Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 06, 2020 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity Registrant Name | Digital Media Solutions, Inc. | |
Entity Central Index Key | 0001725134 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Incorporation, State or Country Code | DE | |
Entity File Number | 001-38393 | |
Entity Tax Identification Number | 98-1399727 | |
Entity Address, Address Line One | 4800 140th Avenue N. | |
Entity Address, Address Line Two | Suite 101 | |
Entity Address, City or Town | Clearwater | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 33762 | |
City Area Code | 877 | |
Local Phone Number | 236-8632 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Class A Common Stock | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Class A common stock, $0.0001 par value per share | |
Trading Symbol | DMS | |
Security Exchange Name | NYSE | |
Entity Common Stock, Shares Outstanding | 32,392,577 | |
Redeemable Warrants to Acquire Class A Common Stock [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Redeemable warrants to acquire Class A common stock | |
Trading Symbol | DMS WS | |
Security Exchange Name | NYSE | |
Class B Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 25,999,464 |
CONSOLIDATED CONDENSED BALANCE
CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash | $ 24,500 | $ 3,008 |
Accounts receivable, net of allowances of $875 and $683, respectively | 38,656 | 30,137 |
Prepaid and other current assets | 2,727 | 2,217 |
Total current assets | 65,883 | 35,362 |
Property and equipment, net | 13,662 | 8,728 |
Goodwill | 44,368 | 41,826 |
Intangible assets, net | 50,275 | 57,935 |
Deferred tax assets | 18,522 | 0 |
Other assets | 285 | 254 |
Total assets | 192,995 | 144,105 |
Current liabilities: | ||
Accounts payable | 28,433 | 24,160 |
Accrued expenses and other current liabilities | 10,798 | 10,839 |
Current portion of long-term debt | 4,150 | 4,150 |
Contingent consideration payable | 0 | 1,000 |
Total current liabilities | 43,381 | 40,149 |
Commitments and contingencies (Note 12) | ||
Long-term debt | 197,059 | 201,048 |
Long-term TRA liability | 15,174 | 0 |
Deferred tax liability | 7,514 | 8,675 |
Other non-current liabilities | 537 | 491 |
Total liabilities | 263,665 | 250,363 |
Preferred stock, $0.0001 par value, 100,000 shares authorized; none issued and outstanding at September 30, 2020 | 0 | 0 |
Additional paid-in capital | (43,145) | 0 |
Retained earnings | 5,342 | 0 |
Total stockholders' deficit | (37,797) | 0 |
Non-controlling interest | (32,873) | 0 |
Member deficit | 0 | (106,258) |
Total deficit | (70,670) | (106,258) |
Total liabilities and deficit | $ 192,995 | 144,105 |
Common stock authorized (in shares) | 600,000,000 | |
Class A Common Stock | ||
Current liabilities: | ||
Common stock | $ 3 | 0 |
Common stock authorized (in shares) | 500,000,000 | |
Common stock outstanding (in shares) | 32,293,793 | |
Class B Common Stock | ||
Current liabilities: | ||
Common stock | $ 3 | 0 |
Common stock authorized (in shares) | 60,000,000 | |
Common stock outstanding (in shares) | 25,857,070 | |
Class C common stock | ||
Current liabilities: | ||
Common stock | $ 0 | $ 0 |
Common stock authorized (in shares) | 40,000,000 | |
Common stock issued (in shares) | 0 | |
Common stock outstanding (in shares) | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Net revenue | $ 82,829 | $ 57,575 | $ 230,753 | $ 173,142 |
Cost of revenue | 57,777 | 39,101 | 160,338 | 117,084 |
Salaries and related costs | 7,882 | 6,599 | 24,114 | 20,495 |
General and administrative expenses | 6,407 | 4,479 | 16,356 | 13,514 |
Acquisition costs | 3,248 | 11,707 | 3,322 | 17,492 |
Depreciation and amortization | 4,636 | 2,201 | 13,307 | 6,165 |
Income (loss) from operations | 2,879 | (6,512) | 13,316 | (1,608) |
Interest expense | 3,421 | 2,980 | 10,702 | 7,389 |
Net (loss) income before income taxes | (542) | (9,492) | 2,614 | (8,997) |
Income tax expense | 1,636 | 0 | 1,901 | 0 |
Net (loss) income | (2,178) | (9,492) | 713 | (8,997) |
Net loss attributable to non-controlling interest | (3,315) | 0 | (424) | 0 |
Net income (loss) attributable to Digital Media Solutions, Inc. | $ 1,137 | $ (9,492) | $ 1,137 | $ (8,997) |
Earnings (loss) per share attributable to Digital Media Solutions, Inc.: | ||||
Basic and diluted (usd per share) | $ 0.04 | $ 0.04 | ||
Weighted-average shares outstanding - basic and diluted (in shares) | 32,294,000 | 32,294,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities | ||
Net income (loss) | $ 713 | $ (8,997) |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Depreciation and amortization | 13,307 | 6,165 |
Payment of contingent consideration | (1,000) | (15,904) |
Amortization of debt issuance costs | 699 | 409 |
Deferred income tax provision, net | (1,261) | 0 |
Change in accounts receivable, net | (7,686) | (1,889) |
Change in prepaid expenses and other current assets | (495) | (837) |
Change in accounts payable and accrued expenses | 3,210 | (3,680) |
Change in contingent consideration payable | 0 | 13,841 |
Change in other liabilities | (136) | (131) |
Net cash provided by (used in) operating activities | 7,351 | (11,023) |
Cash flows from investing activities | ||
Additions to property and equipment | (7,481) | (4,566) |
Acquisition of businesses, net of cash acquired | (2,799) | 0 |
Other | 0 | (14) |
Net cash used in investing activities | (10,280) | (4,580) |
Cash flows from financing activities | ||
Proceeds from Business Combination | 29,278 | 0 |
Proceeds from issuance of long-term debt | 0 | 39,000 |
Payments of long-term debt | (3,423) | (1,739) |
Proceeds from borrowings on revolving credit facilities | 10,000 | 5,500 |
Payments of borrowings on revolving credit facilities | (11,000) | (1,500) |
Payment of debt issuance costs | (264) | (719) |
Payment of contingent consideration payable | 0 | (7,011) |
Distributions to members | (170) | (21,593) |
Net cash provided by financing activities | 24,421 | 11,938 |
Net change in cash | 21,492 | (3,665) |
Cash, beginning of period | 3,008 | 4,589 |
Cash, end of period | 24,500 | 924 |
Supplemental Disclosure of Cash Flow Information | ||
Interest | 10,070 | 2,798 |
Income taxes, net | 1,570 | 0 |
Non-Cash Investing and Financing Transactions: | ||
Issuance of equity for SmarterChaos acquisition | 3,000 | 0 |
Capital expenditures included in accounts payable | $ 138 | $ 284 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT) (Unaudited) - USD ($) $ in Thousands | Total | Class A Common Stock | Class B Common Stock | Total Stockholders' Deficit | Common StockClass A Common Stock | Common StockClass B Common Stock | Additional Paid-in Capital | Retained Earnings | Non- controlling Interest | Members' Deficit |
Beginning balance (in shares) at Dec. 31, 2018 | 0 | 0 | ||||||||
Beginning balance at Dec. 31, 2018 | $ (73,403) | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ (73,403) | ||
Net income (loss) | 606 | 606 | ||||||||
Member distributions | (2,148) | (2,148) | ||||||||
Ending balance (in shares) at Mar. 31, 2019 | 0 | 0 | ||||||||
Ending balance at Mar. 31, 2019 | (74,945) | 0 | $ 0 | $ 0 | 0 | 0 | 0 | (74,945) | ||
Beginning balance (in shares) at Dec. 31, 2018 | 0 | 0 | ||||||||
Beginning balance at Dec. 31, 2018 | (73,403) | 0 | $ 0 | $ 0 | 0 | 0 | 0 | (73,403) | ||
Net income (loss) | (8,997) | |||||||||
Ending balance (in shares) at Sep. 30, 2019 | 0 | 0 | ||||||||
Ending balance at Sep. 30, 2019 | (103,993) | 0 | $ 0 | $ 0 | 0 | 0 | 0 | (103,993) | ||
Beginning balance (in shares) at Mar. 31, 2019 | 0 | 0 | ||||||||
Beginning balance at Mar. 31, 2019 | (74,945) | 0 | $ 0 | $ 0 | 0 | 0 | 0 | (74,945) | ||
Net income (loss) | (111) | (111) | ||||||||
Member distributions | (7,194) | (7,194) | ||||||||
Ending balance (in shares) at Jun. 30, 2019 | 0 | 0 | ||||||||
Ending balance at Jun. 30, 2019 | (82,250) | 0 | $ 0 | $ 0 | 0 | 0 | 0 | (82,250) | ||
Net income (loss) | (9,492) | (9,492) | ||||||||
Member distributions | (12,251) | (12,251) | ||||||||
Ending balance (in shares) at Sep. 30, 2019 | 0 | 0 | ||||||||
Ending balance at Sep. 30, 2019 | (103,993) | 0 | $ 0 | $ 0 | 0 | 0 | 0 | (103,993) | ||
Beginning balance (in shares) at Dec. 31, 2019 | 0 | 0 | ||||||||
Beginning balance at Dec. 31, 2019 | (106,258) | 0 | $ 0 | $ 0 | 0 | 0 | 0 | (106,258) | ||
Net income (loss) | 757 | 757 | ||||||||
Member distributions | (170) | (170) | ||||||||
Ending balance (in shares) at Mar. 31, 2020 | 0 | 0 | ||||||||
Ending balance at Mar. 31, 2020 | (105,671) | 0 | $ 0 | $ 0 | 0 | 0 | 0 | (105,671) | ||
Beginning balance (in shares) at Dec. 31, 2019 | 0 | 0 | ||||||||
Beginning balance at Dec. 31, 2019 | (106,258) | 0 | $ 0 | $ 0 | 0 | 0 | 0 | (106,258) | ||
Net income (loss) | 713 | |||||||||
Ending balance (in shares) at Sep. 30, 2020 | 32,293,793 | 25,857,070 | 32,294,000 | 25,857,000 | ||||||
Ending balance at Sep. 30, 2020 | (70,670) | (37,797) | $ 3 | $ 3 | (43,145) | 5,342 | (32,873) | 0 | ||
Beginning balance (in shares) at Mar. 31, 2020 | 0 | 0 | ||||||||
Beginning balance at Mar. 31, 2020 | (105,671) | 0 | $ 0 | $ 0 | 0 | 0 | 0 | (105,671) | ||
Net income (loss) | 2,134 | 2,134 | ||||||||
Ending balance (in shares) at Jun. 30, 2020 | 0 | 0 | ||||||||
Ending balance at Jun. 30, 2020 | (103,537) | 0 | $ 0 | $ 0 | 0 | 0 | 0 | (103,537) | ||
Net income (loss) | (2,178) | 1,137 | 1,137 | 921 | (4,236) | |||||
Proceeds and shares issued in the Business Combination and the Conversion (Note 2) (in shares) | 32,294,000 | 25,857,000 | ||||||||
Proceeds and shares issued in the Business Combination and the Conversion (Note 2) | 32,045 | (40,795) | $ 3 | $ 3 | (45,006) | 4,205 | (34,933) | 107,773 | ||
DMSH units issued in SmarterChaos acquisition (Note 7) | 3,000 | 1,861 | 1,861 | 1,139 | ||||||
Ending balance (in shares) at Sep. 30, 2020 | 32,293,793 | 25,857,070 | 32,294,000 | 25,857,000 | ||||||
Ending balance at Sep. 30, 2020 | $ (70,670) | $ (37,797) | $ 3 | $ 3 | $ (43,145) | $ 5,342 | $ (32,873) | $ 0 |
CONSOLIDATED CONDENSED BALANC_2
CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Allowance for credit loss | $ 875 | $ 683 |
Preferred stock par value (usd per share) | $ 0.0001 | |
Preferred stock, authorized (in shares) | 100,000,000 | |
Preferred stock issued (in shares) | 0 | |
Preferred stock outstanding (in shares) | 0 | |
Common stock par value (usd per share) | $ 0.0001 | |
Common stock authorized (in shares) | 600,000,000 | |
Class A Common Stock | ||
Common stock par value (usd per share) | $ 0.0001 | |
Common stock authorized (in shares) | 500,000,000 | |
Common stock outstanding (in shares) | 32,293,793 | |
Class B Common Stock | ||
Common stock par value (usd per share) | $ 0.0001 | |
Common stock authorized (in shares) | 60,000,000 | |
Common stock outstanding (in shares) | 25,857,070 | |
Class C common stock | ||
Common stock par value (usd per share) | $ 0.0001 | |
Common stock authorized (in shares) | 40,000,000 | |
Common stock issued (in shares) | 0 | |
Common stock outstanding (in shares) | 0 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Digital Media Solutions, Inc. (“DMS Inc.”) is a performance marketing company offering a diversified lead and software delivery platform that drives high value and high intent leads to its customers. As used in this report, the “Company” refers to DMS Inc. and its consolidated subsidiaries, (including its wholly-owned subsidiary, CEP V DMS US Blocker Company, a Delaware corporation (“Blocker”)). The Company is headquartered in Clearwater, Florida, with satellite offices throughout the United States and Canada. The Company primarily operates and derives most of its revenues in the United States. Leo Holdings Corp. (“Leo”) as a special purpose acquisition company, was incorporated on November 29, 2017 as a Cayman Islands exempted company under the name for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination involving the Company and one or more businesses. On July 15, 2020, Leo consummated a transaction structured similar to a reverse recapitalization (the “Business Combination”) and domesticated as a corporation incorporated in the state of Delaware. At the closing of the Business Combination (the “Closing”), DMS Inc. acquired the equity in Blocker and a portion of the equity of Digital Media Solutions Holding, LLC (“DMSH”) and Blocker became the sole managing member of DMSH, and Leo was renamed Digital Media Solutions, Inc. The business combination was structured as a reverse recapitalization. The historical operations of DMSH are deemed to be those of the Company. Thus, the financial statements included in this report reflect (i) the historical operating results of DMSH prior to the Business Combination; (ii) the combined results of the Company following the Business Combination; (iii) the assets and liabilities of Leo at historical cost; and (iv) the Company’s equity and earnings (loss) per share for all periods presented. Refer to Note 2. Business Combination for additional discussion related to the transaction. Unless otherwise noted below, there have been no material changes to the significant accounting policies presented in Note 2. Basis of Presentation and Summary of Significant Accounting Policies, to the DMSH consolidated financial statements for the fiscal year ended December 31, 2019, included in the Company’s prospectus that forms a part of the Form S-1 registration statement filed with the Securities and Exchange Commission (“SEC”) on August 7, 2020 (the “2020 S-1”). Basis of Presentation These unaudited condensed consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the 2020 S-1. The Unaudited Condensed Consolidated Balance Sheet at December 31, 2019 was derived from the audited Consolidated Balance Sheet as of December 31, 2019, as presented in the 2020 S-1. In management’s opinion, these unaudited condensed consolidated financial statements reflect all normal and recurring adjustments considered necessary for a fair presentation. Principles of Consolidation The Company consists of DMS Inc. and its wholly-owned subsidiary, Blocker. Pursuant to the Business Combination, DMS Inc. acquired, directly and through its acquisition of the equity of Blocker, approximately 55.5% of the membership interest in DMSH, while the Sellers (as defined in Note 2. Business Combination) retained approximately 44.5% of the membership interest in DMSH (“non-controlling interests”). The Company consolidates the assets, liabilities and operating results of DMSH and its wholly-owned subsidiaries. All intercompany activity and balances have been eliminated as part of the consolidation. The results of operations attributable to the non-controlling interests are included in the Company’s unaudited condensed consolidated statements of operations, and the non-controlling interests are reported as a separate component of equity. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements. Actual results could differ from those estimates. Management regularly makes estimates and assumptions that are inherent in the preparation of the consolidated financial statements including, but not limited to, the allowance for doubtful accounts, business combinations, loss contingencies, asset impairments and deferred taxes and amounts associated with the Tax Receivable Agreement related to the Business Combination. Income Taxes The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. In assessing the realizability of deferred tax assets, management considers whether it is more-likely-than-not that the deferred tax assets will be realized. Deferred tax assets and liabilities are calculated by applying existing tax laws and the rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the year of the enacted rate change. The Company accounts for uncertainty in income taxes using a recognition and measurement threshold for tax positions taken or expected to be taken in a tax return, which are subject to examination by federal and state taxing authorities. The tax benefit from an uncertain tax position is recognized when it is more likely than not that the position will be sustained upon examination by taxing authorities based on technical merits of the position. The amount of the tax benefit recognized is the largest amount of the benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The effective tax rate and the tax basis of assets and liabilities reflect management’s estimates of the ultimate outcome of various tax uncertainties. The Company recognizes penalties and interest related to uncertain tax positions within the provision (benefit) for income taxes line in the accompanying consolidated statements of operations. DMSH, the Company’s accounting predecessor, is a limited liability company treated as a partnership for U.S. federal income tax purposes and is not subject to entity-level U.S. federal income tax, except with respect to UE, which was acquired in November 2019. Because UE is treated as a corporation for U.S. federal income tax purposes, it is subject to entity-level U.S. federal income tax. As a result of the Business Combination, Blocker’s allocable share of earnings from DMSH are also subject to U.S. federal and state and local income taxes. New Accounting Standards Recently Adopted Accounting Standards The Company qualifies as an “emerging growth company” and thus, has elected to adhere to the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act. This election allows the Company to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. In March 2020, the Financial Accounting Standards Board (“FASB”) issued guidance related to reference rate reform, which provides optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships, and other transactions that reference LIBOR and are affected by reference rate reform. The Company adopted the standard effective March 31, 2020 and elected the expedient to prospectively adjust the effective interest rate when LIBOR is replaced. We do not expect this standard to have a material impact on the Company’s consolidated financial statements. Accounting Standards Not Yet Adopted In February 2016, the FASB issued authoritative guidance regarding the accounting for leases, and has since issued subsequent updates to the initial guidance. The amended guidance requires the recognition of assets and liabilities for operating leases. The standard was initially effective for annual and interim reporting periods beginning after December 15, 2019. However, in November 2019, the FASB issued amended guidance, which defers the effective date for fiscal years beginning after December 15, 2020, including interim periods within those annual periods. The standard must be adopted using a modified retrospective transition. We plan to elect the following practical expedients: (1) not to reassess our prior conclusions regarding lease identification, lease classification and initial direct costs; and (2) the short term practical expedient for any leases with an initial term of 12 months or less and not recognize right-of-use assets or lease liabilities for those leases. The Company is currently evaluating all the impacts of adopting the new standard and expects the adoption of this standard to have a material impact on the Company’s consolidated balance sheet and related disclosures. In August 2018, the FASB issued authoritative guidance regarding customer's accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. These amendments align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The guidance is effective for fiscal periods beginning after December 15, 2020. We are currently evaluating the potential impact on our consolidated financial statements. |
BUSINESS COMBINATION
BUSINESS COMBINATION | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATION | BUSINESS COMBINATION On July 15, 2020, DMSH consummated the business combination with Leo pursuant to the Business Combination Agreement (the “Busines Combination Agreement”), by and among Leo, DMSH, Blocker, Prism Data, LLC, a Delaware limited liability company (“Prism”), CEP V-A DMS AIV Limited Partnership, a Delaware limited partnership (“Clairvest Direct Seller”) and related entities (the “Sellers”). In connection with the consummation of the Business Combination, the following occurred: • Leo was domesticated and continues as a Delaware corporation, changing its name to “Digital Media Solutions, Inc.” • The Company was organized into an umbrella partnership-C corporation (or “Up-C”) structure, in which substantially all of the assets and business of the Company are held by DMSH and continue to operate through the subsidiaries of DMSH, and the Company’s sole material assets are the equity interests of DMSH indirectly held by it. • DMS Inc. consummated the PIPE investment with certain qualified institutional buyers and accredited investors (the “PIPE Investors”), pursuant to which the PIPE Investors collectively subscribed for 10,424,282 shares of Class A Common Stock for an aggregate purchase price of $100.0 million. • DMS Inc. purchased all of the issued and outstanding common stock of Blocker and a portion of the units of DMSH held by Prism and Clairvest Direct Seller. Those DMSH membership interests were then immediately contributed to the capital of Blocker in exchange for aggregate consideration to the Sellers of $57.3 million in cash, 25,857,070 shares of Class B common stock, 2.0 million warrants to purchase Class A Common Stock, and 17,937,954 shares of Class C common stock. Refer to Note 9. Equity for a description of the Company’s common stock. • The Sellers amended and restated the limited liability company agreement of DMSH (the “Amended Partnership Agreement”), to, among other things: (i) recapitalize DMSH such that, as of immediately following the consummation of the Business Combination, Prism and Clairvest Direct Seller collectively own 25,857,070 of DMSH Units and Blocker owns 32,293,793 of DMSH Units; and (ii) provide Clairvest Direct Seller and Prism the right to redeem their DMSH Units for cash or, at the Company’s option, the Company may acquire the DMSH Units in exchange for cash or shares of Class A Common Stock, subject to certain restrictions set forth therein. • DMS issued 2.0 million warrants in exchange for previously held warrants in Leo, and an additional approximate 10.0 million warrants were issued in exchange for the warrants offered and sold by Leo in its initial public offering . Refer to Note 9. Equity for a description of the Company’s warrants. • DMS obtained $30.0 million in cash for working capital needs and $10.0 million to pay down outstanding indebtedness under the Monroe Facility. • The Sellers exercised their right to convert the shares of Class C Common Stock into shares of Class A Common Stock, on a one-for-one basis, in accordance with the new Certificate of Incorporation (the “Conversion”). • Prism and Clairvest Direct Seller continue to retain a significant continuing equity interest in the Company, representing 44% of the economic interests in DMSH and 44% of the voting interest in DMS Inc. (“non-controlling interest”). • On October 22, 2020, as required by the post-closing working capital adjustment provisions of the Business Combination Agreement, (i) the Company issued (a) 98,783 total additional shares of Class A Common Stock to the Blocker Sellers and (b) 142,394 total additional shares of Class B Common Stock to Prism and Clairvest Direct Seller. • In conjunction with the Business Combination, DMS Inc. and Blocker also entered into a tax receivable agreement (the “TRA”) with the Sellers. Pursuant to the TRA, DMS Inc. is required to pay the Sellers (i) 85% of the amount of savings, if any, in U.S. federal, state and local income tax that DMS Inc. and Blocker actually realize as a result of (A) certain existing tax attributes of Blocker acquired in the Business Combination, and (B) increases in tax basis and certain other tax benefits related to the payment of the cash consideration pursuant to the Business Combination Agreement and any exchanges for Class A Common Stock and (ii) 100% of certain refunds of pre-Closing taxes of DMSH and Blocker received during a taxable year beginning within two (2) years after the Closing. All such payments to the Sellers are the obligation of DMS Inc., and not that of DMSH. As a result of this agreement, the Company recorded a Deferred tax asset of $18.4 million with the offset as a Long-term TRA liability of $15.7 million and Additional Paid-in Capital of $2.8 million in the unaudited condensed consolidated balance sheets. At September 30, 2020, there were (i) 32,293,793 shares of Class A Common Stock outstanding, (ii) 25,857,070 shares of Class B Common Stock outstanding, (iii) no shares of Class C Common Stock outstanding and (iv) 13,999,998 warrants to purchase Class A Common Stock outstanding. In conjunction with the Business Combination, we incurred approximately $2.4 million of transaction expenses related to incentive bonuses and other acquisition related expenses, which were recorded as Acquisitions Costs in the unaudited condensed consolidated statements of operations during the three and nine months ended September 30, 2020. |
REVENUE
REVENUE | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE The Company derives revenue primarily through the delivery of various types of services, including: customer acquisition, managed services and software as a service (“SaaS”). The Company recognizes revenue when the promised goods or services are transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services. The Company has elected the practical expedient to not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which revenue is recognized in the amount to which the Company has the right to invoice for services performed. The Company has organized its operations into three reportable segments: Brand Direct, Marketplace and Other. The Brand Direct reportable segment consists of services delivered against our customer’s brand, while the Marketplace reportable segment includes services delivered directly against the DMS brand. In the Other reportable segment, services offered by the Company include software services and digital media services that are managed on behalf of the customer. Corporate and other represents other business activities and includes eliminating entries. Management uses these segments to evaluate the performance of its businesses and to assess its financial results and forecasts. Disaggregation of Revenue The following tables presents the disaggregation of revenue by reportable segment and type of service (in thousands): Brand Marketplace Other Corporate Total Three Months Ended September 30, 2020 Net revenue: Customer acquisition $ 43,921 $ 39,541 $ — $ (8,755) $ 74,707 Managed services 5,247 — 2,045 — 7,292 Software services — — 830 — 830 Total Net revenue $ 49,168 $ 39,541 $ 2,875 $ (8,755) $ 82,829 Three Months Ended September 30, 2019 Net revenue: Customer acquisition $ 41,330 $ 15,542 $ — $ (3,796) $ 53,076 Managed services 3,147 — 562 — 3,709 Software services — — 790 — 790 Total Net revenue $ 44,477 $ 15,542 $ 1,352 $ (3,796) $ 57,575 Brand Marketplace Other Corporate Total Nine Months Ended September 30, 2020 Net revenue: Customer acquisition $ 122,557 $ 108,937 $ — $ (19,001) $ 212,493 Managed services 12,885 — 2,945 — 15,830 Software services — — 2,430 — 2,430 Total Net revenue $ 135,442 $ 108,937 $ 5,375 $ (19,001) $ 230,753 Nine Months Ended September 30, 2019 Net revenue: Customer acquisition $ 124,173 $ 47,116 $ — $ (12,517) $ 158,772 Managed services 10,054 — 1,973 — 12,027 Software services — — 2,343 — 2,343 Total Net revenue $ 134,227 $ 47,116 $ 4,316 $ (12,517) $ 173,142 Contract balances The Company’s contract liabilities result from payments received in advance of revenue recognition received from clients, which precede the Company’s satisfaction of the associated performance obligation. If a customer pays consideration before the Company’s performance obligations are satisfied, such amounts are classified as deferred revenue on the consolidated balance sheets. As of September 30, 2020 and December 31, 2019, the balance of deferred revenue was $0.4 million and $1.2 million, respectively, and recorded within Accrued expenses and other current liabilities on the unaudited condensed consolidated balance sheets. During the nine months ended September 30, 2020 and 2019, we recognized revenue of $1.2 million and $1.3 million, respectively, related to deferred revenue recorded at December 31, 2019 and 2018, respective ly. We expect the majority of the deferred revenue balance at September 30, 2020 to be recognized as revenue during the fourth quarter of 2020. When there is a delay between the completion of our performance obligations and when a customer is invoiced, revenue is recognized and recorded as unbilled revenue (i.e. contract assets) within Accounts receivable, net on the unaudited condensed consolidated balance sheets. As of September 30, 2020 and December 31, 2019, unbilled revenue included in accounts receivable was $2.0 million and $0.8 million, respectively. In line with industry practice, the Company applies the constraint on variable consideration and records revenue based on internally tracked conversions (leads delivered), net of the amount tracked and subsequently confirmed by customers. Substantially all amounts included within the unbilled revenue balance are invoiced to customers within the month directly following the period of service. Historical estimates related to unbilled revenue have not been materially different from actual revenue billed. |
