Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 02, 2019 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
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 | |
Trading Symbol | sqbg | |
Entity Common Stock, Shares Outstanding | 64,653,294 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current Assets: | ||
Cash | $ 14,925 | $ 14,106 |
Restricted cash | 2,036 | 2,032 |
Accounts receivable, net | 56,465 | 66,202 |
Prepaid expenses and other current assets | 9,290 | 11,224 |
Total current assets | 82,716 | 93,564 |
Property and equipment, net | 8,528 | 8,971 |
Intangible assets, net | 803,194 | 964,911 |
Right-of-use assets - operating leases | 49,317 | |
Other assets | 12,953 | 11,222 |
Total assets | 956,708 | 1,078,668 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 21,844 | 23,527 |
Current portion of long-term debt | 28,300 | 28,300 |
Current portion of deferred revenue | 12,013 | 11,695 |
Current portion of lease liabilities - operating leases | 2,761 | |
Total current liabilities | 64,918 | 63,522 |
Long-term debt, net of current portion | 576,737 | 582,487 |
Long-term deferred revenue, net of current portion | 7,319 | 8,224 |
Deferred income taxes | 27,914 | 67,002 |
Lease liabilities - operating leases | 53,623 | |
Other long-term liabilities | 7,376 | 12,789 |
Total liabilities | 737,887 | 734,024 |
Commitments and Contingencies | ||
Equity: | ||
Preferred stock Series A, $0.01 par value; 10,000,000 shares authorized; none issued and outstanding at March 31, 2019 and 2018 | ||
Common stock, $0.01 par value; 150,000,000 shares authorized; 66,447,913 and 65,990,179 shares issued at March 31, 2019 and December 31, 2018, respectively, and 64,650,477 and 64,327,582 shares outstanding at March 31, 2019 and December 31, 2018, respectively | 662 | 657 |
Additional paid-in capital | 514,485 | 513,764 |
Accumulated other comprehensive loss | (3,034) | (1,554) |
Accumulated deficit | (360,068) | (234,723) |
Treasury stock, at cost; 1,797,436 and 1,662,597 shares at March 31, 2019 and December 31, 2018, respectively | (4,396) | (4,226) |
Total Sequential Brands Group, Inc. and Subsidiaries stockholders' equity | 147,649 | 273,918 |
Noncontrolling interest | 71,172 | 70,726 |
Total equity | 218,821 | 344,644 |
Total liabilities and equity | $ 956,708 | $ 1,078,668 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
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 | 66,447,913 | 65,990,179 |
Common stock, shares outstanding | 64,650,477 | 64,327,582 |
Treasury stock, shares | 1,797,436 | 1,662,597 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||
Net revenue | $ 36,913 | $ 38,104 |
Operating expenses | 22,770 | 18,050 |
Impairment charges | 161,224 | |
Loss on sale of assets | 5,142 | |
(Loss) income from operations | (147,081) | 14,912 |
Other income | 300 | 135 |
Interest expense, net | 15,654 | 15,392 |
Loss before income taxes | (162,435) | (345) |
Benefit from income taxes | (38,629) | (41) |
Net loss | (123,806) | (304) |
Net income attributable to noncontrolling interests | (1,539) | (1,960) |
Net loss attributable to Sequential Brands Group, Inc. and Subsidiaries | $ (125,345) | $ (2,264) |
Loss per share attributable to Sequential Brands Group, Inc. and Subsidiaries: | ||
Basic and diluted (in dollars per share) | $ (1.95) | $ (0.04) |
Weighted-average common shares outstanding: | ||
Basic and diluted ( in shares) | 64,221,687 | 63,232,138 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) | Total Sequential Brands Group, Inc. and Subsidiaries Stockholders' Equity | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Other Comprehensive Loss [Member] | Accumulated Deficit [Member] | Treasury Stock [Member] | Noncontrolling Interest [Member] | Total |
Balance at Dec. 31, 2017 | $ 281,991,000 | $ 635,000 | $ 508,444,000 | $ 80,000 | $ (225,369,000) | $ 71,547,000 | $ 353,538,000 | |
Balance (in shares) at Dec. 31, 2017 | 63,652,721 | |||||||
Treasury stock at Dec. 31, 2017 | $ (1,799,000) | |||||||
Treasury stock, shares at Dec. 31, 2017 | (424,994) | |||||||
Stock-based compensation | 1,345,000 | $ 2,000 | 1,343,000 | 1,345,000 | ||||
Stock-based compensation (in shares) | 452,929 | |||||||
Shares issued under stock incentive plan | 1,500,000 | $ 8,000 | 1,492,000 | 1,500,000 | ||||
Shares issued under stock incentive plan (in shares) | 843,486 | |||||||
Unrealized gain (loss) on interest rate caps, net of tax | 679,000 | 679,000 | 679,000 | |||||
Repurchase of common stock | (1,919,000) | $ (1,919,000) | (1,919,000) | |||||
Repurchase of common stock (in shares) | (986,858) | |||||||
Noncontrolling interest distribution | (1,244,000) | (1,244,000) | ||||||
Net income attributable to noncontrolling interest | 1,960,000 | 1,960,000 | ||||||
Net loss attributable to common stockholders | (2,264,000) | (2,264,000) | (2,264,000) | |||||
Treasury stock at Mar. 31, 2018 | $ (3,718,000) | |||||||
Treasury stock, shares at Mar. 31, 2018 | (1,411,852) | |||||||
Balance at Mar. 31, 2018 | 282,462,000 | $ 645,000 | 511,279,000 | 759,000 | (226,503,000) | 72,618,000 | 355,080,000 | |
Balance (in shares) at Mar. 31, 2018 | 64,949,136 | |||||||
Cumulative effect of revenue recognition accounting change | 1,130,000 | 1,130,000 | 355,000 | 1,485,000 | ||||
Balance at Dec. 31, 2018 | 273,918,000 | $ 657,000 | 513,764,000 | (1,554,000) | (234,723,000) | 70,726,000 | 344,644,000 | |
Balance (in shares) at Dec. 31, 2018 | 65,990,179 | |||||||
Treasury stock at Dec. 31, 2018 | $ (4,226,000) | $ (4,226,000) | ||||||
Treasury stock, shares at Dec. 31, 2018 | (1,662,597) | (1,662,597) | ||||||
Stock-based compensation | 726,000 | $ 5,000 | 721,000 | $ 726,000 | ||||
Stock-based compensation (in shares) | 457,734 | |||||||
Unrealized gain (loss) on interest rate caps, net of tax | (1,480,000) | (1,480,000) | (1,480,000) | |||||
Repurchase of common stock | (170,000) | $ (170,000) | (170,000) | |||||
Repurchase of common stock (in shares) | (134,839) | |||||||
Noncontrolling interest distribution | (1,093,000) | (1,093,000) | ||||||
Net income attributable to noncontrolling interest | 1,539,000 | 1,539,000 | ||||||
Net loss attributable to common stockholders | (125,345,000) | (125,345,000) | (125,345,000) | |||||
Treasury stock at Mar. 31, 2019 | $ (1,797,436) | $ (4,396,000) | ||||||
Treasury stock, shares at Mar. 31, 2019 | (4,396,000) | (1,797,436) | ||||||
Balance at Mar. 31, 2019 | $ 147,649,000 | $ 662,000 | $ 514,485,000 | $ (3,034,000) | $ (360,068,000) | $ 71,172,000 | $ 218,821,000 | |
Balance (in shares) at Mar. 31, 2019 | 66,447,913 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Cash flows from operating activities | |||
Net loss | $ (123,806) | $ (304) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Provision for bad debts | 80 | ||
Depreciation and amortization | 1,011 | 906 | |
Stock-based compensation | 726 | 2,845 | |
Amortization of deferred financing costs | 1,325 | 944 | |
Impairment charges | 161,224 | ||
Gain on equity securities | 328 | ||
Amortization of ROU assets and accretion of lease liabilities - operating leases | 1,544 | ||
Loss on sale of assets | 5,142 | ||
Deferred income taxes | (39,088) | (53) | |
Changes in operating assets and liabilities: | |||
Accounts receivable | 9,657 | 10,528 | |
Prepaid expenses and other assets | 246 | (1,231) | |
Accounts payable and accrued expenses | (1,683) | (2,165) | |
Deferred revenue | (587) | (154) | |
Other liabilities | (1,416) | 1,202 | |
Cash provided by operating activities | 9,561 | 17,660 | |
Cash flows from investing activities | |||
Investments in intangible assets, including registration and renewal costs | (42) | (47) | |
Purchases of property and equipment | (33) | (1,792) | |
Cash used in investing activities | (75) | (1,839) | |
Cash flows from financing activities | |||
Payment of long-term debt | (7,075) | (7,075) | |
Guaranteed payments in connection with acquisitions | (325) | (650) | |
Repurchases of common stock | (170) | (1,919) | |
Noncontrolling interest distributions | (1,093) | (1,244) | |
Cash used in financing activities | (8,663) | (10,888) | |
Net increase in cash and restricted cash | 823 | 4,933 | |
Balance — Beginning of period | 16,138 | 20,433 | $ 20,433 |
Balance — End of period | 16,961 | 25,366 | 16,138 |
Reconciliation to amounts on condensed consolidated balance sheets | |||
Cash | 14,925 | 23,337 | 14,106 |
Restricted cash | 2,036 | 2,029 | $ 2,032 |
Supplemental disclosures of cash flow information | |||
Cash paid for: Interest | 14,420 | 14,513 | |
Cash paid for: Taxes | 2 | ||
Non-cash investing and financing activities | |||
Accrued purchases of property and equipment at year end | 1,114 | ||
Unrealized (loss) gain on interest rate cap, net during the period | $ 679 | ||
Unrealize loss on interest rate swaps, net during the period | $ (1,480) |
Organization and Nature of Oper
Organization and Nature of Operations | 3 Months Ended |
Mar. 31, 2019 | |
Organization and Nature of Operations [Abstract] | |
Organization and Nature of Operations | 1. Organization and Nature of Operations Overview Sequential Brands Group, Inc. (the “Company”) owns a portfolio of consumer brands in the fashion, active and home categories. The Company aims to maximize the strategic value of its brands by promoting, marketing and licensing its global brands through various distribution channels, including to retailers, wholesalers and distributors in the United States and in certain international territories. The Company’s core strategy is to enhance and monetize the global reach of its existing brands, and to pursue additional strategic acquisitions to grow the scope of and diversify its portfolio of brands. The Company licenses brands to both wholesale and direct-to-retail licensees. In a wholesale license, a wholesale supplier is granted rights (typically on an exclusive basis) to a single or small group of related product categories for a particular brand for sale to multiple accounts within an approved channel of distribution and territory. In a direct-to-retail license, a single retailer is granted the right (typically on an exclusive basis) to sell branded products in a broad range of product categories through its brick and mortar stores and e-commerce sites. As of March 31, 2019, the Company had approximately one-hundred forty licensees, with wholesale licensees comprising a significant majority. Refer to Note 11 for discussion regarding the sale of Martha Stewart Living Omnimedia, Inc. (“MSLO”) subsequent to March 31, 2019. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and pursuant to the instructions to Form 10‑Q and Rule 10‑01 of Regulation S-X of the United States Securities and Exchange Commission (the “SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all of the information and footnotes necessary for a comprehensive presentation of financial position, results of operations or cash flows. It is the Company’s opinion, however, that the accompanying unaudited condensed consolidated financial statements include all adjustments, which are of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10‑K for the year ended December 31, 2018, as filed with the SEC on March 14, 2019, which contains the audited consolidated financial statements and notes thereto, together with Management’s Discussion and Analysis of Financial Condition and Results of Operations, for the years ended December 31, 2018, 2017 and 2016. The financial information as of December 31, 2018 is derived from the audited consolidated financial statements presented in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2018. The interim results for the three months ended March 31, 201 9 are not necessarily indicative of the results to be expected for the year ending December 31, 2019 or for any future interim periods. Principles of Consolidation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries. All significant inter-company accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited condensed consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from estimates. Revenue Recognition 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. 