Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Oct. 31, 2014 | |
Document Information [Line Items] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Trading Symbol | 'RVLT | ' |
Entity Registrant Name | 'Revolution Lighting Technologies, Inc. | ' |
Entity Central Index Key | '0000917523 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 83,461,844 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current Assets: | ' | ' |
Cash and cash equivalents | $2,398 | $1,757 |
Trade accounts receivable, less allowance for doubtful accounts of $159 and $210 | 21,601 | 4,353 |
Inventories | 13,662 | 4,969 |
Other assets | 2,238 | 743 |
Total current assets | 39,899 | 11,822 |
Property and equipment: | ' | ' |
Property and equipment | 2,028 | 1,308 |
Accumulated depreciation and amortization | -873 | -551 |
Net property and equipment | 1,155 | 757 |
Goodwill | 39,335 | 21,498 |
Intangible assets, less accumulated amortization of $7,126 and $3,732 | 34,168 | 17,869 |
Other assets, net | 932 | 291 |
Asset | 115,489 | 52,237 |
Current Liabilities: | ' | ' |
Accounts payable | 9,595 | 6,109 |
Accrued liabilities | 3,844 | 2,553 |
Accrued compensation and benefits | 1,707 | 1,077 |
Deferred revenue | 1,009 | 960 |
Customer deposits | 973 | 132 |
Other current liabilities | 961 | 860 |
Purchase price obligations-current | 5,467 | 1,927 |
Total current liabilities | 23,556 | 13,618 |
Purchase price obligation-noncurrent | 3,673 | 960 |
Deferred revenue-noncurrent | 190 | 130 |
Notes payable to affiliates of controlling stockholder | 2,565 | ' |
Bank loan payable | 12,893 | ' |
Dividends payable | 803 | 1,044 |
Other liabilities | 3,374 | 63 |
Total liabilities | 47,054 | 15,815 |
Commitments and contingencies | ' | ' |
Temporary Equity: | ' | ' |
Redeemable convertible preferred stock | 25,079 | 10,966 |
Stockholders' Equity: | ' | ' |
Common stock, $.001 par value, 150,000 shares authorized, 83,462 and 82,095 issued and outstanding at September 30, 2014 and December 31, 2013, respectively | 83 | 82 |
Additional paid-in capital | 101,984 | 82,549 |
Accumulated deficit | -69,675 | -67,111 |
Total stockholders' equity | 43,356 | 25,456 |
Total liabilities and stockholders' equity | 115,489 | 52,237 |
Series E Redeemable Convertible Preferred Stock | ' | ' |
Temporary Equity: | ' | ' |
Redeemable convertible preferred stock | 5,891 | 5,738 |
Series F Redeemable Convertible Preferred Stock | ' | ' |
Temporary Equity: | ' | ' |
Redeemable convertible preferred stock | 0 | 5,228 |
Series G Redeemable Convertible Preferred Stock | ' | ' |
Temporary Equity: | ' | ' |
Redeemable convertible preferred stock | 19,188 | ' |
Series C Convertible Preferred Stock | ' | ' |
Stockholders' Equity: | ' | ' |
Preferred stock | 10,964 | 9,936 |
Series B Convertible Preferred Stock | ' | ' |
Stockholders' Equity: | ' | ' |
Preferred stock | $0 | ' |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Trade accounts receivable, allowance for doubtful accounts | $159,000 | $210,000 |
Intangible assets, accumulated amortization | 7,126,000 | 3,732,000 |
Preferred stock, shares authorized | 5,000,000 | ' |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, issued | 83,462,000 | 82,095,000 |
Common stock, outstanding | 83,462,000 | 82,095,000 |
Series E Redeemable Convertible Preferred Stock | ' | ' |
Redeemable convertible preferred stock, par value | $0.00 | $0.00 |
Redeemable convertible preferred stock, aggregate liquidation preference | 5,891,000 | 5,738,000 |
Redeemable convertible preferred stock, shares authorized | 10,000 | 10,000 |
Redeemable convertible preferred stock, issued | 5,000 | 5,000 |
Redeemable convertible preferred stock, outstanding | 5,000 | 5,000 |
Series F Redeemable Convertible Preferred Stock | ' | ' |
Redeemable convertible preferred stock, par value | ' | $0.00 |
Redeemable convertible preferred stock, shares authorized | 0 | 10,000 |
Redeemable convertible preferred stock, issued | 0 | 5,000 |
Redeemable convertible preferred stock, outstanding | 0 | 5,000 |
Series G Redeemable Convertible Preferred Stock | ' | ' |
Redeemable convertible preferred stock, par value | $0.00 | ' |
Redeemable convertible preferred stock, aggregate liquidation preference | 19,188,000 | ' |
Redeemable convertible preferred stock, shares authorized | 18,000 | ' |
Redeemable convertible preferred stock, issued | 18,000 | ' |
Redeemable convertible preferred stock, outstanding | 18,000 | ' |
Series C Convertible Preferred Stock | ' | ' |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, aggregate liquidation preference | 10,996,000 | 10,031,000 |
Preferred stock, shares authorized | 25,000 | 25,000 |
Preferred stock, issued | 10,000 | 11,000 |
Preferred stock, outstanding | 10,000 | 11,000 |
Series B Convertible Preferred Stock | ' | ' |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, aggregate liquidation preference | $20 | $20 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, issued | 2,000 | 2,000 |
Preferred stock, outstanding | 2,000 | 2,000 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Revenue | $26,877 | $5,313 | $49,344 | $18,982 |
Cost of sales | 18,318 | 3,949 | 33,316 | 11,372 |
Gross profit | 8,559 | 1,364 | 16,028 | 7,610 |
Selling, general and administrative: | ' | ' | ' | ' |
Severance and transition costs | 116 | 134 | 354 | 1,112 |
Acquisition related expenses | 156 | 641 | 584 | 2,216 |
Amortization and depreciation | 1,750 | 532 | 3,858 | 2,588 |
Stock based compensation | 227 | 53 | 588 | 754 |
Other selling, general and administrative | 6,560 | 2,557 | 16,562 | 6,922 |
Research and development | 495 | 503 | 1,474 | 1,283 |
Total operating expenses | 9,304 | 4,420 | 23,420 | 14,875 |
Operating loss | -745 | -3,056 | -7,392 | -7,265 |
Non-operating income (expense): | ' | ' | ' | ' |
Change in fair value of embedded derivative | ' | ' | ' | -6,990 |
Gain on bargain purchase of business | ' | ' | ' | 743 |
Interest expense | -192 | -24 | -651 | -24 |
Other income | 29 | ' | 11 | 3 |
Total non-operating expense, net | -163 | -24 | -640 | -6,268 |
Loss before taxes | -908 | -3,080 | -8,032 | -13,533 |
Deferred income tax (provision) benefit | -496 | ' | 5,468 | ' |
Net loss | -1,404 | -3,080 | -2,564 | -13,533 |
Accrual of preferred stock dividends | -645 | -358 | -1,449 | -951 |
Accretion to redemption value of Series E, F and G preferred stock | -6 | -107 | -919 | -2,284 |
Net loss attributable to common stockholders | ($2,055) | ($3,545) | ($4,932) | ($16,768) |
Net loss per common share attributable to common stockholders-Basic and diluted | ($0.02) | ($0.04) | ($0.06) | ($0.22) |
Weighted average shares outstanding-Basic and diluted | 90,714 | 79,303 | 87,179 | 76,110 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statement of Stockholders' Equity and Temporary Equity (USD $) | Total | Tri-State LED, Inc. | Seesmart Technologies Incorporated | Value Lighting | Series C Preferred Stock | Series G Preferred Stock | Employees | Non Employees | Preferred Stock | Preferred Stock | Common Stock | Common Stock | Common Stock | Additional Paid- in Capital | Additional Paid- in Capital | Additional Paid- in Capital | Additional Paid- in Capital | Additional Paid- in Capital | Additional Paid- in Capital | Additional Paid- in Capital | Accumulated Deficit | Temporary Equity | Temporary Equity | Temporary Equity | Temporary Equity |
Share data in Thousands | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | Series C Preferred Stock | USD ($) | Tri-State LED, Inc. | Seesmart Technologies Incorporated | USD ($) | Seesmart Technologies Incorporated | Value Lighting | Series C Preferred Stock | Series G Preferred Stock | Employees | Non Employees | USD ($) | USD ($) | Series E Preferred Stock | Series F Preferred Stock | Series G Preferred Stock |
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | |||||||||||||||
Beginning Balance at Dec. 31, 2013 | $25,456,000 | ' | ' | ' | ' | ' | ' | ' | $9,936,000 | ' | $82,000 | ' | ' | $82,549,000 | ' | ' | ' | ' | ' | ' | ($67,111,000) | $10,966,000 | ' | ' | ' |
Beginning Balance (in shares) at Dec. 31, 2013 | ' | ' | ' | ' | ' | ' | ' | ' | 10 | ' | 82,095 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock-based compensation | ' | ' | ' | ' | ' | ' | 613,000 | -25,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 613,000 | -25,000 | ' | ' | ' | ' | ' |
Accretion of preferred stock to redemption value | -19,000 | ' | ' | ' | ' | -469,000 | ' | ' | ' | ' | ' | ' | ' | -19,000 | ' | ' | ' | -469,000 | ' | ' | ' | 19,000 | ' | ' | 469,000 |
Accrual of dividends on convertible preferred stock | -1,449,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -1,449,000 | ' | ' | ' | ' | ' | ' | ' | 693,000 | ' | ' | ' |
Issuance of dividends on Series C | ' | ' | ' | ' | 1,000,000 | ' | ' | ' | ' | 1,028,000 | ' | ' | ' | ' | ' | ' | -28,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of common stock for services (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 848 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of common stock for services | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000 | ' | ' | -1,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of stock, net of issuance costs | ' | ' | ' | ' | ' | -431,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -431,000 | ' | ' | ' | ' | -56,000 | ' | 18,392,000 |
Cancellation of Series F preferred stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -5,404,000 | ' |
Forfeiture of restricted stock , shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -50 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Forfeiture of restricted stock , value | -1,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | -1,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fees associated with issuances of common stock | -37,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -37,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of common stock for acquisition (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -6 | 575 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of common stock for acquisition | ' | 0 | 374,000 | 20,908,000 | ' | ' | ' | ' | ' | ' | ' | ' | 1,000 | ' | 373,000 | 20,908,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net loss | -2,564,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -2,564,000 | ' | ' | ' | ' |
Ending Balance at Sep. 30, 2014 | $43,356,000 | ' | ' | ' | ' | ' | ' | ' | $10,964,000 | ' | $83,000 | ' | ' | $101,984,000 | ' | ' | ' | ' | ' | ' | ($69,675,000) | $25,079,000 | ' | ' | ' |
Ending Balance (in shares) at Sep. 30, 2014 | ' | ' | ' | ' | ' | ' | ' | ' | 10 | ' | 83,462 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Cash Flows from Operating Activities: | ' | ' |
Net loss | ($2,564,000) | ($13,533,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Depreciation | 341,000 | 144,000 |
Amortization of intangibles | 3,517,000 | 2,444,000 |
Gain on purchase of business | ' | -743,000 |
Change in fair value of contingent consideration | -120,000 | ' |
Deferred income tax benefit | -5,468,000 | ' |
Stock-based compensation | 588,000 | 754,000 |
Change in fair value of embedded derivative | ' | 6,990,000 |
(Increase) decrease in: | ' | ' |
Trade accounts receivable, net | -8,630,000 | -1,757,000 |
Inventories | -451,000 | -32,000 |
Other, net | 3,043,000 | -209,000 |
Increase (decrease) in: | ' | ' |
Accounts payable and accrued liabilities | -6,786,000 | 655,000 |
Accrued compensation and benefits | 389,000 | 250,000 |
Customer deposits | 336,000 | -1,174,000 |
Deferred revenue | 108,000 | 997,000 |
Net cash used in operating activities | -15,697,000 | -5,214,000 |
Cash Flows from Investing Activities: | ' | ' |
Purchase of property and equipment | -336,000 | -65,000 |
Net cash used in investing activities | -10,420,000 | -8,638,000 |
Cash Flows from Financing Activities: | ' | ' |
Proceeds from issuance of common stock , net of issuance costs | ' | 4,948,000 |
Payment of fees related to issuance of common stock | -74,000 | ' |
Repayment of short-term borrowings | -859,000 | ' |
Proceeds from revolving credit facility | 12,893,000 | ' |
Proceeds of loans from affiliates of controlling stockholder | 18,103,000 | ' |
Repayments of loans from affiliates of controlling stockholder | -3,249,000 | ' |
Proceeds from employee stock options | ' | 265,000 |
Net cash provided by financing activities | 26,758,000 | 15,181,000 |
Net increase in Cash and Cash Equivalents | 641,000 | 1,329,000 |
Cash and Cash Equivalents, beginning of period | 1,757,000 | 4,434,000 |
Cash and Cash Equivalents, end of period | 2,398,000 | 5,763,000 |
Non-cash investing and financing activities: | ' | ' |
Contingent consideration | 7,753,000 | ' |
Accrual of dividends on preferred stock | 1,449,000 | 951,000 |
Common Stock | Value Lighting | ' | ' |
Non-cash investing and financing activities: | ' | ' |
Issuance of stock | 20,908,000 | 8,619,000 |
Common Stock | Seesmart Technologies Incorporated | ' | ' |
Non-cash investing and financing activities: | ' | ' |
Issuance of stock | 374,000 | ' |
Series E Convertible Preferred Stock | ' | ' |
Cash Flows from Financing Activities: | ' | ' |
Proceeds from issuance of convertible preferred stock, net of issuance costs | -56,000 | 4,968,000 |
Series F Redeemable Convertible Preferred Stock | ' | ' |
Cash Flows from Financing Activities: | ' | ' |
Proceeds from issuance of convertible preferred stock, net of issuance costs | ' | 5,000,000 |
Series D Preferred Stock | ' | ' |
Non-cash investing and financing activities: | ' | ' |
Issuance of stock | ' | 63,000 |
Conversion of Preferred Stock | ' | 1,006,000 |
Series C Preferred Stock | Dividend Paid | ' | ' |
Non-cash investing and financing activities: | ' | ' |
Accrual of dividends on preferred stock | 1,000,000 | ' |
Series G Preferred Stock | ' | ' |
Non-cash investing and financing activities: | ' | ' |
Issuance of stock | 18,000,000 | ' |
Relume Technologies Inc | ' | ' |
Cash Flows from Investing Activities: | ' | ' |
Acquisition, net of cash acquired | ' | -4,224,000 |
Seesmart Technologies Incorporated | ' | ' |
Cash Flows from Investing Activities: | ' | ' |
Acquisition, net of cash acquired | ' | -3,849,000 |
Elite LED Solutions Incorporated | ' | ' |
Cash Flows from Investing Activities: | ' | ' |
Acquisition, net of cash acquired | ' | -500,000 |
Value Lighting | ' | ' |
Cash Flows from Investing Activities: | ' | ' |
Acquisition, net of cash acquired | ($10,084,000) | ' |
Condensed_Consolidated_Stateme3
Condensed Consolidated Statements of Cash Flows (Parenthetical) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Relume Technologies Inc | ' | ' |
Acquisition, cash acquired | $61,000 | $61,000 |
Value Lighting | ' | ' |
Acquisition, cash acquired | 35,000 | ' |
Series G Preferred Stock | ' | ' |
Issuance of stock for extinguishment of note payable | 12,600,000 | 12,600,000 |
Series F Preferred Stock | ' | ' |
Conversion of Preferred Stock | $5,400,000 | $5,400,000 |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Summary of Significant Accounting Policies | ' | ||||||||
1 | Summary of Significant Accounting Policies: | ||||||||
Basis of presentation—The accompanying condensed consolidated financial statements of Revolution Lighting Technologies, Inc. and subsidiaries (the “Company”) are unaudited, but in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments) necessary to fairly state the Company’s financial position, results of operations, and cash flows as of and for the dates and periods presented. These condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. Accordingly, they do not necessarily repeat disclosures that would substantially duplicate disclosures included in the annual audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 and details of accounts that have not changed significantly in amount or composition. | |||||||||
These unaudited condensed financial statements should be read in conjunction with the Company’s audited consolidated financial statements and footnotes and other information included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 filed with the Securities and Exchange Commission (“SEC”). The results of operations for the three-month and nine-month periods ended September 30, 2014 are not necessarily indicative of the results that may be expected for the full year ending on December 31, 2014 or for any other future period. | |||||||||
Business—Revolution Lighting Technologies, Inc. and its wholly owned subsidiaries (“Revolution” or the “Company”) design, manufacture, market and sell high-performance, commercial grade, light emitting diodes (“LED”) replacement lamps, LED fixtures and LED-based signage, channel-letter and contour lighting products, as well as conventional lighting products. The Company sells these products under the Value Lighting, Seesmart, Array, CMG, Lumificient and Relume brand names. The Company generates revenue by selling lighting products for use in the commercial market segment, which include vertical markets such as federal, state and local governments, industrial and commercial facilities, multifamily real estate construction, hospitality, institutional, educational, healthcare and signage markets. The Company markets and distributes its products through networks of distributors, independent sales agencies and representatives, and electrical supply companies. | |||||||||