REPORTABLE SEGMENTS
REPORTABLE SEGMENTS | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
REPORTABLE SEGMENTS | REPORTABLE SEGMENTS The Company’s operating segments are determined based on the financial information reviewed by its chief operating decision maker (“CODM”), and the basis upon which management makes resource allocation decisions and assesses the performance of the Company’s segments. The Company evaluates the operating performance of its segments based on financial measures such as net revenue, cost of revenue, and gross profit. Given the nature of the digital marketing solutions business, the amount of assets does not provide meaningful insight into the operating performance of the Company. As a result, the amount of the Company’s assets is not subject to segment allocation and total assets is not included within the disclosure of the Company’s segment financial information. The following tables are a reconciliation of the operations of our segments to income from operations (in thousands): Three Months Ended September 30, 2020 Brand Marketplace Other Corporate Total Net revenue $ 49,168 $ 39,541 $ 2,875 $ (8,755) $ 82,829 Cost of revenue 37,828 27,661 1,043 (8,755) 57,777 Gross profit $ 11,340 $ 11,880 $ 1,832 $ — $ 25,052 Salaries and related costs 7,882 General and administrative expenses 6,407 Acquisition costs 3,248 Depreciation and amortization 4,636 Income from operations $ 2,879 Three Months Ended September 30, 2019 Brand Marketplace Other Corporate Total Net revenue $ 44,477 $ 15,542 $ 1,352 $ (3,796) $ 57,575 Cost of revenue 33,499 9,366 32 (3,796) 39,101 Gross profit $ 10,978 $ 6,176 $ 1,320 $ — $ 18,474 Salaries and related costs 6,599 General and administrative expenses 4,479 Acquisition costs 11,707 Depreciation and amortization 2,201 Loss from operations $ (6,512) Nine Months Ended September 30, 2020 Brand Marketplace Other Corporate Total Net revenue $ 135,442 $ 108,937 $ 5,375 $ (19,001) $ 230,753 Cost of revenue 103,125 75,101 1,113 (19,001) 160,338 Gross profit $ 32,317 $ 33,836 $ 4,262 $ — $ 70,415 Salaries and related costs 24,114 General and administrative expenses 16,356 Acquisition costs 3,322 Depreciation and amortization 13,307 Income from operations $ 13,316 Nine Months Ended September 30, 2019 Brand Marketplace Other Corporate Total Net revenue $ 134,227 $ 47,116 $ 4,316 $ (12,517) $ 173,142 Cost of revenue 100,171 29,345 85 (12,517) 117,084 Gross profit $ 34,056 $ 17,771 $ 4,231 $ — $ 56,058 Salaries and related costs 20,495 General and administrative expenses 13,514 Acquisition costs 17,492 Depreciation and amortization 6,165 Loss from operations $ (1,608) |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Goodwill Changes in the carrying value of goodwill, by reporting segment, were as follows (in thousands): Brand Marketplace Other Total Balance, December 31, 2019 $ 8,616 $ 32,660 $ 550 $ 41,826 Additions (Note 7) — — 2,542 2,542 Balance, September 30, 2020 $ 8,616 $ 32,660 $ 3,092 $ 44,368 The carrying amount of goodwill for all reporting units had no accumulated impairments as of September 30, 2020 and December 31, 2019. Intangible assets, net Finite-lived intangible assets consisted of the following (in thousands): September 30, 2020 December 31, 2019 Amortization Gross Accumulated Net Gross Accumulated Net Intangible assets subject to amortization: Technology 3 to 5 $ 47,946 $ (17,827) $ 30,119 $ 47,946 $ (9,751) $ 38,195 Customer relationships 1 to 12 22,383 (5,127) 17,256 19,583 (3,078) 16,505 Brand 1 to 5 4,459 (2,571) 1,888 4,187 (2,556) 1,631 Non-competition agreements 3 1,815 (803) 1,012 1,815 (211) 1,604 Total $ 76,603 $ (26,328) $ 50,275 $ 73,531 $ (15,596) $ 57,935 Amortization expense for finite-lived intangible assets is recorded on a straight-line basis in the pattern in which the assets’ economic benefits are consumed over their estimated useful lives. Amortization expense related to finite-lived intangible assets was $10.7 million and $5.0 million for the nine months ended September 30, 2020 and 2019, respectively. Impairment analysis For the nine months ended September 30, 2020, there were no events or changes in circumstances to indicate that goodwill or intangible assets are impaired. |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT The following table presents the components of outstanding debt (in thousands): September 30, 2020 December 31, 2019 Term loan $ 191,514 $ 194,810 Revolving credit facility 4,000 5,000 Delayed draw term loan 8,301 8,429 Total debt 203,815 208,239 Unamortized debt issuance costs (2,606) (3,041) Debt, net 201,209 205,198 Current portion of long-term debt (4,150) (4,150) Long-term debt $ 197,059 $ 201,048 On July 3, 2018, DMSH entered into a Credit Agreement with Monroe Capital Management Advisors (as administrative agent and lender) (the “Monroe Facility”). The Monroe Facility matures in July 2023 and bears interest at a variable rate equal to the three-month LIBOR, or an alternate base rate, plus an agreed upon margin with the lender. The Monroe Facility also contains covenants that require the Company to meet certain financial ratios and places restrictions on the payment of dividends, sale of assets, borrowing level, mergers, and purchases of capital stock, assets, and investments. During the year ended December 31, 2019 the Monroe Facility’s capacity was amended to increase the term loan by $99.0 million for a total term commitment of $199.0 million, and this amendment also increased capacity on the revolver by an additional $2.5 million, for a total amended capacity of $221.5 million, which had an effective interest rate of 6.8% for the year ended December 31, 2019. The Company used the funds to finance a portion of the acquisition of UE, accelerate contingent consideration payments, and to add to general working capital. Refer to Note 7. Acquisitions, for a more detailed discussion on the acquisition of UE. On January 7, 2020, the Monroe Facility was amended to increase the revolver commitment to $15.0 million. On August 26, 2020, we amended the Monroe Facility to, among other things, (i) modify the covenant calculation of EBITDA to include certain transaction expenses incurred in connection with the Business Combination and (ii) exclude certain accounts from the SmarterChaos acquisition. |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS Smarterchaos and She is Media On July 16, 2020, the Company acquired SmarterChaos.com, LLC, a premier digital marketing and online performance management marketer, along with She Is Media, a female-centric performance ad network, (collectively, “SmarterChaos”) for cash and equity of DMSH totaling approximately $5.8 million, net of cash, which is subject to a working capital adjustment. This acquisition expanded media distribution, allowing the Company to further accelerate the digital marketing acquisition efforts of its advertiser clients and enable brands to acquire new customers by leveraging our customer acquisition platform and the relationships cultivated by SmarterChaos. DMSH issued the SmarterChaos sellers approximately 307 thousand DMSH Units, which are convertible to Class A Common Stock, with an aggregate total value of $3.0 million based on the DMS Inc. stock price on July 15, 2020. The SmarterChaos sellers also became parties to the Amended Partnership Agreement. In conjunction with this acquisition, we incurred approximately $0.4 million of legal and other acquisition-related expenses, which were recorded as Acquisitions Costs in the unaudited condensed consolidated statements of operations during the three and nine months ended September 30, 2020. The Company primarily used an Income Approach, specifically a Discounted Cash Flow (“DCF”) analysis, which represents Level 3 fair value measurements, to assess the components of its purchase price allocation. The acquisition was accounted for as a business combination, whereby the excess of the fair value of the business over the fair value of identifiable net assets was allocated to goodwill. The results of operations of the acquired businesses have been included in the Company’s results of operations since the acquisition date of July 16, 2020. Under Accounting Standards Codification 805 (ASC 805), an acquirer must recognize any assets acquired and liabilities assumed at the acquisition date, measured at fair value as of that date. Assets meeting the identification criteria included tangible assets, such as real and personal property, and intangible assets. Identified intangible assets included the brand and customer relationships of the acquired business. The fair value of the brand was determined by applying an Income Approach, specifically the Relief from Royalty Method. The fair value of the acquired customer relationships was determined by applying an Income Approach, specifically the Multi Period Excess Earnings Method. As of September 30, 2020, the purchase accounting measurement period has not been finalized primarily due to the working capital adjustment, open tax contingencies and the valuation of DMSH units and intangibles. The following table presents the preliminary fair value allocation of the purchase price to the assets acquired, and liabilities assumed (in thousands): July 16, 2020 Goodwill $ 2,542 Brand 272 Customer relationships 2,800 Accounts receivable 833 Other assets acquired 30 Liabilities assumed (678) Net assets acquired $ 5,799 The goodwill related to this transaction reflects the workforce and synergies expected from combining the operations of SmarterChaos and is included in the Other reportable segment. Intangible assets primarily consist of brand and customer relationships with an estimated useful life of three Management is working with the SmarterChaos sellers on the working capital adjustment per the purchase agreement and expects that this will be resolved in the fourth quarter of 2020. Revenue and net income for SmarterChaos of $1.5 million and $0.1 million, respectively, were included in the unaudited condensed consolidated statements of operations during the three and nine months ended September 30, 2020. UE Authority, Co. On November 1, 2019, the Company acquired UE for cash of approximately $56.6 million, which includes closing purchase price adjustments. The acquisition of UE supports the Company’s strategy of broadening its reach in the insurance vertical. The Company primarily used an income method, or discounted cash flow (“DCF”) analysis, which represent Level 3 fair value measurements, to assess the components of its purchase price allocation. The acquisition was accounted for as a business combination, whereby the excess of the fair value of the business over the fair value of identifiable net assets was allocated to goodwill. The results of operations of the acquired business have been included in the Company’s results of operations since the acquisition date of November 1, 2019. The fair value of the acquired technology and customer relationships was determined using the multi period excess earnings approach. The fair value of the acquired brand was determined using the Relief from Royalty (“RFR”) method. The fair value of the non-competition agreement was determined using the income approach. As of September 30, 2020, the purchase accounting measurement period has not been finalized primarily due to open tax contingencies. The following table presents the preliminary fair value allocation of the purchase price to the assets acquired, and liabilities assumed (in thousands): November 1, 2019 Goodwill $ 29,723 Technology 26,000 Brand 690 Non-competition agreements 1,520 Customer relationships 10,300 Other assets acquired 6,393 Liabilities assumed (9,045) Deferred tax liability (8,961) Net assets acquired $ 56,620 The goodwill related to this transaction reflects the workforce and synergies expected from combining the operations of UE and is included in the Marketplace reportable segment. Intangible assets primarily consist of customer relationships, technology, non-competition agreements and brand with an estimated useful life of nine years, five years, three years and one year, respectively. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The Company utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. Contingent consideration related to acquisitions The fair value of the contingent consideration was determined using a Monte Carlo fair value analysis based on estimated performance and the probability of achieving certain targets. As certain inputs are not observable in the market, the contingent consideration is classified as a Level 3 instrument. During the nine months ended September 30, 2020, we paid this contingent consideration of $1.0 million. The following table presents assets and liabilities measured at fair value on a recurring basis (in thousands): December 31, 2019 Category Balance Sheet Location Level 1 Level 2 Level 3 Total Liabilities: Contingent consideration Contingent consideration payable $ — $ — $ 1,000 $ 1,000 Total $ — $ — $ 1,000 $ 1,000 The following table represents the change in the contingent consideration (in thousands): Level 3 December 31, 2019 $ 1,000 Additions — Changes in fair value — Settlements (1,000) September 30, 2020 $ — |
EQUITY
EQUITY | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
