Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 31, 2017 | Jun. 30, 2016 | |
Document and Entity Information | |||
Entity Registrant Name | HARTE HANKS INC | ||
Entity Central Index Key | 45,919 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | No | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 76,374,241 | ||
Entity Common Stock, Shares Outstanding | 61,645,099 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets | ||
Cash and cash equivalents | $ 46,005 | $ 16,564 |
Accounts receivable (less allowance for doubtful accounts of $1,028 at December 31, 2016 and $974 at December 31, 2015) | 88,813 | 103,758 |
Inventory | 838 | 963 |
Prepaid expenses | 5,944 | 7,908 |
Prepaid income tax | 2,895 | 1,760 |
Other current assets | 4,934 | 6,664 |
Current assets of discontinued operations | 0 | 169,401 |
Total current assets | 149,429 | 307,018 |
Property, plant and equipment | ||
Buildings and improvements | 18,673 | 16,631 |
Software | 53,672 | 55,901 |
Equipment and furniture | 92,367 | 99,726 |
Software development and equipment installations in progress | 600 | 1,015 |
Gross property, plant and equipment | 165,312 | 173,273 |
Less accumulated depreciation and amortization | (141,388) | (145,137) |
Net property, plant and equipment | 23,924 | 28,136 |
Goodwill | 34,510 | 69,699 |
Other intangible assets (less accumulated amortization of $1,471 at December 31, 2016 and $650 at December 31, 2015) | 3,302 | 4,123 |
Deferred tax assets, net | 0 | 3,000 |
Other assets | 2,272 | 2,437 |
Total assets | 213,437 | 414,413 |
Current liabilities | ||
Current maturities of long-term debt | 0 | 3,000 |
Accounts payable | 45,563 | 36,617 |
Accrued payroll and related expenses | 9,990 | 7,416 |
Deferred revenue and customer advances | 6,505 | 6,240 |
Income taxes payable | 30,436 | 1,246 |
Customer postage and program deposits | 7,985 | 12,513 |
Other current liabilities | 4,188 | 6,342 |
Total current liabilities of discontinued operations | 0 | 24,758 |
Total current liabilities | 104,667 | 98,132 |
Long-term debt | 0 | 74,105 |
Pensions | 60,836 | 55,491 |
Contingent consideration | 29,725 | 20,277 |
Deferred tax liability, net | 11,044 | 20,672 |
Other long-term liabilities | 4,509 | 5,420 |
Total liabilities | 210,781 | 274,097 |
Stockholders’ equity | ||
Common stock, $1 par value, 250,000,000 shares authorized 120,436,735 shares issued at December 31, 2016 and 120,146,720 shares issued at December 31, 2015 | 120,437 | 120,147 |
Additional paid-in capital | 350,245 | 353,050 |
Retained earnings | 837,316 | 973,538 |
Less treasury stock, 58,791,630 shares at cost at December 31, 2016 and 58,879,742 shares at cost at December 31, 2015 | (1,259,164) | (1,262,859) |
Accumulated other comprehensive loss | (46,178) | (43,560) |
Total stockholders’ equity | 2,656 | 140,316 |
Total liabilities and stockholders’ equity | $ 213,437 | $ 414,413 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 1,028 | $ 974 |
Accumulated amortization | $ 1,471 | $ 650 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
Common stock, shares issued (in shares) | 120,436,735 | 120,146,720 |
Treasury stock, shares (in shares) | 58,791,630 | 58,879,742 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | |||
Operating revenues | $ 404,412 | $ 444,166 | $ 499,444 |
Operating expenses | |||
Labor | 247,241 | 238,620 | 253,205 |
Production and distribution | 117,126 | 141,920 | 165,307 |
Advertising, selling, general and administrative | 44,804 | 44,579 | 42,758 |
Impairment of goodwill | 38,669 | 209,938 | 0 |
Depreciation, software and intangible asset amortization | 12,352 | 12,378 | 12,889 |
Total operating expenses | 460,192 | 647,435 | 474,159 |
Operating income (loss) | (55,780) | (203,269) | 25,285 |
Other expenses | |||
Interest expense, net | 3,454 | 5,016 | 2,805 |
Loss on sale | 0 | 9,501 | 0 |
Other, net | 9,914 | 640 | 1,100 |
Total other expenses | 13,368 | 15,157 | 3,905 |
Total income (loss) from continuing operations before income taxes | (69,148) | (218,426) | 21,380 |
Income tax expense (benefit) | 20,630 | (37,360) | 7,626 |
Income (loss) from continuing operations | (89,778) | (181,066) | 13,754 |
Income (loss) from discontinued operations, net of tax | (41,159) | 10,138 | 10,237 |
Net income (loss) | $ (130,937) | $ (170,928) | $ 23,991 |
Weighted-average common shares outstanding | 61,487 | 61,643 | 62,444 |
Basic earnings (loss) per common share | |||
Continuing operations (in dollars per share) | $ (1.46) | $ (2.94) | $ 0.22 |
Discontinued operations (in dollars per share) | (0.67) | 0.17 | 0.16 |
Basic earnings (loss) per common share (in dollars per share) | $ (2.13) | $ (2.77) | $ 0.38 |
Weighted-average common and common equivalent shares outstanding | 61,487 | 61,643 | 62,658 |
Diluted earnings (loss) per common share | |||
Continuing operations (in dollars per share) | $ (1.46) | $ (2.94) | $ 0.22 |
Discontinued operations (in dollars per share) | (0.67) | 0.17 | 0.16 |
Diluted earnings (loss) per common share (in dollars per share) | (2.13) | (2.77) | 0.38 |
Declared dividends per share | $ 0.09 | $ 0.34 | $ 0.34 |
Other comprehensive income (loss), net of tax | |||
Adjustment to pension liability | $ (3,062) | $ 5,645 | $ (17,281) |
Foreign currency translation adjustments | 444 | (1,976) | (1,830) |
Total other comprehensive income (loss), net of tax | (2,618) | 3,669 | (19,111) |
Comprehensive income (loss) | $ (133,555) | $ (167,259) | $ 4,880 |
Consolidated Statements of Com5
Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Income Statement [Abstract] | |
Loss on disposal of discontinued operation | $ (44,529) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash Flows from Operating Activities | |||
Net income (loss) | $ (130,937) | $ (170,928) | $ 23,991 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities | |||
(Income) loss from discontinued operations, net of tax | 41,159 | (10,138) | (10,237) |
Loss on sale | 0 | 9,501 | 0 |
Impairment of goodwill | 38,669 | 209,938 | 0 |
Depreciation and software amortization | 11,531 | 11,719 | 12,863 |
Intangible asset amortization | 821 | 659 | 26 |
Stock-based compensation | 2,673 | 5,442 | 3,978 |
Excess tax benefits from stock-based compensation | 0 | (14) | 0 |
Net pension cost (payments) | 385 | (257) | (2,860) |
Interest accretion on contingent consideration | 2,430 | 2,337 | 0 |
Adjustments to fair value of contingent consideration | 7,018 | 0 | 0 |
Discount amortization | 208 | 356 | 357 |
Deferred income taxes | 26,290 | (41,569) | 5,794 |
Other, net | (246) | 333 | 0 |
Changes in operating assets and liabilities, net of acquisitions: | |||
Decrease (increase) in accounts receivable | 14,945 | 7,238 | (8,539) |
Decrease in inventory | 125 | 272 | 51 |
Decrease in prepaid expenses and other current assets | 2,723 | 954 | 4,861 |
Increase (decrease) in accounts payable | 9,126 | 1,888 | (739) |
(Decrease) increase in other accrued expenses and liabilities | 23,045 | (10,390) | (16,299) |
Other, net | 0 | 0 | 98 |
Net cash provided by continuing operations | 49,965 | 17,341 | 13,345 |
Net cash provided by (used in) discontinued operations | (35,375) | 15,945 | 12,672 |
Net cash provided by operating activities | 14,590 | 33,286 | 26,017 |
Cash Flows from Investing Activities | |||
Acquisitions, net of cash acquired | (3,500) | (29,862) | 0 |
Dispositions, net of cash transferred | 0 | 4,974 | 0 |
Purchases of property, plant and equipment | (6,691) | (7,907) | (9,118) |
Proceeds from the sale of property, plant and equipment | 755 | (76) | 45 |
Net cash used in investing activities within continuing operations | (9,436) | (32,871) | (9,073) |
Net cash provided by (used in) investing activities within discontinued operations | 109,139 | (3,269) | (2,084) |
Net cash provided by (used in) investing activities | 99,703 | (36,140) | (11,157) |
Cash Flows from Financing Activities | |||
Borrowings | 276,302 | 13,000 | 0 |
Repayment of borrowings | (353,614) | (18,375) | (15,313) |
Debt financing costs | (2,484) | 0 | 0 |
Issuance of common stock | (233) | (909) | (481) |
Payment of capital leases | (168) | 0 | 0 |
Excess tax benefits from stock-based compensation | 0 | 14 | 0 |
Purchase of treasury stock | 0 | (4,619) | (7,354) |
Issuance of treasury stock | 186 | 193 | 0 |
Dividends paid | (5,285) | (21,241) | (21,485) |
Net cash used in financing activities | (85,296) | (31,937) | (44,633) |
Effect of exchange rate changes on cash and cash equivalents | 444 | (1,976) | (1,830) |
Net increase (decrease) in cash and cash equivalents | 29,441 | (36,767) | (31,603) |
Cash and cash equivalents at beginning of year | 16,564 | 53,331 | 84,934 |
Cash and cash equivalents at end of year | $ 46,005 | $ 16,564 | $ 53,331 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) |
Balance at Dec. 31, 2013 | $ 349,054 | $ 119,187 | $ 345,095 | $ 1,163,201 | $ (1,250,311) | $ (28,118) |
Increase (Decrease) in Stockholders' Equity | ||||||
Exercise of stock options and release of unvested shares | (481) | 420 | (151) | (750) | ||
Net tax effect of stock options exercised and release of unvested shares | (1,993) | (1,993) | ||||
Stock-based compensation | 4,055 | 4,055 | ||||
Dividends paid ($0.085, $0.34, and $0.34 per share in 2016, 2015, and 2014 respectively) | (21,485) | (21,485) | ||||
Treasury stock issued | 540 | (767) | 1,307 | |||
Purchase of treasury stock | (7,894) | (7,894) | ||||
Net income (loss) | 23,991 | 23,991 | ||||
Other comprehensive loss | (19,111) | (19,111) | ||||
Balance at Dec. 31, 2014 | 326,676 | 119,607 | 346,239 | 1,165,707 | (1,257,648) | (47,229) |
Increase (Decrease) in Stockholders' Equity | ||||||
Exercise of stock options and release of unvested shares | (909) | 540 | (329) | (1,120) | ||
Net tax effect of stock options exercised and release of unvested shares | 1,742 | 1,742 | ||||
Stock-based compensation | 5,733 | 5,733 | ||||
Dividends paid ($0.085, $0.34, and $0.34 per share in 2016, 2015, and 2014 respectively) | (21,241) | (21,241) | ||||
Treasury stock issued | 193 | (335) | 528 | |||
Purchase of treasury stock | (4,619) | (4,619) | ||||
Net income (loss) | (170,928) | (170,928) | ||||
Other comprehensive loss | 3,669 | 3,669 | ||||
Balance at Dec. 31, 2015 | 140,316 | 120,147 | 353,050 | 973,538 | (1,262,859) | (43,560) |
Increase (Decrease) in Stockholders' Equity | ||||||
Exercise of stock options and release of unvested shares | (233) | 290 | (290) | (233) | ||
Net tax effect of stock options exercised and release of unvested shares | (1,259) | (1,259) | ||||
Stock-based compensation | 2,486 | 2,486 | ||||
Dividends paid ($0.085, $0.34, and $0.34 per share in 2016, 2015, and 2014 respectively) | (5,285) | (5,285) | ||||
Treasury stock issued | 186 | (3,742) | 3,928 | |||
Purchase of treasury stock | 0 | 0 | ||||
Net income (loss) | (130,937) | (130,937) | ||||
Other comprehensive loss | (2,618) | (2,618) | ||||
Balance at Dec. 31, 2016 | $ 2,656 | $ 120,437 | $ 350,245 | $ 837,316 | $ (1,259,164) | $ (46,178) |
Consolidated Statements of Cha8
Consolidated Statements of Changes in Equity (Parenthetical) - $ / shares | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Stockholders' Equity [Abstract] | ||||
Dividends paid (in dollars per share) | $ 0.085 | $ 0.085 | $ 0.34 | $ 0.34 |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies The consolidated financial statements and accompanying notes are prepared in accordance with United States Generally Accepted Accounting Principles ("U.S. GAAP"). Consolidation The accompanying consolidated financial statements present the financial position and the results of operations and cash flows of Harte Hanks, Inc., and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. As used in this report, the terms “Harte Hanks,” “we,” “us,” or “our” may refer to Harte Hanks, Inc., one or more of our consolidated subsidiaries, or all of them taken as a whole. Discontinued Operations As discussed in Note N , Discontinued Operations , we sold the assets of our Trillium reporting unit as of December 23, 2016. As such, the results of operations, financial position, and cash flows for Trillium are reported separately as discontinued operations for all periods presented in the Consolidated Financial Statements. Results of the remaining Harte Hanks business are reported as continuing operations. Debt under the 2016 Secured Credit Facility, as defined within Note C , Long-Term Debt , was required to be repaid as a result of the Trillium transaction. In accordance with the provisions of ASC 205-20-45-6, Allocation of Interest to Discontinued Operations , we have reclassified interest expense for the 2016 Secured Credit Facility to discontinued operations for December 31, 2016 in the Consolidated Financial Statements. Reclassification of Prior Year Amounts Certain prior year amounts have been reclassified to conform to the current year presentation. This includes amounts related to discontinued operations, which have been reclassified for comparative purposes in all periods presented. In addition, the retrospective adoption of ASU 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs , resulted in the reclassification of $0.2 million of unamortized debt issuance costs from other assets to a direct reduction of the total debt on the company's consolidated balance sheet as of December 31, 2015. Use of Estimates The preparation of consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Actual results and outcomes could differ from those estimates and assumptions. Such estimates include, but are not limited to, estimates related to pension accounting; fair value for purposes of assessing goodwill, long-lived assets, and intangible assets for impairment; income taxes; and contingencies. On an ongoing basis, management reviews its estimates based on currently available information. Changes in facts and circumstances could result in revised estimates and assumptions. Operating Expense Presentation in Consolidated Statements of Comprehensive Income (Loss) The “Labor” line in the Consolidated Statements of Comprehensive Income (Loss) includes all employee payroll and benefits, including stock-based compensation, along with temporary labor costs. The “Production and distribution” and “Advertising, selling, general and administrative” lines do not include labor, depreciation, or amortization. Revenue Recognition We recognize revenue when all of the following criteria are satisfied: (i) persuasive evidence of an arrangement exists; (ii) the price is fixed or determinable; (iii) collectability is reasonably assured; and (iv) the service has been performed or the product has been delivered. In order to recognize revenue, we require either a purchase order, a statement of work signed by the client, a written contract, or some other form of written authorization from the client. Revenue that is not recognized at the time of sale because the foregoing conditions are not met are recognized when those conditions are subsequently met. Revenue is recognized net of any taxes collected from customers and subsequently remitted to governmental authorities. Any payments received in advance of the performance of services or delivery of the product are recorded as deferred revenue until such time as the services are performed or the product is delivered. Revenue from agency and digital services, direct mail, and contact center is recognized as the work is performed. Fees for these services are determined by the terms set forth in the contact with the client. These are typically set at a fixed price or rate by transaction occurrence, service provided, time spent, or product delivered. For arrangements requiring design and build of a database, revenue is not recognized until client acceptance occurs. Up-front fees billed during the setup phase for these arrangements are deferred and direct build costs are capitalized. Pricing for these types of arrangements are typically based on a fixed price determined in the contract. Revenue from other database marketing solutions is recognized ratably over the contractual service period. Pricing for these services are typically based on a fixed price per month or per contract. Going Concern Our recent operating and financial performance (most notably decreased cash flows from operations) have caused us to closely review our ability to continue as a going concern. We have had greater than five consecutive years of declining revenues from continuing operations, and we have not reduced costs at a pace that has allowed us to be profitable in the past two years. Among other things, these trends have caused us to reduce investments in our business, cease dividends and stock repurchases, and caused us to fall out of compliance with financial covenants in our credit facilities. These trends are also significant factors in the goodwill impairment charges we recorded in 2015 and 2016, as well as the valuation allowance we recorded for 2016 in regard to certain deferred tax assets. Changing these trends and returning to revenue growth is essential to our success. In April of 2017, we entered into a new credit agreement with Texas Capital Bank, N.A. (the "Texas Capital Credit Facility"). Upon closing, the Texas Capital Credit Facility provided $20 million in borrowing capacity under a revolving credit line. The Texas Capital Credit Facility has far more favorable and flexible covenant requirements than the 2016 Secured Credit Facility, and was planned to be sufficient in size for our needs given the nature and performance of our operations. See Note P, Subsequent Events, for additional discussion. We have also obtained the deferral of a significant contingent liability that otherwise would have been due in 2018. We are required (under the terms of the purchase agreement for the acquisition of 3Q Digital) to pay the former owners of 3Q Digital an additional sum contingent on achievement of certain revenue growth goals for that business. The maximum amount of future payments that could be required to be paid under the contingent consideration is $35 million . On May 1, 2017, the company entered into an Agreement (the "3Q Agreement") with 3Q Digital, which defers our obligation to pay the contingent consideration to the former owners until April 1, 2019 or the sale of the 3Q Digital business, whichever is earlier. See Note P, Subsequent Events , for additional discussion. We believe that, in conjunction with our current liquidity position and management's execution of the new credit facility and the 3Q Agreement, there are no conditions or events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern for the 12 months following the issuance of the financial statements. We have taken actions to return the business to profitability and improve our cash, liquidity, and financial position. In 2016, we began implementing expense reduction actions, including workforce reductions. These workforce actions are expected to continue into 2017 and will result in further expense reductions in our support functions. We also initiated the closing of our Baltimore direct mail facility in response to the declining demand for printed marketing materials. Continuing work from this facility is being transitioned to other facilities, allowing for higher utilization rates. The favorable impact of the facility closure is expected to begin in the first half of 2017, when the closure is completed. In addition to the actions discussed above, we are taking additional steps to improve our operational and financial performance. We continue to identify and act to secure additional cost reductions and operating efficiencies. We have also focused investments toward improving product offerings that we believe will improve revenue growth. Finally, to increase financial flexibility and allow us to focus on our core business, we have taken steps to sell our 3Q Digital business (as announced in April 2017). The liquidity from the potential sale of 3Q Digital will allow us the liquidity to invest in strategies to strengthen our core offerings. Cash Equivalents All highly liquid investments with an original maturity of 90 days or less at the time of purchase are considered to be cash equivalents. Cash equivalents are carried at cost, which approximates fair value. Allowance for Doubtful Accounts We maintain our allowance for doubtful accounts adequate to reduce accounts receivable to the amount of cash expected to be collected. The methodology used to determine the minimum allowance is based on our prior collection experience and is generally related to the accounts receivable balance in various aging categories. The balance is also influenced by specific clients’ financial strength and circumstance. Accounts that are determined to be uncollectible are written off in the period in which they are determined to be uncollectible. Periodic changes to the allowance balance are recorded as increases or decreases to bad debt expense, which is included in the “Advertising, selling, general, and administrative” line of our Consolidated Statements of Comprehensive Income (Loss). The changes in the allowance for doubtful accounts consisted of the following: Year Ended December 31, In thousands 2016 2015 2014 Balance at beginning of year $ 974 $ 878 $ 1,410 Net charges to expense 711 685 (109 ) Amounts recovered against the allowance (657 ) (589 ) (423 ) Balance at end of year $ 1,028 $ 974 $ 878 Inventory Inventory, consisting primarily of print materials and operating supplies, is stated at the lower of cost (first-in, first-out method) or market. Property, Plant and Equipment Property, plant and equipment are stated on the basis of cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The general ranges of estimated useful lives are: Buildings and improvements 10 to 40 years Software 3 to 10 years Equipment and furniture 3 to 20 years Long-lived assets such as property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The carrying amount of a long-lived asset group is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset group. We did not record an impairment of long-lived assets in 2016 , 2015 , or 2014 . Property, plant and equipment includes capital lease assets. Capital lease assets at December 31, 2016 and 2015 consisted of: December 31, In thousands 2016 2015 Equipment and furniture $ 2,357 $ 1,088 Less accumulated depreciation (903 ) (767 ) Net book value $ 1,454 $ 321 Depreciation expense related to capital lease assets was $0.1 million , $0.1 million , and $0.2 million for the years ended December 31, 2016 , 2015 , and 2014 , respectively. Capital leases accounted for $1.3 million of the additions to property, plant and equipment for the year ended December 31, 2016 . Depreciation and amortization on property, plant and equipment was $11.4 million , $11.6 million , and $12.7 million for the years ended December 31, 2016 , 2015 , and 2014 , respectively. Accounts payable related to additions of property, plant and equipment were $0.3 million , $0.3 million , and $0.5 million for the years ended December 31, 2016 , 2015 , and 2014 , respectively. Goodwill and Other Intangible Assets Goodwill is recorded to the extent that the purchase price of an acquisition exceeds the fair value of the identifiable net assets acquired and is tested for impairment on an annual basis. We have established November 30 as the date for our annual test for impairment of goodwill. Interim testing is performed more frequently if events or circumstances indicate that it is “more likely than not” that goodwill might be impaired. Such events could include changes in the business climate in which we operate, attrition of key personnel, the current volatility in the capital markets, the company’s market capitalization compared to our book value, our recent operating performance, and financial projections. Goodwill is tested for impairment by first assessing qualitative factors to determine whether the existence of events or circumstances leads to a determination that is more likely than not that the fair value of the reporting unit is less than its carrying amount. If after assessing the totality of events or circumstances, or based on management's judgment, we determine it is more likely than not that the fair value is less than its carrying amount, a two-step impairment test is performed. The first step compares the fair value of the reporting unit, using the discounted cash flow method, to its carrying amount. If the fair value is less than its carrying amount, a second step is performed. In the second step, the carrying value of the reporting unit is compared to all of the assets and liabilities of the reporting unit. If the carrying amount of the reporting unit's goodwill exceeds the implied fair value of its goodwill, and impairment loss is recognized in an amount equal to the excess. Our acquired intangible assets are amortized on a straight-line basis over their estimated useful lives, which generally range from 2 to 10 years. Our acquired intangible assets do not have indefinite lives. Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of the intangible asset may not be recoverable. The carrying amount of an intangible asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If it is determined that an impairment loss has occurred, the loss is measured as the amount by which the carrying amount of the intangible asset exceeds its fair value. Income Taxes Income tax expense includes U.S. and international income taxes accounted for under the asset and liability method. Certain income and expenses are not reported in tax returns and financial statements in the same year. Such temporary differences are reported as deferred tax. Deferred tax assets are reported net of valuation allowances where we have assessed that it is more likely than not that a tax benefit will not be realized. Earnings Per Share Basic earnings per common share are based upon the weighted-average number of common shares outstanding during the period. Diluted earnings per common share are based upon the weighted-average number of common shares and dilutive common stock equivalents outstanding during the period. Dilutive common stock equivalents are calculated based on the assumed exercise of stock options and vesting of unvested shares using the treasury stock method. Stock-Based Compensation All share-based awards are recognized as operating expense in the “Labor” line of the Consolidated Statements of Comprehensive Income (Loss). Calculated expense is based on the fair values of the awards on the date of grant and is recognized over the requisite service period. Reserve for Healthcare, Workers’ Compensation, Automobile, and General Liability We are self-insured for our workers’ compensation, automobile, general liability, and the majority of our healthcare insurance. The company pays actual medical claims up to a stop loss limit of $0.3 million . In the fourth quarter of 2016, the company moved to a guaranteed cost program for our workers' compensation and automobile programs. Prior to the change, our deductible for workers’ compensation was $0.5 million . Our deductible for general liability is $0.3 million . The reserve is estimated using current claims activity, historical experience, and claims incurred but not reported. We use loss development factors that consider both industry norms and company specific information. Our liability is recorded at the estimate of the ultimate cost of claims at the balance sheet date. At December 31, 2016 and 2015 , our reserve for healthcare, workers’ compensation, net, automobile, and general liability was $4.6 million and $6.1 million , respectively. Periodic changes to the reserve for workers’ compensation, automobile and general liability are recorded as increases or decreases to insurance expense, which is included in the “Advertising, selling, general and administrative” line of our Consolidated Statements of Comprehensive Income (Loss). Periodic changes to the reserve for healthcare are recorded as increases or decreases to employee benefits expense, which is included in the “Labor” line of our Consolidated Statements of Comprehensive Income (Loss). Foreign Currencies In most instances the functional currencies of our foreign operations are the local currencies. Assets and liabilities recorded in foreign currencies are translated in U.S. dollars at the exchange rate on the balance sheet date. Revenue and expenses are translated at average rates of exchange prevailing during a given month. Adjustments resulting from this translation are charged or credited to other comprehensive loss. Geographic Concentrations Depending on the needs of our clients, our services are provided in an integrated approach through more than 28 facilities worldwide, of which 4 are located outside of the U.S. Information about the operations in different geographic areas: Year Ended December 31, In thousands 2016 2015 2014 Revenue (1) United States $ 324,625 $ 377,717 $ 427,535 Other countries 79,787 66,449 71,909 Total revenue $ 404,412 $ 444,166 $ 499,444 December 31, In thousands 2016 2015 Property, plant and equipment (2) United States $ 19,810 $ 24,695 Other countries 4,114 3,441 Total property, plant and equipment $ 23,924 $ 28,136 (1) Geographic revenues are based on the location of the service being performed. (2) Property, plant and equipment are based on physical location. Recent Accounting Pronouncements In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting , which provides clarified guidance on applying modification accounting to changes in the terms or conditions of a share-base payment award. This ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017.This change is required to be applied prospectively to an award modified on or after the adoption date. Early adoption is permitted. We are evaluating the effect that this will have on our consolidated financial statements and related disclosures. In March 2017, the FASB issued ASU 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , which requires entities to present the service cost component of net benefit cost with the other current compensation costs. All other components of net benefit cost are to be reported outside of operating income. This ASU is effective for annual periods beginning after December 15, 2017. This change is required to be applied using a retrospective transition method for each period presented. Early adoption is permitted as of the beginning of the annual period. We intend to adopt this ASU on January 1, 2017. The new standard will require all components of our net periodic benefit cost currently reported within operating expense, as we no longer have service cost, to be reclassified and reported within other expense. See Note F, Employee Benefit Plans , for our current components of net periodic benefit cost. In January 2017, the FASB issued ASU 2017-04. Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment , which eliminates step two from the goodwill impairment test. Under the amendments in ASU 2017-04, an entity should recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. This ASU is effective for annual periods beginning after December 15, 2020. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. This change is required to be applied on a prospective basis. We are evaluating the effect that this will have on our consolidated financial statements and related disclosures. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , which provides clarified guidance on the classification of certain cash receipts and payments in the statement of cash flows. This ASU is effective for annual periods beginning after December 15, 2018 and for interim periods for fiscal years beginning after December 15, 2019. This change is required to be applied using a retrospective transition method to each period presented. Early adoption is permitted. We are evaluating the effect that this will have on our consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-based Payment Accounting , which requires entities with share-based payment awards to recognize all related excess tax benefits and tax deficiencies as income tax expenses or benefit in the income statement. This ASU is effective for interim and annual periods beginning after December 15, 2016. Amendments related to the timing of when excess tax benefits are recognized, minimum statutory withholding requirements, forfeitures, and intrinsic value should be applied using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. Amendments related to the presentation of employee taxes paid on the statement of cash flows when an employer withholds shares to meet the minimum statutory withholding requirement should be applied retrospectively. Amendments requiring recognition of excess tax benefits and tax deficiencies in the income statement and the practical expedient for estimating expected term should be applied prospectively. An entity may elect to apply the amendments related to the presentation of excess tax benefits on the statement of cash flows using either a prospective transition method or a retrospective transition method. Early adoption is permitted. We are evaluating the effect that this will have on our consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases , which requires all operating leases to be recorded on the balance sheet. The lessee will record a liability for its lease obligations (initially measured at the present value of the future lease payments not yet paid over the lease term, and an asset for its right to use the underlying asset equal to the lease liability, adjusted for lease payments made at or before lease commencement). This ASU is effective for interim and annual periods beginning after December 15, 2018. This change is required to be applied using a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. Full retrospective application is prohibited. Early adoption is permitted. We are evaluating the effect that this will have on our consolidated financial statements and related disclosures. In May 2015, the FASB issued ASU 2015-07, Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) , which removes the requirement to categorize investments for which fair value is measured using the net asset value per share practical expedient within the fair value hierarchy. This ASU is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. This change is required to be applied retrospectively to all periods presented. The adoption of this ASU resulted in removing the disclosure of the fair value of certain assets in the fair value hierarchy table within Note F, Employee Benefit Plans . There was no change in total pension plan assets, financial condition, results of operations, or cash flows as a result of the adoption of ASU 2015-07. In April 2015, the FASB issued ASU 2015-05, Intangibles—Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement , which provides explicit guidance to help companies evaluate the accounting for fees paid by a customer in a cloud computing arrangement. This ASU is effective for interim and annual periods beginning after December 15, 2015. An entity can elect to adopt the amendments either prospectively for all arrangements entered into or materially modified after the effective date, or retrospectively. The adoption of this ASU did not have a material impact on our consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs , which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The ASU is effective for annual periods beginning after December 15, 2015, and interim periods within those annual periods. As a result, we reclassified $0.2 million in unamortized debt issuance costs as a reduction of the debt balance as of December 31, 2015 that were previously included in Other Assets (see Note C , Long-Term Debt ). In August 2014, the FASB issues ASU 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties About an Entity's Ability to Continue as a Going Concern, which provide guidance in management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern. The provision requires management to perform interim and annual assessments of an entity's ability to meet its obligations as they become due within one year from the date that the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity's ability to continue as a going concern. The ASU is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. See above for disclosure containing how substantial doubt may be raised, but is alleviated by management's plans and actions. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The standard permits the use of either the retrospective or cumulative effect transition method. On July 9, 2015, the FASB decided to delay the effective date of the new revenue standard by one year. The new effective date is for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted beginning January 1, 2017 (original effective date of the ASU). The company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The company has not yet selected a transition method nor has it determined the effect of the standard on its consolidated financial statements. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair value of financial instruments | Fair Value of Financial Instruments FASB ASC 820, Fair Value Measurements and Disclosures , ("ASC 820") defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a fair value hierarchy that prioritizes the inputs used in valuation methodologies into three levels: Level 1 Quoted prices in active markets for identical assets or liabilities. Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Because of their maturities and/or variable interest rates, certain financial instruments have fair values approximating their carrying values. These instruments include cash and cash equivalents, accounts receivable, and trade payables. The fair value of the assets in our funded pension plan is disclosed in Note F , Employee Benefit Plans. The assumptions used to determine the fair value of our reporting units in Step One and Step Two of our goodwill impairment tests and the discounted cash flow model used to calculate the fair value of our 3Q Digital customer relationship, trade name and non-compete agreement intangible assets are disclosed in Note E , Goodwill and Other Intangible Assets. The summary of our acquisition related contingent consideration accounted for at fair value on a recurring basis is disclosed in Note M , Acquisition and Disposition. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Our long-term debt obligations at year-end were as follows: December 31, In thousands 2016 2015 2016 Revolving Credit Facility, various interest rates based on the Base rate, due March 10, 2021 (effective rate of 6.00% at December 23, 2016 termination) $ — N/A 2016 Term Loan Facility, various interest rates based on the Base rate plus the applicable margin, due March 10, 2021 (effective rate of 10.72% at December 23, 2016 termination) — N/A 2013 Revolving Credit Facility ($60.6 million capacity), various interest rates based on the highest of (a) the Agent's prime rate, (b) the Federal Funds Rate plus 0.50% per annum, or (c) Eurodollar rate plus 1.00% per annum, plus a spread which is determined based on our total debt-to-EBITDA ratio then in effect, due August 16, 2016 (effective rate of 4.75% at December 31, 2015) N/A 13,000 2011 Term Loan Facility, various interest rates based on LIBOR (effective rate of 2.42% at December 31, 2015), due August 16, 2016 N/A 64,313 Less: unamortized discount and debt issuance costs — (208 ) Total debt — 77,105 Less current maturities — 3,000 Total long-term debt $ — $ 74,105 The carrying values and estimated fair values of our outstanding debt at year-end were as follows: December 31, 2016 2015 In thousands Carrying Value Fair Value Carrying Value Fair Value Total debt $ — $ — $ 77,105 $ 77,105 The estimated fair values were calculated using market quotes for debt of the same remaining maturity and characteristics. These current rates are considered Level 2 inputs under the fair value hierarchy established by ASC 820, Fair Value Measurement . Credit Facilities On August 16, 2011 , we entered into a five -year $122.5 million term loan facility ("2011 Term Loan Facility") with Bank of America, N.A., as Administrative Agent. The 2011 Term Loan Facility was repaid on March 11, 2016 using the proceeds of the 2016 Secured Credit Facility. On August 8, 2013 , we entered into a three -year $80 million revolving credit facility, which included a $25 million letter of credit sub-facility and a $5 million swing line loan sub-facility ("2013 Revolving Credit Facility") with Bank of America, N.A. (as Administrative Agent, Swing Line Lender, and L/C Issuer) and the other lenders party thereto. The 2013 Revolving Credit Facility was repaid on March 11, 2016 using the proceeds of the 2016 Secured Credit Facility. On March 10, 2016 , we entered into a secured credit facility with Wells Fargo Bank, N.A. as Administrative Agent, consisting of a maximum $65.0 million revolving credit facility (the "2016 Revolving Credit Facility"), and a $45.0 million term loan facility (the "2016 Term Loan", and together with the 2016 Revolving Credit Facility, the "2016 Secured Credit Facility"). The 2016 Secured Credit Facility was secured by substantially all of our assets and material domestic subsidiaries. The 2016 Secured Credit Facility was used for general corporate purposes, and to replace, and repay remaining outstanding balances on, our (i) 2013 Revolving Credit Facility, and (ii) 2011 Term Loan Facility. The credit and guarantee agreements related to the 2013 Revolving Credit Facility and 2011 Term Loan Facility were terminated upon repayment. As of April 30, 2016, we were not in compliance with the 2016 Secured Credit Facility's minimum fixed charge coverage ratio or leverage ratio for the period. For the May 1, 2015 to April 30, 2016 covenant reference period, our fixed charge coverage ratio was 0.9 to 1 as compared with the covenant minimum of at least 1.0 to 1 and our leverage ratio was 2.28 to 1 as compared to the requirement of not greater than 2.25 to 1 . On May 16,2016, this noncompliance was waived when we entered into an Amendment and Waiver to the Credit Agreement (the "First Amendment and Waiver"). The First Amendment and Waiver also amended the 2016 Secured Credit Facility to provide that we may only make Restricted Payments (as defined therein) after January 1, 2017, provided the other payment conditions were satisfied. As of June 30, 2016, we were not in compliance with the 2016 Secured Credit Facility's minimum fixed charge coverage ratio or leverage ratio for the period. On August 5, 2016, we entered into a Waiver and Second Amendment to the Credit Agreement (the "Second Amendment and Waiver"). Any covenant violation related to the fixed charge coverage ratio and leverage ratio existing during the period ending June 30, 2016 was waived by Wells Fargo as part of the Second Amendment and Waiver. The Second Amendment and Waiver waived the fixed charge coverage ratio and the leverage ratio until September 30, 2016. We were required to meet a minimum adjusted EBITDA amount that increased month to month starting at $0.5 million for the two-month period ending June 30, 2016 and increased monthly until it met $24.0 million for the period ending April 30, 2017 and each twelve-month period ending each month after that. The Amendment also increased the interest rate applicable to all loans by 1.0% effective May 31, 2016. As of September 30, 2016, we were not in compliance with the 2016 Secured Credit Facility's minimum fixed charge coverage ratio or leverage ratio for the period. For the September 30, 2016 covenant reference period, our fixed charge coverage ratio was 0.6 to 1 as compared with the covenant minimum of 1.1 to 1 and our leverage ratio was 2.40 to 1 as compared to the covenant requirement of not greater than 2.25 to 1 . On November 8, 2016, we entered into a Waiver to Credit Agreement (the "Third Waiver") in which any covenant violation related to the fixed charge coverage ratio and leverage ratio existing during the period ending September 30, 2016 was waived. On December 13, 2016, we entered into a Waiver and Third Amendment to the Credit Agreement in which an event of default caused by the company's failure to meet the minimum fixed charge coverage ratio of 1.1 to 1 for the twelve-month period ending October 31, 2016 was waived. The Amendment also increased the interest rate applicable to all loans by 1.0% effective December 1, 2016. Prepayment of the 2016 Secured Credit Facility was required upon the completion of the sale of Trillium in accordance with its terms. The proceeds of the Trillium sale were used to repay in full all outstanding loans, together with interest, and all other amounts due in connection with repayment. Prepayment penalties of approximately $1.3 million were incurred as a result of repaying the 2016 Secured Credit Facility. The credit and guarantee agreements related to the 2016 Secured Credit Facility were likewise terminated. Cash payments for interest were $5.7 million , $1.7 million , and $2.5 million for the years ended December 31, 2016 , 2015 , and 2014 , respectively. On April 17, 2017, we entered into a secured credit facility with Texas Capital Bank, N.A. , that provides a $20 million revolving credit facility (the "Texas Capital Credit Facility"). The Texas Capital Credit Facility will be used for general corporate purposes. The Texas Capital Credit Facility is secured by substantially all of the company's assets and its material domestic subsidiaries. The Texas Capital Credit Facility is secured by HHS Guaranty, LLC , an entity formed to provide credit support for Harte Hanks by certain members of the Shelton family (descendants of one of our founders). The Texas Capital Credit Facility expires after two years at which point all outstanding principal amounts will be due. Harte Hanks can elect to accrue interest on outstanding principal balances at either LIBOR plus 1.95% or prime plus 0.75% . Unused credit balances will accrue interest at 0.50% . Harte Hanks is required to pay a quarterly fee of $0.1 million as consideration for the collateral balances provided by HHS Guaranty, LLC. The Texas Capital Credit Facility is subject to customary covenants requiring insurance, legal compliance, payment of taxes, prohibition of second liens, and secondary indebtedness, as well as the filing of quarterly and annual financial statements. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The components of income tax expense (benefit) are as follows: Year Ended December 31, In thousands 2016 2015 2014 Current Federal $ (6,360 ) $ 2,920 $ 1,519 State and local (107 ) 744 113 Foreign 807 545 200 Total current $ (5,660 ) $ 4,209 $ 1,832 Deferred Federal $ 18,619 $ (38,048 ) $ 3,427 State and local 7,655 (3,523 ) 1,637 Foreign 16 2 730 Total deferred $ 26,290 $ (41,569 ) $ 5,794 Total income tax expense (benefit) $ 20,630 $ (37,360 ) $ 7,626 The U.S. and foreign components of income (loss) from continuing operations before income taxes were as follows: Year Ended December 31, In thousands 2016 2015 2014 United States $ (66,828 ) $ (217,920 ) $ 17,277 Foreign (2,320 ) (506 ) 4,103 Total income (loss) from continuing operations before income taxes $ (69,148 ) $ (218,426 ) $ 21,380 The differences between total income tax expense (benefit) and the amount computed by applying the statutory federal income tax rate to income (loss) before income taxes were as follows: Year Ended December 31, In thousands 2016 Rate 2015 Rate 2014 Rate Computed expected income tax expense (benefit) $ (24,202 ) 35.0 % $ (76,449 ) 35.0 % $ 7,484 35.0 % Goodwill impairment basis difference 6,275 -9.1 % 36,664 -16.8 % — — % Sold operations basis difference — — % 686 -0.3 % — — % Net effect of state income taxes (954 ) 1.4 % 178 -0.1 % 1,138 5.4 % Foreign subsidiary dividend inclusions 843 -1.2 % 557 -0.3 % 135 0.6 % Foreign tax rate differential 722 -1.0 % 291 -0.1 % (668 ) -3.1 % Change in valuation allowance 34,478 -49.9 % (153 ) 0.1 % (386 ) -1.8 % Non-deductible interest 3,219 -4.7 % 715 -0.3 % — — % Other, net 249 -0.4 % 151 -0.1 % (77 ) -0.4 % Income tax expense (benefit) for the period $ 20,630 -29.9 % $ (37,360 ) 17.1 % $ 7,626 35.7 % Total income tax expense (benefit) was allocated as follows: Year Ended December 31, In thousands 2016 2015 2014 Continuing operations $ 20,630 $ (37,360 ) $ 7,626 Discontinued operations 8,994 5,446 5,689 Loss on sale of discontinued operations (4,600 ) — — Stockholders’ equity (782 ) 2,021 (9,527 ) Total $ 24,242 $ (29,893 ) $ 3,788 The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and deferred tax liabilities were as follows: Year Ended December 31, In thousands 2016 2015 Deferred tax assets Deferred compensation and retirement plan $ 24,715 $ 22,884 Accrued expenses not deductible until paid 3,508 3,612 Employee stock-based compensation 3,321 3,709 Accrued payroll not deductible until paid 1,400 707 Accounts receivable, net 406 1,208 Other, net 393 417 Foreign net operating loss carryforwards 2,271 2,657 State net operating loss carryforwards 3,349 1,956 Foreign tax credit carryforwards 785 785 Capital loss carryforwards — 6,278 Total gross deferred tax assets 40,148 44,213 Less valuation allowances (40,148 ) (9,958 ) Net deferred tax assets $ — $ 34,255 Deferred tax liabilities Property, plant and equipment $ (3,060 ) $ (6,154 ) Goodwill and other intangibles (6,800 ) (45,212 ) Other, net (1,184 ) (561 ) Total gross deferred tax liabilities (11,044 ) (51,927 ) Net deferred tax liabilities $ (11,044 ) $ (17,672 ) A reconciliation of the beginning and ending balance of deferred tax valuation allowance is as follows: In thousands Balance at December 31, 2014 $ 10,933 Additions: Charged to cost and expenses 366 Charged to other accounts — Deductions (1,341 ) Balance at December 31, 2015 $ 9,958 Additions: Charged to cost and expenses 37,798 Charged to other accounts — Deductions (7,608 ) Balance at December 31, 2016 $ 40,148 In assessing the realizability of deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The cumulative loss incurred over the two -year period ended December 31, 2016 constituted significant negative evidence. This evidence indicates that a full valuation allowance is necessary for these deferred tax assets for the year ended December 31, 2016 . The valuation allowance for deferred tax assets was $40.1 million and $10.0 million at December 31, 2016 and 2015, respectively. The valuation allowance for 2016 relates to all deferred tax assets, and the valuation allowance for 2015 relates to net operating loss, capital loss, and foreign tax credit carryforwards, which are not expected to be realized. The amount of the deferred tax asset considered realizable could be adjusted if estimates of future taxable income during the carryforward period are increased, or if objective negative evidence in the form of cumulative losses is no longer present, and additional weight may be given to subjective evidence such as changes in our growth projections. We or one of our subsidiaries file income tax returns in the U.S. federal, U.S. state, and foreign jurisdictions. For U.S. federal, U.S. state, and foreign returns, we are no longer subject to tax examinations for years prior to 2012 . A reconciliation of the beginning and ending amount of unrecognized tax benefit is as follows: In thousands Balance at December 31, 2013 $ 27 Additions for current year tax positions — Additions for prior year tax positions — Reductions for prior year tax positions — Lapse of statute (27 ) Settlements — Balance at December 31, 2014 $ — Additions for current year tax positions — Additions for prior year tax positions 761 Reductions for prior year tax positions — Lapse of statute — Settlements — Balance at December 31, 2015 $ 761 Additions for current year tax positions — Additions for prior year tax positions 206 Reductions for prior year tax positions — Lapse of statute — Settlements — Balance at December 31, 2016 $ 967 Included in the balance as of December 31, 2016 are $1.0 million of unrecognized tax benefits that, if recognized, would impact our effective tax rate. Any adjustments to this liability as a result of the finalization of audits or potential settlements would not be material. We have elected to classify any interest and penalties related to income taxes within income tax expense in our Consolidated Statements of Comprehensive Income (Loss). We did not recognize any tax benefits for the reduction of accrued interest and penalties associated with the reduction of the liability for unrecognized tax benefits during the years ended December 31, 2016 and 2015 . We did not have any interest and penalties accrued at December 31, 2016 or 2015 . As of December 31, 2016 , we had net operating loss carryforwards that are available to reduce future taxable income and that will begin to expire in 2030. Deferred income taxes have not been provided on the undistributed earnings of our foreign subsidiaries as these earnings have been, and under current plans will continue to be, permanently reinvested in these subsidiaries. As of December 31, 2016 , the net cumulative undistributed earnings of these subsidiaries were approximately $0.3 million . If those earnings were not considered permanently reinvested, U.S. federal deferred income taxes would have been recorded, after consideration of U.S. foreign tax credits. However, it is not practicable to estimate the amount of additional taxes which may be payable upon the distribution of their cumulative earnings. As of December 31, 2016 , approximately $0.5 million of cash is located within certain foreign subsidiaries that if repatriated would require that we accrue and pay approximately $0.2 million in additional tax. Cash payments for income taxes were $2.6 million , $10.1 million , and $4.9 million in 2016 , 2015 , and 2014 , respectively. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets As discussed in Note A, Significant Accounting Policies , goodwill is not amortized, but is tested for impairment on an annual basis or when circumstances exist that indicate goodwill may be impaired. Prior to the transaction resulting in the sale of Trillium, the company's goodwill was allocated between two reporting units; Customer Interaction and Trillium. As of December 31, 2016 we had one reporting unit. In conjunction with the sale of Trillium on December 23, 2016, the allocated fair value of goodwill of $149.3 million was written-off. This write-off is reflected in the Income (loss) from discontinued operations, net of income taxes line of the Consolidated Statements of Comprehensive Income (Loss) in the Consolidated Financial Statements. During our annual impairment test in 2016 , we performed a Step One analysis. During the first step we used the income-based approach, in which estimated future cash flows were discounted at a rate of 11.5% . The results were combined with results of the market-based approach to determine fair value of the business. The results indicated that the fair value of the reporting unit was less than its carrying amount and a Step Two analysis was warranted. Under Step Two, the fair value of the reporting unit was estimated for the purpose of deriving an estimate of the implied fair value of goodwill. The fair value of tangible assets along with the estimated fair value of intangible assets including non-compete agreements, trade names, and customer relationships, were taken into consideration for the analysis. Additional assumptions used in measuring the fair value of the assets and liabilities included customer attrition rates, discount rates, and royalty rates used in valuing the intangible assets, and the consideration of the market environment in valuing tangible assets. The resulting implied fair value of the goodwill was then compared to the recorded goodwill to determine the amount of impairment.The results of Step Two indicated that a goodwill write down of $38.7 million was necessary. During 2015, as a result of a sustained decline in our market capitalization below our book value of equity and recent operating performance, the company determined that a triggering event had occurred. Using the income-based approach and the marketing-based approach, the fair value of the reporting unit was estimated to be below the carrying value and therefore indicated impairment. The second step of the test indicated that goodwill was impaired by $209.9 million . The impairment charge resulted in a corresponding $36.8 million tax benefit resulting in a net income impact of $173.1 million . Our fair value estimates relied on management assumptions including discount rate, revenue growth rates, operating margins, attrition rates, and royalty rates. Our accumulated goodwill impairment as of December 31, 2016 was $248.6 million . We recorded $3.5 million in goodwill in 2016 in connection with the acquisition of the business of Aleutian Consulting, Inc. on March 4, 2016. The residual purchase price methodology used in the calculation relied on management's assumptions, which are considered Level 3 inputs, as they are unobservable. This goodwill will be tax deductible. On April 14, 2015, we sold our B2B research businesses, Aberdeen Group and Harte Hanks Market Intelligence (the "B2B research business”). As a result, the $11.1 million allocated fair value within the net book value of Customer Interaction goodwill was written off. In addition, $2.3 million of intangible assets with indefinite useful lives related to the Aberdeen Group trade name was written off. These amounts are reflected in the Loss on sale in the Other expenses section of the Consolidated Statements of Comprehensive Income (Loss). On March 16, 2015, we acquired 3Q Digital. We performed a valuation to estimate of the total purchase consideration and values for the tangible and identifiable intangible assets. As a result, we recorded $41.8 million in goodwill and $4.8 million of identified intangible assets with definite lives for client relationships and non-compete agreements. For further discussion on transactions discussed above, see Note M , Acquisition and Disposition. The changes in the carrying amount of goodwill are as follows: In thousands Balance at December 31, 2014 $ 248,891 Purchase consideration 41,845 Disposition (11,099 ) Impairment (209,938 ) Balance at December 31, 2015 $ 69,699 Additions 3,480 Impairment (38,669 ) Balance at December 31, 2016 $ 34,510 We continue to monitor potential triggering events. The occurrence of one or more triggering events could require additional impairment testing, which could result in additional impairment charges. Other intangibles with indefinite useful lives relate to trade names associated with the Aberdeen Group acquisition in September 2006. As discussed above, these intangibles were written-off in conjunction with the sale of the B2B research business. As of December 31, 2016, we do not have any remaining intangibles with indefinite lives. The changes in the carrying amount of other intangibles with indefinite lives are as follows: In thousands Balance at December 31, 2014 $ 2,250 Acquisition — Impairment (2,250 ) Balance at December 31, 2015 $ — Acquisition — Disposition — Balance at December 31, 2016 $ — Other intangibles with definite useful lives relate to contact databases, client relationships, and non-compete agreements. They are amortized on a straight-line basis over their respective estimated useful lives, typically a period of 2 to 10 years, and reviewed for impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The changes in the carrying amount of other intangibles with definite lives are as follows: In thousands Balance at December 31, 2014 $ 27 Disposition (18 ) Acquisition 4,773 Amortization (659 ) Balance at December 31, 2015 $ 4,123 Amortization (821 ) Balance at December 31, 2016 $ 3,302 Amortization expense related to other intangibles with definite useful lives was $0.8 million , $0.7 million , and 0.0 million for the years ended December 31, 2016 , 2015 , and 2014 , respectively. Expected amortization expense for the next five years is as follows: In thousands 2017 $ 707 2018 627 2019 613 2020 613 2021 613 Thereafter 129 Total 3,302 |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans Prior to January 1, 1999, we maintained a defined benefit pension plan for which most of our employees were eligible (the "Qualified Pension Plan"). In conjunction with significant enhancements to our 401(k) plan, we elected to freeze benefits under the Qualified Pension Plan as of December 31, 1998. In 1994, we adopted a non-qualified, unfunded, supplemental pension plan (the "Restoration Pension Plan") covering certain employees, which provides for incremental pension payments so that total pension payments equal those amounts that would have been payable from the principal pension plan were it not for limitations imposed by income tax regulation. The benefits under the Restoration Pension Plan were intended to provide benefits equivalent to our Qualified Pension Plan as if such plan had not been frozen. We elected to freeze benefits under the Restoration Pension Plan as of April 1, 2014. The overfunded or underfunded status of our defined benefit post-retirement plans is recorded as an asset or liability on our balance sheet. The funded status is measured as the difference between the fair value of plan assets and the projected benefit obligation. Periodic changes in the funded status are recognized through other comprehensive income. We currently measure the funded status of our defined benefit plans as of December 31, the date of our year-end consolidated balance sheets. The status of the defined benefit pension plans at year-end was as follows: Year Ended December 31, In thousands 2016 2015 Change in benefit obligation Benefit obligation at beginning of year $ 178,715 $ 191,065 Interest cost 7,802 7,724 Actuarial (gain) loss 2,127 (10,861 ) Benefits paid (9,397 ) (9,213 ) Benefit obligation at end of year $ 179,247 $ 178,715 Change in plan assets Fair value of plan assets at beginning of year 121,682 124,372 Actual return on plan assets 2,883 982 Contributions 1,557 5,541 Benefits paid (9,397 ) (9,213 ) Fair value of plan assets at end of year $ 116,725 $ 121,682 Funded status at end of year $ (62,522 ) $ (57,033 ) The following amounts have been recognized in the Consolidated Balance Sheets at December 31: In thousands 2016 2015 Other current liabilities $ 1,686 $ 1,542 Pensions 60,836 55,491 Total $ 62,522 $ 57,033 The following amounts have been recognized in accumulated other comprehensive loss, net of tax, at December 31: In thousands 2016 2015 Net loss $ 46,977 $ 43,915 We are not required to make and do not intend to make any contributions to our Qualified Pension Plan in 2017 . Based on current estimates we will not be required to make any contributions to our Qualified Pension Plan until 2018. We are not required to make and do not intend to make any contributions to our Restoration Pension Plan in 2017 other than to the extent needed to cover benefit payments. We expect benefit payments under this supplemental pension plan to total approximately $1.7 million in 2017 . The following information is presented for pension plans with an accumulated benefit obligation in excess of plan assets: In thousands 2016 2015 Projected benefit obligation $ 179,247 $ 178,715 Accumulated benefit obligation $ 179,247 $ 178,715 Fair value of plan assets $ 116,725 $ 121,682 The Restoration Pension Plan had an accumulated benefit obligation of $26.6 million and $26.4 million at December 31, 2016 and 2015 , respectively. The following table presents the components of net periodic benefit cost and other amounts recognized in other comprehensive income (loss) for both plans: Year Ended December 31, In thousands 2016 2015 2014 Net Periodic Benefit Cost (Pre-Tax) Service cost $ — $ — $ 100 Interest cost 7,802 7,724 7,698 Expected return on plan assets (8,245 ) (8,637 ) (8,418 ) Recognized actuarial loss 2,386 6,228 3,654 Net periodic benefit cost $ 1,943 $ 5,315 $ 3,034 Amounts Recognized in Other Comprehensive Income (Loss) (Pre-Tax) Net (gain) loss $ 5,103 $ (9,408 ) $ 28,802 Net (benefit) cost recognized in net periodic benefit cost and other comprehensive (income) loss $ 7,046 $ (4,093 ) $ 31,836 The estimated net loss for the defined benefit pension plans that will be amortized from accumulated other comprehensive loss into net periodic benefit cost in 2017 is $2.7 million . The period over which the net loss from the Qualified Pension Plan is amortized into net periodic benefit cost was changed in 2016 from the average future service of active participants (approximately 9 years) to the average future lifetime of all participants (approximately 23 years). This change reflects that the Qualified Pension Plan is frozen and that almost all of the plan's participants are not active employees. The weighted-average assumptions used for measurement of the defined pension plans were as follows: Year Ended December 31, 2016 2015 2014 Weighted-average assumptions used to determine net periodic benefit cost Discount rate 4.49 % 4.13 % 4.94 % Expected return on plan assets 7.00 % 7.00 % 7.00 % December 31, 2016 2015 Weighted-average assumptions used to determine benefit obligations Discount rate 4.21 % 4.49 % The discount rate assumptions are based on current yields of investment-grade corporate long-term bonds. The expected long-term return on plan assets is based on the expected future average annual return for each major asset class within the plan’s portfolio (which is principally comprised of equity investments) over a long-term horizon. In determining the expected long-term rate of return on plan assets, we evaluated input from our investment consultants, actuaries, and investment management firms, including their review of asset class return expectations, as well as long-term historical asset class returns. Projected returns by such consultants and economists are based on broad equity and bond indices. Additionally, we considered our historical 15 -year compounded returns, which have been in excess of the forward-looking return expectations. The funded pension plan assets as of December 31, 2016 and 2015 , by asset category, are as follows: In thousands 2016 % 2015 % Equity securities $ 61,254 52 % $ 83,185 68 % Debt securities 21,940 19 % 32,726 27 % Other 33,531 29 % 5,771 5 % Total plan assets $ 116,725 100 % $ 121,682 100 % The current economic environment presents employee benefit plans with unprecedented circumstances and challenges, which, in some cases over the last several years, have resulted in large declines in the fair value of investments. The fair values presented have been prepared using values and information available as of December 31, 2016 and 2015 . The following tables present the fair value measurements of the assets in our funded pension plan: In thousands December 31, Quoted Prices in Active Markets for Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Equity securities $ 61,254 $ 61,254 $ — $ — Debt securities 21,940 21,940 — — Total investments, excluding investments valued at NAV 83,194 83,194 — — Investments valued at NAV (1) 33,531 — — Total plan assets $ 116,725 $ 83,194 $ — $ — In thousands December 31, Quoted Prices Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Equity securities $ 83,185 $ 83,185 $ — $ — Debt securities 32,726 32,726 — — Total investments, excluding investments valued at NAV 115,911 115,911 — — Investments valued at NAV (1) 5,771 — — — Total plan assets $ 121,682 $ 115,911 $ — $ — (1) Investment valued at NAV are comprised of cash, cash equivalents, and short-term investments used to provide liquidity for the payment of benefits and other purposes. The commingled funds are valued at NAV based on the market value of the underlying investments, which are primarily government issued securities. The investment policy for the Qualified Pension Plan focuses on the preservation and enhancement of the corpus of the plan’s assets through prudent asset allocation, quarterly monitoring and evaluation of investment results, and periodic meetings with investment managers. The investment policy’s goals and objectives are to meet or exceed the representative indices over a full market cycle ( 3 - 5 years). The policy establishes the following investment mix, which is intended to subject the principal to an acceptable level of volatility while still meeting the desired return objectives: Target Acceptable Range Benchmark Index Domestic Equities 50.0 % 35 % - 75% S&P 500 Large Cap Growth 22.5 % 15 % - 30% Russell 1000 Growth Large Cap Value 22.5 % 15 % - 30% Russell 1000 Value Mid Cap Value 5.0 % 5 % - 15% Russell Mid Cap Value Mid Cap Growth 0.0 % 0 % - 10% Russell Mid Cap Growth Domestic Fixed Income 35.0 % 15 % - 50% LB Aggregate International Equities 15.0 % 10 % - 25% MSC1 EAFE The funded pension plan provides for investment in various investment types. Investments, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility risk. Due to the level of risk associated with investments, it is reasonably possible that changes in the value of investments will occur in the near term and may impact the funded status of the plan. To address the issue of risk, the investment policy places high priority on the preservation of the value of capital (in real terms) over a market cycle. Investments are made in companies with a minimum five -year operating history and sufficient trading volume to facilitate, under most market conditions, prompt sale without severe market effect. Investments are diversified across numerous market sectors and individual companies. Reasonable concentration in any one issue, issuer, industry, or geographic area is allowed if the potential reward is worth the risk. Investment managers are evaluated by the performance of the representative indices over a full market cycle for each class of assets. The Pension Plan Committee reviews, on a quarterly basis, the investment portfolio of each manager, which includes rates of return, performance comparisons with the most appropriate indices, and comparisons of each manager’s performance with a universe of other portfolio managers that employ the same investment style. The expected future pension benefit payments for the next ten years as of December 31, 2016 are as follows: In thousands 2017 $ 9,736 2018 9,873 2019 9,967 2020 10,241 2021 10,513 2022-2026 56,362 Total $ 106,692 We also sponsor a 401(k) retirement plan in which we match a portion of employees’ voluntary before-tax contributions. Under this plan, both employee and matching contributions vest immediately. Total 401(k) expense recognized in 2016 , 2015 , and 2014 was $3.0 million , $3.0 million , and $3.0 million , respectively. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity Attributable to Parent [Abstract] | |
Stockholders' Equity | Stockholders’ Equity We paid a dividend of $0.09 per share in the first quarter of 2016 . Under the stock repurchase program publicly announced in August of 2014, our board of directors provided authorization to spend up to $20.0 million to repurchase shares of our outstanding common stock. During 2016 , no shares of our common stock were purchased. We had $11.4 million remaining under the current authorization as of December 31, 2016 . From 1997 through December 2016 , we have paid more than $1.2 billion to repurchase 67.9 million shares under this program and previously announced programs. Awardees of stock-based compensation may elect to have shares of common stock withheld from vestings to meet tax obligations. These shares are returned to our treasury stock at the time of vesting. During 2016 , we received 95,264 shares of our common stock, with an estimated market value of $0.2 million , from such arrangements. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Compensation expense for stock-based awards is based on the fair values of the awards on the date of grant and is recognized on a straight-line basis over the vesting period of the entire award in the “Labor” line of the Consolidated Statements of Comprehensive Income (Loss). For the years ended December 31, 2016 , 2015 , and 2014 , we recorded total stock-based compensation expense from continuing operations of $2.7 million , $5.4 million , and $4.0 million , respectively. We granted equity awards to our Chief Operations Officer in 2016 and our Chief Executive Officer and Chief Marketing Officer in 2015 as a material inducement for acceptance of such positions. These option, restricted stock, and performance units awards were not submitted for stockholder approval, and were separately listed with the NYSE. In May 2013, our stockholders approved the 2013 Omnibus Incentive Plan ("2013 Plan"), pursuant to which we may issue up to 5.0 million shares of stock-based awards to directors, employees, and consultants. The 2013 Plan replaced the stockholder-approved 2005 Omnibus Incentive Plan ("2005 Plan"), pursuant to which we issued equity securities to directors, officers, and key employees. No additional stock-based awards will be granted under the 2005 Plan, but awards previously granted under the 2005 Plan will remain outstanding in accordance with their respective terms. As of December 31, 2016 , there were 2.5 million shares available for grant under the 2013 Plan. Stock Options Options granted under the 2013 Plan or as inducement awards have an exercise price equal to the market value of the common stock on the grant date. These options become exercisable in 25% increments on the first four anniversaries of their date of grant, and expire on the ten th anniversary of their date of grant. Options to purchase 1.1 million shares granted as inducement awards were outstanding at December 31, 2016 , with exercise prices ranging from $2.85 to $4.26 per share. Options to purchase 0.7 million shares granted under the 2013 Plan were outstanding as of December 31, 2016 with exercise prices ranging from $1.67 to $8.85 per share. Following the third quarter 2015 resignation of Mr. Philpott, vesting was accelerated on his unvested stock options (pursuant to the terms of his employment agreement and inducement award), for which we recognized $0.5 million of accelerated expense in July 2015. Options under the 2005 Plan were granted at exercise prices equal to the market value of the common stock on the grant date. All such awards have met their respective vesting dates. Options to purchase 1.9 million shares were outstanding under the 2005 Plan as of December 31, 2016 , with exercise prices ranging from $6.04 to $26.07 per share. Options issued from January 2013 through March 2015 vest in full (to the extent not previously vested) upon a change in control, as defined in the applicable equity plan. Options granted to officers after April 2015 or before January 2013 vest in full upon a change in control if such options are not assumed or replaced by a publicly-traded successor with an equivalent award (as defined in such officers’ change in control severance agreements). Additionally, 25% of the inducement options granted to the Chief Executive Officer will vest (if not previously vested) in the event her employment is terminated without cause, or if she terminates her employment for good reason (as such terms are defined in her employment agreement). The following summarizes all stock option activity during the years ended December 31, 2016 , 2015 , and 2014 : In thousands Number of Shares Weighted- Average Option Price Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (Thousands) Options outstanding at December 31, 2013 4,245,712 $ 13.65 Granted in 2014 1,002,955 8.01 Exercised in 2014 (78,125 ) 6.19 $ 61 Unvested options forfeited in 2014 (437,984 ) 8.72 Vested options expired in 2014 (268,537 ) 17.83 Options outstanding at December 31, 2014 4,464,021 $ 11.50 Granted in 2015 1,973,606 5.73 Exercised in 2015 (35,000 ) 6.04 $ 67 Unvested options forfeited in 2015 (660,733 ) 7.96 Vested options expired in 2015 (1,139,148 ) 14.89 Options outstanding at December 31, 2015 4,602,746 $ 8.74 Granted in 2016 150,371 2.61 Exercised in 2016 — — $ — Unvested options forfeited in 2016 (570,197 ) 7.57 Vested options expired in 2016 (477,027 ) 16.06 Options outstanding at December 31, 2016 3,705,893 $ 7.72 4.74 $ — Vested and expected to vest at December 31, 2016 3,554,630 $ 7.86 4.58 $ — Exercisable at December 31, 2016 1,950,302 $ 9.83 2.74 $ — The aggregate intrinsic value at year end in the table above represents the total pre-tax intrinsic value that would have been received by the option holders if all of the in-the-money options were exercised on December 31, 2016 . The pre-tax intrinsic value is the difference between the closing price of our common stock on December 31, 2016 and the exercise price for each in-the-money option. This value fluctuates with the changes in the price of our common stock. The following table summarizes information about stock options outstanding at December 31, 2016 : Range of Exercise Prices Number Outstanding Weighted-Average Exercise Price Weighted-Average Remaining Life (Years) Number Exercisable Weighted-Average Exercise Price $ 0.00 - 6.99 1,638,475 $ 4.42 6.22 446,601 $ 4.86 $ 7.00 - 10.99 1,352,768 8.07 4.64 789,051 8.26 $ 11.00 - 11.99 332,500 11.90 1.90 332,500 11.90 $ 12.00 - 15.99 259,100 14.48 1.75 259,100 14.48 $ 16.00 - 24.49 50,000 17.30 0.25 50,000 17.30 $ 24.50 - 28.85 73,050 26.07 0.10 73,050 26.07 3,705,893 $ 7.72 4.74 1,950,302 $ 9.83 The fair value of each option grant is estimated on the date of grant using the Black-Scholes Option-Pricing Model based on the following weighted-average assumptions used for grants during 2016 , 2015 , and 2014 : Year Ended December 31, 2016 2015 2014 Expected term (in years) 6.25 6.24 6.25 Expected stock price volatility 44.80 % 40.60 % 47.10 % Risk-free interest rate 1.48 % 1.58 % 1.88 % Expected dividend yield — % 5.69 % 3.82 % Expected term is estimated using the simplified method, which takes into account vesting and contractual term. The simplified method is being used to calculate expected term instead of historical experience due to a lack of relevant historical data resulting from changes in option vesting schedules and changes in the pool of employees receiving option grants. Expected stock price volatility is based on the historical volatility from traded shares of our stock over the expected term. The risk-free interest rate is based on the rate of a zero-coupon U.S. Treasury instrument with a remaining term approximately equal to the expected term. Expected dividend yield is based on historical stock price movement and anticipated future annual dividends over the expected term. Future annual dividends over the expected term are estimated to be $0.00 per share. The weighted-average fair value of options granted during 2016 , 2015 , and 2014 was $1.17 , $1.36 , and $2.59 , respectively. As of December 31, 2016 , there was $1.2 million