On March 8, 2013, Lighting Integration Technologies, LLC (“LIT”), a wholly owned subsidiary of the Company, acquired certain assets of Elite LED Solutions, Inc. (“Elite”). LIT is headquartered in Palm Beach Gardens, Florida. | |||||||||
On August 22, 2013, the Company purchased all the equity interests of Relume Technologies, Inc. (“Relume”) pursuant to the terms of the Agreement and Plan of Merger, dated as of August 9, 2013. Relume is headquartered in Oxford Township, Michigan. | |||||||||
On November 15, 2013, the Company completed the acquisition of Tri-State DE LLC (“Tri-State”), a distributor of Seesmart products. Tri-State is headquartered in Greenwich, Connecticut. | |||||||||
On April 17, 2014, the Company completed the acquisition of Value Lighting Inc. and certain of its affiliates (“Value Lighting”), a supplier of lighting solutions to the multifamily residential market. Value Lighting is headquartered in Marietta, Georgia with facilities in Marietta, Georgia, Dallas, Texas, Houston, Texas and Beltsville, Maryland. | |||||||||
The Company’s operations comprise two reportable segments for financial reporting purposes: Lighting Fixtures and Lamps and Lighting Signage and Media. The Lighting Fixtures and Lamps reportable segment includes the Seesmart business, the Relume business, the LIT business, the Tri-State business and the Value Lighting business. The Lighting Signage and Media reportable segment is comprised of the Lumificient business. Effective January 1, 2014 the Media business of Relume, included in the Lighting Fixtures and Lamps segment since the acquisition of Relume, was transferred to Lumificient and is now included in the Lighting Signage and Media reportable segment. | |||||||||
Liquidity—At September 30, 2014, the Company had cash on hand of approximately $2.4 million. For the nine months ended September, 30 2014 and 2013, the Company reported negative cash flows from operations of approximately $15.7 million and $5.2 million, respectively. Cash used for operations for the nine months ended September 30, 2014 and 2013 included $0.9 million and $3.3 million paid for acquisition related costs and severance and transition costs, respectively. For the year ended December 31, 2013, the Company used cash for operations of approximately $8.1 million, which included approximately $3.6 million cash paid for acquisition related costs and severance and transition costs. At September 30, 2014, the Company had working capital of approximately $16.3 million, compared to negative working capital of approximately $1.8 million, at December 31, 2013. | |||||||||
During the year ended December 31, 2013, the Company issued convertible redeemable preferred stock to RVL 1, LLC (“RVL”) for cash of approximately $10.0 million and common stock to unaffiliated investors for approximately $5 million in cash and borrowed approximately $0.9 million under an accounts receivable financing facility. During the nine months ended September 30, 2014, the Company borrowed $18.6 million from affiliates of its controlling shareholder for general corporate purposes, including $10.8 million used to fund the cash portion of the consideration for the acquisition of Value Lighting. On June 30, 2014, the Company issued Series G preferred stock of $18.0 million to affiliates of its controlling stockholder in exchange for the extinguishment of notes payable of approximately $12.6 million, including accrued interest, and Series F preferred stock of $5.4 million, including accrued dividends. During the three months ended September 30, 2014, the Company exchanged outstanding borrowings from Aston for a new consolidated note aggregating to $5.7 million bearing interest at 9% and maturing on April 1, 2016, with a balance at September 30, 2014 of $2.6 million. | |||||||||
On August 20, 2014, the Company entered into a loan and security agreement with Bank of America to borrow up to $25 million on a revolving basis. Borrowings under the agreement are determined on specified percentages of eligible receivables and inventory, and bear interest either on the base rate plus specified margins or at LIBOR plus specified margins, at the election of the Company. See Note 11. | |||||||||
Principles of consolidation—The condensed consolidated financial statements include the accounts of Revolution Lighting Technologies, Inc. and its wholly owned subsidiaries, Value Lighting, Lumificient, Seesmart, Relume, LIT and Tri-State. Significant inter-company accounts and transactions have been eliminated. | |||||||||
Use of estimates—The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant estimates relate to revenue recognition, valuation of accounts receivable and inventories, warranty obligations, purchase price allocation of acquired businesses, impairment of long lived assets and goodwill, valuation of financial instruments, income taxes, and contingencies. Actual results could differ from those estimates. | |||||||||
Revenue recognition—The Company recognizes revenue for its products upon shipment or delivery to customers in accordance with the respective contractual arrangements, provided no significant obligations remain and collection is probable. For sales that include customer acceptance terms, revenue is recorded after customer acceptance. It is the Company’s policy that all sales are final. Requests for returns are reviewed on a case-by-case basis. Pursuant to agreements with distributors, which provide the distributors with the rights to purchase and resell inventory, the Company receives upfront fees for ongoing support obligations during the term of the agreement. The Company amortizes such fees over the term of the contracts, which range from three to ten years. Unamortized distributor fees are included in deferred revenue in the accompanying consolidated balance sheets. | |||||||||
The Company from time to time enters into multiple element arrangements, primarily the delivery of products and installation services. The Company allocates the sales value to each element based on its best estimate of the selling price and recognizes revenues in accordance with the relevant standard for each element. | |||||||||
Sales taxes included in revenues for the three months ended September 30, 2014 and 2013 amounted to approximately $944,000 and $22,000, respectively. Sales tax included in revenues for the nine months ended September 30, 2014 and 2013 amounted to approximately $1,547,000 and $544,000, respectively. | |||||||||
Warranties and product liability—The Company’s LED products typically carry a warranty that ranges from one to seven years and includes replacement of defective parts. A warranty reserve is recorded for the estimated costs associated with warranty expense related to recorded sales, which is included within accrued liabilities. Changes in the Company’s warranty liability for the nine months ended September 30, 2014 and 2013 are as follows: | |||||||||
(in thousands) | 2014 | 2013 | |||||||
Warranty liability, January 1 | $ | 597 | $ | 346 | |||||
Provisions for current year sales | 145 | 267 | |||||||
Acquisition of Relume | — | 99 | |||||||
Adjustments | (185 | ) | |||||||
Current period claims | (135 | ) | (112 | ) | |||||
Warranty liability, September 30 | $ | 422 | $ | 600 | |||||
Fair value measurements—The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820 “Fair Value Measurements and Disclosures” (“ASC 820”) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: | |||||||||
Level 1—Quoted prices in active markets for identical assets or liabilities. | |||||||||
Level 2—Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable. | |||||||||
Level 3—Unobservable inputs that are supported by little or no market activity, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing. | |||||||||
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2014. The Company uses the market approach to measure fair value for its Level 1 financial assets and liabilities, which includes cash equivalents of $2,398,000 and $1,757,000 at September 30, 2014 and December 31, 2013, respectively. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The respective carrying value of certain balance sheet financial instruments approximates its fair value. These financial instruments include cash, trade receivables, related party payables, accounts payable, accrued liabilities and short-term borrowings. Fair values were estimated to approximate carrying values for these financial instruments since they are short term in nature and they are receivable or payable on demand. | |||||||||
The estimated fair value of assets and liabilities acquired in business combinations and reporting units and long-lived assets used in the related asset impairment tests utilize inputs classified as Level 3 in the fair value hierarchy. Based on the borrowing rates currently available to the Company for bank loans with similar terms and average maturities, the fair value of the bank loan payable is equal to the carrying value. | |||||||||
The Company determined the fair value of the contingent consideration based on a probability-weighted discounted cash flow analysis. The fair value remeasurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement as defined in the fair value hierarchy. In each period, the Company reassesses its current estimates of performance relative to the stated targets and adjusts the liability to fair value. | |||||||||
(in thousands) | 2014 | ||||||||
Fair value, January 1 | $ | 960 | |||||||
Fair value of contingent consideration issued during the period | 7,775 | ||||||||
Change in fair value | (120 | ) | |||||||
Fair value, September 30 | $ | 8,615 | |||||||
The Company used Level 1 and Level 2 inputs to estimate the fair value of the embedded derivative related to the Series E preferred stock. The Company used Level 2 inputs to value the Series D convertible preferred stock taking into account a lack of marketability discount, as well as the market value of the common shares in which the preferred stock can be converted on the issuance date. Such inputs are also utilized to value contingent consideration related to acquisitions. | |||||||||
Derivative financial instruments—The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risk. Terms of convertible preferred stock and convertible promissory note instruments are reviewed to determine whether or not they contain embedded derivative instruments that are required to be accounted for separately from the host contract, and recorded on the balance sheet at fair value. The fair value of derivative liabilities is required to be revalued at each reporting date, with corresponding changes in fair value recorded in current period operating results. | |||||||||
Freestanding warrants issued by the Company in connection with the issuance or sale of debt and equity instruments are considered to be derivative instruments, and are evaluated and accounted for in accordance with the provisions of ASC 815. Pursuant to ASC 815, an evaluation of specifically identified conditions is made to determine whether the fair value of warrants issued is required to be classified as equity or as a derivative liability. | |||||||||
Beneficial conversion and warrant valuation—In accordance with FASB ASC 470-20, “Debt with Conversion and Other Options” the Company records a beneficial conversion feature (“BCF”) related to the issuance of convertible debt or preferred stock instruments that have conversion features at fixed rates that are in-the-money when issued. The BCF for the convertible instruments is recognized and measured by allocating a portion of the proceeds equal to the intrinsic value of that feature to additional paid-in capital. The intrinsic value is generally calculated at the commitment date as the difference between the conversion price and the fair value of the common stock or other securities into which the security is convertible, multiplied by the number of shares into which the security is convertible. If certain other securities, such as warrants, are issued with the convertible security, the proceeds are allocated among the different components. The portion of the proceeds allocated to the convertible security is divided by the contractual number of the conversion shares to determine the effective conversion price, which is used to measure the BCF. The effective conversion price is used to compute the intrinsic value. The value of the BCF is limited to the basis that is initially allocated to the convertible security. | |||||||||
Cash equivalents—Temporary cash investments with an original maturity of three months or less are considered to be cash equivalents. | |||||||||
Accounts receivable—Accounts receivable are customer obligations due under normal trade terms. The Company performs periodic credit evaluations of its customers’ financial condition. The Company records an allowance for doubtful accounts based upon factors surrounding the credit risk of certain customers and specifically identified amounts that it believes to be uncollectible. Recovery of bad debt amounts previously written off is recorded as a reduction of bad debt expense in the period the payment is collected. If the Company’s actual collection experience changes, revisions to its allowance may be required. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. The following summarizes the changes in the allowance for doubtful accounts for the periods indicated: | |||||||||
(in thousands) | 2014 | 2013 | |||||||
Allowance for doubtful accounts, January 1 | $ | 210 | $ | 57 | |||||
Additions | 38 | 11 | |||||||
Write-offs | (89 | ) | (6 | ) | |||||
Allowance for doubtful accounts, September 30 | $ | 159 | $ | 62 | |||||
Inventories—Inventories are stated at the lower of cost (first-in, first-out) or market. A reserve is recorded for any inventory deemed excessive or obsolete. | |||||||||
Property and equipment—Property and equipment are stated at cost or the estimated fair value if acquired as part of a business combination. Depreciation is computed by the straight-line method and is charged to operations over the estimated useful lives of the assets. Maintenance and repairs are charged to expense as incurred. The carrying amount and accumulated depreciation of assets sold or retired are removed from the accounts in the year of disposal and any resulting gain or loss is included in results of operations. The estimated useful lives of property and equipment are as follows: | |||||||||
Estimated useful lives | |||||||||
Machinery and equipment | 3-7 years | ||||||||
Furniture and fixtures | 5-7 years | ||||||||
Computers and software | 3-7 years | ||||||||
Motor vehicles | 5 years | ||||||||
Leasehold improvements | Lesser of lease term or estimated useful life | ||||||||
Intangible assets and goodwill—Goodwill is not amortized, but is subject to annual impairment testing unless circumstances dictate more frequent assessments. The Company performs an annual impairment assessment for goodwill during the fourth quarter of each year and more frequently whenever events or changes in circumstances indicate that the fair value of the asset may be less than the carrying amount. Goodwill impairment testing is a two-step process performed at the reporting unit level. Step one compares the fair value of the reporting unit to its carrying amount. The fair value of the reporting unit is determined by considering both the income approach and market approaches. The fair values calculated under the income approach and market approaches are weighted based on circumstances surrounding the reporting unit. Under the income approach, the Company determines fair value based on estimated future cash flows of the reporting unit, which are discounted to the present value using discount factors that consider the timing and risk of cash flows. For the discount rate, the Company relies on the capital asset pricing model approach, which includes an assessment of the risk-free interest rate, the rate of return from publicly traded stocks, the Company’s risk relative to the overall market, the Company’s size and industry and other Company specific risks. Other significant assumptions used in the income approach include the terminal value, growth rates, future capital expenditures and changes in future working capital requirements. The market approaches use key multiples from guideline businesses that are comparable and are traded on a public market. If the fair value of the reporting unit is greater than its carrying amount, there is no impairment. If the reporting unit’s carrying amount exceeds its fair value, then the second step must be completed to measure the amount of impairment, if any. Step two calculates the implied fair value of goodwill by deducting the fair value of all tangible and intangible net assets of the reporting unit from the fair value of the reporting unit as calculated in step one. In this step, the fair value of the reporting unit is allocated to all of the reporting unit’s assets and liabilities in a hypothetical purchase price allocation as if the reporting unit had been acquired on that date. If the carrying amount of goodwill exceeds the implied fair value of goodwill, an impairment loss is recognized in an amount equal to the excess. | |||||||||