EQUITY | EQUITY Authorized Capitalization The total amount of the Company’s authorized capital stock consists of 600,000,000 shares of common stock, par value $0.0001 per share, of the DMS Inc., consisting of (i) 500,000,000 shares of Class A Common Stock, (ii) 60,000,000 shares of Class B Common Stock, (iii) 40,000,000 shares of Class C Common Stock, and (iv) 100,000,000 shares of preferred stock, par value $0.0001 per share, of the DMS Inc. (“Company Preferred Stock”). As of September 30, 2020, there were 32,293,793 shares of Class A Common Stock outstanding and 25,857,070 shares of Class B Stock outstanding. Company Common Stock The following table sets forth the economic and voting interests of the Company’s common stockholders as of September 30, 2020: Class Total Shares (1) Economic Ownership Economic Ownership Voting Ownership Class A Common Stock 32,293,793 55.2 % 100.0 % 55.5 % Class B Common Stock 25,857,070 44.2 % — % 44.5 % (1) Represents the total number of outstanding shares for each class of DMS Inc. common stock as of September 30, 2020. (2) Represents (i) the Class A Common Stock holders’ indirect economic interest in DMSH through their ownership of Class A Common Stock and (ii) the Class B Common Stock holders’ direct economic interest in DMSH through their ownership of DMSH Units. The remaining economic ownership is held by the sellers in SmarterChaos acquisition. (3) Represents the aggregate economic interest in the DMS Inc. through the stockholders' ownership of Class A Common Stock. (4) Represents the aggregate voting interest in the DMS Inc. through the stockholders' ownership of Company common stock. Voting rights Each holder of Company Common Stock is entitled to one (1) vote for each share of Company Common Stock held of record by such holder. The holders of shares of Company Common Stock do not have cumulative voting rights. Except as otherwise required in the Company Certificate of Incorporation or by applicable law, the holders of Class A Common Stock, Class B Common Stock and Class C Common Stock will vote together as a single class on all matters on which stockholders are generally entitled to vote (or, if any holders of Company Preferred Stock are entitled to vote together with the holders of Company Common Stock, as a single class with such holders of Company Preferred Stock). In addition to any other vote required in the Company Certificate of Incorporation or by applicable law, the holders of Class A Common Stock, Class B Common Stock and Class C Common Stock will each be entitled to vote separately as a class only with respect to amendments to the Company Certificate of Incorporation that increase or decrease the par value of the shares of such class or alter or change the powers, preferences or special rights of the shares of such class so as to affect them adversely. Notwithstanding the foregoing, except as otherwise required by law, holders of Company Common Stock, as such, will not be entitled to vote on any amendment to the Company Certificate of Incorporation (including any Preferred Stock Designation (as defined in the Company Certificate of Incorporation) relating to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together as a class with the holders of one or more other such series, to vote thereon pursuant to the Company Certificate of Incorporation (including any Preferred Stock Designation relating to any series of Preferred Stock) or pursuant to the General Corporation Law of the State of Delaware (the “ DGCL”). Dividend rights Subject to any other provisions of the Company Certificate of Incorporation, as it may be amended from time to time, holders of shares of Class A Common Stock are entitled to receive ratably, in proportion to the number of shares of Class A Common Stock held by them, such dividends and other distributions in cash, stock or property of the Company when, as and if declared thereon by the Company’s board of directors (the “Board”) from time to time out of assets or funds of the Company legally available therefor. Except as provided in the Company Certificate of Incorporation, dividends and other distributions will not be declared or paid on the Class B Common Stock. Subject to any other provisions of the Company Certificate of Incorporation, as it may be amended from time to time, holders of shares of Class C Common Stock are entitled to receive ratably, in proportion to the number of shares held by them, the dividends and other distributions in cash, stock or property of the Company payable or to be made on outstanding shares of Class A Common Stock that would have been payable on the shares of Class C Common Stock if each such share of Class C Common Stock had been converted into a fraction of a share of Class A Common Stock equal to the Conversion Ratio (as defined in the Company Certificate of Incorporation) immediately prior to the record date for such dividend or distribution. The holders of shares of Class C Common Stock are entitled to receive, on a pari passu basis with the holders of the Class A Common Stock, such dividend or other distribution on the Class A Common Stock when, as and if declared by the Board from time to time out of assets or funds of the Company legally available therefor. At September 30, 2020, there were no shares of Class C Common Stock outstanding. Redemption Pursuant to the terms and subject to the conditions of the Amended Partnership Agreement, each holder (other than Blocker) of a DMSH Unit has the right (the “Redemption Right”) to redeem each such DMSH Unit for the applicable Cash Amount (as defined in the Amended Partnership Agreement), subject to the Company’s right, in its sole and absolute discretion, to elect to acquire some or all of such DMSH Units that such holder has tendered for redemption for a number of shares of Class A Common Stock, an amount of cash or a combination of both (the “Exchange Option”), in the case of each of the Redemption Right and the Exchange Option, on and subject to the terms and conditions set forth in the Company Certificate of Incorporation and in the Amended Partnership Agreement. Retirement of Class B Common Stock In the event that (i) any DMSH Unit is consolidated or otherwise cancelled or retired or (ii) any outstanding share of Class B Common Stock held by a holder of a corresponding DMSH Unit otherwise ceases to be held by such holder, in each case, whether as a result of exchange, reclassification, redemption or otherwise (including in connection with the Redemption Right and the Exchange Option as described above), then the corresponding share(s) of Class B Common Stock, if any, (which, for the avoidance of doubt, will be equal to such DMSH Unit divided by the Conversion Ratio prior to and until the Effective Time (as defined below) (in the case of (i)) or such share of Class B Common Stock (in the case of (ii)) will automatically and without further action on the part of the Company or any holder of Class B Common Stock be transferred to the Company for no consideration and thereupon will be retired and restored to the status of authorized but unissued shares of Class B Common Stock. Rights upon Liquidation In the event of any liquidation, dissolution or winding up (either voluntary or involuntary) of the Company after payments to creditors of the Company that may at the time be outstanding, and subject to the rights of any holders of Preferred Stock that may then be outstanding, holders of shares of Class A Common Stock and Company C Common Stock will be entitled to receive ratably, in proportion to the number of shares held by them, all remaining assets and funds of the Company available for distribution; provided, however, that, for purposes of any such distribution, each share of Class C Common Stock will be entitled to receive the same distribution as would have been payable if such share of Class C Common Stock had been converted into a fraction of a share of Company A Common Stock equal to the Conversion Ratio immediately prior to the record date for such distribution. The holders of shares of Class B Common Stock, as such, will not be entitled to receive any assets of the Company in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company. Automatic Conversion of Class B Common Stock Immediately and automatically upon the earlier of (i) July 4, 2024 and (ii) the date on which there are no amounts owed to any lender pursuant to the Credit Facility, each share of Class B Common Stock will automatically and without any action on the part of the holder thereof, be reclassified as and changed, pursuant to a reverse stock split, into a fraction of a share of Class B Common Stock equal to the Conversion Ratio (the “Effective Time”). Conversion of Class C Common Stock Each holder of Class C Common Stock has the right, at such holder’s option, at any time, to convert all or any portion of such holder’s shares of Class C Common Stock, and the Company will have the right, at the Company’s option, from and after the Effective Time, to convert all or any portion of the issued and outstanding shares of Class C Common Stock, in each case into shares of fully paid and non-assessable Class A Common Stock at the ratio of one (1) share of Class A Common Stock for the number of shares of Class C Common Stock equal to the Issuance Multiple (as defined in the Business Combination Agreement) so converted. Transfers The holders of shares of Class B Common Stock will not transfer such shares other than as part of a concurrent transfer of (i) if prior to the Effective Time, a number of DMSH Units equal to the number of shares of Company Common Stock being so Transferred multiplied by the Conversion Ratio or (ii) if after the Effective Time, an equal number of DMSH Units, in each case made to the same transferee in accordance with the restrictions on transfer contained in the Amended Partnership Agreement. Other rights No holder of shares of Company Common Stock are entitled to preemptive or subscription rights. There are no redemption or sinking fund provisions applicable to the Company Common Stock. The rights, preferences and privileges of holders of the Company Common Stock will be subject to those of the holders of any shares of the Preferred Stock the Company may issue in the future. Preferred Stock The Board has the authority to issue shares of preferred stock from time to time on terms it may determine, to divide shares of preferred stock into one or more series and to fix the designations, preferences, privileges, and restrictions of preferred stock, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preference, sinking fund terms, and the number of shares constituting any series or the designation of any series to the fullest extent permitted by the DGCL. The issuance of Preferred Stock of the Company could have the effect of decreasing the trading price of Company Common Stock, restricting dividends on the capital stock of the Company, diluting the voting power of the Company Common Stock, impairing the liquidation rights of the capital stock of the Company, or delaying or preventing a change in control of the Company. At September 30, 2020, there were no shares of preferred stock outstanding. Warrants Each Company Public Warrant entitles the registered holder to purchase one share of Class A Common Stock at a price of $11.50 per share, subject to adjustment. Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of shares of Class A Common Stock. This means only a whole warrant may be exercised at a given time by a warrant holder. The warrants will expire five years after the Business Combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation. The Company Private Placement Warrants are not be redeemable by the Company so long as they are held by Sponsor or its permitted transferees. Sponsor, or its permitted transferees, has the option to exercise the Company Private Placement Warrants on a cashless basis. Except for the forgoing, the Company Private Placement Warrants have terms and provisions that are identical to those of the Company Public Warrants. If the Company Private Placement Warrants are held by holders other than Sponsor or its permitted transferees, the Company Private Placement Warrants will be redeemable by Company and exercisable by the holders on the same basis as the Company Public Warrants. The Company may call the Company Public Warrants for redemption as follows: (1) in whole and not in part; (2) at a price of $0.01 per warrant; (3) upon a minimum of 30 days’ prior written notice of redemption; and (4) only if the last reported closing price of the Class A Common Stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders. If the Company calls the Company Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Company Public Warrants to do so on a “cashless basis.” The exercise price and number of Class A Common Stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend, recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuances of Class A Common Stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrant shares. At September 30, 2020, approximately 14.0 million warrants were outstanding. Non-controlling Interest The non-controlling interest represents the membership interest in DMSH held by holders other than the Company. On July 15, 2020, upon the close of the Business Combination, the Prism and Clairvest Direct Sellers combined ownership percentage in DMSH was 44.5%. On July 16, 2020, DMSH issued approximately 307 thousand additional DMSH Units to the sellers in the SmarterChaos acquisition, which are included in the non-controlling interest of approximately 44.8%. The Company has consolidated the financial position and results of operations of DMSH and reflected the proportionate interest held by Prism, Clairvest Direct Seller and the SmarterChaos sellers as a non-controlling interest. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Registration Rights At the Closing, the Company entered into an amended and restated registration rights agreement with certain Sellers (the “Amended and Restated Registration Rights Agreement”), pursuant to which the Company registered for resale certain shares of Class A Common Stock and warrants to purchase Class A Common Stock that were held by the parties thereto. Additionally, the Sellers may request to sell all or any portion of their shares of Class A Common Stock in an underwritten offering that is registered pursuant to the shelf registration statement filed by the Company (each, an “Underwritten Shelf Takedown”); however, the Company will only be obligated to effect an Underwritten Shelf Takedown if such offering will include securities with a total offering price reasonably expected to exceed, in the aggregate, $20.0 million and will not be required to effect more than four Underwritten Shelf Takedowns in any six Amended Partnership Agreement Pursuant to the Amended Partnership Agreement, following the expiration of the lock-up period under the lock-up agreement entered into by the Company and the Sellers at the Closing, the non-controlling interests (as defined in the Amended Partnership Agreement) will have the right to redeem their DMSH Units for cash (based on the market price of the shares of Class A Common Stock) or, at the Company’s option, the Company may acquire such DMSH Units (which DMSH Units are expected to be contributed to Blocker) in exchange for cash or Class A Common Stock (a “Redemption”) on a one-for-one basis (subject to customary conversion rate adjustments, including for stock splits, stock dividends and reclassifications), in each case subject to certain restrictions and conditions set forth therein, including that any such Redemption be for an amount no less than the lesser of 10,000 DMSH Units or all of the remaining DMSH Units held by such Non-Blocker Member. In the event of a change of control transaction with respect to a Non-Blocker Member, DMSH will have the right to require such Non-Blocker Member to effect a Redemption with respect to all or any portion of the DMSH Units transferred in such change of control transaction. In connection with any Redemption (other than a Redemption by the SmarterChaos sellers) a number of shares of Class B Common. Stock will automatically be surrendered and cancelled in accordance with the Company Certificate of Incorporation. Tax Receivable Agreement In conjunction with the Business Combination, DMS Inc. and Blocker also entered into the TRA with the Sellers. Pursuant to the TRA, DMS Inc. is required to pay the Sellers (i) 85% of the amount of savings, if any, in U.S. federal, state and local income tax that DMS Inc. and Blocker actually realize as a result of (A) certain existing tax attributes of Blocker acquired in the Business Combination, and (B) increases in tax basis and certain other tax benefits related to the payment of the cash consideration pursuant to the Business Combination Agreement and any exchanges for Class A Common Stock and (ii) 100% of certain refunds of pre-Closing taxes of DMSH and Blocker received during a taxable year beginning within two (2) years after the Closing. All such payments to the Sellers are the obligation of DMS Inc., and not that of DMSH. As a result, the Company recorded a Deferred tax asset of $18.4 million with the offset as a Long-term TRA liability of $15.7 million and Additional Paid-in Capital of $2.8 million in the unaudited condensed consolidated balance sheets. As of September 30, 2020, the total amount of payments under the TRA was $15.7 million, of which $0.5 million was current and included in Accrued expenses and other current liabilities on the unaudited condensed consolidated balance sheet. Lock-Up Agreement At the Closing, Sellers executed and delivered to the Company a lock up agreement (the “Lock-Up Agreement”), pursuant to which, among other things, Sellers agreed not to, subject to certain exceptions set forth in the Lock-Up Agreement, during the period commencing from the Closing and through the 180 day anniversary of the date of the Closing (the “Lock-Up Period”): (i) lend, offer, pledge, hypothecate, encumber, donate, assign, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of any Class A Common Stock, or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of Class A Common Stock, whether any such transaction described in clauses (i) or (ii) above is to be settled by delivery of Class A Common Stock or other securities, in cash or otherwise. Any waiver by the Company of the provisions of the Lock-Up Agreement requires the approval of a majority of the Company’s directors who qualify as “independent” for purposes of serving on the audit committee under the applicable rules of the SEC (including Rule 10A-3 of the Securities Exchange Act of 1934). On July 29, 2020, the Company’s Chief Executive Officer (“CEO”) and Chief Operating Officer (“COO”) executed joinder agreements to the Lock-Up Agreement in connection with Prism’s distribution of 538,912 and 538,911 Seller Warrants to CEO and COO, respectively, as a permitted transfer under the Amended Warrant Agreement and the Lock-Up Agreement. Management Agreement In consideration for various management and advisory services, DMSH pays to one of its members a quarterly retainer of $50 thousand plus any out-of-pocket expenses. The total expense for the nine months ended September 30, 2020 and 2019 was $0.1 million and $0.2 million, respectively, which was recorded in General and administrative expenses in the unaudited condensed consolidated statements of operations. The management agreement was terminated in connection with the Business Combination. DMSH Member Tax Distributions For the nine months ended September 30, 2020 and 2019, tax distributions to members of DMSH were $0.2 million and $21.6 million, respectively. |
BENEFIT PLANS
BENEFIT PLANS | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
BENEFIT PLANS | BENEFIT PLANS 2020 Omnibus Incentive Plan On July 15, 2020, Leo’s shareholders approved the 2020 Omnibus Incentive Plan (the “2020 Plan”). The 2020 Plan allows for the issuance of stock options, stock appreciation rights, stock awards (including restricted stock awards (“RSAs”) and Restricted Stock Units (“RSUs”) and other stock-based awards. The aggregate number of shares reserved under the 2020 Plan is approximately 11.6 million. The 2020 Plan terminates on June 24, 2030. During the three months ended September 30, 2020, there were no shares granted under the 2020 Plan. Employee Incentive Plan The Company instituted a transaction-based cash bonus plan, the Digital Media Solutions, LLC Employee Incentive Plan (the “EIP”), in 2017, which was amended and restated on January 31, 2019. The EIP provides for a cash bonus pool payout to vested participants upon the occurrence of a “Sale of the Company” prior to December 31, 2024, in which the equity value (as determined by the board of managers) exceeds $100 million. Each EIP participant was awarded a number of bonus pool units, and is entitled to a pro rata share of the aggregate bonus pool based on the total number of vested bonus pool units held among all participants. DMSH also instituted a second transaction-based cash bonus plan on November 1, 2019, which mirrors the first plan, except that the equity value was raised to $325 million. On April 23, 2020, DMSH entered into a Business Combination with Leo. Although this business combination is not considered a “Sale of the Company” for purposes of the EIP, the board of managers was permitted at its discretion to make a payment under the plan as it deemed fit upon consummation of the business combination. The board of managers elected to pay a total of approximately $250 thousand in cash to EIP participants in connection with the Business Combination, which was paid during the three and nine months ended September 30, 2020, and these plans were terminated. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Legal proceedings The Company is subject to legal, regulatory and other proceedings and claims that arise in the ordinary course of business. An estimated liability is recorded for those proceedings and claims when the loss from such proceedings and claims becomes probable and reasonably estimable. The risk of loss is reassessed each quarter and liabilities are adjusted as new information becomes available. The actual cost of resolving a claim may be substantially different from the amount of the liability recorded. Differences between the estimated and actual amounts determined upon ultimate resolution, individually or in the aggregate, are not expected to have a material adverse effect on the consolidated financial position, but could be material to the consolidated results of operations or cash flows for any one period. Lease agreements The Company leases certain office locations, including both long-term and short-term leases, with several leases offering renewal options. Rent expense for the nine months ended September 30, 2020 and 2019 was $1.9 million and $1.5 million, respectively. At September 30, 2020, the future minimum lease payments for the Company were comprised of the following (in thousands): Year Ending December 31: 2020 $ 595 2021 2,040 2022 1,941 2023 1,806 2024 1,304 Thereafter 425 Total $ 8,111 Management analyzed our current leases due to the COVID-19 economic environment and recorded a reserve of approximately $1.0 million as a result of the cease use of certain leased properties (included in the future minimum lease payments above) , which was included in General and administrative expenses in the unaudited condensed consolidated statements of operations during the three and nine months ended September 30, 2020. As of September 30, 2020, $0.9 million is accrued for within Accrued expenses and other current liabilities and $0.1 million is accrued for within Other non-current liabilities, on the unaudited condensed consolidated balance sheets. DMSH Unit Redemption Rights The Amended and Restated Partnership Agreement includes provisions intended to ensure that the Company at all times maintains a one-to-one ratio between (i) the number of outstanding shares of Class A Common Stock (including the number of shares of Class A Common Stock into which all of the outstanding shares of Class C Common Stock are convertible in accordance with the Company Certificate of Incorporation) and (ii) the aggregate number of DMSH Units owned by DMS Inc., its subsidiaries and any consolidated, combined, unitary or similar group of entities that join in filing any tax return with DMS Inc. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES As a result of the Business Combination, the Company consists of DMS Inc. and its wholly-owned subsidiary, Blocker, which owns 55.2% of equity interests in DMSH (after the SmarterChaos acquisition). DMSH is treated as a partnership for purposes of U.S. federal and certain state and local income tax. As a U.S. partnership, generally DMSH will not be subject to corporate income taxes (except with respect to UE, as described below). Instead, each of the ultimate partners (including DMS Inc.) are taxed on their proportionate share of DMSH taxable income. While the Company consolidates DMSH for financial reporting purposes, the Company will only be taxed on its allocable share of future earnings (i.e. those earnings not attributed to the non-controlling interests, which continue to be taxed on their own allocable share of future earnings of DMSH). The Company’s income tax expense is attributable to the allocable share of earnings from DMSH, a portion of activities of DMSH that are subject to Canadian income tax, and the activities of UE, a wholly-owned U.S. corporate subsidiary of DMSH, which is subject to U.S. federal and state and local income taxes. The income tax burden on the earnings allocated to the non-controlling interests is not reported by the Company in its condensed consolidated financial statements under GAAP. As a result, the Company’s effective tax rate is expected to differ materially from the statutory rate. The Company’s tax provision or benefit from income taxes for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any. Each quarter the Company updates its estimate of the annual effective tax rate and makes a year-to-date adjustment to the provision. The Company recorded income tax expense of $1.6 million for the three months ended September 30, 2020. The blended effective tax rate for the three and nine months ended September 30, 2020 was 74.2%, which varies from our statutory U.S. tax rate due to the tax impact of the taxable income or loss that is allocated to the non-controlling interest. The Company recorded no income tax expense or benefit for the three and nine months ended September 30, 2019. Tax Receivable Agreement In conjunction with the Business Combination, DMS Inc. and Blocker also entered into the TRA with the Sellers. Pursuant to the TRA, DMS Inc. is required to pay the Sellers (i) 85% of the amount of savings, if any, in U.S. federal, state and local income tax that DMS Inc. and Blocker actually realize as a result of (A) certain existing tax attributes of Blocker acquired in the Business Combination, and (B) increases in tax basis and certain other tax benefits related to the payment of the cash consideration pursuant to the Business Combination Agreement and any exchanges for Class A Common Stock and (ii) 100% of certain refunds of pre-Closing taxes of DMSH and Blocker received during a taxable year beginning within two (2) years after the Closing. All such payments to the Sellers are the obligation of DMS Inc., and not that of DMSH. As a result of the Business Combination, the Company recorded a Deferred tax asset of $18.4 million with the offset as a Long-term TRA liability of $15.7 million and Additional Paid-in Capital of $2.8 million in the unaudited condensed consolidated balance sheet. As of September 30, 2020, the total amount of payments under the TRA was $15.7 million, of which $0.5 million was current and included in Accrued expenses and other current liabilities on the unaudited condensed consolidated balance sheet. CARES Act On March 27, 2020, the “Coronavirus Aid, Relief and Economic Security (CARES) Act” was signed into law. The CARES Act includes income tax provisions relating to net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. The Company benefited from the deferral of payroll taxes and expects to continue to benefit for the remainder of 2020. Management is still evaluating all the impacts of the CARES Act on our business. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE Basic earnings per share of Class A common stock is computed by dividing net income attributable to DMS Inc. by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted earnings per share of Class A common stock is computed by dividing net income attributable to DMS Inc., adjusted for the assumed exchange of all potentially dilutive securities, by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive elements. Diluted loss per share for all period presented is the same as basic loss per share as the inclusion of the potentially issuable shares would be anti-dilutive. Prior to the Business Combination, the membership structure of DMSH included units which had profit interests. The Company analyzed the calculation of earnings per unit for periods prior to the Business Combination and determined that it resulted in values that would not be meaningful to the users of these unaudited condensed consolidated financial statements. Therefore, earnings per share information has not been presented for periods prior to the Business Combination on July 15, 2020. The basic and diluted earnings per share for the three and nine months ended September 30, 2020 represent only the period of July 15, 2020 to September 30, 2020. The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock: Three Months Ended Nine Months Ended Numerator: Net (loss) income $ (2,178) $ 713 Less: Net loss attributable to DMSH prior to the Business Combination (4,236) (1,345) Less: Net income attributable to noncontrolling interests subsequent to the Business Combination 921 921 Net income attributable to DMS Inc. $ 1,137 $ 1,137 Denominator: Weighted-average shares of Class A Common Stock outstanding - basic and diluted 32,294 32,294 Earnings per share of Class A Common Stock - basic and diluted $ 0.04 $ 0.04 Shares of the Company’s Class B common stock do not participate in the earnings or losses of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class B common stock under the two-class method has not been presented. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of presentation | Basis of Presentation These unaudited condensed consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the 2020 S-1. The Unaudited Condensed Consolidated Balance Sheet at December 31, 2019 was derived from the audited Consolidated Balance Sheet as of December 31, 2019, as presented in the 2020 S-1. In management’s opinion, these unaudited condensed consolidated financial statements reflect all normal and recurring adjustments considered necessary for a fair presentation. |