of total unrecognized compensation cost related to unvested stock options. This cost is expected to be recognized over a weighted average period of approximately 2.34 years . Unvested Shares Unvested shares granted as inducement awards or under the 2013 Plan vest in three equal increments on the first three anniversaries of their date of grant. Unvested shares settle solely in common stock and are treated as equity. Unvested shares granted from January 2013 through March 2015 vest in full (to the extent not previously vested) upon a change in control, as defined in the applicable equity plan. Unvested shares granted to officers since April 2015 as inducement awards or under the 2013 Plan vest in full (to the extent not previously vested) upon a change in control if such unvested shares are not assumed or replaced by a publicly-traded successor with an equivalent award (as such terms are defined in such officers’ change-in-control severance agreements). Following the third quarter 2015 resignation of Mr. Philpott, vesting was accelerated on his unvested shares (pursuant to the terms of his employment agreement and inducement award), for which we recognized $1.2 million of accelerated expense in July 2015. The following summarizes all unvested share activity during 2016 , 2015 , and 2014 : Number of Shares Weighted- Average Grant Date Fair Value Unvested shares outstanding at December 31, 2013 686,045 $ 8.72 Granted in 2014 529,426 7.90 Vested in 2014 (342,613 ) 8.98 Forfeited in 2014 (82,720 ) 8.37 Unvested shares outstanding at December 31, 2014 790,138 $ 8.10 Granted in 2015 836,775 6.38 Vested in 2015 (504,686 ) 8.23 Forfeited in 2015 (159,781 ) 7.90 Unvested shares outstanding at December 31, 2015 962,446 $ 6.57 Granted in 2016 741,954 2.63 Vested in 2016 (365,196 ) 6.70 Forfeited in 2016 (393,952 ) 5.78 Unvested shares outstanding at December 31, 2016 945,252 $ 3.76 The fair value of each unvested share is estimated on the date of grant as the closing market price of our common stock on the date of grant. As of December 31, 2016 , there was $2.7 million of total unrecognized compensation cost related to unvested shares. This cost is expected to be recognized over a weighted average period of approximately 1.76 years . Phantom Stock Units In 2016 the Board of Directors approved grants of phantom stock units under the 2013 Plan. Phantom stock units vest in 25% increments on the first four anniversaries of the date of grant. Phantom stock units settle solely in cash and are treated as a liability. Grants of phantom stock units made to officers under the 2013 Plan vest in full (to the extent not previously vested) upon a change in control if they are not assumed or replaced by a publicly-traded successor with an equivalent award (as such terms are defined in such officers’ change-in-control severance agreements). The following summarizes all phantom stock unit activity during 2016 : Number of Weighted- Phantom stock units outstanding at December 31, 2015 — $ — Granted in 2016 781,645 2.69 Vested in 2016 — — Forfeited in 2016 (249,825 ) 2.69 Phantom stock units outstanding at December 31, 2016 531,820 $ 2.69 The fair value of each phantom stock unit is estimated on the date of grant as the closing market price of our common stock on the date of grant. Changes in our stock price will result in adjustments to compensation expense and the corresponding liability over the applicable service period. As of December 31, 2016 , there was $0.7 million of total unrecognized compensation cost related to phantom stock units. This cost is expected to be recognized over a weighted average period of approximately 3.29 years . Performance Stock Units Under the 2013 Plan and grants of inducement awards, performance stock units are a form of share-based award similar to unvested shares, except that the number of shares ultimately issued is based on our performance against specific performance goals over a roughly three-year period. At the end of the performance period, the number of shares of stock issued will be determined in accordance with the specified performance target(s) in a range between 0% and 100% . Performance stock units vest solely in common stock and are treated as equity. Unvested performance stock units granted from January 2013 through March 2015 vest in full at the 100% performance level upon a change in control, as defined in the applicable equity plan. Unvested performance stock units granted to officers since April 2015 as inducement awards or under the 2013 Plan vest in full upon a change in control if such unvested performance stock units are not assumed or replaced by a publicly-traded successor with an equivalent award (as such terms are defined in such officers’ change-in-control severance agreements). The following summarizes all performance stock unit activity during 2016 , 2015 , and 2014 : Number of Shares Weighted- Average Grant-Date Fair Value Performance stock units outstanding at December 31, 2013 470,700 $ 8.58 Granted in 2014 308,507 7.09 Settled in 2014 — — Forfeited in 2014 (175,533 ) 9.30 Performance stock units outstanding at December 31, 2014 603,674 $ 7.61 Granted in 2015 669,839 4.30 Settled in 2015 — — Forfeited in 2015 (572,129 ) 7.54 Performance stock units outstanding at December 31, 2015 701,384 $ 4.51 Granted in 2016 473,000 1.90 Settled in 2016 — — Forfeited in 2016 (330,069 ) 5.76 Performance stock units outstanding at December 31, 2016 844,315 $ 2.56 The fair value of each performance stock unit is estimated on the date of grant as the closing market price of our common stock on the date of grant, minus the present value of anticipated dividend payments. Periodic compensation expense is based on the current estimate of future performance against specific performance goals over a three -year period and is adjusted up or down based on those estimates. As of December 31, 2016 , there was $1.3 million of total unrecognized compensation cost related to performance stock units. This cost is expected to be recognized over a weighted average period of approximately 2.16 years . Cash Performance Stock Units In 2016 the Board of Directors approved grants of cash performance stock units under the 2013 Plan. Cash performance stock units are a form of share-based award similar to phantom stock units, except that the number of units ultimately issued is based on our performance against specific performance goals over a three-year period. At the end of the performance period, the number of units vesting will be determined in accordance with specified performance target(s) in a range between 0% and 100% . Cash performance stock units settle solely in cash and are treated as a liability. Grants of cash performance stock units made to officers under the 2013 Plan vest in full (to the extent not previously vested) upon a change in control if they are not assumed or replaced by a publicly-traded successor with an equivalent award (as such terms are defined in such officers’ change-in-control severance agreements). The following summarizes all performance stock unit activity during 2016 : Number of Weighted- Cash performance stock units outstanding at December 31, 2015 — $ — Granted in 2016 512,127 2.69 Settled in 2016 — — Forfeited in 2016 (68,122 ) 2.69 Cash performance stock units outstanding at December 31, 2016 444,005 $ 2.69 The fair value of each cash performance stock unit is estimated on the date of grant as the closing market price of our common stock on the date of grant, minus the present value of anticipated dividend payments. Periodic compensation expense is based on the current estimate of future performance against specific performance goals over a three -year period and is adjusted up or down based on those estimates. As of December 31, 2016 , there was $0.6 million of total unrecognized compensation cost related to performance stock units. This cost is expected to be recognized over a weighted average period of approximately 2.13 years . |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies At December 31, 2016 , we had letters of credit in the amount of $4.1 million backed by cash collateral. No amounts were drawn against these letters of credit at December 31, 2016 . These letters of credit exist to support insurance programs relating to workers’ compensation, automobile, and general liability, and to offset liability relating to leasehold obligations. In the normal course of our business, we are obligated under some agreements to indemnify our clients as a result of claims that we infringe on the proprietary rights of third parties. The terms and duration of these commitments vary and, in some cases, may be indefinite, and certain of these commitments do not limit the maximum amount of future payments we could become obligated to make there under; accordingly, our actual aggregate maximum exposure related to these types of commitments cannot be reasonably estimated. Historically, we have not been obligated to make significant payments for obligations of this nature, and no liabilities have been recorded for these obligations in our financial statements. We are also currently subject to various other legal proceedings in the course of conducting our businesses and, from time to time, we may become involved in additional claims and lawsuits incidental to our businesses. In the opinion of management, after consultation with counsel, none of these matters is currently considered to be reasonably possible of resulting in a material adverse effect on our consolidated financial position or results of operations. Nevertheless, we cannot predict the impact of future developments affecting our pending or future claims and lawsuits and any resolution of a claim or lawsuit within a particular fiscal quarter may adversely impact our results of operations for that quarter. We expense legal costs as incurred, and all recorded legal liabilities are adjusted as required as better information becomes available to us. The factors we consider when recording an accrual for contingencies include, among others: (i) the opinions and views of our legal counsel, (ii) our previous experience, and (iii) the decision of our management as to how we intend to respond to the complaints. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Leases | Leases We lease real estate and certain equipment under numerous lease agreements, most of which contain some renewal options. The total rent expense applicable to operating leases was $12.4 million , $13.6 million , and $14.3 million for the years ended December 31, 2016 , 2015 , and 2014 , respectively. Step rent provisions and escalation clauses, normal tenant improvements, rent holidays, and other lease concessions are taken into account in computing minimum lease payments. We recognize the minimum lease payments on a straight-line basis over the minimum lease term. The future minimum rental commitments for all non-cancelable operating leases with terms in excess of one year as of December 31, 2016 are as follows: In thousands 2017 $ 10,812 2018 7,482 2019 4,991 2020 2,842 2021 1,597 Thereafter 2,352 Total $ 30,076 We also lease certain equipment and software under capital leases. Our capital lease obligations at year-end were as follows: In thousands 2016 2015 Current portion of capital leases $ 559 $ 132 Long-term portion of capital leases 1,018 204 Total capital lease obligation $ 1,577 $ 336 Cash paid for capital leases was $0.2 million for the year ending December 31, 2016 . The future minimum lease payments for all capital leases operating as of December 31, 2016 are as follows: In thousands 2017 $ 559 2018 522 2019 459 2020 35 2021 2 Thereafter — Total $ 1,577 |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings (Loss) Per Share In periods in which the company has net income, the company is required to calculate earnings per share using the two-class method. The two-class method is required because the company's unvested shares are considered participating securities. Participating securities have the right to receive dividends should the company declare dividends on its common stock. Under the two-class method, undistributed and distributed earnings are allocated on a pro-rata basis to the common and restricted stockholders. The weighted-average number of common and restricted shares outstanding during the period is then used to calculate EPS for each class of shares. In periods in which the company has a net loss, basic loss per share is calculated using the treasury stock method. The treasury stock method is calculated by dividing the net loss by the weighted-average number of common shares outstanding during the period. The two-class method is not used, because the two-class calculation is anti-dilutive. Reconciliations of basic and diluted earnings per share ("EPS") are as follows In thousands, except per share amounts 2016 2015 2014 Net Income (Loss) Income (loss) from continuing operations $ (89,778 ) $ (181,066 ) $ 13,754 Income (loss) from discontinued operations (41,159 ) 10,138 10,237 Net income (loss) $ (130,937 ) $ (170,928 ) $ 23,991 Basic EPS Weighted-average common shares outstanding used in earnings per share computations 61,487 61,643 62,444 Basic earnings (loss) per share Continuing operations $ (1.46 ) $ (2.94 ) $ 0.22 Discontinued operations (0.67 ) 0.17 0.16 Basic earnings (loss) per share $ (2.13 ) $ (2.77 ) $ 0.38 Diluted EPS Shares used in diluted earnings per share computations 61,487 61,643 62,658 Basic earnings (loss) per share Continuing operations $ (1.46 ) $ (2.94 ) $ 0.22 Discontinued operations (0.67 ) 0.17 0.16 Basic earnings (loss) per share $ (2.13 ) $ (2.77 ) $ 0.38 Computation of Shares Used in Earnings Per Share Computations Weighted-average common shares outstanding 61,487 61,643 62,444 Weighted-average common equivalent shares-dilutive effect of stock options and awards — — 214 Shares used in diluted earnings per share computations 61,487 61,643 62,658 For the purpose of calculating the shares used in the diluted EPS calculations, 4.2 million , 4.2 million , and 4.1 million anti-dilutive options have been excluded from the EPS calculations for the years ended December 31, 2016 , 2015 , and 2014 , respectively. 1.1 million , 0.9 million , and 0.0 million anti-dilutive unvested shares were excluded from the calculation of shares used in the diluted EPS calculation for the years ended December 31, 2016 , 2015 , and 2014 , respectively. |
Comprehensive Income (Loss)
Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2016 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) for a period encompasses net income (loss) and all other changes in equity other than from transactions with our stockholders. Our comprehensive income (loss) was as follows: Year Ended December 31, In thousands 2016 2015 2014 Net income (loss) $ (130,937 ) $ (170,928 ) $ 23,991 Other comprehensive income (loss): Adjustment to pension liability (5,103 ) 9,408 (28,802 ) Tax (expense) benefit 2,041 (3,763 ) 11,521 Adjustment to pension liability, net of tax (3,062 ) 5,645 (17,281 ) Foreign currency translation adjustment 444 (1,976 ) (1,830 ) Total other comprehensive income (loss) $ (2,618 ) $ 3,669 $ (19,111 ) Total comprehensive income (loss) $ (133,555 ) $ (167,259 ) $ 4,880 Changes in accumulated other comprehensive income (loss) by component are as follows: In thousands Defined Benefit Pension Items Foreign Currency Items Total Balance at December 31, 2014 $ (49,560 ) $ 2,331 $ (47,229 ) Other comprehensive loss, net of tax, before reclassifications — (1,976 ) (1,976 ) Amounts reclassified from accumulated other comprehensive income (loss), net of tax 5,645 — 5,645 Net current period other comprehensive income (loss), net of tax 5,645 (1,976 ) 3,669 Balance at December 31, 2015 $ (43,915 ) $ 355 $ (43,560 ) Other comprehensive loss, net of tax, before reclassifications — 444 444 Amounts reclassified from accumulated other comprehensive income (loss), net of tax (3,062 ) — (3,062 ) Net current period other comprehensive income (loss), net of tax (3,062 ) 444 (2,618 ) Balance at December 31, 2016 $ (46,977 ) $ 799 $ (46,178 ) Reclassification amounts related to the defined pension plans are included in the computation of net period pension benefit cost (see Note F , Employee Benefit Plans) . |
Acquisition and Disposition
Acquisition and Disposition | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Acquisition and Disposition | Acquisition and Disposition On March 4, 2016 , we acquired Aleutian Consulting, Inc. for $3.5 million in cash. The results of the acquired business, which now operates as Harte Hanks Consulting, have been included in continuing operations beginning the day of acquisition. The residual purchase price methodology was used for determination of fair value of the tangible assets and goodwill allocation. The calculation relied on management's assumptions, which are considered Level 3 inputs, as they are unobservable On March 16, 2015 , we acquired 3Q Digital. The results of the acquired entity have been included in continuing operations beginning the day of acquisition. The fair value of the purchase consideration recognized on acquisition was $48.2 million including an initial purchase price of $30.2 million in cash and a $17.9 million liability for the present value of a contingent consideration included in the agreement. The contingent consideration requires us to pay the former owners an additional sum dependent upon achievement of certain goals up to $35.0 million in cash. The estimate of the fair value of the contingent consideration requires subjective assumptions on expected revenue growth, discount rates, and probabilities. Subsequent revisions to these assumptions could materially change the estimate of the fair value of the contingent consideration. A portion of the fair value of the purchase consideration is allocated to the tangible and intangible assets transferred based on their estimated fair value at the acquisition date. The acquired intangible assets are as follows: customer relationships of $4.3 million (amortized over seven years), trade names and trademarks of $0.3 million (amortized over two years), and non-compete agreements of $0.2 million (amortized over three years). On May 1, 2017, the company entered into the 3Q Agreement, which defers our obligation to pay the contingent consideration to the former owners until April 1, 2019 or the sale of the 3Q Digital business, whichever is earlier. Any portion of the contingent consideration that remains unpaid after March 1, 2018 will accrue interest at a rate of 8.5%. In addition, under the 3Q Agreement we agreed to pay a special bonus pool to the former owners of the 3Q Digital business as well as a sale bonus for certain current employees of 3Q Digital in the event the business is sold prior to April 1, 2019. The following tables summarize the consideration paid and the amounts of estimated fair value of the assets acquired and liabilities assumed at the acquisition date. In thousands Cash consideration per purchase agreement $ 30,245 Estimated fair value of contingent consideration 17,940 Fair value of total consideration $ 48,185 In thousands Recognized amounts of tangible assets and liabilities: Current assets $ 4,135 Property and equipment 164 Other assets 389 Current liabilities (822 ) Other liabilities — Total tangible assets and liabilities $ 3,866 Identifiable intangible assets 4,773 Goodwill (including deferred tax adjustment of $2,299) 41,845 Total $ 50,484 A reconciliation of the beginning and ending accrued balances of the contingent consideration using significant unobservable inputs (Level 3) is as follows: In thousands Contingent consideration at acquisition date $ 17,940 Accretion of interest 2,337 Accrued contingent consideration liability as of December 31, 2015 20,277 Accretion of interest 2,430 Adjustments to fair value 7,018 Accrued contingent consideration liability as of December 31, 2016 $ 29,725 The fair value of the contingent consideration is highly sensitive to changes in revenue. We estimate that a 1% reduction in the year three revenue projection would change the present value of the contingent consideration by approximately $5.9 million . Adjustments to the fair value of the contingent consideration are recorded within the "Other, net" line in the Consolidated Statements of Comprehensive Income (Loss). On April 14, 2015 , Harte Hanks sold its B2B research business. The sale resulted in a pre-tax loss of $9.5 million in the second quarter of 2015. The related asset group represented less than 5% of our total 2014 revenue and did not meet the criteria to be classified as a component of the entity. As such, the related loss on sale is included in continuing operations of the Consolidated Financial Statements. The sale resulted in write-offs of both goodwill and intangible assets allocated to the B2B research business (see Note E , Goodwill and Other Intangible Assets ). |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations On December 23, 2016, we completed the sale of the equity interests of Trillium to Syncsort Ltd. The decision to sell Trillium was largely based on the prioritization of investments in support of optimizing our clients' customer journey across an omni-channel delivery platform, and the determination that the Trillium business is likely to be a better strategic fit and more valuable asset to other parties. The business was sold for gross proceeds of approximately $112.0 million in cash and resulted in a loss on the sale of $39.9 million , net of $4.6 million of income tax benefit. We believe that the sale of Trillium will allow us to better focus on our core Customer Interaction businesses and moving towards growth. Because the sale of Trillium represents a strategic shift that has a major effect on our operations and financial results, the results of operations, financial position, and cash flows for Trillium are reported separately as discontinued operations for all periods presented. Results of the remaining Harte Hanks business are reported as continuing operations. Summarized operating results for the Trillium discontinued operations, through the dates of disposal, are as follows: Year Ended December 31, In thousands 2016 2015 2014 Revenue $ 45,639 $ 51,135 $ 54,232 Labor 18,687 22,219 25,930 Production and distribution 703 1,404 1,651 Advertising, selling, general and administrative 10,255 9,951 9,142 Depreciation, software and intangible asset amortization 2,304 1,867 2,032 Interest expense, net 7,133 (256 ) (246 ) Loss on sale 44,529 — — Other, net (1,207 ) 366 (203 ) Income (loss) from discontinued operations before income taxes (36,765 ) 15,584 15,926 Income tax expense 4,394 5,446 5,689 Net income (loss) from discontinued operations $ (41,159 ) $ 10,138 $ 10,237 The assets and liabilities for the Trillium discontinued operations as of December 31, 2016 and 2015 were as follows: Year Ended December 31, In thousands 2016 2015 ASSETS Current assets Cash and cash equivalents $ — $ 1,049 Accounts receivable, net — 11,397 Prepaid expenses — 1,640 Property, plant and equipment, net — 5,777 Goodwill — 149,273 Other current assets — 265 Total current assets of discontinued operations $ — $ 169,401 LIABILITIES Current liabilities Accounts payable $ — $ 1,670 Accrued payroll and related expenses — 924 Deferred revenue and customer advances — 21,186 Other current liabilities — 978 Total current liabilities of discontinued operations $ — $ 24,758 |
Selected Quarterly Data (Unaudi
Selected Quarterly Data (Unaudited) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Data [Abstract] | |
Selected Quarterly Data (Unaudited) | Selected Quarterly Data (Unaudited) First Quarter Second Quarter Third Quarter Fourth Quarter In thousands, except per share amounts 2016 2015 2016 2015 2016 2015 2016 2015 Revenues $ 99,563 $ 109,315 $ 97,317 $ 109,175 $ 97,425 $ 108,784 $ 110,107 $ 116,892 Operating income (loss) from continuing operations (9,033 ) (258 ) (7,175 ) 3,039 (4,572 ) (209,640 ) (35,000 ) 3,590 Income (loss) from continuing operations before income taxes (9,278 ) (457 ) (8,001 ) (8,613 ) (5,386 ) (208,742 ) (46,483 ) (613 ) Loss from continuing operations (6,700 ) (404 ) (5,902 ) (6,690 ) (4,285 ) (172,856 ) (72,891 ) (1,115 ) Discontinued operations, net of tax 1,097 2,019 1,639 2,518 1,244 1,942 (45,139 ) 3,659 Net income (loss) $ (5,603 ) $ 1,615 $ (4,263 ) (4,172 ) $ (3,041 ) $ (170,914 ) $ (118,030 ) $ 2,544 Basic earnings (loss) per common share Continuing operations $ (0.11 ) $ (0.01 ) $ (0.10 ) $ (0.11 ) $ (0.07 ) $ (2.81 ) $ (1.18 ) $ (0.02 ) Discontinued operations $ 0.02 $ 0.04 $ 0.03 $ 0.04 $ 0.02 $ 0.04 $ (0.74 ) $ 0.06 Diluted earnings (loss) per common share Continuing operations $ (0.11 ) $ (0.01 ) $ (0.10 ) $ (0.11 ) $ (0.07 ) $ (2.81 ) $ (1.18 ) $ (0.02 ) Discontinued operations $ 0.02 $ 0.04 $ 0.03 0.04 $ 0.02 $ 0.04 $ (0.74 ) $ 0.06 Earnings per common share amounts are computed independently for each of the quarters presented. Therefore, the sum of the quarterly earnings per share amounts may not equal the quarterly earnings per share amounts or the annual earnings per share amounts due to rounding. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On April 17, 2017, we entered into a credit agreement with Texas Capital Bank, N.A. as Lender. The Texas Capital Facility consists of a two -year $20 million revolving credit facility guaranteed by HHS Guaranty, LLC, an entity formed by certain members of the Shelton family, descendants of one of the company's founders. The Texas Capital Credit Facility is secured by substantially all of the company's assets and its material domestic subsidiaries. See Note C , Long-Term Debt , for further discussion. On May 1, 2017, we entered into the 3Q Agreement with our wholly owned subsidiary 3Q Digital, Inc. and Maury Domengeaux, as representative to the former stockholders and option holders of 3Q Digital (the “Effective Time Holders”) pursuant to that certain Agreement and Plan of Merger, dated as of March 16, 2015, by and among a wholly owned subsidiary of the company and 3Q Digital (the “2015 Merger Agreement”). The 3Q Agreement provides, among other things, for an amendment to the 2015 Merger Agreement to defer our obligation to pay the Effective Time Holders up to an additional $35 million in contingent consideration until the earlier of (x) the sale of the 3Q Digital business or (y) April 1, 2019, if and to the extent the conditions to payment of the contingent consideration as set forth in the 2015 Merger Agreement are satisfied. In addition, under the 3Q Agreement we agreed to (i) engage financial advisors to assist us in the formal process of soliciting potential bidders and bids for the sale of 3Q Digital, (ii) pay a special bonus pool for the Effective Time Holders upon the sale of the 3Q Digital business in the event such sale occurs prior to April 1, 2019, and (iii) approve and adopt a sale bonus plan for certain current employees of 3Q Digital, payable upon the sale of the 3Q Digital business in the event such sale occurs prior to April 1, 2019. |
Significant Accounting Polici25
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Consolidation | The accompanying consolidated financial statements present the financial position and the results of operations and cash flows of Harte Hanks, Inc., and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. As used in this report, the terms “Harte Hanks,” “we,” “us,” or “our” may refer to Harte Hanks, Inc., one or more of our consolidated subsidiaries, or all of them taken as a whole. |
Discontinued Operations | As discussed in Note N , Discontinued Operations , we sold the assets of our Trillium reporting unit as of December 23, 2016. As such, the results of operations, financial position, and cash flows for Trillium are reported separately as discontinued operations for all periods presented in the Consolidated Financial Statements. Results of the remaining Harte Hanks business are reported as continuing operations. Debt under the 2016 Secured Credit Facility, as defined within Note C , Long-Term Debt , was required to be repaid as a result of the Trillium transaction. In accordance with the provisions of ASC 205-20-45-6, Allocation of Interest to Discontinued Operations , we have reclassified interest expense for the 2016 Secured Credit Facility to discontinued operations for December 31, 2016 in the Consolidated Financial Statements. |
Reclassification of Prior Year Amounts | Certain prior year amounts have been reclassified to conform to the current year presentation. This includes amounts related to discontinued operations, which have been reclassified for comparative purposes in all periods presented. In addition, the retrospective adoption of ASU 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs , resulted in the reclassification of $0.2 million of unamortized debt issuance costs from other assets to a direct reduction of the total debt on the company's consolidated balance sheet as of December 31, 2015. |
Use of Estimates | The preparation of consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Actual results and outcomes could differ from those estimates and assumptions. Such estimates include, but are not limited to, estimates related to pension accounting; fair value for purposes of assessing goodwill, long-lived assets, and intangible assets for impairment; income taxes; and contingencies. On an ongoing basis, management reviews its estimates based on currently available information. Changes in facts and circumstances could result in revised estimates and assumptions. |
Operating Expense Presentation in Consolidated Statements of Comprehensive Income (Loss) | The “Labor” line in the Consolidated Statements of Comprehensive Income (Loss) includes all employee payroll and benefits, including stock-based compensation, along with temporary labor costs. The “Production and distribution” and “Advertising, selling, general and administrative” lines do not include labor, depreciation, or amortization. |
Revenue Recognition | We recognize revenue when all of the following criteria are satisfied: (i) persuasive evidence of an arrangement exists; (ii) the price is fixed or determinable; (iii) collectability is reasonably assured; and (iv) the service has been performed or the product has been delivered. In order to recognize revenue, we require either a purchase order, a statement of work signed by the client, a written contract, or some other form of written authorization from the client. Revenue that is not recognized at the time of sale because the foregoing conditions are not met are recognized when those conditions are subsequently met. Revenue is recognized net of any taxes collected from customers and subsequently remitted to governmental authorities. Any payments received in advance of the performance of services or delivery of the product are recorded as deferred revenue until such time as the services are performed or the product is delivered. Revenue from agency and digital services, direct mail, and contact center is recognized as the work is performed. Fees for these services are determined by the terms set forth in the contact with the client. These are typically set at a fixed price or rate by transaction occurrence, service provided, time spent, or product delivered. For arrangements requiring design and build of a database, revenue is not recognized until client acceptance occurs. Up-front fees billed during the setup phase for these arrangements are deferred and direct build costs are capitalized. Pricing for these types of arrangements are typically based on a fixed price determined in the contract. Revenue from other database marketing solutions is recognized ratably over the contractual service period. Pricing for these services are typically based on a fixed price per month or per contract. |
Going Concern | Our recent operating and financial performance (most notably decreased cash flows from operations) have caused us to closely review our ability to continue as a going concern. We have had greater than five consecutive years of declining revenues from continuing operations, and we have not reduced costs at a pace that has allowed us to be profitable in the past two years. Among other things, these trends have caused us to reduce investments in our business, cease dividends and stock repurchases, and caused us to fall out of compliance with financial covenants in our credit facilities. These trends are also significant factors in the goodwill impairment charges we recorded in 2015 and 2016, as well as the valuation allowance we recorded for 2016 in regard to certain deferred tax assets. Changing these trends and returning to revenue growth is essential to our success. In April of 2017, we entered into a new credit agreement with Texas Capital Bank, N.A. (the "Texas Capital Credit Facility"). Upon closing, the Texas Capital Credit Facility provided $20 million in borrowing capacity under a revolving credit line. The Texas Capital Credit Facility has far more favorable and flexible covenant requirements than the 2016 Secured Credit Facility, and was planned to be sufficient in size for our needs given the nature and performance of our operations. See Note P, Subsequent Events, for additional discussion. We have also obtained the deferral of a significant contingent liability that otherwise would have been due in 2018. We are required (under the terms of the purchase agreement for the acquisition of 3Q Digital) to pay the former owners of 3Q Digital an additional sum contingent on achievement of certain revenue growth goals for that business. The maximum amount of future payments that could be required to be paid under the contingent consideration is $35 million . On May 1, 2017, the company entered into an Agreement (the "3Q Agreement") with 3Q Digital, which defers our obligation to pay the contingent consideration to the former owners until April 1, 2019 or the sale of the 3Q Digital business, whichever is earlier. See Note P, Subsequent Events , for additional discussion. We believe that, in conjunction with our current liquidity position and management's execution of the new credit facility and the 3Q Agreement, there are no conditions or events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern for the 12 months following the issuance of the financial statements. We have taken actions to return the business to profitability and improve our cash, liquidity, and financial position. In 2016, we began implementing expense reduction actions, including workforce reductions. These workforce actions are expected to continue into 2017 and will result in further expense reductions in our support functions. We also initiated the closing of our Baltimore direct mail facility in response to the declining demand for printed marketing materials. Continuing work from this facility is being transitioned to other facilities, allowing for higher utilization rates. The favorable impact of the facility closure is expected to begin in the first half of 2017, when the closure is completed. In addition to the actions discussed above, we are taking additional steps to improve our operational and financial performance. We continue to identify and act to secure additional cost reductions and operating efficiencies. We have also focused investments toward improving product offerings that we believe will improve revenue growth. Finally, to increase financial flexibility and allow us to focus on our core business, we have taken steps to sell our 3Q Digital business (as announced in April 2017). The liquidity from the potential sale of 3Q Digital will allow us the liquidity to invest in strategies to strengthen our core offerings. |
Cash Equivalents | All highly liquid investments with an original maturity of 90 days or less at the time of purchase are considered to be cash equivalents. Cash equivalents are carried at cost, which approximates fair value. |
Allowance for Doubtful Accounts | We maintain our allowance for doubtful accounts adequate to reduce accounts receivable to the amount of cash expected to be collected. The methodology used to determine the minimum allowance is based on our prior collection experience and is generally related to the accounts receivable balance in various aging categories. The balance is also influenced by specific clients’ financial strength and circumstance. Accounts that are determined to be uncollectible are written off in the period in which they are determined to be uncollectible. Periodic changes to the allowance balance are recorded as increases or decreases to bad debt expense, which is included in the “Advertising, selling, general, and administrative” line of our Consolidated Statements of Comprehensive Income (Loss). The changes in the allowance for doubtful accounts consisted of the following: Year Ended December 31, In thousands 2016 2015 2014 Balance at beginning of year $ 974 $ 878 $ 1,410 Net charges to expense 711 685 (109 ) Amounts recovered against the allowance (657 ) (589 ) (423 ) Balance at end of year $ 1,028 $ 974 $ 878 |
Inventory | Inventory, consisting primarily of print materials and operating supplies, is stated at the lower of cost (first-in, first-out method) or market. |
Property, Plant and Equipment | Property, plant and equipment are stated on the basis of cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The general ranges of estimated useful lives are: Buildings and improvements 10 to 40 years Software 3 to 10 years Equipment and furniture 3 to 20 years Long-lived assets such as property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The carrying amount of a long-lived asset group is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset group. We did not record an impairment of long-lived assets in 2016 , 2015 , or 2014 . Property, plant and equipment includes capital lease assets. Capital lease assets at December 31, 2016 and 2015 consisted of: December 31, In thousands 2016 2015 Equipment and furniture $ 2,357 $ 1,088 Less accumulated depreciation (903 ) (767 ) Net book value $ 1,454 $ 321 Depreciation expense related to capital lease assets was $0.1 million , $0.1 million , and $0.2 million for the years ended December 31, 2016 , 2015 , and 2014 , respectively. Capital leases accounted for $1.3 million of the additions to property, plant and equipment for the year ended December 31, 2016 . Depreciation and amortization on property, plant and equipment was $11.4 million , $11.6 million , and $12.7 million for the years ended December 31, 2016 , 2015 , and 2014 , respectively. Accounts payable related to additions of property, plant and equipment were $0.3 million , $0.3 million , and $0.5 million for the years ended December 31, 2016 , 2015 , and 2014 , respectively. |
Goodwill and Other Intangibles | Goodwill is recorded to the extent that the purchase price of an acquisition exceeds the fair value of the identifiable net assets acquired and is tested for impairment on an annual basis. We have established November 30 as the date for our annual test for impairment of goodwill. Interim testing is performed more frequently if events or circumstances indicate that it is “more likely than not” that goodwill might be impaired. Such events could include changes in the business climate in which we operate, attrition of key personnel, the current volatility in the capital markets, the company’s market capitalization compared to our book value, our recent operating performance, and financial projections. Goodwill is tested for impairment by first assessing qualitative factors to determine whether the existence of events or circumstances leads to a determination that is more likely than not that the fair value of the reporting unit is less than its carrying amount. If after assessing the totality of events or circumstances, or based on management's judgment, we determine it is more likely than not that the fair value is less than its carrying amount, a two-step impairment test is performed. The first step compares the fair value of the reporting unit, using the discounted cash flow method, to its carrying amount. If the fair value is less than its carrying amount, a second step is performed. In the second step, the carrying value of the reporting unit is compared to all of the assets and liabilities of the reporting unit. If the carrying amount of the reporting unit's goodwill exceeds the implied fair value of its goodwill, and impairment loss is recognized in an amount equal to the excess. Our acquired intangible assets are amortized on a straight-line basis over their estimated useful lives, which generally range from 2 to 10 years. Our acquired intangible assets do not have indefinite lives. Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of the intangible asset may not be recoverable. The carrying amount of an intangible asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If it is determined that an impairment loss has occurred, the loss is measured as the amount by which the carrying amount of the intangible asset exceeds its fair value. |
Income Taxes | Income tax expense includes U.S. and international income taxes accounted for under the asset and liability method. Certain income and expenses are not reported in tax returns and financial statements in the same year. Such temporary differences are reported as deferred tax. Deferred tax assets are reported net of valuation allowances where we have assessed that it is more likely than not that a tax benefit will not be realized. |
Earnings Per Share | Basic earnings per common share are based upon the weighted-average number of common shares outstanding during the period. Diluted earnings per common share are based upon the weighted-average number of common shares and dilutive common stock equivalents outstanding during the period. Dilutive common stock equivalents are calculated based on the assumed exercise of stock options and vesting of unvested shares using the treasury stock method. |
Stock-Based Compensation | All share-based awards are recognized as operating expense in the “Labor” line of the Consolidated Statements of Comprehensive Income (Loss). Calculated expense is based on the fair values of the awards on the date of grant and is recognized over the requisite service period. |
Reserve for Healthcare, Workers' Compensation, Automobile and General Liability | We are self-insured for our workers’ compensation, automobile, general liability, and the majority of our healthcare insurance. The company pays actual medical claims up to a stop loss limit of $0.3 million . In the fourth quarter of 2016, the company moved to a guaranteed cost program for our workers' compensation and automobile programs. Prior to the change, our deductible for workers’ compensation was $0.5 million . Our deductible for general liability is $0.3 million . The reserve is estimated using current claims activity, historical experience, and claims incurred but not reported. We use loss development factors that consider both industry norms and company specific information. Our liability is recorded at the estimate of the ultimate cost of claims at the balance sheet date. At December 31, 2016 and 2015 , our reserve for healthcare, workers’ compensation, net, automobile, and general liability was $4.6 million and $6.1 million , respectively. Periodic changes to the reserve for workers’ compensation, automobile and general liability are recorded as increases or decreases to insurance expense, which is included in the “Advertising, selling, general and administrative” line of our Consolidated Statements of Comprehensive Income (Loss). Periodic changes to the reserve for healthcare are recorded as increases or decreases to employee benefits expense, which is included in the “Labor” line of our Consolidated Statements of Comprehensive Income (Loss). |
Foreign Currencies | In most instances the functional currencies of our foreign operations are the local currencies. Assets and liabilities recorded in foreign currencies are translated in U.S. dollars at the exchange rate on the balance sheet date. Revenue and expenses are translated at average rates of exchange prevailing during a given month. Adjustments resulting from this translation are charged or credited to other comprehensive loss. |
Geographic Concentrations Policy | Depending on the needs of our clients, our services are provided in an integrated approach through more than 28 facilities worldwide, of which 4 are located outside of the U.S. Information about the operations in different geographic areas: Year Ended December 31, In thousands 2016 2015 2014 Revenue (1) United States $ 324,625 $ 377,717 $ 427,535 Other countries 79,787 66,449 71,909 Total revenue $ 404,412 $ 444,166 $ 499,444 December 31, In thousands 2016 2015 Property, plant and equipment (2) United States $ 19,810 $ 24,695 Other countries 4,114 3,441 Total property, plant and equipment $ 23,924 $ 28,136 (1) Geographic revenues are based on the location of the service being performed. (2) Property, plant and equipment are based on physical location. |
Recent Accounting Pronouncements | In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting , which provides clarified guidance on applying modification accounting to changes in the terms or conditions of a share-base payment award. This ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017.This change is required to be applied prospectively to an award modified on or after the adoption date. Early adoption is permitted. We are evaluating the effect that this will have on our consolidated financial statements and related disclosures. In March 2017, the FASB issued ASU 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , which requires entities to present the service cost component of net benefit cost with the other current compensation costs. All other components of net benefit cost are to be reported outside of operating income. This ASU is effective for annual periods beginning after December 15, 2017. This change is required to be applied using a retrospective transition method for each period presented. Early adoption is permitted as of the beginning of the annual period. We intend to adopt this ASU on January 1, 2017. The new standard will require all components of our net periodic benefit cost currently reported within operating expense, as we no longer have service cost, to be reclassified and reported within other expense. See Note F, Employee Benefit Plans , for our current components of net periodic benefit cost. In January 2017, the FASB issued ASU 2017-04. Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment , which eliminates step two from the goodwill impairment test. Under the amendments in ASU 2017-04, an entity should recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. This ASU is effective for annual periods beginning after December 15, 2020. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. This change is required to be applied on a prospective basis. We are evaluating the effect that this will have on our consolidated financial statements and related disclosures. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , which provides clarified guidance on the classification of certain cash receipts and payments in the statement of cash flows. This ASU is effective for annual periods beginning after December 15, 2018 and for interim periods for fiscal years beginning after December 15, 2019. This change is required to be applied using a retrospective transition method to each period presented. Early adoption is permitted. We are evaluating the effect that this will have on our consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-based Payment Accounting , which requires entities with share-based payment awards to recognize all related excess tax benefits and tax deficiencies as income tax expenses or benefit in the income statement. This ASU is effective for interim and annual periods beginning after December 15, 2016. Amendments related to the timing of when excess tax benefits are recognized, minimum statutory withholding requirements, forfeitures, and intrinsic value should be applied using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. Amendments related to the presentation of employee taxes paid on the statement of cash flows when an employer withholds shares to meet the minimum statutory withholding requirement should be applied retrospectively. Amendments requiring recognition of excess tax benefits and tax deficiencies in the income statement and the practical expedient for estimating expected term should be applied prospectively. An entity may elect to apply the amendments related to the presentation of excess tax benefits on the statement of cash flows using either a prospective transition method or a retrospective transition method. Early adoption is permitted. We are evaluating the effect that this will have on our consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases , which requires all operating leases to be recorded on the balance sheet. The lessee will record a liability for its lease obligations (initially measured at the present value of the future lease payments not yet paid over the lease term, and an asset for its right to use the underlying asset equal to the lease liability, adjusted for lease payments made at or before lease commencement). This ASU is effective for interim and annual periods beginning after December 15, 2018. This change is required to be applied using a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. Full retrospective application is prohibited. Early adoption is permitted. We are evaluating the effect that this will have on our consolidated financial statements and related disclosures. In May 2015, the FASB issued ASU 2015-07, Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) , which removes the requirement to categorize investments for which fair value is measured using the net asset value per share practical expedient within the fair value hierarchy. This ASU is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. This change is required to be applied retrospectively to all periods presented. The adoption of this ASU resulted in removing the disclosure of the fair value of certain assets in the fair value hierarchy table within Note F, Employee Benefit Plans . There was no change in total pension plan assets, financial condition, results of operations, or cash flows as a result of the adoption of ASU 2015-07. In April 2015, the FASB issued ASU 2015-05, Intangibles—Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement , which provides explicit guidance to help companies evaluate the accounting for fees paid by a customer in a cloud computing arrangement. This ASU is effective for interim and annual periods beginning after December 15, 2015. An entity can elect to adopt the amendments either prospectively for all arrangements entered into or materially modified after the effective date, or retrospectively. The adoption of this ASU did not have a material impact on our consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs , which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The ASU is effective for annual periods beginning after December 15, 2015, and interim periods within those annual periods. As a result, we reclassified $0.2 million in unamortized debt issuance costs as a reduction of the debt balance as of December 31, 2015 that were previously included in Other Assets (see Note C , Long-Term Debt ). In August 2014, the FASB issues ASU 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties About an Entity's Ability to Continue as a Going Concern, which provide guidance in management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern. The provision requires management to perform interim and annual assessments of an entity's ability to meet its obligations as they become due within one year from the date that the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity's ability to continue as a going concern. The ASU is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. See above for disclosure containing how substantial doubt may be raised, but is alleviated by management's plans and actions. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The standard permits the use of either the retrospective or cumulative effect transition method. On July 9, 2015, the FASB decided to delay the effective date of the new revenue standard by one year. The new effective date is for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted beginning January 1, 2017 (original effective date of the ASU). The company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The company has not yet selected a transition method nor has it determined the effect of the standard on its consolidated financial statements. |