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 condensed consolidated balance sheets. Contract liabilities represent unearned revenues and are presented within the current portion of deferred revenue on the condensed 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 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 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. No revenue was recorded for the three months ended March 31, 2019 and 2018 related to the advertising credits. The Company recorded $0.9 million and less than $0.1 million of expense related to the advertising credits utilized for the three months ended March 31, 2019 and 2018, respectively. Restricted Cash Restricted cash consists of cash deposited with a financial institution required as collateral for the Company’s cash-collateralized letter of credit facilities. Accounts Receivable Accounts receivable 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 written off after all means of collection have been exhausted and the potential for recovery is considered remote. The allowance for doubtful accounts was $1.8 million and $2.1 million as of March 31, 2019 and December 31, 2018, respectively. The Company’s accounts receivable, net amounted to $56.5 million and $66.2 million as of March 31, 2019 and December 31, 2018, respectively. Two licensees accounted for approximately 35% (22% and 13%) of the Company’s total consolidated accounts receivable balance as of March 31, 2019 and three licensees accounted for approximately 44% (19%, 13% and 12%) of the Company’s total consolidated accounts receivable balance as of December 31, 2018. The Company does not believe the accounts receivable balance 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 gain on its equity securities of $0.3 million recorded in other income on the condensed consolidated statement of operations for the three months ended March 31, 2019. 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, which is included in other assets in the condensed consolidated balance sheets. The Company’s share of earnings from its equity method investee, which was not material for the three months ended March 31, 2019 and 2018, is included in other income in the unaudited condensed 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. Intangible Assets On an annual basis (October 1 st ) and as needed, the Company tests indefinite lived trademarks for impairment through the use of discounted cash flow models. Assumptions used in our discounted cash flow models include: (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 and patents, 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). During the quarter ended March 31, 2019, the Company recorded non-cash impairment charges of $161. 2 million for indefinite-lived intangible assets related to the Martha Stewart and Emeril trademarks. The impairments arose as a result of the sale process for the Martha Stewart and Emeril Lagasse brands (as discussed in Note 11) due to the difference in the fair value as indicated by the sales price as compared to the carrying values of the intangible assets included in the transaction. The sale of the Martha Stewart and Emeril Lagasse brands was approved by the Board of Directors on April 15, 2019, to allow the Company to achieve one of its top priorities in significantly reducing its debt. Going forward the Company’s strategy is to focus on higher margin brands that are well suited for growing health, wellness and beauty categories. These charges are included in impairment charges in the unaudited condensed consolidated statements of operations. See Note 3, Note 6 and Note 11 for further information. Treasury Stock Treasury stock is recorded at cost as a reduction of equity in the condensed consolidated balance sheets. Stock-Based Compensation Compensation cost for restricted stock is measured using the quoted market price of the Company’s common stock at the date the common stock is granted. For restricted stock and restricted stock units, for which restrictions lapse with the passage of time (“time-based restricted stock”), compensation cost is recognized on a straight-line basis over the period between the issue date and the date that restrictions lapse. Time-based restricted stock is included in total shares of common stock outstanding upon the lapse of applicable restrictions. For restricted stock, for which restrictions are based on performance measures (“performance stock units” or “PSUs”), restrictions lapse when those performance measures have been deemed achieved. Compensation cost for PSUs is recognized on a straight-line basis during the period from the date on which the likelihood of the PSUs being earned is deemed probable and (x) the end of the fiscal year during which such PSUs are expected to vest or (y) the date on which awards of such PSUs may be approved by the compensation committee of the Company’s board of directors (the “Compensation Committee”) on a discretionary basis, as applicable. PSUs are included in total shares of common stock outstanding upon the lapse of applicable restrictions. PSUs are included in total diluted shares of common stock outstanding when the performance measures have been deemed achieved but the PSUs have not yet been issued. Fair value 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. Compensation cost is reduced for forfeitures as they occur in accordance with ASU 2016‑09 Simplifying the Accounting for Share-Based Payments (“ASU 2016‑09”) . The Company adopted ASU No. 2018-07 Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”) as of January 1, 2019 on a modified retrospective basis. In accordance with ASU 2018-07, the Company recognizes compensation cost for grants to non-employees on a straight-line basis over the period of the grant. Prior periods have not been restated and were accounted for under the previous method where at each reporting period prior to the lapse of restrictions on warrants, time-based restricted stock and PSUs granted to non-employees, the Company remeasured the aggregate compensation cost of such grants using the Company’s fair value at the end of such reporting period and revised the straight-line recognition of compensation cost in line with such remeasured amount. Leases The Company has operating leases for certain properties for its offices and showrooms and for copiers. The Company adopted ASU No. 2016-02 Leases (“ASU 2016-02” or “ASC 842”) 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. In accordance with ASU 2016-02, for leases over twelve months the Company records a right-of-use asset and a lease liability representing the present value of future lease payments. Rent expense is recognized on a straight-line basis over the term of the lease. See Note 5 for further information. 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 (loss) per share (“EPS”) is computed by dividing net income (loss) attributable to Sequential Brands Group, Inc. and Subsidiaries by the weighted-average number of common shares outstanding during the reporting period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to all potentially dilutive common shares outstanding during the reporting period, including stock options, PSUs and warrants, using the treasury stock method, and convertible debt, using the if-converted method. Diluted EPS excludes all potentially dilutive shares of common stock if their effect is anti-dilutive. Basic weighted-average common shares outstanding is equivalent to diluted weighted-average common shares outstanding for the quarters ended March 31, 2019 and 2018. The computation of diluted EPS for the three months ended March 31, 2019 and 2018 would exclude the following potentially dilutive securities because their inclusion would be anti-dilutive: Three Months Ended March 31, 2019 2018 Unvested restricted stock 492,619 502,283 Concentration of Credit Risk Financial instruments which potentially expose the Company to credit risk consist primarily of cash, restricted cash and accounts receivable. 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 and restricted cash are deposited with high quality financial institutions. At times, however, such cash and restricted cash may be in deposit accounts that exceed the Federal Deposit Insurance Corporation insurance limit. The Company has not experienced any losses in such accounts as of March 31, 2019. Concentration of credit risk with respect to accounts receivable is minimal due to the collection history. The Company performs periodic credit evaluations of its customers’ financial condition. The allowance for doubtful accounts is based upon the expected collectability of all accounts receivable. Customer Concentrations The Company recorded net revenues of $36.9 million and $38.1 million during the three months ended March 31, 2019 and 2018, respectively. During the three months ended March 31, 2019, three licensees represented at least 10% of net revenue, accounting for 12%, 11% and 10% of the Company’s net revenue. During the three months ended March 31, 2018, two licensees represented at least 10% of net revenue, accounting for 11% and 10% 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 three months ended March 31, 2019 and 2018 represents income allocations to Elan Polo International, Inc., a member of DVS Footwear International, LLC and With You, Inc., a member of With You LLC (the partnership between the Company and Jessica Simpson). 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 offices 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, and certain commissions. New Accounting Pronouncements 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. 2018-13, “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 condensed consolidated financial statements. |
Fair Value Measurement of Finan
Fair Value Measurement of Financial Instruments | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Measurement of Financial Instruments [Abstract] | |
Fair Value Measurement of Financial Instruments | 3. Fair Value Measurement 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 three months ended March 31, 2019, the Company recorded non-cash impairment charges of $161.2 million for indefinite-lived intangible assets related to the Martha Stewart and Emeril trademarks. The impairments arose during the sale process for the Martha Stewart and Emeril Lagasse brands (as discussed in Notes 6 and 12) due to the difference in the fair value as indicated by the sales price as compared to the carrying values of the intangible assets included in the transaction. The sale of the Martha Stewart and Emeril Lagasse brands was approved by the Board of Directors on April 15, 2019, to allow the Company to achieve one of its top priorities in significantly reducing its debt. Going forward the Company’s strategy is to focus on higher margin brands that are well suited for growing health, wellness and beauty categories. The following table shows the change in indefinite-lived intangible assets for the three months ended March 31, 2019 (in thousands): Balance at January 1, 2019 $ 954,929 Additions 28 Impairment charges (161,224) Balance at March 31, 2019 $ 793,733 As of March 31, 2019 and December 31, 2018, there were no assets or liabilities that are required to be measured at fair value on a recurring basis, except for interest rate swaps and Legacy Payments (as defined below) to Ms. Martha Stewart. The following table sets forth the carrying value and the fair value of the Company’s financial assets and liabilities required to be disclosed at March 31, 2019 and December 31, 2018: Carrying Value Fair Value Financial Instrument Level 3/31/2019 12/31/2018 3/31/2019 12/31/2018 (in thousands) Equity securities 1 $ 955 $ 627 $ 955 $ 627 Interest rate swaps - liability 2 $ 3,941 $ 2,019 $ 3,941 $ 2,019 Term loans 2 $ 512,775 $ 519,850 $ 509,034 $ 515,742 Revolving loan 2 $ 115,000 $ 115,000 $ 114,855 $ 114,827 Legacy Payments 3 $ 2,629 $ 2,553 $ 2,629 $ 2,553 The carrying amounts of the Company’s cash, restricted cash, accounts receivable and accounts payable approximate fair value due to their short-term maturities. In December 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 accounts payable and accrued expenses and other long-term liabilities on the condensed 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 March 31, 2019 are as follows: Notional Value Derivative Asset Derivative Liability (in thousands) LIBOR based loans $ 300,000 $ — $ 3,941 For purposes of this fair value disclosure, the Company based its fair value estimate for the 2016 Term Loans and 2016 Revolving Loan (each, as defined in Note 7 – both under and prior to the amendment) 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 March 31, 2019 and December 31, 2018 for debt with similar risk characteristics and maturities. In connection with the acquisition of 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 recorded $0.1 million and less than $0.1 million of accretion during the three months ended March 31, 2019 and 2018, respectively, related to the Legacy Payments and recorded the expense within interest expense, net in the unaudited condensed consolidated statements of operations. Refer to Note 11 for discussion regarding the sale of MSLO subsequent to March 31, 2019. |