Principles of consolidation | Principles of Consolidation The Company consists of DMS Inc. and its wholly-owned subsidiary, Blocker. Pursuant to the Business Combination, DMS Inc. acquired, directly and through its acquisition of the equity of Blocker, approximately 55.5% of the membership interest in DMSH, while the Sellers (as defined in Note 2. Business Combination) retained approximately 44.5% of the membership interest in DMSH (“non-controlling interests”). The Company consolidates the assets, liabilities and operating results of DMSH and its wholly-owned subsidiaries. All intercompany activity and balances have been eliminated as part of the consolidation. The results of operations attributable to the non-controlling interests are included in the Company’s unaudited condensed consolidated statements of operations, and the non-controlling interests are reported as a separate component of equity. |
Use of estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements. Actual results could differ from those estimates. Management regularly makes estimates and assumptions that are inherent in the preparation of the consolidated financial statements including, but not limited to, the allowance for doubtful accounts, business combinations, loss contingencies, asset impairments and deferred taxes and amounts associated with the Tax Receivable Agreement related to the Business Combination. |
Earnings per share | Basic earnings per share of Class A common stock is computed by dividing net income attributable to DMS Inc. by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted earnings per share of Class A common stock is computed by dividing net income attributable to DMS Inc., adjusted for the assumed exchange of all potentially dilutive securities, by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive elements. Diluted loss per share for all period presented is the same as basic loss per share as the inclusion of the potentially issuable shares would be anti-dilutive. |
Income taxes | Income Taxes The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. In assessing the realizability of deferred tax assets, management considers whether it is more-likely-than-not that the deferred tax assets will be realized. Deferred tax assets and liabilities are calculated by applying existing tax laws and the rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the year of the enacted rate change. The Company accounts for uncertainty in income taxes using a recognition and measurement threshold for tax positions taken or expected to be taken in a tax return, which are subject to examination by federal and state taxing authorities. The tax benefit from an uncertain tax position is recognized when it is more likely than not that the position will be sustained upon examination by taxing authorities based on technical merits of the position. The amount of the tax benefit recognized is the largest amount of the benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The effective tax rate and the tax basis of assets and liabilities reflect management’s estimates of the ultimate outcome of various tax uncertainties. The Company recognizes penalties and interest related to uncertain tax positions within the provision (benefit) for income taxes line in the accompanying consolidated statements of operations. DMSH, the Company’s accounting predecessor, is a limited liability company treated as a partnership for U.S. federal income tax purposes and is not subject to entity-level U.S. federal income tax, except with respect to UE, which was acquired in November 2019. Because UE is treated as a corporation for U.S. federal income tax purposes, it is subject to entity-level U.S. federal income tax. As a result of the Business Combination, Blocker’s allocable share of earnings from DMSH are also subject to U.S. federal and state and local income taxes. |
New accounting standards | New Accounting Standards Recently Adopted Accounting Standards The Company qualifies as an “emerging growth company” and thus, has elected to adhere to the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act. This election allows the Company to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. In March 2020, the Financial Accounting Standards Board (“FASB”) issued guidance related to reference rate reform, which provides optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships, and other transactions that reference LIBOR and are affected by reference rate reform. The Company adopted the standard effective March 31, 2020 and elected the expedient to prospectively adjust the effective interest rate when LIBOR is replaced. We do not expect this standard to have a material impact on the Company’s consolidated financial statements. Accounting Standards Not Yet Adopted In February 2016, the FASB issued authoritative guidance regarding the accounting for leases, and has since issued subsequent updates to the initial guidance. The amended guidance requires the recognition of assets and liabilities for operating leases. The standard was initially effective for annual and interim reporting periods beginning after December 15, 2019. However, in November 2019, the FASB issued amended guidance, which defers the effective date for fiscal years beginning after December 15, 2020, including interim periods within those annual periods. The standard must be adopted using a modified retrospective transition. We plan to elect the following practical expedients: (1) not to reassess our prior conclusions regarding lease identification, lease classification and initial direct costs; and (2) the short term practical expedient for any leases with an initial term of 12 months or less and not recognize right-of-use assets or lease liabilities for those leases. The Company is currently evaluating all the impacts of adopting the new standard and expects the adoption of this standard to have a material impact on the Company’s consolidated balance sheet and related disclosures. In August 2018, the FASB issued authoritative guidance regarding customer's accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. These amendments align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The guidance is effective for fiscal periods beginning after December 15, 2020. We are currently evaluating the potential impact on our consolidated financial statements. |
Revenue | The Company derives revenue primarily through the delivery of various types of services, including: customer acquisition, managed services and software as a service (“SaaS”). The Company recognizes revenue when the promised goods or services are transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services. The Company has elected the practical expedient to not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which revenue is recognized in the amount to which the Company has the right to invoice for services performed. The Company has organized its operations into three reportable segments: Brand Direct, Marketplace and Other. The Brand Direct reportable segment consists of services delivered against our customer’s brand, while the Marketplace reportable segment includes services delivered directly against the DMS brand. In the Other reportable segment, services offered by the Company include software services and digital media services that are managed on behalf of the customer. Corporate and other represents other business activities and includes eliminating entries. Management uses these segments to evaluate the performance of its businesses and to assess its financial results and forecasts. |
Fair value measurement | The fair value of the contingent consideration was determined using a Monte Carlo fair value analysis based on estimated performance and the probability of achieving certain targets. As certain inputs are not observable in the market, the contingent consideration is classified as a Level 3 instrument. During the nine months ended September 30, 2020, we paid this contingent consideration of $1.0 million. |
REVENUE (Tables)
REVENUE (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following tables presents the disaggregation of revenue by reportable segment and type of service (in thousands): Brand Marketplace Other Corporate Total Three Months Ended September 30, 2020 Net revenue: Customer acquisition $ 43,921 $ 39,541 $ — $ (8,755) $ 74,707 Managed services 5,247 — 2,045 — 7,292 Software services — — 830 — 830 Total Net revenue $ 49,168 $ 39,541 $ 2,875 $ (8,755) $ 82,829 Three Months Ended September 30, 2019 Net revenue: Customer acquisition $ 41,330 $ 15,542 $ — $ (3,796) $ 53,076 Managed services 3,147 — 562 — 3,709 Software services — — 790 — 790 Total Net revenue $ 44,477 $ 15,542 $ 1,352 $ (3,796) $ 57,575 Brand Marketplace Other Corporate Total Nine Months Ended September 30, 2020 Net revenue: Customer acquisition $ 122,557 $ 108,937 $ — $ (19,001) $ 212,493 Managed services 12,885 — 2,945 — 15,830 Software services — — 2,430 — 2,430 Total Net revenue $ 135,442 $ 108,937 $ 5,375 $ (19,001) $ 230,753 Nine Months Ended September 30, 2019 Net revenue: Customer acquisition $ 124,173 $ 47,116 $ — $ (12,517) $ 158,772 Managed services 10,054 — 1,973 — 12,027 Software services — — 2,343 — 2,343 Total Net revenue $ 134,227 $ 47,116 $ 4,316 $ (12,517) $ 173,142 |
REPORTABLE SEGMENTS (Tables)
REPORTABLE SEGMENTS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following tables are a reconciliation of the operations of our segments to income from operations (in thousands): Three Months Ended September 30, 2020 Brand Marketplace Other Corporate Total Net revenue $ 49,168 $ 39,541 $ 2,875 $ (8,755) $ 82,829 Cost of revenue 37,828 27,661 1,043 (8,755) 57,777 Gross profit $ 11,340 $ 11,880 $ 1,832 $ — $ 25,052 Salaries and related costs 7,882 General and administrative expenses 6,407 Acquisition costs 3,248 Depreciation and amortization 4,636 Income from operations $ 2,879 Three Months Ended September 30, 2019 Brand Marketplace Other Corporate Total Net revenue $ 44,477 $ 15,542 $ 1,352 $ (3,796) $ 57,575 Cost of revenue 33,499 9,366 32 (3,796) 39,101 Gross profit $ 10,978 $ 6,176 $ 1,320 $ — $ 18,474 Salaries and related costs 6,599 General and administrative expenses 4,479 Acquisition costs 11,707 Depreciation and amortization 2,201 Loss from operations $ (6,512) Nine Months Ended September 30, 2020 Brand Marketplace Other Corporate Total Net revenue $ 135,442 $ 108,937 $ 5,375 $ (19,001) $ 230,753 Cost of revenue 103,125 75,101 1,113 (19,001) 160,338 Gross profit $ 32,317 $ 33,836 $ 4,262 $ — $ 70,415 Salaries and related costs 24,114 General and administrative expenses 16,356 Acquisition costs 3,322 Depreciation and amortization 13,307 Income from operations $ 13,316 Nine Months Ended September 30, 2019 Brand Marketplace Other Corporate Total Net revenue $ 134,227 $ 47,116 $ 4,316 $ (12,517) $ 173,142 Cost of revenue 100,171 29,345 85 (12,517) 117,084 Gross profit $ 34,056 $ 17,771 $ 4,231 $ — $ 56,058 Salaries and related costs 20,495 General and administrative expenses 13,514 Acquisition costs 17,492 Depreciation and amortization 6,165 Loss from operations $ (1,608) |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Changes in the carrying value of goodwill, by reporting segment, were as follows (in thousands): Brand Marketplace Other Total Balance, December 31, 2019 $ 8,616 $ 32,660 $ 550 $ 41,826 Additions (Note 7) — — 2,542 2,542 Balance, September 30, 2020 $ 8,616 $ 32,660 $ 3,092 $ 44,368 |
