Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | Jun. 30, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | HARTE HANKS INC | |
Entity Central Index Key | 45,919 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 61,975,778 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash and cash equivalents | $ 43,642 | $ 46,005 |
Accounts receivable (less allowance for doubtful accounts of $1,184 at March 31, 2017 and $1,028 at December 31, 2016) | 77,892 | 88,813 |
Inventory | 869 | 838 |
Prepaid expenses | 7,179 | 5,944 |
Prepaid taxes and income tax receivable | 0 | 2,895 |
Other current assets | 3,579 | 4,934 |
Total current assets | 133,161 | 149,429 |
Property, plant and equipment (less accumulated depreciation of $143,576 at March 31, 2017 and $141,388 at December 31, 2016) | 22,111 | 23,924 |
Goodwill | 34,510 | 34,510 |
Other intangible assets (less accumulated amortization of $1,676 at March 31, 2017 and $1,471 at December 31, 2016) | 3,097 | 3,302 |
Other assets | 2,841 | 2,272 |
Total assets | 195,720 | 213,437 |
Current liabilities | ||
Accounts payable | 39,542 | 45,563 |
Accrued payroll and related expenses | 10,059 | 9,990 |
Deferred revenue and customer advances | 6,174 | 6,505 |
Income taxes payable | 26,082 | 30,436 |
Customer postage and program deposits | 7,505 | 7,985 |
Other current liabilities | 4,113 | 4,188 |
Total current liabilities | 93,475 | 104,667 |
Pensions | 60,568 | 60,836 |
Contingent consideration | 30,766 | 29,725 |
Deferred tax liabilities, net | 10,824 | 11,044 |
Other long-term liabilities | 3,910 | 4,509 |
Total liabilities | 199,543 | 210,781 |
Common stock, $1 par value, 250,000,000 shares authorized 120,474,745 shares issued at March 31, 2017 and 120,436,735 shares issued at December 31, 2016 | 120,475 | 120,437 |
Additional paid-in capital | 350,080 | 350,245 |
Retained earnings | 829,057 | 837,316 |
Less treasury stock, 58,729,813 shares at cost at March 31, 2017 and 58,791,630 shares at cost at December 31, 2016 | (1,257,640) | (1,259,164) |
Accumulated other comprehensive loss | (45,795) | (46,178) |
Total stockholders’ (deficit) equity | (3,823) | 2,656 |
Total liabilities and stockholders’ equity | $ 195,720 | $ 213,437 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 1,184 | $ 1,028 |
Property, plant and equipment, accumulated depreciation | 143,576 | 141,388 |
Other intangible assets, accumulated amortization | $ 1,676 | $ 1,471 |
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) | 120,474,745 | 120,436,735 |
Treasury stock, shares (in shares) | 58,729,813 | 58,791,630 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Statement [Abstract] | ||
Operating revenues | $ 94,894 | $ 99,563 |
Operating expenses | ||
Labor | 60,350 | 62,552 |
Production and distribution | 26,878 | 29,879 |
Advertising, selling, general and administrative | 11,060 | 12,643 |
Depreciation, software and intangible asset amortization | 2,948 | 3,036 |
Total operating expenses | 101,236 | 108,110 |
Operating loss | (6,342) | (8,547) |
Other (income) and expenses | ||
Interest expense, net | 1,023 | 980 |
Other, net | 1,497 | (249) |
Total other (income) expenses | 2,520 | 731 |
Loss from continuing operations before income taxes | (8,862) | (9,278) |
Income tax benefit | (1,476) | (2,578) |
Loss from continuing operations | (7,386) | (6,700) |
Income from discontinued operations, net of income taxes | 0 | 1,097 |
Net loss | $ (7,386) | $ (5,603) |
Continuing operations (in dollars per share) | $ (0.12) | $ (0.11) |
Discontinued operations (in dollars per share) | 0 | 0.02 |
Basic earnings per common share (in dollars per share) | $ (0.12) | $ (0.09) |
Weighted-average common shares outstanding (in shares) | 61,686 | 61,331 |
Continuing operations (in dollars per share) | $ (0.12) | $ (0.11) |
Discontinued operations (in dollars per share) | 0 | 0.02 |
Diluted earnings per common share (in dollars per share) | $ (0.12) | $ (0.09) |
Weighted-average common and common equivalent shares outstanding (in shares) | 61,686 | 61,331 |
Declared dividends per share (in dollars per share) | $ 0 | $ 0.09 |
Other comprehensive income (loss), net of tax | ||
Adjustment to pension liability | $ 338 | $ 522 |
Foreign currency translation adjustment | 45 | (470) |
Total other comprehensive income (loss), net of tax | 383 | 52 |
Comprehensive loss | $ (7,003) | $ (5,551) |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Statement of Cash Flows [Abstract] | ||
Net loss | $ (7,386) | $ (5,603) |
Adjustments to reconcile net loss to net cash provided by operating activities | ||
Income from discontinued operations, net of tax | 0 | (1,097) |
Depreciation and software amortization | 2,743 | 2,831 |
Intangible asset amortization | 205 | 205 |
Stock-based compensation | 484 | 639 |
Net pension cost (payments) | 295 | 100 |
Interest accretion on contingent consideration | 1,041 | 328 |
Adjustments to fair value of contingent consideration | 0 | (247) |
Discount amortization | 0 | 208 |
Deferred income taxes | (445) | (675) |
Loss on disposal of assets | 199 | 0 |
Other, net | 0 | 27 |
Changes in assets and liabilities, net of acquisitions: | ||
Decrease in accounts receivable, net | 10,921 | 14,041 |
Increase in inventory | (31) | (159) |
Decrease (increase) in prepaid expenses and other current assets | 2,446 | (920) |
Decrease in accounts payable | (5,418) | (9,341) |
Decrease in other accrued expenses and liabilities | (5,603) | (1,249) |
Net cash (used in) provided by continuing operations | (549) | (912) |
Net cash provided by discontinued operations | 0 | 6,294 |
Net cash (used in) provided by operating activities | (549) | 5,382 |
Cash flows from investing activities | ||
Acquisitions, net of cash acquired | 0 | (3,500) |
Purchases of property, plant and equipment | (1,715) | (3,809) |
Proceeds from sale of property, plant and equipment | 0 | 21 |
Net cash used in investing activities within continuing operations | (1,715) | (7,288) |
Net cash used in investing activities within discontinued operations | 0 | (778) |
Net cash used in investing activities | (1,715) | (8,066) |
Cash flows from financing activities | ||
Borrowings | 0 | 81,008 |
Repayment of borrowings | 0 | (77,313) |
Debt financing costs | 0 | (2,165) |
Issuance of common stock | (15) | (81) |
Issuance of treasury stock | 0 | 40 |
Payment of capital leases | 129 | 0 |
Dividends paid | 0 | (5,285) |
Net cash used in financing activities of continuing operations | (144) | (3,796) |
Effect of exchange rate changes on cash and cash equivalents | 45 | (470) |
Net decrease in cash and cash equivalents | (2,363) | (6,950) |
Cash and cash equivalents at beginning of period | 46,005 | 16,564 |
Cash and cash equivalents at end of period | 43,642 | 9,614 |
Supplemental disclosures | ||
Cash paid for interest | 0 | 1,053 |
Cash paid for income taxes, net of refunds | 799 | 1,238 |
Non-cash investing and financing activities | ||
Purchases of property, plant and equipment included in accounts payable | 755 | 324 |
New capital lease obligations | $ 58 | $ 0 |
Condensed Consolidated Stateme6
Condensed 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, 2015 | $ 140,316 | $ 120,147 | $ 353,050 | $ 973,538 | $ (1,262,859) | $ (43,560) |
Increase (Decrease) in Stockholders' Equity (Deficit) | ||||||
Exercise of stock options and release of unvested shares | (81) | 118 | (118) | (81) | ||
Net tax effect of stock options exercised and release of unvested shares | (593) | (593) | ||||
Stock-based compensation | 563 | 563 | ||||
Dividends paid ($0.085 for the three months ended March 31, 2016) | (5,285) | (5,285) | ||||
Treasury stock issued | 40 | (222) | 262 | |||
Net loss | (5,603) | (5,603) | ||||
Other comprehensive income | 52 | 52 | ||||
Balance at Mar. 31, 2016 | 129,409 | 120,265 | 352,680 | 962,650 | (1,262,678) | (43,508) |
Balance at Dec. 31, 2016 | 2,656 | 120,437 | 350,245 | 837,316 | (1,259,164) | (46,178) |
Increase (Decrease) in Stockholders' Equity (Deficit) | ||||||
Cumulative effect of accounting change | (164) | 709 | (873) | |||
Exercise of stock options and release of unvested shares | (15) | 38 | (38) | (15) | ||
Stock-based compensation | 628 | 628 | ||||
Treasury stock issued | 75 | (1,464) | 1,539 | |||
Net loss | (7,386) | (7,386) | ||||
Other comprehensive income | 383 | 383 | ||||
Balance at Mar. 31, 2017 | $ (3,823) | $ 120,475 | $ 350,080 | $ 829,057 | $ (1,257,640) | $ (45,795) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends paid (in dollars per share) | $ 0 | $ 0.085 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Consolidation The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of Harte Hanks, Inc. and subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. As used in this report, the terms “Harte Hanks,” “the company,” “we,” “us,” or “our” may refer to Harte Hanks, Inc., one or more of its consolidated subsidiaries, or all of them taken as a whole. Interim Financial Information The financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles ("U.S. GAAP") for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017 . The information included in this Form 10-Q should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the consolidated financial statements and notes thereto included in our annual report on Form 10-K for the year ended December 31, 2016 . Discontinued Operations As discussed in Note M , 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 the three months ended March 31, 2016 presented in the Condensed Consolidated Financial Statements. Results of the remaining Harte Hanks business are reported as continuing operations. Going Concern Our recent operating and financial performance has caused us to closely review our ability to continue as a going concern. We have taken a number of actions to continue to support our operations and meet obligations in light of our recent financial performance and decreased cash flows. On April 17, 2017, we entered into a new credit agreement with Texas Capital Bank, N.A. (the "Texas Capital Credit Facility"). The Texas Capital Credit Facility provides $20.0 million in borrowing capacity under a revolving credit line and has far more favorable covenant requirements than our prior credit facility. We believe that the liquidity provided by the Texas Capital Credit Facility is sufficient for our needs given the nature and performance of our operations. On May 1, 2017, we entered into an agreement with 3Q Digital (the "3Q Agreement") which defers payment of a significant contingent liability that otherwise would have been due in 2018. Under the terms of the 3Q Digital purchase agreement, we are required to pay the former owners of 3Q Digital an additional sum contingent on achievement of certain revenue growth goals up to $35.0 million . The 3Q Agreement defers our obligation to pay the contingent consideration until April 1, 2019, or the sale of the 3Q Digital business, whichever is earlier. We believe that in conjunction with our current liquidity position, the new credit facility, and the deferral of payment of the contingent consideration, 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 these unaudited Condensed Consolidated Financial Statements. We continue to take actions to return the business to profitability and improve our cash, liquidity, and financial position. We have implemented expense reductions actions, including downsizing our workforce and consolidating back-office and information technology functions. We also completed the closure of our Baltimore direct mail facility in the first quarter of 2017 in response to the declining demand for printed marketing materials. Continuing work from this facility has been transitioned to other facilities, allowing for higher utilization rates. We have started to see the favorable impact of these actions and intend to continue efforts to reduce expenses through the end of 2017. In addition to the actions discussed above, we are taking steps to improve our operational and financial performance. We continue to work toward increasing operating efficiencies and have focused our investments on improving product offerings that we believe will drive revenue growth. On April 18, 2017, we announced that as part of an initiative to enhance the company's strategic position and increase financial flexibility, the company would seek strategic alternatives for the 3Q Digital business. The liquidity from the potential sale of 3Q Digital will enhance our ability to invest in strategies to strengthen our core offerings. Reclassifications Certain amounts in the financial statements from the prior years have been reclassified to conform to the current year's presentation. This includes amounts related to discontinued operations, which have been reclassified for comparative purposes for the three months ended March 31, 2016 . In addition, the retrospective adoption of ASU 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , resulted in the reclassification of pension expense previously recorded in Labor as of March 31, 2016 to Other, net in the Condensed Consolidated Statements of Comprehensive Income. Use of Estimates The preparation of condensed 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; stock-based compensation; 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. Inventories Our inventories consist primarily of print material and operating supplies. Inventory is stated at the lower of cost using the first-in, first-out method, or market. Operating Expense Presentation in Consolidated Statements of Comprehensive Loss “Labor” in the Consolidated Statements of Comprehensive Loss includes all employee payroll and benefits, including stock-based compensation, along with temporary labor costs. “Production and distribution” and “Advertising, selling, general and administrative” do not include labor, depreciation, or amortization. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | 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, with early adoption permitted. This change is required to be applied prospectively to an award modified on or after the adoption date. 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, with early adoption permitted. This change is required to be applied using a retrospective transition method for each period presented. We adopted the update as of the first quarter of 2017. As a result of the adoption of this ASU, we reclassified $0.5 million of pension expense recorded in Labor in the first quarter of 2016 to Other, net in the Condensed Consolidated Statements of Comprehensive Income. 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 in the amount that 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 or interim goodwill impairment tests in fiscal years beginning after December 15, 2019, with early adoption permitted. We adopted this standard in January 2017, and will apply it as necessary in our financial statements. 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, 2017, including interim reporting periods within those annual reporting periods. 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. We have adopted the update as of the first quarter of 2017. As a result of the adoption of this ASU, excess tax benefits or deficiencies will now be reflected in the Condensed Consolidated Statements of Comprehensive Income (Loss) as a component of income taxes, whereas they previously would be recognized in equity. Excess tax benefits will be recognized in the Consolidated Statement of Cash Flow as an operating activity, with the prior periods adjusted accordingly. Finally, we have elected to account for forfeitures as they occur, rather than estimate expected forfeitures. The ASU was adopted on a modified retrospective basis and no prior periods were restated as a result of the change in accounting policy. 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, with early adoption permitted. 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. We are evaluating the effect that this will have on our consolidated financial statements and related disclosures. In May 2014, the FASB issued ASU No. 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 delayed 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, with early adoption permitted beginning January 1, 2017. We are evaluating the effect that this will have on our consolidated financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing financial reporting. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments FASB ASC 820, Fair Value Measurements and Disclosures, 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. The guidance 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. Our calculation of the acquisition related contingent consideration accounted for at fair value on a recurring basis is disclosed in Note L , Acquisition and Disposition. |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill and Other Intangible Assets Under the provisions of FASB ASC 350, Intangibles-Goodwill and Other (ASC 350), goodwill is tested for impairment at least annually, or more frequently if events or circumstances indicate that it is “more likely than not” that goodwill might be impaired. We perform our annual goodwill impairment assessment as of November 30th of each year. We continuously monitor potential triggering events, including 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. During the quarter ended March 31, 2017 , we did not identify any triggering events that require testing for impairment. The occurrence of one or more triggering events could require additional impairment testing, which could result in impairment charges in the future. The changes in the carrying amount of goodwill are as follows: In thousands Total Balance at December 31, 2016 $ 34,510 Additions to goodwill — Impairment — Balance at March 31, 2017 $ 34,510 Other intangible assets with definite 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 2 to 10 -year period. Other intangible assets are reviewed for impairment when events or changes in circumstance indicate that the carrying amount of an asset may not be recoverable. The changes in the carrying amount of other intangible assets with definite lives are as follows: In thousands Total Balance at December 31, 2016 $ 3,302 Amortization (205 ) Balance at March 31, 2017 $ 3,097 |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt As of March 31, 2017 and December 31, 2016 , we did not have any debt outstanding. Credit Facilities 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 and a $45.0 million term loan facility (together 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 outstanding borrowings. 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. 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") and letters of credit issued by Texas Capital Bank up to $5.0 million . 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. At March 31, 2017 , 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 March 31, 2017 . 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. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation We maintain stock incentive plans for the benefit of certain officers, directors, and employees, including the 2013 Omnibus Incentive Plan (the "2013 Plan"). 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). We recognized $0.5 million and $0.6 million of stock-based compensation expense during the three months ended March 31, 2017 and 2016 , respectively. During the three months ended March 31, 2017 , the company did not issue any grants of stock-based awards. Stock Options Stock options become exercisable in 25% increments on the first four anniversaries of the grant date, and expire on the ten th anniversary of their grant date. Options are granted at an exercise price equal to the market value of the common stock at the market close on the day prior to the grant. Options granted prior to the 2013 Plan will remain outstanding in accordance with their respective terms. The following table summarizes all stock option activity for the three months ended March 31, 2017 : Number of Weighted- Weighted Average Balance as of December 31, 2016 3,705,893 $ 7.72 Granted — — Exercised — — Forfeited (21,247 ) 6.77 Vested options expired (688,723 ) 11.57 Balance as of March 31, 2017 2,995,923 6.85 5.48 Vested and expected to vest as of March 31, 2017 2,995,923 $ 6.85 5.48 Exercisable as of March 31, 2017 2,069,688 $ 8.50 3.42 As of March 31, 2017 , there was $1.0 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 2.18 years. Unvested Shares Unvested shares vest in three equal increments on the first three anniversaries of their grant date. Unvested shares settle solely in common stock and are treated as equity. The following table summarizes all unvested share activity for the three months ended March 31, 2017 : Number of Weighted- Balance as of December 31, 2016 945,252 $ 3.76 Granted — — Vested (62,571 ) 5.59 Forfeited (8,076 ) 6.04 Unvested shares outstanding at March 31, 2017 874,605 $ 3.61 As of March 31, 2017 , there was $2.0 million of total unrecognized compensation cost related to unvested shares. This cost is expected to be recognized over a weighted average period of approximately 1.65 years. Performance Stock Units Performance stock units vest in a range between 0% to 100% based upon certain performance criteria in a three -year period. At the end of the performance period, the number of shares paid will be based on our performance versus the target. Performance stock units settle solely in common stock and are treated as equity. The following table summarizes all performance stock unit activity for the three months ended March 31, 2017 : Number of Weighted-Average Grant-Date Fair Value Balance as of December 31, 2016 844,315 $ 2.56 Granted — — Settled — — Forfeited (43,166 ) 6.96 Performance stock units outstanding at March 31, 2017 801,149 $ 2.32 As of March 31, 2017 , there was $0.9 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 1.91 years. Phantom Stock Units Phantom stock units vest in 25% increments on the first four anniversaries of the grant date. Phantom stock units settle solely in cash and are treated as a liability. The following table summarizes all phantom stock activity for the three months ended March 31, 2017 : Number of Weighted- Balance as of December 31, 2016 531,820 $ 2.69 Granted — — Exercised — — Forfeited (31,596 ) 2.69 Phantom stock units outstanding at March 31, 2017 500,224 $ 2.69 As of March 31, 2017 , there was $0.5 million of total unrecognized compensation cost related to phantom stock. This cost is expected to be recognized over a weighted average period of approximately 3.04 years. Changes in our stock price will result in adjustments to compensation expense and the corresponding liability over the applicable service period. Cash Performance Stock Units Cash performance stock units vest in a range between 0% to 100% based upon certain performance criteria measured over a three -year period. At the end of the performance period, the number of shares settled in cash will be based on our performance versus the target. Cash performance stock units settle solely in cash and are treated as a liability. The following table summarizes all cash performance stock unit activity for the three months ended March 31, 2017 : Number of Weighted- Balance as of December 31, 2016 444,005 $ 2.69 Granted — — Settled — — Forfeited — — Cash performance stock units outstanding at March 31, 2017 444,005 $ 2.69 As of March 31, 2017 , we did not expect any of our cash performance stock units to vest due to financial performance. As such, we do no t expect to recognize any compensation cost related to cash performance stock units. Changes in our stock price will result in adjustments to compensation expense and the corresponding liability over the applicable service period. Expense is also adjusted up or down based on the current estimate of future performance against the established performance goals. |
Components of Net Periodic Bene
Components of Net Periodic Benefit Cost | 3 Months Ended |
Mar. 31, 2017 | |
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract] | |
Components of Net Periodic Benefit Cost | Components of Net Periodic Benefit Cost Prior to January 1, 1999, we maintained a defined benefit pension plan for which most of our employees were eligible (the "Qualified Pension 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 our Qualified Pension Plan were it not for limitations imposed by income tax regulation. The Restoration Pension Plan was 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. Net pension cost for both plans included the following components: Three Months Ended March 31, In thousands 2017 2016 Interest cost $ 1,837 $ 1,950 Expected return on plan assets (1,832 ) (2,061 ) Recognized actuarial loss 688 597 Net periodic benefit cost $ 693 $ 486 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 the 2018 plan year. We are not required to make, and do not intend to make, any contributions to our Restoration Pension Plan other than to the extent needed to cover benefit payments. We made benefit payments under this supplemental plan of $0.4 million in the three months ended March 31, 2017 . |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our three months ended March 31, 2017 income tax benefit of $1.5 million resulted in an effective income tax rate of 16.7% . The effective income tax benefit calculated for the three months ended March 31, 2017 differs from the federal statutory rate of 35.0% , primarily due to the nondeductible interest associated with the 3Q Digital contingent consideration and foreign tax credit limitations on dividends paid from foreign subsidiaries. We have calculated the provision for income taxes for the three months ended March 31, 2017 by applying an estimate of the annual effective tax rate for the full calendar year to ordinary income or loss for the reporting period. Our three months ended March 31, 2016 income tax benefit of $2.6 million resulted in an effective income tax rate of 27.8% . The effective income tax rate calculated for the three months ended March 31, 2016 differs from the federal statutory rate of 35.0% , primarily due to foreign tax credit limitations on dividends paid from foreign subsidiaries. We used a discrete effective tax rate method to calculate income taxes for the three months ended March 31, 2016 because we determined that small changes in estimated ordinary income would result in significant changes in the estimated annual effective tax rate, such that the historical method would not provide a reliable estimate for the three months ended March 31, 2016 . Harte Hanks, or one of our subsidiaries, files income tax returns in the U.S. federal, U.S. state, and foreign jurisdictions. For U.S. state returns, we are no longer subject to tax examinations for tax years prior to 2012. For U.S. federal and foreign returns, we are no longer subject to tax examinations for tax years prior to 2013. We have elected to classify any interest expense and penalties related to income taxes within income tax expense in our Consolidated Statements of Comprehensive Loss. We did not have a significant amount of interest or penalties accrued at March 31, 2017 or December 31, 2016 . |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share In periods in which the company has net income from continuing operations, 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 earnings per share ("EPS") for each class of shares. In periods in which the company has a net loss from continuing operations, 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 calculation would be anti-dilutive. Reconciliations of basic and diluted EPS are as follows: Three Months Ended March 31, In thousands, except per share amounts 2017 2016 Net Loss Loss from continuing operations $ (7,386 ) $ (6,700 ) Income from discontinued operations — 1,097 Net loss $ (7,386 ) $ (5,603 ) Basic Earnings (Loss) per Common Share Weighted-average common shares outstanding 61,686 61,331 Basic earnings (loss) per common share Continuing operations $ (0.12 ) $ (0.11 ) Discontinued operations — 0.02 Basic earnings (loss) per common share $ (0.12 ) $ (0.09 ) Diluted Earnings (Loss) per Common Share Weighted-average common and common equivalent shares outstanding 61,686 61,331 Diluted earnings (loss) per common share Continuing operations $ (0.12 ) $ (0.11 ) Discontinued operations — 0.02 Diluted earnings (loss) per common share $ (0.12 ) $ (0.09 ) Computation of Shares Used in Earnings (Loss) Per Common Share Weighted-average common shares outstanding 61,686 61,331 Weighted-average common equivalent shares-dilutive effect of stock options and awards — — Shares used in diluted earnings (loss) per common share computations 61,686 61,331 3.6 million and 4.4 million of anti-dilutive market price options have been excluded from the calculation of shares used in the diluted EPS calculation for the three months ended March 31, 2017 and 2016 , respectively. 0.9 million and 0.9 million anti-dilutive unvested shares were excluded from the calculation of shares used in the diluted EPS calculation for the three months ended March 31, 2017 and 2016 , respectively. |
Comprehensive Income
Comprehensive Income | 3 Months Ended |
Mar. 31, 2017 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Comprehensive Income | Comprehensive Income Comprehensive income 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: Three Months Ended March 31, In thousands 2017 2016 Net loss $ (7,386 ) $ (5,603 ) Other comprehensive income (loss): Adjustment to pension liability 563 870 Tax expense (225 ) (348 ) Adjustment to pension liability, net of tax 338 522 Foreign currency translation adjustment 45 (470 ) Total other comprehensive loss 383 52 Total comprehensive loss $ (7,003 ) $ (5,551 ) Changes in accumulated other comprehensive loss by component are as follows: In thousands Defined Benefit Foreign Currency Items Total Balance at December 31, 2016 $ (46,977 ) $ 799 $ (46,178 ) Other comprehensive income (loss), net of tax, before reclassifications — 45 45 Amounts reclassified from accumulated other comprehensive income (loss), net of tax 338 — 338 Net current period other comprehensive income (loss), net of tax 338 45 383 Balance at March 31, 2017 $ (46,639 ) $ 844 $ (45,795 ) In thousands Defined Benefit Foreign Currency Items Total Balance at December 31, 2015 $ (43,915 ) $ 355 $ (43,560 ) Other comprehensive income (loss), net of tax, before reclassifications — (470 ) (470 ) Amounts reclassified from accumulated other comprehensive income (loss), net of tax 522 — 522 Net current period other comprehensive income (loss), net of tax 522 (470 ) 52 Balance at March 31, 2016 $ (43,393 ) $ (115 ) $ (43,508 ) Reclassification amounts related to the defined pension plans are included in the computation of net periodic pension benefit cost (see Note G , Components of Net Periodic Pension Benefit Cost ). |
Litigation Contingencies
Litigation Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation Contingencies | Litigation Contingencies 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 thereunder; accordingly, our actual aggregate maximum exposure related to these types of commitments is not reasonably estimable. 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 subject to various claims and 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. We routinely assess the likelihood of adverse judgments or outcomes to these matters, as well as ranges of probable losses; to the extent losses are reasonably estimable. Accruals are recorded for these matters to the extent that management concludes a loss is probable and the financial impact, should an adverse outcome occur, is reasonable estimable. In the opinion of management, appropriate and adequate accruals for legal matters have been made, and management believes that the probability of a material loss beyond the amounts accrued is remote. Nevertheless, we cannot predict the impact of future developments affecting our pending or future claims and lawsuits. 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. |
Acquisition and Disposition
Acquisition and Disposition | 3 Months Ended |
Mar. 31, 2017 | |
Business Combinations [Abstract] | |
Acquisition and Disposition | Acquisition and Disposition On March 4, 2016, we completed the acquisition of Aleutian Consulting, which has been integrated with continuing operations. The results of Aleutian Consulting operations have been included in our financial statements since that date and are reported in continuing operations. The purchase price was $3.5 million in cash. The fair value of the identified tangible assets residual purchase price methodology used in the calculation to determine goodwill allocation relied on management's assumptions. These assumptions, which are significant to the calculated fair values, are considered Level 3 inputs under the fair value hierarchy established by ASC 820, as they are unobservable. The purchase agreement for the 2015 acquisition of 3Q Digital includes a contingent consideration arrangement that requires us to pay the former owners of 3Q Digital an additional cash payment depending on achievement of certain revenue growth goals. The potential undiscounted amount of all future payments that could be required to be paid under the contingent consideration arrangement is between $0 and $35.0 million in cash in 2018. 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 estimate of fair value of the contingent consideration requires subjective assumptions to be made regarding revenue growth, discount rates, discount periods, and probability assessments with respect to the likelihood of reaching the established targets. The fair value measurement is based on significant inputs unobservable in the market and thus represents a Level 3 measurement. Measurement is sensitive to changes in revenue projections used in the assumptions. Changes in current expectations and revenue performance could change the probability of achieving the targets within the measurement period and result in an increase or decrease in the fair value of the contingent consideration. A reconciliation of accrued balances of the contingent consideration using significant unobservable inputs is as follows: (in thousands) Fair Value Accrued contingent consideration liability as of December 31, 2016 $ 29,725 Accretion of interest 1,041 Adjustments to fair value — Accrued contingent consideration liability as of March 31, 2017 $ 30,766 Any adjustments to the fair value of the contingent consideration are recorded within the "Other, net" line in the Consolidated Statements of Comprehensive Income (Loss). |
Discontinued Operations
Discontinued Operations | 3 Months Ended |
Mar. 31, 2017 | |
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. 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: Three Months Ended March 31, In thousands 2017 2016 Revenue $ — $ 11,160 Labor — 5,301 Production and distribution — 256 Advertising, selling, general and administrative — 2,427 Depreciation and software amortization — 512 Interest expense, net — 401 Other, net — 563 Income from discontinued operations before income taxes — 1,700 Income tax expense — 603 Net income from discontinued operations $ — $ 1,097 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidation | Consolidation The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of Harte Hanks, Inc. and subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. As used in this report, the terms “Harte Hanks,” “the company,” “we,” “us,” or “our” may refer to Harte Hanks, Inc., one or more of its consolidated subsidiaries, or all of them taken as a whole. |
Interim Financial Information | Interim Financial Information The financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles ("U.S. GAAP") for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017 . The information included in this Form 10-Q should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the consolidated financial statements and notes thereto included in our annual report on Form 10-K for the year ended December 31, 2016 . |
Discontinued Operations | Discontinued Operations As discussed in Note M , 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 the three months ended March 31, 2016 presented in the Condensed Consolidated Financial Statements. Results of the remaining Harte Hanks business are reported as continuing operations. |
Going Concern | Going Concern Our recent operating and financial performance has caused us to closely review our ability to continue as a going concern. We have taken a number of actions to continue to support our operations and meet obligations in light of our recent financial performance and decreased cash flows. On April 17, 2017, we entered into a new credit agreement with Texas Capital Bank, N.A. (the "Texas Capital Credit Facility"). The Texas Capital Credit Facility provides $20.0 million in borrowing capacity under a revolving credit line and has far more favorable covenant requirements than our prior credit facility. We believe that the liquidity provided by the Texas Capital Credit Facility is sufficient for our needs given the nature and performance of our operations. On May 1, 2017, we entered into an agreement with 3Q Digital (the "3Q Agreement") which defers payment of a significant contingent liability that otherwise would have been due in 2018. Under the terms of the 3Q Digital purchase agreement, we are required to pay the former owners of 3Q Digital an additional sum contingent on achievement of certain revenue growth goals up to $35.0 million . The 3Q Agreement defers our obligation to pay the contingent consideration until April 1, 2019, or the sale of the 3Q Digital business, whichever is earlier. We believe that in conjunction with our current liquidity position, the new credit facility, and the deferral of payment of the contingent consideration, 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 these unaudited Condensed Consolidated Financial Statements. We continue to take actions to return the business to profitability and improve our cash, liquidity, and financial position. We have implemented expense reductions actions, including downsizing our workforce and consolidating back-office and information technology functions. We also completed the closure of our Baltimore direct mail facility in the first quarter of 2017 in response to the declining demand for printed marketing materials. Continuing work from this facility has been transitioned to other facilities, allowing for higher utilization rates. We have started to see the favorable impact of these actions and intend to continue efforts to reduce expenses through the end of 2017. In addition to the actions discussed above, we are taking steps to improve our operational and financial performance. We continue to work toward increasing operating efficiencies and have focused our investments on improving product offerings that we believe will drive revenue growth. On April 18, 2017, we announced that as part of an initiative to enhance the company's strategic position and increase financial flexibility, the company would seek strategic alternatives for the 3Q Digital business. The liquidity from the potential sale of 3Q Digital will enhance our ability to invest in strategies to strengthen our core offerings. |
Reclassifications | Reclassifications Certain amounts in the financial statements from the prior years have been reclassified to conform to the current year's presentation. This includes amounts related to discontinued operations, which have been reclassified for comparative purposes for the three months ended March 31, 2016 . In addition, the retrospective adoption of ASU 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , resulted in the reclassification of pension expense previously |
Use of Estimates | Use of Estimates The preparation of condensed 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; stock-based compensation; 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. |
Inventory | Inventories Our inventories consist primarily of print material and operating supplies. Inventory is stated at the lower of cost using the first-in, first-out method, or market. |
Operating Expense Presentation in Consolidated Statements of Comprehensive Income (Loss) | Operating Expense Presentation in Consolidated Statements of Comprehensive Loss “Labor” in the Consolidated Statements of Comprehensive Loss includes all employee payroll and benefits, including stock-based compensation, along with temporary labor costs. “Production and distribution” and “Advertising, selling, general and administrative” do not include labor, depreciation, or amortization. |
Recent Accounting Pronouncements | 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, with early adoption permitted. This change is required to be applied prospectively to an award modified on or after the adoption date. 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, with early adoption permitted. This change is required to be applied using a retrospective transition method for each period presented. We adopted the update as of the first quarter of 2017. As a result of the adoption of this ASU, we reclassified $0.5 million of pension expense recorded in Labor in the first quarter of 2016 to Other, net in the Condensed Consolidated Statements of Comprehensive Income. 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 in the amount that 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 or interim goodwill impairment tests in fiscal years beginning after December 15, 2019, with early adoption permitted. We adopted this standard in January 2017, and will apply it as necessary in our financial statements. 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, 2017, including interim reporting periods within those annual reporting periods. 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. We have adopted the update as of the first quarter of 2017. As a result of the adoption of this ASU, excess tax benefits or deficiencies will now be reflected in the Condensed Consolidated Statements of Comprehensive Income (Loss) as a component of income taxes, whereas they previously would be recognized in equity. Excess tax benefits will be recognized in the Consolidated Statement of Cash Flow as an operating activity, with the prior periods adjusted accordingly. Finally, we have elected to account for forfeitures as they occur, rather than estimate expected forfeitures. The ASU was adopted on a modified retrospective basis and no prior periods were restated as a result of the change in accounting policy. 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, with early adoption permitted. 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. We are evaluating the effect that this will have on our consolidated financial statements and related disclosures. In May 2014, the FASB issued ASU No. 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 delayed 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, with early adoption permitted beginning January 1, 2017. We are evaluating the effect that this will have on our consolidated financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing financial reporting. |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Intangible assets with definite lives | |
Schedule of intangible assets with definite lives | The changes in the carrying amount of other intangible assets with definite lives are as follows: In thousands Total Balance at December 31, 2016 $ 3,302 Amortization (205 ) Balance at March 31, 2017 $ 3,097 |
Schedule of goodwill | The changes in the carrying amount of goodwill are as follows: In thousands Total Balance at December 31, 2016 $ 34,510 Additions to goodwill — Impairment — Balance at March 31, 2017 $ 34,510 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of stock options granted and weighted-average grant-date fair value | The following table summarizes all stock option activity for the three months ended March 31, 2017 : Number of Weighted- Weighted Average Balance as of December 31, 2016 3,705,893 $ 7.72 Granted — — Exercised — — Forfeited (21,247 ) 6.77 Vested options expired (688,723 ) 11.57 Balance as of March 31, 2017 2,995,923 6.85 5.48 Vested and expected to vest as of March 31, 2017 2,995,923 $ 6.85 5.48 Exercisable as of March 31, 2017 2,069,688 $ 8.50 3.42 |
Schedule of unvested shares granted and weighted-average grant-date fair value | The following table summarizes all unvested share activity for the three months ended March 31, 2017 : Number of Weighted- Balance as of December 31, 2016 945,252 $ 3.76 Granted — — Vested (62,571 ) 5.59 Forfeited (8,076 ) 6.04 Unvested shares outstanding at March 31, 2017 874,605 $ 3.61 |
Schedule of performance shares granted and weighted-average grant-date fair value | The following table summarizes all cash performance stock unit activity for the three months ended March 31, 2017 : Number of Weighted- Balance as of December 31, 2016 444,005 $ 2.69 Granted — — Settled — — Forfeited — — Cash performance stock units outstanding at March 31, 2017 444,005 $ 2.69 The following table summarizes all performance stock unit activity for the three months ended March 31, 2017 : Number of Weighted-Average Grant-Date Fair Value Balance as of December 31, 2016 844,315 $ 2.56 Granted — — Settled — — Forfeited (43,166 ) 6.96 Performance stock units outstanding at March 31, 2017 801,149 $ 2.32 |
Schedule of phantom shares granted and weighted-average grant-date fair value | The following table summarizes all phantom stock activity for the three months ended March 31, 2017 : Number of Weighted- Balance as of December 31, 2016 531,820 $ 2.69 Granted — — Exercised — — Forfeited (31,596 ) 2.69 Phantom stock units outstanding at March 31, 2017 500,224 $ 2.69 |
Components of Net Periodic Be24
Components of Net Periodic Benefit Cost (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract] | |
Schedule of net pension cost of plans | Net pension cost for both plans included the following components: Three Months Ended March 31, In thousands 2017 2016 Interest cost $ 1,837 $ 1,950 Expected return on plan assets (1,832 ) (2,061 ) Recognized actuarial loss 688 597 Net periodic benefit cost $ 693 $ 486 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Reconciliation of basic and diluted earnings per share | Reconciliations of basic and diluted EPS are as follows: Three Months Ended March 31, In thousands, except per share amounts 2017 2016 Net Loss Loss from continuing operations $ (7,386 ) $ (6,700 ) Income from discontinued operations — 1,097 Net loss $ (7,386 ) $ (5,603 ) Basic Earnings (Loss) per Common Share Weighted-average common shares outstanding 61,686 61,331 Basic earnings (loss) per common share Continuing operations $ (0.12 ) $ (0.11 ) Discontinued operations — 0.02 Basic earnings (loss) per common share $ (0.12 ) $ (0.09 ) Diluted Earnings (Loss) per Common Share Weighted-average common and common equivalent shares outstanding 61,686 61,331 Diluted earnings (loss) per common share Continuing operations $ (0.12 ) $ (0.11 ) Discontinued operations — 0.02 Diluted earnings (loss) per common share $ (0.12 ) $ (0.09 ) Computation of Shares Used in Earnings (Loss) Per Common Share Weighted-average common shares outstanding 61,686 61,331 Weighted-average common equivalent shares-dilutive effect of stock options and awards — — Shares used in diluted earnings (loss) per common share computations 61,686 61,331 3.6 million and 4.4 million of anti-dilutive market price options have been excluded from the calculation of shares used in the diluted EPS calculation for the three months ended March 31, 2017 and 2016 , respectively. 0.9 million and 0.9 million anti-dilutive unvested shares were excluded from the calculation of shares used in the diluted EPS calculation for the three months ended March 31, 2017 and 2016 , respectively. |
Comprehensive Income (Tables)
Comprehensive Income (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Schedule of comprehensive income | Our comprehensive income (loss) was as follows: Three Months Ended March 31, In thousands 2017 2016 Net loss $ (7,386 ) $ (5,603 ) Other comprehensive income (loss): Adjustment to pension liability 563 870 Tax expense (225 ) (348 ) Adjustment to pension liability, net of tax 338 522 Foreign currency translation adjustment 45 (470 ) Total other comprehensive loss 383 52 Total comprehensive loss $ (7,003 ) $ (5,551 ) |
Schedule of changes in accumulated other comprehensive income | Changes in accumulated other comprehensive loss by component are as follows: In thousands Defined Benefit Foreign Currency Items Total Balance at December 31, 2016 $ (46,977 ) $ 799 $ (46,178 ) Other comprehensive income (loss), net of tax, before reclassifications — 45 45 Amounts reclassified from accumulated other comprehensive income (loss), net of tax 338 — 338 Net current period other comprehensive income (loss), net of tax 338 45 383 Balance at March 31, 2017 $ (46,639 ) $ 844 $ (45,795 ) In thousands Defined Benefit Foreign Currency Items Total Balance at December 31, 2015 $ (43,915 ) $ 355 $ (43,560 ) Other comprehensive income (loss), net of tax, before reclassifications — (470 ) (470 ) Amounts reclassified from accumulated other comprehensive income (loss), net of tax 522 — 522 Net current period other comprehensive income (loss), net of tax 522 (470 ) 52 Balance at March 31, 2016 $ (43,393 ) $ (115 ) $ (43,508 ) |
Acquisition and Disposition (Ta
Acquisition and Disposition (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Business Combinations [Abstract] | |
Schedule of reconciliation of beginning and ending balances of contingent earnout consideration | (in thousands) Fair Value Accrued contingent consideration liability as of December 31, 2016 $ 29,725 Accretion of interest 1,041 Adjustments to fair value — Accrued contingent consideration liability as of March 31, 2017 $ 30,766 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of discontinued operations | Summarized operating results for the Trillium discontinued operations, through the dates of disposal, are as follows: Three Months Ended March 31, In thousands 2017 2016 Revenue $ — $ 11,160 Labor — 5,301 Production and distribution — 256 Advertising, selling, general and administrative — 2,427 Depreciation and software amortization — 512 Interest expense, net — 401 Other, net — 563 Income from discontinued operations before income taxes — 1,700 Income tax expense — 603 Net income from discontinued operations $ — $ 1,097 |
Basis of Presentation Basis of
Basis of Presentation Basis of Presentation (Details) - USD ($) $ in Millions | Apr. 17, 2017 | Mar. 16, 2015 |
3Q Digital Inc | ||
Debt instrument | ||
Contingent consideration, maximum potential payment | $ 35 | |
Texas Capital Credit Facility | Subsequent Event | ||
Debt instrument | ||
Borrowing capacity | $ 20 |
Recent Accounting Pronounceme30
Recent Accounting Pronouncements (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2016USD ($) | |
New accounting principles, early adoption | Other expense | |
New accounting pronouncements | |
Pension expense relassified for adoption of ASU 2017-07 | $ 0.5 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Goodwill | ||
Balance at December 31, 2016 | $ 34,510 | |
Additions to goodwill | 0 | |
Impairment of goodwill | 0 | |
Goodwill at March 31, 2017 | 34,510 | |
Intangible assets with definite lives | ||
Intangible Assets, Net (Excluding Goodwill) | 3,097 | $ 3,302 |
Intangible assets with definite lives | ||
Intangible assets with definite lives | ||
Balance at December 31, 2016 | 3,302 | |
Intangible asset amortization | (205) | |
Balance at March 31, 2017 | $ 3,097 |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) $ in Millions | Apr. 17, 2017 | Dec. 31, 2016 | Mar. 31, 2017 | Mar. 10, 2016 |
Debt instrument | ||||
Long-term debt | $ 0 | $ 0 | ||
Letters of credit outstanding | $ 4.1 | |||
2016 Secured Credit Facility | ||||
Debt instrument | ||||
Borrowing capacity | $ 65 | |||
Term loan | $ 45 | |||
Debt extinguishment costs | $ 1.3 | |||
Texas Capital Credit Facility | Subsequent Event | ||||
Debt instrument | ||||
Term | 2 years | |||
Borrowing capacity | $ 20 | |||
Sublimit available for letters of credit | 5 | |||
Quarterly collateral fees | $ 0.1 | |||
Unused capacity commitment fee percentage | 0.50% | |||
Texas Capital Credit Facility | Variable rate one | Subsequent Event | ||||
Debt instrument | ||||
Rate spread on variable rate | 1.95% | |||
Variable rate basis | LIBOR | |||
Texas Capital Credit Facility | Variable rate two | Subsequent Event | ||||
Debt instrument | ||||
Rate spread on variable rate | 0.75% | |||
Variable rate basis | prime |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Stock-based compensation arrangement by stock-based payment award | ||
Stock-based compensation | $ 484 | $ 639 |
Stock Options | ||
Stock-based compensation arrangement by stock-based payment award | ||
Expiration period | 10 years | |
Options outstanding | ||
Outstanding at beginning of period | 3,705,893 | |
Granted in period | 0 | |
Exercised in period | 0 | |
Forfeited in period | (21,247) | |
Expired in period | (688,723) | |
Outstanding at end of period | 2,995,923 | |
Vested and expected to vest at end of period | 2,995,923 | |
Excisable at end of period | 2,069,688 | |
Weighted average exercise price | ||
Outstanding at beginning of period | $ 7.72 | |
Granted in period | 0 | |
Exercised in period | 0 | |
Forfeited in period | 6.77 | |
Expired in period | 11.57 | |
Outstanding at end of period | 6.85 | |
Vested and expected to vest at end of period | 6.85 | |
Exercisable at end of period | $ 8.50 | |
Weighted average remaining contractual term | ||
Outstanding | 5 years 5 months 23 days | |
Vested and expected to vest | 5 years 5 months 23 days | |
Exercisable | 3 years 5 months 1 day | |
Unrecognized compensation costs | $ 1,000 | |
Unrecognized compensation costs, recognition period | 2 years 2 months 5 days | |
Stock Options | First anniversary, vesting percentage | ||
Weighted average grant date fair value | ||
Vesting percentage | 25.00% | |
Stock Options | Second anniversary, vesting percentage | ||
Weighted average grant date fair value | ||
Vesting percentage | 25.00% | |
Stock Options | Third anniversary, vesting percentage | ||
Weighted average grant date fair value | ||
Vesting percentage | 25.00% | |
Stock Options | Fourth anniversary, vesting percentage | ||
Weighted average grant date fair value | ||
Vesting percentage | 25.00% | |
Unvested Shares | ||
Weighted average remaining contractual term | ||
Unrecognized compensation costs, recognition period | 1 year 7 months 24 days | |
Outstanding | ||
Outstanding at beginning of period | 945,252 | |
Granted in period | 0 | |
Vested in period | (62,571) | |
Forfeited in period | (8,076) | |
Outstanding at end of period | 874,605 | |
Weighted average grant date fair value | ||
Outstanding at beginning of period | $ 3.76 | |
Granted in period | 0 | |
Vested in period | 5.59 | |
Forfeited in period | 6.04 | |
Outstanding at end of period | $ 3.61 | |
Unrecognized compensation costs | $ 2,000 | |
Unvested Shares | First anniversary, vesting percentage | ||
Weighted average grant date fair value | ||
Vesting percentage | 33.33% | |
Unvested Shares | Second anniversary, vesting percentage | ||
Weighted average grant date fair value | ||
Vesting percentage | 33.33% | |
Unvested Shares | Third anniversary, vesting percentage | ||
Weighted average grant date fair value | ||
Vesting percentage | 33.33% | |
Performance Stock Units | ||
Weighted average remaining contractual term | ||
Unrecognized compensation costs, recognition period | 1 year 10 months 28 days | |
Outstanding | ||
Outstanding at beginning of period | 844,315 | |
Granted in period | 0 | |
Settled in period | 0 | |
Forfeited in period | (43,166) | |
Outstanding at end of period | 801,149 | |
Weighted average grant date fair value | ||
Outstanding at beginning of period | $ 2.56 | |
Granted in period | 0 | |
Vested in period | 0 | |
Forfeited in period | 6.96 | |
Outstanding at end of period | $ 2.32 | |
Unrecognized compensation costs | $ 900 | |
Performance Stock Units | Minimum | ||
Weighted average grant date fair value | ||
Vesting percentage | 0.00% | |
Performance Stock Units | Maximum | ||
Weighted average grant date fair value | ||
Vesting percentage | 100.00% | |
Performance Stock Units | First anniversary, vesting percentage | ||
Weighted average grant date fair value | ||
Vesting percentage | 33.33% | |
Performance Stock Units | Second anniversary, vesting percentage | ||
Weighted average grant date fair value | ||
Vesting percentage | 33.33% | |
Performance Stock Units | Third anniversary, vesting percentage | ||
Weighted average grant date fair value | ||
Vesting percentage | 33.33% | |
Phantom Stock Units | ||
Weighted average remaining contractual term | ||
Unrecognized compensation costs, recognition period | 3 years 15 days | |
Outstanding | ||
Outstanding at beginning of period | 531,820 | |
Granted in period | 0 | |
Vested in period | 0 | |
Forfeited in period | (31,596) | |
Outstanding at end of period | 500,224 | |
Weighted average grant date fair value | ||
Outstanding at beginning of period | $ 2.69 | |
Granted in period | 0 | |
Vested in period | 0 | |
Forfeited in period | 2.69 | |
Outstanding at end of period | $ 2.69 | |
Unrecognized compensation costs | $ 500 | |
Phantom Stock Units | First anniversary, vesting percentage | ||
Weighted average grant date fair value | ||
Vesting percentage | 25.00% | |
Phantom Stock Units | Second anniversary, vesting percentage | ||
Weighted average grant date fair value | ||
Vesting percentage | 25.00% | |
Phantom Stock Units | Third anniversary, vesting percentage | ||
Weighted average grant date fair value | ||
Vesting percentage | 25.00% | |
Phantom Stock Units | Fourth anniversary, vesting percentage | ||
Weighted average grant date fair value | ||
Vesting percentage | 25.00% | |
Cash Performance Stock Units | ||
Outstanding | ||
Outstanding at beginning of period | 444,005 | |
Granted in period | 0 | |
Settled in period | 0 | |
Forfeited in period | 0 | |
Outstanding at end of period | 444,005 | |
Weighted average grant date fair value | ||
Outstanding at beginning of period | $ 2.69 | |
Granted in period | 0 | |
Vested in period | 0 | |
Forfeited in period | 0 | |
Outstanding at end of period | $ 2.69 | |
Unrecognized compensation costs | $ 0 | |
Cash Performance Stock Units | Minimum | ||
Weighted average grant date fair value | ||
Vesting percentage | 0.00% | |
Cash Performance Stock Units | Maximum | ||
Weighted average grant date fair value | ||
Vesting percentage | 100.00% |
Components of Net Periodic Be34
Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Net pension cost of plans | ||
Interest cost | $ 1,837 | $ 1,950 |
Expected return on plan assets | (1,832) | (2,061) |
Recognized actuarial loss | 688 | 597 |
Net periodic benefit cost | 693 | $ 486 |
Qualified Pension Plan | ||
Defined Benefit Plan Disclosure | ||
Contributions to qualified pension plan | 0 | |
Restoration Pension Plan | ||
Defined Benefit Plan Disclosure | ||
Benefits paid | $ 400 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Income tax benefit | $ 1,476 | $ 2,578 | |
Effective income tax rate (as a percent) | 16.70% | 27.80% | |
Statutory income tax rate (as a percent) | 35.00% | ||
Income tax interest or penalties accrued | $ 0 | $ 0 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Net Loss | ||
Loss from continuing operations | $ (7,386) | $ (6,700) |
Income from discontinued operations | 0 | 1,097 |
Net loss | $ (7,386) | $ (5,603) |
Basic Earnings (Loss) per Common Share | ||
Weighted-average common shares outstanding (in shares) | 61,686 | 61,331 |
Continuing operations (in dollars per share) | $ (0.12) | $ (0.11) |
Discontinued operations (in dollars per share) | 0 | 0.02 |
Basic earnings per common share (in dollars per share) | $ (0.12) | $ (0.09) |
Diluted Earnings (Loss) per Common Share | ||
Weighted-average common and common equivalent shares outstanding (in shares) | 61,686 | 61,331 |
Continuing operations (in dollars per share) | $ (0.12) | $ (0.11) |
Discontinued operations (in dollars per share) | 0 | 0.02 |
Diluted earnings per common share (in dollars per share) | $ (0.12) | $ (0.09) |
Computation of Shares Used in Earnings (Loss) Per Common Share | ||
Weighted-average common shares outstanding (in shares) | 61,686 | 61,331 |
Weighted-average common equivalent shares - dilutive effect of stock options and awards (in shares) | 0 | 0 |
Weighted-average common and common equivalent shares outstanding (in shares) | 61,686 | 61,331 |
Stock Options | ||
Stock-based compensation arrangement by stock-based payment award | ||
Weighted-average anti-dilutive shares have been excluded from the EPS calculations (in shares) | 3,600 | 4,400 |
Unvested Shares | ||
Stock-based compensation arrangement by stock-based payment award | ||
Weighted-average anti-dilutive shares have been excluded from the EPS calculations (in shares) | 900 | 900 |
Comprehensive Income (Details)
Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | ||
Net loss | $ (7,386) | $ (5,603) |
Other comprehensive income (loss): | ||
Adjustment to pension liability | 563 | 870 |
Tax expense | (225) | (348) |
Adjustment to pension liability, net of tax | 338 | 522 |
Foreign currency translation adjustment | 45 | (470) |
Total other comprehensive income (loss), net of tax | 383 | 52 |
Comprehensive loss | (7,003) | (5,551) |
Changes in other comprehensive loss by component | ||
Balance | 2,656 | 140,316 |
Other comprehensive income (loss), net of tax, before reclassifications | 45 | (470) |
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 338 | 522 |
Total other comprehensive income (loss), net of tax | 383 | 52 |
Balance | (3,823) | 129,409 |
Defined Benefit Pension Items | ||
Other comprehensive income (loss): | ||
Total other comprehensive income (loss), net of tax | 338 | 522 |
Changes in other comprehensive loss by component | ||
Balance | (46,977) | (43,915) |
Other comprehensive income (loss), net of tax, before reclassifications | 0 | 0 |
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 338 | 522 |
Total other comprehensive income (loss), net of tax | 338 | 522 |
Balance | (46,639) | (43,393) |
Foreign Currency Items | ||
Other comprehensive income (loss): | ||
Total other comprehensive income (loss), net of tax | 45 | (470) |
Changes in other comprehensive loss by component | ||
Balance | 799 | 355 |
Other comprehensive income (loss), net of tax, before reclassifications | 45 | (470) |
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 0 | 0 |
Total other comprehensive income (loss), net of tax | 45 | (470) |
Balance | 844 | (115) |
Accumulated Other Comprehensive Income (Loss) | ||
Changes in other comprehensive loss by component | ||
Balance | (46,178) | (43,560) |
Balance | $ (45,795) | $ (43,508) |
Litigation Contingencies (Detai
Litigation Contingencies (Details) | Mar. 31, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation liability | $ 0 |
Acquisition and Disposition (De
Acquisition and Disposition (Details) - USD ($) $ in Thousands | Mar. 04, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Mar. 16, 2015 |
Reconciliation of accrued earnout consideration | ||||
Interest accretion on contingent consideration | $ 1,041 | $ 328 | ||
Aleutian Consulting Inc | ||||
Acquisitions | ||||
Payments to acquire businesses | $ 3,500 | |||
3Q Digital Inc | ||||
Acquisitions | ||||
Contingent consideration, minimum potential payment | $ 0 | |||
Contingent consideration, maximum potential payment | $ 35,000 | |||
3Q Digital Inc | Level 3 | Contingent Consideration | ||||
Reconciliation of accrued earnout consideration | ||||
Accrued contingent consideration at beginning of period | 29,725 | |||
Interest accretion on contingent consideration | 1,041 | |||
Adjustments to fair value | 0 | |||
Accrued contingent consideration at end of period | $ 30,766 |
Discontinued Operations (Detail
Discontinued Operations (Details) - Trillium Software - USD ($) $ in Thousands | Dec. 23, 2016 | Mar. 31, 2017 | Mar. 31, 2016 |
Operating results for Trillium Software | |||
Revenue | $ 0 | $ 11,160 | |
Labor | 0 | 5,301 | |
Production and distribution | 0 | 256 | |
General and administrative expense | 0 | 2,427 | |
Depreciation, software and intangible amortization | 0 | 512 | |
Interest expense, net | 0 | 401 | |
Other, net | 0 | 563 | |
Income from discontinued operations before income taxes | 0 | 1,700 | |
Income tax expense | 0 | 603 | |
Net income from discontinued operations | $ 0 | $ 1,097 | |
Proceeds from sale of discontinued operation | |||
Proceeds from sale of Trillium | $ 112,000 | ||
Tax effect of sale of discontinued operation | 4,600 | ||
Loss on sale of discontinued operation, net of tax | $ (39,900) |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Millions | Apr. 17, 2017 | Mar. 16, 2015 |
Texas Capital Credit Facility | Subsequent Event | ||
Subsequent event | ||
Term | 2 years | |
Borrowing capacity | $ 20 | |
3Q Digital Inc | ||
Subsequent event | ||
Contingent consideration, maximum potential payment | $ 35 |