Revenues
Revenues | 3 Months Ended |
Mar. 31, 2019 | |
Revenues [Abstract] | |
Revenue | 4. Revenues 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 sponsorships, commissions and vendor placement commissions. Disaggregated Revenue The following table presents revenue disaggregated by source: Three Months Ended March 31, 2019 2018 (in thousands) Licensing agreements $ 35,162 $ 37,527 Other 1,751 577 Total $ 36,913 $ 38,104 Contract Balances Contract assets represent unbilled receivables and are presented within accounts receivable, net on the condensed consolidated balance sheets. Contract liabilities represent unearned revenues and are presented within the current portion of deferred revenue on the condensed consolidated balance sheets. The below table summarizes the Company’s contract assets and contract liabilities: March 31, December 31, 2019 2018 (in thousands) Contract assets $ 3,458 $ 3,167 Contract liabilities 4,483 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 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. Deferred revenue will be recognized as the Company fulfills its performance obligations over periods of approximately one to five years. The below table summarizes amounts related to future performance obligations under fixed contractual arrangements as of March 31, 2019 and the periods in which they are expected to be earned and recognized as revenue: 2019 2020 2021 2022 2023 Thereafter Future Performance Obligations $ 62,671 $ 64,610 $ 48,925 $ 23,577 $ 18,888 $ 16,464 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. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Lease | |
Leases | 5. Leases The Company has operating leases for certain properties for its offices and showrooms and for copiers. The Company adopted ASU 2016-02 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. At January 1, 2019, the Company did not have any leases that had not yet commenced. The Company also elected the practical expedient to not recognize right-of-use assets or lease liabilities for leases with a term of twelve months or less. The Company determines if an arrangement contains a lease and the lease term at contract inception based on the terms of each arrangement. The Company’s operating leases contain options to extend and early termination options. The Company will evaluate the terms on a lease-by-lease basis and include options to extend or early termination options when it is reasonably certain that the Company will exercise the option. For arrangements that are identified as leases and are over twelve months the Company records a right-of-use (“ROU”) asset and a lease liability representing the present value of future lease payments. Under ASC 842, the present value of future lease payments must be discounted by using the interest rate implicit in the lease, or if not readily determinable, its incremental borrowing rate. The Company used an average cost of debt of 6.76% as the discount rate for the leases as it is representative of the interest rate that would be charged to borrow an amount equal to the lease payments on a fully collateralized basis. The operating lease assets and liabilities recorded on the balance sheet as of March 31, 2019 are summarized as follows: March 31, Classification on Balance Sheet 2019 Assets (in thousands) Non-current Right-of-use assets - operating leases $ 49,317 Liabilities Current Current portion of lease liabilities - operating leases $ 2,761 Non-current Lease liabilities - operating leases 53,623 Total operating lease liabilities $ 56,384 Weighted average remaining lease term (in years) 14.1 Rent expense is recognized on a straight-line basis over the term of the lease. Rent expense for operating leases was $1.6 million and $1.5 million for the three months ended March 31, 2019 and 2018, respectively. Sublease income was immaterial for each of the three months ended March 31, 2019 and 2018. As of March 31, 2019, the maturities of the Company’s lease liabilities were as follows (in thousands): Operating Leases 2019 (remaining nine months) $ 4,864 2020 6,404 2021 6,247 2022 6,262 2023 6,277 Thereafter 58,320 Total minimum lease payments 88,374 Less: imputed interest 31,990 Lease liabilities $ 56,384 |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2019 | |
Intangible Assets [Abstract] | |
Intangible Assets | 6. Intangible Assets Intangible assets are summarized as follows: Gross Useful Lives Carrying Accumulated Net Carrying March 31, 2019 (Years) Amount Amortization Amount (in thousands) Finite-lived intangible assets: Trademarks 5 - 15 $ 12,452 $ (3,144) $ 9,308 Customer agreements 4 2,832 (2,717) 115 Patents 10 361 (323) 38 $ 15,645 $ (6,184) 9,461 Indefinite-lived intangible assets: Trademarks 793,733 Intangible assets, net $ 803,194 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 Estimated future annual amortization expense for intangible assets in service as of March 31, 2019 is summarized as follows: Years Ended December 31, (in thousands) 2019 $ 1,485 2020 1,834 2021 1,831 2022 1,808 2023 1,383 Thereafter 1,120 $ 9,461 Amortization expense was approximately $0.5 million and $0.2 million for the three months ended March 31, 2019 and 2018, 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 March 31, 2019, the trademarks of Martha Stewart, Jessica Simpson, Avia, AND1, Joe’s, GAIAM, Emeril, Caribbean Joe, and Ellen Tracy have been determined to have indefinite useful lives, and accordingly, consistent with ASC Topic 350, no amortization has been recorded in the Company’s unaudited condensed 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. During the three months ended March 31, 2019, the Company recorded non-cash impairment charges of $161.2 million for indefinite-lived intangible assets related to the Martha Stewart and Emeril trademarks. The impairments arose during the sale process for the Martha Stewart and Emeril Lagasse brands (as discussed in Note 11) due to the difference in the fair value as indicated by the sales price as compared to the carrying values of the intangible assets included in the transaction. The sale of the Martha Stewart and Emeril Lagasse brands was approved by the Board of Directors on April 15, 2019, to allow the Company to achieve one of its top priorities in significantly reducing its debt. Going forward the Company’s strategy is to focus on higher margin brands that are well suited for growing health, wellness and beauty categories. The following table shows the change in intangible assets for the three months ended March 31, 2019 ( in thousands ): Balance at January 1, 2019 $ 964,911 Impairment charges (161,224) Amortization (535) Additions 42 Balance at March 31, 2019 $ 803,194 On April 19, 2018, the Company sold the Revo trademark. The Company incurred a loss on the sale of the trademark of $5.1 million. As of March 31, 2018, the Company wrote down the value of the trademark to the sale price and reclassified the trademark from intangible assets to asset held for sale. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2019 | |
Long-Term Debt [Abstract] | |
Long-Term Debt | 7. Long-Term Debt The components of long-term debt are as follows: March 31, December 31, 2019 2018 (in thousands) Secured Term Loans $ 512,775 $ 519,850 Revolving Credit Facility 115,000 115,000 Unamortized deferred financing costs (22,738) (24,063) Total long-term debt, net of unamortized deferred financing costs 605,037 610,787 Less: current portion of long-term debt 28,300 28,300 Long-term debt $ 576,737 $ 582,487 August 2018 Debt Facilities On August 7, 2018 (the “Closing Date”), 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. 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, (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 March 31, 2019, 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 March 31, 2019, 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 Company and certain of its subsidiaries entered into (i) the Third Amended and Restated First Lien Credit Agreement (the “Amended BoA Credit Agreement”) with Bank of America, N.A., as administrative agent and collateral agent and the lenders party thereto and (ii) the Third Amended and Restated Credit Agreement (the “Amended FS/KKR Credit Agreement”) with Wilmington Trust, National Association, as administrative agent and collateral agent and the lenders party thereto. Such agreements amended, restated and replaced the Company’s previous 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 FS/KKR 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 July 1, 2016, 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 is disposed, 50.0% of the disposed intellectual property’s orderly liquidation value, and (b) where any other assets constituting collateral are disposed or upon the receipt of certain insurance proceeds, 100% of the net proceeds thereof, subject to certain reinvestment rights; and (ii) the Tranche A-1 Loans to the extent that the outstanding principal amount thereof exceeds 10.0% of the orderly liquidation value of the registered trademarks owned by the BoA Facility Loan Parties. 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 in the agreement), (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 ended 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, 2.50:1.00 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 have exceeded 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 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. On March 31, 2017, 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 required 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 Amended FS/KKR Credit Agreement until reaching the final maximum ratio of 6.50:1.00 for the fiscal quarter ended 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 ended 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 occurs 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 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. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 8. Commitments and Contingencies General Legal Matters From time to time, the Company is involved in legal matters arising in the ordinary course of business. While the Company believes that such matters are currently not material, there can be no assurance that matters arising in the ordinary course of business for which the Company is, or could be, involved in litigation, will not have a material adverse effect on its business, financial condition or results of operations. Contingent liabilities arising from potential litigation are assessed by management based on the individual analysis of these proceedings and on the opinion of the Company’s lawyers and legal consultants. |
Stock-based Compensation
Stock-based Compensation | 3 Months Ended |
Mar. 31, 2019 | |
Stock-based Compensation | |