Significant Accounting Polici26
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of changes in allowance for doubtful accounts | The changes in the allowance for doubtful accounts consisted of the following: Year Ended December 31, In thousands 2016 2015 2014 Balance at beginning of year $ 974 $ 878 $ 1,410 Net charges to expense 711 685 (109 ) Amounts recovered against the allowance (657 ) (589 ) (423 ) Balance at end of year $ 1,028 $ 974 $ 878 |
Schedule of estimated useful lives of property, plant and equipment | Property, plant and equipment are stated on the basis of cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The general ranges of estimated useful lives are: Buildings and improvements 10 to 40 years Software 3 to 10 years Equipment and furniture 3 to 20 years |
Schedule of capital lease assets | Property, plant and equipment includes capital lease assets. Capital lease assets at December 31, 2016 and 2015 consisted of: December 31, In thousands 2016 2015 Equipment and furniture $ 2,357 $ 1,088 Less accumulated depreciation (903 ) (767 ) Net book value $ 1,454 $ 321 |
Schedule of information about the operations in different geographical areas | Information about the operations in different geographic areas: Year Ended December 31, In thousands 2016 2015 2014 Revenue (1) United States $ 324,625 $ 377,717 $ 427,535 Other countries 79,787 66,449 71,909 Total revenue $ 404,412 $ 444,166 $ 499,444 December 31, In thousands 2016 2015 Property, plant and equipment (2) United States $ 19,810 $ 24,695 Other countries 4,114 3,441 Total property, plant and equipment $ 23,924 $ 28,136 (1) Geographic revenues are based on the location of the service being performed. (2) Property, plant and equipment are based on physical location. |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt obligations | Our long-term debt obligations at year-end were as follows: December 31, In thousands 2016 2015 2016 Revolving Credit Facility, various interest rates based on the Base rate, due March 10, 2021 (effective rate of 6.00% at December 23, 2016 termination) $ — N/A 2016 Term Loan Facility, various interest rates based on the Base rate plus the applicable margin, due March 10, 2021 (effective rate of 10.72% at December 23, 2016 termination) — N/A 2013 Revolving Credit Facility ($60.6 million capacity), various interest rates based on the highest of (a) the Agent's prime rate, (b) the Federal Funds Rate plus 0.50% per annum, or (c) Eurodollar rate plus 1.00% per annum, plus a spread which is determined based on our total debt-to-EBITDA ratio then in effect, due August 16, 2016 (effective rate of 4.75% at December 31, 2015) N/A 13,000 2011 Term Loan Facility, various interest rates based on LIBOR (effective rate of 2.42% at December 31, 2015), due August 16, 2016 N/A 64,313 Less: unamortized discount and debt issuance costs — (208 ) Total debt — 77,105 Less current maturities — 3,000 Total long-term debt $ — $ 74,105 |
Schedule of carrying values and estimated fair values of outstanding debt | The carrying values and estimated fair values of our outstanding debt at year-end were as follows: December 31, 2016 2015 In thousands Carrying Value Fair Value Carrying Value Fair Value Total debt $ — $ — $ 77,105 $ 77,105 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of income tax expense (benefit) | The components of income tax expense (benefit) are as follows: Year Ended December 31, In thousands 2016 2015 2014 Current Federal $ (6,360 ) $ 2,920 $ 1,519 State and local (107 ) 744 113 Foreign 807 545 200 Total current $ (5,660 ) $ 4,209 $ 1,832 Deferred Federal $ 18,619 $ (38,048 ) $ 3,427 State and local 7,655 (3,523 ) 1,637 Foreign 16 2 730 Total deferred $ 26,290 $ (41,569 ) $ 5,794 Total income tax expense (benefit) $ 20,630 $ (37,360 ) $ 7,626 |
Schedule of components of income from continuing operations before income taxes | The U.S. and foreign components of income (loss) from continuing operations before income taxes were as follows: Year Ended December 31, In thousands 2016 2015 2014 United States $ (66,828 ) $ (217,920 ) $ 17,277 Foreign (2,320 ) (506 ) 4,103 Total income (loss) from continuing operations before income taxes $ (69,148 ) $ (218,426 ) $ 21,380 |
Schedule of difference between total income tax expense (benefit) and the amount computed by applying the statutory federal income tax rate | The differences between total income tax expense (benefit) and the amount computed by applying the statutory federal income tax rate to income (loss) before income taxes were as follows: Year Ended December 31, In thousands 2016 Rate 2015 Rate 2014 Rate Computed expected income tax expense (benefit) $ (24,202 ) 35.0 % $ (76,449 ) 35.0 % $ 7,484 35.0 % Goodwill impairment basis difference 6,275 -9.1 % 36,664 -16.8 % — — % Sold operations basis difference — — % 686 -0.3 % — — % Net effect of state income taxes (954 ) 1.4 % 178 -0.1 % 1,138 5.4 % Foreign subsidiary dividend inclusions 843 -1.2 % 557 -0.3 % 135 0.6 % Foreign tax rate differential 722 -1.0 % 291 -0.1 % (668 ) -3.1 % Change in valuation allowance 34,478 -49.9 % (153 ) 0.1 % (386 ) -1.8 % Non-deductible interest 3,219 -4.7 % 715 -0.3 % — — % Other, net 249 -0.4 % 151 -0.1 % (77 ) -0.4 % Income tax expense (benefit) for the period $ 20,630 -29.9 % $ (37,360 ) 17.1 % $ 7,626 35.7 % |
Schedule of allocation of income tax expense (benefit) | Total income tax expense (benefit) was allocated as follows: Year Ended December 31, In thousands 2016 2015 2014 Continuing operations $ 20,630 $ (37,360 ) $ 7,626 Discontinued operations 8,994 5,446 5,689 Loss on sale of discontinued operations (4,600 ) — — Stockholders’ equity (782 ) 2,021 (9,527 ) Total $ 24,242 $ (29,893 ) $ 3,788 |
Schedule of tax effects of temporary differences | The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and deferred tax liabilities were as follows: Year Ended December 31, In thousands 2016 2015 Deferred tax assets Deferred compensation and retirement plan $ 24,715 $ 22,884 Accrued expenses not deductible until paid 3,508 3,612 Employee stock-based compensation 3,321 3,709 Accrued payroll not deductible until paid 1,400 707 Accounts receivable, net 406 1,208 Other, net 393 417 Foreign net operating loss carryforwards 2,271 2,657 State net operating loss carryforwards 3,349 1,956 Foreign tax credit carryforwards 785 785 Capital loss carryforwards — 6,278 Total gross deferred tax assets 40,148 44,213 Less valuation allowances (40,148 ) (9,958 ) Net deferred tax assets $ — $ 34,255 Deferred tax liabilities Property, plant and equipment $ (3,060 ) $ (6,154 ) Goodwill and other intangibles (6,800 ) (45,212 ) Other, net (1,184 ) (561 ) Total gross deferred tax liabilities (11,044 ) (51,927 ) Net deferred tax liabilities $ (11,044 ) $ (17,672 ) |
Summary of valuation allowance | A reconciliation of the beginning and ending balance of deferred tax valuation allowance is as follows: In thousands Balance at December 31, 2014 $ 10,933 Additions: Charged to cost and expenses 366 Charged to other accounts — Deductions (1,341 ) Balance at December 31, 2015 $ 9,958 Additions: Charged to cost and expenses 37,798 Charged to other accounts — Deductions (7,608 ) Balance at December 31, 2016 $ 40,148 |
Schedule of reconciliation of the beginning and ending amount of unrecognized tax benefit | A reconciliation of the beginning and ending amount of unrecognized tax benefit is as follows: In thousands Balance at December 31, 2013 $ 27 Additions for current year tax positions — Additions for prior year tax positions — Reductions for prior year tax positions — Lapse of statute (27 ) Settlements — Balance at December 31, 2014 $ — Additions for current year tax positions — Additions for prior year tax positions 761 Reductions for prior year tax positions — Lapse of statute — Settlements — Balance at December 31, 2015 $ 761 Additions for current year tax positions — Additions for prior year tax positions 206 Reductions for prior year tax positions — Lapse of statute — Settlements — Balance at December 31, 2016 $ 967 |
Goodwill and Other Intangible29
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in goodwill | The changes in the carrying amount of goodwill are as follows: In thousands Balance at December 31, 2014 $ 248,891 Purchase consideration 41,845 Disposition (11,099 ) Impairment (209,938 ) Balance at December 31, 2015 $ 69,699 Additions 3,480 Impairment (38,669 ) Balance at December 31, 2016 $ 34,510 |
Schedule of changes in the carrying amount of other intangibles with indefinite lives | The changes in the carrying amount of other intangibles with indefinite lives are as follows: In thousands Balance at December 31, 2014 $ 2,250 Acquisition — Impairment (2,250 ) Balance at December 31, 2015 $ — Acquisition — Disposition — Balance at December 31, 2016 $ — |
Schedule of changes in the carrying amount of other intangibles with definite lives | The changes in the carrying amount of other intangibles with definite lives are as follows: In thousands Balance at December 31, 2014 $ 27 Disposition (18 ) Acquisition 4,773 Amortization (659 ) Balance at December 31, 2015 $ 4,123 Amortization (821 ) Balance at December 31, 2016 $ 3,302 |
Schedule of expected amortization expense | Expected amortization expense for the next five years is as follows: In thousands 2017 $ 707 2018 627 2019 613 2020 613 2021 613 Thereafter 129 Total 3,302 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of status of defined benefit pension plans | The status of the defined benefit pension plans at year-end was as follows: Year Ended December 31, In thousands 2016 2015 Change in benefit obligation Benefit obligation at beginning of year $ 178,715 $ 191,065 Interest cost 7,802 7,724 Actuarial (gain) loss 2,127 (10,861 ) Benefits paid (9,397 ) (9,213 ) Benefit obligation at end of year $ 179,247 $ 178,715 Change in plan assets Fair value of plan assets at beginning of year 121,682 124,372 Actual return on plan assets 2,883 982 Contributions 1,557 5,541 Benefits paid (9,397 ) (9,213 ) Fair value of plan assets at end of year $ 116,725 $ 121,682 Funded status at end of year $ (62,522 ) $ (57,033 ) |
Schedule of amounts recognized in the Consolidated Balance Sheets | The following amounts have been recognized in the Consolidated Balance Sheets at December 31: In thousands 2016 2015 Other current liabilities $ 1,686 $ 1,542 Pensions 60,836 55,491 Total $ 62,522 $ 57,033 |
Schedule of amounts recognized in accumulated other comprehensive loss | The following amounts have been recognized in accumulated other comprehensive loss, net of tax, at December 31: In thousands 2016 2015 Net loss $ 46,977 $ 43,915 |
Schedule of accumulated benefit obligation in excess of plan assets | The following information is presented for pension plans with an accumulated benefit obligation in excess of plan assets: In thousands 2016 2015 Projected benefit obligation $ 179,247 $ 178,715 Accumulated benefit obligation $ 179,247 $ 178,715 Fair value of plan assets $ 116,725 $ 121,682 |
Schedule of net periodic benefit cost and other amounts recognized in other comprehensive income (loss) | The following table presents the components of net periodic benefit cost and other amounts recognized in other comprehensive income (loss) for both plans: Year Ended December 31, In thousands 2016 2015 2014 Net Periodic Benefit Cost (Pre-Tax) Service cost $ — $ — $ 100 Interest cost 7,802 7,724 7,698 Expected return on plan assets (8,245 ) (8,637 ) (8,418 ) Recognized actuarial loss 2,386 6,228 3,654 Net periodic benefit cost $ 1,943 $ 5,315 $ 3,034 Amounts Recognized in Other Comprehensive Income (Loss) (Pre-Tax) Net (gain) loss $ 5,103 $ (9,408 ) $ 28,802 Net (benefit) cost recognized in net periodic benefit cost and other comprehensive (income) loss $ 7,046 $ (4,093 ) $ 31,836 |
Schedule of weighted-average assumptions used for measurement of the defined pension plans | The weighted-average assumptions used for measurement of the defined pension plans were as follows: Year Ended December 31, 2016 2015 2014 Weighted-average assumptions used to determine net periodic benefit cost Discount rate 4.49 % 4.13 % 4.94 % Expected return on plan assets 7.00 % 7.00 % 7.00 % December 31, 2016 2015 Weighted-average assumptions used to determine benefit obligations Discount rate 4.21 % 4.49 % |
Schedule of funded pension plan assets by asset category | The funded pension plan assets as of December 31, 2016 and 2015 , by asset category, are as follows: In thousands 2016 % 2015 % Equity securities $ 61,254 52 % $ 83,185 68 % Debt securities 21,940 19 % 32,726 27 % Other 33,531 29 % 5,771 5 % Total plan assets $ 116,725 100 % $ 121,682 100 % |
Schedule of fair value of plan assets | The following tables present the fair value measurements of the assets in our funded pension plan: In thousands December 31, Quoted Prices in Active Markets for Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Equity securities $ 61,254 $ 61,254 $ — $ — Debt securities 21,940 21,940 — — Total investments, excluding investments valued at NAV 83,194 83,194 — — Investments valued at NAV (1) 33,531 — — Total plan assets $ 116,725 $ 83,194 $ — $ — In thousands December 31, Quoted Prices Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Equity securities $ 83,185 $ 83,185 $ — $ — Debt securities 32,726 32,726 — — Total investments, excluding investments valued at NAV 115,911 115,911 — — Investments valued at NAV (1) 5,771 — — — Total plan assets $ 121,682 $ 115,911 $ — $ — |
Schedule of investment mix, which is intended to subject the principal to an acceptable level of volatility while still meeting the desired return objectives | The policy establishes the following investment mix, which is intended to subject the principal to an acceptable level of volatility while still meeting the desired return objectives: Target Acceptable Range Benchmark Index Domestic Equities 50.0 % 35 % - 75% S&P 500 Large Cap Growth 22.5 % 15 % - 30% Russell 1000 Growth Large Cap Value 22.5 % 15 % - 30% Russell 1000 Value Mid Cap Value 5.0 % 5 % - 15% Russell Mid Cap Value Mid Cap Growth 0.0 % 0 % - 10% Russell Mid Cap Growth Domestic Fixed Income 35.0 % 15 % - 50% LB Aggregate International Equities 15.0 % 10 % - 25% MSC1 EAFE |
Schedule of expected future pension benefit payments | The expected future pension benefit payments for the next ten years as of December 31, 2016 are as follows: In thousands 2017 $ 9,736 2018 9,873 2019 9,967 2020 10,241 2021 10,513 2022-2026 56,362 Total $ 106,692 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of stock option activity | The following summarizes all stock option activity during the years ended December 31, 2016 , 2015 , and 2014 : In thousands Number of Shares Weighted- Average Option Price Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (Thousands) Options outstanding at December 31, 2013 4,245,712 $ 13.65 Granted in 2014 1,002,955 8.01 Exercised in 2014 (78,125 ) 6.19 $ 61 Unvested options forfeited in 2014 (437,984 ) 8.72 Vested options expired in 2014 (268,537 ) 17.83 Options outstanding at December 31, 2014 4,464,021 $ 11.50 Granted in 2015 1,973,606 5.73 Exercised in 2015 (35,000 ) 6.04 $ 67 Unvested options forfeited in 2015 (660,733 ) 7.96 Vested options expired in 2015 (1,139,148 ) 14.89 Options outstanding at December 31, 2015 4,602,746 $ 8.74 Granted in 2016 150,371 2.61 Exercised in 2016 — — $ — Unvested options forfeited in 2016 (570,197 ) 7.57 Vested options expired in 2016 (477,027 ) 16.06 Options outstanding at December 31, 2016 3,705,893 $ 7.72 4.74 $ — Vested and expected to vest at December 31, 2016 3,554,630 $ 7.86 4.58 $ — Exercisable at December 31, 2016 1,950,302 $ 9.83 2.74 $ — |
Summary of information of stock options outstanding | The following table summarizes information about stock options outstanding at December 31, 2016 : Range of Exercise Prices Number Outstanding Weighted-Average Exercise Price Weighted-Average Remaining Life (Years) Number Exercisable Weighted-Average Exercise Price $ 0.00 - 6.99 1,638,475 $ 4.42 6.22 446,601 $ 4.86 $ 7.00 - 10.99 1,352,768 8.07 4.64 789,051 8.26 $ 11.00 - 11.99 332,500 11.90 1.90 332,500 11.90 $ 12.00 - 15.99 259,100 14.48 1.75 259,100 14.48 $ 16.00 - 24.49 50,000 17.30 0.25 50,000 17.30 $ 24.50 - 28.85 73,050 26.07 0.10 73,050 26.07 3,705,893 $ 7.72 4.74 1,950,302 $ 9.83 |
Schedule of weighted-average assumptions used to estimate fair value | The fair value of each option grant is estimated on the date of grant using the Black-Scholes Option-Pricing Model based on the following weighted-average assumptions used for grants during 2016 , 2015 , and 2014 : |
Summary of unvested share activity | The following summarizes all unvested share activity during 2016 , 2015 , and 2014 : Number of Shares Weighted- Average Grant Date Fair Value Unvested shares outstanding at December 31, 2013 686,045 $ 8.72 Granted in 2014 529,426 7.90 Vested in 2014 (342,613 ) 8.98 Forfeited in 2014 (82,720 ) 8.37 Unvested shares outstanding at December 31, 2014 790,138 $ 8.10 Granted in 2015 836,775 6.38 Vested in 2015 (504,686 ) 8.23 Forfeited in 2015 (159,781 ) 7.90 Unvested shares outstanding at December 31, 2015 962,446 $ 6.57 Granted in 2016 741,954 2.63 Vested in 2016 (365,196 ) 6.70 Forfeited in 2016 (393,952 ) 5.78 Unvested shares outstanding at December 31, 2016 945,252 $ 3.76 |
Summary of phantom stock unit activity | The following summarizes all phantom stock unit activity during 2016 : Number of Weighted- Phantom stock units outstanding at December 31, 2015 — $ — Granted in 2016 781,645 2.69 Vested in 2016 — — Forfeited in 2016 (249,825 ) 2.69 Phantom stock units outstanding at December 31, 2016 531,820 $ 2.69 |
Summary of performance stock unit activity | The following summarizes all performance stock unit activity during 2016 , 2015 , and 2014 : Number of Shares Weighted- Average Grant-Date Fair Value Performance stock units outstanding at December 31, 2013 470,700 $ 8.58 Granted in 2014 308,507 7.09 Settled in 2014 — — Forfeited in 2014 (175,533 ) 9.30 Performance stock units outstanding at December 31, 2014 603,674 $ 7.61 Granted in 2015 669,839 4.30 Settled in 2015 — — Forfeited in 2015 (572,129 ) 7.54 Performance stock units outstanding at December 31, 2015 701,384 $ 4.51 Granted in 2016 473,000 1.90 Settled in 2016 — — Forfeited in 2016 (330,069 ) 5.76 Performance stock units outstanding at December 31, 2016 844,315 $ 2.56 |
Summary of cash performance unit activity | The following summarizes all performance stock unit activity during 2016 : Number of Weighted- Cash performance stock units outstanding at December 31, 2015 — $ — Granted in 2016 512,127 2.69 Settled in 2016 — — Forfeited in 2016 (68,122 ) 2.69 Cash performance stock units outstanding at December 31, 2016 444,005 $ 2.69 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Schedule of future minimum rental commitments for all non-cancellable operating leases | The future minimum rental commitments for all non-cancelable operating leases with terms in excess of one year as of December 31, 2016 are as follows: In thousands 2017 $ 10,812 2018 7,482 2019 4,991 2020 2,842 2021 1,597 Thereafter 2,352 Total $ 30,076 |
Schedule of capital lease obligations | We also lease certain equipment and software under capital leases. Our capital lease obligations at year-end were as follows: In thousands 2016 2015 Current portion of capital leases $ 559 $ 132 Long-term portion of capital leases 1,018 204 Total capital lease obligation $ 1,577 $ 336 |
Schedule of future minimum rental commitments for all capital leases | The future minimum lease payments for all capital leases operating as of December 31, 2016 are as follows: In thousands 2017 $ 559 2018 522 2019 459 2020 35 2021 2 Thereafter — Total $ 1,577 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Reconciliation of basic and diluted earnings per share | Reconciliations of basic and diluted earnings per share ("EPS") are as follows In thousands, except per share amounts 2016 2015 2014 Net Income (Loss) Income (loss) from continuing operations $ (89,778 ) $ (181,066 ) $ 13,754 Income (loss) from discontinued operations (41,159 ) 10,138 10,237 Net income (loss) $ (130,937 ) $ (170,928 ) $ 23,991 Basic EPS Weighted-average common shares outstanding used in earnings per share computations 61,487 61,643 62,444 Basic earnings (loss) per share Continuing operations $ (1.46 ) $ (2.94 ) $ 0.22 Discontinued operations (0.67 ) 0.17 0.16 Basic earnings (loss) per share $ (2.13 ) $ (2.77 ) $ 0.38 Diluted EPS Shares used in diluted earnings per share computations 61,487 61,643 62,658 Basic earnings (loss) per share Continuing operations $ (1.46 ) $ (2.94 ) $ 0.22 Discontinued operations (0.67 ) 0.17 0.16 Basic earnings (loss) per share $ (2.13 ) $ (2.77 ) $ 0.38 Computation of Shares Used in Earnings Per Share Computations Weighted-average common shares outstanding 61,487 61,643 62,444 Weighted-average common equivalent shares-dilutive effect of stock options and awards — — 214 Shares used in diluted earnings per share computations 61,487 61,643 62,658 |
Comprehensive Income (Loss) (Ta
Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Schedule of Comprehensive Income (Loss) | Our comprehensive income (loss) was as follows: Year Ended December 31, In thousands 2016 2015 2014 Net income (loss) $ (130,937 ) $ (170,928 ) $ 23,991 Other comprehensive income (loss): Adjustment to pension liability (5,103 ) 9,408 (28,802 ) Tax (expense) benefit 2,041 (3,763 ) 11,521 Adjustment to pension liability, net of tax (3,062 ) 5,645 (17,281 ) Foreign currency translation adjustment 444 (1,976 ) (1,830 ) Total other comprehensive income (loss) $ (2,618 ) $ 3,669 $ (19,111 ) Total comprehensive income (loss) $ (133,555 ) $ (167,259 ) $ 4,880 |
Schedule of changes in accumulated other comprehensive income | Changes in accumulated other comprehensive income (loss) by component are as follows: In thousands Defined Benefit Pension Items Foreign Currency Items Total Balance at December 31, 2014 $ (49,560 ) $ 2,331 $ (47,229 ) Other comprehensive loss, net of tax, before reclassifications — (1,976 ) (1,976 ) Amounts reclassified from accumulated other comprehensive income (loss), net of tax 5,645 — 5,645 Net current period other comprehensive income (loss), net of tax 5,645 (1,976 ) 3,669 Balance at December 31, 2015 $ (43,915 ) $ 355 $ (43,560 ) Other comprehensive loss, net of tax, before reclassifications — 444 444 Amounts reclassified from accumulated other comprehensive income (loss), net of tax (3,062 ) — (3,062 ) Net current period other comprehensive income (loss), net of tax (3,062 ) 444 (2,618 ) Balance at December 31, 2016 $ (46,977 ) $ 799 $ (46,178 ) |
Acquisition and Disposition (Ta
Acquisition and Disposition (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Schedule of estimated fair value of the assets acquired | The following tables summarize the consideration paid and the amounts of estimated fair value of the assets acquired and liabilities assumed at the acquisition date. In thousands Cash consideration per purchase agreement $ 30,245 Estimated fair value of contingent consideration 17,940 Fair value of total consideration $ 48,185 In thousands Recognized amounts of tangible assets and liabilities: Current assets $ 4,135 Property and equipment 164 Other assets 389 Current liabilities (822 ) Other liabilities — Total tangible assets and liabilities $ 3,866 Identifiable intangible assets 4,773 Goodwill (including deferred tax adjustment of $2,299) 41,845 Total $ 50,484 |
Schedule of reconciliation of beginning and ending balances of contingent earnout consideration | A reconciliation of the beginning and ending accrued balances of the contingent consideration using significant unobservable inputs (Level 3) is as follows: In thousands Contingent consideration at acquisition date $ 17,940 Accretion of interest 2,337 Accrued contingent consideration liability as of December 31, 2015 20,277 Accretion of interest 2,430 Adjustments to fair value 7,018 Accrued contingent consideration liability as of December 31, 2016 $ 29,725 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summary of operating results for the Trillium discontinued operations | Summarized operating results for the Trillium discontinued operations, through the dates of disposal, are as follows: Year Ended December 31, In thousands 2016 2015 2014 Revenue $ 45,639 $ 51,135 $ 54,232 Labor 18,687 22,219 25,930 Production and distribution 703 1,404 1,651 Advertising, selling, general and administrative 10,255 9,951 9,142 Depreciation, software and intangible asset amortization 2,304 1,867 2,032 Interest expense, net 7,133 (256 ) (246 ) Loss on sale 44,529 — — Other, net (1,207 ) 366 (203 ) Income (loss) from discontinued operations before income taxes (36,765 ) 15,584 15,926 Income tax expense 4,394 5,446 5,689 Net income (loss) from discontinued operations $ (41,159 ) $ 10,138 $ 10,237 |
Asset and liabilities for the Trillium discontinued operations | The assets and liabilities for the Trillium discontinued operations as of December 31, 2016 and 2015 were as follows: Year Ended December 31, In thousands 2016 2015 ASSETS Current assets Cash and cash equivalents $ — $ 1,049 Accounts receivable, net — 11,397 Prepaid expenses — 1,640 Property, plant and equipment, net — 5,777 Goodwill — 149,273 Other current assets — 265 Total current assets of discontinued operations $ — $ 169,401 LIABILITIES Current liabilities Accounts payable $ — $ 1,670 Accrued payroll and related expenses — 924 Deferred revenue and customer advances — 21,186 Other current liabilities — 978 Total current liabilities of discontinued operations $ — $ 24,758 |
Selected Quarterly Data (Unau37
Selected Quarterly Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Data [Abstract] | |
Schedule of selected quarterly data (unaudited) | First Quarter Second Quarter Third Quarter Fourth Quarter In thousands, except per share amounts 2016 2015 2016 2015 2016 2015 2016 2015 Revenues $ 99,563 $ 109,315 $ 97,317 $ 109,175 $ 97,425 $ 108,784 $ 110,107 $ 116,892 Operating income (loss) from continuing operations (9,033 ) (258 ) (7,175 ) 3,039 (4,572 ) (209,640 ) (35,000 ) 3,590 Income (loss) from continuing operations before income taxes (9,278 ) (457 ) (8,001 ) (8,613 ) (5,386 ) (208,742 ) (46,483 ) (613 ) Loss from continuing operations (6,700 ) (404 ) (5,902 ) (6,690 ) (4,285 ) (172,856 ) (72,891 ) (1,115 ) Discontinued operations, net of tax 1,097 2,019 1,639 2,518 1,244 1,942 (45,139 ) 3,659 Net income (loss) $ (5,603 ) $ 1,615 $ (4,263 ) (4,172 ) $ (3,041 ) $ (170,914 ) $ (118,030 ) $ 2,544 Basic earnings (loss) per common share Continuing operations $ (0.11 ) $ (0.01 ) $ (0.10 ) $ (0.11 ) $ (0.07 ) $ (2.81 ) $ (1.18 ) $ (0.02 ) Discontinued operations $ 0.02 $ 0.04 $ 0.03 $ 0.04 $ 0.02 $ 0.04 $ (0.74 ) $ 0.06 Diluted earnings (loss) per common share Continuing operations $ (0.11 ) $ (0.01 ) $ (0.10 ) $ (0.11 ) $ (0.07 ) $ (2.81 ) $ (1.18 ) $ (0.02 ) Discontinued operations $ 0.02 $ 0.04 $ 0.03 0.04 $ 0.02 $ 0.04 $ (0.74 ) $ 0.06 |
Significant Accounting Polici38
Significant Accounting Policies (Details 1) - USD ($) $ in Millions | Apr. 17, 2017 | Mar. 16, 2015 |
3Q Digital Inc | ||
Going concern considerations | ||
Contingent consideration potential payment, high | $ 35 | |
Subsequent event | Texas Capital Credit Facility | ||
Going concern considerations | ||
Maximum borrowing capacity | $ 20 |
Significant Accounting Polici39
Significant Accounting Policies (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Allowance for doubtful accounts | |||
Balance at beginning of year | $ 974 | $ 878 | $ 1,410 |
Net charges to expense | 711 | 685 | (109) |
Amounts recovered against the allowance | (657) | (589) | (423) |
Balance at end of year | 1,028 | 974 | 878 |
Property, plant and equipment | |||
Depreciation | 11,531 | 11,719 | 12,863 |
Property, plant and equipment | |||
Equipment and furniture | 165,312 | 173,273 | |
Less accumulated depreciation and amortization | (141,388) | (145,137) | |
Net property, plant and equipment | $ 23,924 | 28,136 | |
Goodwill and intangible assets | |||
Annual goodwill impairment testing date | November 30 | ||
Minimum | |||
Property, plant and equipment | |||
Estimated useful lives of acquired intangible assets | 2 years | ||
Maximum | |||
Property, plant and equipment | |||
Estimated useful lives of acquired intangible assets | 10 years | ||
Accounts payable | |||
Property, plant and equipment | |||
Additions to property, plant and equipment | $ 300 | 300 | 500 |
Software | Minimum | |||
Property, plant and equipment | |||
Estimated useful lives | 3 years | ||
Software | Maximum | |||
Property, plant and equipment | |||
Estimated useful lives | 10 years | ||
Equipment and furniture | Minimum | |||
Property, plant and equipment | |||
Estimated useful lives | 3 years | ||
Equipment and furniture | Maximum | |||
Property, plant and equipment | |||
Estimated useful lives | 20 years | ||
Capital lease assets | |||
Property, plant and equipment | |||
Additions to property, plant and equipment | $ 1,300 | ||
Depreciation | 100 | 100 | 200 |
Property, plant and equipment | |||
Equipment and furniture | 2,357 | 1,088 | |
Less accumulated depreciation and amortization | (903) | (767) | |
Net property, plant and equipment | 1,454 | 321 | |
Property, plant and equipment, excluding capital lease assets | |||
Property, plant and equipment | |||
Depreciation | $ 11,400 | $ 11,600 | $ 12,700 |
Buildings and improvements | Minimum | |||
Property, plant and equipment | |||
Estimated useful lives | 10 years | ||
Buildings and improvements | Maximum | |||
Property, plant and equipment | |||
Estimated useful lives | 40 years |
Significant Accounting Polici40
Significant Accounting Policies (Details 3) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Insurance | ||
Deductible for individual healthcare claims | $ 0.3 | |
Deductible for general liability claims | 0.3 | |
Deductible for workers' compensation | 0.5 | |
Self insurance reserve | $ 4.6 | $ 6.1 |
Significant Accounting Polici41
Significant Accounting Policies (Details 4) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2016USD ($)facility | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Geographic concentrations | |||||||||||
Number of facilities to provide services | facility | 28 | ||||||||||
Net property, plant and equipment | $ 23,924 | $ 28,136 | $ 23,924 | $ 28,136 | |||||||
Revenues | 110,107 | $ 97,425 | $ 97,317 | $ 99,563 | 116,892 | $ 108,784 | $ 109,175 | $ 109,315 | 404,412 | 444,166 | $ 499,444 |
Domestic | |||||||||||
Geographic concentrations | |||||||||||
Net property, plant and equipment | 19,810 | 24,695 | 19,810 | 24,695 | |||||||
Revenues | $ 324,625 | 377,717 | 427,535 | ||||||||
Foreign | |||||||||||
Geographic concentrations | |||||||||||
Number of facilities to provide services | facility | 4 | ||||||||||
Net property, plant and equipment | $ 4,114 | 3,441 | $ 4,114 | 3,441 | |||||||
Revenues | $ 79,787 | 66,449 | $ 71,909 | ||||||||
Long-term debt | Accounting Standards Update 2015-03 | |||||||||||
New accounting pronouncements | |||||||||||
Deferred finance costs, net | $ 200 | $ 200 |
Long-Term Debt (Details 1)
Long-Term Debt (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2016 | |
Long-term debt obligation | ||
Unamortized discount and debt issuance costs | $ (208) | $ 0 |
Total debt | 77,105 | 0 |
Current maturities of long-term debt | 3,000 | 0 |
Long-term debt | 74,105 | 0 |
2016 Revolving Credit Facility | ||
Long-term debt obligation | ||
Total debt | $ 0 | |
Effective interest rate | 6.00% | |
2016 Term Loan | ||
Long-term debt obligation | ||
Total debt | $ 0 | |
Effective interest rate | 10.72% | |
2013 Revolving Credit Facility | ||
Long-term debt obligation | ||
Total debt | $ 13,000 | |
Effective interest rate | 4.75% | |
2013 Revolving Credit Facility | Variable Rate One | ||
Long-term debt obligation | ||
Basis of interest rate | PRIME | |
2013 Revolving Credit Facility | Variable Rate Two | ||
Long-term debt obligation | ||
Basis of interest rate | Federal Funds Rate | |
Variable interest rate spread | 0.50% | |
2013 Revolving Credit Facility | Variable Rate Three | ||
Long-term debt obligation | ||
Basis of interest rate | Eurodollar rate | |
Variable interest rate spread | 1.00% | |
2011 Term Loan Facility | ||
Long-term debt obligation | ||
Total debt | $ 64,313 | |
Basis of interest rate | LIBOR | |
Effective interest rate | 2.42% |
Long-Term Debt (Details 2)
Long-Term Debt (Details 2) $ in Millions | Apr. 17, 2017USD ($) | Dec. 01, 2016 | Sep. 30, 2016 | Aug. 05, 2016USD ($) | Mar. 10, 2016USD ($) | Aug. 08, 2013USD ($) | Aug. 16, 2011USD ($) | Dec. 31, 2016USD ($) | Apr. 30, 2016 | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Debt instrument | |||||||||||
Interest paid | $ 5.7 | $ 1.7 | $ 2.5 | ||||||||
Texas Capital Credit Facility | Subsequent event | |||||||||||
Line of credit facility | |||||||||||
Debt term | 2 years | ||||||||||
Maximum borrowing capacity | $ 20 | ||||||||||
Quarterly collateral fee | $ 0.1 | ||||||||||
Unused balance interest rate | 0.50% | ||||||||||
Texas Capital Credit Facility | Variable Rate One | Subsequent event | |||||||||||
Line of credit facility | |||||||||||
Basis of interest rate | LIBOR | ||||||||||
Variable interest rate spread | 1.95% | ||||||||||
Texas Capital Credit Facility | Variable Rate Two | Subsequent event | |||||||||||
Line of credit facility | |||||||||||
Basis of interest rate | prime | ||||||||||
Variable interest rate spread | 0.75% | ||||||||||
2016 Secured Credit Facility | |||||||||||
Debt covenant | |||||||||||
Required minimum adjusted EBITDA monthly increase | $ 0.5 | ||||||||||
Required minimum adjusted EBITDA goal | $ 24 | ||||||||||
Interest rate increase | 1.00% | 1.00% | |||||||||
Debt instrument | |||||||||||
Prepayment penalty | $ 1.3 | ||||||||||
2016 Secured Credit Facility | Debt Covenant, Time Period One | |||||||||||
Debt covenant | |||||||||||
Required fixed charge coverage ratio | 1 | ||||||||||
Actual fixed charge coverage ratio | 0.9 | ||||||||||
Required leverage ratio | 2.25 | ||||||||||
Actual leverage ratio | 2.40 | 2.28 | |||||||||
2016 Secured Credit Facility | Debt Covenant, Time Period Two | |||||||||||
Debt covenant | |||||||||||
Required fixed charge coverage ratio | 1.1 | ||||||||||
Actual fixed charge coverage ratio | 0.6 | ||||||||||
2016 Term Loan | Term loan | |||||||||||
Line of credit facility | |||||||||||
Term loan | $ 45 | ||||||||||
2016 Revolving Credit Facility | Revolving line of credit | |||||||||||
Line of credit facility | |||||||||||
Maximum borrowing capacity | $ 65 | ||||||||||
2013 Revolving Credit Facility | |||||||||||
Line of credit facility | |||||||||||
Maximum borrowing capacity | $ 80 | ||||||||||
2013 Revolving Credit Facility | Variable Rate One | |||||||||||
Line of credit facility | |||||||||||
Basis of interest rate | PRIME | ||||||||||
2013 Revolving Credit Facility | Variable Rate Two | |||||||||||
Line of credit facility | |||||||||||
Basis of interest rate | Federal Funds Rate | ||||||||||
Variable interest rate spread | 0.50% | ||||||||||
2013 Revolving Credit Facility | Variable Rate Three | |||||||||||
Line of credit facility | |||||||||||
Basis of interest rate | Eurodollar rate | ||||||||||
Variable interest rate spread | 1.00% | ||||||||||
2013 Revolving Credit Facility | Revolving line of credit | |||||||||||
Line of credit facility | |||||||||||
Debt term | 3 years | ||||||||||
Maximum borrowing capacity, letters of credit | $ 25 | ||||||||||
Swingline sublimit maximum borrowing capacity | $ 5 | ||||||||||
2011 Term Loan Facility | |||||||||||
Line of credit facility | |||||||||||
Basis of interest rate | LIBOR | ||||||||||
2011 Term Loan Facility | Term loan | |||||||||||
Line of credit facility | |||||||||||
Debt term | 5 years | ||||||||||
Term loan | $ 122.5 |
Long-Term Debt (Details 3)
Long-Term Debt (Details 3) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Carrying value | ||
Carrying values and estimated fair values of outstanding debt | ||
Total debt, fair value | $ 0 | $ 77,105 |
Fair value | Level 2 | ||
Carrying values and estimated fair values of outstanding debt | ||
Total debt, fair value | $ 0 | $ 77,105 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current | |||||||||||
Federal | $ (6,360) | $ 2,920 | $ 1,519 | ||||||||
State and local | (107) | 744 | 113 | ||||||||
Foreign | 807 | 545 | 200 | ||||||||
Total current | (5,660) | 4,209 | 1,832 | ||||||||
Deferred | |||||||||||
Federal | 18,619 | (38,048) | 3,427 | ||||||||
State and local | 7,655 | (3,523) | 1,637 | ||||||||
Foreign | 16 | 2 | 730 | ||||||||
Total deferred | 26,290 | (41,569) | 5,794 | ||||||||
Income tax expense (benefit) | 20,630 | (37,360) | 7,626 | ||||||||
Results of operation, income before income taxes | |||||||||||
United States | (66,828) | (217,920) | 17,277 | ||||||||
Foreign | (2,320) | (506) | 4,103 | ||||||||
Total income (loss) from continuing operations before income taxes | $ (46,483) | $ (5,386) | $ (8,001) | $ (9,278) | $ (613) | $ (208,742) | $ (8,613) | $ (457) | (69,148) | (218,426) | $ 21,380 |
Deferred tax assets | |||||||||||
Deferred compensation and retirement plan | 24,715 | 22,884 | 24,715 | 22,884 | |||||||
Accrued expenses not deductible until paid | 3,508 | 3,612 | 3,508 | 3,612 | |||||||
Employee stock-based compensation | 3,321 | 3,709 | 3,321 | 3,709 | |||||||
Accrued payroll not deductible until paid | 1,400 | 707 | 1,400 | 707 | |||||||
Accounts receivable, net | 406 | 1,208 | 406 | 1,208 | |||||||
Other, net | 393 | 417 | 393 | 417 | |||||||
Foreign net operating loss carryforwards | 2,271 | 2,657 | 2,271 | 2,657 | |||||||
State net operating loss carryforwards | 3,349 | 1,956 | 3,349 | 1,956 | |||||||
Foreign tax credit carryforwards | 785 | 785 | 785 | 785 | |||||||
Capital loss carryforwards | 0 | 6,278 | 0 | 6,278 | |||||||
Total gross deferred tax assets | 40,148 | 44,213 | 40,148 | 44,213 | |||||||
Less valuation allowances | (40,148) | (9,958) | (40,148) | (9,958) | |||||||
Net deferred tax assets | 0 | 34,255 | 0 | 34,255 | |||||||
Deferred tax liabilities | |||||||||||
Property, plant and equipment | (3,060) | (6,154) | (3,060) | (6,154) | |||||||
Goodwill and other intangibles | (6,800) | (45,212) | (6,800) | (45,212) | |||||||
Deferred tax liabilities, other | (1,184) | (561) | (1,184) | (561) | |||||||
Total gross deferred tax liabilities | (11,044) | (51,927) | (11,044) | (51,927) | |||||||
Deferred tax liabilities, Net | $ (11,044) | $ (17,672) | $ (11,044) | $ (17,672) |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Effective income tax rate reconciliation, amount | |||
Computed expected income tax expense (benefit) | $ (24,202) | $ (76,449) | $ 7,484 |
Goodwill impairment basis difference | 6,275 | 36,664 | 0 |
Sold operations basis difference | 0 | 686 | 0 |
Net effect of state income taxes | (954) | 178 | 1,138 |
Foreign subsidiary dividend inclusions | 843 | 557 | 135 |
Foreign tax rate differential | 722 | 291 | (668) |
Change in valuation allowance | 34,478 | (153) | (386) |
Non-deductible interest | 3,219 | 715 | 0 |
Other, net | 249 | 151 | (77) |
Income tax expense (benefit) | $ 20,630 | $ (37,360) | $ 7,626 |
Effective income tax rate reconciliation, percent | |||
Computed expected income tax expense (benefit) | 35.00% | 35.00% | 35.00% |
Goodwill impairment basis difference | (9.10%) | (16.80%) | 0.00% |
Sold operations basis difference | 0.00% | (0.30%) | 0.00% |
Net effect of state income taxes | 1.40% | (0.10%) | 5.40% |
Foreign subsidiary dividend inclusions | (1.20%) | (0.30%) | 0.60% |
Foreign tax rate differential | (1.00%) | (0.10%) | (3.10%) |
Change in valuation allowance | (49.90%) | 0.10% | (1.80%) |
Non-deductible interest | (4.70%) | (0.30%) | 0.00% |
Other, net | (0.40%) | (0.10%) | (0.40%) |
Income tax expense (benefit) | (29.90%) | 17.10% | 35.70% |
Total income tax expense (benefit) allocation | |||
Income tax expense (benefit) | $ 20,630 | $ (37,360) | $ 7,626 |
Income tax expense, discontinued operations | 8,994 | 5,446 | 5,689 |
Tax effect of gain (loss) from disposal of discontinued operation | (4,600) | 0 | 0 |
Income tax expense (benefit), stockholders' equity | (782) | 2,021 | (9,527) |
Income tax expense, (benefit) | $ 24,242 | $ (29,893) | $ 3,788 |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Valuation allowance | |||
Balance at beginning of year | $ 9,958 | $ 10,933 | |
Additions for charges to cost and expense | 37,798 | 366 | |
Additions for charges to other accounts | 0 | 0 | |
Deductions | (7,608) | (1,341) | |
Balance at end of year | 40,148 | 9,958 | $ 10,933 |
Reconciliation of unrecognized tax benefits, excluding amounts pertaining to examined tax returns | |||
Balance at beginning of period | 761 | 0 | 27 |
Additions for current year tax positions | 0 | 0 | 0 |
Additions for prior year tax positions | 206 | 761 | 0 |
Reductions for prior year tax positions | 0 | 0 | 0 |
Lapse of statute | 0 | 0 | (27) |
Settlements | 0 | 0 | 0 |
Balance at end of period | $ 967 | $ 761 | $ 0 |
Income Taxes (Details 4)
Income Taxes (Details 4) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income taxes | |||
Valuation allowance | $ 40,148 | $ 9,958 | $ 10,933 |
Unrecognized tax benefits that would impact effective tax rate | 1,000 | ||
Interest and penalties | 0 | 0 | |
Interest and penalties accrued | 0 | 0 | |
Undistributed earnings in foreign subsidiaries | 300 | ||
Cash held in foreign subsidiaries for permanent reinvestment | 500 | ||
Income tax due if cash held in foreign subsidiaries was repatriated | 200 | ||
Income Taxes Paid, Net | $ 2,600 | $ 10,100 | $ 4,900 |
Minimum | |||
Income taxes | |||
Open Tax Year | 2,012 |
Goodwill and Other Intangible49
Goodwill and Other Intangible Assets (Details 1) - USD ($) $ in Thousands | Mar. 04, 2016 | Apr. 14, 2015 | Mar. 16, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Goodwill | ||||||
Finite-lived intangible assets, amortization | $ 800 | $ 700 | $ 0 | |||
Number of reporting units | 1 | |||||
Goodwill written off related to sale of business | 11,099 | |||||
Goodwill impairment | $ 38,669 | 209,938 | ||||
Discount rate | 11.50% | |||||
Accumulated goodwill impairment loss | $ 248,600 | |||||
Goodwill, acquired during period | $ 3,480 | $ 41,845 | ||||
Scenario, previously reported | ||||||
Goodwill | ||||||
Number of reporting units | 2 | |||||
Trillium Software | Discontinued operations | ||||||
Goodwill | ||||||
Goodwill written off related to sale of business | $ 149,300 | |||||
B2B Research Business | Disposition | ||||||
Goodwill | ||||||
Goodwill written off related to sale of business | $ 11,100 | |||||
B2B Research Business | Disposition | Tradenames and trademarks | ||||||
Goodwill | ||||||
Indefinite-lived intangible asset written off | $ 2,300 | |||||
Aleutian Consulting Inc | ||||||
Goodwill | ||||||
Goodwill, acquired during period | $ 3,500 | |||||
3Q Digital Inc | ||||||
Goodwill | ||||||
Goodwill, acquired during period | $ 41,800 | |||||
3Q Digital Inc | Customer relationships | ||||||
Goodwill | ||||||
Useful life | 7 years | |||||
Finite-lived intangible assets acquired | $ 4,800 | |||||
3Q Digital Inc | Tradenames and trademarks | ||||||
Goodwill | ||||||
Useful life | 2 years | |||||
Minimum | ||||||
Goodwill | ||||||
Useful life | 2 years | |||||
Maximum | ||||||
Goodwill | ||||||
Useful life | 10 years | |||||
Customer Interaction | ||||||
Goodwill | ||||||
Goodwill impairment | $ 209,900 | |||||
Income tax benefit from impairment of goodwill | 36,800 | |||||
Net income impact of goodwill impairment | $ 173,100 |
Goodwill and Other Intangible50
Goodwill and Other Intangible Assets (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2016 | |
Changes in the carrying amount of goodwill | ||||
Balance at beginning of the period | $ 69,699 | $ 248,891 | ||
Purchase consideration | 3,480 | 41,845 | ||
Disposition | (11,099) | |||
Impairment | (38,669) | (209,938) | ||
Balance at the end of the period | 34,510 | 69,699 | $ 248,891 | |
Changes in the carrying amount of other intangibles with definite lives | ||||
Intangible asset amortization | 821 | 659 | 26 | |
Intangible assets with indefinite lives | ||||
Changes in the carrying amount of other intangibles with indefinite lives | ||||
Balance at beginning of the period | 0 | 2,250 | ||
Impairment | (2,250) | |||
Disposition | 0 | |||
Acquisition | 0 | 0 | ||
Balance at end of the period | 0 | 0 | 2,250 | |
Intangible assets with definite lives | ||||
Amortization expense for intangible assets with definite useful lives | ||||
2,017 | $ 707 | |||
2,018 | 627 | |||
2,019 | 613 | |||
2,020 | 613 | |||
2,021 | 613 | |||
Thereafter | 129 | |||
Total | 4,123 | 27 | 27 | $ 3,302 |
Changes in the carrying amount of other intangibles with definite lives | ||||
Balance at the beginning of the period | 4,123 | 27 | ||
Disposition | (18) | |||
Acquisitions | 4,773 | |||
Intangible asset amortization | (821) | (659) | ||
Balance at the end of the period | $ 3,302 | $ 4,123 | $ 27 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Amounts recognized in consolidated balance sheets | |||
Pensions | $ 60,836 | $ 55,491 | |
401(k) retirement plan | |||
Expense recognized in the 401(k) retirement plan | 3,000 | 3,000 | $ 3,000 |
Pension Plan | |||
Change in benefit obligation | |||
Benefit obligation at beginning of year | 178,715 | 191,065 | |
Interest cost | 7,802 | 7,724 | 7,698 |
Actuarial (gain) loss | 2,127 | (10,861) | |
Benefits paid | (9,397) | (9,213) | |
Benefit obligation at end of year | 179,247 | 178,715 | 191,065 |
Change in plan assets | |||
Fair value of plan assets at beginning of year | 121,682 | 124,372 | |
Actual return on plan assets | 2,883 | 982 | |
Contributions | 1,557 | 5,541 | |
Benefits paid | (9,397) | (9,213) | |
Fair value of plan assets at end of year | 116,725 | 121,682 | 124,372 |
Funded status at end of year | (62,522) | (57,033) | |
Amounts recognized in consolidated balance sheets | |||
Other current liabilities | 1,686 | 1,542 | |
Pensions | 60,836 | 55,491 | |
Total | 62,522 | 57,033 | |
Amounts recognized in accumulated other comprehensive income (loss) | |||
Total | 46,977 | 43,915 | |
Accumulated benefit obligation | |||
Projected benefit obligation | 179,247 | 178,715 | |
Accumulated benefit obligation | 179,247 | 178,715 | |
Fair value of plan assets | 116,725 | 121,682 | |
Net Periodic Benefit Cost (Pre-Tax) | |||
Service cost | 0 | 0 | 100 |
Interest cost | 7,802 | 7,724 | 7,698 |
Expected return on plan assets | (8,245) | (8,637) | (8,418) |
Recognized actuarial loss | 2,386 | 6,228 | 3,654 |
Net periodic benefit cost | 1,943 | 5,315 | 3,034 |
Amounts Recognized in Other Comprehensive Income (Loss) (Pre-Tax) | |||
Net (gain) loss | 5,103 | (9,408) | 28,802 |
Net (benefit) cost recognized in net periodic benefit cost and other comprehensive (income) loss | 7,046 | $ (4,093) | $ 31,836 |
Estimated net loss that will be amortized from accumulated other comprehensive loss into net periodic benefit cost in next fiscal year | $ 2,700 | ||
Weighted-average assumptions used to determine net periodic benefit cost | |||
Discount rate (as a percent) | 4.49% | 4.13% | 4.94% |
Expected return on plan assets (as a percent) | 7.00% | 7.00% | 7.00% |
Weighted-average assumptions used to determine benefit obligations | |||
Discount rate (as a percent) | 4.21% | 4.49% | |
Period considered for compounded returns | 15 years | ||
Pension Plan | Scenario, previously reported | |||
Weighted-average assumptions used to determine benefit obligations | |||
Amortization period | 9 years | ||
Pension Plan | Scenario, Adjustment | |||
Weighted-average assumptions used to determine benefit obligations | |||
Amortization period | 23 years | ||
Restoration Pension Plan | |||
Accumulated benefit obligation | |||
Accumulated benefit obligation | $ 26,600 | $ 26,400 |
Employee Benefit Plans (Detai52
Employee Benefit Plans (Details 2) - Pension Plan - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Employee benefits plans | |||
Fair value of plan assets | $ 116,725 | $ 121,682 | $ 124,372 |
Total investments, excluding investments valued at NAV | $ 83,194 | $ 115,911 | |
Funded pension plan assets, by asset category (as a percent) | 100.00% | 100.00% | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Employee benefits plans | |||
Fair value of plan assets | $ 83,194 | $ 115,911 | |
Total investments, excluding investments valued at NAV | 83,194 | 115,911 | |
Equity Securities | |||
Employee benefits plans | |||
Fair value of plan assets | $ 61,254 | $ 83,185 | |
Funded pension plan assets, by asset category (as a percent) | 52.00% | 68.00% | |
Equity Securities | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Employee benefits plans | |||
Fair value of plan assets | $ 61,254 | $ 83,185 | |
Debt Securities | |||
Employee benefits plans | |||
Fair value of plan assets | $ 21,940 | $ 32,726 | |
Funded pension plan assets, by asset category (as a percent) | 19.00% | 27.00% | |
Debt Securities | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Employee benefits plans | |||
Fair value of plan assets | $ 21,940 | $ 32,726 | |
Other Securities | |||
Employee benefits plans | |||
Fair value of plan assets | $ 33,531 | $ 5,771 | |
Funded pension plan assets, by asset category (as a percent) | 29.00% | 5.00% |
Employee Benefit Plans (Detai53
Employee Benefit Plans (Details 3) - Pension Plan | 12 Months Ended |
Dec. 31, 2016 | |
Employee benefits plans | |
Period of operating history and sufficient trading volume of invested entity (minimum) | 5 years |
Minimum | |
Employee benefits plans | |
Period to meet policy goals | 3 years |
Maximum | |
Employee benefits plans | |
Period to meet policy goals | 5 years |
Domestic Equities | |
Employee benefits plans | |
Target (as a percent) | 50.00% |
Acceptable range, minimum (as a percent) | 35.00% |
Acceptable range, maximum (as a percent) | 75.00% |
Large Cap Growth | |
Employee benefits plans | |
Target (as a percent) | 22.50% |
Acceptable range, minimum (as a percent) | 15.00% |
Acceptable range, maximum (as a percent) | 30.00% |
Large Cap Value | |
Employee benefits plans | |
Target (as a percent) | 22.50% |
Acceptable range, minimum (as a percent) | 15.00% |
Acceptable range, maximum (as a percent) | 30.00% |
Mid Cap Value | |
Employee benefits plans | |
Target (as a percent) | 5.00% |
Acceptable range, minimum (as a percent) | 5.00% |
Acceptable range, maximum (as a percent) | 15.00% |
Mid Cap Growth | |
Employee benefits plans | |
Target (as a percent) | 0.00% |
Acceptable range, minimum (as a percent) | 0.00% |
Acceptable range, maximum (as a percent) | 10.00% |
Domestic Fixed Income | |
Employee benefits plans | |
Target (as a percent) | 35.00% |
Acceptable range, minimum (as a percent) | 15.00% |
Acceptable range, maximum (as a percent) | 50.00% |
International Equities | |
Employee benefits plans | |
Target (as a percent) | 15.00% |
Acceptable range, minimum (as a percent) | 10.00% |
Acceptable range, maximum (as a percent) | 25.00% |
Employee Benefit Plans (Detai54
Employee Benefit Plans (Details 4) $ in Thousands | Dec. 31, 2016USD ($) |
Expected future pension benefit payments | |
2,017 | $ 9,736 |
2,018 | 9,873 |
2,019 | 9,967 |
2,020 | 10,241 |
2,021 | 10,513 |
2022-2026 | 56,362 |
Total | 106,692 |
Restoration Pension Plan | |
Expected future pension benefit payments | |
2,017 | $ 1,700 |
Stockholders' Equity (Details 1
Stockholders' Equity (Details 1) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | 240 Months Ended | |||
Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2016 | Aug. 31, 2014 | |
Stock repurchase program | ||||||
Dividends paid (in dollars per share) | $ 0.085 | $ 0.085 | $ 0.34 | $ 0.34 | ||
Common Stock | ||||||
Stock repurchase program | ||||||
Dividends paid (in dollars per share) | $ 0.085 | |||||
Stock repurchased under current and previously announced share repurchase programs | $ 1,200 | |||||
Stock repurchased under current and previously announced share repurchase programs (in shares) | 67,900,000 | |||||
Common Stock | 2012 Stock Repurchase program | ||||||
Stock repurchase program | ||||||
Common stock repurchased (in shares) | 0 | |||||
Authorized amount to repurchase shares | $ 20 | |||||
Remaining amount available to repurchase shares | $ 11.4 | $ 11.4 | ||||
Common stock received in lieu of cash from stock option exercises and vesting of non-vested shares (in shares) | 95,264 | |||||
Common stock received in lieu of cash from stock option exercises and vesting of non-vested shares | $ 0.2 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details 1) - USD ($) shares in Millions, $ in Millions | 1 Months Ended | 12 Months Ended | |
Jul. 31, 2015 | Dec. 31, 2016 | May 31, 2013 | |
Cash Performance Shares | |||
Stock-based compensation | |||
Performance measurement period | 3 years | ||
Performance Shares | |||
Stock-based compensation | |||
Performance measurement period | 3 years | ||
Inducement Awards | Employee Stock Option | |||
Stock-based compensation | |||
Number of equal vesting increments | 3 | ||
Inducement Awards | Employee Stock Option | Tranche One | |||
Stock-based compensation | |||
Award vesting rights, percentage | 25.00% | ||
Inducement Awards | Employee Stock Option | Tranche Two | |||
Stock-based compensation | |||
Award vesting rights, percentage | 25.00% | ||
Inducement Awards | Unvested Shares | Tranche One | |||
Stock-based compensation | |||
Award vesting rights, percentage | 33.00% | ||
Inducement Awards | Unvested Shares | Tranche Two | |||
Stock-based compensation | |||
Award vesting rights, percentage | 33.00% | ||
Inducement Awards | Unvested Shares | Tranche Three | |||
Stock-based compensation | |||
Award vesting rights, percentage | 33.00% | ||
2013 Plan | |||
Stock-based compensation | |||
Number of shares authorized | 5 | ||
Number of shares available for grant | 2.5 | ||
2013 Plan | Employee Stock Option | |||
Stock-based compensation | |||
Number of equal vesting increments | 3 | ||
Expiration period | 10 years | ||
2013 Plan | Unvested Shares | Tranche One | |||
Stock-based compensation | |||
Award vesting rights, percentage | 33.00% | ||
2013 Plan | Unvested Shares | Tranche Two | |||
Stock-based compensation | |||
Award vesting rights, percentage | 33.00% | ||
2013 Plan | Unvested Shares | Tranche Three | |||
Stock-based compensation | |||
Award vesting rights, percentage | 33.00% | ||
2013 Plan | Cash Performance Shares | Minimum | |||
Stock-based compensation | |||
Percentage of award shares to be issued based on performance | 0.00% | ||
2013 Plan | Cash Performance Shares | Maximum | |||
Stock-based compensation | |||
Percentage of award shares to be issued based on performance | 100.00% | ||
2013 Plan | Phantom Stock Units | Tranche One | |||
Stock-based compensation | |||
Award vesting rights, percentage | 25.00% | ||
2013 Plan | Phantom Stock Units | Tranche Two | |||
Stock-based compensation | |||
Award vesting rights, percentage | 25.00% | ||
2013 Plan | Phantom Stock Units | Tranche Three | |||
Stock-based compensation | |||
Award vesting rights, percentage | 25.00% | ||
2013 Plan | Phantom Stock Units | Tranche Four | |||
Stock-based compensation | |||
Award vesting rights, percentage | 25.00% | ||
2013 CEO Plan | Employee Stock Option | |||
Stock-based compensation | |||
Accelerated compensation cost | $ 0.5 | ||
2013 CEO Plan | Unvested Shares | |||
Stock-based compensation | |||
Accelerated compensation cost | $ 1.2 | ||
2005 Plan | |||
Stock-based compensation | |||
Number of shares available for grant | 0 | ||
2005 Plan | Employee Stock Option | |||
Stock-based compensation | |||
Number of equal vesting increments | 3 |
Stock-Based Compensation (Det57
Stock-Based Compensation (Details 2) - Employee Stock Option - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Options outstanding | |||
Outstanding at beginning of period | 4,602,746 | 4,464,021 | 4,245,712 |
Granted in period | 150,371 | 1,973,606 | 1,002,955 |
Exercised in period | 0 | 35,000 | 78,125 |
Expired in period | 477,027 | 1,139,148 | 268,537 |
Forfeited in period | 570,197 | 660,733 | 437,984 |
Outstanding at end of period | 3,705,893 | 4,602,746 | 4,464,021 |
Vested and expected to vest at end of period | 3,554,630 | ||
Exercisable at end of period | 1,950,302 | ||
Weighted average exercise price | |||
Outstanding at beginning of period | $ 8.74 | $ 11.50 | $ 13.65 |
Granted in period | 2.61 | 5.73 | 8.01 |
Exercised in period | 0 | 6.04 | 6.19 |
Expired in period | 16.06 | 14.89 | 17.83 |
Forfeited in period | 7.57 | 7.96 | 8.72 |
Outstanding at end of period | 7.72 | $ 8.74 | $ 11.50 |
Vested and expected to vest at end of period | 7.86 | ||
Exercisable | $ 9.83 | ||
Weighted average remaining contractual term | |||
Outstanding | 4 years 8 months 27 days | ||
Vested and expected to vest | 4 years 6 months 29 days | ||
Exercisable | 2 years 8 months 27 days | ||
Intrinsic value | |||
Exercises in period | $ 0 | $ 67 | $ 61 |
Outstanding | 0 | ||
Vested and expected to vest | 0 | ||
Exercisable | $ 0 | ||
Additional disclosures | |||
Grants in period, weighted average grant date fair value | $ 1.17 | $ 1.36 | $ 2.59 |
Compensation cost not yet recognized | $ 1,200 | ||
Period for recognition of compensation cost not yet recognized | 2 years 4 months 2 days | ||
Black-Scholes Option-Pricing Model weighted average assumptions | |||
Expected dividend payments per share | $ 0 | ||
Expected term | 6 years 3 months | 6 years 2 months 27 days | 6 years 3 months |
Expected volatility rate | 44.80% | 40.60% | 47.10% |
Risk free interest rate | 1.48% | 1.58% | 1.88% |
Expected dividend rate | 0.00% | 5.69% | 3.82% |
2005 Plan | |||
Options outstanding | |||
Outstanding at end of period | 1,900,000 | ||
2005 Plan | Minimum | |||
Weighted average exercise price | |||
Outstanding at end of period | $ 6.04 | ||
2005 Plan | Maximum | |||
Weighted average exercise price | |||
Outstanding at end of period | $ 26.07 | ||
Inducement Awards | |||
Options outstanding | |||
Outstanding at end of period | 1,100,000 | ||
Inducement Awards | Minimum | |||
Weighted average exercise price | |||
Outstanding at end of period | $ 2.85 | ||
Inducement Awards | Maximum | |||
Weighted average exercise price | |||
Outstanding at end of period | $ 4.26 | ||
2013 Plan | |||
Options outstanding | |||
Outstanding at end of period | 700,000 | ||
2013 Plan | Minimum | |||
Weighted average exercise price | |||
Outstanding at end of period | $ 1.67 | ||
2013 Plan | Maximum | |||
Weighted average exercise price | |||
Outstanding at end of period | $ 8.85 |
Stock-Based Compensation (Det58
Stock-Based Compensation (Details 3) - Employee Stock Option | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Option exercise price range | |
Number of outstanding options | shares | 3,705,893 |
Weighted average exercise price | $ 7.72 |
Weighted average remaining contractual term | 4 years 8 months 27 days |
Number of exercisable options | shares | 1,950,302 |
Weighted average exercise price | $ 9.83 |
Exercise Price From 0 to 6.99 Dollars | |
Option exercise price range | |
Lower range limit | 0 |
Upper range limit | $ 6.99 |
Number of outstanding options | shares | 1,638,475 |
Weighted average exercise price | $ 4.42 |
Weighted average remaining contractual term | 6 years 2 months 19 days |
Number of exercisable options | shares | 446,601 |
Weighted average exercise price | $ 4.86 |
Exercise Price From 7.00 to 10.99 Dollars | |
Option exercise price range | |
Lower range limit | 7 |
Upper range limit | $ 10.99 |
Number of outstanding options | shares | 1,352,768 |
Weighted average exercise price | $ 8.07 |
Weighted average remaining contractual term | 4 years 7 months 21 days |
Number of exercisable options | shares | 789,051 |
Weighted average exercise price | $ 8.26 |
Exercise Price From 11.00 to 11.99 Dollars | |
Option exercise price range | |
Lower range limit | 11 |
Upper range limit | $ 11.99 |
Number of outstanding options | shares | 332,500 |
Weighted average exercise price | $ 11.90 |
Weighted average remaining contractual term | 1 year 10 months 24 days |
Number of exercisable options | shares | 332,500 |
Weighted average exercise price | $ 11.90 |
Exercise Price From 12.00 to 15.99 Dollars | |
Option exercise price range | |
Lower range limit | 12 |
Upper range limit | $ 15.99 |
Number of outstanding options | shares | 259,100 |
Weighted average exercise price | $ 14.48 |
Weighted average remaining contractual term | 1 year 9 months |
Number of exercisable options | shares | 259,100 |
Weighted average exercise price | $ 14.48 |
Exercise Price From16.00 to 24.49 Dollars | |
Option exercise price range | |
Lower range limit | 16 |
Upper range limit | $ 24.49 |
Number of outstanding options | shares | 50,000 |
Weighted average exercise price | $ 17.30 |
Weighted average remaining contractual term | 3 months |
Number of exercisable options | shares | 50,000 |
Weighted average exercise price | $ 17.30 |
Exercise Price From 24.50 to 28.85 Dollars | |
Option exercise price range | |
Lower range limit | 24.50 |
Upper range limit | $ 28.85 |
Number of outstanding options | shares | 73,050 |
Weighted average exercise price | $ 26.07 |
Weighted average remaining contractual term | 1 month 6 days |
Number of exercisable options | shares | 73,050 |
Weighted average exercise price | $ 26.07 |
Stock-Based Compensation (Det59
Stock-Based Compensation (Details 4) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Additional disclosures | ||||
Stock-based compensation | $ 2,673 | $ 5,442 | $ 3,978 | |
Unvested Shares | ||||
Outstanding | ||||
Nonvested at beginning of period | 962,446 | 790,138 | 686,045 | |
Granted in period | 741,954 | 836,775 | 529,426 | |
Vested in period | 365,196 | 504,686 | 342,613 | |
Forfeited in period | (393,952) | (159,781) | (82,720) | |
Nonvested at end of period | 945,252 | 962,446 | 790,138 | |
Weighted average grant date fair value | ||||
Granted in period | $ 2.63 | $ 6.38 | $ 7.90 | |
Vested in period | 6.70 | 8.23 | 8.98 | |
Forfeited in period | 5.78 | 7.90 | 8.37 | |
Nonvested | $ 3.76 | $ 6.57 | $ 8.10 | $ 8.72 |
Additional disclosures | ||||
Compensation cost not yet recognized | $ 2,700 | |||
Period for recognition of compensation cost not yet recognized | 1 year 9 months 4 days | |||
Phantom Stock Units | ||||
Outstanding | ||||
Nonvested at beginning of period | 0 | |||
Granted in period | 781,645 | |||
Vested in period | 0 | |||
Forfeited in period | (249,825) | |||
Nonvested at end of period | 531,820 | 0 | ||
Weighted average grant date fair value | ||||
Granted in period | $ 2.69 | |||
Vested in period | 0 | |||
Forfeited in period | 2.69 | |||
Nonvested | $ 2.69 | $ 0 | ||
Additional disclosures | ||||
Compensation cost not yet recognized | $ 700 | |||
Period for recognition of compensation cost not yet recognized | 3 years 3 months 15 days | |||
Performance Shares | ||||
Outstanding | ||||
Nonvested at beginning of period | 701,384 | 603,674 | 470,700 | |
Granted in period | 473,000 | 669,839 | 308,507 | |
Vested in period | 0 | 0 | 0 | |
Forfeited in period | (330,069) | (572,129) | (175,533) | |
Nonvested at end of period | 844,315 | 701,384 | 603,674 | |
Weighted average grant date fair value | ||||
Granted in period | $ 1.90 | $ 4.30 | $ 7.09 | |
Vested in period | 0 | 0 | 0 | |
Forfeited in period | 5.76 | 7.54 | 9.30 | |
Nonvested | $ 2.56 | $ 4.51 | $ 7.61 | $ 8.58 |
Additional disclosures | ||||
Compensation cost not yet recognized | $ 1,300 | |||
Period for recognition of compensation cost not yet recognized | 2 years 1 month 28 days | |||
Cash Performance Shares | ||||
Outstanding | ||||
Outstanding at beginning of period | 0 | |||
Granted in period | 512,127 | |||
Settled in period | 0 | |||
Forfeited in period | (68,122) | |||
Outstanding at end of period | 444,005 | 0 | ||
Weighted average grant date fair value | ||||
Granted in period | $ 2.69 | |||
Vested in period | 0 | |||
Forfeited in period | 2.69 | |||
Nonvested | $ 2.69 | $ 0 | ||
Additional disclosures | ||||
Compensation cost not yet recognized | $ 600 | |||
Period for recognition of compensation cost not yet recognized | 2 years 1 month 17 days |
Commitments and Contingencies (
Commitments and Contingencies (Details 1) - Letter of Credit $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Contingencies | |
Letters of credit amount issued | $ 4.1 |
Amount drawn against letters of credit | $ 0 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating leases | |||
Operating leases | |||
Rent expense | $ 12,400 | $ 13,600 | $ 14,300 |
Future minimum payments due | |||
2,017 | 10,812 | ||
2,018 | 7,482 | ||
2,019 | 4,991 | ||
2,020 | 2,842 | ||
2,021 | 1,597 | ||
Thereafter | 2,352 | ||
Total | 30,076 | ||
Capital lease obligations | Equipment | |||
Operating leases | |||
Amount paid for capital leases | 200 | ||
Capital lease obligations | |||
Current portion of capital leases | 559 | 132 | |
Long-term portion of capital leases | 1,018 | 204 | |
Total capital lease obligation | 1,577 | $ 336 | |
Future minimum payments due | |||
2,017 | 559 | ||
2,018 | 522 | ||
2,019 | 459 | ||
2,020 | 35 | ||
2,021 | 2 | ||
Thereafter | 0 | ||
Total | $ 1,577 |
Earnings Per Share (Details 1)
Earnings Per Share (Details 1) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Net Income (Loss) | |||||||||||
Income (loss) from continuing operations | $ (72,891) | $ (4,285) | $ (5,902) | $ (6,700) | $ (1,115) | $ (172,856) | $ (6,690) | $ (404) | $ (89,778) | $ (181,066) | $ 13,754 |
Income (loss) from discontinued operations, net of tax | (45,139) | 1,244 | 1,639 | 1,097 | 3,659 | 1,942 | 2,518 | 2,019 | (41,159) | 10,138 | 10,237 |
Net income (loss) | $ (118,030) | $ (3,041) | $ (4,263) | $ (5,603) | $ 2,544 | $ (170,914) | $ (4,172) | $ 1,615 | $ (130,937) | $ (170,928) | $ 23,991 |
Basic EPS | |||||||||||
Weighted-average common shares outstanding | 61,487 | 61,643 | 62,444 | ||||||||
Continuing operations (in dollars per share) | $ (1.18) | $ (0.07) | $ (0.10) | $ (0.11) | $ (0.02) | $ (2.81) | $ (0.11) | $ (0.01) | $ (1.46) | $ (2.94) | $ 0.22 |
Discontinued operations (in dollars per share) | (0.74) | 0.02 | 0.03 | 0.02 | 0.06 | 0.04 | 0.04 | 0.04 | (0.67) | 0.17 | 0.16 |
Basic earnings (loss) per common share (in dollars per share) | $ (2.13) | $ (2.77) | $ 0.38 | ||||||||
Diluted EPS | |||||||||||
Weighted-average common and common equivalent shares outstanding | 61,487 | 61,643 | 62,658 | ||||||||
Continuing operations (in dollars per share) | (1.18) | (0.07) | (0.10) | (0.11) | (0.02) | (2.81) | (0.11) | (0.01) | $ (1.46) | $ (2.94) | $ 0.22 |
Discontinued operations (in dollars per share) | $ (0.74) | $ 0.02 | $ 0.03 | $ 0.02 | $ 0.06 | $ 0.04 | $ 0.04 | $ 0.04 | (0.67) | 0.17 | 0.16 |
Diluted earnings (loss) per common share (in dollars per share) | $ (2.13) | $ (2.77) | $ 0.38 | ||||||||
Computation of Shares Used in Earnings Per Share Computations | |||||||||||
Weighted-average common shares outstanding | 61,487 | 61,643 | 62,444 | ||||||||
Weighted-average common equivalent shares - dilutive effect of stock options and awards (in shares) | 0 | 0 | 214 | ||||||||
Weighted-average common and common equivalent shares outstanding | 61,487 | 61,643 | 62,658 | ||||||||
Employee Stock Option | |||||||||||
Stock-based compensation | |||||||||||
Weighted-average anti-dilutive shares have been excluded from the EPS calculations | 4,200 | 4,200 | 4,100 | ||||||||
Unvested Shares | |||||||||||
Stock-based compensation | |||||||||||
Weighted-average anti-dilutive shares have been excluded from the EPS calculations | 1,100 | 900 | 0 |
Comprehensive Income (Loss) (De
Comprehensive Income (Loss) (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accumulated other comprehensive income (loss) | |||||||||||
Net income (loss) | $ (118,030) | $ (3,041) | $ (4,263) | $ (5,603) | $ 2,544 | $ (170,914) | $ (4,172) | $ 1,615 | $ (130,937) | $ (170,928) | $ 23,991 |
Adjustment to pension liability | (5,103) | 9,408 | (28,802) | ||||||||
Tax (expense) benefit | 2,041 | (3,763) | 11,521 | ||||||||
Adjustment to pension liability | (3,062) | 5,645 | (17,281) | ||||||||
Foreign currency translation adjustment | 444 | (1,976) | (1,830) | ||||||||
Total other comprehensive income (loss) | (2,618) | 3,669 | (19,111) | ||||||||
Comprehensive income (loss) | $ (133,555) | $ (167,259) | $ 4,880 |
Comprehensive Income (Loss) (64
Comprehensive Income (Loss) (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accumulated other comprehensive income (loss) | |||
Accumulated other comprehensive loss, beginning of period | $ (43,560) | ||
Accumulated other comprehensive income (loss), net of tax | |||
Other comprehensive loss | (2,618) | $ 3,669 | $ (19,111) |
Accumulated other comprehensive loss, end of period | (46,178) | (43,560) | |
Accumulated defined benefit plan adjustment | |||
Accumulated other comprehensive income (loss) | |||
Accumulated other comprehensive loss, beginning of period | (43,915) | (49,560) | |
Accumulated other comprehensive income (loss), net of tax | |||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | (3,062) | 5,645 | |
Other comprehensive loss | (3,062) | 5,645 | |
Accumulated other comprehensive loss, end of period | (46,977) | (43,915) | (49,560) |
Accumulated translation adjustment | |||
Accumulated other comprehensive income (loss) | |||
Accumulated other comprehensive loss, beginning of period | 355 | 2,331 | |
Accumulated other comprehensive income (loss), net of tax | |||
Other comprehensive loss, net of tax, before reclassifications | 444 | (1,976) | |
Other comprehensive loss | 444 | (1,976) | |
Accumulated other comprehensive loss, end of period | 799 | 355 | 2,331 |
Accumulated Other Comprehensive Income (Loss) | |||
Accumulated other comprehensive income (loss) | |||
Accumulated other comprehensive loss, beginning of period | (43,560) | (47,229) | |
Accumulated other comprehensive income (loss), net of tax | |||
Other comprehensive loss, net of tax, before reclassifications | 444 | (1,976) | |
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | (3,062) | 5,645 | |
Other comprehensive loss | (2,618) | 3,669 | (19,111) |
Accumulated other comprehensive loss, end of period | $ (46,178) | $ (43,560) | $ (47,229) |
Acquisition and Disposition (De
Acquisition and Disposition (Details 1) - USD ($) $ in Thousands | Mar. 04, 2016 | Apr. 14, 2015 | Mar. 16, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | May 01, 2017 |
Acquisition and Disposition | |||||||
Intangible asset amortization | $ 821 | $ 659 | $ 26 | ||||
Sale of business | |||||||
Loss on sale | $ 0 | $ 9,501 | $ 0 | ||||
Maximum | |||||||
Acquisition and Disposition | |||||||
Amortization period | 10 years | ||||||
Aleutian Consulting Inc | |||||||
Acquisition and Disposition | |||||||
Effective date of acquisition | Mar. 4, 2016 | ||||||
Payments to Acquire Businesses, Gross | $ 3,500 | ||||||
3Q Digital Inc | |||||||
Acquisition and Disposition | |||||||
Effective date of acquisition | Mar. 16, 2015 | ||||||
Payments to Acquire Businesses, Gross | $ 30,245 | ||||||
Business Combination, Consideration Transferred, Liabilities Incurred | 17,940 | ||||||
Contingent consideration potential payment, high | 35,000 | ||||||
Identifiable intangible assets | 4,773 | ||||||
Deferred tax adjustment | 2,299 | ||||||
3Q Digital Inc | Customer relationships | |||||||
Acquisition and Disposition | |||||||
Identifiable intangible assets | $ 4,300 | ||||||
Amortization period | 7 years | ||||||
3Q Digital Inc | Tradenames and trademarks | |||||||
Acquisition and Disposition | |||||||
Identifiable intangible assets | $ 300 | ||||||
Amortization period | 2 years | ||||||
3Q Digital Inc | Non-compete agreements | |||||||
Acquisition and Disposition | |||||||
Identifiable intangible assets | $ 200 | ||||||
Amortization period | 3 years | ||||||
3Q Digital Inc | Assumption change | Contingent consideration | |||||||
Acquisition and Disposition | |||||||
Reduction in revenue projection | 0.01 | ||||||
Adjustments to fair value of contingent consideration results from change in assumptions | $ 5,900 | ||||||
Disposition | B2B research business | |||||||
Sale of business | |||||||
Loss on sale | $ 9,500 | ||||||
Disposition | B2B research business | Maximum | |||||||
Sale of business | |||||||
Percent of total Company revenue (less than) | 5.00% | ||||||
Subsequent event | 3Q Agreement | 3Q Digital Inc | |||||||
Acquisition and Disposition | |||||||
Interest rate of unpaid portion of contingent consideration | 8.50% |
Acquisition and Disposition (66
Acquisition and Disposition (Details 2) - USD ($) $ in Thousands | Mar. 16, 2015 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Assets and liabilities assumed | |||||
Goodwill | $ 69,699 | $ 34,510 | $ 69,699 | $ 248,891 | |
Reconciliation of accrued earnout consideration | |||||
Interest accretion on contingent consideration | 2,430 | 2,337 | 0 | ||
Adjustments to fair value of contingent consideration | 7,018 | 0 | $ 0 | ||
3Q Digital Inc | |||||
Total consideration | |||||
Cash consideration per purchase agreement | $ 30,245 | ||||
Estimated fair value of contingent consideration | 17,940 | ||||
Identifiable intangible assets and goodwill | 48,185 | ||||
Assets and liabilities assumed | |||||
Current assets | 4,135 | ||||
Property and equipment | 164 | ||||
Other assets | 389 | ||||
Current liabilities | (822) | ||||
Other liabilities | 0 | ||||
Total tangible assets and liabilities: | 3,866 | ||||
Identifiable intangible assets | 4,773 | ||||
Goodwill | 41,845 | ||||
Total | 50,484 | ||||
Level 3 | Contingent consideration | 3Q Digital Inc | |||||
Reconciliation of accrued earnout consideration | |||||
Contingent consideration at beginning of period | 17,940 | 20,277 | |||
Interest accretion on contingent consideration | 2,337 | 2,430 | |||
Adjustments to fair value of contingent consideration | 7,018 | ||||
Contingent consideration at end of period | $ 17,940 | $ 20,277 | $ 29,725 | $ 20,277 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) $ in Thousands | Dec. 23, 2016 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Discontinued operations | ||||||||||||
Tax effect of gain (loss) from disposal of discontinued operation | $ (4,600) | $ 0 | $ 0 | |||||||||
Summarized operating results for the Trillium discontinued operation | ||||||||||||
Loss on disposal of discontinued operation | 44,529 | |||||||||||
Income (loss) from discontinued operations, net of tax | $ (45,139) | $ 1,244 | $ 1,639 | $ 1,097 | $ 3,659 | $ 1,942 | $ 2,518 | $ 2,019 | (41,159) | 10,138 | 10,237 | |
Assets and liabilities of the Trillium discontinued operation | ||||||||||||
Total current assets of discontinued operations | 0 | 169,401 | 0 | 169,401 | ||||||||
Total current liabilities of discontinued operations | 0 | 24,758 | 0 | 24,758 | ||||||||
Trillium Software | Discontinued operations | ||||||||||||
Discontinued operations | ||||||||||||
Proceeds from sale | $ 112,000 | |||||||||||
Loss on disposal, net of tax | 39,900 | |||||||||||
Tax effect of gain (loss) from disposal of discontinued operation | $ (4,600) | |||||||||||
Summarized operating results for the Trillium discontinued operation | ||||||||||||
Revenue | 45,639 | 51,135 | 54,232 | |||||||||
Labor | 18,687 | 22,219 | 25,930 | |||||||||
Production and distribution | 703 | 1,404 | 1,651 | |||||||||
Advertising, selling, general and administrative | 10,255 | 9,951 | 9,142 | |||||||||
Depreciation, software and intangible asset amortization | 2,304 | 1,867 | 2,032 | |||||||||
Disposal Group, Including Discontinued Operations, Interest Expense, Net | 7,133 | (256) | (246) | |||||||||
Loss on disposal of discontinued operation | 44,529 | 0 | 0 | |||||||||
Other, net | (1,207) | 366 | (203) | |||||||||
Income (loss) from discontinued operations before income taxes | (36,765) | 15,584 | 15,926 | |||||||||
Income tax expense | 4,394 | 5,446 | 5,689 | |||||||||
Income (loss) from discontinued operations, net of tax | (41,159) | 10,138 | $ 10,237 | |||||||||
Assets and liabilities of the Trillium discontinued operation | ||||||||||||
Cash and cash equivalents | 0 | 1,049 | 0 | 1,049 | ||||||||
Accounts receivable, net | 0 | 11,397 | 0 | 11,397 | ||||||||
Prepaid expenses | 0 | 1,640 | 0 | 1,640 | ||||||||
Property, plant and equipment, net | 0 | 5,777 | 0 | 5,777 | ||||||||
Goodwill | 0 | 149,273 | 0 | 149,273 | ||||||||
Other current assets | 0 | 265 | 0 | 265 | ||||||||
Total current assets of discontinued operations | 0 | 169,401 | 0 | 169,401 | ||||||||
Accounts payable | 0 | 1,670 | 0 | 1,670 | ||||||||
Accrued payroll and related expenses | 0 | 924 | 0 | 924 | ||||||||
Deferred revenue and customer advances | 0 | 21,186 | 0 | 21,186 | ||||||||
Other current liabilities | 0 | 978 | 0 | 978 | ||||||||
Total current liabilities of discontinued operations | $ 0 | $ 24,758 | $ 0 | $ 24,758 |
Selected Quarterly Data (Unau68
Selected Quarterly Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Selected quarterly data (unaudited) | |||||||||||
Revenues | $ 110,107 | $ 97,425 | $ 97,317 | $ 99,563 | $ 116,892 | $ 108,784 | $ 109,175 | $ 109,315 | $ 404,412 | $ 444,166 | $ 499,444 |
Operating income (loss) | (35,000) | (4,572) | (7,175) | (9,033) | 3,590 | (209,640) | 3,039 | (258) | (55,780) | (203,269) | 25,285 |
Income (loss) from continuing operations before income taxes | (46,483) | (5,386) | (8,001) | (9,278) | (613) | (208,742) | (8,613) | (457) | (69,148) | (218,426) | 21,380 |
Income (loss) from continuing operations | (72,891) | (4,285) | (5,902) | (6,700) | (1,115) | (172,856) | (6,690) | (404) | (89,778) | (181,066) | 13,754 |
Income (loss) from discontinued operations, net of tax | (45,139) | 1,244 | 1,639 | 1,097 | 3,659 | 1,942 | 2,518 | 2,019 | (41,159) | 10,138 | 10,237 |
Net income (loss) | $ (118,030) | $ (3,041) | $ (4,263) | $ (5,603) | $ 2,544 | $ (170,914) | $ (4,172) | $ 1,615 | $ (130,937) | $ (170,928) | $ 23,991 |
Basic earnings (loss) per common share | |||||||||||
Continuing operations, per basic share | $ (1.18) | $ (0.07) | $ (0.10) | $ (0.11) | $ (0.02) | $ (2.81) | $ (0.11) | $ (0.01) | $ (1.46) | $ (2.94) | $ 0.22 |
Discontinued operations, per basic share | (0.74) | 0.02 | 0.03 | 0.02 | 0.06 | 0.04 | 0.04 | 0.04 | (0.67) | 0.17 | 0.16 |
Diluted earnings (loss) per common share | |||||||||||
Continuing operations, per diluted share | (1.18) | (0.07) | (0.10) | (0.11) | (0.02) | (2.81) | (0.11) | (0.01) | (1.46) | (2.94) | 0.22 |
Discontinued operations, per diluted share | $ (0.74) | $ 0.02 | $ 0.03 | $ 0.02 | $ 0.06 | $ 0.04 | $ 0.04 | $ 0.04 | $ (0.67) | $ 0.17 | $ 0.16 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Millions | Apr. 17, 2017 | Mar. 16, 2015 |
Texas Capital Credit Facility | Subsequent event | ||
Subsequent event | ||
Debt term | 2 years | |
Maximum borrowing capacity | $ 20 | |
3Q Digital Inc | ||
Subsequent event | ||
Contingent consideration potential payment, high | $ 35 |