Schedule of Finite-Lived Intangible Assets | Finite-lived intangible assets consisted of the following (in thousands): September 30, 2020 December 31, 2019 Amortization Gross Accumulated Net Gross Accumulated Net Intangible assets subject to amortization: Technology 3 to 5 $ 47,946 $ (17,827) $ 30,119 $ 47,946 $ (9,751) $ 38,195 Customer relationships 1 to 12 22,383 (5,127) 17,256 19,583 (3,078) 16,505 Brand 1 to 5 4,459 (2,571) 1,888 4,187 (2,556) 1,631 Non-competition agreements 3 1,815 (803) 1,012 1,815 (211) 1,604 Total $ 76,603 $ (26,328) $ 50,275 $ 73,531 $ (15,596) $ 57,935 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The following table presents the components of outstanding debt (in thousands): September 30, 2020 December 31, 2019 Term loan $ 191,514 $ 194,810 Revolving credit facility 4,000 5,000 Delayed draw term loan 8,301 8,429 Total debt 203,815 208,239 Unamortized debt issuance costs (2,606) (3,041) Debt, net 201,209 205,198 Current portion of long-term debt (4,150) (4,150) Long-term debt $ 197,059 $ 201,048 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table presents the preliminary fair value allocation of the purchase price to the assets acquired, and liabilities assumed (in thousands): July 16, 2020 Goodwill $ 2,542 Brand 272 Customer relationships 2,800 Accounts receivable 833 Other assets acquired 30 Liabilities assumed (678) Net assets acquired $ 5,799 The following table presents the preliminary fair value allocation of the purchase price to the assets acquired, and liabilities assumed (in thousands): November 1, 2019 Goodwill $ 29,723 Technology 26,000 Brand 690 Non-competition agreements 1,520 Customer relationships 10,300 Other assets acquired 6,393 Liabilities assumed (9,045) Deferred tax liability (8,961) Net assets acquired $ 56,620 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements, Recurring and Nonrecurring | The following table presents assets and liabilities measured at fair value on a recurring basis (in thousands): December 31, 2019 Category Balance Sheet Location Level 1 Level 2 Level 3 Total Liabilities: Contingent consideration Contingent consideration payable $ — $ — $ 1,000 $ 1,000 Total $ — $ — $ 1,000 $ 1,000 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The following table represents the change in the contingent consideration (in thousands): Level 3 December 31, 2019 $ 1,000 Additions — Changes in fair value — Settlements (1,000) September 30, 2020 $ — |
EQUITY (Tables)
EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Schedule of Stockholders Equity | The following table sets forth the economic and voting interests of the Company’s common stockholders as of September 30, 2020: Class Total Shares (1) Economic Ownership Economic Ownership Voting Ownership Class A Common Stock 32,293,793 55.2 % 100.0 % 55.5 % Class B Common Stock 25,857,070 44.2 % — % 44.5 % (1) Represents the total number of outstanding shares for each class of DMS Inc. common stock as of September 30, 2020. (2) Represents (i) the Class A Common Stock holders’ indirect economic interest in DMSH through their ownership of Class A Common Stock and (ii) the Class B Common Stock holders’ direct economic interest in DMSH through their ownership of DMSH Units. The remaining economic ownership is held by the sellers in SmarterChaos acquisition. (3) Represents the aggregate economic interest in the DMS Inc. through the stockholders' ownership of Class A Common Stock. (4) Represents the aggregate voting interest in the DMS Inc. through the stockholders' ownership of Company common stock. |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Lessee, Operating Lease, Liability, Maturity | At September 30, 2020, the future minimum lease payments for the Company were comprised of the following (in thousands): Year Ending December 31: 2020 $ 595 2021 2,040 2022 1,941 2023 1,806 2024 1,304 Thereafter 425 Total $ 8,111 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock: Three Months Ended Nine Months Ended Numerator: Net (loss) income $ (2,178) $ 713 Less: Net loss attributable to DMSH prior to the Business Combination (4,236) (1,345) Less: Net income attributable to noncontrolling interests subsequent to the Business Combination 921 921 Net income attributable to DMS Inc. $ 1,137 $ 1,137 Denominator: Weighted-average shares of Class A Common Stock outstanding - basic and diluted 32,294 32,294 Earnings per share of Class A Common Stock - basic and diluted $ 0.04 $ 0.04 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - DMSH | Sep. 30, 2020 | Jul. 15, 2020 |
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||
Equity method investment, ownership percentage | 55.50% | 55.20% |
Prism and Clairvest Direct Seller | ||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||
Noncontrolling interest, ownership percentage by noncontrolling owners | 44.50% | 44.50% |
BUSINESS COMBINATION (Details)
BUSINESS COMBINATION (Details) $ in Thousands | Oct. 22, 2020shares | Jul. 15, 2020USD ($)shares | Sep. 30, 2020USD ($)shares | Apr. 22, 2020USD ($)shares | Sep. 30, 2020USD ($)shares | Sep. 30, 2019USD ($) | Jul. 17, 2020shares | Dec. 31, 2019USD ($) |
Business Acquisition [Line Items] | ||||||||
Payments to acquire business | $ | $ 2,799 | $ 0 | ||||||
Repayments of debt | $ | $ 3,423 | $ 1,739 | ||||||
Unit redemption rights ratio | 1 | 1 | ||||||
Tax receivable agreement liability, noncurrent | $ | $ 15,174 | $ 15,174 | $ 0 | |||||
Additional paid-in capital | $ | $ (43,145) | $ (43,145) | $ 0 | |||||
Warrants outstanding (in shares) | 13,999,998 | 13,999,998 | ||||||
Blocker Corp | ||||||||
Business Acquisition [Line Items] | ||||||||
Payments to acquire business | $ | $ 57,300 | |||||||
Cash acquired from acquisition | $ | $ 30,000 | |||||||
Unit redemption rights ratio | 1 | |||||||
Leo | ||||||||
Business Acquisition [Line Items] | ||||||||
Warrants issued (in shares) | 2 | |||||||
Class A Common Stock | ||||||||
Business Acquisition [Line Items] | ||||||||
Voting ownership in the company | 55.50% | |||||||
Economic ownership in company | 100.00% | 100.00% | ||||||
Common stock outstanding (in shares) | 32,293,793 | 32,293,793 | ||||||
Class A Common Stock | Blocker Corp | ||||||||
Business Acquisition [Line Items] | ||||||||
Warrants issued (in shares) | 2,000,000 | |||||||
Class A Common Stock | Leo | IPO | ||||||||
Business Acquisition [Line Items] | ||||||||
Warrants issued (in shares) | 10,000,000 | |||||||
Class B Common Stock | ||||||||
Business Acquisition [Line Items] | ||||||||
Voting ownership in the company | 44.50% | |||||||
Economic ownership in company | 0.00% | 0.00% | ||||||
Common stock outstanding (in shares) | 25,857,070 | 25,857,070 | ||||||
Class B Common Stock | Blocker Corp | ||||||||
Business Acquisition [Line Items] | ||||||||
Shares issued (in shares) | 25,857,070 | |||||||
Class C common stock | ||||||||
Business Acquisition [Line Items] | ||||||||
Common stock outstanding (in shares) | 0 | 0 | 0 | |||||
Class C common stock | Blocker Corp | ||||||||
Business Acquisition [Line Items] | ||||||||
Shares issued (in shares) | 17,937,954 | |||||||
Blocker Corp | ||||||||
Business Acquisition [Line Items] | ||||||||
Deferred tax asset | $ | $ 18,400 | $ 18,400 | ||||||
Tax receivable agreement liability, noncurrent | $ | 15,700 | 15,700 | ||||||
Additional paid-in capital | $ | 2,800 | $ 2,800 | ||||||
Acquisition costs | $ | $ 2,400 | |||||||
Line of Credit | DMSH | ||||||||
Business Acquisition [Line Items] | ||||||||
Repayments of debt | $ | $ 10,000 | |||||||
PIPE Investors | Class A Common Stock | ||||||||
Business Acquisition [Line Items] | ||||||||
Common stock, subscribed (in shares) | 10,424,282 | |||||||
Sale of stock consideration received | $ | $ 100,000 | |||||||
Blocker Corp | ||||||||
Business Acquisition [Line Items] | ||||||||
Other ownership interests, units outstanding (in shares) | 32,293,793 | |||||||
Blocker Corp | Class A Common Stock | Subsequent Event | ||||||||
Business Acquisition [Line Items] | ||||||||
Shares issued (in shares) | 98,783 | |||||||
Prism and Clairvest Direct Seller | DMS | ||||||||
Business Acquisition [Line Items] | ||||||||
Voting ownership in the company | 44.00% | 44.00% | ||||||
Prism and Clairvest Direct Seller | DMSH | ||||||||
Business Acquisition [Line Items] | ||||||||
Economic ownership in company | 44.00% | 44.00% | ||||||
Prism and Clairvest Direct Seller | DMSH | Subsequent Event | ||||||||
Business Acquisition [Line Items] | ||||||||
Shares issued (in shares) | 142,394 | |||||||
Prism and Clairvest Direct Seller | Class B Common Stock | ||||||||
Business Acquisition [Line Items] | ||||||||
Other ownership interests, units outstanding (in shares) | 25,857,070 | |||||||
Prism and Clairvest Direct Seller | Class B Common Stock | Subsequent Event | ||||||||
Business Acquisition [Line Items] | ||||||||
Shares issued (in shares) | 142,394 |
REVENUE - Narrative (Details)
REVENUE - Narrative (Details) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2020USD ($)segment | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Revenue from Contract with Customer [Abstract] | |||
Number of reportable segments | segment | 3 | ||
Contract with customer, liability | $ 400 | $ 1,200 | |
Contract with customer, liability, revenue recognized | 1,200 | $ 1,300 | |
Contract with customer, receivable, net | $ 2,000 | $ 800 |
REVENUE (Details)
REVENUE (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Net revenue | $ 82,829 | $ 57,575 | $ 230,753 | $ 173,142 |
Brand Direct | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 49,168 | 44,477 | 135,442 | 134,227 |
Marketplace | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 39,541 | 15,542 | 108,937 | 47,116 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 2,875 | 1,352 | 5,375 | 4,316 |
Corporate and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | (8,755) | (3,796) | (19,001) | (12,517) |
Customer acquisition | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 74,707 | 53,076 | 212,493 | 158,772 |
Customer acquisition | Brand Direct | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 43,921 | 41,330 | 122,557 | 124,173 |
Customer acquisition | Marketplace | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 39,541 | 15,542 | 108,937 | 47,116 |
Customer acquisition | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 0 | 0 | 0 | 0 |
Customer acquisition | Corporate and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | (8,755) | (3,796) | (19,001) | (12,517) |
Managed services | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 7,292 | 3,709 | 15,830 | 12,027 |
Managed services | Brand Direct | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 5,247 | 3,147 | 12,885 | 10,054 |
Managed services | Marketplace | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 0 | 0 | 0 | 0 |
Managed services | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 2,045 | 562 | 2,945 | 1,973 |
Managed services | Corporate and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 0 | 0 | 0 | 0 |
Software services | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 830 | 790 | 2,430 | 2,343 |
Software services | Brand Direct | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 0 | 0 | 0 | 0 |
Software services | Marketplace | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 0 | 0 | 0 | 0 |
Software services | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 830 | 790 | 2,430 | 2,343 |
Software services | Corporate and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | $ 0 | $ 0 | $ 0 | $ 0 |
REPORTABLE SEGMENTS (Details)
REPORTABLE SEGMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||
Net revenue | $ 82,829 | $ 57,575 | $ 230,753 | $ 173,142 |
Cost of revenue | 57,777 | 39,101 | 160,338 | 117,084 |
Gross profit | 25,052 | 18,474 | 70,415 | 56,058 |
Salaries and related costs | 7,882 | 6,599 | 24,114 | 20,495 |
General and administrative expenses | 6,407 | 4,479 | 16,356 | 13,514 |
Acquisition costs | 3,248 | 11,707 | 3,322 | 17,492 |
Depreciation and amortization | 4,636 | 2,201 | 13,307 | 6,165 |
Income (loss) from operations | 2,879 | (6,512) | 13,316 | (1,608) |
Corporate, Non-Segment | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | (8,755) | (3,796) | (19,001) | (12,517) |
Cost of revenue | (8,755) | (3,796) | (19,001) | (12,517) |
Gross profit | 0 | 0 | 0 | 0 |
Brand Direct | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 49,168 | 44,477 | 135,442 | 134,227 |
Brand Direct | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 49,168 | 44,477 | 135,442 | 134,227 |
Cost of revenue | 37,828 | 33,499 | 103,125 | 100,171 |
Gross profit | 11,340 | 10,978 | 32,317 | 34,056 |
Marketplace | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 39,541 | 15,542 | 108,937 | 47,116 |
Marketplace | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 39,541 | 15,542 | 108,937 | 47,116 |
Cost of revenue | 27,661 | 9,366 | 75,101 | 29,345 |
Gross profit | 11,880 | 6,176 | 33,836 | 17,771 |
Other | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 2,875 | 1,352 | 5,375 | 4,316 |
Other | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 2,875 | 1,352 | 5,375 | 4,316 |
Cost of revenue | 1,043 | 32 | 1,113 | 85 |
Gross profit | $ 1,832 | $ 1,320 | $ 4,262 | $ 4,231 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Goodwill [Roll Forward] | |
Balance, December 31, 2019 | $ 41,826 |
Additions (Note 7) | 2,542 |
Balance, September 30, 2020 | 44,368 |
Brand Direct | Operating Segments | |
Goodwill [Roll Forward] | |
Balance, December 31, 2019 | 8,616 |
Additions (Note 7) | 0 |
Balance, September 30, 2020 | 8,616 |
Marketplace | Operating Segments | |
Goodwill [Roll Forward] | |
Balance, December 31, 2019 | 32,660 |
Additions (Note 7) | 0 |
Balance, September 30, 2020 | 32,660 |
Other | Operating Segments | |
Goodwill [Roll Forward] | |
Balance, December 31, 2019 | 550 |
Additions (Note 7) | 2,542 |
Balance, September 30, 2020 | $ 3,092 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization of intangible assets | $ 10,700,000 | $ 5,000,000 | |
Goodwill, Impaired, Accumulated Impairment Loss | $ 0 | $ 0 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Finite-lived Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 76,603 | $ 73,531 |
Accumulated Amortization | (26,328) | (15,596) |
Net | 50,275 | 57,935 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 47,946 | 47,946 |
Accumulated Amortization | (17,827) | (9,751) |
Net | $ 30,119 | 38,195 |
Technology | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 3 years | |
Technology | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 5 years | |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 22,383 | 19,583 |
Accumulated Amortization | (5,127) | (3,078) |
Net | $ 17,256 | 16,505 |
Customer relationships | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 1 year | |
Customer relationships | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 12 years | |
Brand | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 4,459 | 4,187 |
Accumulated Amortization | (2,571) | (2,556) |
Net | $ 1,888 | 1,631 |
Brand | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 1 year | |
Brand | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 5 years | |
