Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | Apr. 30, 2015 | |
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | LCUT | |
Entity Registrant Name | LIFETIME BRANDS, INC | |
Entity Central Index Key | 874396 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 13,861,406 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
CURRENT ASSETS | ||
Cash and cash equivalents | $3,415 | $5,068 |
Accounts receivable, less allowances of $6,375 at March 31, 2015 and $6,663 at December 31, 2014 | 78,761 | 107,211 |
Inventory (Note A) | 142,997 | 137,924 |
Prepaid expenses and other current assets | 11,462 | 7,914 |
Deferred income taxes (Note H) | 420 | |
TOTAL CURRENT ASSETS | 237,055 | 258,117 |
PROPERTY AND EQUIPMENT, net | 26,317 | 26,801 |
INVESTMENTS (Note C) | 27,970 | 28,155 |
INTANGIBLE ASSETS, net (Note D) | 101,851 | 103,597 |
OTHER ASSETS | 4,539 | 4,732 |
TOTAL ASSETS | 397,732 | 421,402 |
CURRENT LIABILITIES | ||
Current maturity of Credit Agreement Term Loan (Note E) | 10,000 | 10,000 |
Short term loan (Note E) | 480 | 765 |
Accounts payable | 27,155 | 28,694 |
Accrued expenses | 32,393 | 36,961 |
Deferred income taxes (Note H) | 2,551 | 2,293 |
Income taxes payable (Note H) | 60 | 5,156 |
TOTAL CURRENT LIABILITIES | 72,639 | 83,869 |
DEFERRED RENT & OTHER LONG-TERM LIABILITIES | 20,303 | 20,160 |
DEFERRED INCOME TAXES (Note H) | 1,485 | 1,485 |
REVOLVING CREDIT FACILITY (Note E) | 85,279 | 92,655 |
CREDIT AGREEMENT TERM LOAN (Note E) | 32,500 | 35,000 |
STOCKHOLDERS' EQUITY | ||
Preferred stock, $.01 par value, shares authorized: 100 shares of Series A and 2,000,000 shares of Series B; none issued and outstanding | ||
Common stock, $.01 par value, shares authorized: 25,000,000; shares issued and outstanding: 13,859,121 at March 31, 2015 and 13,712,081 at December 31, 2014 | 139 | 137 |
Paid-in capital | 162,970 | 160,315 |
Retained earnings | 35,078 | 37,703 |
Accumulated other comprehensive loss (Note K) | -12,661 | -9,922 |
TOTAL STOCKHOLDERS' EQUITY | 185,526 | 188,233 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $397,732 | $421,402 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, except Share data, unless otherwise specified | ||
Accounts receivable, allowances | $6,375 | $6,663 |
Preferred stock, par value | $0.01 | $0.01 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, shares issued | 13,859,121 | 13,712,081 |
Common stock, shares outstanding | 13,859,121 | 13,712,081 |
Preferred stock Series A | ||
Preferred stock, shares authorized | 100 | 100 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Preferred stock Series B | ||
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Net sales | $117,657 | $118,411 |
Cost of sales | 72,749 | 74,079 |
Gross margin | 44,908 | 44,332 |
Distribution expenses | 13,483 | 12,346 |
Selling, general and administrative expenses | 33,596 | 34,183 |
Loss from operations | -2,171 | -2,197 |
Interest expense (Note E) | -1,431 | -1,390 |
Financing expense | -154 | |
Loss on early retirement of debt | -319 | |
Loss before income taxes and equity in earnings | -3,756 | -3,906 |
Income tax benefit (Note H) | 1,363 | 1,185 |
Equity in earnings (losses), net of taxes (Note C) | 288 | -208 |
NET LOSS | ($2,105) | ($2,929) |
BASIC LOSS PER COMMON SHARE (NOTE G) | ($0.15) | ($0.22) |
DILUTED LOSS PER COMMON SHARE (NOTE G) | ($0.15) | ($0.22) |
Cash dividends declared per common share | $0.04 | $0.04 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Income (Loss) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Net loss | ($2,105) | ($2,929) |
Other comprehensive income (loss), net of taxes: | ||
Translation adjustment | -2,705 | 690 |
Derivative fair value adjustment | -54 | 9 |
Effect of retirement benefit obligations | 20 | 7 |
Other comprehensive income (loss), net of taxes | -2,739 | 706 |
Comprehensive loss | ($4,844) | ($2,223) |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
OPERATING ACTIVITIES | ||
Net loss | ($2,105) | ($2,929) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Provision for doubtful accounts | 18 | 50 |
Depreciation and amortization | 3,555 | 3,613 |
Amortization of financing costs | 149 | 149 |
Deferred rent | 346 | -274 |
Deferred income taxes | -179 | |
Stock compensation expense | 750 | 726 |
Undistributed equity in (earnings) losses, net | -288 | 208 |
Loss on early retirement of debt | 319 | |
Changes in operating assets and liabilities (excluding the effects of business acquisitions) | ||
Accounts receivable | 27,355 | 19,218 |
Inventory | -6,468 | -3,068 |
Prepaid expenses, other current assets and other assets | -3,593 | -3,755 |
Accounts payable, accrued expenses and other liabilities | -4,407 | -10,197 |
Income taxes payable | -5,071 | -2,947 |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 10,241 | 934 |
INVESTING ACTIVITIES | ||
Purchases of property and equipment | -1,406 | -1,156 |
Kitchen Craft acquisition, net of cash acquired | -59,856 | |
Other acquisitions, net of cash acquired | -5,280 | |
NET CASH USED IN INVESTING ACTIVITIES | -1,406 | -66,292 |
FINANCING ACTIVITIES | ||
Proceeds from Revolving Credit Facility | 61,523 | 78,657 |
Repayments of Revolving Credit Facility | -68,899 | -43,458 |
Repayments of Senior Secured Term Loan | -20,625 | |
Proceeds from Credit Agreement Term Loan | 50,000 | |
Repayment of Credit Agreement Term Loan | -2,500 | |
Proceeds from Short Term Loan | 37 | |
Payments on Short Term Loan | -322 | |
Payment of financing costs | -1,375 | |
Proceeds from exercise of stock options | 281 | 1,200 |
Cash dividends paid (Note K) | -514 | -501 |
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES | -10,394 | 63,898 |
Effect of foreign exchange on cash | -94 | 736 |
DECREASE IN CASH AND CASH EQUIVALENTS | -1,653 | -724 |
Cash and cash equivalents at beginning of period | 5,068 | 4,947 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $3,415 | $4,223 |
BASIS_OF_PRESENTATION_AND_SUMM
BASIS OF PRESENTATION AND SUMMARY ACCOUNTING POLICIES | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
BASIS OF PRESENTATION AND SUMMARY ACCOUNTING POLICIES | NOTE A — BASIS OF PRESENTATION AND SUMMARY ACCOUNTING POLICIES | ||||||||
Organization and business | |||||||||
Lifetime Brands, Inc. (the “Company”) designs, sources and sells branded kitchenware, tableware and other products used in the home and markets its products under a number of brand names and trademarks, which are either owned or licensed by the Company, or through retailers’ private labels. The Company markets and sells its products principally on a wholesale basis to retailers. The Company also markets and sells a limited selection of its products directly to consumers through its Pfaltzgraff®, Mikasa®, Fred® and Friends, Built NY®, Lifetime Sterling® and The English Table Internet websites. | |||||||||
During the second quarter of 2014, the Company realigned its reportable segments into three categories, U.S. Wholesale, International and Retail Direct. The U.S. Wholesale segment, formerly the Wholesale segment, includes the domestic operations of the Company’s primary business that designs, markets and distributes its products to retailers and distributors. Due to recent acquisitions, certain business operations conducted outside the U.S., previously included in the Wholesale segment, were moved to the International segment. This change reflects the manner in which management assesses performance and allocates resources. No changes were made to the Retail Direct segment. Previous periods presented have been recast to conform with the current period presentation. | |||||||||
Basis of presentation | |||||||||
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, which consist only of normal recurring accruals, considered necessary for a fair presentation have been included. These condensed consolidated financial statements should be read in conjunction with the condensed consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014. Operating results for the three month period ended March 31, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. | |||||||||
The Company’s business and working capital needs are highly seasonal, with a majority of sales occurring in the third and fourth quarters. In 2014 and 2013, net sales for the third and fourth quarters accounted for 60% and 61% of total annual net sales, respectively. In anticipation of the pre-holiday shipping season, inventory levels increase primarily in the June through October time period. | |||||||||
Revenue recognition | |||||||||
The Company sells products wholesale, to retailers and distributors, and retail, directly to the consumer. Wholesale sales and retail sales are recognized when title passes to the customer, which is primarily at the shipping point for wholesale sales and upon delivery to the customer for retail sales. Shipping and handling fees that are billed to customers in sales transactions are included in net sales and amounted to $409,000 and $370,000 for the three months ended March 31, 2015 and 2014, respectively. Net sales exclude taxes that are collected from customers and remitted to the taxing authorities. | |||||||||
The Company offers various sales incentives and promotional programs to its customers from time to time in the normal course of business. These incentives and promotions typically include arrangements such as cooperative advertising, buydowns, volume rebates and discounts. These arrangements and an estimate of sales returns are reflected as reductions in net sales in the Company’s condensed consolidated statements of operations. | |||||||||
Cost of sales | |||||||||
Cost of sales consists primarily of costs associated with the production and procurement of product, inbound freight costs, purchasing costs, royalties and other product procurement related charges. | |||||||||
Distribution expenses | |||||||||
Distribution expenses consist primarily of warehousing expenses and freight-out expenses. | |||||||||
Inventory | |||||||||
Inventory consists principally of finished goods sourced from third-party suppliers. Inventory also includes finished goods, work in process and raw materials related to the Company’s manufacture of sterling silver products. Inventory is priced using the lower of cost (first-in, first-out basis) or market method. The Company estimates the selling price of its inventory on a product by product basis based on the current selling environment. If the estimated selling price is lower than the inventory’s cost, the Company reduces the value of the inventory to its net realizable value. | |||||||||
The components of inventory are as follows: | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
(in thousands) | |||||||||
Finished goods | $ | 139,556 | $ | 134,564 | |||||
Work in process | 1,814 | 1,887 | |||||||
Raw materials | 1,627 | 1,473 | |||||||
Total | $ | 142,997 | $ | 137,924 | |||||
Fair value of financial instruments | |||||||||
The Company determined the carrying amounts of cash and cash equivalents, accounts receivable and accounts payable are reasonable estimates of their fair values because of their short-term nature. The Company determined that the carrying amounts of borrowings outstanding under its revolving credit facility, term loan and short term loan approximate fair value since such borrowings bear interest at variable market rates. | |||||||||
Derivatives | |||||||||
The Company accounts for derivative instruments in accordance with Accounting Standard Codification (“ASC”) Topic No. 815, Derivatives and Hedging. ASC Topic No. 815 requires that all derivative instruments be recognized on the balance sheet at fair value as either an asset or liability. Changes in the fair value of derivatives that qualify as hedges and have been designated as part of a hedging relationship for accounting purposes have no net impact on earnings to the extent the derivative is considered highly effective in achieving offsetting changes in fair value or cash flows attributable to the risk being hedged, until the hedged item is recognized in earnings. If a derivative which is designated as part of a hedging relationship is considered ineffective in achieving offsetting changes in fair value or cash flows attributable to the risk being hedged, the changes in fair value are recorded in operations. For derivatives that do not qualify or are not designated as hedging instruments for accounting purposes, changes in fair value are recorded in operations. | |||||||||
The Company is a party to interest rate swap agreements with an aggregate notional amount of $24.1 million to manage interest rate exposure in connection with its variable interest rate borrowings. The hedge periods of these agreements commenced in March 2013 and expire in June 2018 and the notional amounts amortize over this period. The interest rate swap agreements were designated as cash flow hedges under ASC Topic No. 815. The effective portion of the fair value gain or loss on these agreements is recorded as a component of accumulated other comprehensive loss. The effect of recording these derivatives at fair value resulted in an unrealized loss of $54,000 and an unrealized gain of $9,000, net of taxes, for the three months ended March 31, 2015 and 2014, respectively. No amounts recorded in accumulated other comprehensive loss are expected to be reclassified to interest expense in the next twelve months. | |||||||||
The fair value of the derivatives have been obtained from the counterparties to the agreement and were based on Level 2 observable inputs using proprietary models and estimates about relevant future market conditions. The aggregate fair value of the Company’s interest derivative instruments was a liability of $123,000 and $32,000 at March 31, 2015 and December 31, 2014, respectively, and is included in accrued expenses and other long-term liabilities in the condensed consolidated balance sheet. | |||||||||
Employee Healthcare | |||||||||
The Company self-insures certain portions of its health insurance plan. The Company maintains an accrual for unpaid claims and estimated claims incurred but not yet reported (“IBNR”). Although management believes that it uses the best information available to estimate claims IBNR, actual claims may vary significantly from estimated claims. | |||||||||
New Accounting Pronouncements | |||||||||
In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement, which provides guidance about whether a cloud computing arrangement includes a software license. This ASU is effective for financial statements issued for fiscal years and interim periods within those fiscal years beginning after December 15, 2015. This ASU can be applied prospectively to all arrangements entered into or materially modified after the effective date or retrospectively. Early adoption is permitted. The Company is currently determining its implementation approach and assessing the impact, if any, on the condensed consolidated financial statements. | |||||||||
In April 2015, FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the associated debt liability. This ASU is effective for financial statements issued for fiscal years and interim periods within those fiscal years beginning after December 15, 2015. This ASU will be applied on a retrospective basis and early adoption is permitted. The Company’s adoption of this guidance will not have a material impact on the Company’s condensed consolidated financial position. | |||||||||
In May 2014, FASB issued ASU 2014-09, Revenue from Contracts with Customers, to clarify the principles of recognizing revenue and create common revenue recognition guidance under U.S. GAAP and International Financial Reporting Standards. This ASU is effective for fiscal years and interim periods within those years beginning after December 15, 2016 and can be adopted either retrospectively to each reporting period presented or as a cumulative effect adjustment as of the date of the adoption, with early application not permitted. The Company is currently determining its implementation approach and assessing the impact, if any, on the condensed consolidated financial statements. |
ACQUISITIONS
ACQUISITIONS | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
ACQUISITIONS | NOTE B — ACQUISITIONS | ||||
Kitchen Craft | |||||
On January 15, 2014, the Company acquired 100% of the share capital of Thomas Plant (Birmingham) Limited (“Kitchen Craft”) for cash in the amount of £37.4 million ($61.5 million) and 581,432 shares of common stock of the Company with the market value of £5.5 million ($9.0 million), at the date of closing. The purchase price also included contingent cash consideration of up to £5.5 million ($9.0 million). Kitchen Craft is a leading supplier of kitchenware products and accessories in the United Kingdom. The assets, liabilities and operating results of Kitchen Craft are reflected in the Company’s condensed consolidated financial statements in accordance with ASC Topic No. 805, Business Combinations, commencing from the acquisition date. For detailed information on the allocation of the purchase price, see the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014. | |||||
The purchase price has been determined to be as follows (in thousands): | |||||
Cash | $ | 61,302 | |||
Share consideration issued(1) | 8,382 | ||||
Value of contingent consideration(2) | 2,488 | ||||
Working capital adjustment(3) | 374 | ||||
Total purchase price | $ | 72,546 | |||
-1 | Share consideration issued is valued at the closing market price discounted to account for lack of marketability related to the lock up period as described in the share purchase agreement. | ||||
-2 | The value of contingent consideration represents the present value of the estimated payments related to the attainment of certain financial targets for the years 2014 through 2016, determined as of the date of the acquisition. The maximum undiscounted contingent consideration to be paid under the agreement is £5.5 million ($9.0 million). | ||||
-3 | A working capital adjustment was made in May 2014 as provided for in the share purchase agreement. | ||||
As of March 31, 2015 the fair value of the contingent consideration is approximately £2.1 million (approximately $3.1 million). In April 2015, the Company entered into a Deed of Variation and Settlement with the sellers of Kitchen Craft to amend the calculation and financial targets of the contingent consideration included in the purchase agreement. The maximum undiscounted contingent consideration to be paid remains unchanged at £5.5 million. The Company is in the process of determining the fair value of this amended contingent consideration. | |||||
Kitchen Craft is the sponsor of a defined benefit pension plan (the “Plan”) for which service costs accrual ceased prior to the acquisition. Pursuant to the share purchase agreement, the Company and the sellers agreed to take action to settle the Plan’s obligation through the purchase of a group annuity contract and terminate the Plan. At December 31, 2014 the Plan’s net funding was approximately $1.7 million. There was no impact, nor is there any expected future impact, to the Company’s annual statement of operations in connection with the settlement and planned termination of the Plan, which is expected to occur in 2015. | |||||
The Company’s results of operations for the three months ended March 31, 2014 includes the operations of Kitchen Craft for the period from January 15, 2014 to March 31, 2014. Kitchen Craft’s results of operations for the period from January 1, 2014 to January 14, 2014 were immaterial. For the three months ended March 31, 2014, the Company’s results from operations reflect a $0.5 million charge in cost of sales for the increase in fair value of Kitchen Craft’s acquired inventory and $0.9 million charge of related acquisition costs. Had these charges not been incurred, the reported net loss would have been $2.1 million (basic and diluted per loss per common share of $(0.16)). |
INVESTMENTS
INVESTMENTS | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
INVESTMENTS | NOTE C — INVESTMENTS | ||||||||||||||||
The Company owns approximately a 30% interest in Grupo Vasconia S.A.B. (“Vasconia”), an integrated manufacturer of aluminum products and one of Mexico’s largest housewares companies. Shares of Vasconia’s capital stock are traded on the Bolsa Mexicana de Valores, the Mexican Stock Exchange. The Quotation Key is VASCONI. The Company accounts for its investment in Vasconia using the equity method of accounting and records its proportionate share of Vasconia’s net income in the Company’s statement of operations. Accordingly, the Company has recorded its proportionate share of Vasconia’s net income (reduced for amortization expense related to the customer relationships acquired) for the three month periods ended March 31, 2015 and 2014 in the accompanying condensed consolidated statements of operations. The value of the Company’s investment balance has been translated from Mexican Pesos (“MXN”) to U.S. Dollars (“USD”) using the spot rates of MXN 15.26 and MXN 14.74 at March 31, 2015 and December 31, 2014, respectively. The Company’s proportionate share of Vasconia’s net income has been translated from MXN to USD using the average exchange rates of MXN 14.94 and MXN 13.23 during the three months ended March 31, 2015 and 2014, respectively. The effect of the translation of the Company’s investment resulted in a decrease to the investment of $1.7 million and $11,000 during the three months ended March 31, 2015 and 2014, respectively (also see Note K). These translation effects are recorded in accumulated other comprehensive loss. Included within accrued expenses at March 31, 2015 are amounts due to Vasconia of $119,000. Included in prepaid expenses and other current assets at December 31, 2014 are amounts due from Vasconia of $33,000. | |||||||||||||||||
Summarized statement of income information for Vasconia in USD and MXN is as follows: | |||||||||||||||||
Three Months Ended | |||||||||||||||||
March 31, | |||||||||||||||||
2015 | 2014 | ||||||||||||||||
(in thousands) | |||||||||||||||||
USD | MXN | USD | MXN | ||||||||||||||
Net sales | $ | 47,339 | $ | 707,435 | $ | 43,258 | $ | 572,196 | |||||||||
Gross profit | 9,436 | 141,012 | 7,839 | 103,697 | |||||||||||||
Income from operations | 2,747 | 41,048 | 1,754 | 23,207 | |||||||||||||
Net income | 1,245 | 18,612 | 109 | 1,438 | |||||||||||||
The Company recorded equity in earnings of Vasconia, net of taxes, of $0.3 million and $41,000 for the three months ended March 31, 2015 and 2014, respectively. | |||||||||||||||||
As of March 31, 2015 and December 31, 2014, the fair value (based upon Vasconia’s quoted stock price) of the Company’s investment in Vasconia was $29.8 million and $30.8 million, respectively. The carrying value of the Company’s investment in Vasconia was $27.6 million and $27.8 million as of March 31, 2015 and December 31, 2014, respectively. | |||||||||||||||||
The Company has a 40% equity interest in GS Internacional S/A (“GSI”), a leading wholesale distributor of branded housewares products in Brazil, which the Company acquired in December 2011. As of March 31, 2015 and December 31, 2014, the carrying value of the Company’s investment in GSI was $0 and therefore the Company has not recorded its share of equity in losses in the three months ended March 31, 2015. The Company will continue to monitor the operating results of GSI and will record equity in earnings when the equity in earnings exceeds the Company’s previously unrecognized losses. The Company recorded equity in losses of GSI of $213,000, net of taxes for the three months ended March 31, 2014. | |||||||||||||||||
The Company evaluated the disclosure requirements of ASC Topic No. 860, Transfers and Servicing, and determined that at March 31, 2015, the Company did not have a controlling voting interest or variable interest in any of its investments and therefore continued accounting for the investments using the equity method of accounting. |
INTANGIBLE_ASSETS
INTANGIBLE ASSETS | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||
INTANGIBLE ASSETS | NOTE D — INTANGIBLE ASSETS | ||||||||||||||||||||||||
Intangible assets consist of the following (in thousands): | |||||||||||||||||||||||||
March 31, 2015 | December 31, 2014 | ||||||||||||||||||||||||
Gross | Accumulated | Net | Gross | Accumulated | Net | ||||||||||||||||||||
Amortization | Amortization | ||||||||||||||||||||||||
Goodwill | $ | 18,101 | $ | — | $ | 18,101 | $ | 18,101 | $ | — | $ | 18,101 | |||||||||||||
Indefinite-lived intangible assets: | |||||||||||||||||||||||||
Trade names | 7,616 | — | 7,616 | 7,616 | — | 7,616 | |||||||||||||||||||
Finite-lived intangible assets: | |||||||||||||||||||||||||
Licenses | 15,847 | (8,121 | ) | 7,726 | 15,847 | (8,007 | ) | 7,840 | |||||||||||||||||
Trade names | 29,724 | (5,097 | ) | 24,627 | 29,768 | (4,568 | ) | 25,200 | |||||||||||||||||
Customer relationships | 50,823 | (7,762 | ) | 43,061 | 50,823 | (6,754 | ) | 44,069 | |||||||||||||||||
Other | 1,202 | (482 | ) | 720 | 1,202 | (431 | ) | 771 | |||||||||||||||||
Total | $ | 123,313 | $ | (21,462 | ) | $ | 101,851 | $ | 123,357 | $ | (19,760 | ) | $ | 103,597 | |||||||||||
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2015 | |
DEBT | NOTE E — DEBT |
Credit Agreement | |
The Company’s Credit Agreement, which expires in January 2019, provides for, among other things, a Revolving Credit Facility commitment totaling $175.0 million ($40.0 million of which is available for multi-currency borrowings) and a Term Loan facility of $50.0 million. | |
At March 31, 2015 and December 31, 2014, borrowings outstanding under the Revolving Credit Facility were $85.3 million and $92.7 million, respectively, and open letters of credit were $1.9 million and $2.3 million, respectively. At March 31, 2015, availability under the Revolving Credit Facility was approximately $55.4 million. | |
The borrowing capacity under the Revolving Credit Facility depends, in part, on eligible levels of accounts receivable and inventory that fluctuate regularly and certain trademark values based upon periodic appraisals, and may be lower in the first and second quarters when the Company’s inventory level is lower due to seasonality. | |
The Company’s payment obligations under the Revolving Credit Facility are unconditionally guaranteed by each of its existing U.S. subsidiaries and will be unconditionally guaranteed by each of its future U.S. subsidiaries. Certain payment obligations under the Revolving Credit Facility are also direct obligations of its foreign subsidiary borrowers designated as such under the Credit Agreement and, subject to limitations on such guaranties, are guaranteed by the foreign subsidiary borrowers, as well as by the Company. The obligations of the Company under the Revolving Credit Facility and any hedging arrangements and cash management services and the guarantees by its domestic subsidiaries in respect of those obligations are secured by substantially all of the assets and stock (but in the case of foreign subsidiaries, limited to 65% of the capital stock in first-tier foreign subsidiaries and not including the stock of subsidiaries of such first-tier foreign subsidiaries) owned by the Company and the U.S. subsidiary guarantors, subject to certain exceptions. Such security interests consist of a first-priority lien, subject to certain permitted liens, with respect to the assets of the Company and its domestic subsidiaries pledged as collateral in favor of lenders under the Revolving Credit Facility. | |
As of March 31, 2015 and December 31, 2014, $42.5 million and $45.0 million, respectively, was outstanding under the Term Loan. | |
Interest rates on outstanding borrowings at March 31, 2015 ranged from 2.125% to 4.6875%. In addition, the Company pays a commitment fee of 0.375% on the unused portion of the Revolving Credit Facility. | |
The Credit Agreement provides for customary restrictions and events of default. Restrictions include limitations on additional indebtedness, acquisitions, investments and payment of dividends, among other things. Further, the Credit Agreement provides that at any time any Term Loan is outstanding or at any time no Term Loan is outstanding and availability under the Revolving Credit Facility is less than $17.5 million and continuing until availability of at least $20.0 million is maintained for three consecutive months, the Company is required to maintain a minimum fixed charge coverage ratio of 1.10 to 1.00 for each of four consecutive fiscal quarter periods. The Credit Agreement also provides that when the Term Loan is outstanding, the Company is required to maintain a Senior Leverage Ratio within defined parameters not to exceed 4.00 to 1.00 for each fiscal quarter ending during 2015; and 3.25 to 1.00 for each fiscal quarter ending thereafter. | |
Pursuant to the term loan agreement, as of March 31, 2015, the maximum additional permitted indebtedness other than certain subordinated indebtedness was $35.5 million. The Company was in compliance with the financial covenants of the Credit Agreement at March 31, 2015. | |
Other Credit Agreements | |
A subsidiary of the Company has a credit facility (“HSBC Facility” or “Short term loan”) with HSBC Bank (China) Company Limited, Shanghai Branch (“HSBC”) for up to RMB 18.0 million ($2.9 million). The HSBC Facility is subject to annual renewal and may be used to fund general working capital needs of the subsidiary which is a trading company in the People’s Republic of China. Borrowings under the HSBC Facility are guaranteed by the Company and are granted at the sole discretion of HSBC. At March 31, 2015, RMB 3.0 million ($480,000) was outstanding and the average interest rate was 6.28% under the HSBC Facility. |
STOCK_COMPENSATION
STOCK COMPENSATION | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
STOCK COMPENSATION | NOTE F — STOCK COMPENSATION | ||||||||||||||||
A summary of the Company’s stock option activity and related information for the three months ended March 31, 2015 is as follows: | |||||||||||||||||
Options | Weighted- | Weighted- | Aggregate | ||||||||||||||
average | average | intrinsic | |||||||||||||||
exercise | remaining | value | |||||||||||||||
price | contractual | ||||||||||||||||
life (years) | |||||||||||||||||
Options outstanding, January 1, 2015 | 2,326,627 | $ | 14.19 | ||||||||||||||
Exercises | (30,700 | ) | 9.16 | ||||||||||||||
Cancellations | (19,000 | ) | 15.09 | ||||||||||||||
Options outstanding, March 31, 2015 | 2,276,927 | 14.25 | 5.7 | $ | 7,304 | ||||||||||||
Options exercisable, March 31, 2015 | 1,503,085 | $ | 13.79 | 4.6 | $ | 5,922 | |||||||||||
The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value that would have been received by the option holders had all option holders exercised their stock options on March 31, 2015. The intrinsic value is calculated for each in-the-money stock option as the difference between the closing price of the Company’s common stock on March 31, 2015 and the exercise price. | |||||||||||||||||
The total intrinsic value of stock options exercised for the three months ended March 31, 2015 and 2014 was $163,500 and $668,300, respectively. The intrinsic value of a stock option that is exercised is calculated at the date of exercise. | |||||||||||||||||
Total unrecognized stock option compensation expense at March 31, 2015, before the effect of income taxes, was $4.4 million and is expected to be recognized over a weighted-average period of 2.4 years. | |||||||||||||||||
During the three months ended March 31, 2015, the Company granted 1,471 shares of restricted stock to a director with a weighted average grant date fair value of $15.65 per share. These shares will vest over approximately three months. | |||||||||||||||||
Total unrecognized restricted stock compensation expense at March 31, 2015 was $140,000 and is expected to be recognized over a weighted-average period of 0.6 years. | |||||||||||||||||
The Company recognized total stock compensation expense of $750,000 for the three months ended March 31, 2015, of which $597,000 represents stock option compensation expense, $100,000 represents restricted stock compensation expense and $53,000 represents stock awards granted in 2015. Total stock compensation expense for the three months ended March 31, 2014 was $726,000, of which $648,000 represents stock option compensation expense and $78,000 represents restricted share compensation expense. | |||||||||||||||||
At March 31, 2015, there were 199,022 shares available for awards that could be granted under the Company’s 2000 Long-Term Incentive Plan. |
LOSS_PER_COMMON_SHARE
LOSS PER COMMON SHARE | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
LOSS PER COMMON SHARE | NOTE G — LOSS PER COMMON SHARE | ||||||||
Basic loss per common share has been computed by dividing net loss by the weighted-average number of shares of the Company’s common stock outstanding during the relevant period. Diluted loss per common share adjusts net loss and basic loss per common share for the effect of all potentially dilutive shares of the Company’s common stock. The calculations of basic and diluted loss per common share for the three month periods ended March 31, 2015 and 2014 are as follows: | |||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
2015 | 2014 | ||||||||
(in thousands, except per share amounts) | |||||||||
Net loss – basic and diluted | $ | (2,105 | ) | $ | (2,929 | ) | |||
Weighted-average shares outstanding – basic and diluted | 13,738 | 13,274 | |||||||
Basic and diluted loss per common share | $ | (0.15 | ) | $ | (0.22 | ) | |||
The computation of diluted loss per common share for the three months ended March 31, 2015 and 2014 excludes options to purchase 2,276,927 and 2,361,437 shares, respectively. These shares were excluded due to their antidilutive effects. |
INCOME_TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2015 | |
INCOME TAXES | NOTE H — INCOME TAXES |
On a quarterly basis, the Company evaluates its tax positions and revises its estimates accordingly. The estimated value of the Company’s uncertain tax positions at March 31, 2015 is a gross liability of tax and interest of $475,000. The Company believes that $313,000 of its tax positions will be resolved within the next twelve months. | |
The Company has identified the following jurisdictions as “major” tax jurisdictions: U.S. Federal, California, Massachusetts, New York, New Jersey and the United Kingdom. The Company is no longer subject to U.S. Federal income tax examinations for the years prior to 2010. At March 31, 2015, the periods subject to examination for the Company’s major state jurisdictions are the years ended 2010 through 2013. | |
The Company’s policy for recording interest and penalties is to record such items as a component of income taxes. Interest and penalties were not material to the Company’s financial position, results of operations or cash flows as of and for the three months ended March 31, 2015 and 2014. |
BUSINESS_SEGMENTS
BUSINESS SEGMENTS | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
BUSINESS SEGMENTS | NOTE I — BUSINESS SEGMENTS | ||||||||
The Company operates in three reportable business segments: U.S. Wholesale, International and Retail Direct. The U.S. Wholesale segment is the Company’s primary domestic business that designs, markets and distributes its products to retailers and distributors. The International segment consists of certain business operations conducted outside the U.S. which was previously included in the Wholesale segment. The Retail Direct segment is where the Company markets and sells a limited selection of its products directly to consumers through its Pfaltzgraff®, Mikasa®, Fred® and Friends, Built NY®, Lifetime Sterling® and The English Table Internet websites. | |||||||||
The Company has segmented its operations to reflect the manner in which management reviews and evaluates the results of its operations. While the three segments distribute similar products, the segments have been distinct due to the different methods the Company uses to sell, market and distribute the products. Management evaluates the performance of the U.S. Wholesale, International and Retail Direct segments based on net sales and income (loss) from operations. Such measures give recognition to specifically identifiable operating costs such as cost of sales, distribution expenses and selling, general and administrative expenses. Certain general and administrative expenses, such as senior executive salaries and benefits, stock compensation, director fees and accounting, legal and consulting fees, are not allocated to the specific segments and are reflected as unallocated corporate expenses. | |||||||||
During the second quarter of 2014, the Company realigned its reportable segments into the three categories discussed above. The March 31, 2014 period presented has been recast to conform with the current period presentation. | |||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
2015 | 2014 | ||||||||
(in thousands) | |||||||||
Net sales | |||||||||
U.S. Wholesale | $ | 86,521 | $ | 85,681 | |||||
International | 25,365 | 28,137 | |||||||
Retail Direct | 5,771 | 4,593 | |||||||
Total net sales | $ | 117,657 | $ | 118,411 | |||||
Income (loss) from operations | |||||||||
U.S. Wholesale | $ | 1,951 | $ | 2,409 | |||||
International | (545 | ) | (206 | ) | |||||
Retail Direct | (49 | ) | (299 | ) | |||||
Unallocated corporate expenses | (3,528 | ) | (4,101 | ) | |||||
Total loss from operations | $ | (2,171 | ) | $ | (2,197 | ) | |||
Depreciation and amortization | |||||||||
U.S. Wholesale | $ | 2,187 | $ | 2,269 | |||||
International | 1,330 | 1,280 | |||||||
Retail Direct | 38 | 64 | |||||||
Total depreciation and amortization | $ | 3,555 | $ | 3,613 | |||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
(in thousands) | |||||||||
Assets | |||||||||
U.S. Wholesale | $ | 275,116 | $ | 287,744 | |||||
International | 118,345 | 128,055 | |||||||
Retail Direct | 436 | 535 | |||||||
Unallocated/ Corporate/ Other | 3,835 | 5,068 | |||||||
Total assets | $ | 397,732 | $ | 421,402 | |||||
CONTINGENCIES
CONTINGENCIES | 3 Months Ended |
Mar. 31, 2015 | |
CONTINGENCIES | NOTE J — CONTINGENCIES |
Wallace Silversmiths de Puerto Rico, Ltd. (“Wallace de Puerto Rico”), a wholly-owned subsidiary of the Company, operates a manufacturing facility in San Germán, Puerto Rico that is leased from the Puerto Rico Industrial Development Company (“PRIDCO”). In March 2008, the United States Environmental Protection Agency (the “EPA”) announced that the San Germán Ground Water Contamination site in Puerto Rico (the “Site”) had been added to the Superfund National Priorities List due to contamination present in the local drinking water supply. | |
In May 2008, Wallace de Puerto Rico received from the EPA a Notice of Potential Liability and Request for Information Pursuant to 42 U.S.C. Sections 9607(a) and 9604(e) of the Comprehensive Environmental Response, Compensation, and Liability Act. The Company responded to the EPA’s Request for Information on behalf of Wallace de Puerto Rico. In July 2011, Wallace de Puerto Rico received a letter from the EPA requesting access to the property that it leases from PRIDCO, and the Company granted such access. In February 2013, the EPA requested access to conduct further environmental investigation at the property. PRIDCO agreed to such access and the Company consented. EPA conducted further investigation during 2013. EPA has since provided PRIDCO and the Company with the vapor intrusion sampling results and, during an April 2015 meeting with PRIDCO and the Company, the EPA advised that the results from the vapor intrusion sampling required the implementation of measures to mitigate potential exposure to sub-slab soil gas. The Company is presently reviewing this information and has requested that PRIDCO, as the property owner, find and implement a solution acceptable to the EPA. The Company is not yet able to estimate the extent of any possible liability with respect to the vapor intrusion issues. During the referenced April 2015 meeting, the EPA also advised PRIDCO and the Company that in the coming months they plan to release Remedial Investigation results with respect to the San Germán Groundwater Contamination Site. The Company is unable to determine what, if any, additional requirements or potential liabilities will result from the EPA’s Remedial Investigation. | |
The Company is, from time to time, involved in other legal proceedings. The Company believes that other current litigation is routine in nature and incidental to the conduct of the Company’s business and that none such litigation, individually or collectively, would have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. |
OTHER
OTHER | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
OTHER | NOTE K — OTHER | ||||||||
Cash dividends | |||||||||
On March 4, 2015, the Board of Directors declared a quarterly dividend of $0.0375 per share payable on May 15, 2015 to shareholders of record on May 1, 2015. As of March 31, 2015, the Company accrued $520,000 for the payment of the dividend. | |||||||||
Supplemental cash flow information | |||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
2015 | 2014 | ||||||||
(in thousands) | |||||||||
Supplemental disclosure of cash flow information: | |||||||||
Cash paid for interest | $ | 1,151 | $ | 1,099 | |||||
Cash paid for taxes | 6,018 | 4,340 | |||||||
Non-cash investing activities: | |||||||||
Translation adjustment | $ | 2,705 | $ | (690 | ) | ||||
Components of accumulated other comprehensive loss, net | |||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
2015 | 2014 | ||||||||
(in thousands) | |||||||||
Accumulated translation adjustment: | |||||||||
Balance at beginning of period | $ | (7,680 | ) | $ | (2,944 | ) | |||
Translation gain (loss) during period | (2,705 | ) | 690 | ||||||
Balance at end of period | $ | (10,385 | ) | $ | (2,254 | ) | |||
Accumulated deferred losses on cash flow hedges: | |||||||||
Balance at beginning of period | $ | (18 | ) | $ | (31 | ) | |||
Derivative fair value adjustment, net of taxes of $49 and $6 for the three months ended March 31, 2015 and 2014, respectively. | (54 | ) | 9 | ||||||
Balance at end of period | $ | (72 | ) | $ | (22 | ) | |||
Accumulated effect of retirement benefit obligations: | |||||||||
Balance at beginning of period | $ | (2,224 | ) | $ | (745 | ) | |||
Amounts reclassified from accumulated other comprehensive loss: (1) | |||||||||
Amortization of actuarial losses, net of taxes of $13 and $5 for the three months ended March 31, 2015 and 2014, respectively. | 20 | 7 | |||||||
Balance at end of period | $ | (2,204 | ) | $ | (738 | ) | |||
Total accumulated other comprehensive loss at end of period | $ | (12,661 | ) | $ | (3,014 | ) | |||
-1 | Amounts are recorded in selling, general and administrative expense on the condensed consolidated statements of operations. | ||||||||
Subsequent Event | |||||||||
Reed and Barton | |||||||||
In February 2015, the Company entered into an asset purchase agreement to acquire the operating assets and to assume certain liabilities of Reed and Barton Corporation. The agreement provides that the Company will purchase the assets pursuant to Section 363 of the United States Bankruptcy Code. The transaction is subject to a number of conditions, including completion of an auction process and bankruptcy court approval. On April 28, 2015, the Bankruptcy Court selected an alternative bidder to purchase the operating assets and to assume certain liabilities of Reed and Barton Corporation. If the transaction with the alternative bidder does not close, the Company has agreed to serve as backup bidder for these assets, at the price and on the terms and conditions set forth in the asset purchase agreement. |
BASIS_OF_PRESENTATION_AND_SUMM1
BASIS OF PRESENTATION AND SUMMARY ACCOUNTING POLICIES (Policies) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Basis of presentation | Basis of presentation | ||||||||
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, which consist only of normal recurring accruals, considered necessary for a fair presentation have been included. These condensed consolidated financial statements should be read in conjunction with the condensed consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014. Operating results for the three month period ended March 31, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. | |||||||||
The Company’s business and working capital needs are highly seasonal, with a majority of sales occurring in the third and fourth quarters. In 2014 and 2013, net sales for the third and fourth quarters accounted for 60% and 61% of total annual net sales, respectively. In anticipation of the pre-holiday shipping season, inventory levels increase primarily in the June through October time period. | |||||||||
Revenue recognition | Revenue recognition | ||||||||
The Company sells products wholesale, to retailers and distributors, and retail, directly to the consumer. Wholesale sales and retail sales are recognized when title passes to the customer, which is primarily at the shipping point for wholesale sales and upon delivery to the customer for retail sales. Shipping and handling fees that are billed to customers in sales transactions are included in net sales and amounted to $409,000 and $370,000 for the three months ended March 31, 2015 and 2014, respectively. Net sales exclude taxes that are collected from customers and remitted to the taxing authorities. | |||||||||
The Company offers various sales incentives and promotional programs to its customers from time to time in the normal course of business. These incentives and promotions typically include arrangements such as cooperative advertising, buydowns, volume rebates and discounts. These arrangements and an estimate of sales returns are reflected as reductions in net sales in the Company’s condensed consolidated statements of operations. | |||||||||
Cost of sales | Cost of sales | ||||||||
Cost of sales consists primarily of costs associated with the production and procurement of product, inbound freight costs, purchasing costs, royalties and other product procurement related charges. | |||||||||
Distribution expenses | Distribution expenses | ||||||||
Distribution expenses consist primarily of warehousing expenses and freight-out expenses. | |||||||||
Inventory | Inventory | ||||||||
Inventory consists principally of finished goods sourced from third-party suppliers. Inventory also includes finished goods, work in process and raw materials related to the Company’s manufacture of sterling silver products. Inventory is priced using the lower of cost (first-in, first-out basis) or market method. The Company estimates the selling price of its inventory on a product by product basis based on the current selling environment. If the estimated selling price is lower than the inventory’s cost, the Company reduces the value of the inventory to its net realizable value. | |||||||||
The components of inventory are as follows: | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
(in thousands) | |||||||||
Finished goods | $ | 139,556 | $ | 134,564 | |||||
Work in process | 1,814 | 1,887 | |||||||
Raw materials | 1,627 | 1,473 | |||||||
Total | $ | 142,997 | $ | 137,924 | |||||
Fair value of financial instruments | Fair value of financial instruments | ||||||||
The Company determined the carrying amounts of cash and cash equivalents, accounts receivable and accounts payable are reasonable estimates of their fair values because of their short-term nature. The Company determined that the carrying amounts of borrowings outstanding under its revolving credit facility, term loan and short term loan approximate fair value since such borrowings bear interest at variable market rates. | |||||||||
Derivatives | Derivatives | ||||||||
The Company accounts for derivative instruments in accordance with Accounting Standard Codification (“ASC”) Topic No. 815, Derivatives and Hedging. ASC Topic No. 815 requires that all derivative instruments be recognized on the balance sheet at fair value as either an asset or liability. Changes in the fair value of derivatives that qualify as hedges and have been designated as part of a hedging relationship for accounting purposes have no net impact on earnings to the extent the derivative is considered highly effective in achieving offsetting changes in fair value or cash flows attributable to the risk being hedged, until the hedged item is recognized in earnings. If a derivative which is designated as part of a hedging relationship is considered ineffective in achieving offsetting changes in fair value or cash flows attributable to the risk being hedged, the changes in fair value are recorded in operations. For derivatives that do not qualify or are not designated as hedging instruments for accounting purposes, changes in fair value are recorded in operations. | |||||||||
The Company is a party to interest rate swap agreements with an aggregate notional amount of $24.1 million to manage interest rate exposure in connection with its variable interest rate borrowings. The hedge periods of these agreements commenced in March 2013 and expire in June 2018 and the notional amounts amortize over this period. The interest rate swap agreements were designated as cash flow hedges under ASC Topic No. 815. The effective portion of the fair value gain or loss on these agreements is recorded as a component of accumulated other comprehensive loss. The effect of recording these derivatives at fair value resulted in an unrealized loss of $54,000 and an unrealized gain of $9,000, net of taxes, for the three months ended March 31, 2015 and 2014, respectively. No amounts recorded in accumulated other comprehensive loss are expected to be reclassified to interest expense in the next twelve months. | |||||||||
The fair value of the derivatives have been obtained from the counterparties to the agreement and were based on Level 2 observable inputs using proprietary models and estimates about relevant future market conditions. The aggregate fair value of the Company’s interest derivative instruments was a liability of $123,000 and $32,000 at March 31, 2015 and December 31, 2014, respectively, and is included in accrued expenses and other long-term liabilities in the condensed consolidated balance sheet. | |||||||||
Employee Healthcare | Employee Healthcare | ||||||||
The Company self-insures certain portions of its health insurance plan. The Company maintains an accrual for unpaid claims and estimated claims incurred but not yet reported (“IBNR”). Although management believes that it uses the best information available to estimate claims IBNR, actual claims may vary significantly from estimated claims. | |||||||||
New Accounting Pronouncements | New Accounting Pronouncements | ||||||||
In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement, which provides guidance about whether a cloud computing arrangement includes a software license. This ASU is effective for financial statements issued for fiscal years and interim periods within those fiscal years beginning after December 15, 2015. This ASU can be applied prospectively to all arrangements entered into or materially modified after the effective date or retrospectively. Early adoption is permitted. The Company is currently determining its implementation approach and assessing the impact, if any, on the condensed consolidated financial statements. | |||||||||
In April 2015, FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the associated debt liability. This ASU is effective for financial statements issued for fiscal years and interim periods within those fiscal years beginning after December 15, 2015. This ASU will be applied on a retrospective basis and early adoption is permitted. The Company’s adoption of this guidance will not have a material impact on the Company’s condensed consolidated financial position. | |||||||||
In May 2014, FASB issued ASU 2014-09, Revenue from Contracts with Customers, to clarify the principles of recognizing revenue and create common revenue recognition guidance under U.S. GAAP and International Financial Reporting Standards. This ASU is effective for fiscal years and interim periods within those years beginning after December 15, 2016 and can be adopted either retrospectively to each reporting period presented or as a cumulative effect adjustment as of the date of the adoption, with early application not permitted. The Company is currently determining its implementation approach and assessing the impact, if any, on the condensed consolidated financial statements. |
BASIS_OF_PRESENTATION_AND_SUMM2
BASIS OF PRESENTATION AND SUMMARY ACCOUNTING POLICIES (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Components of Inventory | The components of inventory are as follows: | ||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
(in thousands) | |||||||||
Finished goods | $ | 139,556 | $ | 134,564 | |||||
Work in process | 1,814 | 1,887 | |||||||
Raw materials | 1,627 | 1,473 | |||||||
Total | $ | 142,997 | $ | 137,924 | |||||
ACQUISITIONS_Tables
ACQUISITIONS (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Purchase Price of Acquisition | The purchase price has been determined to be as follows (in thousands): | ||||
Cash | $ | 61,302 | |||
Share consideration issued(1) | 8,382 | ||||
Value of contingent consideration(2) | 2,488 | ||||
Working capital adjustment(3) | 374 | ||||
Total purchase price | $ | 72,546 | |||
-1 | Share consideration issued is valued at the closing market price discounted to account for lack of marketability related to the lock up period as described in the share purchase agreement. | ||||
-2 | The value of contingent consideration represents the present value of the estimated payments related to the attainment of certain financial targets for the years 2014 through 2016, determined as of the date of the acquisition. The maximum undiscounted contingent consideration to be paid under the agreement is £5.5 million ($9.0 million). | ||||
-3 | A working capital adjustment was made in May 2014 as provided for in the share purchase agreement. |
INVESTMENTS_Tables
INVESTMENTS (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Summarized Statement of Income Information for Vasconia in USD and MXN | Summarized statement of income information for Vasconia in USD and MXN is as follows: | ||||||||||||||||
Three Months Ended | |||||||||||||||||
March 31, | |||||||||||||||||
2015 | 2014 | ||||||||||||||||
(in thousands) | |||||||||||||||||
USD | MXN | USD | MXN | ||||||||||||||
Net sales | $ | 47,339 | $ | 707,435 | $ | 43,258 | $ | 572,196 | |||||||||
Gross profit | 9,436 | 141,012 | 7,839 | 103,697 | |||||||||||||
Income from operations | 2,747 | 41,048 | 1,754 | 23,207 | |||||||||||||
Net income | 1,245 | 18,612 | 109 | 1,438 |
INTANGIBLE_ASSETS_Tables
INTANGIBLE ASSETS (Tables) | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||
Components of Intangible Assets | Intangible assets consist of the following (in thousands): | ||||||||||||||||||||||||
March 31, 2015 | December 31, 2014 | ||||||||||||||||||||||||
Gross | Accumulated | Net | Gross | Accumulated | Net | ||||||||||||||||||||
Amortization | Amortization | ||||||||||||||||||||||||
Goodwill | $ | 18,101 | $ | — | $ | 18,101 | $ | 18,101 | $ | — | $ | 18,101 | |||||||||||||
Indefinite-lived intangible assets: | |||||||||||||||||||||||||
Trade names | 7,616 | — | 7,616 | 7,616 | — | 7,616 | |||||||||||||||||||
Finite-lived intangible assets: | |||||||||||||||||||||||||
Licenses | 15,847 | (8,121 | ) | 7,726 | 15,847 | (8,007 | ) | 7,840 | |||||||||||||||||
Trade names | 29,724 | (5,097 | ) | 24,627 | 29,768 | (4,568 | ) | 25,200 | |||||||||||||||||
Customer relationships | 50,823 | (7,762 | ) | 43,061 | 50,823 | (6,754 | ) | 44,069 | |||||||||||||||||
Other | 1,202 | (482 | ) | 720 | 1,202 | (431 | ) | 771 | |||||||||||||||||
Total | $ | 123,313 | $ | (21,462 | ) | $ | 101,851 | $ | 123,357 | $ | (19,760 | ) | $ | 103,597 | |||||||||||
STOCK_COMPENSATION_Tables
STOCK COMPENSATION (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Summary of Stock Option Activity and Related Information | A summary of the Company’s stock option activity and related information for the three months ended March 31, 2015 is as follows: | ||||||||||||||||
Options | Weighted- | Weighted- | Aggregate | ||||||||||||||
average | average | intrinsic | |||||||||||||||
exercise | remaining | value | |||||||||||||||
price | contractual | ||||||||||||||||
life (years) | |||||||||||||||||
Options outstanding, January 1, 2015 | 2,326,627 | $ | 14.19 | ||||||||||||||
Exercises | (30,700 | ) | 9.16 | ||||||||||||||
Cancellations | (19,000 | ) | 15.09 | ||||||||||||||
Options outstanding, March 31, 2015 | 2,276,927 | 14.25 | 5.7 | $ | 7,304 | ||||||||||||
Options exercisable, March 31, 2015 | 1,503,085 | $ | 13.79 | 4.6 | $ | 5,922 | |||||||||||
LOSS_PER_COMMON_SHARE_Tables
LOSS PER COMMON SHARE (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Calculations of Basic and Diluted Income (Loss) per Common Share | The calculations of basic and diluted loss per common share for the three month periods ended March 31, 2015 and 2014 are as follows: | ||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
2015 | 2014 | ||||||||
(in thousands, except per share amounts) | |||||||||
Net loss – basic and diluted | $ | (2,105 | ) | $ | (2,929 | ) | |||
Weighted-average shares outstanding – basic and diluted | 13,738 | 13,274 | |||||||
Basic and diluted loss per common share | $ | (0.15 | ) | $ | (0.22 | ) | |||
BUSINESS_SEGMENTS_Tables
BUSINESS SEGMENTS (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Segment Reporting Information | During the second quarter of 2014, the Company realigned its reportable segments into the three categories discussed above. The March 31, 2014 period presented has been recast to conform with the current period presentation. | ||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
2015 | 2014 | ||||||||
(in thousands) | |||||||||
Net sales | |||||||||
U.S. Wholesale | $ | 86,521 | $ | 85,681 | |||||
International | 25,365 | 28,137 | |||||||
Retail Direct | 5,771 | 4,593 | |||||||
Total net sales | $ | 117,657 | $ | 118,411 | |||||
Income (loss) from operations | |||||||||
U.S. Wholesale | $ | 1,951 | $ | 2,409 | |||||
International | (545 | ) | (206 | ) | |||||
Retail Direct | (49 | ) | (299 | ) | |||||
Unallocated corporate expenses | (3,528 | ) | (4,101 | ) | |||||
Total loss from operations | $ | (2,171 | ) | $ | (2,197 | ) | |||
Depreciation and amortization | |||||||||
U.S. Wholesale | $ | 2,187 | $ | 2,269 | |||||
International | 1,330 | 1,280 | |||||||
Retail Direct | 38 | 64 | |||||||
Total depreciation and amortization | $ | 3,555 | $ | 3,613 | |||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
(in thousands) | |||||||||
Assets | |||||||||
U.S. Wholesale | $ | 275,116 | $ | 287,744 | |||||
International | 118,345 | 128,055 | |||||||
Retail Direct | 436 | 535 | |||||||
Unallocated/ Corporate/ Other | 3,835 | 5,068 | |||||||
Total assets | $ | 397,732 | $ | 421,402 | |||||
OTHER_Tables
OTHER (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Supplemental Cash Flow Information | Supplemental cash flow information | ||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
2015 | 2014 | ||||||||
(in thousands) | |||||||||
Supplemental disclosure of cash flow information: | |||||||||
Cash paid for interest | $ | 1,151 | $ | 1,099 | |||||
Cash paid for taxes | 6,018 | 4,340 | |||||||
Non-cash investing activities: | |||||||||
Translation adjustment | $ | 2,705 | $ | (690 | ) | ||||
Components of Accumulated Other Comprehensive Loss, Net | Components of accumulated other comprehensive loss, net | ||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
2015 | 2014 | ||||||||
(in thousands) | |||||||||
Accumulated translation adjustment: | |||||||||
Balance at beginning of period | $ | (7,680 | ) | $ | (2,944 | ) | |||
Translation gain (loss) during period | (2,705 | ) | 690 | ||||||
Balance at end of period | $ | (10,385 | ) | $ | (2,254 | ) | |||
Accumulated deferred losses on cash flow hedges: | |||||||||
Balance at beginning of period | $ | (18 | ) | $ | (31 | ) | |||
Derivative fair value adjustment, net of taxes of $49 and $6 for the three months ended March 31, 2015 and 2014, respectively. | (54 | ) | 9 | ||||||
Balance at end of period | $ | (72 | ) | $ | (22 | ) | |||
Accumulated effect of retirement benefit obligations: | |||||||||
Balance at beginning of period | $ | (2,224 | ) | $ | (745 | ) | |||
Amounts reclassified from accumulated other comprehensive loss: (1) | |||||||||
Amortization of actuarial losses, net of taxes of $13 and $5 for the three months ended March 31, 2015 and 2014, respectively. | 20 | 7 | |||||||
Balance at end of period | $ | (2,204 | ) | $ | (738 | ) | |||
Total accumulated other comprehensive loss at end of period | $ | (12,661 | ) | $ | (3,014 | ) | |||
-1 | Amounts are recorded in selling, general and administrative expense on the condensed consolidated statements of operations. |
Recovered_Sheet1
Basis of Presentation and Summary Accounting Policies - Additional Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule Of Significant Accounting Policies [Line Items] | ||||
Percentage of total annual net sales in the third and fourth quarters | 60.00% | 61.00% | ||
Shipping and handling revenue | $409,000 | $370,000 | ||
Derivative fair value adjustment gain (loss), net of tax | -54,000 | 9,000 | ||
Fair Value, Observable inputs, Level 2 | Accrued Expenses and Other Long-Term Liabilities | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Fair value of derivative instruments, liability | 32,000 | 32,000 | ||
Fair Value, Observable inputs, Level 2 | Other Current Assets and Other Long-Term Assets | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Fair value of derivative instruments, asset | 123,000 | 123,000 | ||
Interest Rate Swap Agreements | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Commencement date | 2013-03 | |||
Expiry date | 30-Jun-18 | |||
Derivative fair value adjustment gain (loss), net of tax | 54,000 | 9,000 | ||
Interest Rate Swap Agreements | Cash Flow Hedging | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Notional amount | $24,100,000 |
Components_of_Inventory_Detail
Components of Inventory (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Inventory [Line Items] | ||
Finished goods | $139,556 | $134,564 |
Work in process | 1,814 | 1,887 |
Raw materials | 1,627 | 1,473 |
Total | $142,997 | $137,924 |
Acquisitions_Additional_Inform
Acquisitions - Additional Information (Detail) (Thomas Plant) | 0 Months Ended | 3 Months Ended | 3 Months Ended | |||||
In Millions, except Share data, unless otherwise specified | Jan. 15, 2014 | Jan. 15, 2014 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Jan. 15, 2014 | Jan. 15, 2014 | Mar. 31, 2014 |
USD ($) | GBP (£) | USD ($) | USD ($) | GBP (£) | USD ($) | GBP (£) | Cost of Sales | |
USD ($) | ||||||||
Business Acquisition [Line Items] | ||||||||
Percentage of equity interests acquired | 100.00% | 100.00% | ||||||
Business acquisition cash paid | $61.50 | £ 37.4 | ||||||
Business acquisition, issuance of common stock shares | 581,432 | 581,432 | ||||||
Business acquisition, common stock value | 9 | 5.5 | ||||||
Business acquisition, contingent cash consideration payable | 9 | 5.5 | 9 | 5.5 | ||||
Fair value of contingent consideration | 3.1 | 2.1 | ||||||
Plan obligation, net funding | 1.7 | |||||||
Business combination increase in fair value of inventory | 0.5 | |||||||
Business combination related costs | 0.9 | |||||||
Net loss | ($2.10) | |||||||
Basic and diluted loss per common share | ($0.16) |
Purchase_Price_of_Acquisition_
Purchase Price of Acquisition (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | |
Business Acquisition [Line Items] | ||
Cash | $61,302 | |
Share consideration issued | 8,382 | [1] |
Value of contingent consideration | 2,488 | [2] |
Working capital adjustment | 374 | [3] |
Total purchase price | $72,546 | |
[1] | Share consideration issued is valued at the closing market price discounted to account for lack of marketability related to the lock up period as described in the share purchase agreement. | |
[2] | The value of contingent consideration represents the present value of the estimated payments related to the attainment of certain financial targets for the years 2014 through 2016, determined as of the date of the acquisition. The maximum undiscounted contingent consideration to be paid under the agreement is £5.5 million ($9.0 million). | |
[3] | A working capital adjustment was made in May 2014 as provided for in the share purchase agreement. |
Purchase_Price_of_Acquisition_1
Purchase Price of Acquisition (Parenthetical) (Detail) (Thomas Plant) | Mar. 31, 2015 | Mar. 31, 2015 | Jan. 15, 2014 | Jan. 15, 2014 |
In Millions, unless otherwise specified | USD ($) | GBP (£) | USD ($) | GBP (£) |
Business Acquisition [Line Items] | ||||
Undiscounted deferred and contingent consideration, higher range | $9 | £ 5.5 | $9 | £ 5.5 |
Investments_Additional_Informa
Investments - Additional Information (Detail) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Schedule of Equity Method Investments [Line Items] | |||
Equity in earnings (losses), net of taxes | $288,000 | ($208,000) | |
Grupo Vasconia S.A.B. | |||
Schedule of Equity Method Investments [Line Items] | |||
Percentage of ownership in equity method investment | 30.00% | ||
Exchange rate at period end - MXN to USD | 15.26 | 14.74 | |
Increase (decrease) in equity method investment | 1,700,000 | 11,000 | |
Equity in earnings (losses), net of taxes | 300,000 | 41,000 | |
Fair value of investment | 29,800,000 | 30,800,000 | |
Carrying value of investment | 27,600,000 | 27,800,000 | |
Grupo Vasconia S.A.B. | Prepaid expenses and other current assets | |||
Schedule of Equity Method Investments [Line Items] | |||
Due from related party | 33,000 | ||
Grupo Vasconia S.A.B. | Accrued expense | |||
Schedule of Equity Method Investments [Line Items] | |||
Due to related party | 119,000 | ||
Grupo Vasconia S.A.B. | Transaction 02 | |||
Schedule of Equity Method Investments [Line Items] | |||
Average daily exchange rate for period - MXN to USD | 14.94 | 13.23 | |
GS Internacional S/A | |||
Schedule of Equity Method Investments [Line Items] | |||
Percentage of ownership in equity method investment | 40.00% | ||
Equity in earnings (losses), net of taxes | 213,000 | ||
Carrying value of investment | $0 | $0 |
Summarized_Statement_of_Income
Summarized Statement of Income Information for Vasconia in USD and MXN (Detail) | 3 Months Ended | |||||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2014 |
USD ($) | USD ($) | Grupo Vasconia S.A.B. | Grupo Vasconia S.A.B. | Grupo Vasconia S.A.B. | Grupo Vasconia S.A.B. | |
USD ($) | MXN | USD ($) | MXN | |||
Schedule of Equity Method Investments [Line Items] | ||||||
Net sales | $117,657 | $118,411 | $47,339 | 707,435 | $43,258 | 572,196 |
Gross profit | 44,908 | 44,332 | 9,436 | 141,012 | 7,839 | 103,697 |
Income from operations | -2,171 | -2,197 | 2,747 | 41,048 | 1,754 | 23,207 |
Net income | ($2,105) | ($2,929) | $1,245 | 18,612 | $109 | 1,438 |
Components_of_Intangible_Asset
Components of Intangible Assets (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Schedule of Intangible Assets Disclosure [Line Items] | ||
Goodwill, Gross | $18,101 | $18,101 |
Goodwill, Accumulated Amortization | 0 | 0 |
Goodwill, Net | 18,101 | 18,101 |
Indefinite-Lived Trade Names, Gross | 7,616 | 7,616 |
Indefinite-Lived Trade Names, Accumulated Amortization | 0 | 0 |
Indefinite-Lived Trade Names, Net | 7,616 | 7,616 |
Intangible Assets, Gross (Including Goodwill) | 123,313 | 123,357 |
Finite-Lived Intangible Assets, Accumulated Amortization | -21,462 | -19,760 |
Intangible Assets, Net (Including Goodwill) | 101,851 | 103,597 |
License | ||
Schedule of Intangible Assets Disclosure [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 15,847 | 15,847 |
Finite-Lived Intangible Assets, Accumulated Amortization | -8,121 | -8,007 |
Finite-Lived Intangible Assets, Net | 7,726 | 7,840 |
Trade Names | ||
Schedule of Intangible Assets Disclosure [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 29,724 | 29,768 |
Finite-Lived Intangible Assets, Accumulated Amortization | -5,097 | -4,568 |
Finite-Lived Intangible Assets, Net | 24,627 | 25,200 |
Customer Relationships | ||
Schedule of Intangible Assets Disclosure [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 50,823 | 50,823 |
Finite-Lived Intangible Assets, Accumulated Amortization | -7,762 | -6,754 |
Finite-Lived Intangible Assets, Net | 43,061 | 44,069 |
Other | ||
Schedule of Intangible Assets Disclosure [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 1,202 | 1,202 |
Finite-Lived Intangible Assets, Accumulated Amortization | -482 | -431 |
Finite-Lived Intangible Assets, Net | $720 | $771 |
Debt_Additional_Information_De
Debt - Additional Information (Detail) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Jan. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 |
USD ($) | USD ($) | Second Amended and Restated Credit Agreement | Amended and Restated Credit Agreement | Revolving Credit Facility | Revolving Credit Facility | Revolving Credit Facility | Revolving Credit Facility | Revolving Credit Facility | Revolving Credit Facility | Revolving Credit Facility | Revolving Credit Facility | Revolving Credit Facility | Revolving Credit Facility | Revolving Credit Facility | Term Loan | Term Loan | Other than certain subordinated indebtedness | HSBC Facility | HSBC Facility | |
USD ($) | USD ($) | USD ($) | Multi-currency Borrowings | Amended and Restated Credit Agreement | Amended and Restated Credit Agreement | Amended and Restated Credit Agreement | Amended and Restated Credit Agreement | Amended and Restated Credit Agreement | Minimum | Minimum | Maximum | USD ($) | USD ($) | USD ($) | USD ($) | CNY | ||||
USD ($) | USD ($) | At any time any Term Loan is outstanding or at any time no Term Loan is outstanding and availability under the Revolving Credit Facility is less than $17.5 million and continuing until availability of at least $20.0 million is maintained for three consecutive months, the Company is required to maintain a minimum fixed charge coverage ratio of 1.10 to 1.00 for each of four consecutive fiscal quarter periods. | At each fiscal quarter end in 2015 | At each fiscal quarter end thereafter; provided that for any fiscal quarter ending on September 30 of any year, the maximum Senior Leverage Ratio specified above shall be increased by an additional 0.25:1.00 | Amended and Restated Credit Agreement | |||||||||||||||
USD ($) | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Credit facility, maturity date | 2019-01 | |||||||||||||||||||
Credit facility, maximum borrowing capacity | $175,000,000 | $40,000,000 | $35,500,000 | $2,900,000 | 18,000,000 | |||||||||||||||
New Term Loan facility | 50,000,000 | |||||||||||||||||||
Open letters of credit | 1,900,000 | 2,300,000 | ||||||||||||||||||
Outstanding borrowing under credit facility | 480,000 | 765,000 | 85,300,000 | 92,700,000 | 42,500,000 | 45,000,000 | 480,000 | 3,000,000 | ||||||||||||
Availability under revolving credit facility | 55,400,000 | |||||||||||||||||||
Credit facility, maximum borrowing capacity terms | The borrowing capacity under the Revolving Credit Facility depends, in part, on eligible levels of accounts receivable and inventory that fluctuate regularly and certain trademark values based upon periodic appraisals, and may be lower in the first and second quarters when the Company's inventory level is lower due to seasonality. | |||||||||||||||||||
Percentage of capital stock of foreign subsidiaries pledged as collateral | 65.00% | |||||||||||||||||||
Interest rates on outstanding borrowings | 2.13% | 4.69% | 6.28% | 6.28% | ||||||||||||||||
Percentage of line of credit facility unused capacity commitment fee | 0.38% | |||||||||||||||||||
Credit facility terms | The Credit Agreement provides for customary restrictions and events of default. Restrictions include limitations on additional indebtedness, acquisitions, investments and payment of dividends, among other things. Further, the Credit Agreement provides that at any time any Term Loan is outstanding or at any time no Term Loan is outstanding and availability under the Revolving Credit Facility is less than $17.5 million and continuing until availability of at least $20.0 million is maintained for three consecutive months, the Company is required to maintain a minimum fixed charge coverage ratio of 1.10 to 1.00 for each of four consecutive fiscal quarter periods. The Credit Agreement also provides that when the Term Loan is outstanding, the Company is required to maintain a Senior Leverage Ratio within defined parameters not to exceed 4.00 to 1.00 for each fiscal quarter ending during 2015; and 3.25 to 1.00 for each fiscal quarter ending thereafter. | |||||||||||||||||||
Minimum availability under revolving credit to maintain minimum fixed charge ratio for four consecutive months | 17,500,000 | |||||||||||||||||||
Minimum availability under revolving credit to maintain minimum fixed charge ratio for three consecutive months | $20,000,000 | |||||||||||||||||||
Fixed charge coverage ratio minimum | 110.00% | |||||||||||||||||||
Senior leverage ratio | 400.00% | |||||||||||||||||||
Increase in senior leverage ratio | 325.00% |
Summary_of_Stock_Option_Detail
Summary of Stock Option (Detail) (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Options | |
Beginning balance | 2,326,627 |
Exercises | -30,700 |
Cancellations | -19,000 |
Ending balance | 2,276,927 |
Options exercisable at End of Period | 1,503,085 |
Weighted-average exercise price | |
Beginning balance | $14.19 |
Exercises | $9.16 |
Cancellations | $15.09 |
Ending balance | $14.25 |
Options exercisable at End of Period | $13.79 |
Weighted-average remaining contractual life (years) | |
Options outstanding, Ending balance | 5 years 8 months 12 days |
Options exercisable, Ending balance | 4 years 7 months 6 days |
Aggregate intrinsic value | |
Options outstanding, end of period | $7,304 |
Options exercisable, end of period | $5,922 |
Stock_Compensation_Additional_
Stock Compensation - Additional Information (Detail) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total intrinsic value of stock options exercised | $163,500 | $668,300 |
Unrecognized stock option compensation cost | 4,400,000 | |
Weighted-average recognition period | 2 years 4 months 24 days | |
Stock compensation expense | 750,000 | 726,000 |
Stock compensation expense, stock option | 597,000 | 648,000 |
Stock compensation expense, restricted share | 100,000 | 78,000 |
Stock compensation expense, stock awards granted in 2015 | 53,000 | |
Options available for grant in period | 199,022 | |
Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted-average recognition period | 7 months 6 days | |
Restricted stock granted in period | 1,471 | |
Restricted stock vesting period | 3 months | |
Fair value of restricted stock at weighted average grant date | $15.65 | |
Unrecognized restricted stock compensation cost | $140,000 |
Calculations_of_Basic_and_Dilu
Calculations of Basic and Diluted Loss per Common Share (Detail) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Earnings Per Share Disclosure [Line Items] | ||
Net loss - basic and diluted | ($2,105) | ($2,929) |
Weighted-average shares outstanding - basic and diluted | 13,738 | 13,274 |
Basic and diluted loss per common share | ($0.15) | ($0.22) |
Loss_per_Common_Share_Addition
Loss per Common Share - Additional Information (Detail) (Options Held) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Options Held | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Antidilutive Securities Excluded from Computation of Diluted Income (Loss) Per Common Share | 2,276,927 | 2,361,437 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Income Tax Examination [Line Items] | |
Gross liability for tax and interest positions | $475,000 |
Reduction in income tax liability if tax positions sustained | $313,000 |
Income tax examination years description | The Company is no longer subject to U.S. Federal income tax examinations for the years prior to 2010. |
State Tax Authority | Minimum | |
Income Tax Examination [Line Items] | |
Income tax examination year | 2010 |
State Tax Authority | Maximum | |
Income Tax Examination [Line Items] | |
Income tax examination year | 2013 |
Business_Segments_Additional_I
Business Segments - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2015 | |
Segment | |
Segment Reporting Information [Line Items] | |
Number of reportable business segment | 3 |
Segment_Reporting_Information_
Segment Reporting Information (Detail) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Segment Reporting Information [Line Items] | |||
Net sales | $117,657 | $118,411 | |
Depreciation and amortization | 3,555 | 3,613 | |
Income(loss) from operations | -2,171 | -2,197 | |
Assets | 397,732 | 421,402 | |
Unallocated corporate expenses | |||
Segment Reporting Information [Line Items] | |||
Income(loss) from operations | -3,528 | -4,101 | |
Assets | 3,835 | 5,068 | |
U.S. Wholesale | |||
Segment Reporting Information [Line Items] | |||
Net sales | 86,521 | 85,681 | |
Depreciation and amortization | 2,187 | 2,269 | |
U.S. Wholesale | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Income(loss) from operations | 1,951 | 2,409 | |
Assets | 275,116 | 287,744 | |
International | |||
Segment Reporting Information [Line Items] | |||
Net sales | 25,365 | 28,137 | |
Depreciation and amortization | 1,330 | 1,280 | |
International | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Income(loss) from operations | -545 | -206 | |
Assets | 118,345 | 128,055 | |
Retail Direct | |||
Segment Reporting Information [Line Items] | |||
Net sales | 5,771 | 4,593 | |
Depreciation and amortization | 38 | 64 | |
Retail Direct | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Income(loss) from operations | -49 | -299 | |
Assets | $436 | $535 |
Other_Additional_Information_D
Other - Additional Information (Detail) (USD $) | 3 Months Ended | 0 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 04, 2015 | |
Other [Line Items] | |||
Quarterly dividend declared | $0.04 | $0.04 | |
Dividend Declared | |||
Other [Line Items] | |||
Dividend declaration date | 4-Mar-15 | ||
Quarterly dividend declared | $0.04 | ||
Dividend payable date | 15-May-15 | ||
Dividend declared, date of record | 1-May-15 | ||
Dividend payable | $520,000 |
Supplemental_Cash_Flow_Informa
Supplemental Cash Flow Information (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | $1,151 | $1,099 |
Cash paid for taxes | 6,018 | 4,340 |
Non-cash investing activities: | ||
Translation adjustment | $2,705 | ($690) |
Components_of_Accumulated_Othe
Components of Accumulated Other Comprehensive Loss, Net (Detail) (USD $) | 3 Months Ended | ||||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | ||
Accumulated translation adjustment: | |||||
Balance at beginning of period | ($7,680) | ($2,944) | |||
Translation gain (loss) during period | -2,705 | 690 | |||
Balance at end of period | -10,385 | -2,254 | |||
Accumulated deferred losses on cash flow hedges: | |||||
Balance at beginning of period | -18 | -31 | |||
Derivative fair value adjustment, net of taxes of $49 and $6 for the three months ended March 31, 2015 and 2014, respectively. | -54 | 9 | |||
Balance at end of period | -72 | -22 | |||
Accumulated effect of retirement benefit obligations: | |||||
Balance at beginning of period | -2,224 | -745 | |||
Amounts reclassified from accumulated other comprehensive loss | |||||
Amortization of actuarial losses, net of taxes of $13 and $5 for the three months ended March 31, 2015 and 2014, respectively. | 20 | [1] | 7 | [1] | |
Balance at end of period | -2,204 | -738 | |||
Total accumulated other comprehensive loss at end of period | ($12,661) | ($3,014) | ($9,922) | ||
[1] | Amounts are recorded in selling, general and administrative expense on the condensed consolidated statements of operations. |
Components_of_Accumulated_Othe1
Components of Accumulated Other Comprehensive Loss, Net (Parenthetical) (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Derivative fair value adjustment, tax | $49 | $6 |
Amortization of actuarial losses, taxes | $13 | $5 |