Stock-based Compensation | 9. Stock-based Compensation Stock Options The following table summarizes the Company’s stock option activity for the three months ended March 31, 2019: 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, 2019 49,501 $ 10.22 2.3 $ — Granted — — Exercised — — Forfeited or canceled — — Outstanding at March 31, 2019 49,501 $ 10.22 2.0 $ — Exercisable - March 31, 2019 49,501 $ 10.22 2.0 $ — There was no compensation expense related to stock options for the three months ended March 31, 2019 and 2018. At March 31, 2019, there is no unrecognized compensation expense related to stock options and no unvested stock options. Warrants The following table summarizes the Company’s outstanding warrants for the three months ended March 31, 2019: 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, 2019 200,000 $ 13.32 6.4 $ — Granted — — Exercised — — Forfeited or canceled — — Outstanding at March 31, 2019 200,000 $ 13.32 6.2 $ — Exercisable - March 31, 2019 200,000 $ 13.32 6.2 $ — There was no compensation expense related to warrants for the three months ended March 31, 2019 and 2018. At March 31, 2019, there is no unrecognized compensation expense related to warrants and no unvested warrants. Restricted Stock A summary of the time-based restricted stock activity for the three months ended March 31, 2019 is as follows: Weighted-Average Weighted-Average Remaining Grant Date Fair Contractual Life Number of Shares Value (in Years) Unvested - January 1, 2019 292,989 $ 3.72 0.9 Granted — — Vested — — Unvested - March 31, 2019 292,989 $ 3.72 0.6 The Company did not grant time-based restricted stock during the three months ended March 31, 2019 and 2018. Total compensation expense related to time-based restricted stock grants for each of the three months ended March 31, 2019 and 2018 was $0.1 million. Total unrecognized compensation expense related to time-based restricted stock grants at March 31, 2019 amounted to $0.1 million and is expected to be recognized over a weighted-average period of 0. 6 years. Restricted Stock Units A summary of the time-based restricted stock units activity for the three months ended March 31, 2019 is as follows: Weighted-Average Weighted-Average Remaining Grant Date Fair Contractual Life Number of Shares Value (in Years) Unvested - January 1, 2019 1,615,953 $ 2.24 2.2 Granted — — Vested (168,063) (2.38) Forfeited or canceled (16,667) (1.76) Unvested - March 31, 2019 1,431,223 $ 2.23 1.9 The Company did not grant time-based restricted stock units during the three months ended March 31, 2019. During the three months ended March 31, 2018, the Company granted 903,679 time-based restricted stock units to certain employees and consultants for future services. These shares of time-based restricted stock units had a grant date fair value of $1.6 million and vest immediately to over a period of five years. The Company recorded less than $0.1 million and $0.3 million during the three months ended March 31, 2019 and 2018, respectively, as compensation expense pertaining to these grants. During the three months ended March 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 was fully recognized in 2017 related to this grant. Total compensation expense related to time-based restricted stock unit grants for the three months ended March 31, 2019 and 2018 was $0.3 million and $0.6 million, respectively. Total unrecognized compensation expense related to time-based restricted stock unit grants at March 31, 2019 amounted to $1.5 million and is expected to be recognized over a weighted-average period of 1.9 years. Performance Stock Units A summary of the PSUs activity for the three months ended March 31, 2019 is as follows: Weighted-Average Weighted-Average Remaining Grant Date Fair Contractual Life Number of Shares Value (in Years) Unvested - January 1, 2019 2,219,818 $ 4.47 0.8 Granted — — Vested (289,671) (4.68) Forfeited or canceled (26,179) (5.14) Unvested - March 31, 2019 1,903,968 $ 4.43 1.1 On March 27, 2019, the Compensation Committee voted to approve, on a discretionary basis, vesting of 231,396 PSUs to employees and consultants previously granted during the years ended December 31, 2016, 2017 and 2018 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 $0.3 million was recorded as operating expenses in the unaudited condensed consolidated statements of operations for the three months ended March 31, 2019. During the three months ended March 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 three months ended March 31, 2019 as the likelihood of these PSUs being earned was not considered probable. During the three months ended March 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 three months ended March 31, 2019 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 unaudited condensed consolidated statements of operations for the three months ended March 31, 2018. Total compensation expense related to the PSUs for the three months ended March 31, 2019 and 2018 was $0.3 million and $0.7 million, respectively. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 10. 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”). 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 2014. The Company paid TCP $0.2 million for services under the Amended TCP Agreement during the three months ended March 31, 2019. The Company did not pay any fees for services under the Amended TCP Agreement during the three months ended March 31, 2018. At March 31, 2019 and December 31, 2018, there were $0.2 million due to TCP for services. 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. In 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. In 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 $0.1 million for services under the consulting arrangement during each of the three-month periods ended March 31, 2019 and 2018. These amounts are included in operating expenses in the Company’s unaudited condensed consolidated financial statements. At March 31, 2019 and December 31, 2018, less than $0.1 million was due to the TCP Employee. 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 $1.2 million and $1.6 million of revenue for the three months ended March 31, 2019 and 2018, respectively, for royalties, commission, and advertising revenue earned from ESO license agreements. At March 31, 2019 and December 31, 2018, the Company had $4.3 million and $6.2 million recorded as accounts receivable from ESO in the condensed consolidated balance sheets, respectively. The Company entered into an agreement with ESO under which the Company received a sales commission. At March 31, 2019, the Company had $0.9 million recorded as accounts receivable from ESO and $1.0 million recorded as other assets in the condensed consolidated balance sheet. At December 31, 2018, the Company had $0.9 million recorded as accounts receivable from ESO and $1.2 million recorded as other assets in the condensed 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 less than $0.1 million in license-back expense for each of the three months ended March 31, 2019 and 2018. Transactions with Centric Brands Inc. (f/k/a Differential Brands Group, Inc.) During the fourth quarter of 2018, Centric Brands, Inc. (“Centric”) , an affiliate of TCP, acquired a significant portion of Global Brands Group Holding Limited’s (“GBG”) North American licensing business. The Company recorded approximately $1.7 million for royalty revenue earned from the Centric license agreement for the three months ended March 31, 2019. At March 31, 2019 and December 31, 2018, the Company had $0.3 million and $0.8 million recorded as accounts receivable from Centric in the unaudited condensed consolidated balance sheets, respectively. At March 31, 2019, the Company had accrued $0.5 million payable as accounts payable and accrued expenses to Centric in the unaudited condensed consolidated balance sheet. 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 condensed consolidated balance sheets. One of the Company’s directors, Mr. Al Gossett, has a partial ownership interest in JALP. The Company sold the FUL trademark and incurred a loss on the sale of the trademark of $2.0 million during the year ended December 31, 2018. No noncontrolling interest was recorded during the three months ended March 31, 2019 and 2018. IP License Agreement and Intangible Asset Agreement In connection with the transactions contemplated by the acquisition of MSLO (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 Ms. Stewart’s employment agreement) if either the aggregate gross licensing revenues (as defined in Ms. Stewart’s 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 $0.5 million and less than $0.1 million in connection with other related services during the three months ended March 31, 2019 and 2018, 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 of the three months ended March 31, 2019 and 2018 , the Company made payments of $0.3 million to Ms. Stewart in connection with the terms of the IP License Agreement. The IP License Agreement is perpetual. During each of the three-month periods ended March 31, 2019 and 2018, the Company expensed non-cash interest of $0.1 million related to the accretion of the present value of these guaranteed contractual payments. At March 31, 2019, there was $3.7 million due under the IP Agreements of which $2.9 million is recorded in accounts payable and accrued expenses and $0.8 million is recorded in other long-term liabilities. 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. |
Subsequent Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events | |
Subsequent Events | 11. Subsequent Events On April 16, 2019, the Company entered into an equity purchase agreement (the “Purchase Agreement”) with Marquee Brands LLC (the “Buyer”), pursuant to which Sequential has agreed, among other things, to sell to the Buyer 100% of the issued and outstanding equity interests of MSLO, a Delaware corporation and a wholly-owned subsidiary of the Company, for $167,000,000 in cash consideration at closing, plus additional amounts in respect of pre-closing accounts receivable that are received after the closing, subject to certain adjustments. In addition, the Purchase Agreement provides for an earnout of up to $40,000,000 if certain performance targets are achieved during the three calendar years ending December 31, 2020, December 31, 2021 and December 31, 2022. MSLO and its subsidiaries are engaged in the business of promoting, marketing and licensing the Martha Stewart and the Emeril Lagasse brands through various distribution channels. In connection with the transactions contemplated by the Purchase Agreement, MSLO will undertake an internal reorganization to convert each of MSLO and its wholly-owned subsidiaries to a limited partnership prior to the closing. During the quarter ended March 31, 2019, the Company recorded non-cash impairment charges of $161. 2 million for indefinite-lived intangible assets related to the Martha Stewart and Emeril trademarks. The impairments arose during the sale process for the Martha Stewart and Emeril Lagasse brands due to the difference in the fair value as indicated by the sales price as compared to the carrying values of the intangible assets included in the transaction. The sale of the Martha Stewart and Emeril Lagasse brands was approved by the Board of Directors on April 15, 2019, to allow the Company to achieve one of its top priorities in significantly reducing its debt. Going forward the Company’s strategy is to focus on higher margin brands that are well suited for growing health, wellness and beauty categories. These charges are included in impairment charges in the unaudited condensed consolidated statements of operations. The consummation of the transactions contemplated by the Purchase Agreement is subject to customary conditions, including the expiration or termination of any applicable waiting period (and any extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the absence of any government order or other legal restraint prohibiting the consummation of the transactions contemplated by the Purchase Agreement. In addition, the obligation of the Buyer to consummate the transactions contemplated by the Purchase Agreement is subject to the absence of any event, change, occurrence or effect having occurred from the date of the Purchase Agreement that has had a Material Adverse Effect (as defined in the Purchase Agreement). The Purchase Agreement contains provisions giving the Company and the Buyer rights to terminate the Purchase Agreement under specified circumstances, including if the closing has not occurred on or before December 31, 2019. The Purchase Agreement includes customary representations, warranties and covenants of the Company and the Buyer. The Purchase Agreement also contains indemnification provisions pursuant to which the Company has agreed to indemnify the Buyer against certain losses, subject to the limitations set forth therein, including losses related to breaches of representations, warranties and covenants. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and pursuant to the instructions to Form 10‑Q and Rule 10‑01 of Regulation S-X of the United States Securities and Exchange Commission (the “SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all of the information and footnotes necessary for a comprehensive presentation of financial position, results of operations or cash flows. It is the Company’s opinion, however, that the accompanying unaudited condensed consolidated financial statements include all adjustments, which are of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10‑K for the year ended December 31, 2018, as filed with the SEC on March 14, 2019, which contains the audited consolidated financial statements and notes thereto, together with Management’s Discussion and Analysis of Financial Condition and Results of Operations, for the years ended December 31, 2018, 2017 and 2016. The financial information as of December 31, 2018 is derived from the audited consolidated financial statements presented in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2018. The interim results for the three months ended March 31, 201 9 are not necessarily indicative of the results to be expected for the year ending December 31, 2019 or for any future interim periods. |
Principles of Consolidation | Principles of Consolidation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries. All significant inter-company accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited condensed consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from estimates. |
Revenue Recognition | Revenue Recognition The Company 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. 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 condensed consolidated balance sheets. Contract liabilities represent unearned revenues and are presented within the current portion of deferred revenue on the condensed 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 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 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. No revenue was recorded for the three months ended March 31, 2019 and 2018 related to the advertising credits. The Company recorded $0.9 million and less than $0.1 million of expense related to the advertising credits utilized for the three months ended March 31, 2019 and 2018, respectively. |
Restricted Cash | Restricted Cash Restricted cash consists of cash deposited with a financial institution required as collateral for the Company’s cash-collateralized letter of credit facilities. |
Accounts Receivable | Accounts Receivable Accounts receivable are recorded net of allowances for doubtful accounts, based on the Company’s ongoing discussions with its licensees and other customers and its evaluation of their creditworthiness, payment history and account aging. Accounts receivable balances deemed to be uncollectible are written off after all means of collection have been exhausted and the potential for recovery is considered remote. The allowance for doubtful accounts was $1.8 million and $2.1 million as of March 31, 2019 and December 31, 2018, respectively. The Company’s accounts receivable, net amounted to $56.5 million and $66.2 million as of March 31, 2019 and December 31, 2018, respectively. Two licensees accounted for approximately 35% (22% and 13%) of the Company’s total consolidated accounts receivable balance as of March 31, 2019 and three licensees accounted for approximately 44% (19%, 13% and 12%) of the Company’s total consolidated accounts receivable balance as of December 31, 2018. The Company does not believe the accounts receivable balance 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 gain on its equity securities of $0.3 million recorded in other income on the condensed consolidated statement of operations for the three months ended March 31, 2019. |
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, which is included in other assets in the condensed consolidated balance sheets. The Company’s share of earnings from its equity method investee, which was not material for the three months ended March 31, 2019 and 2018, is included in other income in the unaudited condensed 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. |
Treasury Stock | Treasury Stock Treasury stock is recorded at cost as a reduction of equity in the condensed consolidated balance sheets. |
Stock-Based Compensation | Stock-Based Compensation Compensation cost for restricted stock is measured using the quoted market price of the Company’s common stock at the date the common stock is granted. For restricted stock and restricted stock units, for which restrictions lapse with the passage of time (“time-based restricted stock”), compensation cost is recognized on a straight-line basis over the period between the issue date and the date that restrictions lapse. Time-based restricted stock is included in total shares of common stock outstanding upon the lapse of applicable restrictions. For restricted stock, for which restrictions are based on performance measures (“performance stock units” or “PSUs”), restrictions lapse when those performance measures have been deemed achieved. Compensation cost for PSUs is recognized on a straight-line basis during the period from the date on which the likelihood of the PSUs being earned is deemed probable and (x) the end of the fiscal year during which such PSUs are expected to vest or (y) the date on which awards of such PSUs may be approved by the compensation committee of the Company’s board of directors (the “Compensation Committee”) on a discretionary basis, as applicable. PSUs are included in total shares of common stock outstanding upon the lapse of applicable restrictions. PSUs are included in total diluted shares of common stock outstanding when the performance measures have been deemed achieved but the PSUs have not yet been issued. Fair value 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. Compensation cost is reduced for forfeitures as they occur in accordance with ASU 2016‑09 Simplifying the Accounting for Share-Based Payments (“ASU 2016‑09”) . The Company adopted ASU No. 2018-07 Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”) as of January 1, 2019 on a modified retrospective basis. In accordance with ASU 2018-07, the Company recognizes compensation cost for grants to non-employees on a straight-line basis over the period of the grant. Prior periods have not been restated and were accounted for under the previous method where at each reporting period prior to the lapse of restrictions on warrants, time-based restricted stock and PSUs granted to non-employees, the Company remeasured the aggregate compensation cost of such grants using the Company’s fair value at the end of such reporting period and revised the straight-line recognition of compensation cost in line with such remeasured amount. |
Lease | Leases The Company has operating leases for certain properties for its offices and showrooms and for copiers. The Company adopted ASU No. 2016-02 Leases (“ASU 2016-02” or “ASC 842”) 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. In accordance with ASU 2016-02, for leases over twelve months the Company records a right-of-use asset and a lease liability representing the present value of future lease payments. Rent expense is recognized on a straight-line basis over the term of the lease. See Note 5 for further information. |
Earnings Per Share | Earnings Per Share Basic earnings (loss) per share (“EPS”) is computed by dividing net income (loss) attributable to Sequential Brands Group, Inc. and Subsidiaries by the weighted-average number of common shares outstanding during the reporting period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to all potentially dilutive common shares outstanding during the reporting period, including stock options, PSUs and warrants, using the treasury stock method, and convertible debt, using the if-converted method. Diluted EPS excludes all potentially dilutive shares of common stock if their effect is anti-dilutive. Basic weighted-average common shares outstanding is equivalent to diluted weighted-average common shares outstanding for the quarters ended March 31, 2019 and 2018. The computation of diluted EPS for the three months ended March 31, 2019 and 2018 would exclude the following potentially dilutive securities because their inclusion would be anti-dilutive: Three Months Ended March 31, 2019 2018 Unvested restricted stock 492,619 502,283 |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments which potentially expose the Company to credit risk consist primarily of cash, restricted cash and accounts receivable. 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 and restricted cash are deposited with high quality financial institutions. At times, however, such cash and restricted cash may be in deposit accounts that exceed the Federal Deposit Insurance Corporation insurance limit. The Company has not experienced any losses in such accounts as of March 31, 2019. Concentration of credit risk with respect to accounts receivable is minimal due to the collection history. The Company performs periodic credit evaluations of its customers’ financial condition. The allowance for doubtful accounts is based upon the expected collectability of all accounts receivable. |
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 three months ended March 31, 2019 and 2018 represents income allocations to Elan Polo International, Inc., a member of DVS Footwear International, LLC and With You, Inc., a member of With You LLC (the partnership between the Company and Jessica Simpson). |
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 offices 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, and certain commissions. |
New Accounting Pronouncements | New Accounting Pronouncements 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. 2018-13, “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 condensed consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Summary of Significant Accounting Policies [Abstract] | |
Earnings Per Share, Basic and Diluted | Three Months Ended March 31, 2019 2018 Unvested restricted stock 492,619 502,283 |
Fair Value Measurement of Fin_2
Fair Value Measurement of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Measurement of Financial Instruments [Abstract] | |
Schedule of Indefinite-lived Assets | Balance at January 1, 2019 $ 964,911 Impairment charges (161,224) Amortization (535) Additions 42 Balance at March 31, 2019 $ 803,194 |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | Carrying Value Fair Value Financial Instrument Level 3/31/2019 12/31/2018 3/31/2019 12/31/2018 (in thousands) Equity securities 1 $ 955 $ 627 $ 955 $ 627 Interest rate swaps - liability 2 $ 3,941 $ 2,019 $ 3,941 $ 2,019 Term loans 2 $ 512,775 $ 519,850 $ 509,034 $ 515,742 Revolving loan 2 $ 115,000 $ 115,000 $ 114,855 $ 114,827 Legacy Payments 3 $ 2,629 $ 2,553 $ 2,629 $ 2,553 |
Schedule of Notional Amounts of Outstanding Derivative Positions | Notional Value Derivative Asset Derivative Liability (in thousands) LIBOR based loans $ 300,000 $ — $ 3,941 |
Revenues (Tables)
Revenues (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenues [Abstract] | |
Disaggregated Revenue | The following table presents revenue disaggregated by source: Three Months Ended March 31, 2019 2018 (in thousands) Licensing agreements $ 35,162 $ 37,527 Other 1,751 577 Total $ 36,913 $ 38,104 |
Contract Balances | The below table summarizes the Company’s contract assets and contract liabilities: March 31, December 31, 2019 2018 (in thousands) Contract assets $ 3,458 $ 3,167 Contract liabilities 4,483 4,999 |
Future Performance Obligations | The below table summarizes amounts related to future performance obligations under fixed contractual arrangements as of March 31, 2019 and the periods in which they are expected to be earned and recognized as revenue: 2019 2020 2021 2022 2023 Thereafter Future Performance Obligations $ 62,671 $ 64,610 $ 48,925 $ 23,577 $ 18,888 $ 16,464 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Lease | |
Summary of operating lease assets and liabilities recorded on the balance sheet | March 31, Classification on Balance Sheet 2019 Assets (in thousands) Non-current Right-of-use assets - operating leases $ 49,317 Liabilities Current Current portion of lease liabilities - operating leases $ 2,761 Non-current Lease liabilities - operating leases 53,623 Total operating lease liabilities $ 56,384 Weighted average remaining lease term (in years) 14.1 |
Summary of maturities of the Company’s lease liabilities | As of March 31, 2019, the maturities of the Company’s lease liabilities were as follows (in thousands): Operating Leases 2019 (remaining nine months) $ 4,864 2020 6,404 2021 6,247 2022 6,262 2023 6,277 Thereafter 58,320 Total minimum lease payments 88,374 Less: imputed interest 31,990 Lease liabilities $ 56,384 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Intangible Assets [Abstract] | |
Summary of Intangible Assets | Gross Useful Lives Carrying Accumulated Net Carrying March 31, 2019 (Years) Amount Amortization Amount (in thousands) Finite-lived intangible assets: Trademarks 5 - 15 $ 12,452 $ (3,144) $ 9,308 Customer agreements 4 2,832 (2,717) 115 Patents 10 361 (323) 38 $ 15,645 $ (6,184) 9,461 Indefinite-lived intangible assets: Trademarks 793,733 Intangible assets, net $ 803,194 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 |
Summary of Future Annual Estimated Amortization Expense | Estimated future annual amortization expense for intangible assets in service as of March 31, 2019 is summarized as follows: Years Ended December 31, (in thousands) 2019 $ 1,485 2020 1,834 2021 1,831 2022 1,808 2023 1,383 Thereafter 1,120 $ 9,461 |
Schedule of Indefinite-lived Assets | Balance at January 1, 2019 $ 964,911 Impairment charges (161,224) Amortization (535) Additions 42 Balance at March 31, 2019 $ 803,194 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Long-Term Debt [Abstract] | |
Schedule of Long Term Debt | The components of long-term debt are as follows: March 31, December 31, 2019 2018 (in thousands) Secured Term Loans $ 512,775 $ 519,850 Revolving Credit Facility 115,000 115,000 Unamortized deferred financing costs (22,738) (24,063) Total long-term debt, net of unamortized deferred financing costs 605,037 610,787 Less: current portion of long-term debt 28,300 28,300 Long-term debt $ 576,737 $ 582,487 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Stock-based Compensation | |
Summary of Stock Option Activity | The following table summarizes the Company’s stock option activity for the three months ended March 31, 2019: 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, 2019 49,501 $ 10.22 2.3 $ — Granted — — Exercised — — Forfeited or canceled — — Outstanding at March 31, 2019 49,501 $ 10.22 2.0 $ — Exercisable - March 31, 2019 49,501 $ 10.22 2.0 $ — |
Schedule of Warrants Activity and Nonvested Warrants | The following table summarizes the Company’s outstanding warrants for the three months ended March 31, 2019: 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, 2019 200,000 $ 13.32 6.4 $ — Granted — — Exercised — — Forfeited or canceled — — Outstanding at March 31, 2019 200,000 $ 13.32 6.2 $ — Exercisable - March 31, 2019 200,000 $ 13.32 6.2 $ — |
Schedule of Restricted Stock Activity | A summary of the time-based restricted stock activity for the three months ended March 31, 2019 is as follows: Weighted-Average Weighted-Average Remaining Grant Date Fair Contractual Life Number of Shares Value (in Years) Unvested - January 1, 2019 292,989 $ 3.72 0.9 Granted — — Vested — — Unvested - March 31, 2019 292,989 $ 3.72 0.6 |
Schedule of Restricted Stock Units Activity | A summary of the time-based restricted stock units activity for the three months ended March 31, 2019 is as follows: Weighted-Average Weighted-Average Remaining Grant Date Fair Contractual Life Number of Shares Value (in Years) Unvested - January 1, 2019 1,615,953 $ 2.24 2.2 Granted — — Vested (168,063) (2.38) Forfeited or canceled (16,667) (1.76) Unvested - March 31, 2019 1,431,223 $ 2.23 1.9 |
Schedule of Performance Stock Units Activity | A summary of the PSUs activity for the three months ended March 31, 2019 is as follows: Weighted-Average Weighted-Average Remaining Grant Date Fair Contractual Life Number of Shares Value (in Years) Unvested - January 1, 2019 2,219,818 $ 4.47 0.8 Granted — — Vested (289,671) (4.68) Forfeited or canceled (26,179) (5.14) Unvested - March 31, 2019 1,903,968 $ 4.43 1.1 |
Organization and Nature of Op_2
Organization and Nature of Operations (Details) | Mar. 31, 2019entity |
Minimum [Member] | |
Number of licensees | 140 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Narrative) (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2019USD ($)segment | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($) | Jul. 01, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net revenue | $ 36,913 | $ 38,104 | ||
Advertising expenses | 900 | |||
Accounts receivable, net | 56,465 | $ 66,202 | ||
Gain on equity securities | (328) | |||
Impairment of trademark | $ 161,224 | |||
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] | ||||
Advertising expenses | $ 100 | |||
Useful Lives | 15 years | |||
Trademarks [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Impairment of trademark | $ 161,224 | |||
Gaiam Pty Limited [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Equity method investment, noncontrolling interest | 49.90% | |||
Accounts Receivable [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Concentration risk, percentage | 35.00% | 44.00% | ||
Accounts Receivable [Member] | License One [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Concentration risk, percentage | 22.00% | 19.00% | ||
Accounts Receivable [Member] | License Two [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Concentration risk, percentage | 13.00% | 13.00% | ||
Accounts Receivable [Member] | License Three [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Concentration risk, percentage | 12.00% | |||
Sales Revenue, Services, Net [Member] | License One [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Concentration risk, percentage | 12.00% | 11.00% | ||
Sales Revenue, Services, Net [Member] | License Two [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Concentration risk, percentage | 11.00% | 10.00% | ||
Sales Revenue, Services, Net [Member] | License Three [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Concentration risk, percentage | 10.00% | |||
Advertising Member | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net revenue | $ 0 | $ 0 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Antidilutive Shares Excluded from Computation of Diluted EPS) (Details) - shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Equity Option [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 492,619 | 502,283 |
Fair Value Measurement of Fin_3
Fair Value Measurement of Financial Instruments (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Impairment of trademark | $ 161,224 | |
Derivative, maturing in 2021 | 150,000 | |
Derivative, maturing in 2022 | $ 150,000 | |
Gross licensing revenue payable, percentage | 3.50% | |
Licensing revenue payment period | 5 years | |
Accretion expense | $ 100 | |
Amortization expense | 500 | $ 200 |
Trademarks [Member] | ||
Impairment of trademark | 161,224 | |
Maximum [Member] | ||
Accretion expense | $ 100 | |
Interest Rate Cap [Member] | ||
Derivative, notional amount | $ 300,000 |
Fair Value Measurement of Fin_4
Fair Value Measurement of Financial Instruments (Schedule of Indefinite-lived Assets) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Indefinite-lived Intangible Assets [Line Items] | |
Impairment charges | $ (161,224) |
Trademarks [Member] | |
Indefinite-lived Intangible Assets [Line Items] | |
Balance at January 1 | 954,929 |
Additions | 28 |
Impairment charges | (161,224) |
Balance at March 31 | $ 793,733 |
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 | Mar. 31, 2019 | Dec. 31, 2018 |
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 liability | $ 955 | $ 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] | ||
Term loan | 955 | 627 |
Fair Value, Inputs, Level 2 [Member] | Interest Rate Swap [Member] | Carrying Value [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 3,941 | 2,019 |
Fair Value, Inputs, Level 2 [Member] | Interest Rate Swap [Member] | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Term loan | 3,941 | 2,019 |
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Nonrecurring [Member] | Term Loans Member | Carrying Value [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Term loan | 512,775 | 519,850 |
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Nonrecurring [Member] | Term Loans Member | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Term loan | 509,034 | 515,742 |
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Nonrecurring [Member] | Revolving Loans [Member] | Carrying Value [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 115,000 | 115,000 |
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Nonrecurring [Member] | Revolving Loans [Member] | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Term loan | 114,855 | 114,827 |
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | Carrying Value [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Legacy payments | 2,629 | 2,553 |
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Legacy payments | $ 2,629 | $ 2,553 |
Fair Value Measurement of Fin_6
Fair Value Measurement of Financial Instruments (Schedule of Notional Amounts of Outstanding Derivative Positions) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 10, 2018 |
Interest Rate Swap [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Notional Value | $ 300,000 | $ 300,000 | |
Interest Rate Cap [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Notional Value | $ 300,000 | ||
Derivative Liability | $ 3,941 |
Revenues (Narrative) (Details)
Revenues (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Revenues [Abstract] | |||
Retained Earnings (Accumulated Deficit), Total | $ (360,068) | $ (234,723) | |
Accounts receivable, net | 56,465 | 66,202 | |
Noncontrolling interest | 71,172 | 70,726 | |
Deferred income taxes | 27,914 | $ 67,002 | |
Net revenue | 36,913 | $ 38,104 | |
Benefit from income taxes | $ (38,629) | $ (41) |
Revenues (Disaggregated Revenue
Revenues (Disaggregated Revenue) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregated revenue | $ 36,913 | $ 38,104 |
Licensing Agreements [Member] | ||
Disaggregated revenue | 35,162 | 37,527 |
Other Contract [Member] | ||
Disaggregated revenue | $ 1,751 | $ 577 |
Revenues (Contract Balances) (D
Revenues (Contract Balances) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Revenues [Abstract] | ||
Contract assets | $ 3,458 | $ 3,167 |
Contract liabilities | $ 4,483 | $ 4,999 |
Revenues (Future Performance Ob
Revenues (Future Performance Obligations) (Details) $ in Thousands | Mar. 31, 2019USD ($) |
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 | $ 62,671 |
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 | 64,610 |
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 | 48,925 |
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 | 23,577 |
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 | 18,888 |
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 | $ 16,464 |
Revenues (Future Performance _2
Revenues (Future Performance Obligations Alternate) (Details) | 3 Months Ended |
Mar. 31, 2019 | |
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 | 9 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 | 1 year |
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 | 1 year |
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 | 1 year |
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 | 1 year |
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 years |
Leases - (Details)
Leases - (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Lease | ||
Discount rate for the leases | 6.76% | |
Rent expense for operating leases | $ 1.6 | $ 1.5 |
Lease, Practical Expedients, Package | true |
Leases - Lease Assets and Liabi
Leases - Lease Assets and Liabilities (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Operating lease assets and liabilities recorded on the balance sheet | |
Right-of-use assets - operating leases | $ 49,317 |
Financial position | us-gaap:OtherAssetsNoncurrent |
Current portion of lease liabilities - operating leases | $ 2,761 |
Financial position | us-gaap:OtherLiabilitiesCurrent |
Lease liabilities - operating leases | $ 53,623 |
Financial position | us-gaap:OtherLiabilitiesNoncurrent |
Total operating lease liabilities | $ 56,384 |
Weighted average remaining lease term (in years) | 14 years 1 month 6 days |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Maturities of the Company’s lease liabilities | |
2019 (remaining nine months) | $ 4,864 |
2020 | 6,404 |
2021 | 6,247 |
2022 | 6,262 |
2023 | 6,277 |
Thereafter | 58,320 |
Total minimum lease payments | 88,374 |
Less: imputed interest | 31,990 |
Lease liabilities | $ 56,384 |
Intangible Assets (Narrative) (
Intangible Assets (Narrative) (Details) - USD ($) $ in Thousands | Apr. 19, 2018 | Mar. 31, 2019 | Mar. 31, 2018 |
Amortization expense | $ 500 | $ 200 | |
Loss on sale of assets | $ (5,142) | ||
Impairment charges | $ 161,224 | ||
Revo Trademark | |||
Loss on sale of assets | $ 5,100 |
Intangible Assets (Summary of I
Intangible Assets (Summary of Intangible Assets) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Schedule Of Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 15,645 | $ 15,631 |
Accumulated Amortization | (6,184) | (5,649) |
Finite-lived intangible assets, net | 9,461 | 9,982 |
Net Carrying Amount, Intangible Assets | $ 803,194 | 964,911 |
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 | $ 793,733 | 954,929 |
Trademarks [Member] | ||
Schedule Of Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 12,452 | 12,438 |
Accumulated Amortization | (3,144) | (2,689) |
Finite-lived intangible assets, net | $ 9,308 | $ 9,749 |
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 | 4 years |
Gross Carrying Amount | $ 2,832 | $ 2,832 |
Accumulated Amortization | (2,717) | (2,639) |
Finite-lived intangible assets, net | $ 115 | $ 193 |
Patents [Member] | ||
Schedule Of Finite Lived Intangible Assets [Line Items] | ||
Useful Lives | 10 years | 10 years |
Gross Carrying Amount | $ 361 | $ 361 |
Accumulated Amortization | (323) | (321) |
Finite-lived intangible assets, net | $ 38 | $ 40 |
Intangible Assets (Future Annua
Intangible Assets (Future Annual Estimated Amortization Expense) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Intangible Assets [Abstract] | ||
2019 | $ 1,485 | |
2020 | 1,834 | |
2021 | 1,831 | |
2022 | 1,808 | |
2023 | 1,383 | |
Thereafter | 1,120 | |
Intangible assets amortization, total | 9,461 | $ 9,982 |
Intangible Assets, Net (Excluding Goodwill), Total | $ 803,194 | $ 964,911 |
Intangible Assets (Changes in I
Intangible Assets (Changes in Indefinite-Lived Intangible Assets) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Impairment charges | $ (161,224) | |
Amortization | $ 500 | $ 200 |
Indefinite-lived Intangible Assets [Member] | ||
Balance at January 1 | 964,911 | |
Impairment charges | (161,224) | |
Amortization | (535) | |
Additions | 42 | |
Balance at March 31 | $ 803,194 |
Long-Term Debt (Narrative) (Det
Long-Term Debt (Narrative) (Details) - USD ($) | Aug. 07, 2018 | Jul. 02, 2016 | Jul. 02, 2016 | Mar. 31, 2017 | Mar. 31, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 10, 2018 | Jul. 01, 2016 |
Disclosure Long Term Debt Additional Information [Line Items] | |||||||||
Long-term debt | $ 605,037,000 | $ 610,787,000 | |||||||
Derivative, maturing in 2021 | 150,000,000 | ||||||||
Derivative, maturing in 2022 | 150,000,000 | ||||||||
Interest Rate Cap [Member] | |||||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||||
Derivative, notional amount | $ 300,000,000 | ||||||||
Interest Rate Swap [Member] | |||||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||||
Derivative, notional amount | $ 300,000,000 | $ 300,000,000 | |||||||
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% | ||||||||
Debt instrument, covenant description | (i) maintain a positive net income, (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. | ||||||||
Quarterly amortization installments | $ 5,000,000 | ||||||||
Debt instrument, description | (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. | ||||||||
Debt instrument, covenant compliance | At March 31, 2019, the Company is in compliance with the covenants included in the New Amended BoA Credit Agreement. | ||||||||
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 in the agreement), (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 ended 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, 2.50:1.00 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] | |||||||||
Debt instrument, periodic payment | $ 5,000,000 | ||||||||
Debt instrument, date of first required payment | Sep. 30, 2016 | ||||||||
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% | ||||||||
Line of credit facility, covenant terms | (i) the Revolving Credit Facility and Tranche A Loans as would not cause the consolidated first lien leverage ratio, determined on a pro forma basis after giving effect to any such increase, to exceed 2.80:1.00 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. | ||||||||
Revolving Loans [Member] | |||||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||||
Long-term debt | 115,000,000 | ||||||||
Maximum loan to value ratio | 50.00% | ||||||||
Revolving Loans [Member] | Notes Payable to Banks [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||||
Debt instrument, basis spread on variable rate | 3.50% | ||||||||
GSO Credit Agreement [Member] | |||||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||||
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. | ||||||||
Line of credit facility, interest rate description | (i) the LIBOR rate plus 8.75% per annum or (ii) the base rate plus 7.75% per annum. | ||||||||
Debt instrument, covenant compliance | At March 31, 2019, the Company is in compliance with the covenants included in the New Amended FS/KKR Credit Agreement. | ||||||||
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 required 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 Amended FS/KKR Credit Agreement until reaching the final maximum ratio of 6.50:1.00 for the fiscal quarter ended 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 ended September 30, 2018 and thereafter | ||||||||
GSO Credit Agreement Reinvestment Rights Scenario Three [Member] | |||||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||||
Debt instrument covenant payment percentage of net proceeds related to other assets constituting collateral | 0.00% | ||||||||
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 have exceeded 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] | |||||||||
Debt instrument covenant payment percentage of net proceeds related to other assets constituting collateral | 75.00% | ||||||||
Amended KKR Credit Agreement [Member] | Scenario Plan Two [Member] | |||||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||||
Debt instrument covenant payment percentage of net proceeds related to other assets constituting collateral | 50.00% | ||||||||
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% | ||||||||
Amended FS/KKR Credit Agreement [Member] | Scenario Plan Four [Member] | |||||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||||
Consolidated total leverage ratio | 6.00% | ||||||||
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 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] | |||||||||
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, 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 | ||||||||
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] | Additional Loan Facility [Member] | Scenario Plan Three [Member] | |||||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||||
Consolidated total leverage ratio | 6.00% | ||||||||
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] | |||||||||
Line of credit facility, maximum borrowing capacity | 130,000,000 | ||||||||
Line of credit facility, unused capacity, commitment fee percentage | 0.375% | ||||||||
Maximum loan to value ratio | 50.00% | ||||||||
Consolidated first lien leverage ratio | 3.875% | ||||||||
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% | ||||||||
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% | ||||||||
Third Amended BoA Tranche A-1 Loans [Member] | |||||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||||
Debt instrument, face amount | 70,000,000 | ||||||||
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% | ||||||||
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% | ||||||||
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 [Member] | Scenario Plan One [Member] | |||||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||||
Consolidated first lien leverage ratio | 2.80% | ||||||||
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] | Tranche A -1 Term Loans [Member] | |||||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||||
Consolidated first lien leverage ratio | 3.00% | ||||||||
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 | Mar. 31, 2019 | Dec. 31, 2018 | Jul. 01, 2016 |
Unamortized deferred financing costs | $ (22,738) | $ (24,063) | |
Total long-term debt, net of unamortized deferred financing costs | 605,037 | 610,787 | |
Less: current portion of long-term debt | 28,300 | 28,300 | |
Long term debt, noncurrent | 576,737 | 582,487 | |
BoA Credit Agreement [Member] | |||
Total long-term debt, net of unamortized deferred financing costs | $ 258,000 | ||
BoA Term Loans [Member] | |||
Secured Term Loans | 512,775 | 519,850 | |
Revolving Loans [Member] | |||
Revolving Credit Facility | $ 115,000 | $ 115,000 | |
Total long-term debt, net of unamortized deferred financing costs | $ 115,000 |
Stock-based Compensation (Narra
Stock-based Compensation (Narrative) (Details) - USD ($) | Feb. 20, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 |
Warrants | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated share-based compensation expense | $ 0 | $ 0 | ||
Unvested shares | 0 | |||
Stock Appreciation Rights (SARs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated share-based compensation expense | $ 100,000 | 100,000 | ||
Unrecognized compensation expense, other than options | $ 100,000 | |||
Unrecognized compensation expense, period for recognition | 7 months 6 days | |||
Stock Appreciation Rights (SARs) [Member] | Chief Financial Officer And Former Chief Financial Officer And Chief Executive Officer And Employees And Consultants [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated share-based compensation expense | $ 300,000 | 600,000 | ||
Unrecognized compensation expense, other than options | $ 1,500,000 | |||
Unrecognized compensation expense, period for recognition | 1 year 10 months 24 days | |||
Stock Appreciation Rights (SARs) [Member] | Employees and Consultants [Member] | Share-based Compensation Award, Tranche One [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated share-based compensation expense | $ 300,000 | |||
Stock Appreciation Rights (SARs) [Member] | Employees and Consultants [Member] | Share-based Compensation Award, Tranche One [Member] | Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated share-based compensation expense | $ 100,000 | |||
Stock Appreciation Rights (SARs) [Member] | Employee [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock awards, granted in period | 843,486 | |||
Performance based restricted stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated share-based compensation expense | $ 300,000 | $ 700,000 | ||
Unvested shares | 1,903,968 | 2,219,818 | ||
Performance based restricted stock | Years Ended December 31, 2016 - 2018 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated share-based compensation expense | $ 300,000 | |||
Number of shares vested | 231,396 | |||
Performance based restricted stock | Employees and Consultants [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated share-based compensation expense | $ 500,000 | |||
Restricted stock awards, granted in period | 208,883 | |||
Performance based restricted stock | Employee [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock awards, granted in period | 200,000 | |||
Award vesting period | 2 years | |||
Grant date fair value of stock units granted | $ 500,000 | |||
Performance based restricted stock | Consultant [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock awards, granted in period | 250,000 | |||
Award vesting period | 5 years | |||
Grant date fair value of stock units granted | $ 500,000 | |||
Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unvested shares | 292,989 | 292,989 | ||
Restricted Stock Units (RSUs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unvested shares | 1,431,223 | 1,615,953 | ||
Restricted Stock Units (RSUs) [Member] | Employees and Consultants [Member] | Share-based Compensation Award, Tranche One [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Grant date fair value of stock units granted | $ 1,600,000 | |||
Restricted Stock Units (RSUs) [Member] | Employees and Consultants [Member] | Share-based Compensation Award, Tranche One [Member] | Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 5 years | |||
Restricted Stock Units (RSUs) [Member] | Employees [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock awards, granted in period | 903,679 | |||
Employee Stock Option [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated share-based compensation expense | $ 0 | $ 0 | ||
Unrecognized compensation expense, options | $ 0 | |||
Nonvested options | 0 | |||
Warrants [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation expense, other than options | $ 0 | |||
Granted, Options |
Stock-based Compensation (Summa
Stock-based Compensation (Summary of Stock Option Activity and Changes in Unvested Stock Options) (Detail) - Employee Stock Option [Member] - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding beginning, Number of Options | 49,501 | |
Outstanding ending, Number of Options | 49,501 | 49,501 |
Exercisable, Number of Options | 49,501 | |
Outstanding beginning, Weighted Average Exercise Price | $ 10.22 | |
Outstanding ending, Weighted Average Exercise Price | 10.22 | $ 10.22 |
Exercisable, Weighted Average Exercise Price | $ 10.22 | |
Weighted Average Remaining Contractual Life (in years) | 2 years | 2 years 3 months 18 days |
Exercisable, Weighted Average Remaining Contractual Life (in years) | 2 years | |
Nonvested | ||
Outstanding ending, Number of Options | 0 |
Stock-based Compensation (Sum_2
Stock-based Compensation (Summary of Warrant Activity) (Detail) - Warrants [Member] - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding beginning, Number of Options | 200,000 | |
Granted, Number of Options | ||
Outstanding ending, Number of Options | 200,000 | 200,000 |
Exercisable, Number of Options | 200,000 | |
Outstanding beginning, Weighted Average Exercise Price | $ 13.32 | |
Granted, Weighted Average Exercise Price | ||
Outstanding ending, Weighted Average Exercise Price | 13.32 | $ 13.32 |
Exercisable, Weighted Average Exercise Price | $ 13.32 | |
Weighted Average Remaining Contractual Life (in years) | 6 years 2 months 12 days | 6 years 4 months 24 days |
Exercisable, Weighted Average Remaining Contractual Life (in years) | 6 years 2 months 12 days | |
Nonvested | ||
Granted, Options |
Stock-based Compensation (Sum_3
Stock-based Compensation (Summary of Restricted Stock Activity and Performance Stock Units) (Detail) - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Restricted Stock | ||
Summary Of Restricted Stock Activity [Line Items] | ||
Outstanding beginning, Other than options | 292,989 | |
Outstanding ending, Other than options | 292,989 | 292,989 |
Outstanding beginning, Weighted Average Exercise Price, Other than options | $ 3.72 | |
Outstanding ending , Weighted Average Exercise Price, Other than options | $ 3.72 | $ 3.72 |
Nonvested, Weighted Average Remaining Vesting Period, Other Than Options, Nonvested | 7 months 6 days | 10 months 24 days |
Performance based restricted stock | ||
Summary Of Restricted Stock Activity [Line Items] | ||
Outstanding beginning, Other than options | 2,219,818 | |
Vested, Other than options | (289,671) | |
Forfeited or Canceled, Other than options | (26,179) | |
Outstanding ending, Other than options | 1,903,968 | 2,219,818 |
Outstanding beginning, Weighted Average Exercise Price, Other than options | $ 4.47 | |
Vested, Weighted Average Grant Date Fair Value | (4.68) | |
Forfeited or Canceled, Weighted Average Exercise Price, Other than options | (5.14) | |
Outstanding ending , Weighted Average Exercise Price, Other than options | $ 4.43 | $ 4.47 |
Nonvested, Weighted Average Remaining Vesting Period, Other Than Options, Nonvested | 1 year 1 month 6 days | 9 months 18 days |
Restricted Stock Units (RSUs) [Member] | ||
Summary Of Restricted Stock Activity [Line Items] | ||
Outstanding beginning, Other than options | 1,615,953 | |
Vested, Other than options | (168,063) | |
Forfeited or Canceled, Other than options | (16,667) | |
Outstanding ending, Other than options | 1,431,223 | 1,615,953 |
Outstanding beginning, Weighted Average Exercise Price, Other than options | $ 2.24 | |
Vested, Weighted Average Grant Date Fair Value | (2.38) | |
Forfeited or Canceled, Weighted Average Exercise Price, Other than options | (1.76) | |
Outstanding ending , Weighted Average Exercise Price, Other than options | $ 2.23 | $ 2.24 |
Nonvested, Weighted Average Remaining Vesting Period, Other Than Options, Nonvested | 1 year 10 months 24 days | 2 years 2 months 12 days |
Related Party Transactions (Nar
Related Party Transactions (Narrative) (Details) - USD ($) $ in Thousands | Jul. 30, 2016 | Dec. 04, 2015 | Nov. 17, 2014 | Jul. 30, 2013 | Jan. 01, 2013 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Aug. 15, 2014 |
Related Party [Line Items] | |||||||||
Operating expenses | $ 22,770 | $ 18,050 | |||||||
Revenue from Contract with Customer, Including Assessed Tax | 36,913 | 38,104 | |||||||
Loss on sale of assets | $ (5,142) | ||||||||
Intangible asset agreement annual payment | 1,700 | ||||||||
Accretion expense | 100 | ||||||||
Accounts Payable and Accrued Liabilities, Current | 21,844 | $ 23,527 | |||||||
TCP Agreement [Member] | |||||||||
Related Party [Line Items] | |||||||||
Cash Paid For Services | $ 200 | ||||||||
License agreement annual payment | $ 900 | ||||||||
FUL [Member] | |||||||||
Related Party [Line Items] | |||||||||
Loss on sale of assets | (2,000) | ||||||||
FUL [Member] | |||||||||
Related Party [Line Items] | |||||||||
Business combination, recognized identifiable assets acquired and liabilities assumed, intangible assets, other than goodwill | $ 8,900 | ||||||||
Business acquisition, percentage of voting interests acquired | 50.50% | ||||||||
Payments to acquire businesses, net of cash acquired | $ 4,500 | ||||||||
Tengram Capital Partners Gen2 Fund LP [Member] | |||||||||
Related Party [Line Items] | |||||||||
Percentage of beneficially owned outstanding common stock | 5.00% | ||||||||
Tengram Capital Partners Gen2 Fund LP [Member] | TCP Agreement [Member] | |||||||||
Related Party [Line Items] | |||||||||
Amount due for services | 200 | ||||||||
ES Originals Inc [Member] | |||||||||
Related Party [Line Items] | |||||||||
Type of Revenue | us-gaap:RoyaltyMember | us-gaap:RoyaltyMember | |||||||
Revenue from Contract with Customer, Including Assessed Tax | $ 1,200 | $ 1,600 | |||||||
Other asset | 1,000 | 1,200 | |||||||
Due from related parties, current | 4,300 | 6,200 | |||||||
Current receivable | 900 | 900 | |||||||
ES Originals Inc [Member] | License-back Agreement [Member] | |||||||||
Related Party [Line Items] | |||||||||
License agreement payments during period | 300 | 300 | |||||||
TCP Employee [Member] | |||||||||
Related Party [Line Items] | |||||||||
Operating expenses | $ 100 | 100 | |||||||
TCP Employee [Member] | Restricted Stock | |||||||||
Related Party [Line Items] | |||||||||
Other than options, granted | 125,000 | ||||||||
Award vesting period | 4 years | ||||||||
TCP Employee [Member] | Performance based restricted stock | |||||||||
Related Party [Line Items] | |||||||||
Other than options, granted | 200,000 | 180,000 | |||||||
Award vesting period | 3 years | ||||||||
TCP Employee [Member] | Share-based Compensation Award, Tranche Two [Member] | Restricted Stock | |||||||||
Related Party [Line Items] | |||||||||
Other than options, granted | 300,000 | ||||||||
Award vesting period | 3 years | ||||||||
Share based compensation, vesting percentage | 25.00% | ||||||||
Centric Brands, Inc. [Member] | |||||||||
Related Party [Line Items] | |||||||||
Revenue from Contract with Customer, Including Assessed Tax | $ 1,700 | ||||||||
Current receivable | 300 | 800 | |||||||
Accounts Payable and Accrued Liabilities, Current | $ 500 | ||||||||
IP License Agreement and Intangible Asset Agreement [Member] | |||||||||
Related Party [Line Items] | |||||||||
Terms of agreement, description | for calendar years 2018 through 2020 exceed $195 million or the gross licensing revenues for calendar year 2020 equal or exceed $65 million. | ||||||||
Aggregate gross revenues per agreement, benchmark | $ 195,000 | ||||||||
Gross revenues per agreement, benchmark | $ 65,000 | ||||||||
License agreement payments during period | $ 500 | ||||||||
Accretion expense | 100 | 100 | |||||||
IP License Agreement [Member] | |||||||||
Related Party [Line Items] | |||||||||
License agreement annual payment | 1,300 | ||||||||
Due to related parties, current | 3,700 | 3,900 | |||||||
IP License Agreement [Member] | Other Noncurrent Liabilities [Member] | |||||||||
Related Party [Line Items] | |||||||||
Due to related parties, current | 800 | 1,100 | |||||||
IP License Agreement [Member] | Accounts Payable and Accrued Liabilities [Member] | |||||||||
Related Party [Line Items] | |||||||||
Due to related parties, current | $ 2,900 | 2,800 | |||||||
Award Date One [Member] | TCP Employee [Member] | Share-based Compensation Award, Tranche One [Member] | Performance based restricted stock | |||||||||
Related Party [Line Items] | |||||||||
Share based compensation, vesting percentage | 20.00% | ||||||||
Award Date One [Member] | TCP Employee [Member] | Share-based Compensation Award, Tranche Two [Member] | Performance based restricted stock | |||||||||
Related Party [Line Items] | |||||||||
Share based compensation, vesting percentage | 20.00% | ||||||||
Award Date One [Member] | TCP Employee [Member] | Share-based Compensation Award, Tranche Three [Member] | Performance based restricted stock | |||||||||
Related Party [Line Items] | |||||||||
Share based compensation, vesting percentage | 60.00% | ||||||||
Award Date Two [Member] | TCP Employee [Member] | Share-based Compensation Award, Tranche One [Member] | Performance based restricted stock | |||||||||
Related Party [Line Items] | |||||||||
Share based compensation, vesting percentage | 33.30% | ||||||||
Award Date Two [Member] | TCP Employee [Member] | Share-based Compensation Award, Tranche Two [Member] | Performance based restricted stock | |||||||||
Related Party [Line Items] | |||||||||
Share based compensation, vesting percentage | 33.30% | ||||||||
Award Date Two [Member] | TCP Employee [Member] | Share-based Compensation Award, Tranche Three [Member] | Restricted Stock | |||||||||
Related Party [Line Items] | |||||||||
Other than options, granted | 150,000 | ||||||||
Award Date Two [Member] | TCP Employee [Member] | Share-based Compensation Award, Tranche Three [Member] | Performance based restricted stock | |||||||||
Related Party [Line Items] | |||||||||
Share based compensation, vesting percentage | 33.40% | ||||||||
Maximum [Member] | |||||||||
Related Party [Line Items] | |||||||||
Accretion expense | 100 | ||||||||
Maximum [Member] | ES Originals Inc [Member] | |||||||||
Related Party [Line Items] | |||||||||
Expenses, related party | $ 100 | 100 | |||||||
Maximum [Member] | TCP Employee [Member] | |||||||||
Related Party [Line Items] | |||||||||
Due to related parties, current | $ 100 | $ 100 | |||||||
Maximum [Member] | IP License Agreement and Intangible Asset Agreement [Member] | |||||||||
Related Party [Line Items] | |||||||||
License agreement payments during period | $ 100 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Apr. 06, 2019 | Mar. 31, 2019 |
Subsequent Event [Line Items] | ||
Impairment charges | $ 161,224,000 | |
MLSO | ||
Subsequent Event [Line Items] | ||
Percentage of ownership before transaction | 100.00% | |
Sale of issued and outstanding equity interest | $ 167,000,000 | |
Maximum [Member] | MLSO | ||
Subsequent Event [Line Items] | ||
Earnout on performance target achieved during first three year | $ 40,000,000 |