Non-competition agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 3 years | |
Gross | $ 1,815 | 1,815 |
Accumulated Amortization | (803) | (211) |
Net | $ 1,012 | $ 1,604 |
DEBT - Schedule of Debt (Detail
DEBT - Schedule of Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Debt | $ 203,815 | $ 208,239 |
Unamortized debt issuance costs | (2,606) | (3,041) |
Debt, net | 201,209 | 205,198 |
Current portion of long-term debt | (4,150) | (4,150) |
Long-term debt | 197,059 | 201,048 |
Term loan | ||
Debt Instrument [Line Items] | ||
Debt | 191,514 | 194,810 |
Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Debt | 4,000 | 5,000 |
Delayed draw term loan | ||
Debt Instrument [Line Items] | ||
Debt | $ 8,301 | $ 8,429 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) - Monroe Facility - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Sep. 30, 2020 | |
Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Increase to borrowing capacity | $ 2,500,000 | $ 15,000,000 |
Line of Credit | ||
Debt Instrument [Line Items] | ||
Line of credit facility increase | 99,000,000 | |
Debt instrument, face amount | 199,000,000 | |
Amended Capacity, Term Loan | ||
Debt Instrument [Line Items] | ||
Debt instrument, face amount | $ 221,500,000 | |
Effective rate | 6.80% |
ACQUISITIONS - Narrative (Detai
ACQUISITIONS - Narrative (Details) - USD ($) shares in Thousands, $ in Thousands | Jul. 16, 2020 | Nov. 01, 2019 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Jul. 15, 2020 |
Business Acquisition [Line Items] | |||||||||||
Net income (loss) | $ (2,178) | $ 2,134 | $ 757 | $ (9,492) | $ (111) | $ 606 | $ 713 | $ (8,997) | |||
SmarterChaos | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Payments to acquire business | $ 5,800 | ||||||||||
Acquisition costs | 400 | ||||||||||
Revenues | 1,500 | ||||||||||
Net income (loss) | $ 100 | ||||||||||
SmarterChaos | DMSH | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Equity issued to acquiree (in shares) | 307 | ||||||||||
Value of equity issued | $ 3,000 | ||||||||||
SmarterChaos | Brand | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Useful life | 3 years | ||||||||||
SmarterChaos | Customer relationships | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Useful life | 5 years | ||||||||||
UE Authority, Co. | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Payments to acquire business | $ 56,600 | ||||||||||
UE Authority, Co. | Brand | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Useful life | 1 year | ||||||||||
UE Authority, Co. | Customer relationships | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Useful life | 9 years | ||||||||||
UE Authority, Co. | Technology | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Useful life | 5 years | ||||||||||
UE Authority, Co. | Non-competition agreements | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Useful life | 3 years |
ACQUISITIONS - Assets Acquired
ACQUISITIONS - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Jul. 16, 2020 | Dec. 31, 2019 | Nov. 01, 2019 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 44,368 | $ 41,826 | ||
SmarterChaos | ||||
Business Acquisition [Line Items] | ||||
Goodwill | $ 2,542 | |||
Other assets acquired | 30 | |||
Liabilities assumed | (678) | |||
Net assets acquired | 5,799 | |||
SmarterChaos | Brand | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangible assets acquired | 272 | |||
SmarterChaos | Customer relationships | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangible assets acquired | 2,800 | |||
Accounts receivable | $ 833 | |||
UE Authority, Co. | ||||
Business Acquisition [Line Items] | ||||
Goodwill | $ 29,723 | |||
Other assets acquired | 6,393 | |||
Liabilities assumed | (9,045) | |||
Deferred tax liability | (8,961) | |||
Net assets acquired | 56,620 | |||
UE Authority, Co. | Technology | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangible assets acquired | 26,000 | |||
UE Authority, Co. | Brand | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangible assets acquired | 690 | |||
UE Authority, Co. | Non-competition agreements | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangible assets acquired | 1,520 | |||
UE Authority, Co. | Customer relationships | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangible assets acquired | $ 10,300 |
FAIR VALUE MEASUREMENTS - Liabi
FAIR VALUE MEASUREMENTS - Liabilities Measured on a Recurring Basis (Details) - Fair Value, Recurring $ in Thousands | Dec. 31, 2019USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Contingent consideration | $ 1,000 |
Total | 1,000 |
Level 1 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Contingent consideration | 0 |
Total | 0 |
Level 2 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Contingent consideration | 0 |
Total | 0 |
Level 3 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Contingent consideration | 1,000 |
Total | $ 1,000 |
FAIR VALUE MEASUREMENTS - Level
FAIR VALUE MEASUREMENTS - Level 3 Reconciliation (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | $ 1,000 |
Additions | 0 |
Changes in fair value | 0 |
Settlements | (1,000) |
Ending balance | $ 0 |
EQUITY - Authorized Capitalizat
EQUITY - Authorized Capitalization (Details) - $ / shares | Sep. 30, 2020 | Jul. 17, 2020 |
Class of Stock [Line Items] | ||
Common stock authorized (in shares) | 600,000,000 | |
Common stock par value (usd per share) | $ 0.0001 | |
Preferred stock, authorized (in shares) | 100,000,000 | |
Preferred stock par value (usd per share) | $ 0.0001 | |
Class A Common Stock | ||
Class of Stock [Line Items] | ||
Common stock authorized (in shares) | 500,000,000 | |
Common stock par value (usd per share) | $ 0.0001 | |
Common stock outstanding (in shares) | 32,293,793 | |
Class B Common Stock | ||
Class of Stock [Line Items] | ||
Common stock authorized (in shares) | 60,000,000 | |
Common stock par value (usd per share) | $ 0.0001 | |
Common stock outstanding (in shares) | 25,857,070 | |
Class C common stock | ||
Class of Stock [Line Items] | ||
Common stock authorized (in shares) | 40,000,000 | |
Common stock par value (usd per share) | $ 0.0001 | |
Common stock outstanding (in shares) | 0 | 0 |
EQUITY - Company Common Stock (
EQUITY - Company Common Stock (Details) - shares | Sep. 30, 2020 | Jul. 15, 2020 |
Class A Common Stock | ||
Class of Stock [Line Items] | ||
Common stock outstanding (in shares) | 32,293,793 | |
Economic Ownership in DMSH | 55.20% | |
Economic Ownership in the Company | 100.00% | |
Company Stock, Voting Ownership | 55.50% | |
Class B Common Stock | ||
Class of Stock [Line Items] | ||
Common stock outstanding (in shares) | 25,857,070 | |
Economic Ownership in DMSH | 44.20% | |
Economic Ownership in the Company | 0.00% | |
Company Stock, Voting Ownership | 44.50% |
EQUITY - Voting Rights, Dividen
EQUITY - Voting Rights, Dividend Rights, Conversion of Company Class C Common Stock, Preferred Stock (Details) | 9 Months Ended | |
Sep. 30, 2020votingRightshares | Jul. 17, 2020shares | |
Equity [Abstract] | ||
Voting rights per each share | votingRight | 1 | |
Class of Stock [Line Items] | ||
Preferred stock outstanding (in shares) | 0 | |
Class C common stock | ||
Class of Stock [Line Items] | ||
Common stock outstanding (in shares) | 0 | 0 |
Equity conversion ratio | 1 |
EQUITY - Warrants (Details)
EQUITY - Warrants (Details) | Sep. 30, 2020$ / sharesshares |
Class of Warrant or Right [Line Items] | |
Warrant exercise price (usd per share) | $ 0.01 |
Warrants, term | 5 years |
Warrants outstanding (in shares) | shares | 13,999,998 |
Class A Common Stock | |
Class of Warrant or Right [Line Items] | |
Share price (usd per share) | $ 18 |
Class A Common Stock | |
Class of Warrant or Right [Line Items] | |
Warrant exercise price (usd per share) | $ 11.50 |
EQUITY - Noncontrolling Interes
EQUITY - Noncontrolling Interest (Details) - shares shares in Thousands | Jul. 16, 2020 | Sep. 30, 2020 | Jul. 15, 2020 |
SmarterChaos | DMSH | |||
Noncontrolling Interest [Line Items] | |||
Equity issued to acquiree (in shares) | 307 | ||
DMSH | Prism and Clairvest Direct Seller | |||
Noncontrolling Interest [Line Items] | |||
Noncontrolling interest, ownership percentage by noncontrolling owners | 44.50% | 44.50% | |
DMS | Prism, Clairvest Direct Seller, SmarterChaos | |||
Noncontrolling Interest [Line Items] | |||
Noncontrolling interest, ownership percentage by noncontrolling owners | 44.80% |
RELATED PARTY TRANSACTIONS - Re
RELATED PARTY TRANSACTIONS - Registration Rights (Details) | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2017USD ($)takedown | |
Related Party Transactions [Abstract] | ||
Shelf takedown, aggregate minimum amount | $ | $ 20,000,000 | |
Shelf takedown, maximum number | takedown | 4 | |
Shelf takedown, period per incident | 6 months |
RELATED PARTY TRANSACTIONS - Am
RELATED PARTY TRANSACTIONS - Amended Partnership Agreement (Details) - Non-Blocker Members - Amended Partnership Agreement | 9 Months Ended |
Sep. 30, 2020shares | |
Related Party Transaction [Line Items] | |
Equity conversion ratio | 1 |
Conversion, minimum units (in shares) | 10,000 |
RELATED PARTY TRANSACTIONS - Ta
RELATED PARTY TRANSACTIONS - Tax Receivable Agreement (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Related Party Transaction [Line Items] | ||
Tax receivable agreement liability, noncurrent | $ 15,174 | $ 0 |
Additional paid-in capital | (43,145) | $ 0 |
Blocker Corp | ||
Related Party Transaction [Line Items] | ||
Deferred tax asset | 18,400 | |
Tax receivable agreement liability, noncurrent | 15,700 | |
Additional paid-in capital | 2,800 | |
Due to related parties | 15,700 | |
Due to related parties, current | $ 500 |
RELATED PARTY TRANSACTIONS - Lo
RELATED PARTY TRANSACTIONS - Lock-Up Agreement (Details) - Lock-Up Agreement | Jul. 29, 2020shares |
Chief Executive Officer | |
Related Party Transaction [Line Items] | |
Warrants transferred (in shares) | 538,912 |
Chief Operating Officer | |
Related Party Transaction [Line Items] | |
Warrants transferred (in shares) | 538,911 |
RELATED PARTY TRANSACTIONS - Ma
RELATED PARTY TRANSACTIONS - Management Agreement (Details) - Management and Advisory Services - Management - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Related Party Transaction [Line Items] | ||
Quarterly retainer to related party | $ 50 | |
General and administrative, related party expenses | $ 100 | $ 200 |
RELATED PARTY TRANSACTIONS - DM
RELATED PARTY TRANSACTIONS - DMSH Member Tax Distributions (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Related Party Transactions [Abstract] | ||
Tax distributions to members | $ 200 | $ 21,600 |
BENEFIT PLANS (Details)
BENEFIT PLANS (Details) - USD ($) $ in Thousands | Apr. 23, 2020 | Sep. 30, 2020 | Jul. 15, 2020 | Nov. 01, 2019 | Jan. 31, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Equity value of plan | $ 325,000 | $ 100,000 | |||
Payments to employee incentive plan participants | $ 250 | ||||
2020 Omnibus Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Capital shares reserved for future issuance (in shares) | 11,600,000 | ||||
Shares issued (in shares) | 0 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | ||
Lease cost | $ 1,900 | $ 1,500 |
Lessee, Lease, Description [Line Items] | ||
Lease reserve | $ 1,000 | |
Unit redemption rights ratio | 1 | |
Accounts Payable and Accrued Liabilities | ||
Lessee, Lease, Description [Line Items] | ||
Lease reserve | $ 900 | |
Other Noncurrent Liabilities | ||
Lessee, Lease, Description [Line Items] | ||
Lease reserve | $ 100 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Lease Liability (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2020 | $ 595 |
2021 | 2,040 |
2022 | 1,941 |
2023 | 1,806 |
2024 | 1,304 |
Thereafter | 425 |
Total | $ 8,111 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Jul. 15, 2020 | Dec. 31, 2019 | |
Related Party Transaction [Line Items] | ||||||
Income tax expense | $ 1,636 | $ 0 | $ 1,901 | $ 0 | ||
Effective tax rate | 74.20% | 74.20% | ||||
Tax receivable agreement liability, noncurrent | $ 15,174 | $ 15,174 | $ 0 | |||
Additional paid-in capital | $ (43,145) | $ (43,145) | $ 0 | |||
DMSH | ||||||
Related Party Transaction [Line Items] | ||||||
Equity method investment, ownership percentage | 55.50% | 55.50% | 55.20% | |||
Blocker Corp | ||||||
Related Party Transaction [Line Items] | ||||||
Deferred tax asset | $ 18,400 | $ 18,400 | ||||
Tax receivable agreement liability, noncurrent | 15,700 | 15,700 | ||||
Additional paid-in capital | 2,800 | 2,800 | ||||
Due to related parties | 15,700 | 15,700 | ||||
Due to related parties, current | $ 500 | $ 500 |
EARNINGS PER SHARE - Reconcilia
EARNINGS PER SHARE - Reconciliation (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||||||
Net (loss) income | $ (2,178) | $ 2,134 | $ 757 | $ (9,492) | $ (111) | $ 606 | $ 713 | $ (8,997) |
Less: Net loss attributable to DMSH prior to the Business Combination | (4,236) | (1,345) | ||||||
Less: Net income attributable to noncontrolling interests subsequent to the Business Combination | 921 | 921 | ||||||
Net income (loss) attributable to Digital Media Solutions, Inc. | $ 1,137 | $ (9,492) | $ 1,137 | $ (8,997) | ||||
Weighted-average shares outstanding - basic and diluted (in shares) | 32,294,000 | 32,294,000 | ||||||
Basic and diluted (usd per share) | $ 0.04 | $ 0.04 | ||||||
Class A Common Stock | ||||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||||||
Weighted-average shares outstanding - basic and diluted (in shares) | 32,294,000 | 32,294,000 | ||||||
Basic and diluted (usd per share) | $ 0.04 | $ 0.04 |
EARNINGS PER SHARE - Narrative
EARNINGS PER SHARE - Narrative (Details) - shares | Oct. 28, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||||
Warrants outstanding (in shares) | 13,999,998 | ||||||||
Subsequent Event | |||||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||||
Stock options granted (in shares) | 600,000 | ||||||||
Restricted Stock Units (RSUs) | Subsequent Event | |||||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||||
Shares granted (in shares) | 1,200,000 | ||||||||
Class B Common Stock | |||||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||||
Common stock outstanding (in shares) | 25,857,070 | ||||||||
Class B Common Stock | Common Stock | |||||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||||
Common stock outstanding (in shares) | 25,857,000 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |