||||||||||||||||
Stock-based compensation | 5,911 | $ 11 | 5,900 | 5,911 | |||||||||||||||
Stock-based compensation (in shares) | 1,050,680 | ||||||||||||||||||
Stock registration costs | (20) | (20) | (20) | ||||||||||||||||
Unrealized gain ( loss) on interest rate | 224 | 224 | 224 | ||||||||||||||||
Repurchase of common stock | (1,161) | $ (1,161) | (1,161) | ||||||||||||||||
Repurchase of common stock (in shares) | (327,308) | ||||||||||||||||||
Noncontrolling interest distribution | (7,438) | (7,438) | |||||||||||||||||
Net income attributable to noncontrolling interest | 4,172 | 4,172 | |||||||||||||||||
Net loss attributable to common stockholders | (185,718) | (185,718) | (185,718) | ||||||||||||||||
Balance at Dec. 31, 2017 | 281,991 | $ 635 | 508,444 | 80 | (225,369) | $ (1,799) | 71,547 | 353,538 | |||||||||||
Balance (in shares) at Dec. 31, 2017 | 63,652,721 | (424,994) | |||||||||||||||||
Treasury stock | $ (1,799) | ||||||||||||||||||
Treasury stock, shares | (424,994) | ||||||||||||||||||
Shares issued under stock incentive plan | 1,500 | $ 8 | 1,492 | $ 1,500 | |||||||||||||||
Shares issued under stock incentive plan (in shares) | 843,486 | ||||||||||||||||||
Stock-based compensation | 3,842 | $ 14 | 3,828 | 3,842 | |||||||||||||||
Stock-based compensation (in shares) | 1,493,972 | ||||||||||||||||||
Unrealized gain ( loss) on interest rate | $ (80) | $ (1,554) | $ (80) | $ (1,554) | $ (80) | $ (1,554) | |||||||||||||
Repurchase of common stock | (2,427) | $ (2,427) | (2,427) | ||||||||||||||||
Repurchase of common stock (in shares) | (1,237,603) | ||||||||||||||||||
Noncontrolling interest distribution | (6,682) | (6,682) | |||||||||||||||||
Net income attributable to noncontrolling interest | 5,506 | 5,506 | |||||||||||||||||
Net loss attributable to common stockholders | (10,484) | (10,484) | (10,484) | ||||||||||||||||
Balance at Dec. 31, 2018 | 273,918 | $ 657 | $ 513,764 | $ (1,554) | (234,723) | $ (4,226) | 70,726 | 344,644 | |||||||||||
Balance (in shares) at Dec. 31, 2018 | 65,990,179 | (1,662,597) | |||||||||||||||||
Cumulative effect of revenue recognition accounting change | $ 1,130 | $ 1,130 | $ 355 | 1,485 | |||||||||||||||
Treasury stock | $ (4,226) | ||||||||||||||||||
Treasury stock, shares | (1,662,597) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash Flows From Operating Activities | |||
Net (loss) income | $ (4,978) | $ (181,546) | $ 6,631 |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Provision for bad debts | 1,618 | 689 | 295 |
Depreciation and amortization | 3,366 | 4,788 | 4,765 |
Stock-based compensation | 3,842 | 5,911 | 6,404 |
Impairment of available-for-sale securities | 4,375 | ||
Amortization of deferred financing costs | 4,481 | 3,862 | 3,111 |
Loss on debt extinguishment | 148 | ||
Impairment charges | 17,899 | 340,628 | |
Income from equity method investment | (61) | (22) | (9) |
Loss on disposal of property and equipment | 131 | 2 | 447 |
Realized loss on sale of available-for-sale securities | 1,916 | ||
Loss on sale of assets | 7,117 | ||
Deferred income taxes | (1,260) | (132,669) | 9,581 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (1,383) | (7,596) | (11,464) |
Prepaid expenses and other assets | (7,994) | (6,350) | 2,347 |
Accounts payable and accrued expenses | 5,808 | 59 | (5,132) |
Deferred revenue | (4,415) | (3,336) | 22,126 |
Other liabilities | 8,581 | 1,874 | 125 |
Cash Provided By Operating Activities From Continuing Operations | 32,900 | 28,210 | 43,602 |
Cash Used In Operating Activities From Discontinued Operations | (564) | ||
Cash Provided By Operating Activities | 32,900 | 28,210 | 43,038 |
Cash Flows From Investing Activities | |||
Cash paid for acquisitions, net of cash acquired | (146,883) | ||
Cash paid for equity method investment | (704) | ||
Investments in intangible assets, including registration and renewal costs | (295) | (335) | (500) |
Proceeds from sale of available-for-sale securities | 5,757 | ||
Purchases of property and equipment | (4,233) | (3,061) | (3,325) |
Proceeds from sale of property and equipment | 2 | 45 | |
Proceeds from sale of trademark | 4,356 | 500 | |
Cash Provided By (Used in) Investing Activities | (172) | 2,863 | (151,367) |
Cash Flows From Financing Activities | |||
Proceeds from long-term debt | 107,607 | 10,000 | 132,000 |
Stock registration costs | (20) | ||
Payment of long-term debt | (117,456) | (28,300) | (19,000) |
Purchase of interest rate caps | (1,248) | ||
Guaranteed payments in connection with acquisitions | (3,475) | (4,375) | (3,750) |
Deferred financing costs | (14,590) | (13,141) | |
Repurchases of common stock | (2,427) | (1,161) | (638) |
Noncontrolling interest distributions | (6,682) | (7,438) | (6,800) |
Cash (Used in) Provided By Financing Activities | (37,023) | (31,294) | 87,423 |
Net Decrease In Cash and Restricted Cash | (4,295) | (221) | (20,906) |
Balance — Beginning of year | 20,433 | 20,654 | 41,560 |
Balance — End of year | 16,138 | 20,433 | 20,654 |
Supplemental Disclosures Of Cash Flow Information | |||
Cash paid for: Interest | 58,681 | 55,755 | 45,308 |
Cash paid for: Taxes | 90 | 163 | 178 |
Non-cash Investing And Financing Activities | |||
Accrued purchases of property and equipment at year end | 18 | 152 | 10 |
Unrealized (loss) gain on available-for-sale securities during the year | 2,062 | ||
Unrealized (loss) gain on interest rate cap, net during the year | (80) | $ 224 | $ (144) |
Unrealize loss on interest rate swaps, net during the year | $ (1,554) |
Organization and Nature of Oper
Organization and Nature of Operations | 12 Months Ended |
Dec. 31, 2018 | |
Organization and Nature of Operations [Abstract] | |
Organization and Nature of Operations | NOTE 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 December 31, 2018, the Company had approximately one-hundred fifty licensees, with wholesale licensees comprising a significant majority. We were formed in June 2015 in connection with a strategic combination resulting in our predecessors, Sequential Brands Group, Inc. (“Old Sequential”) and Martha Stewart Living Omnimedia, Inc. (“MSLO”), becoming our wholly-owned subsidiaries (the “Mergers”). Old Sequential was incorporated under the laws of the State of Delaware in 1982 as People’s Liberation, Inc. and changed its name to Sequential Brands Group, Inc. in 2012. Old Sequential's common stock began trading on the Nasdaq Capital Market (“Nasdaq”) under the ticker “SQBG” on September 24, 2013, and we succeeded to Old Sequential’s listing on December 7, 2015. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reclassification of Prior Year Presentation On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) No. 2016-18 “Statement of Cash Flows (Topic 230): Restricted Cash” (“ASU 2016-18”), which changes the presentation of restricted cash on the statement of cash flows. ASU 2016-18 requires an entity to show the changes in total cash, cash equivalents, restricted cash, and restricted cash equivalents in the statement of cash flows. As a result of the adoption of ASU 2016-18, the Company no longer shows the changes in restricted cash as investing activities on the statement of cash flows and reconciles to the total cash and restricted cash balance, which are presented separately on the consolidated balance sheets. Principles of Consolidation The accompanying 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 the consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (“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 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 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, actual results could differ significantly from estimates. Discontinued Operations The Company accounted for the closure of its wholesale operations during 2013 as discontinued operations in accordance with the guidance provided in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 360, Accounting for Impairment or Disposal of Long-Lived Assets , and ASC 205, Presentation of Financial Statements , which requires that only a component of an entity or a group of components of an entity, that represents a strategic shift that has, or will have, a major effect on the reporting entity’s operations that has been disposed of or is classified as held for sale and has operations and cash flows that can be clearly distinguished from the rest of the entity be reported as discontinued operations and assets held for sale. The statements of cash flows for the periods presented are also reclassified to reflect the results of discontinued operations as separate line items. Revenue Recognition The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”), which became effective for the Company as of January 1, 2018 (See Note 5 for impact of adoption and other related disclosures). ASC 606 requires a five-step approach to determine the appropriate method of revenue recognition for each contractual arrangement: Step 1: Identify the Contract(s) with a Customer Step 2: Identify the Performance Obligation(s) in the Contract Step 3: Determine the Transaction Price Step 4: Allocate the Transaction Price to the Performance Obligation(s) in the Contract Step 5: Recognize Revenue when (or as) the Entity Satisfies a Performance Obligation The Company has entered into various license agreements for its owned trademarks. Under ASC 606, the Company’s agreements are generally considered symbolic licenses, which contain the characteristics of a right-to-access license since the customer is simultaneously receiving the intellectual property (“IP”) and benefiting from it throughout the license period. The Company assesses each license agreement at inception and determines the performance obligation(s) and appropriate revenue recognition method. As part of this process, the Company applies judgments based on historical trends when estimating future revenues and the period over which to recognize revenue. The Company generally recognizes revenue for license agreements under the following methods: 1. Licenses with guaranteed minimum royalties (“GMRs”) : Generally, guaranteed minimum royalty payments (fixed revenue) comprising the transaction price are recognized on a straight-line basis over the term of the contract, as defined in each license agreement. 2. Licenses with both GMRs (fixed revenue) and earned royalties (variable revenue) : Earned royalties in excess of fixed revenue are only recognized when the Company is reasonably certain that the guaranteed minimum payments for the period, as defined in each license agreement, will be exceeded. Additionally, the Company has categorized certain contracts as variable when there is a history and future expectation of exceeding GMRs. The Company recognizes income for these contracts during the period corresponding to the licensee’s sales. 3. Licenses that are sales-based only or earned royalties : Earned royalties (variable revenue) are recognized as income during the period corresponding to the licensee’s sales. Payments received as consideration for the grant of a license or advanced royalty payments are recorded as deferred revenue at the time payment is received and recognized into revenue under the methods described above. Contract assets represent unbilled receivables and are presented within accounts receivable, net on the consolidated balance sheets. Contract liabilities represent unearned revenues and are presented within the current portion of deferred revenue on the consolidated balance sheets. The Company disaggregates its revenue into two categories: licensing agreements and other, which is comprised of revenue from sources such as editorial content for books, television, sales commissions and vendor placement commissions. 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. Revenue from media content is recognized at a point in time, when the content is delivered and accepted. Commission revenues and vendor placement commission revenues are recorded in the period the commission is earned. The Company entered into a transaction with a media company in 2017 for which it receives advertising credits as part of the consideration exchanged. These transactions are recorded at the estimated fair value of the advertising credits received, as their fair value is deemed more readily determinable than the fair value of the trademark licensing right and other services provided by the Company, in accordance with ASC 845, Nonmonetary Transactions . The fair value of the advertising credits are recorded as revenue and in other assets when earned, and expensed when the advertising credits are utilized. The Company recorded revenue of $3.7 million for each year ended December 31, 2018 and 2017 related to the advertising credits. The Company recorded $1.3 million of expense related to the advertising credits utilized for the year ended December 31, 2018. The Company did not record any expense related to the advertising credits for the year ended December 31, 2017 as they had not yet been utilized. Restricted Cash Restricted cash at December 31, 2018 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 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 $2.1 million and $0.6 million at December 31, 2018 and 2017, respectively. The Company’s accounts receivable, net amounted to $66.2 million and $60.1 million as of December 31, 2018 and 2017, respectively. Three licensees accounted for approximately 44% (19%, 13%, and 12%) of the Company’s total consolidated accounts receivable, net balance as of December 31, 2018 and three licensees accounted for approximately 53% (25%, 15% and 13%) of the Company’s total consolidated accounts receivable, net balance as of December 31, 2017. The Company does not believe the accounts receivable balances from these licensees represents a significant collection risk based on past collection experience. Investments The Company accounts for equity securities under ASC 321, Investments – Equity Securities (“ASC 321”). Such securities are reported at fair value in the consolidated balance sheets and, at the time of purchase, are reported in the consolidated statements of cash flows as an investing activity. Gains and losses on equity securities are recognized through net loss. The Company recognized a loss on its equity securities for $0.9 million recorded in other expense on the consolidated statement of operations for the year ended December 31, 2018. Prior to adoption of ASC 321 in 2018, the Company accounted for its equity securities under ASC 320, Investments – Debt and Equity Securities . During the second quarter of 2017, the Company sold equity securities for $5.8 million. The book cost basis of the equity securities was approximately $7.7 million, which was determined using the specific identification method. The sale resulted in a net realized loss of $1.9 million, which is recorded in other expense (income) in the consolidated statement of operations for the year ended December 31, 2017. The Company did not hold any equity securities as of December 31, 2017. 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% noncontrolling interest in Gaiam Pty. Ltd. in connection with its acquisition of Gaiam Brand Holdco, LLC (see Note 6). The value of the Company’s equity method investment was $0.7 million and $0.8 million as of December 31, 2018 and 2017, respectively, and is included in other assets in the consolidated balance sheets. The Company’s share of earnings from its equity method investee, which was not material for the years ended December 31, 2018, 2017 and 2016, is included in other (income) expense in the consolidated statements of operations. 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 represents the excess of purchase price over the fair value of net assets acquired in business combinations accounted for under the purchase method of accounting. The Company does not have any goodwill reported on its consolidated balance sheet at December 31, 2018. On an annual basis and as needed, the Company tests goodwill and indefinite lived trademarks for impairment through the use of discounted cash flow models. Assumptions used in our discounted cash flow models are as follows: (i) discount rates; (ii) projected average revenue growth rates; and (iii) projected long-term growth rates. Our estimates also factor in economic conditions and expectations of management, which may change in the future based on period-specific facts and circumstances. Other intangibles with determinable lives, including certain trademarks, customer agreements, patents and a favorable lease, are evaluated for the possibility of impairment when certain indicators are present, and are otherwise amortized on a straight-line basis over the estimated useful lives of the assets (currently ranging from 2 to 15 years). Due to the identification of impairment indicators during the quarter ended September 30, 2018, specifically the impairment of certain tradenames due to reduced growth expectations and the impact of licensee transitions for these brands, the Company performed impairment testing of its indefinite-lived assets at September 30, 2018, which replaced its October 1 st annual test. As a result of its testing, the Company recorded a non-cash impairment charge of $17.9 million relating to its indefinite-lived intangible assets during the quarter ended September 30, 2018. Due to the identification of impairment indicators during the quarter ended September 30, 2017, the Company performed impairment testing of its goodwill and indefinite-lived assets at September 30, 2017, which replaced its October 1 st annual test. As a result of its testing, the Company recorded a non-cash impairment charge of $36.5 million relating to its indefinite-lived intangible assets during the quarter ended September 30, 2017. Due to the identification of impairment indicators during the quarter ended December 31, 2017, the Company performed impairment testing of its goodwill and indefinite-lived assets at December 31, 2017. As a result of its testing, the Company recorded a non-cash goodwill impairment charge of $304.1 million during the quarter ended December 31, 2017. See Notes 3, 8 and 9 for further details. Property and Equipment Property and equipment are stated at cost, less accumulated depreciation and amortization. Maintenance and repairs are charged to expense as incurred. Upon retirement or other disposition of property and equipment, applicable cost and accumulated depreciation and amortization are removed from the accounts and any gains or losses are included in results of operations. Depreciation and amortization of property and equipment is computed using the straight-line method based on estimated useful lives of the assets as follows: Furniture and fixtures 5 years Computer hardware/equipment 5 to 7 years Leasehold improvements Term of the lease or the estimated life of the related improvements, whichever is shorter. Computer software 5 years Automobiles and trucks 5 years Websites 3 years Deferred Financing Costs Deferred financing costs represent lender fees, legal and other third-party costs incurred in connection with issuing debt securities or obtaining debt or other credit arrangements. Deferred financing costs are recorded as a deduction of the carrying value of debt and are amortized as interest expense, using the effective interest method, over the term of the related debt. Debt discounts are amortized to interest expense over the term of the related debt. Treasury Stock Treasury stock is recorded at cost as a reduction of equity in the consolidated balance sheets. Preferred Stock Preferred stock subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value. The Company classifies conditionally redeemable preferred stock (if any), which includes preferred stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control, as temporary equity. At all other times, the Company classifies preferred stock as a component of equity. The Company’s preferred stock does not feature any redemption rights within the holders’ control or conditional redemption features not solely within its control as of December 31, 2018 and 2017. Accordingly, all issuances of preferred stock are presented as a component of equity. The Company did not have any preferred stock outstanding as of December 31, 2018 and 2017. Common Stock Purchase Warrants and Derivative Financial Instruments The Company classifies as equity any contracts that (i) require physical settlement or net-share settlement or (ii) give the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies as assets or liabilities any contracts that (i) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the Company’s control) or (ii) gives the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). The Company assesses classification of its common stock purchase warrants and other freestanding derivatives, if any, at each reporting date to determine whether a change in classification between assets and liabilities is required. The Company determined that its outstanding common stock purchase warrants satisfied the criteria for classification as equity instruments at December 31, 2018 and 2017. Advertising Advertising costs related to media ads are charged to expense as of the first date the advertisements take place. Advertising costs related to campaign ads, such as production and talent, are expensed over the term of the related advertising campaign. Advertising expenses included in operating expenses approximated $13.9 million, $6.9 million and $9.6 million for the years ended December 31, 2018, 2017 and 2016, respectively. As of December 31, 2018, the Company had no capitalized advertising costs recorded on the consolidated balance sheet. As of December 31, 2017, the Company had $0.4 million of capitalized advertising costs recorded on the consolidated balance sheet. Stock-Based Compensation Compensation cost for restricted stock is measured at fair value 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 common stock outstanding upon the lapse of applicable restrictions. PSUs are included in total diluted common stock outstanding when the performance measures have been deemed achieved but the PSUs have not yet been issued. Fair value 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. In accordance with the provisions of ASU 2016‑09 “Simplifying the Accounting for Share-Based Payments” (“ASU 2016‑09”) compensation cost is reduced 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 stock price at the end of such reporting period and revises the straight-line recognition of compensation cost in line with such remeasured amount. 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 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. During the years ended December 31, 2018 and 2017, the Company did not have any reserves or interest and penalties to record through current income tax expense in accordance with ASC 740, Income Taxes (“ASC 740”). 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, 2015 through December 31, 2018. Earnings Per Share Basic earnings per share (“EPS”) is computed by dividing net 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. In periods when there is a net loss, diluted loss per share is equal to basic loss per share, since the effect of including any common stock equivalents would be anti-dilutive. Basic weighted-average common shares outstanding is equivalent to diluted weighted-average common shares outstanding for the years ended December 31, 2018, 2017 and 2016. The computation of diluted EPS for the years ended December 31, 2018, 2017 and 2016 excludes the common stock equivalents of the following potentially dilutive securities because their inclusion would be anti-dilutive: Year Ended December 31, 2018 2017 2016 Warrants — — 125,535 Acquisition hold back shares — — 172,814 Unvested restricted stock 1,233,703 166,607 122,167 Performance based restricted stock 58,275 65,087 407,303 Stock options — — 7,977 Total 1,291,978 231,694 835,796 Concentration of Credit Risk Financial instruments which potentially expose the Company to credit risk consist primarily of cash, restricted cash, accounts receivable and equity 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 equity securities are deposited with high quality financial institutions. At times, however, such cash, restricted cash and equity 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 December 31, 2018. Concentration of credit risk with respect to accounts receivable is minimal due to the collection history and the nature of the Company’s revenue arrangements. Customer Concentrations The Company recorded net revenues of $170.0 million, $167.5 million and $155.5 million during the years ended December 31, 2018, 2017 and 2016, respectively. During the year ended December 31, 2018, one licensee represented at least 10% of net revenue, accounting for 13% of the Company’s net revenue. During the year ended December 31, 2017, three licensees represented at least 10% of net revenue, each accounting for 11% of the Company’s net revenue. During the year ended December 31, 2016, one licensee represented at least 10% of net revenue, accounting for 11% of the Company’s net revenue. 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. Noncontrolling Interest Noncontrolling interest recorded for the year ended December 31, 2018 represents income allocations to Elan Polo International, Inc., a member of DVS Footwear International, LLC (“DVS LLC”) and With You, Inc., a member of With You LLC (the partnership between the Company and Jessica Simpson) and a loss allocation to JALP, LLC (“JALP”), a member of FUL IP Holdings, LLC (“FUL IP”). Noncontrolling interest recorded for the year ended December 31, 2017 represents income allocations to DVS LLC, With You, Inc. and a loss allocation to JALP. Noncontrolling interest recorded for the year ended December 31, 2016 represents income allocations to DVS LLC, With You, Inc. and JALP. The following table sets forth the noncontrolling interest for the years ended December 31, 2018, 2017 and 2016: Year Ended December 31, 2018 2017 2016 (in thousands) With You LLC $ 5,607 $ 5,816 $ 6,525 DVS LLC 614 581 564 FUL IP (715) (2,225) 363 Net income attributable to noncontrolling interests $ 5,506 $ 4,172 $ 7,452 The following table sets forth the noncontrolling interest as of December 31, 2018 and 2017: DVS LLC FUL IP With You LLC Total (in thousands) Balance at January 1, 2017 $ 2,651 $ 4,774 $ 67,388 $ 74,813 Net income (loss) attributable to noncontrolling interests 581 (2,225) 5,816 4,172 Distributions (564) (363) (6,511) (7,438) Balance at December 31, 2017 2,668 2,186 66,693 71,547 Net income (loss) attributable to noncontrolling interests 614 (715) 5,607 5,506 Impact of adoption of ASC 606 - - 355 355 Distributions (581) (975) (5,126) (6,682) Balance at December 31, 2018 $ 2,701 $ 496 $ 67,529 $ 70,726 During the year ended December 31, 2018, the Company recorded a loss on sale of assets of $2.0 million related to the sale of the FUL trademark. 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. The majority of the Company’s operations consist of a single revenue stream, which is the licensing of its trademark portfolio, with additional revenues derived from television, book, café operations and certain commissions. Recently Issued Accounting Standards ASU No. 2018-18, “Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606” In November 2018, the FASB issued ASU No. 2018-18 “Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606” (“ASU 2018-18”). ASU 2018-18 amends ASC 808, Collaborative Arrangements (“ ASC 808”) and ASC 606, Revenue from Contracts with Customers (“ASC 606”) to clarify that certain transactions between participants in a collaborative arrangement should be accounted for under ASC 606 when the counterparty is a customer. ASU 2018-18 is effective for annual and interim periods beginning after December 15, 2019, and early adoption is permitted. The Company does not expect the adoption of ASU 2018-18 to have a material impact on the Company’s consolidated financial statements. ASU No. 2018-16, “Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes” In October 2018, the FASB issued ASU No. 2018-16 “Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes” (“ASU 2018-16”). ASU 2018-16 adds the overnight index swap rate based on the Secured Overnight Financing Rate to the list of US benchmark interest rates in ASC 815 that are eligible to be hedged. Entities may now designate changes in this rate as the hedged risk in hedges of interest rate risk for fixed-rate financial instruments. ASU 2018-16 is effective when an entity adopts the new hedging guidance in ASU No. 2017‑12, “Targeted Improvements to Accounting for Hedging Activities” (“ASU 2017‑12”). The Company early adopted the provisions of ASU 2017‑12 in December 2018. The adoption of ASU 2017-12 and ASU 2018-16 did not have a material impact on the Company’s consolidated financial statements. ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement” In August 2018, the FASB issued ASU No. 2018-13 “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). ASU 2018-13 eliminates, amends, and adds certain disclosure requirements for fair value measurements. ASU 2018-13 is effective for annual and interim periods beginning after December 15, 2019, and early adoption is permitted for the entire standard or for the provisions that eliminate or amend disclosure requirements. The Company does not expect the adoption of ASU 2018-13 to have a material impact on the Company’s consolidated financial statements. ASU No. 2018-07, “Improvements to Nonemployee Share-Based Payment Accounting” In June 2018, the FASB issued ASU No. 2018-07 “Improvements to Nonemployee Share-Based Payment Accounting” (“ASU 2018-07”). ASU 2018-07 aligns the accounting for share-based payment awards to employees and non-employees. Under ASU 2018-07 the existing employee guidance will apply to nonemployee share-based transactions, except for specific guidance related to the attribution of compensation cost. ASU 2018-07 should be applied to all new awards granted after the date of adoption. ASU 2018-07 is effective for annual and interim periods beginning after December 15, 2018, and early adoption is permitted. The Company does not expect the adoption of ASU 2018-02 to have a material impact on the Company’s consolidated financial statements. ASU No. 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” In February 2018, the FASB issued ASU No. 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” (“ASU 2018-02”). ASU 2018-02 permits a company to reclassify the disproportionate income tax effects (“stranded tax effects”) of the Tax Cuts and Jobs Act of 2017 on items within accumulated other comprehensive income to retained earnings. ASU 2018-02 is effective for annual and interim periods beginning after December 15, 2018, and early adoption is permitted. The Company does not expect the adoption of ASU 2018-02 to |
Fair Value Measurement of Finan
Fair Value Measurement of Financial Instruments | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Measurement of Financial Instruments [Abstract] | |
Fair Value Measurement of Financial Instruments | NOTE 3 – FAIR VALUE OF FINANCIAL INSTRUMENTS ASC 820‑10, Fair Value Measurements and Disclosures (“ASC 820‑10”), defines fair value, establishes a framework for measuring fair value in GAAP and provides for expanded disclosure about fair value measurements. ASC 820‑10 applies to all other accounting pronouncements that require or permit fair value measurements. 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. During the year ended December 31, 2018, the Company recorded non-cash impairment charges of $17.9 million for indefinite-lived intangible assets related to the trademarks of two of the Company’s brands: Ellen Tracy and Caribbean Joe. The impairments arose due to reduced growth expectations and the impact of licensee transitions for these brands. Fair value for each trademark was determined based on the income approach using estimates of future discounted cash flows, a Level 3 measurement within the fair value hierarchy. The Company determined that certain trademarks which had been impaired during the year ended December 31, 2018 should no longer be classified as indefinite-lived intangible assets. The Company recorded $0.3 million in amortization during the year ended December 31, 2018 related to these trademarks. The following table shows the change in indefinite-lived intangible assets for the year ended December 31, 2018 (in thousands): Balance at January 1, 2018 $ 990,677 Additions 272 Impairment charges (17,899) Reclassified to finite-lived intangible assets (6,951) Sale of trademarks (11,170) Ending balance at December 31, 2018 $ 954,929 During the year ended December 31, 2017, the Company recorded non-cash impairment charges of $36.5 million for indefinite-lived intangible assets related to the trademarks of five of the Company’s brands: Caribbean Joe , Revo , Franklin Mint , Nevados , and FUL . Fair value for each trademark was determined based on the income approach using estimates of future discounted cash flows, a Level 3 measure within the fair value hierarchy. The impairments arose due to reduced contractual minimums or reduced sales forecasts in key distribution channels for these brands. When an intangible asset’s useful life is no longer considered to be indefinite, it must be amortized over the remaining period that it is expected to contribute to cash flows. The Company determined that certain trademarks which had been impaired during the year ended December 31, 2017 should no longer be classified as indefinite-lived intangible assets. The Company recorded less than $0.1 million in amortization during the year ended December 31, 2017 related to these trademarks. The following table shows the change in indefinite-lived assets for the year ended December 31, 2017: Balance at January 1, 2017 $ 1,025,260 Additions 2,383 Impairment charges (36,505) Reclassified to finite-lived intangible assets (461) Ending balance at December 31, 2017 $ 990,677 During the year ended December 31, 2017, the Company recorded a non-cash goodwill impairment charge of $304.1 million. The quantitative evaluation of goodwill impairment included an assessment of fair value under the income approach using estimates of future discounted cash flows, a Level 3 measure within the fair value hierarchy. See Note 9 for further details. As of December 31, 2018 and 2017, there were no assets or liabilities that are required to be measured at fair value on a recurring basis, except for the Company’s equity securities (see Note 2), interest rate cap (see Note 10), interest rate swaps (see Note 10) and Legacy Payments (as defined below) for Ms. Martha Stewart. There was no change to fair value level hierarchy classification for the years ended December 31, 2018 and 2017. 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 December 31, 2018 and 2017: Carrying Value Fair Value Financial Instrument Level 12/31/2018 12/31/2017 12/31/2018 12/31/2017 (in thousands) Equity securities 1 $ 627 $ - $ 627 $ - Interest rate caps 2 $ - $ 1,239 $ - $ 1,239 Interest rate swaps - liability 2 $ 2,019 $ - $ 2,019 $ - Term Loans 2 $ 519,850 $ 551,913 $ 515,742 $ 542,655 Revolving Loan 2 $ 115,000 $ 92,787 $ 114,827 $ 92,389 Legacy Payments 3 $ 2,553 $ 2,256 $ 2,553 $ 2,256 The carrying amounts of the Company’s cash, restricted cash, accounts receivable and accounts payable approximate fair value due to their short-term maturities. On December 10, 2018, the Company entered into interest rate swap agreements related to its term loans (the “2018 Swap Agreements”) with certain financial institutions. The Company recorded its interest rates swaps in accrued expense and other long-term liabilities on the consolidated balance sheets at fair value using Level 2 inputs. The 2018 Swap Agreements have a $300 million notional value and $150 million matures on December 31, 2021 and $150 million matures on January 4, 2022. The Company’s risk management objective and strategy with respect to the 2018 Swap Agreements is to reduce its exposure to variability in cash flows on a portion of the Company’s floating-rate debt. The 2018 Swap Agreements protect the Company from increases in changes in its cash flows attributable to changes in a contractually specified interest rate on an amount of borrowing equal to the then outstanding swap notional. The Company will periodically assess the effectiveness of the hedge (both prospective and retrospective) by performing a single regression analysis that was prepared at the inception of the hedging relationship. To the extent the hedging relationship is highly effective, the gain or loss on the swap will be recorded in accumulated other comprehensive loss and reclassified into interest expense in the same period during which the hedged transactions affect earnings. The components of the 2018 Swap Agreements as of December 31, 2018 are as follows: Notional Value Derivative Asset Derivative Liability (in thousands) LIBOR based loans $ 300,000 $ — $ 2,019 On November 30, 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 had a $500 million notional value, strike rate of 1.50% and matured on November 23, 2018. The Company recorded its interest rate caps on the consolidated balance sheets at fair value using Level 2 inputs. The valuation technique used to determine the fair value of the 2016 Cap Agreements approximated the net present value of future cash flows, taking into account current interest rates. The Company’s risk management objective and strategy with respect to the 2016 Cap Agreements was 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 would pay the Company for an amount equivalent to the excess interest over the strike rate. To the extent the hedging relationship was perfectly effective, changes in the fair value of the hedging instrument each period would 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 existed, accumulated other comprehensive loss would be adjusted to a balance that reflected 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. For purposes of this fair value disclosure, the Company based its fair value estimate for the Term Loans and Revolving Loan (each, as defined in Note 10) 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 interest rates as of December 31, 2018 and 2017 for debt with similar risk characteristics and maturities. 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%) of Gross Licensing Revenues (as defined in Ms. Stewart’s employment agreement) for each such calendar year for the remainder of Ms. Stewart’s life (with a minimum of five (5) years of payments, to be made to Ms. Stewart’s estate if Ms. Stewart dies before December 31, 2030) (the “Legacy Payments”). The Company determined the acquisition date fair value of Legacy Payments due to Ms. Martha Stewart was $1.7 million. The fair value of the Legacy Payments due to Ms. Martha Stewart was $2.6 million and $2.3 million at December 31, 2018 and 2017, respectively. The Company recorded $0.3 million of accretion during the each of the years ended December 31, 2018, 2017 and 2016 related to the Legacy Payments and recorded the expense within interest expense, net in the consolidated statements of operations. |
Discontinued Operations of Whol
Discontinued Operations of Wholesale Business | 12 Months Ended |
Dec. 31, 2018 | |
Discontinued Operations of Wholesale Business [Abstract] | |
Discontinued Operations of Wholesale Business | NOTE 4 – DISCONTINUED OPERATIONS OF WHOLESALE BUSINESS During the year ended December 31, 2016, the Company released its $0.6 million reserve of certain unrecognized tax benefits through current income tax expense in accordance with ASC 740. In addition, the Company wrote off the remaining assets and liabilities, a net de minimis amount, within other expense (income) in the consolidated statements of operations. There are no further transactions involving discontinued operations. |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2018 | |
Revenue [Abstract] | |
Revenue | NOTE 5 – REVENUE Adoption On January 1, 2018, the Company adopted ASC 606 on a modified retrospective basis for all open contracts as of January 1, 2018. The core principle of the new guidance is the recognition of revenue when a company transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled to in exchange for those goods or services. The new guidance defines a five-step approach to achieve this core principle and, in doing so, requires greater use of judgment and estimates and requires expanded disclosures related to the amounts of revenue recognized and judgements made. Under the modified retrospective basis, results for reporting periods beginning after January 1, 2018 are presented under the new revenue standard, while prior period amounts are not adjusted and continue to be reported in accordance with ASC 605, Revenue Recognition (“ASC 605”). In connection with the adoption of the new guidance, the Company recorded a net increase of $1.1 million to the opening balance of retained earnings (a reduction of the accumulated deficit). The adjustments consisted of increases of $6.3 million to accounts receivable (resulting in unbilled receivables) and $4.4 million to deferred revenue (contract liability) offset by a noncontrolling interests opening balance adjustment of $0.4 million and an income tax impact of $0.5 million. The adjustments are recorded in the consolidated financial statements as the cumulative effect of revenue recognition accounting change. Changes to the balances at January 1, 2018 resulting from the adoption of ASC 606 are as follows: December 31, Impact of 2017 Adoption of January 1, (As Reported) ASC 606 2018 (in thousands) Assets Current Assets: Accounts receivable, net $ 60,102 $ 6,335 $ 66,437 Liabilities Current Liabilities: Current portion of deferred revenue $ 8,102 $ 4,387 $ 12,489 Deferred income taxes 67,799 463 68,262 Equity Accumulated deficit $ (225,369) $ 1,130 $ (224,239) Noncontrolling interests 71,547 355 71,902 Deferred revenue will be recognized as the Company fulfills its performance obligations over periods of approximately one to five years. The impact to revenue for the year ended December 31, 2018 was a decrease of $3.5 million due to the adoption of ASC 606. The impact to the provision for income taxes for the year ended December 31, 2018 was a reduction of income tax expense of $0.9 million due to the adoption of ASC 606. The tables below summarize the impact of the adoption on the consolidated statement of operations for the year ended December 31, 2018: Year Ended December 31, 2018 (in thousands, except share and per share data) Adjustments Under previous As due to guidance Reported ASC 606 (ASC 605) Net revenue $ 169,956 $ (3,553) $ 173,509 Operating expenses 87,767 226 87,541 Impairment charges 17,899 - 17,899 Loss on sale of assets 7,117 - 7,117 Income from operations 57,173 (3,779) 60,952 Other expense 693 - 693 Interest expense, net 62,152 - 62,152 Loss before income taxes (5,672) (3,779) (1,893) (Benefit from) provision for income taxes (694) (869) 175 Net loss (4,978) (2,910) (2,068) Net income attributable to noncontrolling interests (5,506) 177 (5,683) Net loss attributable to Sequential Brands Group, Inc. and Subsidiaries $ (10,484) $ (2,733) $ (7,751) Loss per share attributable to Sequential Brands Group, Inc. and Subsidiaries: Basic and diluted $ (0.16) $ (0.04) $ (0.12) Weighted-average common shares outstanding: Basic and diluted 63,700,081 63,700,081 63,700,081 Disaggregated Revenue The following table presents revenue disaggregated by source for the years ended December 31, 2018, 2017 and 2016: Year Ended December 31, 2018 2017 2016 (in thousands) Licensing Agreements $ 160,500 $ 161,703 $ 149,026 Other 9,456 5,761 6,502 Total $ 169,956 $ 167,464 $ 155,528 The Company has entered into various license agreements that provide revenues in exchange for use of the Company’s IP. Licensing agreements are the Company’s primary source of revenue. The Company also derives revenue from other sources such as editorial content for books, television, commissions and vendor placement commissions. Contract Balances Contract assets represent unbilled receivables and are presented within accounts receivable, net on the consolidated balance sheets. Contract liabilities represent unearned revenues and are presented within the current portion of deferred revenue on the consolidated balance sheets. The below table summarizes the net change in contract assets and contract liabilities from the date of adoption to December 31, 2018: January 1, December 31, 2018 Changes 2018 (in thousands) Contract assets $ 6,335 $ (3,168) $ 3,167 Contract liabilities 4,387 612 4,999 Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. The Company has reviewed its various revenue streams for its existing contracts under the five-step approach. The Company has entered into various license agreements that provide revenues based on guaranteed minimum royalty payments with additional royalty revenues based on a percentage of defined sales. Guaranteed minimum royalty payments (“fixed revenue”) are recognized on a straight-line basis over the term of the contract, as defined in each license agreement. Earned royalties and earned royalties in excess of the fixed revenue (“variable revenue”) are recognized as income during the period corresponding to the licensee’s sales. Earned royalties in excess of fixed revenue are only recognized when the Company is reasonably certain that the guaranteed minimums payments for the period, as defined in each license agreement, will be exceeded. Licensing for trademarks is the Company’s largest revenue source. Under ASC 606, the Company’s agreements are generally considered symbolic licenses which contain the characteristics of a right-to-access license since the customer is simultaneously receiving the IP and benefiting from it throughout the license period. As such, the Company primarily records revenue from licenses with fixed revenue on a straight-line basis over the license period as the performance obligation is satisfied over time. The Company applies its judgment based on historical trends when estimating future revenues and the period over which to recognize revenue when evaluating its licensing contracts. The below table summarizes amounts related to future performance obligations under fixed contractual arrangements as of December 31, 2018 and the periods in which they are expected to be earned and recognized as revenue: 2019 2020 2021 2022 2023 Thereafter Future Performance Obligations $ 73,561 $ 58,011 $ 42,300 $ 22,705 $ 18,148 $ 19,524 The Company does not disclose the amount attributable to unsatisfied or partially satisfied performance obligations for variable revenue contracts in accordance with the optional exemption allowed for under ASC 606. The Company has categorized certain contracts as variable when there is a history and future expectation of exceeding guaranteed minimum royalties. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2018 | |
Acquisitions [Abstract] | |
Acquisition | NOTE 6 – ACQUISITIONS Acquisition of Gaiam Brand Holdco, LLC On July 1, 2016, the Company, together with its wholly-owned subsidiary, SBG-Gaiam Holdings LLC (formerly known as Stretch & Bend Holdings LLC), a Delaware limited liability company (“SBG-Gaiam” or the “Purchaser”) completed the acquisition pursuant to the terms of the Membership Interest Purchase Agreement (the “MIPA”) with GAIAM, Inc., a Colorado corporation (“Seller”) pursuant to which Purchaser agreed to acquire the branded consumer business of Seller for a total purchase price of $145.7 million in cash. As part of the transaction, SBG-Gaiam acquired Seller’s yoga, fitness and wellness product business, which include the GAIAM and SPRI brands. In tandem with the transaction, the Company signed long-term licensing agreements for the brands’ core categories, which became effective upon closing. As part of the MIPA, the Company paid $1.9 million to Seller for severance related charges to employees of GAIAM, Inc. Also as part of the MIPA, the Company acquired a 49.9% noncontrolling interest in Gaiam Pty. Ltd, which is recorded under the equity method of accounting. The acquisition was accounted for under the acquisition method of accounting. Accordingly, the acquired assets were recorded at their estimated fair values, and operating results for the GAIAM and SPRI brands are included in the Company’s consolidated financial statements from the effective date of the acquisition, July 1, 2016. The Company made the following updates to the purchase price during the year ended December 31, 2017 in connection with finalizing the valuation of the Gaiam Brand Holdco, LLC acquisition (in thousands): Allocated to: Goodwill $ (3,621) Trademarks 3,568 Equity method investment 53 $ — The final allocation of the purchase price is summarized as follows (in thousands): Total consideration paid $ 147,587 Allocated to: Trademarks $ 145,923 Goodwill 1,084 Equity method investment 757 Customer agreements 23 Accrued expenses (200) $ 147,587 The Company and Gaiam Brand Holdco, LLC elected to treat the acquisition as an asset acquisition under section 338(h)(10) of the United States Internal Revenue Service tax code. As such, the Company did not record a deferred tax liability in connection with the acquisition. Goodwill arising from the acquisition mainly consists of the synergies of an ongoing licensing and brand management business. Trademarks have been determined by management to have an indefinite useful life and, accordingly, no amortization is recorded in the Company’s consolidated statement of operations. Goodwill and trademarks are tested for impairment on an annual basis or sooner, if an event occurs or circumstances change that indicate that the carrying amount of the goodwill or trademarks may not be recoverable. The Company incurred legal and other costs related to the transaction of $3.8 million, which have been recognized in operating expenses in the consolidated statement of operations during the year ended December 31, 2016. Total revenues and income from continuing operations since the date of the acquisition of the GAIAM and SPRI brands, included in the consolidated statement of operations for the year ended December 31, 2016, are $12.0 million and $11.1 million, respectively. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 7 – PROPERTY AND EQUIPMENT Property and equipment is summarized as follows: December 31, 2018 2017 (in thousands) Furniture and fixtures $ 6,094 $ 6,164 Computer hardware/equipment 1,400 1,198 Leasehold improvements 9,860 5,937 Computer software 973 974 Websites 304 400 Automobiles and trucks 140 140 Property and equipment 18,771 14,813 Less accumulated depreciation and amortization (9,800) (7,778) Property and equipment, net $ 8,971 $ 7,035 As discussed in Note 19, in February 2016, the Company wrote-off $0.4 million of leasehold improvements due to moving its corporate headquarters. There were no impairments of property and equipment recorded in the consolidated statements of operations for the years ended December 31, 2018, 2017 and 2016. Depreciation and amortization expense amounted to $2.2 million, $3.8 million and $3.5 million for the years ended December 31, 2018, 2017 and 2016, respectively. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2018 | |
Intangible Assets [Abstract] | |
Intangible Assets | NOTE 8 – INTANGIBLE ASSETS Intangible assets are summarized as follows: Gross Useful Lives Carrying Accumulated Net Carrying December 31, 2018 (Years) Amount Amortization Amount (in thousands) Finite-lived intangible assets: Trademarks 5 - 15 $ 12,438 $ (2,689) $ 9,749 Customer agreements 4 2,832 (2,639) 193 Patents 10 361 (321) 40 $ 15,631 $ (5,649) 9,982 Indefinite-lived intangible assets: Trademarks 954,929 Intangible assets, net $ 964,911 Gross Useful Lives Carrying Accumulated Net Carrying December 31, 2017 (Years) Amount Amortization Amount (in thousands) Finite-lived intangible assets: Trademarks 5 - 15 $ 5,462 $ (1,913) $ 3,549 Customer agreements 4 2,832 (2,257) 575 Patents 10 665 (296) 369 $ 8,959 $ (4,466) 4,493 Indefinite-lived intangible assets: Trademarks 990,677 Intangible assets, net $ 995,170 Future annual estimated amortization expense is summarized as follows: Years Ended December 31, (in thousands) 2019 $ 2,018 2020 1,831 2021 1,828 2022 1,806 2023 1,381 Thereafter 1,118 $ 9,982 Amortization expense amounted to $1.2 million, $0.9 million and $1.3 million for the years ended December 31, 2018, 2017 and 2016, respectively. Finite-lived intangible assets represent trademarks, customer agreements and patents related to the Company’s brands. Finite-lived intangible assets are amortized on a straight-line basis over the estimated useful lives of the assets. 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. Indefinite-lived intangible assets are not amortized, but instead are subject to impairment evaluation. As of December 31, 2018, the trademarks of Martha Stewart , Jessica Simpson , Avia , AND1 , Joe’s , GAIAM , Emeril , Caribbean Joe , and Ellen Tracy have been determined to have an indefinite useful life, and accordingly, consistent with ASC Topic 350, no amortization has been recorded in the Company’s consolidated statements of operations. Instead, each of these intangible assets are tested for impairment annually and as needed on an individual basis as separate single units of accounting, with any related impairment charge recorded to the statement of operations at the time of determining such impairment. The annual evaluation of the Company’s indefinite-lived trademarks is performed as of October 1, the beginning of the Company’s fourth fiscal quarter. Based on the Company’s annual evaluation, the Company determined that a certain trademark should no longer be classified as an indefinite-lived intangible asset and was reclassified in the fourth quarter of 2018 as a finite-lived intangible asset and amortized on a straight-line basis over the remaining estimated useful life of the trademark. When conducting its impairment assessment of indefinite-lived intangible assets, 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. The Company tests its indefinite-lived intangible assets for recovery in accordance with ASC‑820‑10‑55‑3D. When the income approach is used, fair value measurement reflects current market expectations about those future amounts. The income approach is based on the present value of future earnings expected to be generated by a business or asset. Income projections for a future period are discounted at a rate commensurate with the degree of risk associated with future proceeds. A residual or terminal value is also added to the present value of the income to quantify the value of the business beyond the projection period. As such, recoverability of assets to be held and used is measured by a comparison of the carrying amount of the asset to its expected future discounted 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. Assumptions used in our estimates are as follows: (i) discount rates; (ii) projected annual revenue growth rates; and (iii) projected long-term growth rates. Our estimates also factor in economic conditions and expectations of management which may change in the future based on period-specific facts and circumstances. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. During the year ended December 31, 2018, the Company recorded non-cash impairment charges of $17.9 million for indefinite-lived intangible assets related to the trademarks of two of the Company’s brands: Caribbean Joe and Ellen Tracy . The impairments arose due to reduced growth expectations and the impact of licensee transitions for these brands identified during the annual budget process which began at the end of the third quarter 2018. Fair value for each trademark was determined based on the income approach using estimates of future discounted cash flows. These charges are included in impairment charges in the consolidated statements of operations. Due to the identification of impairment indicators during the quarter ended September 30, 2017, the Company performed impairment testing of its goodwill and indefinite-lived assets at September 30, 2017, which replaced its October 1 st annual test. As a result of its testing, during the quarter ended September 30, 2017, the Company recorded a non-cash impairment charge of $36.5 million relating to its indefinite-lived intangible assets related to the trademarks of Caribbean Joe , Revo , Franklin Mint , Nevados, and FUL . The impairments arose due to reduced contractual minimums or reduced sales forecasts in key distribution channels for these brands. In addition, in connection with its goodwill impairment testing performed at December 31, 2017, the Company performed impairment testing of its indefinite-lived assets at December 31, 2017, noting no additional impairment of its indefinite-lived intangible assets. See Note 9 – Goodwill for further details. When an intangible asset’s useful life is no longer considered to be indefinite, it must be amortized over the remaining period that it is expected to contribute to cash flows. The Company determined that certain trademarks which had been impaired during the year ended December 31, 2017 should no longer be classified as indefinite-lived intangible assets. The Company recorded less than $0.1 million in amortization during the year ended December 31, 2017 related to these trademarks. There was no impairment of intangible assets or other long-lived assets recognized during the year ended December 31, 2016. During the year ended December 31, 2018, the Company sold both the Revo and FUL trademarks and incurred a loss on the sale of the assets of $7.1 million. The following table shows the change in indefinite-lived intangible assets for the year ended December 31, 2018 (in thousands): Balance at January 1, 2018 $ 995,170 Impairment of trademarks (17,899) Sale of trademarks (11,473) Amortization (1,182) Additions 295 Balance at December 31, 2018 $ 964,911 |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill [Abstract] | |
Goodwill | NOTE 9 – GOODWILL Previous changes in goodwill are summarized as follows (in thousands): Balance at January 1, 2017 $ 307,744 Adjustment for acquisition of Gaiam Brand Holdco, LLC (a) (3,621) Impairment charges (304,123) Ending balance at December 31, 2017 $ - (a) Goodwill from the acquisition of Gaiam Brand Holdco, LLC represented 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 (the Company has determined that it has a single reporting unit) on an annual basis (October 1 st ) 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. As discussed below, during 2017, due to impairment indicators noted in between annual tests, the Company performed impairment testing at September 30, 2017, which replaced its October 1st annual test. 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 its 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 its reporting unit is less than its carrying value, it then performs a quantitative impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment to be recognized, if any. If the carrying value of the reporting unit’s goodwill exceeds the implied fair value of the goodwill, an impairment loss is recognized in the amount of that excess, not to exceed the carrying amount of goodwill. Due to impairment indicators noted during the third quarter of 2017, specifically the impairment of certain tradenames due to reduced contractual minimums or reduced sales forecasts in key distribution channels, the Company , with the assistance of a third party valuation specialist, performed a quantitative assessment at September 30, 2017, which replaced its October 1 st annual test. Fair value for the quantitative assessment was determined under an income approach using estimates of discounted future cash flows. The income approach relies on assumptions such as the Company’s projected future earnings and appropriate discount rates. Significant assumptions used in the income approach were as follows: (i) discount rates; (ii) projected annual revenue growth rates; and (iii) projected long-term growth rates. The Company’s estimates also factor in economic conditions and expectations of management which may change in the future based on period-specific facts and circumstances. The Company corroborated the results of the income approach by reconciling to within a reasonable range of the Company’s market capitalization , (calculated as total common shares outstanding multiplied by the common equity price per share, as adjusted for a control premium factor). The control premium was estimated based upon control premiums observed in comparable market transactions. Reconciling items identified included the benefit of the Company’s fully reserved tax assets for which the market may not have been giving full value and depressed market multiples experienced by the entities within our brand licensing peer group. Based on the results of the quantitative assessment, the Company determined that goodwill was not impaired as of September 30, 2017. Due to additional impairment indicators noted during the fourth quarter of 2017, specifically a sharp and continued decline in its stock price and the related decline in its market capitalization, the Company determined that there was a fourth quarter impairment indicator and a quantitative impairment test was required to be performed at December 31, 2017. During the fourth quarter of 2017, the Company’s stock price and market capitalization declined approximately 41%, consistent with the decline in market capitalization of similar companies in the Company’s sector . The Company evaluated the fair value of its reporting unit under the income approach (in the same manner as noted above in its assessment at September 30, 2017), adjusting its assumptions to reflect additional market risk in the discount rate (from 10.25% to 11.25%), as well as adjusted future effective tax rates, noting that the fair value of its reporting unit indicated by the income approach at December 31, 2017 was no longer in excess of its carrying value. At December 31, 2017, after comparing the results of the income approach to the market capitalization approach, the Company noted it could no longer corroborate the results of the income approach by reconciling to within a reasonable range of the Company’s market capitalization, including an assumed control premium. As discussed above, the two primary differences between the market approach and income approach were determined to be the Company’s fully reserved tax assets, for which the market may not have been giving full value and depressed market multiples experienced by all entities within the brand licensing peer group. The reconciliation was significantly impacted by the decreased market capitalization, as well as the enactment in December 2017 of the Tax Cuts and Jobs Act, which reduced the aforementioned reconciling item for fully reserved tax assets. As such, the Company determined that the value indicated by the market capitalization approach, calculated using the December 31, 2017 closing stock price of $1.78 and an estimated control premium factor of 20%, was the most appropriate measure of the fair value of the Company as of December 31, 2017. Based on this analysis, the fair value of the Company’s single reporting unit was below its carrying value by an amount greater than the carrying value of goodwill, and the Company recorded an impairment charge of $304.1 million in the fourth quarter of 2017 to fully write off its goodwill. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2018 | |
Long-Term Debt [Abstract] | |
Long-Term Debt | NOTE 10 – LONG-TERM DEBT The components of long-term debt are as follows: December 31, 2018 2017 (in thousands) Secured Term Loans $ 519,850 $ 551,913 Revolving Credit Facility 115,000 92,787 Unamortized deferred financing costs (24,063) (14,103) Total long-term debt, net of unamortized deferred financing costs 610,787 630,597 Less: current portion of long-term debt 28,300 28,300 Long-term debt $ 582,487 $ 602,297 August 2018 Debt Facilities On August 7, 2018, the Company and certain of its subsidiaries amended its (i) Third Amended and Restated First Lien Credit Agreement (the “New Amended BoA Credit Agreement”) with Bank of America, N.A., as administrative agent and collateral agent and the lenders party thereto (the “BoA Facility Loan Parties”) and (ii) the Third Amended and Restated Credit Agreement (the “New Amended FS/KKR Credit Agreement”) with Wilmington Trust, National Association, as administrative agent and collateral agent (the “FS/KKR Agent”) and the lenders party thereto (the “FS/KKR Facility Loan Parties”). The Company used a portion of the proceeds of the $335.0 million loans made to the Company under the New Amended BoA Credit Agreement to prepay loans under the Amended FS/KKR Credit Agreement. During 2018, the Company incurred $14.6 million in lender and certain third-party fees associated with debt refinancing, which was recorded as deferred financing costs in accordance with ASC 470 – Debt and included in Long-term debt, net of current portion in the consolidated balance sheet at December 31, 2018. These fees are being amortized using the effective interest rate method over the terms of the New Amended BoA Credit Agreement and New Amended FS/KKR Credit Agreement. The Company expensed $0.1 million of deferred financing costs, included in Interest Expense, net in the consolidated statement of operations, as a result of a partial extinguishment of the Amended BoA Credit Agreement in accordance with ASC 470 – Debt in connection with the Company’s entry into the New Amended BoA Credit Agreement. The New Amended BoA Credit Agreement provides for several five-year senior secured credit facilities, consisting of (i) Tranche A Term Loans in an aggregate principal amount of $150.0 million (the “Amended Tranche A Loans”), (ii) Tranche A-1 Term Loans in an aggregate principal amount of $70.0 million (the “Amended Tranche A-1 Loans” and, together with the Tranche A Loans, the “Amended BoA Term Loans”) and (iii) revolving credit commitments in the aggregate principal amount of $130.0 million (the “Amended Revolving Credit Commitments” and, the loans under the Revolving Credit Commitments, the “Amended Revolving Loans”). On the Closing Date, the total amount outstanding under the New Amended BoA Credit Agreement was $335.0 million, including (i) $150.0 million of Amended Tranche A Loans, (ii) $70.0 million of Amended Tranche A-1 Loans and (iii) $115.0 million of Amended Revolving Loans. The loans under the New Amended BoA Credit Agreement bear interest, at the Company’s option, at a rate equal to (i) with respect to the Amended Revolving Loans and the Amended 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 Amended Tranche A-1 Loans (a) the LIBOR rate plus 7.00% per annum or (b) the base rate plus 6.00% per annum. The loans under the New Amended BoA Credit Agreement provide for interest rate reductions if certain leverage ratios are achieved, with minimum interest rates equal to (i) with respect to the Amended Revolving Loans and the Amended Tranche A Loans (a) the LIBOR rate plus 3.00% per annum or (b) the base rate plus 2.00% per annum and (ii) with respect to the Amended Tranche A-1 Loans (a) the LIBOR rate plus 6.00% per annum or (b) the base rate plus 5.00% per annum. The undrawn portions of the Revolving Credit Commitments are subject to a commitment fee of 0.375% per annum. The Company may make voluntary prepayments of the loans outstanding under the New 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 New Amended BoA Credit Agreement. Additionally, the Company is mandated to make prepayments (without payment of a premium or penalty) under the New Amended BoA Credit Agreement amounting to: (i) the loans outstanding under the New 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 Amended Tranche A-1 Loans to the extent that the outstanding principal amount thereof exceeds 15.0% of the orderly liquidation value of the registered trademarks owned by the BoA Facility Loan Parties. The Amended BoA Term Loans will continue to amortize in quarterly installments of $5.0 million. The New 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 New Amended BoA Credit Agreement contains financial covenants that require the BoA Facility Loan Parties and their subsidiaries to (i) maintain a positive net income (as defined in the New Amended BoA Credit Agreement) (ii) satisfy a maximum loan to value ratio initially set at 50.0% (applicable to the Amended Revolving Loans and Amended Tranche A Loans) decreasing over the term of the New Amended BoA Credit Agreement until reaching a final maximum loan to value ratio of 42.5% and (iii) satisfy a maximum consolidated first lien leverage ratio, initially set at 3.875:1.00, decreasing over the term of the New Amended BoA Credit Agreement until reaching a final maximum ratio of 2.875:1.00 for the fiscal quarter ending September 30, 2022 and thereafter. The New 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 New Amended BoA Credit Agreement, must take various actions, including, without limitation, the acceleration of all amounts due under the New 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 2.80:1.00 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, 3.00:1.00 and (b) with respect to any other increase, 2.90:1.00, subject to the satisfaction of certain conditions in the New Amended BoA Credit Agreement. At December 31, 2018, the Company is in compliance with the covenants included in the New Amended BoA Credit Agreement. The New Amended FS/KKR Credit Agreement provides for a five and a half-year $314.0 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 New Amended FS/KKR Credit Agreement as would not have caused 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 New Amended FS/KKR Credit Agreement. The loans under the New Amended FS/KKR Credit Agreement bear interest, at the Company’s option, at a rate equal to either (i) the LIBOR rate plus 8.75% per annum or (ii) the base rate plus 7.75% per annum. The Company may make voluntary prepayments of the loans outstanding under the New Amended FS/KKR 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 New Amended FS/KKR Credit Agreement. The Company is mandated to make prepayments (without payment of a premium or penalty) of loans outstanding under the New Amended FS/KKR Credit Agreement amounting to: (i) where intellectual property was 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 was at least 4.00:1.00, 75% thereof, (b) in the event the consolidated total leverage ratio was 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 was less than 3.00:1.00, 0% thereof. The loans under the New Amended FS/KKR Credit Agreement will continue to amortize in quarterly installments of approximately $2.1 million. The New Amended FS/KKR Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants applicable to the FS/KKR Facility Loan Parties and their subsidiaries. Moreover, the New Amended FS/KKR Credit Agreement contains financial covenants that require the FS/KKR 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 New Amended FS/KKR Credit Agreement until reaching a final maximum ratio of 6.25:1.00 for the fiscal quarter ending September 30, 2022 and thereafter and (ii) a maximum consolidated first lien leverage ratio, initially set at 3.875:1.00, decreasing over the term of the New Amended FS/KKR Credit Agreement until reaching a final maximum ratio of 2.875:1.00 for the fiscal quarter ending September 30, 2022 and thereafter. At December 31, 2018, the Company is in compliance with the covenants included in the New Amended FS/KKR Credit Agreement. The New Amended FS/KKR 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 FS/KKR Agent, at the request of the lenders under the New Amended FS/KKR 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 New Amended FS/KKR Credit Agreement as would not have caused 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 New Amended FS/KKR Credit Agreement. 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 (the “BoA Facility Loan Parties”) and (ii) the Third Amended and Restated Credit Agreement (the “Amended FS/KKR Credit Agreement”) with Wilmington Trust, National Association, as administrative agent and collateral agent (the “FS/KKR Agent”) and the lenders party thereto. Such agreements amended, restated and replaced the December 2015 debt facilities. The Company used a portion of the proceeds of the $287.5 million loans made to the Company under the Amended BoA Credit Agreement and the $415.0 million loans made to the Company under the Amended GSO Credit Agreement to fund the payment of the purchase price with respect to the acquisition of the Gaiam Brand Holdco, LLC and costs and expenses incurred in connection with such acquisition and related transactions. The Amended BoA Credit Agreement provided for several five-year credit facilities, consisting of (i) Tranche A Term Loans in an aggregate principal amount of $133.0 million (the “Tranche A Loans”), (ii) Tranche A‑1 Term Loans in an aggregate principal amount of $44.5 million (the “Tranche A‑1 Loans” and, together with the Tranche A Loans, the “BoA Term Loans”) and (iii) revolving credit commitments in the aggregate principal amount of $110.0 million (the “Revolving Credit Facility” and, the loans under the Revolving Credit Facility, the “Revolving Loans”). On the Closing Date, the total amount outstanding under the Amended BoA Credit Agreement was $258.0 million, including (i) $133.0 million of Tranche A Loans, (ii) $44.5 million of Tranche A‑1 Loans and (iii) $80.5 million of borrowing under the Revolving Loans. The loans under the Amended BoA Credit Agreement bore 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 were subject to a commitment fee of 0.375% per annum. The Company could have made 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 was 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 was 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. On September 30, 2016, the BoA Term Loans commenced amortization in quarterly installments of $5.0 million. The Amended BoA Credit Agreement contained 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 contained financial covenants that required the BoA Facility Loan Parties and their subsidiaries to (i) maintain a positive net income (as defined), (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 contained certain customary events of default, including a change of control. If an event of default occurred and was 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 could have requested an increase in (i) the Revolving Credit Facility and Tranche A Loans as would not have caused 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 have caused 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. The Amended FS/KKR Credit Agreement provided for a six-year $415.0 million senior secured term loan facility. The Company could have requested one or more additional term loan facilities or the increase of term loan commitments under the Amended FS/KKR Credit Agreement as would not have caused 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 FS/KKR Credit Agreement. The loans under the Amended FS/KKR Credit Agreement bore 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 could have made voluntary prepayments of the loans outstanding under the Amended FS/KKR 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 FS/KKR Credit Agreement. The Company was mandated to make prepayments (without payment of a premium or penalty) of loans outstanding under the Amended FS/KKR Credit Agreement amounting to: (i) where intellectual property was disposed, 50.0% of the disposed intellectual property’s orderly liquidation value, (ii) where any other asset constituting collateral was 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 was at least 4.00:1.00, 75% thereof, (b) in the event the consolidated total leverage ratio was 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 was less than 3.00:1.00, 0% thereof. On March 31, 2018, the Loans under the Amended FS/KKR Credit Agreement commenced amortization in quarterly installments, equal to 2.00% per annum of the original aggregate principal amount thereof. The Amended FS/KKR Credit Agreement contained customary representations and warranties and customary affirmative and negative covenants applicable to the FS/KKR Facility Loan Parties and their subsidiaries. Moreover, the Amended FS/KKR Credit Agreement contained 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 FS/KKR 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 FS/KKR 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 FS/KKR Credit Agreement contained certain customary events of default, including a change of control. If an event of default occurred and was not cured within any applicable grace period or was not waived, the FS/KKR Agent, at the request of the lenders under the Amended FS/KKR Credit Agreement, was required to take various actions, including, without limitation, the acceleration of amounts due thereunder. The Company could have requested one or more additional term loan facilities or the increase of term loan commitments under the FS/KKR Credit Agreement as would not have caused 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 FS/KKR Credit Agreement. Interest Expense Interest expense during the year ended December 31, 2018 includes interest incurred under our loan agreements, interest rate caps and interest rate swaps of $57.1 million, non-cash interest related to the amortization of deferred financing costs of $4.5 million and $0.1 million of deferred financing costs as a result of a partial extinguishment of the Amended BoA Credit Agreement in accordance with ASC 470 – Debt in connection with the Company’s entry into the New Amended BoA Credit Agreement . Additionally, we expensed non-cash interest of $0.5 million related to the accretion of the present value of guaranteed contractual payments and Legacy Payments assumed through certain of the Company’s acquisitions in 2015 and certain other payment arrangements . Interest expense during the year ended December 31, 2017 includes interest incurred under our loan agreements and interest rate caps of $55.1 million and non-cash interest related to the amortization of deferred financing costs of $3.9 million. Additionally, we expensed non-cash interest of $0.9 million related to the accretion of the present value of guaranteed contractual payments and Legacy Payments assumed through certain of the Company’s acquisitions in 2015. Interest expense during the year ended December 31, 2016 includes interest incurred under our loan agreements and interest rate caps of $46.2 million, non-cash interest related to the amortization of deferred financing costs of $2.8 million and the write-off of $0.3 million of deferred financing costs as a result of an extinguishment a portion of the BoA Credit Agreement in accordance with ASC 470 – Debt in connection with the Company’s entry into the Amended BoA Credit Agreement. Additionally, we expensed non-cash interest of $1.2 million related to the accretion of the present value of guaranteed contractual payments and Legacy Payments assumed through certain of the Company’s acquisitions in 2015. Interest Rate Swaps On December 10, 2018, the Company entered into interest rate swap agreements related to its term loans (the “2018 Swap Agreements”) with certain financial institutions. The Company recorded its interest rate swaps in accrued expense and other long-term liabilities on the consolidated balance sheets at fair value using Level 2 inputs. The 2018 Swap Agreements have a $300 million notional value, and $150 million matures on December 31, 2021 and $150 million matures on January 4, 2022. The Company’s risk management objective and strategy with respect to the 2018 Swap Agreements is to reduce its exposure to variability in cash flows on a portion of the Company’s floating-rate debt. The 2018 Swap Agreements protect the Company from changes in its cash flows attributable to changes in a contractually specified interest rate on an amount of borrowing equal to the then outstanding swap notional. The Company will periodically assess the effectiveness of the hedge (both prospective and retrospective) by performing a single regression analysis that was prepared at the inception of the hedging relationship. To the extent the hedging relationship is highly effective, the gain or loss on the swap will be recorded in accumulated other comprehensive loss and reclassified into interest expense in the same period during which the hedged transactions affect earnings. During 2015, the Company entered into an interest rate swap agreement related to term loans (the “2015 Swap Agreement”). The Company recorded its interest rate swap on the consolidated balance sheets at fair value using Level 2 inputs. The 2015 Swap Agreement ended on December 30, 2016. The objective of the swap agreement was to reduce the variability in cash flows for interest payments associated with the loan agreements, which are based on the 1‑month LIBOR rates. The Company formally documented the swap agreement as a cash flow hedge of the Company’s exposure to 1‑month LIBOR. Because the critical terms of the swap agreement and the hedged items coincided at inception (e.g., notional amount, interest rate reset dates, interest rate payment dates, maturity/expiration date and underlying index), the hedge was expected to completely offset changes in expected cash flows due to fluctuations in the 1‑month LIBOR rate over the term of the hedge. The effectiveness of the hedge relationship was periodically assessed during the life of the hedge by comparing the current terms of the swap agreement and the loan agreements to assure they continue to coincide and through an evaluation of the continued ability of the respective counterparties to honor their obligations under the 2015 Swap Agreement. When the key terms no longer match exactly, hedge effectiveness (both prospective and retrospective) is assessed by evaluating the cumulative dollar offset for the actual hedging instrument relative to a hypothetical derivative whose terms exactly match the terms of the hedged item. Because the notional amounts of the Company’s swap agreement no longer matched the notional amounts of the loan agreements exactly, the Company assessed the ineffectiveness of the swap agreement and determined that differences were immaterial during the year ended December 31, 2016. Interest Rate Caps On November 30, 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 had a $500 million notional value, strike rate of 1.5% and matured on November 23, 2018. The Company recorded its interest rate caps on the consolidated balance sheets at fair value using Level 2 inputs. The valuation technique used to determine the fair value of the 2016 Cap Agreements approximated the net present value of future cash flows, taking into account current interest rates. The Company’s risk management objective and strategy with respect to the 2016 Cap Agreements was 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 protected 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 would have paid 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 would be deferred in accumulated other comprehensive loss in the statement of changes in equity, and the upfront hedging instrument purchase price would 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 would 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. Debt Maturities As of December 31, 2018, the Company’s debt maturities for the next five years and thereafter on a calendar year basis are as follows: Total 2019 2020 2021 2022 2023 Thereafter (in thousands) Term Loans $ 519,850 $ 28,300 $ 28,300 $ 28,300 $ 28,300 $ 138,300 $ 268,350 Revolving Loan 115,000 - - - - 115,000 - Total $ 634,850 $ 28,300 $ 28,300 $ 28,300 $ 28,300 $ 253,300 $ 268,350 |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 12 Months Ended |
Dec. 31, 2018 | |
Accounts Payable and Accrued Expenses [Abstract] | |
Accounts Payable and Accrued Expenses | NOTE 11 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consist of the following: December 31, 2018 2017 (in thousands) Accounts payable $ 4,207 $ 1,627 Accrued expenses Guaranteed payments in connection with acquisitions - current 2,828 3,295 Interest 2,401 3,215 Compensation 3,365 4,928 Marketing and commissions 1,330 2,804 Professional services fees 1,986 424 Legal settlement payable - current 3,200 - Licensee settlement payable - current 1,883 - Other accrued expenses 2,327 2,833 Total accounts payable and accrued expenses $ 23,527 $ 19,126 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2018 | |
Leases [Abstract] | |
Leases | NOTE 12 – LEASES Operating Leases The Company leases the following spaces as of December 31, 2018: Square Footage Location Type (Approximate) Expiration Date New York, NY Corporate Headquarters 82,300 December 31, 2033 New York, NY Office and Showroom 10,900 September 12, 2024 Los Angeles, CA Office 4,724 July 31, 2020 On February 21, 2017, the Company amended the lease of its corporate headquarters, which extended the lease through December 31, 2033 and effective in February 2018, lowered the rented square footage to approximately 63,000 square feet of corporate office space and 7,000 square feet of other rentable space. On January 12, 2018, the Company amended the lease of its corporate headquarters, effective in February 2018, increasing the rented square footage by approximately 12,300 square feet. Total rent expense for the years ended December 31, 2018, 2017 and 2016 amounted to $5.7 million, $6.1 million and $8.1 million, respectively. Future annual minimum payments due under the leases for the next five years and thereafter are summarized as follows: Year Ended December 31, (in thousands) 2019 $ 6,481 2020 6,400 2021 6,247 2022 6,262 2023 6,277 Thereafter 57,625 $ 89,292 Future sublease income due under sublease agreements is summarized as follows: Year Ended December 31, (in thousands) 2019 $ 443 2020 300 2021 300 2022 300 2023 300 Thereafter 600 $ 2,243 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | NOTE 13 – COMMITMENTS AND CONTINGENCIES During the year ended December 31, 2018, the Company accrued $3.2 million related to a legacy litigation settlement claim. 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, results of operations or cash flows. 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. Guaranteed Payments The Company has certain guaranteed payments in connection with acquisitions. Future payments of these guaranteed payments, less imputed interest, are as follows: Year Ended December 31, (in thousands) 2019 $ 2,828 2020 1,158 $ 3,986 |
Preferred Stock
Preferred Stock | 12 Months Ended |
Dec. 31, 2018 | |
Preferred Stock [Abstract] | |
Preferred Stock | NOTE 14 – PREFERRED STOCK As of December 31, 2018 and 2017, the Company had 10,000,000 shares of preferred stock authorized with a par value of $0.01 per share, none of which were designated or issued and outstanding. The board of directors of the Company (the “BOD”) is authorized, with the limitations and restrictions set forth in the Company’s certificate of incorporation, to designate from time to time the terms of the preferred stock. |
Stock Incentive Plan, Options a
Stock Incentive Plan, Options and Warrants | 12 Months Ended |
Dec. 31, 2018 | |
Stock Incentive Plan, Options and Warrants [Abstract] | |
Stock Incentive Plan, Options and Warrants | NOTE 15 – STOCK INCENTIVE PLAN, OPTIONS AND WARRANTS Stock Options 2005 Stock Incentive Plan On January 5, 2006, the Company adopted the 2005 Stock Incentive Plan, which authorized the granting of a variety of stock-based incentive awards. The 2005 Stock Incentive Plan was administered by the Company’s BOD, or a committee appointed by the BOD, which determined the recipients and terms of the awards granted. The 2005 Stock Incentive Plan provided for the issuance of both incentive stock options (“ISOs”) and non-qualified stock options (“NQOs”). ISOs could only be granted to employees and NQOs could be granted to directors, officers, employees, consultants, independent contractors and advisors. The 2005 Stock Incentive Plan provided for a total of 366,667 shares of common stock to be reserved for issuance under the 2005 Stock Incentive Plan. 2013 Stock Incentive Plan On July 24, 2013, the BOD approved and adopted the 2013 Stock Incentive Plan. The 2013 Stock Incentive Plan replaced the 2005 Stock Incentive Plan. No new grants will be granted under the 2005 Stock Incentive Plan as of July 24, 2013. Grants that were made under the 2005 Stock Incentive Plan prior to the BOD’s approval and adoption of the 2013 Stock Incentive Plan will continue to be administered in effect in accordance with their terms. The 2013 Stock Incentive Plan became effective on July 24, 2013 and, subject to the right of the BOD to amend or terminate the 2013 Stock Incentive Plan in accordance with terms and conditions thereof, will remain in effect until all shares of the Company’s common stock reserved for issuance thereunder have been delivered and any restrictions on such shares have lapsed. Notwithstanding the foregoing, no shares of the Company’s common stock may be granted under the 2013 Stock Incentive Plan on or after July 24, 2023. On December 4, 2015, the Company filed a registration statement, whereby the 2013 Stock Incentive Plan authorizes the issuance of not more than 2,500,000 shares of the Company’s common stock. The 2013 Stock Incentive Plan is administered by the Compensation Committee. Under the 2013 Stock Incentive Plan, the Compensation Committee is authorized to grant awards to employees, consultants and any other persons to whom the 2013 Stock Incentive Plan is applicable and to determine the number and types of such awards and the terms, conditions, vesting and other limitations applicable to each such award. The Compensation Committee has the power to interpret the 2013 Stock Incentive Plan and to adopt such rules and regulations as it considers necessary or appropriate for purposes of administering the 2013 Stock Incentive Plan. The following types of awards or any combination of awards may be granted under the 2013 Stock Incentive Plan: (i) NQOs, (ii) stock appreciation rights, (iii) restricted stock, (iv) restricted stock units, (v) other stock-based awards, (vi) dividend equivalents and (vii) cash-based awards. The aggregate number of shares of the Company’s common stock that are reserved for awards to be granted under the 2013 Stock Incentive Plan is 2,500,000 shares, subject to adjustments for stock splits, recapitalizations and other specified events. Stock-based Compensation Expense The fair value of options is estimated on the date of grant using the Black-Scholes option pricing model. The valuation determined by the Black-Scholes pricing model is affected by the Company’s stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. The risk free rate is based on the U.S. Treasury rate for the expected life at the time of grant, volatility is based on the average long-term implied volatilities of peer companies and the expected life is based on the estimated average of the life of options using the simplified method as prescribed by ASC 718, Compensation – stock compensation . The Company utilizes the simplified method to determine the expected life of the options due to insufficient exercise activity during recent years as a basis from which to estimate future exercise patterns. The expected dividend assumption is based on the Company’s history and expectation of dividend payouts. In accordance with the provisions of ASU 2016‑09, the Company reduces compensation cost for actual forfeitures as they occur. Prior to the adoption to ASU 2016‑09 during the fourth quarter of 2016, the Company’s estimated forfeiture rate utilized in calculating compensation cost was zero percent based on the Company’s limited historical forfeiture experience. The following table summarizes the Company’s stock option activity for the years ended December 31, 2018, 2017 and 2016: Weighted-Average Remaining Number of Weighted-Average Contractual Life Aggregate Options Exercise Price (in Years) Intrinsic Value (in thousands, except share and per share data) Outstanding - January 1, 2016 129,501 $ 9.65 3.3 $ 148 Granted — — Exercised — — Forfeited or Canceled — — Outstanding - January 1, 2017 129,501 $ 9.65 2.3 $ — Granted — — Exercised — — Forfeited or Canceled (45,500) (11.49) Outstanding - January 1, 2018 84,001 $ 8.65 2.1 $ — Granted — — Exercised — — Forfeited or canceled (34,500) (6.41) Outstanding at December 31, 2018 49,501 $ 10.22 2.3 $ — Exercisable - December 31, 2018 49,501 $ 10.22 2.3 $ — A summary of the changes in the Company’s unvested stock options is as follows: Weighted-Average Grant Date Number of Options Fair Value Unvested - January 1, 2016 21,000 $ 2.71 Granted — — Vested (16,000) (2.94) Forfeited or Canceled — — Unvested - January 1, 2017 5,000 $ 1.96 Granted — — Vested (5,000) (1.96) Forfeited or Canceled — — Unvested - January 1, 2018 — $ — Granted — — Vested — — Forfeited or Canceled — — Unvested - December 31, 2018 — $ — There was no compensation expense related to stock options for the year ended December 31, 2018. Total compensation expense related to stock options for each of the years ended December 31, 2017 and 2016 was less than $0.1 million. At December 31, 2018, there is no unrecognized compensation expense related to stock options. Warrants The following table summarizes the Company’s outstanding warrants: Weighted-Average Remaining Number of Weighted-Average Contractual Life Aggregate Warrants Exercise Price (in Years) Intrinsic Value (in thousands, except share and per share data) Outstanding - January 1, 2016 801,760 $ 7.87 4.1 $ 1,377 Granted — — Exercised — — Forfeited or Canceled — — Outstanding - January 1, 2017 801,760 $ 7.87 3.1 $ 51 Granted — — Exercised — — Forfeited or Canceled (31,600) — Outstanding - January 1, 2018 770,160 $ 7.95 2.2 $ — Granted — — Exercised — — Forfeited or canceled (570,160) 6.07 Outstanding at December 31, 2018 200,000 $ 13.32 6.4 $ — Exercisable - December 31, 2018 200,000 $ 13.32 6.4 $ — A summary of the changes in the Company’s unvested warrants is as follows: Weighted-Average Grant Date Number of Warrants Fair Value Unvested - January 1, 2016 150,000 $ 6.32 Granted — — Vested (100,000) 6.32 Forfeited or Canceled — — Unvested - January 1, 2017 50,000 $ 6.32 Granted — — Vested (50,000) 6.32 Forfeited or Canceled — — Unvested - January 1, 2018 — $ — Granted — — Vested — — Forfeited or Canceled — — Unvested - December 31, 2018 — $ — There was no compensation expense related to warrants for the year ended December 31, 2018. Total compensation expense related to warrants for the years ended December 31, 2017 and 2016 was less than $0.1 million and $0.2 million, respectively. At December 31, 2018 there is no unrecognized compensation expense related to warrants. Restricted Stock A summary of the time-based restricted stock activity for the years ended December 31, 2018, 2017 and 2016 is as follows: Weighted-Average Weighted-Average Remaining Grant Date Fair Contractual Life Number of Shares Value (in Years) Unvested - January 1, 2016 410,653 $ 8.81 1.8 Granted 80,903 5.57 Vested (232,769) 8.08 Unvested - January 1, 2017 258,787 $ 8.45 2.1 Granted 111,112 3.60 Vested (174,363) (6.73) Unvested - January 1, 2018 195,536 $ 7.23 1.8 Granted 235,296 1.70 Vested (137,843) 5.25 Unvested - December 31, 2018 292,989 $ 3.72 0.9 During the year ended December 31, 2018, the Company granted 235,296 shares of time-based restricted stock to members of the Company’s board of directors. These shares had a grant date fair value of $0.4 million and vest over a period of one year. The Company recorded $0.3 million during the year ended December 31, 2018 as compensation expense pertaining to these grants. During the year ended December 31, 2017, the Company granted 111,112 shares of time-based restricted stock to members of the Company’s board of directors. These shares had a grant date fair value of $0.4 million and vest over a period of one year. The Company recorded $0.1 million and $0.3 million during the years ended December 31, 2018 and 2017, respectively, as compensation expense pertaining to these grants. During the year ended December 31, 2016, the Company accelerated the vesting of 32,500 shares of time-based restricted stock in connection with restructuring activities. The Company recorded $0.2 million during the year ended December 31, 2016 as compensation expense pertaining to these restructuring activities. During the year ended December 31, 2016, the Company granted (i) 70,548 shares of time-based restricted stock to members of the Company’s BOD and (ii) 10,355 shares of time-based restricted stock to a non-employee pursuant to a partnership agreement. These shares had a grant date fair value of $0.5 million and vest over a period of one to five years. The Company recorded less than $0.1 million, $0.1 million and $0.3 million during the years ended December 31, 2018, 2017 and 2016, respectively, as compensation expense pertaining to these grants. Total compensation expense related to time-based restricted stock grants for the year ended December 31, 2018, 2017 and 2016 was $0.5 million, $0.6 million, and $1.6 million, respectively. Total unrecognized compensation expense related to time-based restricted stock grants at December 31, 2018 amounted to $0.2 million and is expected to be recognized over a weighted average period of 0.9 years. Restricted Stock Units A summary of the time-based restricted stock unit activity for the years ended December 31, 2018, 2017 and 2016 is as follows: Weighted-Average Weighted-Average Remaining Grant Date Fair Contractual Life Number of Shares Value (in Years) Unvested - January 1, 2016 100,000 $ 14.33 3.0 Granted 260,000 7.03 Vested (33,333) (14.33) Unvested - January 1, 2017 326,667 $ 8.52 2.5 Granted 688,836 3.18 Vested (219,103) (8.29) Forfeited or canceled (60,000) (4.89) Unvested - January 1, 2018 736,400 $ 3.89 2.2 Granted 2,678,743 1.77 Vested (1,732,523) (2.18) Forfeited or canceled (66,667) (3.20) Unvested - December 31, 2018 1,615,953 $ 2.24 2.2 During the year ended December 31, 2018, the Company granted 1,835,257 time-based restricted stock units, respectively, to certain employees and consultants for future services. These shares of time-based restricted stock units had a grant date fair value of $3.2 million and vest immediately to over a period of five years. The Company recorded $1.4 million during the year ended December 31, 2018 as compensation expense pertaining to these grants. The Company marks-to-market the expense for the restricted stock units granted to the consultants. During the year ended December 31, 2018, the Company issued 843,486 time-based restricted stock units to an employee for a 2017 performance-based bonus pursuant to their employment agreement. The bonus was paid in restricted stock in the first quarter of 2018, based on the average closing stock price for the 30 days preceding March 1, 2018. Compensation expense of $1.5 million was fully recognized in 2017 related to this grant. During the year ended December 31, 2017, the Company granted 52,083 time-based restricted stock units to a consultant for future services. These shares of time-based restricted stock units had a grant date fair value of $0.1 million and vest over a period of six months. The Company recorded less than $0.1 million during the years ended December 31, 2018 and 2017 as compensation expense pertaining to these grants. During the year ended December 31, 2017, the Company accelerated the vesting of 16,667 shares of time-based restricted stock units for an employee pursuant to their termination agreement. Total compensation expense related to these shares of $0.1 million was recorded as operating expenses in the consolidated statement of operations for the year ended December 31, 2017. During the year ended December 31, 2017, the Company granted 200,000 time-based restricted stock units to certain employees for future services and 276,753 time-based restricted stock units to a consultant for future services. These shares of time-based restricted stock units had a grant date fair value of $1.4 million and vest over a period of three years. The Company recorded $0.4 million and $0.2 million during the years ended December 31, 2018 and 2017, respectively, as compensation expense pertaining to these grants. During the year ended December 31, 2017, the Company granted 100,000 time-based restricted stock units to the Company’s Chief Executive Officer pursuant to an employment agreement, dated April 3, 2017. These shares of time-based restricted stock units had a grant date fair value of $0.4 million and vest over a period of three years. The Company recorded $0.1 million during each of the years ended December 31, 2018 and 2017, respectively, as compensation expense pertaining to this grant. During the year ended December 31, 2017, the Company accelerated the vesting of 66,667 shares of time-based restricted stock units for the Company’s former Chief Executive Officer in connection with the CEO transition. Total compensation expense related to these shares of $0.7 million was recorded as operating expenses in the consolidated statement of operations for the year ended December 31, 2017. During the year ended December 31, 2017, the Company granted 60,000 time-based restricted stock units to the Company’s former Chief Financial Officer pursuant to an amended employment agreement, dated January 3, 2017. These shares of time-based restricted stock units had a grant date fair value of $0.3 million and a vesting period of two years. Upon the former Chief Financial Officer’s departure, these shares were forfeited prior to vesting during the year ended December 31, 2017. Compensation expense previously recognized was reversed during the year ended December 31, 2017. During the year ended December 31, 2016, the Company granted 260,000 shares of time-based restricted stock units to employees for future services. These shares of time-based restricted stock had a grant date fair value of $1.8 million and vest over a period of three years. The Company recorded $0.5 million, $0.7 million and $0.2 million during the years ended December 31, 2018, 2017 and 2016, respectively, as compensation expense pertaining to this grant. Total compensation expense related to time-based restricted stock units grants for the years ended December 31, 2018, 2017 and 2016 was $2.4 million, $1.8 million and $0.6 million, respectively. Total accrued compensation expense related to performance-based restricted stock units for the year ended December 31, 2017 was $1.5 million. Total unrecognized compensation expense related to time-based restricted stock units grants at December 31, 2018 amounted to $1.9 million and is expected to be recognized over a weighted average period of 2.2 years. Performance Stock Units A summary of the PSUs activity for the years ended December 31, 2018, 2017 and 2016 is as follows: Weighted-Average Weighted-Average Remaining Grant Date Fair Contractual Life Number of Shares Value (in Years) Unvested - January 1, 2016 1,308,500 $ 10.98 1.4 Granted 2,134,100 7.23 Vested (317,833) (9.58) Forfeited or Cancelled (321,400) (11.89) Unvested - January 1, 2017 2,803,367 $ 8.18 2.4 Granted 716,600 3.17 Vested (701,233) (10.97) Forfeited or Cancelled (773,100) (7.22) Unvested - January 1, 2018 2,045,634 $ 5.83 2.0 Granted 785,000 1.98 Vested (350,408) (4.71) Forfeited or canceled (260,408) (7.32) Unvested - December 31, 2018 2,219,818 $ 4.47 0.8 During the year ended December 31, 2018, the Company granted 135,000 PSUs to employees pursuant to their employment agreements. These PSUs had a grant date fair value of $0.3 million, vest over a period of one to two years and require achievement of certain performance metrics within each fiscal year for such PSUs to be earned. The Company issued 83,250 PSUs to an employee related to this grant. The fair value and expense recorded for such PSUs was based on the closing price of the Company’s common stock on the date the performance metric was communicated to the employee. The Company recorded $0.2 million in compensation expense during the year ended December 31, 2018 as operating expenses in the consolidated statements of operations. During the year ended December 31, 2018, the Company granted 200,000 PSUs to an employee upon their commencement of employment with the Company. These PSUs had a grant date fair value of $0.4 million, vest over a period of three years and require achievement of certain of the Company’s performance metrics within each fiscal year for such PSUs to be earned. The Company did not record any compensation expense during the year ended December 31, 2018 as the likelihood of these PSUs being earned was not considered probable. During the year ended December 31, 2018, the Company granted 200,000 PSUs to an employee upon their commencement of employment with the Company. These PSUs had a grant date fair value of $0.5 million, vest over a period of two years and require achievement of certain of the Company’s performance metrics within each fiscal year for such PSUs to be earned. The Company did not record any compensation expense during the year ended December 31, 2018 as the likelihood of these PSUs being earned was not considered probable. During the year ended December 31, 2018, the Company granted 250,000 PSUs to a consultant pursuant to their endorsement agreement. The PSUs had a grant date fair value of $0.5 million, vest over a period of five years and require achievement of certain sales targets within each fiscal year for such PSUs to be earned. The Company did not record any compensation expense during the year ended December 31, 2018 as the likelihood of these PSUs being earned was not considered probable. On February 20, 2018, the Compensation Committee voted to approve, on a discretionary basis, vesting of 208,883 PSUs to employees and consultants previously granted during the years ended December 31, 2016 and 2017 subject to achievement of certain of the Company’s performance metrics within each fiscal year. The fair value and expense recorded for such PSUs was based on the closing price of the Company’s common stock on the date the modification of the performance metric was communicated to employees and consultants. Total compensation expense related to these PSUs of $0.5 million was recorded as operating expenses in the consolidated statements of operations for the year ended December 31, 2018. During the year ended December 31, 2017, the Company granted 200,000 PSUs to an employee upon their commencement of employment with the Company. These PSUs had a grant date fair value of $0.7 million and vest over a period of three years and require achievement of certain of the Company’s performance metrics within each fiscal year for such PSUs to be earned. The Company recorded expense related to this award for the year ended December 31, 2018 as part of the discretionary vesting approved by the Compensation Committee on February 20, 2018. No additional expense was recorded during the year ended December 31, 2018 as the likelihood of these PSUs being earned was not probable. The Company did not record any compensation expense during the year ended December 31, 2017 as the likelihood of these PSUs being earned was not probable. On July 25, 2017, the Compensation Committee voted to approve, on a discretionary basis, an award of 41,600 PSUs to employees and consultants. The fair value and expense recorded for such PSUs was based on the closing price of the Company’s common stock on the date the modification of the performance metric was communicated to employees and consultants. The Company recorded expense related to this award for the year ended December 31, 2018 as part of the discretionary vesting approved by the Compensation Committee on February 20, 2018. No additional expense was recorded during the year ended December 31, 2018 as the likelihood of these PSUs being earned was not probable. The Company did not record any compensation expense during the year ended December 31, 2017 as the likelihood of these PSUs being earned was not probable. During the year ended December 31, 2017, the Company granted 300,000 PSUs to the Company’s Chief Executive Officer. These PSUs had a grant date fair value of $0.8 million and vest over a period of three years and require achievement of certain of the Company’s performance metrics within each fiscal year for such PSUs to be earned. The Company recorded expense related to this award for the year ended December 31, 2018 as part of the discretionary vesting approved by the Compensation Committee on February 20, 2018. No additional expense was recorded during the year ended December 31, 2018 as the likelihood of these PSUs being earned was not probable. The Company did not record any compensation expense during the year ended December 31, 2017 as the likelihood of these PSUs being earned was not probable. During the year ended December 31, 2017, the Company granted 175,000 PSUs to the Company’s Chief Executive Officer pursuant to an employment agreement, dated April 3, 2017. These PSUs had a grant date fair value of $0.7 million and vest over a period of three years and require achievement of certain of the Company’s performance metrics within each fiscal year for such PSUs to be earned. The Company recorded $0.2 million in compensation expense during the year ended December 31, 2018 as the performance metrics were achieved pursuant to fiscal year end results. The Company recorded $0.1 million in compensation expense during the year ended December 31, 2018, respectively, as the likelihood of these PSUs being earned was considered probable for the current fiscal year. During the year ended December 31, 2017, the Company accelerated the vesting of 200,000 PSUs for the Company’s former Chief Executive Officer in connection with the CEO transition. Total compensation expense related to these PSUs of $2.9 million was recorded as operating expenses in the consolidated statement of operations for the year ended December 31, 2017. On February 28, 2017, the Compensation Committee voted to approve, on a discretionary basis, an award of 164,978 PSUs to employees and consultants. Included in the above award were 60,000 PSUs and 36,000 PSUs for the Company’s former Chief Executive Officer and Chief Financial Officer, respectively. The fair value and expense recorded for such PSUs was based on the closing price of the Company’s common stock on the date the modification of the performance metric was communicated to employees and consultants. Total compensation expense related to these PSUs of $0.6 million was recorded as operating expenses in the consolidated statements of operations for the year ended December 31, 2017. During the year ended December 31, 2016, the Company accelerated the vesting of 108,500 PSUs in connection with restructuring activities. Total compensation expense related to these PSUs of $0.5 million was recorded as operating expenses in the consolidated statement of operations for the year ended December 31, 2016. During the year ended December 31, 2016, the Company granted 2,104,100 PSUs to employees and consultants and 30,000 PSUs to an employee upon the commencement of his employment with the Company. These PSUs had a grant date fair value of $15.4 million, vest over a period of three years and require achievement of certain of the Company’s performance metrics within each fiscal year for such PSUs to be earned. The Company recorded less than $0.1 million during the year ended December 31, 2016 as compensation expense in the consolidated statement of operations pertaining to these PSUs as the likelihood of a portion of these PSUs being earned became probable. The Company did not record any compensation expense during the year ended December 31, 2017 as the likelihood of these PSUs being earned was not probable. On February 23, 2016, the Compensation Committee voted to approve, on a discretionary basis, an award of 69,994 PSUs to employees and consultants. Included in the above award were 20,000 PSUs and 12,000 PSUs for the Company’s Chief Executive Officer and Chief Financial Officer, respectively. The fair value and expense recorded for such PSUs was based on the closing price of the Company’s common stock on the date the modification of the performance metric was communicated to employees and consultants. Total compensation expense related to these PSUs of $0.4 million was recorded as operating expenses in the consolidated statement of operations for the year ended December 31, 2016. Total compensation expense related to the PSUs for the years ended December 31, 2018, 2017 and 2016 was $0.9 million, $3.5 million and $4.0 million, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes [Abstract] | |
Income Taxes | NOTE 16 – INCOME TAXES The provision for (benefit from) income taxes consists of the following: For the Year Ended December 31, 2018 2017 2016 (in thousands) Federal: Current provision $ - $ - $ (111) Deferred provision (1,512) (131,344) 10,145 (1,512) (131,344) 10,034 Foreign: Current provision 84 134 206 Deferred provision - - - 84 134 206 State: Current provision 19 - (519) Deferred provision 715 (1,325) (564) 734 (1,325) (1,083) (Benefit from) provision for income taxes $ (694) $ (132,535) $ 9,157 The difference between the provision for (benefit from) income taxes and the expected income tax provision determined by applying the statutory federal and state income tax rates to pre-tax income are as follows: For the Year Ended December 31, 2018 2017 2016 Federal statutory rate 21.0 % 35.0 % 35.0 % State taxes, net of federal tax benefit 3.4 0.1 0.2 Goodwill impairment — (33.9) — Non-deductible transaction costs — — 0.7 Noncontrolling interest 20.4 0.6 (16.5) Valuation allowance (17.9) 29.5 43.2 Nondeductible compensation (13.9) (0.1) 2.2 Foreign taxes (1.2) (0.1) 1.3 Other 2.4 (0.7) 1.1 Tax Cuts and Jobs Act — 11.8 — Change in state tax rates (2.0) — (5.5) FIN 48 reversal — — (3.7) 12.2 % 42.2 % 58.0 % The Tax Cuts and Jobs Act On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (“Tax Act”) that instituted fundamental changes to the taxation of multinational corporations. The Tax Act includes changes to the taxation of foreign earnings by implementing a dividend exemption system, expansion of the current anti-deferral rules, a minimum tax on low-taxed foreign earnings and new measures to deter base erosion. The Tax Act also includes a permanent reduction in the corporate tax rate to 21%, repeal of the corporate alternative minimum tax, expensing of capital investment, and limitation of the deduction for interest expense. Furthermore, as part of the transition to the new tax system, a one-time transition tax is imposed on a U.S. shareholder’s historical undistributed earnings of foreign affiliates. Although the Tax Act was generally effective as of January 1, 2018, GAAP required recognition of the tax effects of new legislation during the reporting period that included the enactment date, which was December 22, 2017. In response to the Tax Act, the U.S. Securities and Exchange Commission (“SEC”) provided guidance by issuing Staff Accounting Bulletin No. 118 (“SAB 118”). SAB 118 allowed companies to record provisional amounts during a measurement period with respect to the impacts of the Tax Act for which the accounting requirements under ASC Topic 740 are not complete, but a reasonable estimate has been determined. The measurement period ends when a company has obtained, prepared and analyzed the information that was needed in order to complete the accounting requirements under ASC Topic 740, but cannot exceed one year. As of December 31, 2018, the Company has completed the accounting for the effects of the Tax Act and determined that no further adjustments were required. The components of the Company’s consolidated deferred income tax balances as of December 31, 2018 and 2017 are as follows: December 31, 2018 2017 (in thousands) Deferred income tax assets Net operating loss carryforwards $ 51,042 $ 54,909 Capital loss carryforwards 4,417 1,885 Intangible assets - finite life 3,261 6,809 Stock-based compensation 439 716 Property and equipment 3,649 3,587 Deferred rent 799 (64) Credits carryforward 1,281 2,274 Deferred revenue 2,755 2,973 Deferred interest expense 8,644 - Deferred compensation 1,053 1,772 Other 3,585 1,187 80,925 76,048 Deferred income tax liability - long-term Intangible assets - Indefinite-lived (130,818) (126,443) (130,818) (126,443) Less: Valuation Allowance (17,109) (17,404) Net deferred income tax liability - long-term $ (67,002) $ (67,799) Deferred income taxes arise principally from net operating loss (“NOL”) carryforwards and intangible asset deferred tax assets and liabilities. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on consideration of these items and new tax provisions under the Tax Act, primarily the new limitation on interest expense deductions, management determined that enough certainty existed to warrant the release of the valuation allowance recorded against substantially all the Company’s deferred tax assets as of December 31, 2017. As of December 31, 2018 and 2017, a valuation allowance of $17.1 million and $17.4 million, respectively, has been recognized for deferred income taxes that may not be realized by the Company in future periods. The valuation allowance at December 31, 2018 primarily relates to state net operating losses and capital loss carryforwards. The Company has federal NOLs available to carryforward to future periods of $188.9 million as of December 31, 2018 which begin expiring in 2024. The Company has state NOLs available to carryforward to future periods of $208.2 million as of December 31, 2018 which begin expiring in 2019. The Company has foreign tax credits available to carryforward to future periods of $0.6 million as of December 31, 2018 which began expiring in 2019. The Company has experienced several changes of ownership under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), which places various limitations on the NOLs. The limitations on NOLs are based upon a formula provided under Section 382 of the Code that is based on the fair market value of the Company and prevailing interest rates at the time of the ownership change. An “ownership change” is generally a 50% increase in ownership over a three-year period by stockholders who directly or indirectly own at least five percent of a company’s stock. The limitations on the use of the NOLs under Section 382 could affect the Company’s ability to offset future taxable income. The Company currently files U.S. federal tax returns and various state tax returns. Tax years that remain open for assessment for federal and state purposes include years ended December 31, 2015 through December 31, 2018. The Company recognizes interest and penalties related to unrecognized tax benefits in the tax provision. The Company has no unrecognized tax benefits at December 31, 2018 and 2017. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 17 – 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 million, including fees and reimbursement of out-of-pocket expenses in connection with performing its services under the TCP Agreement. The TCP Agreement remains in effect for a period continuing through the earlier of five years or the date on which TCP and its affiliates cease to own in excess of 5% of the outstanding shares of common stock in the Company. On August 15, 2014, the Company consummated transactions pursuant to an agreement and plan of merger, dated as of June 24, 2014 (the “Galaxy Merger Agreement”) with SBG Universe Brands LLC, a Delaware limited liability company and the Company’s direct wholly-owned subsidiary (“LLC Sub”), Universe Galaxy Merger Sub, Inc., a Delaware corporation and direct wholly-owned subsidiary of LLC Sub, Galaxy Brand Holdings, Inc. and Carlyle Galaxy Holdings, L.P. (such transactions, collectively, the “Galaxy Acquisition”). In connection with the Galaxy Merger Agreement, the Company and TCP entered into an amendment to the TCP Agreement (the “Amended TCP Agreement”), pursuant to which, among other things, TCP is entitled to receive annual fees of $0.9 million beginning with fiscal year 2014. The Company paid TCP $0.7 million, $0.9 million, and $0.9 million for services under the Amended TCP Agreement during the years ended December 31, 2018, 2017 and 2016, respectively. These amounts are included in operating expenses in the Company’s consolidated financial statements. At December 31, 2018, there was $0.2 million due to TCP for services. At December 31, 2017, there were no amounts due to TCP for services. In connection with the consummation of the acquisition of MSLO, a $2.5 million transaction fee was paid to TCP during the year ended December 31, 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 shares of restricted stock, vesting over a four-year period and 180,000 PSUs, vesting over three years in increments of 20% for 2014, 20% for 2015 and 60% for 2016. During the year ended December 31, 2016, the TCP employee was granted 200,000 PSUs, vesting over three years in increments of 33.3% for 2017, 33.3% for 2018 and 33.4% for 2019. During the year ended December 31, 2018, the TCP employee was granted 150,000 shares of time-based restricted stock units, vesting over a three year period and 300,000 shares of time-based restricted stock units, vesting over a three year period with 25% vesting immediately. The Company paid the TCP Employee $0.3 million, $0.3 million and $0.4 million for services under the consulting arrangement during the years ended December 31, 2018, 2017 and 2016, respectively. These amounts are included in operating expenses in the Company’s consolidated financial statements. At December 31, 2018, less than $0.1 million was due to the TCP Employee. At December 31, 2017, there were no amounts due to the TCP Employee. Transactions with Tommie Copper, Inc. The Company entered into an agreement with Tommie Copper, Inc. (“TCI”), an affiliate of TCP, under which the Company received a vendor placement fee for facilitating certain distribution arrangements. The Company recorded $3.1 million of revenue for the year ended December 31, 2018. During the year ended December 31, 2018, the Company recorded non-cash interest income of $0.1 million related to the accretion of the present value of this fee. At December 31, 2018, the Company recorded a current receivable of $1.0 million from TCI in other current assets and a long-term receivable of $2.1 million from TCI in other assets in the consolidated balance sheets. 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 $8.4 million, $18.1 million and $17.0 million of revenue for the years ended December 31, 2018, 2017 and 2016, respectively, for royalties, commissions and advertising revenue earned from ESO license agreements. At December 31, 2018 and 2017, the Company had $6.2 million and $8.0 million recorded as accounts receivable from ESO in the consolidated balance sheets, respectively. The Company entered into an agreement with ESO under which the Company received a sales commission. The Company recorded $3.0 million of revenue for the year ended December 31, 2018. At December 31, 2018, the Company had $0.9 million recorded as accounts receivable from ESO and $1.2 million recorded as a long-term receivable in other assets in the consolidated balance sheets. In addition, the Company entered into a license-back agreement with ESO under which the Company reacquired the rights to certain international territories in order to re-license these rights to an unrelated party. The Company recorded approximately $0.3 million in license-back expense for the year ended December 31, 2018. Transactions with Centric Brands Inc. (f/k/a Differential Brands Group, Inc.) During the fourth quarter of 2018, Centric Brands, Inc. (“Centric”) acquired a significant portion of Global Brands Group Holding Limited’s (“GBG”) North American licensing business. The Company entered into an agreement with Centric, an affiliate of TCP, under which the Company received a rights transfer fee of $4.0 million related to the Joe’s license. Additionally, during the fourth quarter of 2018 the Company recorded approximately $1.2 million for royalty revenue earned from the Centric license agreement. At December 31, 2018, the Company had $0.8 million recorded as accounts receivable from Centric in the consolidated balance sheets. 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 trademark to third parties in connection with the manufacturing, distribution, marketing and sale of FUL branded bags, backpacks, duffels, luggage and apparel accessories. JALP contributed the FUL trademark with a fair value of $8.9 million. In exchange for a 50.5% economic interest in FUL IP the Company paid JALP $4.5 million. JALP’s minority member interest in FUL IP has been reflected as noncontrolling interest on the Company’s consolidated balance sheets. One of the Company’s directors, Mr. Al Gossett, has a partial ownership interest in JALP. There was $0.7 million and $2.2 million of noncontrolling interest loss recorded during the years ended December 31, 2018 and 2017, respectively. No noncontrolling interest was recorded during the years ended December 31, 2016. The Company sold the FUL trademark during the year ended December 31, 2018. Investment in Equity Securities As further discussed in Note 2, in September 2015, the Company purchased equity 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 million (plus related transaction expenses), which was the purchase price paid by Tengram Capital Partners, L.P. upon the acquisition of such equity securities in open market transactions. The Company did not pay a fee or any compensation to Tengram Capital Partners, L.P. in connection with the Company’s investment in the equity securities. During the year ended December 31, 2017, the Company sold its equity securities for $5.8 million. 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. During the term of the Intangible Asset Agreement with the Company, Lifestyle Research Center LLC will be entitled to receive a guaranteed annual payment of $1.7 million, which amounts are being paid in connection with the Mergers regardless of Ms. Stewart’s continued employment with the Company plus reimbursable expenses. The Company has paid Lifestyle Research Center LLC $2.1 million and $3.3 million in connection with the guaranteed payment and other related services during the years ended December 31, 2018 and 2017, respectively. During the term of the IP License Agreement with the Company, Ms. Stewart will be entitled to receive a guaranteed annual payment of $1.3 million, which amounts are being paid in connection with the Mergers regardless of Ms. Stewart’s continued employment with the Company. During each year ended December 31, 2018 and 2017, the Company made payments of $1.3 million to Ms. Stewart in connection with the terms of the IP Licenses Agreement. The IP License Agreement is perpetual. During the years ended December 31, 2018, 2017 and 2016, the Company expensed non-cash interest of $0.4 million, $0.6 million and $0.8 million, respectively, related to the accretion of the present value of these guaranteed contractual payments. At December 31, 2018, there was $3.9 million due under the IP Agreements of which $2.8 million is recorded in accounts payable and accrued expenses and $1.1 million is recorded in other long-term liabilities. At December 31, 2017, there was $6.4 million due under the IP Agreements of which $2.8 million is recorded in accounts payable and accrued expenses and $3.6 million is recorded in other long-term liabilities. Registration Rights Agreement On June 22, 2015, Martha Stewart, the Martha Stewart Family Limited Partnership, Alexis Stewart, the Martha Stewart 1999 Family Trust, the Martha Stewart 2000 Family Trust and the Martha and Alexis Stewart Charitable Foundation (collectively, the “Stewart Stockholders”) entered into an agreement (the “Registration Rights Agreement”) with the Company, which grants the Stewart Stockholders certain “demand” registration rights for up to two offerings of greater than $15 million each, certain “S-3” registration rights for up to three offerings of greater than $5 million each and “piggyback” registration rights with respect to the shares of the Company’s common stock held by the Stewart Stockholders (whether issued pursuant to the Merger Agreement or acquired thereafter) and their transferees. All reasonable expenses incident to such registrations generally are required to be borne by the Company. The Registration Rights Agreement became effective on December 4, 2015. |
Profit Sharing Plan
Profit Sharing Plan | 12 Months Ended |
Dec. 31, 2018 | |
Profit Sharing Plan [Abstract] | |
Profit Sharing Plan | NOTE 18 – PROFIT SHARING PLAN The Company has established a 401(k) profit-sharing plan for the benefit of eligible employees. The Company may make contributions to the plan as determined by the BOD. The Company accrued a matching contribution, net of forfeitures, of $0.1 million, $0.5 million and $0.5 million for the years ended December 31, 2018, 2017, and 2016, respectively. |
Restructuring
Restructuring | 12 Months Ended |
Dec. 31, 2018 | |
Restructuring [Abstract] | |
Restructuring | NOTE 19 – RESTRUCTURING The Company did not incur restructuring charges during the years ended December 31, 2018 and 2017. During the year ended December 31, 2016, the Company recorded $3.2 million of restructuring charges in connection with headcount reductions and lease termination costs. The charges incurred during the year ended December 31, 2016 consisted of $1.7 million of severance and related benefits associated with headcount reductions, $0.8 million of professional fees, $0.3 million in contract termination fees and $0.4 million of leasehold improvement write-offs due to moving the corporate headquarters. These charges are included in operating expenses in the 2016 consolidated statement of operations. On a cumulative basis, the Company has recorded $11.9 million of restructuring charges in connection with the acquisition of MSLO, headcount reductions and contract termination costs. The associated employee headcount reductions in connection with the reduction in workforce since inception were 65 employees. All restructuring charges incurred are included in operating expenses in the 2016 consolidated statement of operations. There is no restructuring accrual as of December 31, 2018. The Company has paid $10.5 million in cash related to these initiatives as of December 31, 2018. Changes in the restructuring accruals during fiscal 2017 were as follows: Contract Termination Costs Total Accrual (in thousands) Balance at January 1, 2017 $ 1,500 $ 1,500 Charges to expense — — Amounts paid (1,500) (1,500) Balance at December 31, 2017 $ — $ — |
Quarterly Data (Unaudited)
Quarterly Data (Unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Data (Unaudited) [Abstract] | |
Quarterly Data | NOTE 20 – QUARTERLY DATA (UNAUDITED) Unaudited quarterly consolidated financial information for 2018 and 2017 is summarized as follows: First Second Third Fourth Quarter Quarter Quarter Quarter Full Year (in thousands, except per share data) 2018 Net revenue $ 38,104 $ 42,207 $ 40,771 $ 48,874 $ 169,956 Income (loss) from operations 14,912 21,783 (643) 21,121 57,173 (Loss) income before income taxes (345) 6,105 (16,247) 4,815 (5,672) Net (loss) income (304) 4,689 (8,034) (1,329) (4,978) Net income attributable to noncontrolling interests (1,960) (1,102) (1,581) (863) (5,506) Net (loss) income attributable to Sequential Brands Group, Inc. and Subsidiaries (2,264) 3,587 (9,615) (2,192) (10,484) Basic (loss) earnings per share: Attributable to Sequential Brands Group, Inc. and Subsidiaries $ (0.04) $ 0.06 $ (0.15) $ (0.03) Diluted (loss) earnings per share: Attributable to Sequential Brands Group, Inc. and Subsidiaries $ (0.04) $ 0.06 $ (0.15) $ (0.03) First Second Third Fourth Quarter Quarter Quarter Quarter (1) Full Year (in thousands, except per share data) 2017 Net revenue $ 39,400 $ 42,144 $ 39,025 $ 46,895 $ 167,464 Income (loss) from operations 15,992 24,244 (13,551) (279,292) (252,607) Income (loss) before income taxes 1,540 7,566 (28,574) (294,613) (314,081) Net income (loss) 955 4,451 (24,732) (162,220) (181,546) Net (income) loss attributable to noncontrolling interests (2,135) (1,921) 552 (668) (4,172) Net (loss) income attributable to Sequential Brands Group, Inc. and Subsidiaries (1,180) 2,530 (24,180) (162,888) (185,718) Basic (loss) earnings per share: Attributable to Sequential Brands Group, Inc. and Subsidiaries $ (0.02) $ 0.04 $ (0.38) $ (2.58) Diluted (loss) earnings per share: Attributable to Sequential Brands Group, Inc. and Subsidiaries $ (0.02) $ 0.04 $ (0.38) $ (2.58) (1) During the fourth quarter of 2017, the Company recorded a non-cash positive benefit of $132.4 million due to tax reform impact and non-cash impairment charges of $304.1 million related to the Company’s goodwill. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2018 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts | Schedule II – Valuation and Qualifying Accounts Sequential Brands Group, Inc. (in thousands) Additions Balance at Charged to Beginning of Costs and Balance at End Description Period Expenses Deductions of Period Reserves and allowance deducted from asset accounts: Accounts receivable (a): Year Ended December 31, 2018 $ 577 $ 1,618 $ (103) $ 2,092 Year Ended December 31, 2017 $ 221 $ 689 $ (333) $ 577 Year Ended December 31, 2016 $ 271 $ 475 $ (525) $ 221 Valuation allowance on deferred tax assets (b): Year Ended December 31, 2018 $ 17,404 $ - $ (295) $ 17,109 Year Ended December 31, 2017 $ 110,829 $ - $ (93,425) $ 17,404 Year Ended December 31, 2016 $ 104,182 $ 6,647 $ - $ 110,829 (a) These amounts include reserves for doubtful accounts. (b) Changes are recognized in the provision for (benefit from) income taxes. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Reclassification of Prior Year Presentation | Reclassification of Prior Year Presentation On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) No. 2016-18 “Statement of Cash Flows (Topic 230): Restricted Cash” (“ASU 2016-18”), which changes the presentation of restricted cash on the statement of cash flows. ASU 2016-18 requires an entity to show the changes in total cash, cash equivalents, restricted cash, and restricted cash equivalents in the statement of cash flows. As a result of the adoption of ASU 2016-18, the Company no longer shows the changes in restricted cash as investing activities on the statement of cash flows and reconciles to the total cash and restricted cash balance, which are presented separately on the consolidated balance sheets. |
Principles of Consolidation | Principles of Consolidation The accompanying 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 the consolidation. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (“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 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 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, actual results could differ significantly from estimates. |
Discontinued Operations | Discontinued Operations The Company accounted for the closure of its wholesale operations during 2013 as discontinued operations in accordance with the guidance provided in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 360, Accounting for Impairment or Disposal of Long-Lived Assets , and ASC 205, Presentation of Financial Statements , which requires that only a component of an entity or a group of components of an entity, that represents a strategic shift that has, or will have, a major effect on the reporting entity’s operations that has been disposed of or is classified as held for sale and has operations and cash flows that can be clearly distinguished from the rest of the entity be reported as discontinued operations and assets held for sale. The statements of cash flows for the periods presented are also reclassified to reflect the results of discontinued operations as separate line items. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”), which became effective for the Company as of January 1, 2018 (See Note 5 for impact of adoption and other related disclosures). ASC 606 requires a five-step approach to determine the appropriate method of revenue recognition for each contractual arrangement: Step 1: Identify the Contract(s) with a Customer Step 2: Identify the Performance Obligation(s) in the Contract Step 3: Determine the Transaction Price Step 4: Allocate the Transaction Price to the Performance Obligation(s) in the Contract Step 5: Recognize Revenue when (or as) the Entity Satisfies a Performance Obligation The Company has entered into various license agreements for its owned trademarks. Under ASC 606, the Company’s agreements are generally considered symbolic licenses, which contain the characteristics of a right-to-access license since the customer is simultaneously receiving the intellectual property (“IP”) and benefiting from it throughout the license period. The Company assesses each license agreement at inception and determines the performance obligation(s) and appropriate revenue recognition method. As part of this process, the Company applies judgments based on historical trends when estimating future revenues and the period over which to recognize revenue. The Company generally recognizes revenue for license agreements under the following methods: 1. Licenses with guaranteed minimum royalties (“GMRs”) : Generally, guaranteed minimum royalty payments (fixed revenue) comprising the transaction price are recognized on a straight-line basis over the term of the contract, as defined in each license agreement. 2. Licenses with both GMRs (fixed revenue) and earned royalties (variable revenue) : Earned royalties in excess of fixed revenue are only recognized when the Company is reasonably certain that the guaranteed minimum payments for the period, as defined in each license agreement, will be exceeded. Additionally, the Company has categorized certain contracts as variable when there is a history and future expectation of exceeding GMRs. The Company recognizes income for these contracts during the period corresponding to the licensee’s sales. 3. Licenses that are sales-based only or earned royalties : Earned royalties (variable revenue) are recognized as income during the period corresponding to the licensee’s sales. Payments received as consideration for the grant of a license or advanced royalty payments are recorded as deferred revenue at the time payment is received and recognized into revenue under the methods described above. Contract assets represent unbilled receivables and are presented within accounts receivable, net on the consolidated balance sheets. Contract liabilities represent unearned revenues and are presented within the current portion of deferred revenue on the consolidated balance sheets. The Company disaggregates its revenue into two categories: licensing agreements and other, which is comprised of revenue from sources such as editorial content for books, television, sales commissions and vendor placement commissions. 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. Revenue from media content is recognized at a point in time, when the content is delivered and accepted. Commission revenues and vendor placement commission revenues are recorded in the period the commission is earned. The Company entered into a transaction with a media company in 2017 for which it receives advertising credits as part of the consideration exchanged. These transactions are recorded at the estimated fair value of the advertising credits received, as their fair value is deemed more readily determinable than the fair value of the trademark licensing right and other services provided by the Company, in accordance with ASC 845, Nonmonetary Transactions . The fair value of the advertising credits are recorded as revenue and in other assets when earned, and expensed when the advertising credits are utilized. The Company recorded revenue of $3.7 million for each year ended December 31, 2018 and 2017 related to the advertising credits. The Company recorded $1.3 million of expense related to the advertising credits utilized for the year ended December 31, 2018. The Company did not record any expense related to the advertising credits for the year ended December 31, 2017 as they had not yet been utilized. |
Restricted Cash | Restricted Cash Restricted cash at December 31, 2018 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 $2.1 million and $0.6 million at December 31, 2018 and 2017, respectively. The Company’s accounts receivable, net amounted to $66.2 million and $60.1 million as of December 31, 2018 and 2017, respectively. Three licensees accounted for approximately 44% (19%, 13%, and 12%) of the Company’s total consolidated accounts receivable, net balance as of December 31, 2018 and three licensees accounted for approximately 53% (25%, 15% and 13%) of the Company’s total consolidated accounts receivable, net balance as of December 31, 2017. The Company does not believe the accounts receivable balances from these licensees represents a significant collection risk based on past collection experience. |
Investments | Investments The Company accounts for equity securities under ASC 321, Investments – Equity Securities (“ASC 321”). Such securities are reported at fair value in the consolidated balance sheets and, at the time of purchase, are reported in the consolidated statements of cash flows as an investing activity. Gains and losses on equity securities are recognized through net loss. The Company recognized a loss on its equity securities for $0.9 million recorded in other expense on the consolidated statement of operations for the year ended December 31, 2018. Prior to adoption of ASC 321 in 2018, the Company accounted for its equity securities under ASC 320, Investments – Debt and Equity Securities . During the second quarter of 2017, the Company sold equity securities for $5.8 million. The book cost basis of the equity securities was approximately $7.7 million, which was determined using the specific identification method. The sale resulted in a net realized loss of $1.9 million, which is recorded in other expense (income) in the consolidated statement of operations for the year ended December 31, 2017. The Company did not hold any equity securities as of December 31, 2017. |
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% noncontrolling interest in Gaiam Pty. Ltd. in connection with its acquisition of Gaiam Brand Holdco, LLC (see Note 6). The value of the Company’s equity method investment was $0.7 million and $0.8 million as of December 31, 2018 and 2017, respectively, and is included in other assets in the consolidated balance sheets. The Company’s share of earnings from its equity method investee, which was not material for the years ended December 31, 2018, 2017 and 2016, is included in other (income) expense in the consolidated statements of operations. 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 represents the excess of purchase price over the fair value of net assets acquired in business combinations accounted for under the purchase method of accounting. The Company does not have any goodwill reported on its consolidated balance sheet at December 31, 2018. On an annual basis and as needed, the Company tests goodwill and indefinite lived trademarks for impairment through the use of discounted cash flow models. Assumptions used in our discounted cash flow models are as follows: (i) discount rates; (ii) projected average revenue growth rates; and (iii) projected long-term growth rates. Our estimates also factor in economic conditions and expectations of management, which may change in the future based on period-specific facts and circumstances. Other intangibles with determinable lives, including certain trademarks, customer agreements, patents and a favorable lease, are evaluated for the possibility of impairment when certain indicators are present, and are otherwise amortized on a straight-line basis over the estimated useful lives of the assets (currently ranging from 2 to 15 years). Due to the identification of impairment indicators during the quarter ended September 30, 2018, specifically the impairment of certain tradenames due to reduced growth expectations and the impact of licensee transitions for these brands, the Company performed impairment testing of its indefinite-lived assets at September 30, 2018, which replaced its October 1 st annual test. As a result of its testing, the Company recorded a non-cash impairment charge of $17.9 million relating to its indefinite-lived intangible assets during the quarter ended September 30, 2018. Due to the identification of impairment indicators during the quarter ended September 30, 2017, the Company performed impairment testing of its goodwill and indefinite-lived assets at September 30, 2017, which replaced its October 1 st annual test. As a result of its testing, the Company recorded a non-cash impairment charge of $36.5 million relating to its indefinite-lived intangible assets during the quarter ended September 30, 2017. Due to the identification of impairment indicators during the quarter ended December 31, 2017, the Company performed impairment testing of its goodwill and indefinite-lived assets at December 31, 2017. As a result of its testing, the Company recorded a non-cash goodwill impairment charge of $304.1 million during the quarter ended December 31, 2017. See Notes 3, 8 and 9 for further details. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, less accumulated depreciation and amortization. Maintenance and repairs are charged to expense as incurred. Upon retirement or other disposition of property and equipment, applicable cost and accumulated depreciation and amortization are removed from the accounts and any gains or losses are included in results of operations. Depreciation and amortization of property and equipment is computed using the straight-line method based on estimated useful lives of the assets as follows: Furniture and fixtures 5 years Computer hardware/equipment 5 to 7 years Leasehold improvements Term of the lease or the estimated life of the related improvements, whichever is shorter. Computer software 5 years Automobiles and trucks 5 years Websites 3 years |
Deferred Financing Costs | Deferred Financing Costs Deferred financing costs represent lender fees, legal and other third-party costs incurred in connection with issuing debt securities or obtaining debt or other credit arrangements. Deferred financing costs are recorded as a deduction of the carrying value of debt and are amortized as interest expense, using the effective interest method, over the term of the related debt. Debt discounts are amortized to interest expense over the term of the related debt. |
Treasury Stock | Treasury Stock Treasury stock is recorded at cost as a reduction of equity in the consolidated balance sheets. |
Preferred Stock | Preferred Stock Preferred stock subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value. The Company classifies conditionally redeemable preferred stock (if any), which includes preferred stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control, as temporary equity. At all other times, the Company classifies preferred stock as a component of equity. The Company’s preferred stock does not feature any redemption rights within the holders’ control or conditional redemption features not solely within its control as of December 31, 2018 and 2017. Accordingly, all issuances of preferred stock are presented as a component of equity. The Company did not have any preferred stock outstanding as of December 31, 2018 and 2017. |
Common Stock Purchase Warrants and Derivative Financial Instruments | Common Stock Purchase Warrants and Derivative Financial Instruments The Company classifies as equity any contracts that (i) require physical settlement or net-share settlement or (ii) give the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies as assets or liabilities any contracts that (i) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the Company’s control) or (ii) gives the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). The Company assesses classification of its common stock purchase warrants and other freestanding derivatives, if any, at each reporting date to determine whether a change in classification between assets and liabilities is required. The Company determined that its outstanding common stock purchase warrants satisfied the criteria for classification as equity instruments at December 31, 2018 and 2017. |
Advertising | Advertising Advertising costs related to media ads are charged to expense as of the first date the advertisements take place. Advertising costs related to campaign ads, such as production and talent, are expensed over the term of the related advertising campaign. Advertising expenses included in operating expenses approximated $13.9 million, $6.9 million and $9.6 million for the years ended December 31, 2018, 2017 and 2016, respectively. As of December 31, 2018, the Company had no capitalized advertising costs recorded on the consolidated balance sheet. As of December 31, 2017, the Company had $0.4 million of capitalized advertising costs recorded on the consolidated balance sheet. |
Stock-Based Compensation | Stock-Based Compensation Compensation cost for restricted stock is measured at fair value 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 common stock outstanding upon the lapse of applicable restrictions. PSUs are included in total diluted common stock outstanding when the performance measures have been deemed achieved but the PSUs have not yet been issued. Fair value 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. In accordance with the provisions of ASU 2016‑09 “Simplifying the Accounting for Share-Based Payments” (“ASU 2016‑09”) compensation cost is reduced 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 stock price at the end of such reporting period and revises the straight-line recognition of compensation cost in line with such remeasured amount. |
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 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. During the years ended December 31, 2018 and 2017, the Company did not have any reserves or interest and penalties to record through current income tax expense in accordance with ASC 740, Income Taxes (“ASC 740”). 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, 2015 through December 31, 2018. |
Earnings Per Share | Earnings Per Share Basic earnings per share (“EPS”) is computed by dividing net 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. In periods when there is a net loss, diluted loss per share is equal to basic loss per share, since the effect of including any common stock equivalents would be anti-dilutive. Basic weighted-average common shares outstanding is equivalent to diluted weighted-average common shares outstanding for the years ended December 31, 2018, 2017 and 2016. The computation of diluted EPS for the years ended December 31, 2018, 2017 and 2016 excludes the common stock equivalents of the following potentially dilutive securities because their inclusion would be anti-dilutive: Year Ended December 31, 2018 2017 2016 Warrants — — 125,535 Acquisition hold back shares — — 172,814 Unvested restricted stock 1,233,703 166,607 122,167 Performance based restricted stock 58,275 65,087 407,303 Stock options — — 7,977 Total 1,291,978 231,694 835,796 |
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 equity 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 equity securities are deposited with high quality financial institutions. At times, however, such cash, restricted cash and equity 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 December 31, 2018. Concentration of credit risk with respect to accounts receivable is minimal due to the collection history and the nature of the Company’s revenue arrangements. |
Customer Concentrations | Customer Concentrations The Company recorded net revenues of $170.0 million, $167.5 million and $155.5 million during the years ended December 31, 2018, 2017 and 2016, respectively. During the year ended December 31, 2018, one licensee represented at least 10% of net revenue, accounting for 13% of the Company’s net revenue. During the year ended December 31, 2017, three licensees represented at least 10% of net revenue, each accounting for 11% of the Company’s net revenue. During the year ended December 31, 2016, one licensee represented at least 10% of net revenue, accounting for 11% of the Company’s net revenue. |
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. |
Noncontrolling Interest | Noncontrolling Interest Noncontrolling interest recorded for the year ended December 31, 2018 represents income allocations to Elan Polo International, Inc., a member of DVS Footwear International, LLC (“DVS LLC”) and With You, Inc., a member of With You LLC (the partnership between the Company and Jessica Simpson) and a loss allocation to JALP, LLC (“JALP”), a member of FUL IP Holdings, LLC (“FUL IP”). Noncontrolling interest recorded for the year ended December 31, 2017 represents income allocations to DVS LLC, With You, Inc. and a loss allocation to JALP. Noncontrolling interest recorded for the year ended December 31, 2016 represents income allocations to DVS LLC, With You, Inc. and JALP. The following table sets forth the noncontrolling interest for the years ended December 31, 2018, 2017 and 2016: Year Ended December 31, 2018 2017 2016 (in thousands) With You LLC $ 5,607 $ 5,816 $ 6,525 DVS LLC 614 581 564 FUL IP (715) (2,225) 363 Net income attributable to noncontrolling interests $ 5,506 $ 4,172 $ 7,452 The following table sets forth the noncontrolling interest as of December 31, 2018 and 2017: DVS LLC FUL IP With You LLC Total (in thousands) Balance at January 1, 2017 $ 2,651 $ 4,774 $ 67,388 $ 74,813 Net income (loss) attributable to noncontrolling interests 581 (2,225) 5,816 4,172 Distributions (564) (363) (6,511) (7,438) Balance at December 31, 2017 2,668 2,186 66,693 71,547 Net income (loss) attributable to noncontrolling interests 614 (715) 5,607 5,506 Impact of adoption of ASC 606 - - 355 355 Distributions (581) (975) (5,126) (6,682) Balance at December 31, 2018 $ 2,701 $ 496 $ 67,529 $ 70,726 During the year ended December 31, 2018, the Company recorded a loss on sale of assets of $2.0 million related to the sale of the FUL trademark. |
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. The majority of the Company’s operations consist of a single revenue stream, which is the licensing of its trademark portfolio, with additional revenues derived from television, book, café operations and certain commissions. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards ASU No. 2018-18, “Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606” In November 2018, the FASB issued ASU No. 2018-18 “Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606” (“ASU 2018-18”). ASU 2018-18 amends ASC 808, Collaborative Arrangements (“ ASC 808”) and ASC 606, Revenue from Contracts with Customers (“ASC 606”) to clarify that certain transactions between participants in a collaborative arrangement should be accounted for under ASC 606 when the counterparty is a customer. ASU 2018-18 is effective for annual and interim periods beginning after December 15, 2019, and early adoption is permitted. The Company does not expect the adoption of ASU 2018-18 to have a material impact on the Company’s consolidated financial statements. ASU No. 2018-16, “Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes” In October 2018, the FASB issued ASU No. 2018-16 “Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes” (“ASU 2018-16”). ASU 2018-16 adds the overnight index swap rate based on the Secured Overnight Financing Rate to the list of US benchmark interest rates in ASC 815 that are eligible to be hedged. Entities may now designate changes in this rate as the hedged risk in hedges of interest rate risk for fixed-rate financial instruments. ASU 2018-16 is effective when an entity adopts the new hedging guidance in ASU No. 2017‑12, “Targeted Improvements to Accounting for Hedging Activities” (“ASU 2017‑12”). The Company early adopted the provisions of ASU 2017‑12 in December 2018. The adoption of ASU 2017-12 and ASU 2018-16 did not have a material impact on the Company’s consolidated financial statements. ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement” In August 2018, the FASB issued ASU No. 2018-13 “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). ASU 2018-13 eliminates, amends, and adds certain disclosure requirements for fair value measurements. ASU 2018-13 is effective for annual and interim periods beginning after December 15, 2019, and early adoption is permitted for the entire standard or for the provisions that eliminate or amend disclosure requirements. The Company does not expect the adoption of ASU 2018-13 to have a material impact on the Company’s consolidated financial statements. ASU No. 2018-07, “Improvements to Nonemployee Share-Based Payment Accounting” In June 2018, the FASB issued ASU No. 2018-07 “Improvements to Nonemployee Share-Based Payment Accounting” (“ASU 2018-07”). ASU 2018-07 aligns the accounting for share-based payment awards to employees and non-employees. Under ASU 2018-07 the existing employee guidance will apply to nonemployee share-based transactions, except for specific guidance related to the attribution of compensation cost. ASU 2018-07 should be applied to all new awards granted after the date of adoption. ASU 2018-07 is effective for annual and interim periods beginning after December 15, 2018, and early adoption is permitted. The Company does not expect the adoption of ASU 2018-02 to have a material impact on the Company’s consolidated financial statements. ASU No. 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” In February 2018, the FASB issued ASU No. 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” (“ASU 2018-02”). ASU 2018-02 permits a company to reclassify the disproportionate income tax effects (“stranded tax effects”) of the Tax Cuts and Jobs Act of 2017 on items within accumulated other comprehensive income to retained earnings. ASU 2018-02 is effective for annual and interim periods beginning after December 15, 2018, and early adoption is permitted. The Company does not expect the adoption of ASU 2018-02 to have a material impact on the Company’s consolidated financial statements. ASU No. 2017‑12, “Targeted Improvements to Accounting for Hedging Activities” In August 2017, the FASB issued ASU No. 2017‑12, “Targeted Improvements to Accounting for Hedging Activities” (“ASU 2017-12”). ASU 2017‑12 amends the hedge accounting recognition and presentation requirements in ASC 815, Derivatives and Hedging . The amendments in ASU 2017‑12 are intended to improve the transparency and understandability of information about an entity’s risk management activities and simplify the application of hedge accounting. ASU 2017‑12 is effective for annual and interim periods beginning after December 15, 2018, and early adoption is permitted. The Company early adopted the provisions of ASU 2017‑12 in December 2018. The adoption of ASU 2017-12 did not have a material impact on the Company’s consolidated financial statements. 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. 2016‑02, “Leases” In February 2016, the FASB issued ASU No. 2016-02, “Leases” (“ASU 2016-02”). The core principle of ASU 2016-02 is that an entity should recognize on its balance sheet, assets and liabilities arising from a lease. In accordance with that principle, ASU 2016-02 requires that a lessee recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying leased asset for the lease term. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will depend on the lease classification as a finance or operating lease. In July 2018, the FASB issued ASU No. 2018-10, “Codification Improvements to Topic 842, Leases” (“ASU 2018-10”) and ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements” (“ASU 2018-11”) to improve certain aspects of ASU 2016-02. ASU 2016-02 is effective for annual and interim periods beginning after December 15, 2018, and early adoption is permitted. The Company adopted the new standard as of January 1, 2019 using the modified retrospective method as of the period of adoption. The Company elected the package of practical expedients upon transition where the Company did not reassess the lease classification and initial direct costs for leases that existed prior to adoption. Additionally, the Company did not reassess contracts entered into prior to adoption to determine whether the arrangement was or contained a lease. The Company elected to keep leases with an initial term of twelve months or less off the balance sheet. The Company estimates the adoption of the standard will increase assets and lease liabilities on its consolidated balance sheet by approximately $57 million primarily related to its corporate headquarters lease and will not have a material impact on the Company’s statements of operations and cash flows. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Estimated Useful Lives of Property and Equipment | Depreciation and amortization of property and equipment is computed using the straight-line method based on estimated useful lives of the assets as follows: Furniture and fixtures 5 years Computer hardware/equipment 5 to 7 years Leasehold improvements Term of the lease or the estimated life of the related improvements, whichever is shorter. Computer software 5 years Automobiles and trucks 5 years Websites 3 years |
Earnings Per Share, Basic and Diluted | The computation of diluted EPS for the years ended December 31, 2018, 2017 and 2016 excludes the common stock equivalents of the following potentially dilutive securities because their inclusion would be anti-dilutive: Year Ended December 31, 2018 2017 2016 Warrants — — 125,535 Acquisition hold back shares — — 172,814 Unvested restricted stock 1,233,703 166,607 122,167 Performance based restricted stock 58,275 65,087 407,303 Stock options — — 7,977 Total 1,291,978 231,694 835,796 |
Schedule of Noncontrolling Interest | The following table sets forth the noncontrolling interest for the years ended December 31, 2018, 2017 and 2016: Year Ended December 31, 2018 2017 2016 (in thousands) With You LLC $ 5,607 $ 5,816 $ 6,525 DVS LLC 614 581 564 FUL IP (715) (2,225) 363 Net income attributable to noncontrolling interests $ 5,506 $ 4,172 $ 7,452 |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net | The following table sets forth the noncontrolling interest as of December 31, 2018 and 2017: DVS LLC FUL IP With You LLC Total (in thousands) Balance at January 1, 2017 $ 2,651 $ 4,774 $ 67,388 $ 74,813 Net income (loss) attributable to noncontrolling interests 581 (2,225) 5,816 4,172 Distributions (564) (363) (6,511) (7,438) Balance at December 31, 2017 2,668 2,186 66,693 71,547 Net income (loss) attributable to noncontrolling interests 614 (715) 5,607 5,506 Impact of adoption of ASC 606 - - 355 355 Distributions (581) (975) (5,126) (6,682) Balance at December 31, 2018 $ 2,701 $ 496 $ 67,529 $ 70,726 |
Fair Value Measurement of Fin_2
Fair Value Measurement of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Schedule of Indefinite-lived Assets | The following table shows the change in indefinite-lived intangible assets for the year ended December 31, 2018 (in thousands): Balance at January 1, 2018 $ 995,170 Impairment of trademarks (17,899) Sale of trademarks (11,473) Amortization (1,182) Additions 295 Balance at December 31, 2018 $ 964,911 |
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 December 31, 2018 and 2017: Carrying Value Fair Value Financial Instrument Level 12/31/2018 12/31/2017 12/31/2018 12/31/2017 (in thousands) Equity securities 1 $ 627 $ - $ 627 $ - Interest rate caps 2 $ - $ 1,239 $ - $ 1,239 Interest rate swaps - liability 2 $ 2,019 $ - $ 2,019 $ - Term Loans 2 $ 519,850 $ 551,913 $ 515,742 $ 542,655 Revolving Loan 2 $ 115,000 $ 92,787 $ 114,827 $ 92,389 Legacy Payments 3 $ 2,553 $ 2,256 $ 2,553 $ 2,256 |
Schedule of Notional Amounts of Outstanding Derivative Positions | The components of the 2018 Swap Agreements as of December 31, 2018 are as follows: Notional Value Derivative Asset Derivative Liability (in thousands) LIBOR based loans $ 300,000 $ — $ 2,019 |
Trademarks [Member] | |
Schedule of Indefinite-lived Assets | The following table shows the change in indefinite-lived intangible assets for the year ended December 31, 2018 (in thousands): Balance at January 1, 2018 $ 990,677 Additions 272 Impairment charges (17,899) Reclassified to finite-lived intangible assets (6,951) Sale of trademarks (11,170) Ending balance at December 31, 2018 $ 954,929 During the year ended December 31, 2017, the Company recorded non-cash impairment charges of $36.5 million for indefinite-lived intangible assets related to the trademarks of five of the Company’s brands: Caribbean Joe , Revo , Franklin Mint , Nevados , and FUL . Fair value for each trademark was determined based on the income approach using estimates of future discounted cash flows, a Level 3 measure within the fair value hierarchy. The impairments arose due to reduced contractual minimums or reduced sales forecasts in key distribution channels for these brands. When an intangible asset’s useful life is no longer considered to be indefinite, it must be amortized over the remaining period that it is expected to contribute to cash flows. The Company determined that certain trademarks which had been impaired during the year ended December 31, 2017 should no longer be classified as indefinite-lived intangible assets. The Company recorded less than $0.1 million in amortization during the year ended December 31, 2017 related to these trademarks. The following table shows the change in indefinite-lived assets for the year ended December 31, 2017: Balance at January 1, 2017 $ 1,025,260 Additions 2,383 Impairment charges (36,505) Reclassified to finite-lived intangible assets (461) Ending balance at December 31, 2017 $ 990,677 |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue [Abstract] | |
Impact of Adoption of ASC 606 At Year End | Changes to the balances at January 1, 2018 resulting from the adoption of ASC 606 are as follows: December 31, Impact of 2017 Adoption of January 1, (As Reported) ASC 606 2018 (in thousands) Assets Current Assets: Accounts receivable, net $ 60,102 $ 6,335 $ 66,437 Liabilities Current Liabilities: Current portion of deferred revenue $ 8,102 $ 4,387 $ 12,489 Deferred income taxes 67,799 463 68,262 Equity Accumulated deficit $ (225,369) $ 1,130 $ (224,239) Noncontrolling interests 71,547 355 71,902 |
Impact of Adoption of ASC 606 On Statement of Operations | The tables below summarize the impact of the adoption on the consolidated statement of operations for the year ended December 31, 2018: Year Ended December 31, 2018 (in thousands, except share and per share data) Adjustments Under previous As due to guidance Reported ASC 606 (ASC 605) Net revenue $ 169,956 $ (3,553) $ 173,509 Operating expenses 87,767 226 87,541 Impairment charges 17,899 - 17,899 Loss on sale of assets 7,117 - 7,117 Income from operations 57,173 (3,779) 60,952 Other expense 693 - 693 Interest expense, net 62,152 - 62,152 Loss before income taxes (5,672) (3,779) (1,893) (Benefit from) provision for income taxes (694) (869) 175 Net loss (4,978) (2,910) (2,068) Net income attributable to noncontrolling interests (5,506) 177 (5,683) Net loss attributable to Sequential Brands Group, Inc. and Subsidiaries $ (10,484) $ (2,733) $ (7,751) Loss per share attributable to Sequential Brands Group, Inc. and Subsidiaries: Basic and diluted $ (0.16) $ (0.04) $ (0.12) Weighted-average common shares outstanding: Basic and diluted 63,700,081 63,700,081 63,700,081 |
Disaggregated Revenue | The following table presents revenue disaggregated by source for the years ended December 31, 2018, 2017 and 2016: Year Ended December 31, 2018 2017 2016 (in thousands) Licensing Agreements $ 160,500 $ 161,703 $ 149,026 Other 9,456 5,761 6,502 Total $ 169,956 $ 167,464 $ 155,528 |
Contract Balances | The below table summarizes the net change in contract assets and contract liabilities from the date of adoption to December 31, 2018: January 1, December 31, 2018 Changes 2018 (in thousands) Contract assets $ 6,335 $ (3,168) $ 3,167 Contract liabilities 4,387 612 4,999 |
Future Performance Obligations | The below table summarizes amounts related to future performance obligations under fixed contractual arrangements as of December 31, 2018 and the periods in which they are expected to be earned and recognized as revenue: 2019 2020 2021 2022 2023 Thereafter Future Performance Obligations $ 73,561 $ 58,011 $ 42,300 $ 22,705 $ 18,148 $ 19,524 |
Acquisitions (Tables)
Acquisitions (Tables) - Gaiam Brand Holdco, LLC [Member] | 12 Months Ended |
Dec. 31, 2018 | |
Updates to Purchase Price During Measurement Period | The Company made the following updates to the purchase price during the year ended December 31, 2017 in connection with finalizing the valuation of the Gaiam Brand Holdco, LLC acquisition (in thousands): Allocated to: Goodwill $ (3,621) Trademarks 3,568 Equity method investment 53 $ — |
Schedule Of Purchase Price Allocation | The final allocation of the purchase price is summarized as follows (in thousands): Total consideration paid $ 147,587 Allocated to: Trademarks $ 145,923 Goodwill 1,084 Equity method investment 757 Customer agreements 23 Accrued expenses (200) $ 147,587 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment is summarized as follows: December 31, 2018 2017 (in thousands) Furniture and fixtures $ 6,094 $ 6,164 Computer hardware/equipment 1,400 1,198 Leasehold improvements 9,860 5,937 Computer software 973 974 Websites 304 400 Automobiles and trucks 140 140 Property and equipment 18,771 14,813 Less accumulated depreciation and amortization (9,800) (7,778) Property and equipment, net $ 8,971 $ 7,035 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Intangible Assets [Abstract] | |
Summary of Intangible Assets | Intangible assets are summarized as follows: Gross Useful Lives Carrying Accumulated Net Carrying December 31, 2018 (Years) Amount Amortization Amount (in thousands) Finite-lived intangible assets: Trademarks 5 - 15 $ 12,438 $ (2,689) $ 9,749 Customer agreements 4 2,832 (2,639) 193 Patents 10 361 (321) 40 $ 15,631 $ (5,649) 9,982 Indefinite-lived intangible assets: Trademarks 954,929 Intangible assets, net $ 964,911 Gross Useful Lives Carrying Accumulated Net Carrying December 31, 2017 (Years) Amount Amortization Amount (in thousands) Finite-lived intangible assets: Trademarks 5 - 15 $ 5,462 $ (1,913) $ 3,549 Customer agreements 4 2,832 (2,257) 575 Patents 10 665 (296) 369 $ 8,959 $ (4,466) 4,493 Indefinite-lived intangible assets: Trademarks 990,677 Intangible assets, net $ 995,170 |
Summary of Future Annual Estimated Amortization Expense | Future annual estimated amortization expense is summarized as follows: Years Ended December 31, (in thousands) 2019 $ 2,018 2020 1,831 2021 1,828 2022 1,806 2023 1,381 Thereafter 1,118 $ 9,982 |
Schedule of Indefinite-lived Assets | The following table shows the change in indefinite-lived intangible assets for the year ended December 31, 2018 (in thousands): Balance at January 1, 2018 $ 995,170 Impairment of trademarks (17,899) Sale of trademarks (11,473) Amortization (1,182) Additions 295 Balance at December 31, 2018 $ 964,911 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill [Abstract] | |
Schedule of Goodwill | Previous changes in goodwill are summarized as follows (in thousands): Balance at January 1, 2017 $ 307,744 Adjustment for acquisition of Gaiam Brand Holdco, LLC (a) (3,621) Impairment charges (304,123) Ending balance at December 31, 2017 $ - (a) Goodwill from the acquisition of Gaiam Brand Holdco, LLC represented the excess of the purchase price over the fair value of net assets acquired under the acquisition method of accounting. |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Long-Term Debt [Abstract] | |
Schedule of Long Term Debt | December 31, 2018 2017 (in thousands) Secured Term Loans $ 519,850 $ 551,913 Revolving Credit Facility 115,000 92,787 Unamortized deferred financing costs (24,063) (14,103) Total long-term debt, net of unamortized deferred financing costs 610,787 630,597 Less: current portion of long-term debt 28,300 28,300 Long-term debt $ 582,487 $ 602,297 |
Schedule of Maturities of Long-term Debt | As of December 31, 2018, the Company’s debt maturities for the next five years and thereafter on a calendar year basis are as follows: Total 2019 2020 2021 2022 2023 Thereafter (in thousands) Term Loans $ 519,850 $ 28,300 $ 28,300 $ 28,300 $ 28,300 $ 138,300 $ 268,350 Revolving Loan 115,000 - - - - 115,000 - Total $ 634,850 $ 28,300 $ 28,300 $ 28,300 $ 28,300 $ 253,300 $ 268,350 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounts Payable and Accrued Expenses [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | December 31, 2018 2017 (in thousands) Accounts payable $ 4,207 $ 1,627 Accrued expenses Guaranteed payments in connection with acquisitions - current 2,828 3,295 Interest 2,401 3,215 Compensation 3,365 4,928 Marketing and commissions 1,330 2,804 Professional services fees 1,986 424 Legal settlement payable - current 3,200 - Licensee settlement payable - current 1,883 - Other accrued expenses 2,327 2,833 Total accounts payable and accrued expenses $ 23,527 $ 19,126 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Leases [Abstract] | |
Schedule of Operating Leases Spaces | Square Footage Location Type (Approximate) Expiration Date New York, NY Corporate Headquarters 82,300 December 31, 2033 New York, NY Office and Showroom 10,900 September 12, 2024 Los Angeles, CA Office 4,724 July 31, 2020 |
Future Annual Minimum Payments Due Under the Leases | Year Ended December 31, (in thousands) 2019 $ 6,481 2020 6,400 2021 6,247 2022 6,262 2023 6,277 Thereafter 57,625 $ 89,292 |
Schedule of Future Sublease Income for Operating Leases | Year Ended December 31, (in thousands) 2019 $ 443 2020 300 2021 300 2022 300 2023 300 Thereafter 600 $ 2,243 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies [Abstract] | |
Schedule of Future Payments of Guaranteed Payments, Less Imputed Interest | The Company has certain guaranteed payments in connection with acquisitions. Future payments of these guaranteed payments, less imputed interest, are as follows: Year Ended December 31, (in thousands) 2019 $ 2,828 2020 1,158 $ 3,986 |
Stock Incentive Plan, Options_2
Stock Incentive Plan, Options and Warrants (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Stock Incentive Plan, Options and Warrants [Abstract] | |
Summary of Stock Option Activity | The following table summarizes the Company’s stock option activity for the years ended December 31, 2018, 2017 and 2016: Weighted-Average Remaining Number of Weighted-Average Contractual Life Aggregate Options Exercise Price (in Years) Intrinsic Value (in thousands, except share and per share data) Outstanding - January 1, 2016 129,501 $ 9.65 3.3 $ 148 Granted — — Exercised — — Forfeited or Canceled — — Outstanding - January 1, 2017 129,501 $ 9.65 2.3 $ — Granted — — Exercised — — Forfeited or Canceled (45,500) (11.49) Outstanding - January 1, 2018 84,001 $ 8.65 2.1 $ — Granted — — Exercised — — Forfeited or canceled (34,500) (6.41) Outstanding at December 31, 2018 49,501 $ 10.22 2.3 $ — Exercisable - December 31, 2018 49,501 $ 10.22 2.3 $ — |
Schedule of Nonvested Stock Options | A summary of the changes in the Company’s unvested stock options is as follows: Weighted-Average Grant Date Number of Options Fair Value Unvested - January 1, 2016 21,000 $ 2.71 Granted — — Vested (16,000) (2.94) Forfeited or Canceled — — Unvested - January 1, 2017 5,000 $ 1.96 Granted — — Vested (5,000) (1.96) Forfeited or Canceled — — Unvested - January 1, 2018 — $ — Granted — — Vested — — Forfeited or Canceled — — Unvested - December 31, 2018 — $ — |
Schedule of Warrants Activity and Nonvested Warrants | The following table summarizes the Company’s outstanding warrants: Weighted-Average Remaining Number of Weighted-Average Contractual Life Aggregate Warrants Exercise Price (in Years) Intrinsic Value (in thousands, except share and per share data) Outstanding - January 1, 2016 801,760 $ 7.87 4.1 $ 1,377 Granted — — Exercised — — Forfeited or Canceled — — Outstanding - January 1, 2017 801,760 $ 7.87 3.1 $ 51 Granted — — Exercised — — Forfeited or Canceled (31,600) — Outstanding - January 1, 2018 770,160 $ 7.95 2.2 $ — Granted — — Exercised — — Forfeited or canceled (570,160) 6.07 Outstanding at December 31, 2018 200,000 $ 13.32 6.4 $ — Exercisable - December 31, 2018 200,000 $ 13.32 6.4 $ — A summary of the changes in the Company’s unvested warrants is as follows: Weighted-Average Grant Date Number of Warrants Fair Value Unvested - January 1, 2016 150,000 $ 6.32 Granted — — Vested (100,000) 6.32 Forfeited or Canceled — — Unvested - January 1, 2017 50,000 $ 6.32 Granted — — Vested (50,000) 6.32 Forfeited or Canceled — — Unvested - January 1, 2018 — $ — Granted — — Vested — — Forfeited or Canceled — — Unvested - December 31, 2018 — $ — |
Schedule of Restricted Stock Activity | A summary of the time-based restricted stock activity for the years ended December 31, 2018, 2017 and 2016 is as follows: Weighted-Average Weighted-Average Remaining Grant Date Fair Contractual Life Number of Shares Value (in Years) Unvested - January 1, 2016 410,653 $ 8.81 1.8 Granted 80,903 5.57 Vested (232,769) 8.08 Unvested - January 1, 2017 258,787 $ 8.45 2.1 Granted 111,112 3.60 Vested (174,363) (6.73) Unvested - January 1, 2018 195,536 $ 7.23 1.8 Granted 235,296 1.70 Vested (137,843) 5.25 Unvested - December 31, 2018 292,989 $ 3.72 0.9 |
Schedule of Restricted Stock Units Activity | A summary of the time-based restricted stock unit activity for the years ended December 31, 2018, 2017 and 2016 is as follows: Weighted-Average Weighted-Average Remaining Grant Date Fair Contractual Life Number of Shares Value (in Years) Unvested - January 1, 2016 100,000 $ 14.33 3.0 Granted 260,000 7.03 Vested (33,333) (14.33) Unvested - January 1, 2017 326,667 $ 8.52 2.5 Granted 688,836 3.18 Vested (219,103) (8.29) Forfeited or canceled (60,000) (4.89) Unvested - January 1, 2018 736,400 $ 3.89 2.2 Granted 2,678,743 1.77 Vested (1,732,523) (2.18) Forfeited or canceled (66,667) (3.20) Unvested - December 31, 2018 1,615,953 $ 2.24 2.2 |
Schedule of Performance Stock Units Activity | A summary of the PSUs activity for the years ended December 31, 2018, 2017 and 2016 is as follows: Weighted-Average Weighted-Average Remaining Grant Date Fair Contractual Life Number of Shares Value (in Years) Unvested - January 1, 2016 1,308,500 $ 10.98 1.4 Granted 2,134,100 7.23 Vested (317,833) (9.58) Forfeited or Cancelled (321,400) (11.89) Unvested - January 1, 2017 2,803,367 $ 8.18 2.4 Granted 716,600 3.17 Vested (701,233) (10.97) Forfeited or Cancelled (773,100) (7.22) Unvested - January 1, 2018 2,045,634 $ 5.83 2.0 Granted 785,000 1.98 Vested (350,408) (4.71) Forfeited or canceled (260,408) (7.32) Unvested - December 31, 2018 2,219,818 $ 4.47 0.8 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The provision for (benefit from) income taxes consists of the following: For the Year Ended December 31, 2018 2017 2016 (in thousands) Federal: Current provision $ - $ - $ (111) Deferred provision (1,512) (131,344) 10,145 (1,512) (131,344) 10,034 Foreign: Current provision 84 134 206 Deferred provision - - - 84 134 206 State: Current provision 19 - (519) Deferred provision 715 (1,325) (564) 734 (1,325) (1,083) (Benefit from) provision for income taxes $ (694) $ (132,535) $ 9,157 |
Schedule of Effective Income Tax Rate Reconciliation | The difference between the provision for (benefit from) income taxes and the expected income tax provision determined by applying the statutory federal and state income tax rates to pre-tax income are as follows: For the Year Ended December 31, 2018 2017 2016 Federal statutory rate 21.0 % 35.0 % 35.0 % State taxes, net of federal tax benefit 3.4 0.1 0.2 Goodwill impairment — (33.9) — Non-deductible transaction costs — — 0.7 Noncontrolling interest 20.4 0.6 (16.5) Valuation allowance (17.9) 29.5 43.2 Nondeductible compensation (13.9) (0.1) 2.2 Foreign taxes (1.2) (0.1) 1.3 Other 2.4 (0.7) 1.1 Tax Cuts and Jobs Act — 11.8 — Change in state tax rates (2.0) — (5.5) FIN 48 reversal — — (3.7) 12.2 % 42.2 % 58.0 % |
Schedule of Deferred Tax Assets and Liabilities | The components of the Company’s consolidated deferred income tax balances as of December 31, 2018 and 2017 are as follows: December 31, 2018 2017 (in thousands) Deferred income tax assets Net operating loss carryforwards $ 51,042 $ 54,909 Capital loss carryforwards 4,417 1,885 Intangible assets - finite life 3,261 6,809 Stock-based compensation 439 716 Property and equipment 3,649 3,587 Deferred rent 799 (64) Credits carryforward 1,281 2,274 Deferred revenue 2,755 2,973 Deferred interest expense 8,644 - Deferred compensation 1,053 1,772 Other 3,585 1,187 80,925 76,048 Deferred income tax liability - long-term Intangible assets - Indefinite-lived (130,818) (126,443) (130,818) (126,443) Less: Valuation Allowance (17,109) (17,404) Net deferred income tax liability - long-term $ (67,002) $ (67,799) |
Restructuring (Tables)
Restructuring (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Restructuring [Abstract] | |
Restructuring and Related Costs | Contract Termination Costs Total Accrual (in thousands) Balance at January 1, 2017 $ 1,500 $ 1,500 Charges to expense — — Amounts paid (1,500) (1,500) Balance at December 31, 2017 $ — $ — |
Organization and Nature of Op_2
Organization and Nature of Operations (Details) | Dec. 31, 2018item |
Organization and Nature of Operations [Abstract] | |
Number of licensees | 150 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Narrative) (Details) shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2018USD ($)shares | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($)shares | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2018USD ($)segmentshares | Dec. 31, 2017USD ($)shares | Dec. 31, 2016USD ($) | Jan. 01, 2018USD ($) | Jul. 01, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||
Net revenue | $ 48,874 | $ 40,771 | $ 42,207 | $ 38,104 | $ 46,895 | $ 39,025 | $ 42,144 | $ 39,400 | $ 169,956 | $ 167,464 | $ 155,528 | ||
Allowance for doubtful accounts receivable | 2,100 | 600 | 2,100 | 600 | |||||||||
Accounts receivable, net | $ 66,202 | 60,102 | 66,202 | 60,102 | $ 66,437 | ||||||||
Loss on equity securities | 900 | ||||||||||||
Goodwill, impairment loss | $ 304,100 | 304,123 | |||||||||||
Impairment of trademark | $ 17,900 | $ 36,500 | $ 17,899 | $ 340,628 | |||||||||
Preferred stock, shares outstanding | shares | 0 | 0 | 0 | 0 | |||||||||
Advertising expenses | $ 13,900 | $ 6,900 | 9,600 | ||||||||||
Capitalized advertising costs | $ 0 | $ 400 | $ 0 | 400 | |||||||||
Number of operating segments | segment | 1 | ||||||||||||
Number of reportable segments | segment | 1 | ||||||||||||
Minimum [Member] | |||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||
Useful Lives | 2 years | ||||||||||||
Maximum [Member] | |||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||
Impairment of trademark | 100 | ||||||||||||
Useful Lives | 15 years | ||||||||||||
Advertising Member | |||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||
Net revenue | $ 3,700 | 3,700 | |||||||||||
Cost of Revenue | 1,300 | ||||||||||||
Trademarks [Member] | |||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||
Impairment of trademark | 17,899 | 36,505 | |||||||||||
Gaiam Brand Holdco, LLC [Member] | |||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||
Net revenue | $ 12,000 | ||||||||||||
Equity method investment, noncontrolling interest | 49.90% | ||||||||||||
Equity method investments | $ 700 | $ 800 | $ 700 | $ 800 | |||||||||
Accounts Receivable [Member] | |||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||
Concentration risk, percentage | 44.00% | 53.00% | |||||||||||
Accounts Receivable [Member] | License One [Member] | |||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||
Concentration risk, percentage | 19.00% | 25.00% | |||||||||||
Accounts Receivable [Member] | License Two [Member] | |||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||
Concentration risk, percentage | 13.00% | 15.00% | |||||||||||
Accounts Receivable [Member] | License Three [Member] | |||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||
Concentration risk, percentage | 12.00% | 13.00% | |||||||||||
Sales Revenue, Services, Net [Member] | |||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||
Concentration risk, percentage | 11.00% | ||||||||||||
Sales Revenue, Services, Net [Member] | License One [Member] | |||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||
Concentration risk, percentage | 13.00% | 11.00% | |||||||||||
Sales Revenue, Services, Net [Member] | License Three [Member] | |||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||
Concentration risk, percentage | 0.00% | ||||||||||||
FUL [Member] | Trademarks [Member] | |||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||
Loss on sale of assets | $ 2,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Depreciation of Property, Plant and Equipment) (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Furniture and Fixtures | |
Property, Plant and Equipment, Useful Life | 5 years |
Computer Hardware and Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment, Useful Life | 5 years |
Computer Hardware and Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment, Useful Life | 7 years |
Computer Software [Member] | |
Property, Plant and Equipment, Useful Life | 5 years |
Automobiles and Trucks [Member] | |
Property, Plant and Equipment, Useful Life | 5 years |
Websites [Member] | |
Property, Plant and Equipment, Useful Life | 3 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Antidilutive Shares Excluded from Computation of Diluted EPS) (Details) - shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 1,291,978 | 231,694 | 835,796 |
Warrants | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 125,535 | ||
Performance based restricted stock | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 58,275 | 65,087 | 407,303 |
Acquisition hold back shares [Member] | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 172,814 | ||
Restricted Stock | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 1,233,703 | 166,607 | 122,167 |
Equity Option [Member] | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 7,977 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Noncontrolling Interest from Continuing Operations) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Net Income (Loss) Attributable to Noncontrolling Interest, Total | $ 863 | $ 1,581 | $ 1,102 | $ 1,960 | $ 668 | $ (552) | $ 1,921 | $ 2,135 | $ 5,506 | $ 4,172 | $ 7,452 |
With You LLC [Member] | |||||||||||
Net Income (Loss) Attributable to Noncontrolling Interest, Total | 5,607 | 5,816 | 6,525 | ||||||||
DVS LLC [Member] | |||||||||||
Net Income (Loss) Attributable to Noncontrolling Interest, Total | 614 | 581 | 564 | ||||||||
FUL [Member] | |||||||||||
Net Income (Loss) Attributable to Noncontrolling Interest, Total | $ (715) | $ (2,225) | $ 363 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies (Noncontrolling Interest) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Balance | $ 71,547 | $ 74,813 | $ 71,547 | $ 74,813 | |||||||
Net income attributable to noncontrolling interest | $ 863 | $ 1,581 | $ 1,102 | 1,960 | $ 668 | $ (552) | $ 1,921 | 2,135 | 5,506 | 4,172 | $ 7,452 |
Distributions | (6,682) | (7,438) | |||||||||
Balance | 70,726 | 71,547 | 70,726 | 71,547 | 74,813 | ||||||
With You LLC [Member] | |||||||||||
Balance | 66,693 | 67,388 | 66,693 | 67,388 | |||||||
Net income attributable to noncontrolling interest | 5,607 | 5,816 | 6,525 | ||||||||
Distributions | (5,126) | (6,511) | |||||||||
Balance | 67,529 | 66,693 | 67,529 | 66,693 | 67,388 | ||||||
DVS LLC [Member] | |||||||||||
Balance | 2,668 | 2,651 | 2,668 | 2,651 | |||||||
Net income attributable to noncontrolling interest | 614 | 581 | 564 | ||||||||
Distributions | (581) | (564) | |||||||||
Balance | 2,701 | 2,668 | 2,701 | 2,668 | 2,651 | ||||||
FUL [Member] | |||||||||||
Balance | $ 2,186 | $ 4,774 | 2,186 | 4,774 | |||||||
Net income attributable to noncontrolling interest | (715) | (2,225) | 363 | ||||||||
Distributions | (975) | (363) | |||||||||
Balance | $ 496 | $ 2,186 | $ 496 | $ 2,186 | $ 4,774 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies (Recently Issued Accounting Standards) (Details) - Accounting Standards Update 2016-02 [Member] - Restatement Adjustment [Member] $ in Millions | Dec. 31, 2018USD ($) |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Operating Lease, Right-of-Use Asset | $ 5 |
Operating Lease, Liability | $ 56.9 |
Fair Value Measurement of Fin_3
Fair Value Measurement of Financial Instruments (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Nov. 30, 2016 | Dec. 04, 2015 | |
Impairment of trademark | $ 17,900 | $ 36,500 | $ 17,899 | $ 340,628 | ||||
Goodwill impairment charge | $ 304,100 | 304,123 | ||||||
Maximum LIBOR rate above strike to trigger interest payments to Company | 1.50% | |||||||
Gross licensing revenue payable, percentage | 3.50% | |||||||
Amortization expense | $ 1,200 | 900 | $ 1,300 | |||||
Trademarks [Member] | ||||||||
Impairment of trademark | 17,899 | 36,505 | ||||||
Amortization expense | 300 | |||||||
Maximum [Member] | ||||||||
Impairment of trademark | 100 | |||||||
Maximum [Member] | Trademarks [Member] | ||||||||
Amortization expense | 100 | |||||||
Interest Rate Cap [Member] | ||||||||
Derivative, notional amount | $ 500,000 | $ 500,000 | ||||||
Derivative, cap interest rate | 1.50% | |||||||
Derivative, maturity date | Nov. 23, 2018 | |||||||
Martha Stewart Living Omnimedia [Member] | ||||||||
Acquisition date fair value of Legacy Payments | $ 2,300 | $ 2,600 | 2,300 | $ 1,700 | ||||
Interest Expense [Member] | ||||||||
Accretion expense | $ 300 | $ 300 |
Fair Value Measurement of Fin_4
Fair Value Measurement of Financial Instruments (Schedule of Indefinite-lived Assets) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Indefinite-lived Intangible Assets [Line Items] | ||||
Impairment charges | $ (17,900) | $ (36,500) | $ (17,899) | $ (340,628) |
Trademarks [Member] | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Balance January 1 | 990,677 | 1,025,260 | ||
Additions | 272 | 2,383 | ||
Impairment charges | (17,899) | (36,505) | ||
Reclassified to finite-lived intangible assets | (6,951) | (461) | ||
Sale of trademarks | (11,170) | |||
Ending Balance | $ 954,929 | $ 990,677 |
Fair Value Measurement of Fin_5
Fair Value Measurement of Financial Instruments (Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value, Inputs, Level 1 [Member] | Equity Securities [Member] | Carrying Value [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Asset | $ 627 | |
Fair Value, Inputs, Level 1 [Member] | Equity Securities [Member] | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Asset | 627 | |
Fair Value, Inputs, Level 2 [Member] | Revolving Loans [Member] | Carrying Value [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 115,000 | $ 92,787 |
Fair Value, Inputs, Level 2 [Member] | Revolving Loans [Member] | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 114,827 | 92,389 |
Fair Value, Inputs, Level 2 [Member] | Term Loans Member | Carrying Value [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 519,850 | 551,913 |
Fair Value, Inputs, Level 2 [Member] | Term Loans Member | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 515,742 | 542,655 |
Fair Value, Inputs, Level 3 [Member] | Carrying Value [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 2,553 | 2,256 |
Fair Value, Inputs, Level 3 [Member] | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 2,553 | 2,256 |
Interest Rate Cap [Member] | Fair Value, Inputs, Level 2 [Member] | Carrying Value [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Asset | 1,239 | |
Interest Rate Cap [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Asset | $ 1,239 | |
Interest Rate Swap [Member] | Fair Value, Inputs, Level 2 [Member] | Carrying Value [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 2,019 | |
Interest Rate Swap [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | $ 2,019 |
Fair Value Measurement of Fin_6
Fair Value Measurement of Financial Instruments (Schedule of Notional Amounts of Outstanding Derivative Positions) (Details) - Interest Rate Swap [Member] - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 10, 2018 |
Derivatives, Fair Value [Line Items] | ||
Notional Value | $ 300,000 | $ 300,000 |
Derivative Liability | $ 2,019 |
Discontinued Operations of Wh_2
Discontinued Operations of Wholesale Business (Narrative) (Detail) $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Discontinued Operations [Member] | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Release of reserve of certain unrecognized tax benefits | $ 0.6 |
Revenue (Narrative) (Details)
Revenue (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2018 | |
Retained Earnings (Accumulated Deficit), Total | $ (234,723) | $ (225,369) | $ (224,239) | |
Accounts receivable, net | 66,202 | 60,102 | 66,437 | |
Current portion of deferred revenue | 8,102 | 12,489 | ||
Noncontrolling interest | 70,726 | 71,547 | $ 74,813 | 71,902 |
Deferred income taxes | 67,002 | 67,799 | $ 68,262 | |
Net revenue | 169,956 | 167,464 | 155,528 | |
(Benefit from) provision for income taxes | (694) | (132,535) | $ 9,157 | |
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | ||||
Retained Earnings (Accumulated Deficit), Total | 1,130 | |||
Accounts receivable, net | 6,335 | |||
Current portion of deferred revenue | 4,387 | |||
Noncontrolling interest | 355 | |||
Deferred income taxes | $ 463 | |||
Net revenue | (3,553) | |||
(Benefit from) provision for income taxes | $ (869) |
Revenue (Changes to Balances fr
Revenue (Changes to Balances from Adoption) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Accounts receivable, net | $ 66,202 | $ 66,437 | $ 60,102 | |
Current portion of deferred revenue | 12,489 | 8,102 | ||
Deferred income taxes | 67,002 | 68,262 | 67,799 | |
Accumulated deficit | (234,723) | (224,239) | (225,369) | |
Noncontrolling interest | $ 70,726 | $ 71,902 | 71,547 | $ 74,813 |
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | ||||
Accounts receivable, net | 6,335 | |||
Current portion of deferred revenue | 4,387 | |||
Deferred income taxes | 463 | |||
Accumulated deficit | 1,130 | |||
Noncontrolling interest | $ 355 |
Revenue (Impact of Adoption of
Revenue (Impact of Adoption of ASC 606) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Net revenue | $ 169,956 | $ 167,464 | $ 155,528 | ||||||||
Operating expenses | 87,767 | 79,443 | 85,392 | ||||||||
Impairment charges | 17,899 | 340,628 | |||||||||
Loss on sale of assets | 7,117 | ||||||||||
Income (loss) from operations | $ 21,121 | $ (643) | $ 21,783 | $ 14,912 | $ (279,292) | $ (13,551) | $ 24,244 | $ 15,992 | 57,173 | (252,607) | 70,136 |
Other expense (income) | 693 | 1,583 | 3,810 | ||||||||
Interest expense, net | 62,152 | 59,891 | 50,538 | ||||||||
(Loss) income before income taxes | 4,815 | (16,247) | 6,105 | (345) | (294,613) | (28,574) | 7,566 | 1,540 | (5,672) | (314,081) | 15,788 |
(Benefit from) provision for income taxes | (694) | (132,535) | 9,157 | ||||||||
Net (loss) income | (1,329) | (8,034) | 4,689 | (304) | (162,220) | (24,732) | 4,451 | 955 | (4,978) | (181,546) | 6,631 |
Net income attributable to noncontrolling interest | (863) | (1,581) | (1,102) | (1,960) | (668) | 552 | (1,921) | (2,135) | (5,506) | (4,172) | (7,452) |
Net loss attributable to Sequential Brands Group, Inc. and Subsidiaries | $ (2,192) | $ (9,615) | $ 3,587 | $ (2,264) | $ (162,888) | $ (24,180) | $ 2,530 | $ (1,180) | $ (10,484) | $ (185,718) | $ (821) |
Loss per share attributable to Sequential Brands Group, Inc. and Subsidiaries: | |||||||||||
Basic | $ (0.03) | $ (0.15) | $ 0.06 | $ (0.04) | $ (2.58) | $ (0.38) | $ 0.04 | $ (0.02) | |||
Diluted | $ (0.03) | $ (0.15) | $ 0.06 | $ (0.04) | $ (2.58) | $ (0.38) | $ 0.04 | $ (0.02) | |||
Basic and diluted (in dollars per share) | $ (0.16) | $ (2.95) | $ (0.01) | ||||||||
Weighted-average common shares outstanding: | |||||||||||
Basic and diluted ( in shares) | 63,700,081 | 62,861,743 | 61,912,410 | ||||||||
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | |||||||||||
Net revenue | $ (3,553) | ||||||||||
Operating expenses | 226 | ||||||||||
Income (loss) from operations | (3,779) | ||||||||||
(Loss) income before income taxes | (3,779) | ||||||||||
(Benefit from) provision for income taxes | (869) | ||||||||||
Net (loss) income | (2,910) | ||||||||||
Net income attributable to noncontrolling interest | 177 | ||||||||||
Net loss attributable to Sequential Brands Group, Inc. and Subsidiaries | $ (2,733) | ||||||||||
Loss per share attributable to Sequential Brands Group, Inc. and Subsidiaries: | |||||||||||
Basic and diluted (in dollars per share) | $ (0.04) | ||||||||||
Weighted-average common shares outstanding: | |||||||||||
Basic and diluted ( in shares) | 63,700,081 | ||||||||||
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | |||||||||||
Net revenue | $ 173,509 | ||||||||||
Operating expenses | 87,541 | ||||||||||
Impairment charges | 17,899 | ||||||||||
Loss on sale of assets | 7,117 | ||||||||||
Income (loss) from operations | 60,952 | ||||||||||
Other expense (income) | 693 | ||||||||||
Interest expense, net | 62,152 | ||||||||||
(Loss) income before income taxes | (1,893) | ||||||||||
(Benefit from) provision for income taxes | 175 | ||||||||||
Net (loss) income | (2,068) | ||||||||||
Net income attributable to noncontrolling interest | (5,683) | ||||||||||
Net loss attributable to Sequential Brands Group, Inc. and Subsidiaries | $ (7,751) | ||||||||||
Loss per share attributable to Sequential Brands Group, Inc. and Subsidiaries: | |||||||||||
Basic and diluted (in dollars per share) | $ (0.12) | ||||||||||
Weighted-average common shares outstanding: | |||||||||||
Basic and diluted ( in shares) | 63,700,081 |
Revenue (Disaggregated Revenue)
Revenue (Disaggregated Revenue) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disaggregated revenue | $ 48,874 | $ 40,771 | $ 42,207 | $ 38,104 | $ 46,895 | $ 39,025 | $ 42,144 | $ 39,400 | $ 169,956 | $ 167,464 | $ 155,528 |
Licensing Agreements [Member] | |||||||||||
Disaggregated revenue | 160,500 | 161,703 | 149,026 | ||||||||
Other Contract [Member] | |||||||||||
Disaggregated revenue | $ 9,456 | $ 5,761 | $ 6,502 |
Revenue (Contract Balances) (De
Revenue (Contract Balances) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Contract assets | $ 3,167 | $ 6,335 |
Contract liabilities | 4,999 | $ 4,387 |
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | ||
Contract assets | (3,168) | |
Contract liabilities | $ 612 |
Revenue (Future Performance Obl
Revenue (Future Performance Obligations) (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Future Performance Obligations | $ 73,561 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Future Performance Obligations | 58,011 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Future Performance Obligations | 42,300 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Future Performance Obligations | 22,705 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Future Performance Obligations | 18,148 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Future Performance Obligations | $ 19,524 |
Revenue (Future Performance O_2
Revenue (Future Performance Obligations Alternate) (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 0 months |
Acquisitions (Narrative) (Detai
Acquisitions (Narrative) (Detail) - USD ($) $ / shares in Units, $ in Thousands | Jul. 01, 2016 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Disclosure Acquisitions Additional Information [Line Items] | ||||||||||||
Net revenue | $ 48,874 | $ 40,771 | $ 42,207 | $ 38,104 | $ 46,895 | $ 39,025 | $ 42,144 | $ 39,400 | $ 169,956 | $ 167,464 | $ 155,528 | |
Common stock, par or stated value per share | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||
Gaiam Brand Holdco, LLC [Member] | ||||||||||||
Disclosure Acquisitions Additional Information [Line Items] | ||||||||||||
Business acquisition, cost of acquired entity, cash paid | $ 145,700 | |||||||||||
Business acquisition, percentage of voting interests acquired | 49.90% | |||||||||||
Legal and other fees related to acquisition | 3,800 | |||||||||||
Net revenue | 12,000 | |||||||||||
Income from continuing operations | $ 11,100 | |||||||||||
Gaiam Brand Holdco, LLC [Member] | Employee Severance [Member] | ||||||||||||
Disclosure Acquisitions Additional Information [Line Items] | ||||||||||||
Business combination, acquisition-related costs | $ 1,900 |
Acquisitions (Measurement Perio
Acquisitions (Measurement Period Reclassifications) (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Allocated to: | |
Total consideration paid | |
Gaiam Brand Holdco, LLC [Member] | |
Allocated to: | |
Goodwill | (3,621) |
Trademarks | 3,568 |
Equity method investment | $ 53 |
Acquisitions (Allocation of The
Acquisitions (Allocation of The Purchase Price) (Detail) - USD ($) $ in Thousands | Jul. 01, 2016 | Dec. 31, 2018 | Dec. 31, 2016 |
Allocated to: | |||
Goodwill | $ 307,744 | ||
Total Consideration Paid | |||
Acquisition of Gaiam, Inc. Branded Consumer Business [Member] | |||
Allocated to: | |||
Goodwill | $ 1,084 | ||
Trademarks | 145,923 | ||
Equity method investment | 757 | ||
Customer agreements | 23 | ||
Accrued expenses | (200) | ||
Total Consideration Paid | $ 147,587 |
Property And Equipment (Narrati
Property And Equipment (Narrative) (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |||
Impairment of property and equipment | $ 0 | $ 0 | $ 0 |
Depreciation and amortization expense | $ 2,200 | $ 3,800 | $ 3,500 |
Property and Equipment (Summary
Property and Equipment (Summary of Property and Equipment) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 18,771 | $ 14,813 |
Less accumulated depreciation and amortization | (9,800) | (7,778) |
Property and equipment, net | 8,971 | 7,035 |
Furniture and Fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 6,094 | 6,164 |
Computer Hardware and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 1,400 | 1,198 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 9,860 | 5,937 |
Computer Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 973 | 974 |
Websites [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 304 | 400 |
Automobiles and Trucks [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 140 | $ 140 |
Intangible Assets (Narrative) (
Intangible Assets (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Amortization expense | $ 1,200 | $ 900 | $ 1,300 |
Loss on sale of assets | (7,117) | ||
Impairment charges | 17,899 | 340,628 | |
Trademarks [Member] | |||
Amortization expense | 300 | ||
Trademarks [Member] | Maximum [Member] | |||
Amortization expense | $ 100 | ||
Revo and FUL Trademarks [Member] | |||
Loss on sale of assets | $ 7,100 |
Intangible Assets (Summary of I
Intangible Assets (Summary of Intangible Assets) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule Of Finite Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 15,631 | $ 8,959 | |
Accumulated Amortization | (5,649) | (4,466) | |
Finite-lived intangible assets, net | 9,982 | 4,493 | |
Net Carrying Amount, Intangible Assets | $ 964,911 | 995,170 | |
Minimum [Member] | |||
Schedule Of Finite Lived Intangible Assets [Line Items] | |||
Useful Lives | 2 years | ||
Maximum [Member] | |||
Schedule Of Finite Lived Intangible Assets [Line Items] | |||
Useful Lives | 15 years | ||
Trademarks [Member] | |||
Schedule Of Finite Lived Intangible Assets [Line Items] | |||
Indefinite lived intangible assets | $ 954,929 | $ 990,677 | $ 1,025,260 |
Trademarks [Member] | |||
Schedule Of Finite Lived Intangible Assets [Line Items] | |||
Useful Lives | 4 years | ||
Gross Carrying Amount | 12,438 | $ 5,462 | |
Accumulated Amortization | (2,689) | (1,913) | |
Finite-lived intangible assets, net | $ 9,749 | $ 3,549 | |
Trademarks [Member] | Minimum [Member] | |||
Schedule Of Finite Lived Intangible Assets [Line Items] | |||
Useful Lives | 5 years | 5 years | |
Trademarks [Member] | Maximum [Member] | |||
Schedule Of Finite Lived Intangible Assets [Line Items] | |||
Useful Lives | 15 years | 15 years | |
Customer Contracts [Member] | |||
Schedule Of Finite Lived Intangible Assets [Line Items] | |||
Useful Lives | 4 years | ||
Gross Carrying Amount | $ 2,832 | $ 2,832 | |
Accumulated Amortization | (2,639) | (2,257) | |
Finite-lived intangible assets, net | $ 193 | $ 575 | |
Patents [Member] | |||
Schedule Of Finite Lived Intangible Assets [Line Items] | |||
Useful Lives | 10 years | 10 years | |
Gross Carrying Amount | $ 361 | $ 665 | |
Accumulated Amortization | (321) | (296) | |
Finite-lived intangible assets, net | $ 40 | $ 369 |
Intangible Assets (Future Annua
Intangible Assets (Future Annual Estimated Amortization Expense) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Intangible Assets [Abstract] | ||
2019 | $ 2,018 | |
2020 | 1,831 | |
2021 | 1,828 | |
2022 | 1,806 | |
2023 | 1,381 | |
Thereafter | 1,118 | |
Intangible assets amortization, total | 9,982 | $ 4,493 |
Intangible Assets, Net (Excluding Goodwill), Total | $ 964,911 | $ 995,170 |
Intangible Assets (Changes in I
Intangible Assets (Changes in Indefinite-Lived Intangible Assets) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Impairment of trademarks | $ 17,899 | $ 340,628 | |
Amortization Of Intangible Assets | 1,200 | 900 | $ 1,300 |
Indefinite-lived Intangible Assets [Member] | |||
Balance January 1 | 995,170 | ||
Impairment of trademarks | (17,899) | ||
Sale of trademarks | (11,473) | ||
Amortization Of Intangible Assets | (1,182) | ||
Additions | 295 | ||
Ending Balance | $ 964,911 | $ 995,170 |
Goodwill (Narrative) (Details)
Goodwill (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2018 | |
Goodwill [Abstract] | ||||
Increase (decrease) in stock price and market capitalization | (41.00%) | |||
Discount rate | 11.25% | 10.25% | ||
Closing stock price | $ 1.78 | |||
Control premium | 20.00% | |||
Goodwill, impairment loss | $ 304,100 | $ 304,123 |
Goodwill (Summary of Goodwill)
Goodwill (Summary of Goodwill) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Dec. 31, 2017 | Dec. 31, 2017 | |
Schedule Of Goodwill [Line Items] | ||
Beginning Balance | $ 307,744 | |
Goodwill, impairment loss | $ (304,100) | (304,123) |
Acquisition of Gaiam, Inc. Branded Consumer Business [Member] | ||
Schedule Of Goodwill [Line Items] | ||
(Adjustment for) acquisition | $ (3,621) |
Long-Term Debt (Narrative) (Det
Long-Term Debt (Narrative) (Details) - USD ($) | Dec. 10, 2018 | Aug. 07, 2018 | Jul. 02, 2016 | Nov. 30, 2016 | Jul. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jul. 01, 2016 |
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Proceeds from issuance of long-term debt | $ 107,607,000 | $ 10,000,000 | $ 132,000,000 | |||||||
Long-term debt | 610,787,000 | 630,597,000 | ||||||||
Debt Issuance Costs, Noncurrent | 14,600,000 | |||||||||
Deferred financing costs | 100,000 | 900,000 | 300,000 | |||||||
Interest expense | 57,100,000 | 55,100,000 | 46,200,000 | |||||||
Amortization of financing costs | $ 4,500,000 | 3,900,000 | 2,800,000 | |||||||
Debt instrument, covenant description | (a) in the event the consolidated total leverage ratio was at least 4.00:1.00, 75% thereof, (b) in the event the consolidated total leverage ratio was 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 was less than 3.00:1.00, 0% thereof. The loans under the New Amended FS/KKR Credit Agreement will continue to amortize in quarterly installments of approximately $2.1 million. | |||||||||
Non cash interest expense | $ 400,000 | $ 600,000 | $ 800,000 | $ 1,200,000 | ||||||
Interest Expense [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Deferred financing costs | 500,000 | |||||||||
Interest Rate Cap [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Derivative, notional amount | $ 500,000,000 | $ 500,000,000 | ||||||||
Derivative, cap interest rate | 1.50% | |||||||||
Derivative, maturity date | Nov. 23, 2018 | |||||||||
Benchmark LIBOR rate for repayment to company from financial institutions | 1.50% | |||||||||
Interest Rate Swap [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Derivative, notional amount | $ 300,000,000 | $ 300,000,000 | ||||||||
Derivative, maturity date | Dec. 31, 2021 | |||||||||
BoA Credit Agreement [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Debt instrument period of credit agreement | 5 years | |||||||||
Proceeds from issuance of long-term debt | $ 335,000,000 | $ 287,500,000 | ||||||||
Long-term debt | $ 258,000,000 | |||||||||
Debt instrument covenant payment percentage of intellectual property disposed liquidation value | 50.00% | |||||||||
Debt instrument covenant payment percentage of net proceeds related to other assets constituting collateral | 100.00% | |||||||||
Debt instrument orderly liquidation value of registered trademarks percentage benchmark | 15.00% | |||||||||
Quarterly amortization installments | $ 5,000,000 | |||||||||
Line of credit facility, covenant terms | The Amended BoA Credit Agreement contained 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 contained financial covenants that required the BoA Facility Loan Parties and their subsidiaries to (i) maintain a positive net income (as defined), (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 | |||||||||
BoA Credit Agreement [Member] | Revolving Credit Facility [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | 110,000,000 | |||||||||
Line of credit facility, unused capacity, commitment fee percentage | 0.375% | |||||||||
Debt instrument increase conditions | The Company could have requested an increase in (i) the Revolving Credit Facility and Tranche A Loans as would not have caused 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 have caused 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 | |||||||||
Long-term Line of Credit | 80,500,000 | |||||||||
BoA Credit Agreement [Member] | Tranche A -1 Term Loans [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Debt instrument, face amount | 44,500,000 | |||||||||
Long-term debt | 44,500,000 | |||||||||
BoA Credit Agreement [Member] | Tranche A -1 Term Loans [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Debt instrument, basis spread on variable rate | 7.00% | |||||||||
BoA Credit Agreement [Member] | Tranche A -1 Term Loans [Member] | Base Rate [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Debt instrument, basis spread on variable rate | 6.00% | |||||||||
BoA Credit Agreement [Member] | Tranche A [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Debt instrument, face amount | 133,000,000 | |||||||||
Long-term debt | 133,000,000 | |||||||||
BoA Credit Agreement [Member] | Tranche A [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Debt instrument, basis spread on variable rate | 3.50% | |||||||||
BoA Credit Agreement [Member] | Tranche A [Member] | Base Rate [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Debt instrument, basis spread on variable rate | 2.50% | |||||||||
BoA Term Loans [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Long-term debt | $ 5,000,000 | |||||||||
Tranche A [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Maximum loan to value ratio | 50.00% | |||||||||
Tranche A [Member] | Revolving Credit Facility [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Consolidated first lien leverage ratio | 2.80% | |||||||||
Tranche A -1 Term Loans [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Consolidated first lien leverage ratio | 3.00% | |||||||||
Revolving Loans [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Long-term debt | $ 115,000,000 | |||||||||
GSO Credit Agreement [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | 415,000,000 | |||||||||
Line of credit facility, covenant terms | The Amended FS/KKR Credit Agreement contained customary representations and warranties and customary affirmative and negative covenants applicable to the FS/KKR Facility Loan Parties and their subsidiaries. Moreover, the Amended FS/KKR Credit Agreement contained 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 FS/KKR 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 FS/KKR Credit Agreement until reaching the final maximum ratio of 2.50:1.00 for the fiscal quarter ending September 30, 2018 and thereafter | |||||||||
Amended KKR Credit Agreement [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | $ 415,000,000 | |||||||||
Debt instrument increase conditions | The Company could have requested one or more additional term loan facilities or the increase of term loan commitments under the Amended FS/KKR Credit Agreement as would not have caused 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 FS/KKR Credit Agreement | |||||||||
Amended KKR Credit Agreement [Member] | Scenario Plan One [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Percent of consolidated excess cash flow for mandatory prepayment | 75.00% | |||||||||
Amended KKR Credit Agreement [Member] | Scenario Plan Two [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Percent of consolidated excess cash flow for mandatory prepayment | 50.00% | |||||||||
Amended KKR Credit Agreement [Member] | Scenario Plan Three [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Percent of consolidated excess cash flow for mandatory prepayment | 0.00% | |||||||||
Amended FS/KKR Credit Agreement [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Percent of disposed intellectual property for mandatory prepayment | 50.00% | |||||||||
Percent of assets disposed of other than intellectual property for mandatory prepayment | 100.00% | |||||||||
Annual amortization as a percent of original aggregate principal | 2.00% | |||||||||
Amended FS/KKR Credit Agreement [Member] | Scenario Plan One [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Percent of consolidated excess cash flow for mandatory prepayment | 75.00% | |||||||||
Amended FS/KKR Credit Agreement [Member] | Scenario Plan Two [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Percent of consolidated excess cash flow for mandatory prepayment | 50.00% | |||||||||
Amended FS/KKR Credit Agreement [Member] | Scenario Plan Three [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Percent of consolidated excess cash flow for mandatory prepayment | 0.00% | |||||||||
FS/KKR Credit Agreement [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Debt instrument, face amount | 314,000,000 | |||||||||
Debt instrument, periodic payment | $ 2,100,000 | |||||||||
Debt instrument, covenant description | (i) a maximum consolidated total leverage ratio, initially set at 7.25:1.00, decreasing over the term of the New Amended FS/KKR Credit Agreement until reaching a final maximum ratio of 6.25:1.00 for the fiscal quarter ending September 30, 2022 and thereafter and (ii) a maximum consolidated first lien leverage ratio, initially set at 3.875:1.00, decreasing over the term of the New Amended FS/KKR Credit Agreement until reaching a final maximum ratio of 2.875:1.00 for the fiscal quarter ending September 30, 2022 and thereafter | |||||||||
Debt instrument consolidated total leverage ratio | 6.00% | |||||||||
FS/KKR Credit Agreement [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Debt instrument, basis spread on variable rate | 8.75% | |||||||||
FS/KKR Credit Agreement [Member] | Base Rate [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Debt instrument, basis spread on variable rate | 7.75% | |||||||||
New Amended FS/KKR Credit Agreement [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Percent of disposed intellectual property for mandatory prepayment | 50.00% | |||||||||
Percent of assets disposed of other than intellectual property for mandatory prepayment | 100.00% | |||||||||
New Amended FS/KKR Credit Agreement [Member] | Scenario Plan One [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Consolidated first lien leverage ratio | 3.875% | |||||||||
Final consolidated total leverage ratio | 7.25% | |||||||||
New Amended FS/KKR Credit Agreement [Member] | Scenario Plan Two [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Consolidated first lien leverage ratio | 2.875% | |||||||||
Final consolidated total leverage ratio | 6.25% | |||||||||
New Amended FS/KKR Credit Agreement [Member] | Scenario Plan Three [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Consolidated total leverage ratio | 6.00% | |||||||||
Amended GSO Credit Agreement [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Debt instrument increase conditions | 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 | |||||||||
Third Amended BoA Credit Agreement [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Long-term debt | $ 335,000,000 | |||||||||
Amended BoA Revolving Credit Commitments [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Debt instrument, face amount | $ 130,000,000 | |||||||||
Maximum loan to value ratio | 50.00% | |||||||||
Consolidated first lien leverage ratio | 3.875% | |||||||||
Final consolidated first lien leverage ratio | 2.875% | |||||||||
Final consolidated first lien leverage ratio | 2.875% | |||||||||
Percent of disposed intellectual property for mandatory prepayment | 50.00% | |||||||||
Percent of assets disposed of other than intellectual property for mandatory prepayment | 100.00% | |||||||||
Line of Credit Facility, Commitment Fee Percentage | 0.375% | |||||||||
Amended BoA Revolving Credit Commitments [Member] | Scenario Plan One [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Consolidated first lien leverage ratio | 2.80% | |||||||||
Amended BoA Revolving Credit Commitments [Member] | Scenario Plan Two [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Final consolidated first lien leverage ratio | 2.50% | |||||||||
Final consolidated first lien leverage ratio | 2.50% | |||||||||
Third Amended BoA Tranche A-1 Loans [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Long-term debt | $ 70,000,000 | |||||||||
Third Amended BoA Tranche A-1 Loans [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Debt instrument, basis spread on variable rate | 7.00% | |||||||||
Third Amended BoA Tranche A-1 Loans [Member] | Base Rate [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Debt instrument, basis spread on variable rate | 6.00% | |||||||||
Amended BoA Revolving Loans and Amended Tranche A Loans [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Debt instrument, basis spread on variable rate | 3.50% | |||||||||
Amended BoA Revolving Loans and Amended Tranche A Loans [Member] | Base Rate [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Debt instrument, basis spread on variable rate | 2.50% | |||||||||
Third Amended BoA Tranche A Loans [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Debt instrument, face amount | $ 150,000,000 | |||||||||
Long-term debt | $ 150,000,000 | |||||||||
New Amended BoA Credit Agreement [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Consolidated first lien leverage ratio | 2.90% | |||||||||
Amended FS/KKR Covenant Requirements - GSO Facility Loan Parties [Member] | Scenario Plan One [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Consolidated first lien leverage ratio | 7.25% | |||||||||
Final consolidated first lien leverage ratio | 6.50% | |||||||||
Final consolidated first lien leverage ratio | 6.50% | |||||||||
Amended FS/KKR Covenant Requirements - GSO Facility Loan Parties [Member] | Scenario Plan Two [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Consolidated first lien leverage ratio | 2.80% | |||||||||
Final consolidated first lien leverage ratio | 2.50% | |||||||||
Final consolidated first lien leverage ratio | 2.50% | |||||||||
Maximum [Member] | Tranche A -1 Term Loans [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Debt instrument orderly liquidation value of registered trademarks percentage benchmark | 10.00% | |||||||||
Maximum [Member] | Tranche A -1 Term Loans [Member] | Scenario Plan One [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Consolidated first lien leverage ratio | 2.50% | |||||||||
Maximum [Member] | Tranche A -1 Term Loans [Member] | Scenario Plan Two [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Consolidated first lien leverage ratio | 2.40% | |||||||||
Maximum [Member] | Amended KKR Credit Agreement [Member] | Scenario Plan Two [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Debt instrument consolidated total leverage ratio | 4.00% | |||||||||
Maximum [Member] | Amended KKR Credit Agreement [Member] | Scenario Plan Three [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Debt instrument consolidated total leverage ratio | 3.00% | |||||||||
Maximum [Member] | Amended KKR Credit Agreement [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Debt instrument, basis spread on variable rate | 9.00% | |||||||||
Maximum [Member] | Amended KKR Credit Agreement [Member] | Base Rate [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Debt instrument, basis spread on variable rate | 8.00% | |||||||||
Maximum [Member] | Amended FS/KKR Credit Agreement [Member] | Scenario Plan Two [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Consolidated total leverage ratio | 4.00% | |||||||||
Maximum [Member] | Amended FS/KKR Credit Agreement [Member] | Scenario Plan Three [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Consolidated total leverage ratio | 3.00% | |||||||||
Maximum [Member] | Amended FS/KKR Credit Agreement [Member] | Scenario Plan Four [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Consolidated total leverage ratio | 6.00% | |||||||||
Maximum [Member] | Third Amended BoA Credit Agreement [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Maximum loan to value ratio | 42.50% | |||||||||
Maximum [Member] | Third Amended BoA Tranche A-1 Loans [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Debt instrument, basis spread on variable rate | 6.00% | |||||||||
Maximum [Member] | Third Amended BoA Tranche A-1 Loans [Member] | Base Rate [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Debt instrument, basis spread on variable rate | 5.00% | |||||||||
Maximum [Member] | Amended BoA Revolving Loans and Amended Tranche A Loans [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Debt instrument, basis spread on variable rate | 3.00% | |||||||||
Maximum [Member] | Amended BoA Revolving Loans and Amended Tranche A Loans [Member] | Base Rate [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Debt instrument, basis spread on variable rate | 2.00% | |||||||||
Maximum [Member] | Revolving Credit Facility and Tranche A Loans [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Consolidated first lien leverage ratio | 2.33% | |||||||||
Minimum [Member] | Amended KKR Credit Agreement [Member] | Scenario Plan One [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Debt instrument consolidated total leverage ratio | 4.00% | |||||||||
Minimum [Member] | Amended KKR Credit Agreement [Member] | Scenario Plan Three [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Debt instrument consolidated total leverage ratio | 3.00% | |||||||||
Minimum [Member] | Amended KKR Credit Agreement [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Debt instrument, basis spread on variable rate | 8.25% | |||||||||
Minimum [Member] | Amended KKR Credit Agreement [Member] | Base Rate [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Debt instrument, basis spread on variable rate | 7.25% | |||||||||
Minimum [Member] | Amended FS/KKR Credit Agreement [Member] | Scenario Plan One [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Consolidated total leverage ratio | 4.00% | |||||||||
Minimum [Member] | Amended FS/KKR Credit Agreement [Member] | Scenario Plan Two [Member] | ||||||||||
Disclosure Long Term Debt Additional Information [Line Items] | ||||||||||
Consolidated total leverage ratio | 3.00% |
Long-Term Debt (Schedule of Lon
Long-Term Debt (Schedule of Long Term Debt) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Aug. 07, 2018 | Dec. 31, 2017 | Jul. 01, 2016 |
Secured Term Loans | $ 519,850 | $ 551,913 | ||
Revolving Credit Facility | 634,850 | |||
Unamortized deferred financing costs | (24,063) | (14,103) | ||
Total long-term debt, net of unamortized deferred financing costs | 610,787 | 630,597 | ||
Less: current portion of long-term debt | 28,300 | 28,300 | ||
Long term debt, noncurrent | 582,487 | 602,297 | ||
Revolving Credit Facility [Member] | ||||
Revolving Credit Facility | 115,000 | $ 92,787 | ||
BoA Credit Agreement [Member] | ||||
Total long-term debt, net of unamortized deferred financing costs | $ 258,000 | |||
BoA Term Loans [Member] | ||||
Total long-term debt, net of unamortized deferred financing costs | $ 5,000 | |||
Revolving Loans [Member] | ||||
Total long-term debt, net of unamortized deferred financing costs | $ 115,000 |
Long-Term Debt (Long Term Debt
Long-Term Debt (Long Term Debt Maturities) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Long-term Debt, Fiscal Year Maturity [Abstract] | ||
2019 | $ 28,300 | |
2020 | 28,300 | |
2021 | 28,300 | |
2022 | 28,300 | |
2023 | 253,300 | |
Thereafter | 268,350 | |
Total long-term debt, gross | 634,850 | |
Revolving Credit Facility [Member] | ||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||
2023 | 115,000 | |
Total long-term debt, gross | 115,000 | $ 92,787 |
Term Loans Member | ||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||
2019 | 28,300 | |
2020 | 28,300 | |
2021 | 28,300 | |
2022 | 28,300 | |
2023 | 138,300 | |
Thereafter | 268,350 | |
Total long-term debt, gross | $ 519,850 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses (Schedule of Accounts Payable and Accrued Expenses) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts Payable and Accrued Expenses [Abstract] | ||
Accounts payable | $ 4,207 | $ 1,627 |
Accrued Expenses | ||
Guaranteed payments in connection with acquisitions - current | 2,828 | 3,295 |
Interest | 2,401 | 3,215 |
Compensation | 3,365 | 4,928 |
Marketing and Commissions | 1,330 | 2,804 |
Professional services fees | 1,986 | 424 |
Legal settlement payable - current | 3,200 | |
Licensee settlement payable - current | 1,883 | |
Other accrued expenses | 2,327 | 2,833 |
Total accounts payable and accrued expenses | $ 23,527 | $ 19,126 |
Leases (Narrative) (Details)
Leases (Narrative) (Details) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Feb. 28, 2018ft² | Jan. 12, 2018ft² | |
Operating Leased Assets [Line Items] | |||||
Rent expense | $ | $ 5.7 | $ 6.1 | $ 8.1 | ||
Photocopiers [Member] | |||||
Operating Leased Assets [Line Items] | |||||
Lease expiration date | Sep. 30, 2020 | ||||
Corporate Headquarters [Member] | |||||
Operating Leased Assets [Line Items] | |||||
Rented area of office space | 63,000 | ||||
Increase in area of real estate property | 12,300 | ||||
Other Rentable Space [Member] | |||||
Operating Leased Assets [Line Items] | |||||
Rented area of office space | 7,000 |
Leases (Schedule of Operating L
Leases (Schedule of Operating Leases Spaces) (Details) - ft² | 12 Months Ended | |
Dec. 31, 2018 | Feb. 28, 2018 | |
Corporate Headquarters [Member] | ||
Operating Leased Assets [Line Items] | ||
Square Footage (Approximate) | 63,000 | |
Corporate Headquarters [Member] | New York, NY [Member] | ||
Operating Leased Assets [Line Items] | ||
Square Footage (Approximate) | 82,300 | |
Expiration Date | Dec. 31, 2033 | |
Office and Showroom [Member] | New York, NY [Member] | ||
Operating Leased Assets [Line Items] | ||
Square Footage (Approximate) | 10,900 | |
Expiration Date | Sep. 12, 2024 | |
Other Rentable Space [Member] | ||
Operating Leased Assets [Line Items] | ||
Square Footage (Approximate) | 7,000 | |
Other Rentable Space [Member] | Los Angeles, CA [Member] | ||
Operating Leased Assets [Line Items] | ||
Square Footage (Approximate) | 4,724 | |
Expiration Date | Jul. 31, 2020 |
Leases (Future Annual Minimum P
Leases (Future Annual Minimum Payments Due Under the Leases) (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 6,481 |
2020 | 6,400 |
2021 | 6,247 |
2022 | 6,262 |
2023 | 6,277 |
Thereafter | 57,625 |
Future annual minimum payments due | $ 89,292 |
Leases (Schedule of Future Subl
Leases (Schedule of Future Sublease Income for Operating Leases) (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 443 |
2020 | 300 |
2021 | 300 |
2022 | 300 |
2023 | 300 |
Thereafter | 600 |
Future sublease income due | $ 2,243 |
Commitments and Contingencies_2
Commitments and Contingencies (Narrative) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Commitments and Contingencies [Abstract] | |
Contingency related to settlement claim | $ 3.2 |
Commitments and Contingencies_3
Commitments and Contingencies (Guaranteed Payments) (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Commitments and Contingencies [Abstract] | |
2019 | $ 2,828 |
2020 | 1,158 |
Total guaranteed payments | $ 3,986 |
Preferred Stock (Narrative) (De
Preferred Stock (Narrative) (Details) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Series A Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Stock Incentive Plan, Options_3
Stock Incentive Plan, Options and Warrants (Narrative) (Detail) - USD ($) | Feb. 20, 2018 | Jul. 25, 2017 | Feb. 23, 2016 | Feb. 28, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 04, 2005 | Jan. 05, 2005 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Estimated forfeiture rate for calculating compensation cost | 0.00% | |||||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | $ 0 | |||||||||
2005 Stock Incentive Compensation Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Shares authorized | 366,667 | |||||||||
2013 Stock Incentive Compensation Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Shares authorized | 2,500,000 | |||||||||
Chief Executive Officer [Member] | Year 2017 One [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Allocated share-based compensation expense | $ 0 | |||||||||
Employees and Consultant [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Allocated share-based compensation expense | $ 400,000 | |||||||||
Restricted Stock | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Accelerated shares, vesting | 32,500 | |||||||||
Accelerated shares, compensation expense | $ 200,000 | |||||||||
Restricted stock awards, granted in period | 235,296 | 111,112 | 80,903 | |||||||
Vested units | 137,843 | 174,363 | 232,769 | |||||||
Restricted Stock | Members of BOD | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting period | 1 year | |||||||||
Allocated share-based compensation expense | $ 300,000 | |||||||||
Restricted stock awards, granted in period | 235,296 | |||||||||
Fair value of restricted stock grant | $ 400,000 | |||||||||
Restricted Stock | Board of Directors Chairman [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Restricted stock awards, granted in period | 70,548 | |||||||||
Time-based Restricted Stock [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Total compensation expense | $ 500,000 | $ 600,000 | $ 1,600,000 | |||||||
Stock option expense, Recognition period | 10 months 24 days | |||||||||
Unrecognized compensation expense, other than options | $ 200,000 | |||||||||
Unrecognized compensation expense, period for recognition | 10 months 24 days | |||||||||
Time-based Restricted Stock [Member] | Employees [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Allocated share-based compensation expense | 1,500,000 | |||||||||
Fair value of restricted stock grant | $ 843,486 | |||||||||
Time-based Restricted Stock [Member] | Board Of Director Chairman And Non employee Member | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Allocated share-based compensation expense | 100,000 | $ 100,000 | 300,000 | |||||||
Fair value of restricted stock grant | $ 500,000 | |||||||||
Time-based Restricted Stock [Member] | Board Of Director Chairman And Non employee Member | Minimum [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting period | 1 year | |||||||||
Time-based Restricted Stock [Member] | Board Of Director Chairman And Non employee Member | Maximum [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting period | 5 years | |||||||||
Time-based Restricted Stock [Member] | Members of BOD | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting period | 1 year | |||||||||
Allocated share-based compensation expense | $ 100,000 | $ 300,000 | ||||||||
Restricted stock awards, granted in period | 111,112 | 70,548 | ||||||||
Fair value of restricted stock grant | $ 400,000 | |||||||||
Time-based Restricted Stock [Member] | Employees and Consultant [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting period | 5 years | |||||||||
Allocated share-based compensation expense | $ 1,400,000 | |||||||||
Restricted stock awards, granted in period | 1,835,257 | |||||||||
Fair value of restricted stock grant | $ 3,200,000 | |||||||||
Time-based Restricted Stock [Member] | Nonemployee [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Restricted stock awards, granted in period | 10,355 | |||||||||
Warrants | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Allocated share-based compensation expense | 0 | 100,000 | $ 200,000 | |||||||
Restricted Stock Units (RSUs) [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Accrued share-based compensation expense | $ 1,500,000 | |||||||||
Accelerated shares, vesting | 16,667 | |||||||||
Accelerated shares, compensation expense | $ 100,000 | |||||||||
Restricted stock awards, granted in period | 2,678,743 | 688,836 | 260,000 | |||||||
Vested units | 1,732,523 | 219,103 | 33,333 | |||||||
Restricted Stock Units (RSUs) [Member] | Chief Executive Officer [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting period | 3 years | |||||||||
Allocated share-based compensation expense | $ 100,000 | $ 100,000 | ||||||||
Restricted stock awards, granted in period | 100,000 | |||||||||
Fair value of restricted stock grant | $ 400,000 | |||||||||
Restricted Stock Units (RSUs) [Member] | Former Chief Executive Officer [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting period | 2 years | |||||||||
Accelerated shares, vesting | 66,667 | |||||||||
Accelerated shares, compensation expense | $ 700,000 | |||||||||
Restricted stock awards, granted in period | 60,000 | |||||||||
Fair value of restricted stock grant | $ 300,000 | |||||||||
Restricted Stock Units (RSUs) [Member] | Employees [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting period | 3 years | |||||||||
Allocated share-based compensation expense | 500,000 | 700,000 | $ 200,000 | |||||||
Total compensation expense | $ 2,400,000 | $ 1,800,000 | $ 600,000 | |||||||
Stock option expense, Recognition period | 2 years 2 months 12 days | |||||||||
Restricted stock awards, granted in period | 200,000 | 260,000 | ||||||||
Fair value of restricted stock grant | $ 1,800,000 | |||||||||
Unrecognized compensation expense, other than options | $ 1,900,000 | |||||||||
Unrecognized compensation expense, period for recognition | 2 years 2 months 12 days | |||||||||
Restricted Stock Units (RSUs) [Member] | Employees and Consultant Two [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting period | 3 years | |||||||||
Allocated share-based compensation expense | $ 400,000 | $ 200,000 | ||||||||
Fair value of restricted stock grant | $ 1,400,000 | |||||||||
Restricted Stock Units (RSUs) [Member] | Consultant [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting period | 6 months | |||||||||
Restricted stock awards, granted in period | 52,083 | |||||||||
Fair value of restricted stock grant | $ 100,000 | |||||||||
Restricted Stock Units (RSUs) [Member] | Consultant [Member] | Maximum [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Allocated share-based compensation expense | 100,000 | |||||||||
Restricted Stock Units (RSUs) [Member] | Consultant Two [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Restricted stock awards, granted in period | 276,753 | |||||||||
Performance based restricted stock | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Allocated share-based compensation expense | $ 900,000 | $ 3,500,000 | $ 4,000,000 | |||||||
Accelerated shares, vesting | 108,500 | |||||||||
Accelerated shares, compensation expense | $ 500,000 | |||||||||
Restricted stock awards, granted in period | 785,000 | 716,600 | 2,134,100 | |||||||
Vested units | 350,408 | 701,233 | 317,833 | |||||||
Performance based restricted stock | Chief Executive Officer [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Accelerated shares, compensation expense | $ 2,900,000 | |||||||||
Restricted stock awards, granted in period | 20,000 | 200,000 | ||||||||
Performance based restricted stock | Chief Executive Officer [Member] | Year 2017 One [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting period | 3 years | |||||||||
Restricted stock awards, granted in period | 300,000 | |||||||||
Fair value of restricted stock grant | $ 800,000 | |||||||||
Performance based restricted stock | Chief Executive Officer [Member] | Year 2017 Two [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting period | 3 years | |||||||||
Restricted stock awards, granted in period | 175,000 | |||||||||
Fair value of restricted stock grant | $ 700,000 | |||||||||
Performance based restricted stock | Chief Financial Officer [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Restricted stock awards, granted in period | 12,000 | 36,000 | ||||||||
Performance based restricted stock | Chief Financial Officer [Member] | Year 2017 Two [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Allocated share-based compensation expense | $ 100,000 | |||||||||
Total compensation expense | 200,000 | |||||||||
Performance based restricted stock | Former Chief Executive Officer [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Restricted stock awards, granted in period | 60,000 | |||||||||
Performance based restricted stock | Employees [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting period | 3 years | |||||||||
Allocated share-based compensation expense | 0 | |||||||||
Total compensation expense | $ 200,000 | |||||||||
Restricted stock awards, granted in period | 135,000 | 30,000 | ||||||||
Stock issued | 83,250 | |||||||||
Fair value of restricted stock grant | $ 300,000 | $ 700,000 | ||||||||
Performance based restricted stock | Employees [Member] | Minimum [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting period | 1 year | |||||||||
Performance based restricted stock | Employees [Member] | Maximum [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting period | 2 years | |||||||||
Performance based restricted stock | Employees and Consultant [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting period | 3 years | |||||||||
Allocated share-based compensation expense | $ 0 | |||||||||
Total compensation expense | 500,000 | |||||||||
Restricted stock awards, granted in period | 41,600 | 69,994 | 164,978 | 2,104,100 | ||||||
Fair value of restricted stock grant | $ 15,400,000 | |||||||||
Vested units | 208,883 | |||||||||
Performance based restricted stock | Employees and Consultant [Member] | February 28, 2107 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Allocated share-based compensation expense | $ 600,000 | |||||||||
Performance based restricted stock | Employees and Consultant [Member] | Maximum [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Allocated share-based compensation expense | $ 100,000 | |||||||||
Performance based restricted stock | Consultant [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting period | 5 years | |||||||||
Restricted stock awards, granted in period | 250,000 | |||||||||
Fair value of restricted stock grant | $ 500,000 | |||||||||
Performance based restricted stock | Employee 1 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting period | 3 years | |||||||||
Restricted stock awards, granted in period | 200,000 | 200,000 | ||||||||
Fair value of restricted stock grant | $ 400,000 | |||||||||
Performance based restricted stock | Employee 2 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting period | 2 years | |||||||||
Restricted stock awards, granted in period | 200,000 | |||||||||
Fair value of restricted stock grant | $ 500,000 | |||||||||
Employee Stock Option [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Allocated share-based compensation expense | $ 0 | |||||||||
Employee Stock Option [Member] | Maximum [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Allocated share-based compensation expense | $ 100,000 |
Stock Incentive Plan, Options_4
Stock Incentive Plan, Options and Warrants (Summary of Stock Option Activity and Changes in Unvested Stock Options) (Detail) - Employee Stock Option [Member] - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||||
Outstanding beginning, Number of Options | 84,001 | 129,501 | 129,501 | |
Vested, Number of Options | (5,000) | (16,000) | ||
Forfeited or Canceled, Number of Options | (34,500) | (45,500) | ||
Outstanding ending, Number of Options | 49,501 | 84,001 | 129,501 | 129,501 |
Exercisable, Number of Options | 49,501 | |||
Outstanding beginning, Weighted Average Exercise Price | $ 8.65 | $ 9.65 | $ 9.65 | |
Vested, options - Weighted-Average Grant Date Fair Value | 1.96 | 2.94 | ||
Forfeited or Canceled, Weighted Average Exercise Price | (6.41) | (11.49) | ||
Outstanding ending, Weighted Average Exercise Price | 10.22 | $ 8.65 | $ 9.65 | $ 9.65 |
Exercisable, Weighted Average Exercise Price | $ 10.22 | |||
Weighted Average Remaining Contractual Life (in years) | 2 years 3 months 18 days | 2 years 1 month 6 days | 2 years 3 months 18 days | 3 years 3 months 18 days |
Exercisable, Weighted Average Remaining Contractual Life (in years) | 2 years 3 months 18 days | |||
Outstanding, Aggregate Intrinsic Value | $ 148 | |||
Nonvested | ||||
Outstanding beginning, Number of Options | 5,000 | 21,000 | ||
Vested, Number of Options | (5,000) | (16,000) | ||
Outstanding ending, Number of Options | 5,000 | 21,000 | ||
Outstanding beginning, Weighted Average Exercise Price, Options | $ 1.96 | $ 2.71 | ||
Vested, options Weighted Average Exercise Price, Options | $ 1.96 | 2.94 | ||
Outstanding ending, Weighted Average Exercise Price, Unvested Options | $ 1.96 | $ 2.71 |
Stock Incentive Plan, Options_5
Stock Incentive Plan, Options and Warrants (Summary of Warrant Activity) (Detail) - Warrants - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||||
Outstanding beginning, Number of Options | 770,160 | 801,760 | 801,760 | |
Vested, Number of Options | (50,000) | (100,000) | ||
Forfeited or Canceled, Number of Options | (570,160) | (31,600) | ||
Outstanding ending, Number of Options | 200,000 | 770,160 | 801,760 | 801,760 |
Exercisable, Number of Options | 200,000 | |||
Outstanding beginning, Weighted Average Exercise Price | $ 7.95 | $ 7.87 | $ 7.87 | |
Vested, options - Weighted-Average Grant Date Fair Value | 6.32 | 6.32 | ||
Forfeited or Canceled, Weighted Average Exercise Price | 6.07 | |||
Outstanding ending, Weighted Average Exercise Price | 13.32 | $ 7.95 | $ 7.87 | $ 7.87 |
Exercisable, Weighted Average Exercise Price | $ 13.32 | |||
Weighted Average Remaining Contractual Life (in years) | 6 years 4 months 24 days | 2 years 2 months 12 days | 3 years 1 month 6 days | 4 years 1 month 6 days |
Exercisable, Weighted Average Remaining Contractual Life (in years) | 6 years 4 months 24 days | |||
Outstanding, Aggregate Intrinsic Value | $ 51 | $ 1,377 | ||
Nonvested | ||||
Outstanding beginning, Number of Options | 50,000 | 150,000 | ||
Vested, Number of Options | (50,000) | (100,000) | ||
Outstanding ending, Number of Options | 50,000 | 150,000 | ||
Outstanding beginning, Weighted Average Exercise Price, Options | $ 6.32 | $ 6.32 | ||
Vested, options Weighted Average Exercise Price, Options | $ 6.32 | 6.32 | ||
Outstanding ending, Weighted Average Exercise Price, Unvested Options | $ 6.32 | $ 6.32 |
Stock Incentive Plan, Options_6
Stock Incentive Plan, Options and Warrants (Summary of Restricted Stock Activity and Performance Stock Units) (Detail) - $ / shares | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Restricted Stock | ||||
Summary Of Restricted Stock Activity [Line Items] | ||||
Outstanding beginning, Other than options | 195,536 | 258,787 | 410,653 | |
Restricted stock awards, granted in period | 235,296 | 111,112 | 80,903 | |
Vested, Other than options | (137,843) | (174,363) | (232,769) | |
Outstanding ending, Other than options | 292,989 | 195,536 | 258,787 | 410,653 |
Outstanding beginning, Weighted Average Exercise Price, Other than options | $ 7.23 | $ 8.45 | $ 8.81 | |
Granted, Weighted Average Exercise Price, Other than options | 1.70 | 3.60 | 5.57 | |
Vested, Weighted Average Grant Date Fair Value | (5.25) | (6.73) | (8.08) | |
Outstanding ending , Weighted Average Exercise Price, Other than options | $ 3.72 | $ 7.23 | $ 8.45 | $ 8.81 |
Nonvested, Weighted Average Remaining Vesting Period, Other Than Options, Nonvested | 10 months 24 days | 1 year 9 months 18 days | 2 years 1 month 6 days | 1 year 9 months 18 days |
Performance based restricted stock | ||||
Summary Of Restricted Stock Activity [Line Items] | ||||
Outstanding beginning, Other than options | 2,045,634 | 2,803,367 | 1,308,500 | |
Restricted stock awards, granted in period | 785,000 | 716,600 | 2,134,100 | |
Vested, Other than options | (350,408) | (701,233) | (317,833) | |
Forfeited or Canceled, Other than options | (260,408) | (773,100) | (321,400) | |
Outstanding ending, Other than options | 2,219,818 | 2,045,634 | 2,803,367 | 1,308,500 |
Outstanding beginning, Weighted Average Exercise Price, Other than options | $ 5.83 | $ 8.18 | $ 10.98 | |
Granted, Weighted Average Exercise Price, Other than options | 1.98 | 3.17 | 7.23 | |
Vested, Weighted Average Grant Date Fair Value | (4.71) | (10.97) | (9.58) | |
Forfeited or Canceled, Weighted Average Exercise Price, Other than options | (7.32) | (7.22) | (11.89) | |
Outstanding ending , Weighted Average Exercise Price, Other than options | $ 4.47 | $ 5.83 | $ 8.18 | $ 10.98 |
Nonvested, Weighted Average Remaining Vesting Period, Other Than Options, Nonvested | 9 months 18 days | 2 years | 2 years 4 months 24 days | 1 year 4 months 24 days |
Restricted Stock Units (RSUs) [Member] | ||||
Summary Of Restricted Stock Activity [Line Items] | ||||
Outstanding beginning, Other than options | 736,400 | 326,667 | 100,000 | |
Restricted stock awards, granted in period | 2,678,743 | 688,836 | 260,000 | |
Vested, Other than options | (1,732,523) | (219,103) | (33,333) | |
Forfeited or Canceled, Other than options | (66,667) | (60,000) | ||
Outstanding ending, Other than options | 1,615,953 | 736,400 | 326,667 | 100,000 |
Outstanding beginning, Weighted Average Exercise Price, Other than options | $ 3.89 | $ 8.52 | $ 14.33 | |
Granted, Weighted Average Exercise Price, Other than options | 1.77 | 3.18 | 7.03 | |
Vested, Weighted Average Grant Date Fair Value | (2.18) | (8.29) | (14.33) | |
Forfeited or Canceled, Weighted Average Exercise Price, Other than options | (3.20) | (4.89) | ||
Outstanding ending , Weighted Average Exercise Price, Other than options | $ 2.24 | $ 3.89 | $ 8.52 | $ 14.33 |
Nonvested, Weighted Average Remaining Vesting Period, Other Than Options, Nonvested | 2 years 2 months 12 days | 2 years 2 months 12 days | 2 years 6 months | 0 years |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Operating Loss Carryforwards [Line Items] | |||
Valuation allowance | $ 17,109 | $ 17,404 | |
Deferred tax liability, net | 67,002 | $ 68,262 | 67,799 |
Accrued interest and penalties associated with release of certain unrecognized tax benefits | 0 | $ 0 | |
Federal | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | 188,900 | ||
State | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | 208,000 | ||
Foreign | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | $ 600 |
Income Taxes (Schedule of Compo
Income Taxes (Schedule of Components of Income Tax Expense (Benefit)) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Taxes [Abstract] | |||
Federal, Current provision | $ (111) | ||
Federal, Deferred provision | $ (1,512) | $ (131,344) | 10,145 |
Federal, Total | (1,512) | (131,344) | 10,034 |
Foreign, Current provision | 84 | 134 | 206 |
Foreign, Total | 84 | 134 | 206 |
State, Current provision | 19 | (519) | |
State, Deferred provision | 715 | (1,325) | (564) |
State, Total | 734 | (1,325) | (1,083) |
Provision for (benefit from) income taxes | $ (694) | $ (132,535) | $ 9,157 |
Income Taxes (Schedule of Effec
Income Taxes (Schedule of Effective Income Tax Rate Reconciliation) (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Effective Income Tax Rate Reconciliation, Percentage | |||
Federal statutory rate | 21.00% | 35.00% | 35.00% |
State taxes net of federal tax benefit | 3.40% | 0.10% | 0.20% |
Goodwill impairment | (33.90%) | ||
Non-deductible transaction costs | 0.70% | ||
Noncontrolling interest | 20.40% | 0.60% | (16.50%) |
Valuation allowance | (17.90%) | 29.50% | 43.20% |
Nondeductible compensation | (13.90%) | (0.10%) | 2.20% |
Foreign taxes | (1.20%) | (0.10%) | 1.30% |
Other | 2.40% | (0.70%) | 1.10% |
Tax Act impact | 11.80% | ||
Change in state tax rates | (2.00%) | (5.50%) | |
FIN 48 reversal | (3.70%) | ||
Effective income tax rate, percent | 12.20% | 42.20% | 58.00% |
Income Taxes (Schedule of Defer
Income Taxes (Schedule of Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Deferred income tax assets | |||
Net operating loss carryforwards | $ 51,042 | $ 54,909 | |
Capital loss carryforwards | 4,417 | 1,885 | |
Intangible assets - finite life | 3,261 | 6,809 | |
Stock-based compensation | 439 | 716 | |
Property, plant & equipment | 3,649 | 3,587 | |
Deferred rent | 799 | ||
Deferred rent expense | (64) | ||
Credits | 1,281 | 2,274 | |
Deferred revenue | 2,755 | 2,973 | |
Available-for-sale securities | 8,644 | ||
Deferred compensation | 1,053 | 1,772 | |
Other | 3,585 | 1,187 | |
Deferred income tax assets | 80,925 | 76,048 | |
Deferred income tax liability - long-term | |||
Intangible assets - Indefinite-lived | (130,818) | (126,443) | |
Deferred income tax liability - long-term | (130,818) | (126,443) | |
Less: Valuation Allowance | (17,109) | (17,404) | |
Net deferred income tax liability - long-term | $ (67,002) | $ (68,262) | $ (67,799) |
Related Party Transactions (Nar
Related Party Transactions (Narrative) (Detail) - USD ($) $ in Thousands | Jun. 22, 2015 | Jan. 01, 2013 | Sep. 30, 2015 | Nov. 17, 2014 | Jul. 31, 2013 | Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jan. 01, 2018 |
Related Party [Line Items] | |||||||||||
Revenue from Contract with Customer, Including Assessed Tax | $ 169,956 | $ 167,464 | $ 155,528 | ||||||||
Accounts receivable, net | $ 66,202 | 66,202 | 60,102 | $ 66,437 | |||||||
Intangible asset agreement annual payment | 1,700 | 1,700 | |||||||||
License agreement annual payment | 1,300 | 1,300 | 1,300 | ||||||||
License agreement payments during period | 2,100 | 3,300 | |||||||||
Minority Interest | 70,726 | 70,726 | 71,547 | 74,813 | $ 71,902 | ||||||
Increase (decrease) in noncontrolling interest | (6,682) | (7,438) | (6,800) | ||||||||
Sale of available-for-sale securities | 5,757 | ||||||||||
Non cash interest expense | 400 | 600 | $ 800 | $ 1,200 | |||||||
Accounts payable and accrued expenses | 23,527 | 23,527 | 19,126 | ||||||||
Other long-term liabilities | 12,789 | $ 12,789 | $ 6,204 | ||||||||
Demand registration right threshold amount two offerings | $ 15,000 | ||||||||||
Security registration form aggregate amount threshold per agreement | $ 5,000 | ||||||||||
Restricted Stock | |||||||||||
Related Party [Line Items] | |||||||||||
Restricted stock awards, granted in period | 235,296 | 111,112 | 80,903 | ||||||||
Tengram Capital Partners Gen2 Fund LP [Member] | |||||||||||
Related Party [Line Items] | |||||||||||
Percentage of beneficially owned outstanding common stock | 5.00% | ||||||||||
Accounts payable annually, related parties | 900 | $ 900 | |||||||||
Sale of available-for-sale securities | 5,800 | ||||||||||
Purchase of available-for-sale securities | $ 12,000 | ||||||||||
TCI | |||||||||||
Related Party [Line Items] | |||||||||||
Revenue | 3,100 | ||||||||||
Other Noncash Income | 100 | ||||||||||
TCI | Other Current Assets | |||||||||||
Related Party [Line Items] | |||||||||||
Current receivable | 1,000 | 1,000 | |||||||||
TCI | Other Assets | |||||||||||
Related Party [Line Items] | |||||||||||
Long-term receivable | 2,100 | 2,100 | |||||||||
FUL [Member] | |||||||||||
Related Party [Line Items] | |||||||||||
Business combination, recognized identifiable assets acquired and liabilities assumed, intangible assets, other than goodwill | $ 8,900 | ||||||||||
Percentage of voting interests acquired | 50.50% | ||||||||||
Payments to acquire interest in joint venture | $ 4,500 | ||||||||||
Increase (decrease) in noncontrolling interest | 700 | $ 2,200 | $ 0 | ||||||||
ES Originals Inc [Member] | |||||||||||
Related Party [Line Items] | |||||||||||
Accounts receivable, net | 6,200 | 6,200 | 8,000 | ||||||||
Revenue | 3,000 | ||||||||||
Current receivable | 900 | 900 | |||||||||
Long-term receivable | 1,200 | 1,200 | |||||||||
ES Originals Inc [Member] | Royalty | |||||||||||
Related Party [Line Items] | |||||||||||
Revenue from Contract with Customer, Including Assessed Tax | $ 8,400 | $ 18,100 | |||||||||
ES Originals Inc [Member] | Advertising Member | |||||||||||
Related Party [Line Items] | |||||||||||
Revenue from Contract with Customer, Including Assessed Tax | 17,000 | ||||||||||
TCP Employee [Member] | |||||||||||
Related Party [Line Items] | |||||||||||
Award vesting period | 3 years | ||||||||||
Restricted stock awards, granted in period | 125,000 | 200,000 | |||||||||
TCP Employee [Member] | Restricted Stock | |||||||||||
Related Party [Line Items] | |||||||||||
Award vesting period | 4 years | ||||||||||
TCP Employee [Member] | Phantom Share Units (PSUs) [Member] | |||||||||||
Related Party [Line Items] | |||||||||||
Award vesting period | 3 years | ||||||||||
Restricted stock awards, granted in period | 180,000 | ||||||||||
TCP Employee [Member] | Share-based Compensation Award, Tranche One [Member] | |||||||||||
Related Party [Line Items] | |||||||||||
Vesting percentage | 20.00% | 33.30% | |||||||||
TCP Employee [Member] | Share-based Compensation Award, Tranche One [Member] | Restricted Stock | |||||||||||
Related Party [Line Items] | |||||||||||
Award vesting period | 3 years | ||||||||||
Vesting percentage | 150000.00% | ||||||||||
TCP Employee [Member] | Share-based Compensation Award, Tranche Two [Member] | |||||||||||
Related Party [Line Items] | |||||||||||
Vesting percentage | 20.00% | 33.30% | |||||||||
TCP Employee [Member] | Share-based Compensation Award, Tranche Two [Member] | Restricted Stock | |||||||||||
Related Party [Line Items] | |||||||||||
Award vesting period | 3 years | ||||||||||
Restricted stock awards, granted in period | 300,000 | ||||||||||
Vesting percentage | 25.00% | ||||||||||
TCP Employee [Member] | Share-based Compensation Award, Tranche Three [Member] | |||||||||||
Related Party [Line Items] | |||||||||||
Vesting percentage | 60.00% | 33.40% | |||||||||
Centric Brands, Inc. [Member] | |||||||||||
Related Party [Line Items] | |||||||||||
Current receivable | 800 | $ 800 | |||||||||
Transfer fee received for license rights | 4,000 | ||||||||||
Centric Brands, Inc. [Member] | Royalty | |||||||||||
Related Party [Line Items] | |||||||||||
Revenue from Contract with Customer, Including Assessed Tax | 1,200 | ||||||||||
IP License Agreement and Intangible Asset Agreement [Member] | |||||||||||
Related Party [Line Items] | |||||||||||
Terms of agreement, description | calendar years 2018 through 2020 exceed $195 million or the gross licensing revenues for calendar year 2020 equal or exceed $65 million. | ||||||||||
Gross revenue threshold, period one, amount | $ 195,000 | ||||||||||
Gross revenue threshold, period two, amount | 65,000 | ||||||||||
Accounts payable and accrued expenses | 2,800 | 2,800 | $ 2,800 | ||||||||
Other long-term liabilities | 1,100 | 1,100 | 3,600 | ||||||||
Amount due under agreement | 3,900 | $ 3,900 | 6,400 | ||||||||
Registration Rights Agreement [Member] | |||||||||||
Related Party [Line Items] | |||||||||||
Terms of agreement, description | up to two offerings of greater than $15 million each, certain "S-3" registration rights for up to three offerings of greater than $5 million each | ||||||||||
TCP Agreement [Member] | |||||||||||
Related Party [Line Items] | |||||||||||
Cash Paid For Services | $ 700 | 900 | 900 | ||||||||
Receivables from services rendered for merger and acquisition | $ 1,000 | ||||||||||
TCP Agreement [Member] | Tengram Capital Partners Gen2 Fund LP [Member] | |||||||||||
Related Party [Line Items] | |||||||||||
Amount due for services | 200 | 200 | 0 | ||||||||
TCP Agreement [Member] | Tengram Capital Partners Gen2 Fund LP [Member] | Martha Stewart Living Omnimedia, Inc [Member] | |||||||||||
Related Party [Line Items] | |||||||||||
Acquisition of Transaction Fee | 2,500 | ||||||||||
TCP Agreement [Member] | TCP Employee [Member] | |||||||||||
Related Party [Line Items] | |||||||||||
Amount due for services | 0 | ||||||||||
Payment For Consulting Services | 300 | $ 300 | $ 400 | ||||||||
TCP Agreement [Member] | TCP Employee [Member] | Maximum [Member] | |||||||||||
Related Party [Line Items] | |||||||||||
Amount due for services | $ 100 | 100 | |||||||||
License-back Agreement [Member] | ES Originals Inc [Member] | |||||||||||
Related Party [Line Items] | |||||||||||
License agreement payments during period | $ 300 |
Profit Sharing Plan (Narrative)
Profit Sharing Plan (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
401 (k) Profit Sharing Plan (Member) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Employer matching contribution amount | $ 0.1 | $ 0.5 | $ 0.5 |
Restructuring (Narrative) (Deta
Restructuring (Narrative) (Details) | 12 Months Ended | 24 Months Ended | ||
Dec. 31, 2018USD ($)employee | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2018USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Reserve | $ 0 | $ 1,500,000 | $ 0 | |
Payments for restructuring | $ 1,500,000 | $ 10,500,000 | ||
Restructuring and related cost, number of positions eliminated | employee | 65 | |||
Other Restructuring Costs | $ 11,900,000 | |||
Professional Fees [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges, total | 800,000 | |||
Asset Write-Offs [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges, total | 400,000 | |||
Employee Severance [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges, total | 1,700,000 | |||
Employee Severance and Contract Termination [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges, total | 3,200,000 | |||
Contract Termination [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges, total | 300,000 | |||
Restructuring Reserve | $ 1,500,000 | |||
Payments for restructuring | $ 1,500,000 |
Restructuring (Changes in Restr
Restructuring (Changes in Restructuring Accruals) (Details) - USD ($) | 12 Months Ended | 24 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | |
Reserves and allowance deducted from asset accounts: | |||
Beginning Balance | $ 1,500,000 | $ 1,500,000 | |
Amounts paid | (1,500,000) | (10,500,000) | |
Ending Balance | $ 1,500,000 | 0 | |
Employee Severance [Member] | |||
Reserves and allowance deducted from asset accounts: | |||
Charges to expense | 1,700,000 | ||
Contract Termination [Member] | |||
Reserves and allowance deducted from asset accounts: | |||
Beginning Balance | 1,500,000 | $ 1,500,000 | |
Charges to expense | 300,000 | ||
Amounts paid | $ (1,500,000) | ||
Ending Balance | 1,500,000 | ||
Professional Fees [Member] | |||
Reserves and allowance deducted from asset accounts: | |||
Charges to expense | $ 800,000 |
Quarterly Data (Schedule of Qua
Quarterly Data (Schedule of Quarterly Financial Information) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Quarterly Data (Unaudited) [Abstract] | |||||||||||
Net revenue | $ 48,874 | $ 40,771 | $ 42,207 | $ 38,104 | $ 46,895 | $ 39,025 | $ 42,144 | $ 39,400 | $ 169,956 | $ 167,464 | $ 155,528 |
Income (loss) from operations | 21,121 | (643) | 21,783 | 14,912 | (279,292) | (13,551) | 24,244 | 15,992 | 57,173 | (252,607) | 70,136 |
(Loss) income before income taxes | 4,815 | (16,247) | 6,105 | (345) | (294,613) | (28,574) | 7,566 | 1,540 | (5,672) | (314,081) | 15,788 |
Net (loss) income | (1,329) | (8,034) | 4,689 | (304) | (162,220) | (24,732) | 4,451 | 955 | (4,978) | (181,546) | 6,631 |
Net income attributable to noncontrolling interest | (863) | (1,581) | (1,102) | (1,960) | (668) | 552 | (1,921) | (2,135) | (5,506) | (4,172) | (7,452) |
Net (loss) income attributable to Sequential Brands Group, Inc. and Subsidiaries | $ (2,192) | $ (9,615) | $ 3,587 | $ (2,264) | $ (162,888) | $ (24,180) | $ 2,530 | $ (1,180) | $ (10,484) | (185,718) | $ (821) |
Basic (loss) earnings per share: | |||||||||||
Attributable to Sequential Brands Group, Inc. and Subsidiaries | $ (0.03) | $ (0.15) | $ 0.06 | $ (0.04) | $ (2.58) | $ (0.38) | $ 0.04 | $ (0.02) | |||
Diluted (loss) earnings per share: | |||||||||||
Attributable to Sequential Brands Group, Inc. and Subsidiaries | $ (0.03) | $ (0.15) | $ 0.06 | $ (0.04) | $ (2.58) | $ (0.38) | $ 0.04 | $ (0.02) | |||
Non-cash positive benefit due to tax reform impact | $ 132,400 | ||||||||||
Non-cash impairment charges of goodwill | $ 304,100 | $ 304,123 |
Schedule II - Valuation and Q_2
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Allowance for Doubtful Accounts [Member] | |||
Balance at Beginning of Period | $ 577 | $ 221 | $ 271 |
Additions Charged to Costs and Expenses | 1,618 | 689 | 475 |
Deductions | (103) | (333) | (525) |
Balance at End of Period | 2,092 | 577 | 221 |
Valuation Allowance of Deferred Tax Assets [Member] | |||
Balance at Beginning of Period | 17,404 | 110,829 | 104,182 |
Additions Charged to Costs and Expenses | 6,647 | ||
Deductions | (295) | (93,425) | |
Balance at End of Period | $ 17,109 | $ 17,404 | $ 110,829 |