Determining the fair value of a reporting unit is judgmental in nature and requires the use of significant estimates and assumptions, including revenue growth rates, strategic plans and future market conditions, among others. There can be no assurance that the Company’s estimates and assumptions made for purposes of the goodwill impairment testing will prove to be accurate predictions of the future. Changes in assumptions and estimates could cause the Company to perform impairment test prior to scheduled annual impairment tests scheduled in the fourth quarter. | |||||||||
Long-lived assets—The Company evaluates the recoverability of its long-lived assets whenever events or changes in circumstances have indicated that an asset may not be recoverable. The long-lived asset is grouped with other assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. If the sum of the projected undiscounted cash flows is less than the carrying value of the assets, the assets are written down to the estimated fair value. | |||||||||
Deferred rent—The Company accounts for certain operating leases containing predetermined fixed increases of the base rental rate during the lease term as rental expense on a straight-line basis over the lease term. The Company has reported the difference between the amounts charged to operations and amounts payable under the leases as a liability in the accompanying consolidated balance sheets. | |||||||||
Shipping and handling costs—Shipping and handling costs related to the acquisition of goods from vendors are included in cost of sales. | |||||||||
Research and development—Research and development costs to develop new products are charged to expense as incurred. | |||||||||
Income taxes—Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes resulting from temporary differences. Such temporary differences result from differences in the carrying value of assets and liabilities for tax and financial reporting purposes. The deferred tax assets and liabilities represent the future tax consequences of those differences, which will be either taxable or deductible when the assets and liabilities are recovered or settled. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. | |||||||||
The Company applies the provisions of FASB ASC 740-10, “Accounting for “Uncertainty in Income Taxes”, and has not recognized a liability pursuant to that standard. In addition, a reconciliation of the beginning and ending amount of unrecognized tax benefits has not been provided since there are no unrecognized benefits since the date of adoption. If there were an unrecognized tax benefit, the Company would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. | |||||||||
The Company has provided a full valuation allowance related to income tax benefits resulting from losses incurred and accumulated on operations (“NOLs”). The NOLs are subject to limitations under the provisions of Section 382 of the Internal Revenue Code of 1986, as amended. The Company has analyzed the limitations and their impact and has recognized deferred tax assets for those NOLs that are not subject to limitations. At December 31, 2013 the Company recognized a full valuation allowance related to its net deferred tax assets, and the adjustments to the deferred tax assets related to the NOLs were offset by a corresponding adjustment to the valuation allowance. | |||||||||
In connection with the acquisition of Value Lighting in 2014, the Company recorded net deferred tax liabilities of $5.6 million, primarily resulting from the recognition of amortizable intangible assets at the date of acquisition. These net deferred tax liabilities can be used to reduce net deferred tax assets for which the Company had provided a valuation allowance. Accordingly, the valuation allowance has been reduced by a corresponding amount during the nine months ended September 30, 2014. | |||||||||
Stock-based compensation—The Company recognizes the cost of employee or director services received in exchange for an award of equity instruments in the financial statements, which is measured based on the grant date fair value of the award. Stock-based compensation expense is recognized over the period during which an employee is required to provide service in exchange for the award (typically, the vesting period). | |||||||||
The Company values restricted stock awards to employees at the quoted market price on the grant date. The Company estimates the fair value of option awards issued under its stock option plans on the date of grant using a Black-Scholes option-pricing model that uses the assumptions noted below. The Company estimates the volatility of its common stock at the date of grant based on the historical volatility of its common stock. The Company determines the expected life based on historical experience with similar awards, giving consideration to the contractual terms, vesting schedules and post-vesting forfeitures. For shares that vest contingent upon achievement of certain performance criteria, an estimate of the probability of achievement is applied in the estimate of fair value. If the goals are not met, no compensation cost is recognized and any previously recognized compensation cost is reversed. The Company bases the risk-free interest rate on the implied yield currently available on U.S. Treasury issues with an equivalent remaining term approximately equal to the expected life of the award. The Company has never paid any cash dividends on its common stock and does not anticipate paying any cash dividends in the foreseeable future. During the nine months ended September 30, 2014, 52,500 options were granted on April 22, 2014: 35,000 were incentive stock options to employees and 17,500 were non-qualified stock options to consultants. The strike price is $3.02. The options vest annually over three years beginning April 22, 2015. The options have a 10-year expiration period, otherwise, options are terminated when an employee is terminated for cause or 3 months following when an employee ceases to be engaged by the Company. For the nine months ended September 30, 2014, the Company computed expense for each group utilizing the following assumptions: | |||||||||
Nine Months Ended | |||||||||
September 30, 2014 | |||||||||
Expected volatility | 75.8 – 81.1% | ||||||||
Weighted-average volatility | 76.00% | ||||||||
Risk-free interest rate | 0.4 – 0.9% | ||||||||
Expected dividend | 0% | ||||||||
Expected life in years | 3.5 – 8.6 Years | ||||||||
The Company from time to time enters into arrangements with non-employee service providers pursuant to which it issues restricted stock vesting over specified periods for time-based services. These arrangements are accounted for under the provisions of FASB ASC 505-50 “Equity-Based Payments to Non-Employees”. Pursuant to this standard, the restricted stock is valued at the quoted price at the date of vesting. Prior to vesting, compensation is recorded on a cumulative basis based on the quoted market price at the end of the reporting period. | |||||||||
Loss per share—Basic loss per share is computed by dividing net loss attributable to common stockholders by the weighted average common shares outstanding for the period. Diluted loss per share is computed giving effect to all potentially dilutive common shares. Potentially dilutive common shares consist of incremental shares issuable upon the exercise of stock options and vesting of restricted shares and the conversion of outstanding convertible securities. In periods in which a net loss has been incurred, all potentially dilutive common shares are considered anti-dilutive and thus are excluded from the calculation. For the nine months ended September 30, 2014 and September 30, 2013, the Company had 27.2 million and 23.0 common equivalent shares, respectively, which may be issued, primarily pursuant to convertible securities, which were not included in the computation of loss per share at September 30, 2014 and 2013 because the effect would have been anti-dilutive. For the three months ended September 30, 2014 and 2013 such common equivalent shares amounted to 27.2 million and 23.0 million, respectively. | |||||||||
Recent accounting pronouncements—In May 2014 the Financial Accounting Standards Board issued the standard “Revenue from Contracts with Customers” which supersedes existing revenue recognition standards including most industry-specific revenue recognition guidance. The standard is effective for annual periods beginning after December 31, 2016. Early adoption is not permitted. At this time, the Company has not determined the effect that this accounting pronouncement will have on its financial statements. | |||||||||
In June 2014, the FASB issued guidance that requires a performance target in a share-based payment that affects vesting and that could be achieved after the requisite service period be accounted for as a performance condition. The guidance is effective for annual periods beginning after December 15, 2015 and interim periods within the year, and early adoption is permitted. The guidance should be applied on a prospective basis to awards that are granted or modified on or after the effective date. The guidance may be applied on a modified retrospective basis for performance targets outstanding on or after the beginning of the first annual period presented as of the date of adoption. The Company does not expect to grant these type of awards, but will adopt this guidance on January 1, 2016 and will apply it prospectively to any awards granted on or after January 1, 2016 that include these terms. | |||||||||
In August 2014, the FASB issued ASU No. 2014-15 (“ASU 2014-15”), Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This ASU requires management to assess and evaluate whether conditions or events exist, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the financial statements issue date. The provisions of ASU 2014-15 are effective for annual periods beginning after December 15, 2016 and for annual and interim periods thereafter; early adoption is permitted. The adoption of ASU 2014-15 is not expected to have a material effect on our consolidated financial statements. |
Acquisitions
Acquisitions | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Acquisitions | ' | ||||||||
2 | Acquisitions: | ||||||||
Value Lighting—On April 17, 2014, the Company completed the acquisition of Value Lighting, a supplier of lighting solutions to the multifamily residential market. The purchase consideration aggregated to $39.1 million and consisted of cash of $10.6 million funded with a loan from an affiliate, an unconditional obligation to issue an aggregate of 8,468,192 shares of common stock in four installments at six, twelve, eighteen and twenty-four months from the acquisition date, preliminarily valued at $20.9 million, and contingent consideration payable in cash or common stock at the option of the Company aggregating up to a total of $11 million, preliminarily valued at $7.8 million, if certain revenue and EBITDA targets are achieved by Value Lighting for 2014 and 2015. The purchase price was preliminarily reduced by $0.2 million based on the closing working capital. The Company acquired Value Lighting for its presence in the multifamily residential market and construction, the experience of the management team, its customer base, operational and business development synergies. | |||||||||
The following amounts represent the preliminary determination of the fair value of identifiable assets acquired and liabilities assumed from the Value Lighting acquisition. The excess of the purchase price over the estimated fair value of the net tangible assets acquired was allocated to intangible assets of approximately $19.8 million and goodwill of approximately $17.8 million. The final determination of the fair value of certain assets and liabilities including income taxes and contingencies will be completed within the one-year measurement period from the date of acquisition as required by the FASB ASC Topic 805, “Business Combinations.” | |||||||||
(in thousands) | |||||||||
Cash | $ | 35 | |||||||
Accounts receivable | 8,617 | ||||||||
Inventory | 8,241 | ||||||||
Goodwill | 17,837 | ||||||||
Customer relationships | 12,140 | ||||||||
Trade names | 4,930 | ||||||||
Backlog | 2,370 | ||||||||
Non-compete agreements | 260 | ||||||||
Other intangibles | 116 | ||||||||
Other assets | 2,900 | ||||||||
Assets acquired | 57,446 | ||||||||
Accounts payable | 8,919 | ||||||||
Accrued liabilities | 1,375 | ||||||||
Other current liabilities | 1,421 | ||||||||
Other liabilities | 1032 | ||||||||
Deferred income tax liability | 5,554 | ||||||||
Liabilities assumed | 18,301 | ||||||||
Preliminary purchase price | $ | 39,145 | |||||||
The acquired intangibles are being amortized consistent with the period the underlying cash flows are generated. All of the goodwill is included in the Lighting Fixtures and Lamps reportable segment. Goodwill is not expected to be deductible for income tax purposes. | |||||||||
In connection with the acquisition, Value Lighting formalized a leasing arrangement pursuant to which Value Lighting leased its warehouse in Marietta, Georgia from Aldean Properties LLC., an entity owned by the sellers. Since Aldean was not acquired by the Company, the terms of the lease were negotiated between the Sellers and the Company and approximate market rates. The lease does not include any residual value guaranties or purchase options. | |||||||||
The merger agreement provides for the sellers to indemnify the Company for undisclosed liabilities, including guarantees. Subsequent to the acquisition, the Company became aware that Value Lighting was a guarantor, together with the sellers individually, of debt encumbering the property with a carrying amount of approximately $2.4 million. There was no intention to have the Company assume the guarantee. Accordingly, the Company notified the sellers who executed an agreement jointly and severally indemnifying and holding Value Lighting and the Company harmless from and against any losses and expenses relating to the guarantee. | |||||||||
Tri-State—On November 15, 2013, the Company completed the acquisition of Tri-State, a distributor of Seesmart products, for cash at closing of approximately $1.8 million (including a preliminary working capital adjustment), an obligation to pay an additional $1.5 million in cash originally due in six months bearing interest at 5% annually, 543,052 shares of common stock valued at approximately $1.6 million, of which one half were issued at closing, and an obligation to issue up to 365,628 additional shares contingent on Tri-State achieving specified revenue targets within one year following the acquisition date, which has been initially valued at approximately $0.9 million. The deferred consideration payment obligation remains outstanding. Under the terms of the agreement, the Company acquired Tri-State debt free and cash free. The Company acquired Tri-State for its management team, its client base in New York, New Jersey and Connecticut and operational and business development synergies. The purchase price exceeds the fair value of the tangible assets acquired and reflects the expected growth of the business. | |||||||||
The following amounts represent the preliminary determination of the fair value of identifiable assets acquired and liabilities assumed from the Tri-State acquisition. | |||||||||
(in thousands) | |||||||||
Accounts receivable | $ | 468 | |||||||
Inventory | 310 | ||||||||
Goodwill | 2,786 | ||||||||
Customer relationships | 1,680 | ||||||||
Non-compete agreements | 480 | ||||||||
Other intangibles | 738 | ||||||||
Other assets | 38 | ||||||||
Assets acquired | 6,500 | ||||||||
Accounts payable | 440 | ||||||||
Accrued liabilities | 208 | ||||||||
Other current liabilities | 80 | ||||||||
Liabilities assumed | 728 | ||||||||
Preliminary purchase price | $ | 5,772 | |||||||
The acquired intangibles are being amortized consistent with the period the underlying cash flows are generated. All of the goodwill is included in the Lighting Fixtures and Lamps reportable segment. Goodwill is expected to be deductible for income tax purposes. Goodwill was retroactively adjusted by $25,000 to reflect a working capital adjustment finalized in 2014. | |||||||||
Pro forma information—The following pro forma information gives effect to all the acquisitions described above as if they had been consummated on January 1, 2013 (in thousands): | |||||||||
(in thousands) | September 30, | December 31, | |||||||
2014 | 2013 | ||||||||
Revenues | $ | 63,024 | $ | 80,609 | |||||
Operating loss | (7,336 | ) | (14,539 | ) | |||||
Net loss | (3,614 | ) | (24,398 | ) | |||||
The pro forma results for the nine months ended September 30, 2014 reflect pre acquisition transaction costs of $0.5 million incurred by Value Lighting’s sellers. The results for the year ended December 31, 2013 includes a pro forma charge of $2.3 million for amortization of the intangible assets related to acquired backlog of Value Lighting, which is not expected to reoccur after the first year following the acquisition, a gain on the bargain purchase of Elite of $0.7 million, as well as the following charges and credits directly related to the acquisition recorded by Relume: transaction costs of $0.4 million, change in control payments of $0.7 million, loss on extinguishment of debt of $4.2 million, and a gain of $1.5 million resulting from the deconsolidation of a subsidiary that had filed of a petition for liquidation under Chapter 7 of the Bankruptcy Code prior to the acquisition. Revenues and net income of Value Lighting included in the results of operations for the three months ended September 30, 2014 were $16,466,000 and $1,485,000 respectively. |
Inventories
Inventories | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Inventories | ' | ||||||||
3 | Inventories: | ||||||||
Inventories consist of the following: | |||||||||
(in thousands) | September 30, | December 31, | |||||||
2014 | 2013 | ||||||||
Raw materials | $ | 3,985 | $ | 4,450 | |||||
Finished goods | 11,232 | 2,227 | |||||||
15,217 | 6,677 | ||||||||
Less: reserves | (1,555 | ) | (1,708 | ) | |||||
Net inventories | $ | 13,662 | $ | 4,969 | |||||
Intangible_Assets
Intangible Assets | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||
Intangible Assets | ' | ||||||||||||||||||||
4 | Intangible Assets: | ||||||||||||||||||||
At September 30, 2014, the Company had the following intangible assets subject to amortization: | |||||||||||||||||||||
(in thousands) | Gross Carrying | Accumulated | Net Carrying | ||||||||||||||||||
Amount | Amortization | Amount | |||||||||||||||||||
Customer contracts | $ | 1,877 | $ | (1,655 | ) | $ | 222 | ||||||||||||||
Customer relationships | 22,760 | (2,349 | ) | 20,412 | |||||||||||||||||
Favorable lease | 334 | (45 | ) | 289 | |||||||||||||||||
Non-Compete agreement | 740 | (110 | ) | 630 | |||||||||||||||||
Patents | 268 | (147 | ) | 121 | |||||||||||||||||
Product certification | 61 | (55 | ) | 6 | |||||||||||||||||
Technology | 1,953 | (146 | ) | 1,806 | |||||||||||||||||
Backlog | 2,370 | (1,534 | ) | 836 | |||||||||||||||||
Trademarks / Trade Names | 10,931 | (1,085 | ) | 9,846 | |||||||||||||||||
$ | 41,294 | $ | (7,126 | ) | $ | 34,168 | |||||||||||||||
As of September 30, 2014, amortization expense on intangible assets for the next five years is estimated as follows: | |||||||||||||||||||||
(in thousands) | 2014 | 2015 | 2016 | 2017 | 2018 | ||||||||||||||||
Customer contracts | $ | 14 | $ | 56 | $ | 56 | $ | 56 | $ | 42 | |||||||||||
Customer relationships | 385 | 1,622 | 1,622 | 1,622 | 1,622 | ||||||||||||||||
Favorable lease | 17 | 74 | 48 | 22 | 22 | ||||||||||||||||
Non-Compete agreement | 34 | 152 | 152 | 141 | 80 | ||||||||||||||||
Patents | 6 | 23 | 23 | 23 | 23 | ||||||||||||||||
Product certification | 2 | 4 | — | — | — | ||||||||||||||||
Technology | 103 | 190 | 190 | 190 | 122 | ||||||||||||||||
Backlog | 558 | 278 | — | — | — | ||||||||||||||||
Trademarks / Trade Names | 187 | 689 | 689 | 689 | 689 | ||||||||||||||||
Total | $ | 1,306 | $ | 3,088 | $ | 2,780 | $ | 2,743 | $ | 2,600 | |||||||||||
Goodwill
Goodwill | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Goodwill | ' | ||||||||||||
5 | Goodwill: | ||||||||||||
The changes in the carrying amount of goodwill for the nine months ended September 30, 2014 is presented below. The balance at December 31, 2013 has been retroactively increased by approximately $430,000 as a result of the working capital adjustment related to Tristate and the provision for unfavorable purchase commitments related to Relume, as described in Note 2. | |||||||||||||
(in thousands) | Lighting Fixtures | Lighting | Total | ||||||||||
and Lamps | Signage and | ||||||||||||
Media | |||||||||||||
January 1, 2014 | $ | 21,498 | $ | — | $ | 21,498 | |||||||
Acquisition of Value Lighting | 17,837 | — | 17,837 | ||||||||||
Transfer of Relume’s Media business | (1,463 | ) | 1,463 | — | |||||||||
Balance, September 30, 2014 | $ | 37,872 | $ | 1,463 | $ | 39,335 | |||||||
Accumulated Balances: | |||||||||||||
Goodwill | $ | 39,861 | $ | 1,870 | $ | 41,731 | |||||||
Accumulated impairment losses | (1,989 | ) | (407 | ) | (2,396 | ) | |||||||
Balance, September 30, 2014 | $ | 37,872 | $ | 1,463 | $ | 39,335 | |||||||
Preferred_Stock
Preferred Stock | 9 Months Ended | |
Sep. 30, 2014 | ||
Preferred Stock | ' | |
6 | Preferred Stock: | |
At September 30, 2014, the Company is authorized to issue 5 million shares of preferred stock. | ||
Series C Preferred Stock | ||
Each share of Series C Preferred Stock shall be entitled to receive cumulative dividends payable at a rate per annum of 10% of the Series C Stated Value on the date of issuance (i.e. $1,000). Such dividends shall be payable through the issuance of additional shares of Series C Preferred Stock on each anniversary of the date of issuance, shall not be paid in cash, and will accrue and accumulate daily. Additionally, the Series C Preferred Stock shall share ratably on an as converted basis with the common stock in the payment of all other dividends and distributions. For the nine months and the year ended September 30, 2014 and December 31, 2013, the Company accrued dividends of approximately $758,000 and $1,014,000, respectively. | ||
Series E Preferred Stock | ||
Each share of Series E Preferred Stock shall be entitled to receive dividends (the “Series E Dividend”) payable at a rate per annum of 5% of the Series E Stated Value then in effect (the “Series E Dividend Rate”). To the extent funds are legally available and the Company is not contractually prohibited from paying such Series E Dividend, the Series E Dividend must be declared and paid from and including the Original Issue Date on each six-month anniversary of the Original Issue Date. At the holder’s option, such dividends are payable through the issuance of additional shares of Series E Preferred Stock or in cash. To the extent the Company is unable to pay any Series E Dividend (i.e. in the event funds are not legally available or the Company is contractually prohibited from making payment), any such unpaid Series E Dividend shall be cumulative and shall accrue and compound on a quarterly basis at the then applicable Dividend Rate. Such unpaid Series E Dividend shall be paid as soon as funds are legally available or as soon as the Company is no longer contractually prohibited from paying such Series E Dividend, as applicable. Additionally, the Series E Preferred Stock shall share ratably on an as-converted basis with the common stock in the payment of all other dividends and distributions. For the nine months and year ended September 30, 2014 and December 31, 2013, the Company accrued dividends of $190,000 and $218,000, respectively. | ||
Series F Preferred Stock | ||
Each share of Series F Preferred Stock shall be entitled to receive dividends (the “Series F Dividend”) payable at a rate per annum of 7% of the Series F Stated Value then in effect (the “Series F Dividend Rate”). Such dividends shall be payable in cash or in kind; provided that the Company shall not pay Series F Dividends in kind through the issuance of any shares of Series F Preferred Stock to the extent that such issuance would require prior approval of the stockholders of the Company pursuant to NASDAQ Listing Rule 5636, and in lieu of such issuance shall make such dividend payment in cash. To the extent funds are legally available and the Company is not contractually prohibited from paying such Series F Dividend, the Series F Dividend must be declared and paid from and including the Original Issue Date on each six-month anniversary of the Original Issue Date. At the holder’s option, such dividends are payable through the issuance of additional Series F Shares or in cash. To the extent the Company is unable to pay any Series F Dividend (i.e. in the event funds are not legally available or the Company is contractually prohibited from making payment), any such unpaid Series F Dividend shall be cumulative and shall accrue and compound on a quarterly basis at the then applicable Series F Dividend Rate. Such unpaid Series F Dividend shall be paid as soon as funds are legally available or as soon as the Company is no longer contractually prohibited from paying such Series F Dividend, as applicable. Additionally, the Series F Preferred Stock shall share ratably on an as-converted basis with the common stock in the payment of all other dividends and distributions. For the nine months and year ended September 30, 2014 and December 31, 2013, the Company accrued dividends of $175,000 and $129,000, respectively. | ||
The Series F preferred stock was redeemed in connection with the exchange of Series F preferred stock for Series G preferred stock described below. Following the redemption, the Series F preferred stock was cancelled in June 2014. | ||
Series G Preferred Stock—The Company designated 18,000 shares of preferred stock as Series G Senior Convertible Redeemable Preferred Stock, par value $0.001 per share (the “Series G Preferred Stock”). | ||
On June 30, 2014, Revolution entered into an Exchange Agreement (the “Exchange Agreement”) with Aston Capital, LLC (“Aston”) and RVL and closed the transactions contemplated by the Exchange Agreement. Pursuant to the Exchange Agreement, the Company issued to RVL on 10,956,000 shares of Series G Preferred Stock in exchange for $10,956, the entire outstanding principal amount of, and the accrued and unpaid interest on, that certain promissory note, dated April 17, 2014. Pursuant to the Exchange Agreement, the Company also issued to Aston 1,640 shares of Series G Preferred Stock in exchange for $1,640,085, a portion of the outstanding principal amount of, and the accrued and unpaid interest on, that certain promissory note, dated February 25, 2014. In addition, pursuant to the Exchange Agreement, the Company issued to RVL 5,404 shares of the Company’s newly-created Series G Senior Convertible Redeemable Preferred Stock, $0.001 par value per share in exchange for 5,000 shares (including accrued and unpaid dividends thereon) of the Company’s Series F Preferred Stock , held by RVL. | ||
The Series G Preferred Stock is voting and convertible into shares of the Company’s common stock, $0.001 par value per share the Company’s common stock at any time at the option of the holder at a conversion price equal to $2.30 (the “Series G Conversion Price”). | ||
In accordance with the Series G Certificate of Designations, the holders of the shares of Series G Preferred Stock have the same consent rights as the Series B, C and E Preferred Stock. The shares of Series G Preferred Stock have a liquidation preference per share equal to the greater of (i) $1,000 (subject to customary adjustments with respect to events affecting the Series G Preferred Stock, the ( “Series G Stated Value”)) plus accrued but unpaid dividends (the “Series G Liquidation Preference”) and (ii) such amount as would have been received had the Series G Preferred Stock converted into common stock immediately prior to the liquidation. | ||
For so long as shares of Series G Preferred Stock are outstanding, the Company will be prohibited from taking certain actions specified in the Series G certificate of designations without the consent of the holders of at least a majority of the then outstanding shares of Series G Preferred Stock, including, among other things, authorization of additional shares of capital stock, increases in the size of the Board, declaration of dividends, consummation of certain business combination transactions, and incurrence of indebtedness and liens. | ||
The Series G Preferred Stock will have a liquidation preference per share equal to the greater of (i) $1,000 (subject to customary adjustments with respect to events affecting the Series G Preferred Stock) plus accrued but unpaid dividends (the “Series G Liquidation Preference”) and (ii) such amount as would have been received had the Series G Preferred Stock converted into Common Stock immediately prior to the liquidation. | ||
The Company has the option to redeem all or any part of the Series G Preferred Stock for cash at any time subject to the Investor’s right to convert and require delivery of shares of common stock. The redemption price to be paid by the Company is the Series G Liquidation Preference per share plus $900,000, if the Company redeems the Series G shares on or prior to the second anniversary of the date of the original issuance of shares of Series G Preferred Stock (the “Original Issue Date”), or the Series G Liquidation Preference, if the Company redeems the Series G shares after the second anniversary of the Original Issue Date. At the option of the holders of two-thirds (2/3rds) of the then-outstanding shares of Series G Preferred Stock, the Company must redeem the number of shares of Series G Preferred Stock so requested for cash at the Series G Liquidation Preference. Such option can only be exercised on or after the third anniversary of the Original Issue Date. | ||
Each share of Series G Preferred Stock shall be entitled to receive cumulative dividends payable at a rate per annum of nine percent (9%) of the Series G Stated Value (as defined in the Series G Certificate of Designations) then in effect (the “Series G Dividend”). At the option of the holder, such dividends shall be payable either (i) in cash or (ii) in kind; provided, the Company shall not make any Series G dividend payments in kind through the issuance of additional Series G Preferred Stock to the extent (and only to the extent) such issuance would require the prior approval of the stockholders of the Company pursuant to NASDAQ Listing Rule 5636, and in lieu of such issuance, the Company will make such Series G dividend payments in cash. To the extent, funds are legally available and the Company is not contractually prohibited from paying such Series G Dividend, the Series G Dividend must be declared and paid from and including the Original Issue Date on each six-month anniversary of the Original Issue Date. For the nine months and year ended September 30, 2014 and December 31, 2013, the Company accrued dividends of $326,000 and $0, respectively. | ||
The Company has classified the Series G Preferred Stock as temporary equity in the financial statements as it is subject to mandatory redemption at the option of the holder. The Company has concluded that the Series G Preferred Stock is more akin to a debt-type instrument than an equity-type instrument. The embedded conversion option in the Series G Preferred Stock is not clearly and closely related to a debt-type host; however, it meets the criteria for classification as equity and therefore it has not been separated from the host instrument. The redemption call by the issuer and the redemption put by the holder were deemed to be clearly and closely related to the host contract and therefore were not separated from the host instrument. The call by the issuer was exercisable at the balance sheet date, but was not deemed to be under the control of the Company since the principal holder of the Series G Preferred Stock holds the majority of the Company’s voting rights; accordingly the Series G Preferred Stock was accreted to the redemption amount in effect on the balance sheet date. As the Company’s common stock closing price immediately preceding the issuance date was equal to the Series G Conversion Price, the Company has not recognized a BCF. | ||
The exchange transaction was accounted for as an extinguishment of debt and Series F preferred stock in exchange for the issuance of Series G Preferred Stock. The market value of the Series G Preferred Stock was estimated to approximate $18.4 million. The difference between the fair value of the preferred stock and its stated value was attributed to the difference between the stated value of the Series F Preferred Stock exchanged for an equivalent amount of Series G Preferred Stock and its fair market value; accordingly, the Company recorded a charge of approximately $0.4 million to additional paid capital and in earnings applicable to common stockholders. | ||
Liquidation Preferences—The following summarize the order of seniority of liquidation preference: | ||
1 | Series G preferred stock | |
2 | Series E preferred stock | |
3 | Series C preferred stock | |
4 | Series B preferred stock |
StockBased_Compensation
Stock-Based Compensation | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Stock-Based Compensation | ' | ||||||||||||
7 | Stock-Based Compensation: | ||||||||||||
On September 18, 2003, the Company adopted a stock option plan (the “2003 Plan”) that provides for the grant of incentive stock options and nonqualified stock options, and reserved 450,000 additional shares of the Company’s common stock for future issuance under the plan. The 2003 Plan was subsequently amended to increase the number of shares to 1,160,000. The option price of incentive stock options must be at least 100% of market value at the date of the grant and incentive stock options have a maximum term of ten years. Options granted typically vest ratably over a three-year period or based on achievement of performance criteria. The Company has granted selected executives and other key employees share option awards, whose vesting is contingent upon meeting various departmental and company-wide performance goals including sales targets and net profit targets. As of September 30, 2014, 399,020 shares of common stock were vested and exercisable under the 2003 Plan, while 52,500 shares remained unvested. In 2009, the Company amended the 2003 Plan to extend the post-service termination exercise period of non-statutory stock options granted to directors for their service to the Company as directors from three months after the director’s termination date to the tenth anniversary of the date of grant. The Company’s Board of Directors has determined that no awards will be made pursuant to the 2003 Plan in the future. | |||||||||||||
At the stockholder meeting on May 15, 2013, shareholders approved the 2013 Stock Incentive Plan (the “2013 Plan”). On May 12, 2014 the stockholders approved an amendment to increase the number of shares of the Company’s common stock that may be awarded under the plan by 1,000,000 shares. Accordingly, an aggregate of 3,000,000 shares of the Company’s common stock may be issued pursuant to the 2013 Plan to officers, employees, non-employee directors and consultants of the Company and its affiliates. Awards under the plan may be in the form of stock options, which may constitute incentive stock options, or non-qualified stock options, restricted shares, restricted stock units, performance awards, stock bonus awards, share appreciation rights and other stock based awards. Stock options will be issued at an exercise price not less than 100% of the market value at the date of grant and expire no later than ten years after the date of grant. Stock awards typically vest over three years but vesting periods for non-employees may vest for longer periods or based on the achievement of performance goals. | |||||||||||||
The following table summarizes activity in the stock option plans: | |||||||||||||
Shares | Number of | Weighted | |||||||||||
Available | Shares | Average | |||||||||||
for Future Grant | Outstanding | Exercise | |||||||||||
Under Option | Price | ||||||||||||
Balance, January 1, 2014 | 680,953 | 407,020 | $ | 4.52 | |||||||||
Options granted at market | (52,500 | ) | 52,500 | 2.32 | |||||||||
Options exercised | — | — | — | ||||||||||
Options forfeited or expired | 8,000 | (8,000 | ) | 3.54 | |||||||||
Balance, September 30, 2014 | 636,453 | 451,520 | $ | 4.33 | |||||||||
During the three months, ended September 30, 2014, no options to purchase shares of the Company’s common stock were granted and no options were exercised. No options were granted nor exercised during the three months ended September 30, 2014. The aggregate intrinsic value of the outstanding exercisable options at September 30, 2014 and December 31, 2013 was $0 and $98,000, respectively. | |||||||||||||
The weighted average vesting term of employee restricted stock is three years. During the year ended December 31, 2013, the Company issued 1,257,500 restricted shares under the 2013 Plan to employees and non-employee service providers of which 26,000 were subsequently forfeited. The weighted average grant date fair value for shares issued in 2013 was $1.94 per share. During the nine months ended September 30, 2014, 50,000 shares were forfeited and 848,000 shares were granted. At September 30, 2014, 970,500 shares were available for issuance under the 2013 Plan. Unrecognized compensation expense for employee restricted stock grants outstanding at September 30, 2014 and December 31, 2013 amounted to $2,250,000 and $1,019,000, respectively. Stock-based compensation expense for employees recognized in the accompanying statements of operations for the three and nine months ended September 30, 2014 was $263,000 and $613,000, respectively. Stock-based compensation expense for employees recognized in the accompanying statements of operations for the three and nine months ended September 30, 2013 was $53,000 and $754,000, respectively. |
Related_Party_Transactions
Related Party Transactions | 9 Months Ended | |
Sep. 30, 2014 | ||
Related Party Transactions | ' | |
8 | Related Party Transactions: | |
Financings—In February 2014 the Company entered in an arrangement with Aston, an affiliate of our Chairman and Chief Executive Officer, pursuant to which the company borrowed $3.5 million for general corporate purposes (the “February Note”) The borrowing bore interest at 9% annually and originally matured on April 1, 2015. The Company had the option to prepay the note at any time without penalty. In April 2014, the Company borrowed an additional $1 million from Aston for general corporate purposes on the same terms and conditions as the February Note (the “ April Note”). Also in April 2014, the company borrowed $10.8 million from RVL to fund the acquisition of Value Lighting (the “RVL Note”) which bears interest at 9% annually and originally matured on the earliest of April 1, 2015 or the date on which the Company received proceeds from any debt, factoring or other similar facility or equity securities in the commercial banking, private placement or public markets. | ||
In June 2014, the company exchanged the RVL Note and $1.6 million of the February Note plus related accrued interest, for an equivalent amount of Series G preferred stock. | ||
In addition, Aston advanced an additional $2.7 million for general corporate purposes in four separate transactions during May and June 2014. As of July 31, 2014, the Audit Committee ratified these advances and approved the issuance of a promissory note in respect of such amount, which bears interest at per annum and matures on April 1, 2016 and can be prepaid at any time at the option of the Company. | ||
The Company has accrued interest on such borrowings of $132,000 at September 30, 2014 on debt outstanding at such date and recorded interest expense of $76,000 and $132,000 for the three and nine months ended September 30, 2014. | ||
Investment Agreements—The Company has entered into four separate investment agreements and an Exchange Agreement with RVL, an affiliate of Aston, whereby the Company issued to RVL Series B, C, E , F and G preferred stock . Cash received by the Company for the issuance for Series B, C, E, and F preferred stock aggregated to $26.0 million. Cash received for debt exchanged for Series G preferred stock aggregated to $12.5 million. The terms of the Series B, C, E, F and G preferred stock are described in note 7 of the financial statements. In addition, in 2013 an affiliate of RVL purchased 75,000 shares of common stock from the Company for $192,000 at the closing market price of the stock on the date purchased. | ||
Customer Financing—In 2013, Aston provided $9.9 million in financing to a related group of customers of the Company who used the proceeds to repay its obligations to the Company for the purchase of Company products. The Company has no obligations to Aston with respect to the financing arrangements between the customer and Aston. The Company’s obligations to the customer are limited to the standard warranty obligation on the products sold. | ||
Management Agreement—On April 9, 2013, the Company ratified a management services agreement with Aston (the “Management Agreement”) to memorialize certain management services that Aston has been providing to the Company since RVL acquired majority control of the Company’s voting securities in September 2012. Pursuant to the Management Agreement, Aston provides consulting services in connection with financing matters, budgeting, strategic planning and business development, including, without limitation, assisting the Company in (i) analyzing the operations and historical performance of target companies; (ii) analyzing and evaluating the transactions with such target companies; (iii) conducting financial, business and operational due diligence, and (iv) evaluating related structuring and other matters. In consideration of the services provided by Aston under the Management Agreement, the Company issued 500,000 shares of restricted common stock to Aston to vest in three equal annual increments, with the first such vesting date being September 25, 2013. On April 21, the Company granted an additional 300,000 shares of restricted stock to Aston which vest in three annual installments with the first such vesting date being September 25, 2014. The Audit Committee of the Board will consider from time to time (at a minimum at such times when the Compensation Committee of the Board evaluates director compensation) whether additional compensation to Aston is appropriate given the nature of the services provided. | ||
Relocation of Corporate Headquarters—During the first quarter of 2013, the Company relocated its corporate headquarters to Stamford, Connecticut to a space also occupied by affiliates of the Company’s Chairman and Chief Executive Officer. The terms and conditions of the arrangement have not been finalized but the Audit Committee of the Board agreed to an allocation of the costs of the Stamford headquarters between Aston and the Company. The Company pays Aston $21,355 monthly, representing its proportionate share of the space under the underlying lease. Costs allocated to the Company amounted to $92,637 and $84,591 for the three months ended September 30, 2014 and 2013 and $276,692 and $249,262 for the nine months ended September 30, 2014 and 2013. | ||
RVL Transaction Fees—Pursuant to the Series E and Series F Investment Agreement with RVL, the Company agreed to pay certain transaction costs incurred by RVL in connection with its investment. For the year ended December 31, 2013, the Company incurred $33,000 related to these costs. Pursuant to the Series G Exchange Agreement with Aston and RVL, the Company also agreed to pay certain transaction costs incurred by Aston in connection with the issuance of the Series G stock. |
Segment_Reporting
Segment Reporting | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Segment Reporting | ' | ||||||||||||||||
9 | Segment Reporting: | ||||||||||||||||
The Company’s operations are principally managed on a product basis and are comprised of two reportable segments for financial reporting purposes: Lighting Fixtures and Lamps and Lighting Signage and Media. The Lighting Fixtures and Lamps reportable segment includes the Seesmart operating segment, the Relume operating segment, the LIT operating segment, the Tri-State and the Value Lighting operating segment, each of which are also reporting units. Effective January 1, 2014, as a result of transferring the Relume’s Media business to Lumificient, goodwill of $1.4 million was allocated to the Lighting Signage and Media reportable segment. None of the goodwill is expected to be deductible for income tax purposes. Financial information relating to the reportable operating segments for the three and nine months ended September 30, 2014 and 2013 is presented below: | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
(in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Revenues from external customers: | |||||||||||||||||
Lighting Fixtures and Lamps | $ | 25,457 | $ | 4,447 | $ | 45,664 | $ | 16,413 | |||||||||
Lighting Signage and Media | 1,420 | 866 | 3,680 | 2,569 | |||||||||||||
Total revenues from external customers | $ | 26,877 | $ | 5,313 | $ | 49,344 | $ | 18,982 | |||||||||
Segment income (loss): | |||||||||||||||||
Lighting Fixtures and Lamps | $ | 227 | $ | (1,554 | ) | $ | (3,499 | ) | $ | (1,886 | ) | ||||||
Lighting Signage and Media | 144 | 11 | (94 | ) | (82 | ) | |||||||||||
Segment income (loss) | 371 | (1,543 | ) | (3,593 | ) | (1,968 | ) | ||||||||||
Unallocated amounts: | |||||||||||||||||
Corporate expenses | (1,116 | ) | (1,513 | ) | (3,799 | ) | (5,297 | ) | |||||||||
Change in fair value of embedded derivative | — | — | — | (6,990 | ) | ||||||||||||
Interest expense | (192 | ) | (24 | ) | (651 | ) | (24 | ) | |||||||||
Deferred income tax (provision) benefit | (496 | ) | — | 5,468 | — | ||||||||||||
Other income | 29 | — | 11 | 746 | |||||||||||||
Loss from continuing operations | $ | (1,404 | ) | $ | (3,080 | ) | $ | (2,564 | ) | $ | (13,533 | ) | |||||
Depreciation and amortization: | |||||||||||||||||
Lighting Fixtures and Lamps | $ | 1,663 | $ | 470 | $ | 3,608 | $ | 2,400 | |||||||||
Lighting Signage and Media | 79 | 56 | 237 | 171 | |||||||||||||
Segment depreciation and amortization | 1,742 | 526 | 3,845 | 2,571 | |||||||||||||
Corporate depreciation and amortization | 8 | 6 | 13 | 17 | |||||||||||||
Total depreciation and amortization | $ | 1,750 | $ | 532 | $ | 3,858 | $ | 2,588 | |||||||||
Segment assets on the dates indicated comprise the following: | |||||||||||||||||
(in thousands) | September 30, 2014 | December 31, 2013 | |||||||||||||||
Lighting Fixtures and lamps | $ | 109,336 | $ | 50,553 | |||||||||||||
Lighting Signage and Media | 5,414 | 6,960 | |||||||||||||||
114,750 | 57,513 | ||||||||||||||||
Elimination of intercompany receivables | (75 | ) | (14,231 | ) | |||||||||||||
Corporate assets, principally cash | 814 | 8,955 | |||||||||||||||
$ | 115,489 | $ | 52,237 | ||||||||||||||
Contingencies
Contingencies | 9 Months Ended | |
Sep. 30, 2014 | ||
Contingencies | ' | |
10 | Contingencies: | |
In the ordinary course of business, the Company may become a party to various legal proceedings generally involving collection actions, contractual matters, infringement actions, product liability claims and other matters. The Company is not a party to any legal proceedings for which it believes it will incur a material loss. |
Financings
Financings | 9 Months Ended | |
Sep. 30, 2014 | ||
Financings | ' | |
11 | Financings: | |
Two subsidiaries of the Company entered into a loan and finance agreements with a financial institution pursuant to which the subsidiary could borrow up to 85% against eligible accounts receivable as defined in the agreement up to a maximum of $2 million. Borrowings under the arrangements bore interest at a rate of 1.75% above the prime rate reported by the Wall Street Journal but not less than 5%. The company was also obligated to pay an annual fee of 1% of the maximum amount that could be borrowed under the arrangement as well a monthly maintenance fee of 0.5 % on the higher of monthly average outstanding principal balance or a specified minimum and certain other fees. The borrowings were repaid as the receivables were collected, were collateralized by specified assets of the subsidiaries and were guaranteed by Revolution. Under the terms of the agreement, the subsidiaries were prohibited from paying dividends and making distributions to the Company. This loan and finance agreement was paid off during the three months ended September 30, 2014. Borrowings outstanding as of December 31, 2013 amount to approximately $0.9 million and are included in accrued liabilities in the accompanying condensed balance sheet. | ||
In August 2014, the Company entered into a 3-year loan and security agreement with Bank of America pursuant to which the Company can borrow up to specified percentages against eligible accounts receivable as defined in the Revolving Credit Facility and against eligible inventory as defined in the Revolving Credit Facility (the “Borrowing Base”) up to a maximum of $25 million. Borrowings under the arrangements bear interest at a rate of the LIBOR rate or a defined base rate, each plus an applicable margin, depending on the nature of the loan. The Company is also obligated to pay various fees monthly. Outstanding loans become payable on demand to the extent that such loans exceed the Borrowing Base, and all outstanding amounts must be repaid on August 20, 2017. All obligations under the Revolving Credit Facility are secured by the assets of the Company and its subsidiaries and are guaranteed by the Company and its subsidiaries. Borrowings outstanding as of September 30, 2014 amount to approximately $12.9 million and are included in bank loan payable under non-current liabilities in the accompanying condensed balance sheet. |
Subsequent_Events
Subsequent Events | 9 Months Ended | |
Sep. 30, 2014 | ||
Subsequent Events | ' | |
12 | Subsequent Events: | |
The Company has evaluated events and transactions occurring subsequent to September 30, 2014 and determined that there were no events or transactions that would have a material impact on the Company’s results of operations or financial position. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Basis of Presentation | ' | ||||||||
Basis of presentation—The accompanying condensed consolidated financial statements of Revolution Lighting Technologies, Inc. and subsidiaries (the “Company”) are unaudited, but in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments) necessary to fairly state the Company’s financial position, results of operations, and cash flows as of and for the dates and periods presented. These condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. Accordingly, they do not necessarily repeat disclosures that would substantially duplicate disclosures included in the annual audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 and details of accounts that have not changed significantly in amount or composition. | |||||||||
These unaudited condensed financial statements should be read in conjunction with the Company’s audited consolidated financial statements and footnotes and other information included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 filed with the Securities and Exchange Commission (“SEC”). The results of operations for the three-month and nine-month periods ended September 30, 2014 are not necessarily indicative of the results that may be expected for the full year ending on December 31, 2014 or for any other future period. | |||||||||
Liquidity | ' | ||||||||
Liquidity—At September 30, 2014, the Company had cash on hand of approximately $2.4 million. For the nine months ended September, 30 2014 and 2013, the Company reported negative cash flows from operations of approximately $15.7 million and $5.2 million, respectively. Cash used for operations for the nine months ended September 30, 2014 and 2013 included $0.9 million and $3.3 million paid for acquisition related costs and severance and transition costs, respectively. For the year ended December 31, 2013, the Company used cash for operations of approximately $8.1 million, which included approximately $3.6 million cash paid for acquisition related costs and severance and transition costs. At September 30, 2014, the Company had working capital of approximately $16.3 million, compared to negative working capital of approximately $1.8 million, at December 31, 2013. | |||||||||
During the year ended December 31, 2013, the Company issued convertible redeemable preferred stock to RVL 1, LLC (“RVL”) for cash of approximately $10.0 million and common stock to unaffiliated investors for approximately $5 million in cash and borrowed approximately $0.9 million under an accounts receivable financing facility. During the nine months ended September 30, 2014, the Company borrowed $18.6 million from affiliates of its controlling shareholder for general corporate purposes, including $10.8 million used to fund the cash portion of the consideration for the acquisition of Value Lighting. On June 30, 2014, the Company issued Series G preferred stock of $18.0 million to affiliates of its controlling stockholder in exchange for the extinguishment of notes payable of approximately $12.6 million, including accrued interest, and Series F preferred stock of $5.4 million, including accrued dividends. During the three months ended September 30, 2014, the Company exchanged outstanding borrowings from Aston for a new consolidated note aggregating to $5.7 million bearing interest at 9% and maturing on April 1, 2016, with a balance at September 30, 2014 of $2.6 million. | |||||||||
On August 20, 2014, the Company entered into a loan and security agreement with Bank of America to borrow up to $25 million on a revolving basis. Borrowings under the agreement are determined on specified percentages of eligible receivables and inventory, and bear interest either on the base rate plus specified margins or at LIBOR plus specified margins, at the election of the Company. See Note 11. | |||||||||
Principles of Consolidation | ' | ||||||||
Principles of consolidation—The condensed consolidated financial statements include the accounts of Revolution Lighting Technologies, Inc. and its wholly owned subsidiaries, Value Lighting, Lumificient, Seesmart, Relume, LIT and Tri-State. Significant inter-company accounts and transactions have been eliminated. | |||||||||
Use of Estimates | ' | ||||||||
Use of estimates—The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant estimates relate to revenue recognition, valuation of accounts receivable and inventories, warranty obligations, purchase price allocation of acquired businesses, impairment of long lived assets and goodwill, valuation of financial instruments, income taxes, and contingencies. Actual results could differ from those estimates. | |||||||||
Revenue Recognition | ' | ||||||||
Revenue recognition—The Company recognizes revenue for its products upon shipment or delivery to customers in accordance with the respective contractual arrangements, provided no significant obligations remain and collection is probable. For sales that include customer acceptance terms, revenue is recorded after customer acceptance. It is the Company’s policy that all sales are final. Requests for returns are reviewed on a case-by-case basis. Pursuant to agreements with distributors, which provide the distributors with the rights to purchase and resell inventory, the Company receives upfront fees for ongoing support obligations during the term of the agreement. The Company amortizes such fees over the term of the contracts, which range from three to ten years. Unamortized distributor fees are included in deferred revenue in the accompanying consolidated balance sheets. | |||||||||
The Company from time to time enters into multiple element arrangements, primarily the delivery of products and installation services. The Company allocates the sales value to each element based on its best estimate of the selling price and recognizes revenues in accordance with the relevant standard for each element. | |||||||||
Sales taxes included in revenues for the three months ended September 30, 2014 and 2013 amounted to approximately $944,000 and $22,000, respectively. Sales tax included in revenues for the nine months ended September 30, 2014 and 2013 amounted to approximately $1,547,000 and $544,000, respectively. | |||||||||
Warranties and Product Liability | ' | ||||||||
Warranties and product liability—The Company’s LED products typically carry a warranty that ranges from one to seven years and includes replacement of defective parts. A warranty reserve is recorded for the estimated costs associated with warranty expense related to recorded sales, which is included within accrued liabilities. Changes in the Company’s warranty liability for the nine months ended September 30, 2014 and 2013 are as follows: | |||||||||
(in thousands) | 2014 | 2013 | |||||||
Warranty liability, January 1 | $ | 597 | $ | 346 | |||||
Provisions for current year sales | 145 | 267 | |||||||
Acquisition of Relume | — | 99 | |||||||
Adjustments | (185 | ) | |||||||
Current period claims | (135 | ) | (112 | ) | |||||
Warranty liability, September 30 | $ | 422 | $ | 600 | |||||
Fair value measurements | ' | ||||||||
Fair value measurements—The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820 “Fair Value Measurements and Disclosures” (“ASC 820”) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: | |||||||||
Level 1—Quoted prices in active markets for identical assets or liabilities. | |||||||||
Level 2—Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable. | |||||||||
Level 3—Unobservable inputs that are supported by little or no market activity, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing. | |||||||||
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2014. The Company uses the market approach to measure fair value for its Level 1 financial assets and liabilities, which includes cash equivalents of $2,398,000 and $1,757,000 at September 30, 2014 and December 31, 2013, respectively. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The respective carrying value of certain balance sheet financial instruments approximates its fair value. These financial instruments include cash, trade receivables, related party payables, accounts payable, accrued liabilities and short-term borrowings. Fair values were estimated to approximate carrying values for these financial instruments since they are short term in nature and they are receivable or payable on demand. | |||||||||
The estimated fair value of assets and liabilities acquired in business combinations and reporting units and long-lived assets used in the related asset impairment tests utilize inputs classified as Level 3 in the fair value hierarchy. Based on the borrowing rates currently available to the Company for bank loans with similar terms and average maturities, the fair value of the bank loan payable is equal to the carrying value. | |||||||||
The Company determined the fair value of the contingent consideration based on a probability-weighted discounted cash flow analysis. The fair value remeasurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement as defined in the fair value hierarchy. In each period, the Company reassesses its current estimates of performance relative to the stated targets and adjusts the liability to fair value. | |||||||||
(in thousands) | 2014 | ||||||||
Fair value, January 1 | $ | 960 | |||||||
Fair value of contingent consideration issued during the period | 7,775 | ||||||||
Change in fair value | (120 | ) | |||||||
Fair value, September 30 | $ | 8,615 | |||||||
The Company used Level 1 and Level 2 inputs to estimate the fair value of the embedded derivative related to the Series E preferred stock. The Company used Level 2 inputs to value the Series D convertible preferred stock taking into account a lack of marketability discount, as well as the market value of the common shares in which the preferred stock can be converted on the issuance date. Such inputs are also utilized to value contingent consideration related to acquisitions. | |||||||||
Derivative Financial Instruments | ' | ||||||||
Derivative financial instruments—The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risk. Terms of convertible preferred stock and convertible promissory note instruments are reviewed to determine whether or not they contain embedded derivative instruments that are required to be accounted for separately from the host contract, and recorded on the balance sheet at fair value. The fair value of derivative liabilities is required to be revalued at each reporting date, with corresponding changes in fair value recorded in current period operating results. | |||||||||
Freestanding warrants issued by the Company in connection with the issuance or sale of debt and equity instruments are considered to be derivative instruments, and are evaluated and accounted for in accordance with the provisions of ASC 815. Pursuant to ASC 815, an evaluation of specifically identified conditions is made to determine whether the fair value of warrants issued is required to be classified as equity or as a derivative liability. | |||||||||
Beneficial conversion and warrant valuation | ' | ||||||||
Beneficial conversion and warrant valuation—In accordance with FASB ASC 470-20, “Debt with Conversion and Other Options” the Company records a beneficial conversion feature (“BCF”) related to the issuance of convertible debt or preferred stock instruments that have conversion features at fixed rates that are in-the-money when issued. The BCF for the convertible instruments is recognized and measured by allocating a portion of the proceeds equal to the intrinsic value of that feature to additional paid-in capital. The intrinsic value is generally calculated at the commitment date as the difference between the conversion price and the fair value of the common stock or other securities into which the security is convertible, multiplied by the number of shares into which the security is convertible. If certain other securities, such as warrants, are issued with the convertible security, the proceeds are allocated among the different components. The portion of the proceeds allocated to the convertible security is divided by the contractual number of the conversion shares to determine the effective conversion price, which is used to measure the BCF. The effective conversion price is used to compute the intrinsic value. The value of the BCF is limited to the basis that is initially allocated to the convertible security. | |||||||||
Cash equivalents | ' | ||||||||
Cash equivalents—Temporary cash investments with an original maturity of three months or less are considered to be cash equivalents. | |||||||||
Accounts receivable | ' | ||||||||
Accounts receivable—Accounts receivable are customer obligations due under normal trade terms. The Company performs periodic credit evaluations of its customers’ financial condition. The Company records an allowance for doubtful accounts based upon factors surrounding the credit risk of certain customers and specifically identified amounts that it believes to be uncollectible. Recovery of bad debt amounts previously written off is recorded as a reduction of bad debt expense in the period the payment is collected. If the Company’s actual collection experience changes, revisions to its allowance may be required. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. The following summarizes the changes in the allowance for doubtful accounts for the periods indicated: | |||||||||
(in thousands) | 2014 | 2013 | |||||||
Allowance for doubtful accounts, January 1 | $ | 210 | $ | 57 | |||||
Additions | 38 | 11 | |||||||
Write-offs | (89 | ) | (6 | ) | |||||
Allowance for doubtful accounts, September 30 | $ | 159 | $ | 62 | |||||
Inventories | ' | ||||||||
Inventories—Inventories are stated at the lower of cost (first-in, first-out) or market. A reserve is recorded for any inventory deemed excessive or obsolete. | |||||||||
Property and equipment | ' | ||||||||
Property and equipment—Property and equipment are stated at cost or the estimated fair value if acquired as part of a business combination. Depreciation is computed by the straight-line method and is charged to operations over the estimated useful lives of the assets. Maintenance and repairs are charged to expense as incurred. The carrying amount and accumulated depreciation of assets sold or retired are removed from the accounts in the year of disposal and any resulting gain or loss is included in results of operations. The estimated useful lives of property and equipment are as follows: | |||||||||
Estimated useful lives | |||||||||
Machinery and equipment | 3-7 years | ||||||||
Furniture and fixtures | 5-7 years | ||||||||
Computers and software | 3-7 years | ||||||||
Motor vehicles | 5 years | ||||||||
Leasehold improvements | Lesser of lease term or estimated useful life | ||||||||
Intangible assets and goodwill | ' | ||||||||
Intangible assets and goodwill—Goodwill is not amortized, but is subject to annual impairment testing unless circumstances dictate more frequent assessments. The Company performs an annual impairment assessment for goodwill during the fourth quarter of each year and more frequently whenever events or changes in circumstances indicate that the fair value of the asset may be less than the carrying amount. Goodwill impairment testing is a two-step process performed at the reporting unit level. Step one compares the fair value of the reporting unit to its carrying amount. The fair value of the reporting unit is determined by considering both the income approach and market approaches. The fair values calculated under the income approach and market approaches are weighted based on circumstances surrounding the reporting unit. Under the income approach, the Company determines fair value based on estimated future cash flows of the reporting unit, which are discounted to the present value using discount factors that consider the timing and risk of cash flows. For the discount rate, the Company relies on the capital asset pricing model approach, which includes an assessment of the risk-free interest rate, the rate of return from publicly traded stocks, the Company’s risk relative to the overall market, the Company’s size and industry and other Company specific risks. Other significant assumptions used in the income approach include the terminal value, growth rates, future capital expenditures and changes in future working capital requirements. The market approaches use key multiples from guideline businesses that are comparable and are traded on a public market. If the fair value of the reporting unit is greater than its carrying amount, there is no impairment. If the reporting unit’s carrying amount exceeds its fair value, then the second step must be completed to measure the amount of impairment, if any. Step two calculates the implied fair value of goodwill by deducting the fair value of all tangible and intangible net assets of the reporting unit from the fair value of the reporting unit as calculated in step one. In this step, the fair value of the reporting unit is allocated to all of the reporting unit’s assets and liabilities in a hypothetical purchase price allocation as if the reporting unit had been acquired on that date. If the carrying amount of goodwill exceeds the implied fair value of goodwill, an impairment loss is recognized in an amount equal to the excess. | |||||||||
Determining the fair value of a reporting unit is judgmental in nature and requires the use of significant estimates and assumptions, including revenue growth rates, strategic plans and future market conditions, among others. There can be no assurance that the Company’s estimates and assumptions made for purposes of the goodwill impairment testing will prove to be accurate predictions of the future. Changes in assumptions and estimates could cause the Company to perform impairment test prior to scheduled annual impairment tests scheduled in the fourth quarter. | |||||||||
Long-lived assets | ' | ||||||||
Long-lived assets—The Company evaluates the recoverability of its long-lived assets whenever events or changes in circumstances have indicated that an asset may not be recoverable. The long-lived asset is grouped with other assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. If the sum of the projected undiscounted cash flows is less than the carrying value of the assets, the assets are written down to the estimated fair value. | |||||||||
Deferred rent | ' | ||||||||
Deferred rent—The Company accounts for certain operating leases containing predetermined fixed increases of the base rental rate during the lease term as rental expense on a straight-line basis over the lease term. The Company has reported the difference between the amounts charged to operations and amounts payable under the leases as a liability in the accompanying consolidated balance sheets. | |||||||||
Shipping and handling costs | ' | ||||||||
Shipping and handling costs—Shipping and handling costs related to the acquisition of goods from vendors are included in cost of sales. | |||||||||
Research and development | ' | ||||||||
Research and development—Research and development costs to develop new products are charged to expense as incurred. | |||||||||
Income taxes | ' | ||||||||
Income taxes—Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes resulting from temporary differences. Such temporary differences result from differences in the carrying value of assets and liabilities for tax and financial reporting purposes. The deferred tax assets and liabilities represent the future tax consequences of those differences, which will be either taxable or deductible when the assets and liabilities are recovered or settled. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. | |||||||||
The Company applies the provisions of FASB ASC 740-10, “Accounting for “Uncertainty in Income Taxes”, and has not recognized a liability pursuant to that standard. In addition, a reconciliation of the beginning and ending amount of unrecognized tax benefits has not been provided since there are no unrecognized benefits since the date of adoption. If there were an unrecognized tax benefit, the Company would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. | |||||||||
The Company has provided a full valuation allowance related to income tax benefits resulting from losses incurred and accumulated on operations (“NOLs”). The NOLs are subject to limitations under the provisions of Section 382 of the Internal Revenue Code of 1986, as amended. The Company has analyzed the limitations and their impact and has recognized deferred tax assets for those NOLs that are not subject to limitations. At December 31, 2013 the Company recognized a full valuation allowance related to its net deferred tax assets, and the adjustments to the deferred tax assets related to the NOLs were offset by a corresponding adjustment to the valuation allowance. | |||||||||
In connection with the acquisition of Value Lighting in 2014, the Company recorded net deferred tax liabilities of $5.6 million, primarily resulting from the recognition of amortizable intangible assets at the date of acquisition. These net deferred tax liabilities can be used to reduce net deferred tax assets for which the Company had provided a valuation allowance. Accordingly, the valuation allowance has been reduced by a corresponding amount during the nine months ended September 30, 2014. | |||||||||
Stock-based compensation | ' | ||||||||
Stock-based compensation—The Company recognizes the cost of employee or director services received in exchange for an award of equity instruments in the financial statements, which is measured based on the grant date fair value of the award. Stock-based compensation expense is recognized over the period during which an employee is required to provide service in exchange for the award (typically, the vesting period). | |||||||||
The Company values restricted stock awards to employees at the quoted market price on the grant date. The Company estimates the fair value of option awards issued under its stock option plans on the date of grant using a Black-Scholes option-pricing model that uses the assumptions noted below. The Company estimates the volatility of its common stock at the date of grant based on the historical volatility of its common stock. The Company determines the expected life based on historical experience with similar awards, giving consideration to the contractual terms, vesting schedules and post-vesting forfeitures. For shares that vest contingent upon achievement of certain performance criteria, an estimate of the probability of achievement is applied in the estimate of fair value. If the goals are not met, no compensation cost is recognized and any previously recognized compensation cost is reversed. The Company bases the risk-free interest rate on the implied yield currently available on U.S. Treasury issues with an equivalent remaining term approximately equal to the expected life of the award. The Company has never paid any cash dividends on its common stock and does not anticipate paying any cash dividends in the foreseeable future. During the nine months ended September 30, 2014, 52,500 options were granted on April 22, 2014: 35,000 were incentive stock options to employees and 17,500 were non-qualified stock options to consultants. The strike price is $3.02. The options vest annually over three years beginning April 22, 2015. The options have a 10-year expiration period, otherwise, options are terminated when an employee is terminated for cause or 3 months following when an employee ceases to be engaged by the Company. For the nine months ended September 30, 2014, the Company computed expense for each group utilizing the following assumptions: | |||||||||
Nine Months Ended | |||||||||
September 30, 2014 | |||||||||
Expected volatility | 75.8 – 81.1% | ||||||||
Weighted-average volatility | 76.00% | ||||||||
Risk-free interest rate | 0.4 – 0.9% | ||||||||
Expected dividend | 0% | ||||||||
Expected life in years | 3.5 – 8.6 Years | ||||||||
The Company from time to time enters into arrangements with non-employee service providers pursuant to which it issues restricted stock vesting over specified periods for time-based services. These arrangements are accounted for under the provisions of FASB ASC 505-50 “Equity-Based Payments to Non-Employees”. Pursuant to this standard, the restricted stock is valued at the quoted price at the date of vesting. Prior to vesting, compensation is recorded on a cumulative basis based on the quoted market price at the end of the reporting period. | |||||||||
Loss per share | ' | ||||||||
Loss per share—Basic loss per share is computed by dividing net loss attributable to common stockholders by the weighted average common shares outstanding for the period. Diluted loss per share is computed giving effect to all potentially dilutive common shares. Potentially dilutive common shares consist of incremental shares issuable upon the exercise of stock options and vesting of restricted shares and the conversion of outstanding convertible securities. In periods in which a net loss has been incurred, all potentially dilutive common shares are considered anti-dilutive and thus are excluded from the calculation. For the nine months ended September 30, 2014 and September 30, 2013, the Company had 27.2 million and 23.0 common equivalent shares, respectively, which may be issued, primarily pursuant to convertible securities, which were not included in the computation of loss per share at September 30, 2014 and 2013 because the effect would have been anti-dilutive. For the three months ended September 30, 2014 and 2013 such common equivalent shares amounted to 27.2 million and 23.0 million, respectively. | |||||||||
Recent accounting pronouncements | ' | ||||||||
Recent accounting pronouncements—In May 2014 the Financial Accounting Standards Board issued the standard “Revenue from Contracts with Customers” which supersedes existing revenue recognition standards including most industry-specific revenue recognition guidance. The standard is effective for annual periods beginning after December 31, 2016. Early adoption is not permitted. At this time, the Company has not determined the effect that this accounting pronouncement will have on its financial statements. | |||||||||
In June 2014, the FASB issued guidance that requires a performance target in a share-based payment that affects vesting and that could be achieved after the requisite service period be accounted for as a performance condition. The guidance is effective for annual periods beginning after December 15, 2015 and interim periods within the year, and early adoption is permitted. The guidance should be applied on a prospective basis to awards that are granted or modified on or after the effective date. The guidance may be applied on a modified retrospective basis for performance targets outstanding on or after the beginning of the first annual period presented as of the date of adoption. The Company does not expect to grant these type of awards, but will adopt this guidance on January 1, 2016 and will apply it prospectively to any awards granted on or after January 1, 2016 that include these terms. | |||||||||
In August 2014, the FASB issued ASU No. 2014-15 (“ASU 2014-15”), Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This ASU requires management to assess and evaluate whether conditions or events exist, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the financial statements issue date. The provisions of ASU 2014-15 are effective for annual periods beginning after December 15, 2016 and for annual and interim periods thereafter; early adoption is permitted. The adoption of ASU 2014-15 is not expected to have a material effect on our consolidated financial statements. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Changes in Warranty Liability | ' | ||||||||
Changes in the Company’s warranty liability for the nine months ended September 30, 2014 and 2013 are as follows: | |||||||||
(in thousands) | 2014 | 2013 | |||||||
Warranty liability, January 1 | $ | 597 | $ | 346 | |||||
Provisions for current year sales | 145 | 267 | |||||||
Acquisition of Relume | — | 99 | |||||||
Adjustments | (185 | ) | |||||||
Current period claims | (135 | ) | (112 | ) | |||||
Warranty liability, September 30 | $ | 422 | $ | 600 | |||||
Fair Value Remeasurement Based on Significant Inputs Not Observable, Level 3 Measurement | ' | ||||||||
The fair value remeasurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement as defined in the fair value hierarchy. In each period, the Company reassesses its current estimates of performance relative to the stated targets and adjusts the liability to fair value. | |||||||||
(in thousands) | 2014 | ||||||||
Fair value, January 1 | $ | 960 | |||||||
Fair value of contingent consideration issued during the period | 7,775 | ||||||||
Change in fair value | (120 | ) | |||||||
Fair value, September 30 | $ | 8,615 | |||||||
Summary of Changes in Allowance for Doubtful Accounts | ' | ||||||||
The following summarizes the changes in the allowance for doubtful accounts for the periods indicated: | |||||||||
(in thousands) | 2014 | 2013 | |||||||
Allowance for doubtful accounts, January 1 | $ | 210 | $ | 57 | |||||
Additions | 38 | 11 | |||||||
Write-offs | (89 | ) | (6 | ) | |||||
Allowance for doubtful accounts, September 30 | $ | 159 | $ | 62 | |||||
Estimated Useful Lives of Property and Equipment | ' | ||||||||
The estimated useful lives of property and equipment are as follows: | |||||||||
Estimated useful lives | |||||||||
Machinery and equipment | 3-7 years | ||||||||
Furniture and fixtures | 5-7 years | ||||||||
Computers and software | 3-7 years | ||||||||
Motor vehicles | 5 years | ||||||||
Leasehold improvements | Lesser of lease term or estimated useful life | ||||||||
Valuation Assumptions used in Computation of Stock Option Expense | ' | ||||||||
For the nine months ended September 30, 2014, the Company computed expense for each group utilizing the following assumptions: | |||||||||
Nine Months Ended | |||||||||
September 30, 2014 | |||||||||
Expected volatility | 75.8 – 81.1% | ||||||||
Weighted-average volatility | 76.00% | ||||||||
Risk-free interest rate | 0.4 – 0.9% | ||||||||
Expected dividend | 0% | ||||||||
Expected life in years | 3.5 – 8.6 Years |
Acquisitions_Tables
Acquisitions (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Business Acquisition Proforma Information | ' | ||||||||
The following pro forma information gives effect to all the acquisitions described above as if they had been consummated on January 1, 2013 (in thousands): | |||||||||
(in thousands) | September 30, | December 31, | |||||||
2014 | 2013 | ||||||||
Revenues | $ | 63,024 | $ | 80,609 | |||||
Operating loss | (7,336 | ) | (14,539 | ) | |||||
Net loss | (3,614 | ) | (24,398 | ) | |||||
Value Lighting | ' | ||||||||
Preliminary Values Assigned to Assets Acquired and Liabilities Assumed | ' | ||||||||
The following amounts represent the preliminary determination of the fair value of identifiable assets acquired and liabilities assumed from the Value Lighting acquisition. The excess of the purchase price over the estimated fair value of the net tangible assets acquired was allocated to intangible assets of approximately $19.8 million and goodwill of approximately $17.8 million. The final determination of the fair value of certain assets and liabilities including income taxes and contingencies will be completed within the one-year measurement period from the date of acquisition as required by the FASB ASC Topic 805, “Business Combinations.” | |||||||||
(in thousands) | |||||||||
Cash | $ | 35 | |||||||
Accounts receivable | 8,617 | ||||||||
Inventory | 8,241 | ||||||||
Goodwill | 17,837 | ||||||||
Customer relationships | 12,140 | ||||||||
Trade names | 4,930 | ||||||||
Backlog | 2,370 | ||||||||
Non-compete agreements | 260 | ||||||||
Other intangibles | 116 | ||||||||
Other assets | 2,900 | ||||||||
Assets acquired | 57,446 | ||||||||
Accounts payable | 8,919 | ||||||||
Accrued liabilities | 1,375 | ||||||||
Other current liabilities | 1,421 | ||||||||
Other liabilities | 1032 | ||||||||
Deferred income tax liability | 5,554 | ||||||||
Liabilities assumed | 18,301 | ||||||||
Preliminary purchase price | $ | 39,145 | |||||||
Tri-State LED, Inc. | ' | ||||||||
Preliminary Values Assigned to Assets Acquired and Liabilities Assumed | ' | ||||||||
The following amounts represent the preliminary determination of the fair value of identifiable assets acquired and liabilities assumed from the Tri-State acquisition. | |||||||||
(in thousands) | |||||||||
Accounts receivable | $ | 468 | |||||||
Inventory | 310 | ||||||||
Goodwill | 2,786 | ||||||||
Customer relationships | 1,680 | ||||||||
Non-compete agreements | 480 | ||||||||
Other intangibles | 738 | ||||||||
Other assets | 38 | ||||||||
Assets acquired | 6,500 | ||||||||
Accounts payable | 440 | ||||||||
Accrued liabilities | 208 | ||||||||
Other current liabilities | 80 | ||||||||
Liabilities assumed | 728 | ||||||||
Preliminary purchase price | $ | 5,772 | |||||||
Inventories_Tables
Inventories (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Components of Inventories | ' | ||||||||
Inventories consist of the following: | |||||||||
(in thousands) | September 30, | December 31, | |||||||
2014 | 2013 | ||||||||
Raw materials | $ | 3,985 | $ | 4,450 | |||||
Finished goods | 11,232 | 2,227 | |||||||
15,217 | 6,677 | ||||||||
Less: reserves | (1,555 | ) | (1,708 | ) | |||||
Net inventories | $ | 13,662 | $ | 4,969 | |||||
Intangible_Assets_Tables
Intangible Assets (Tables) | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||
Intangible Assets Subject to Amortization | ' | ||||||||||||||||||||
At September 30, 2014, the Company had the following intangible assets subject to amortization: | |||||||||||||||||||||
(in thousands) | Gross Carrying | Accumulated | Net Carrying | ||||||||||||||||||
Amount | Amortization | Amount | |||||||||||||||||||
Customer contracts | $ | 1,877 | $ | (1,655 | ) | $ | 222 | ||||||||||||||
Customer relationships | 22,760 | (2,349 | ) | 20,412 | |||||||||||||||||
Favorable lease | 334 | (45 | ) | 289 | |||||||||||||||||
Non-Compete agreement | 740 | (110 | ) | 630 | |||||||||||||||||
Patents | 268 | (147 | ) | 121 | |||||||||||||||||
Product certification | 61 | (55 | ) | 6 | |||||||||||||||||
Technology | 1,953 | (146 | ) | 1,806 | |||||||||||||||||
Backlog | 2,370 | (1,534 | ) | 836 | |||||||||||||||||
Trademarks / Trade Names | 10,931 | (1,085 | ) | 9,846 | |||||||||||||||||
$ | 41,294 | $ | (7,126 | ) | $ | 34,168 | |||||||||||||||
Estimated Annual Amortization Expense | ' | ||||||||||||||||||||
As of September 30, 2014, amortization expense on intangible assets for the next five years is estimated as follows: | |||||||||||||||||||||
(in thousands) | 2014 | 2015 | 2016 | 2017 | 2018 | ||||||||||||||||
Customer contracts | $ | 14 | $ | 56 | $ | 56 | $ | 56 | $ | 42 | |||||||||||
Customer relationships | 385 | 1,622 | 1,622 | 1,622 | 1,622 | ||||||||||||||||
Favorable lease | 17 | 74 | 48 | 22 | 22 | ||||||||||||||||
Non-Compete agreement | 34 | 152 | 152 | 141 | 80 | ||||||||||||||||
Patents | 6 | 23 | 23 | 23 | 23 | ||||||||||||||||
Product certification | 2 | 4 | — | — | — | ||||||||||||||||
Technology | 103 | 190 | 190 | 190 | 122 | ||||||||||||||||
Backlog | 558 | 278 | — | — | — | ||||||||||||||||
Trademarks / Trade Names | 187 | 689 | 689 | 689 | 689 | ||||||||||||||||
Total | $ | 1,306 | $ | 3,088 | $ | 2,780 | $ | 2,743 | $ | 2,600 | |||||||||||
Goodwill_Tables
Goodwill (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Changes in Carrying Amount of Goodwill | ' | ||||||||||||
The changes in the carrying amount of goodwill for the nine months ended September 30, 2014 is presented below. The balance at December 31, 2013 has been retroactively increased by approximately $430,000 as a result of the working capital adjustment related to Tristate and the provision for unfavorable purchase commitments related to Relume, as described in Note 2. | |||||||||||||
(in thousands) | Lighting Fixtures | Lighting | Total | ||||||||||
and Lamps | Signage and | ||||||||||||
Media | |||||||||||||
January 1, 2014 | $ | 21,498 | $ | — | $ | 21,498 | |||||||
Acquisition of Value Lighting | 17,837 | — | 17,837 | ||||||||||
Transfer of Relume’s Media business | (1,463 | ) | 1,463 | — | |||||||||
Balance, September 30, 2014 | $ | 37,872 | $ | 1,463 | $ | 39,335 | |||||||
Accumulated Balances: | |||||||||||||
Goodwill | $ | 39,861 | $ | 1,870 | $ | 41,731 | |||||||
Accumulated impairment losses | (1,989 | ) | (407 | ) | (2,396 | ) | |||||||
Balance, September 30, 2014 | $ | 37,872 | $ | 1,463 | $ | 39,335 | |||||||
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Summary of Stock Option Activity | ' | ||||||||||||
The following table summarizes activity in the stock option plans: | |||||||||||||
Shares | Number of | Weighted | |||||||||||
Available | Shares | Average | |||||||||||
for Future Grant | Outstanding | Exercise | |||||||||||
Under Option | Price | ||||||||||||
Balance, January 1, 2014 | 680,953 | 407,020 | $ | 4.52 | |||||||||
Options granted at market | (52,500 | ) | 52,500 | 2.32 | |||||||||
Options exercised | — | — | — | ||||||||||
Options forfeited or expired | 8,000 | (8,000 | ) | 3.54 | |||||||||
Balance, September 30, 2014 | 636,453 | 451,520 | $ | 4.33 | |||||||||
Segment_Reporting_Tables
Segment Reporting (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Components of Segment Reporting | ' | ||||||||||||||||
Financial information relating to the reportable operating segments for the three and nine months ended September 30, 2014 and 2013 is presented below: | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
(in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Revenues from external customers: | |||||||||||||||||
Lighting Fixtures and Lamps | $ | 25,457 | $ | 4,447 | $ | 45,664 | $ | 16,413 | |||||||||
Lighting Signage and Media | 1,420 | 866 | 3,680 | 2,569 | |||||||||||||
Total revenues from external customers | $ | 26,877 | $ | 5,313 | $ | 49,344 | $ | 18,982 | |||||||||
Segment income (loss): | |||||||||||||||||
Lighting Fixtures and Lamps | $ | 227 | $ | (1,554 | ) | $ | (3,499 | ) | $ | (1,886 | ) | ||||||
Lighting Signage and Media | 144 | 11 | (94 | ) | (82 | ) | |||||||||||
Segment income (loss) | 371 | (1,543 | ) | (3,593 | ) | (1,968 | ) | ||||||||||
Unallocated amounts: | |||||||||||||||||
Corporate expenses | (1,116 | ) | (1,513 | ) | (3,799 | ) | (5,297 | ) | |||||||||
Change in fair value of embedded derivative | — | — | — | (6,990 | ) | ||||||||||||
Interest expense | (192 | ) | (24 | ) | (651 | ) | (24 | ) | |||||||||
Deferred income tax (provision) benefit | (496 | ) | — | 5,468 | — | ||||||||||||
Other income | 29 | — | 11 | 746 | |||||||||||||
Loss from continuing operations | $ | (1,404 | ) | $ | (3,080 | ) | $ | (2,564 | ) | $ | (13,533 | ) | |||||
Depreciation and amortization: | |||||||||||||||||
Lighting Fixtures and Lamps | $ | 1,663 | $ | 470 | $ | 3,608 | $ | 2,400 | |||||||||
Lighting Signage and Media | 79 | 56 | 237 | 171 | |||||||||||||
Segment depreciation and amortization | 1,742 | 526 | 3,845 | 2,571 | |||||||||||||
Corporate depreciation and amortization | 8 | 6 | 13 | 17 | |||||||||||||
Total depreciation and amortization | $ | 1,750 | $ | 532 | $ | 3,858 | $ | 2,588 | |||||||||
Segment Assets | ' | ||||||||||||||||
Segment assets on the dates indicated comprise the following: | |||||||||||||||||
(in thousands) | September 30, 2014 | December 31, 2013 | |||||||||||||||
Lighting Fixtures and lamps | $ | 109,336 | $ | 50,553 | |||||||||||||
Lighting Signage and Media | 5,414 | 6,960 | |||||||||||||||
114,750 | 57,513 | ||||||||||||||||
Elimination of intercompany receivables | (75 | ) | (14,231 | ) | |||||||||||||
Corporate assets, principally cash | 814 | 8,955 | |||||||||||||||
$ | 115,489 | $ | 52,237 | ||||||||||||||
Summary_of_Significant_Account3
Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | 12 Months Ended | 9 Months Ended | |||||||||||||
Apr. 22, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Aug. 20, 2014 | Dec. 31, 2012 | Sep. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Apr. 22, 2014 | Apr. 22, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | |
Segment | Segment | Segment | Segment | Level 1 | Level 1 | Series G Redeemable Convertible Preferred Stock | Series G Preferred Stock | Series G Preferred Stock | Series G Preferred Stock | Incentive Stock Options | Nonqualified Stock Options | Tranche C Term Loan | Tranche B loan | New consolidated note | Notes Payable One | Value Lighting | Issuance of Equity | Minimum | Maximum | |||||
Employees | Consultants | Series G Redeemable Convertible Preferred Stock | ||||||||||||||||||||||
Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of reportable segments | ' | 2 | 2 | 2 | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash and cash equivalents | ' | $2,398,000 | $5,763,000 | $2,398,000 | $5,763,000 | $1,757,000 | ' | $4,434,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash flow from operations | ' | ' | ' | -15,697,000 | -5,214,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash paid for acquisition related costs | ' | ' | ' | 900,000 | 3,300,000 | 3,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash flow from operations | ' | ' | ' | ' | ' | 8,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Working capital excluding cash and cash equivalent | ' | 16,300,000 | ' | 16,300,000 | ' | -1,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash proceeds from issuance of convertible preferred stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,000,000 | ' | ' |
Cash proceeds from issuance of common stock | ' | ' | ' | ' | 4,948,000 | 5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash borrowed under a receivable financing facility | ' | ' | ' | ' | ' | 900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from related party debt | ' | ' | ' | 18,103,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 18,600,000 | 10,800,000 | ' | ' | ' | ' | ' | ' |
Stock issued in noncash exchange | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 18,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt exchanged with stock, amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12,600,000 | 12,600,000 | ' | ' | ' | ' | ' | 12,600,000 | ' | ' | ' | ' |
Accrued dividend settled in stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt exchange with new consolidated note | ' | 5,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt conversion,interest rate | ' | 9.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt conversion due date | ' | 1-Apr-16 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument amount | ' | 2,700,000 | ' | 2,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,600,000 | ' | ' | ' | ' | ' |
Line of credit facility, maximum borrowing amount | ' | ' | ' | ' | ' | ' | 25,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unamortized licensing fees Period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | '10 years |
Sales tax include in revenue | ' | 944,000 | 22,000 | 1,547,000 | 544,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash equivalents at fair value | ' | ' | ' | ' | ' | ' | ' | ' | 2,398,000 | 1,757,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maturity of temporary cash investments | ' | ' | ' | '3 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net deferred tax liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $5,600,000 | ' | ' | ' |
Stock options granted | 52,500 | 0 | ' | 52,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 35,000 | 17,500 | ' | ' | ' | ' | ' | ' | ' | ' |
Stock options strike price | $3.02 | ' | ' | $2.32 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock options vesting period | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock options vesting period beginning date | 22-Apr-15 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock options expiration period | '10 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Anti-dilutive shares | ' | 27,200,000 | 23,000,000 | 27,200,000 | 23,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Changes_in_Warranty_Liability_
Changes in Warranty Liability (Detail) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Product Warranty [Line Items] | ' | ' |
Warranty liability | $597 | $346 |
Provisions for current year sales | 145 | 267 |
Acquisition of Relume | ' | 99 |
Adjustments | -185 | ' |
Current period claims | -135 | -112 |
Warranty liability | $422 | $600 |
Fair_Value_Remeasurement_Based
Fair Value Remeasurement Based on Significant Inputs Not Observable, Level 3 Measurement (Detail) (USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2014 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' |
Fair value, beginning balance | $960 |
Fair value of contingent consideration issued during the period | 7,775 |
Change in fair value | -120 |
Fair value, ending balance | $8,615 |
Allowance_for_Bad_Debts_Detail
Allowance for Bad Debts (Detail) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' |
Allowance for doubtful accounts | $210 | $57 |
Additions | 38 | 11 |
Write-offs | -89 | -6 |
Allowance for doubtful accounts | $159 | $62 |
Estimated_Useful_Lives_of_Prop
Estimated Useful Lives of Property and Equipment (Detail) | 9 Months Ended |
Sep. 30, 2014 | |
Motor Vehicles | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, plant and equipment, Useful Life | '5 years |
Leasehold Improvements | ' |
Property, Plant and Equipment [Line Items] | ' |
Leasehold improvements | 'Lesser of lease term or estimated useful life |
Minimum | Machinery and Equipment | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, plant and equipment, Useful Life | '3 years |
Minimum | Furniture and Fixtures | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, plant and equipment, Useful Life | '5 years |
Minimum | Computers And Software | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, plant and equipment, Useful Life | '3 years |
Maximum | Machinery and Equipment | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, plant and equipment, Useful Life | '7 years |
Maximum | Furniture and Fixtures | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, plant and equipment, Useful Life | '7 years |
Maximum | Computers And Software | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, plant and equipment, Useful Life | '7 years |
Valuation_Assumptions_Used_in_
Valuation Assumptions Used in Computation of Stock Option Expense (Detail) | 9 Months Ended |
Sep. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Expected volatility, minimum | 75.80% |
Expected volatility, maximum | 81.10% |
Weighted-average volatility | 76.00% |
Risk-free interest rate, minimum | 0.40% |
Risk-free interest rate, maximum | 0.90% |
Expected dividend | 0.00% |
Minimum | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Expected life in years | '3 years 6 months |
Maximum | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Expected life in years | '8 years 7 months 6 days |
Acquisitions_Additional_Inform
Acquisitions - Additional Information (Detail) (USD $) | 9 Months Ended | 0 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2014 | Sep. 30, 2013 | Apr. 17, 2014 | Dec. 31, 2013 | Nov. 15, 2013 | Sep. 30, 2014 | Nov. 15, 2013 | Nov. 15, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Apr. 17, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Apr. 17, 2014 | |
Tri-State DE LLC | Tri-State DE LLC | Tri-State DE LLC | Tri-State DE LLC | Relume Technologies Inc | Relume Technologies Inc | Elite LED Solutions Incorporated | Value Lighting | Value Lighting | Value Lighting | Value Lighting | |||||
Common Stock | Change of Control | Installment | |||||||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business acquisition cash Consideration | ' | ' | ' | ' | $1,800,000 | ' | ' | ' | ' | ' | ' | $10,600,000 | ' | ' | ' |
Business acquisition aggregate purchase consideration | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 39,100,000 | ' | ' | ' |
Business acquisition, number of shares issued | ' | ' | ' | ' | ' | ' | ' | 543,052 | ' | ' | ' | 8,468,192 | ' | ' | ' |
Business acquisition, number of Installments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4 | ' | ' | ' |
Business acquisition, common stock issuable installment value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20,900,000 | ' | ' | ' |
Business acquisition, contingent consideration payable in cash or common stock, maximum | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 11,000,000 |
Business acquisition, contingent consideration | ' | ' | ' | ' | ' | ' | 900,000 | ' | ' | ' | ' | ' | ' | ' | 7,800,000 |
Business acquisition, preliminarily reduced purchase price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200,000 | ' | ' | ' |
Estimated fair value of intangible assets | ' | ' | 19,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill | 39,335,000 | ' | 17,800,000 | 21,498,000 | ' | ' | 2,786,000 | ' | ' | ' | ' | ' | ' | ' | 17,837,000 |
Carrying amount of debt encumbering with property | ' | ' | 2,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business acquisition, liability incurred | ' | ' | ' | ' | 1,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business acquisition, liability incurred repayment term | ' | ' | ' | ' | '6 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business acquisition, interest rate on liability incurred | ' | ' | ' | ' | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business acquisition, value of equity issued | ' | ' | ' | ' | ' | ' | ' | 1,600,000 | ' | ' | ' | ' | ' | ' | ' |
Contingent obligation, number of additional shares to issue | ' | ' | ' | ' | ' | ' | ' | 365,628 | ' | ' | ' | ' | ' | ' | ' |
Business acquisition, working capital adjustment | ' | ' | ' | ' | ' | 25,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business acquisition, charges | 500,000 | ' | ' | ' | ' | ' | ' | ' | 400,000 | 700,000 | ' | ' | ' | ' | ' |
Amortization of intangible assets related to acquired backlog | 3,517,000 | 2,444,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,300,000 | ' |
Gain on bargain purchase of business | ' | 743,000 | ' | ' | ' | ' | ' | ' | ' | ' | 700,000 | ' | ' | ' | ' |
Loss on extinguishment of debt | ' | ' | ' | ' | ' | ' | ' | ' | 4,200,000 | ' | ' | ' | ' | ' | ' |
Gain on deconsolidation of subsidiary that filed a bankruptcy petition | ' | ' | ' | ' | ' | ' | ' | ' | 1,500,000 | ' | ' | ' | ' | ' | ' |
Revenue from the date of acquisition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 16,466,000 | ' | ' |
Net income from the date of acquisition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1,485,000 | ' | ' |
Preliminary_Values_Assigned_to
Preliminary Values Assigned to Assets Acquired and Liabilities Assumed (Detail) (USD $) | Sep. 30, 2014 | Apr. 17, 2014 | Dec. 31, 2013 | Nov. 15, 2013 | Nov. 15, 2013 | Nov. 15, 2013 | Apr. 17, 2014 | Apr. 17, 2014 | Apr. 17, 2014 | Apr. 17, 2014 | Apr. 17, 2014 |
In Thousands, unless otherwise specified | Tri-State DE LLC | Tri-State DE LLC | Tri-State DE LLC | Value Lighting | Value Lighting | Value Lighting | Value Lighting | Value Lighting | |||
Customer Relationships | Non-compete agreements | Customer Relationships | Non-compete agreements | Trade Names | Backlog | ||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash | ' | ' | ' | ' | ' | ' | $35 | ' | ' | ' | ' |
Accounts receivable | ' | ' | ' | 468 | ' | ' | 8,617 | ' | ' | ' | ' |
Inventory | ' | ' | ' | 310 | ' | ' | 8,241 | ' | ' | ' | ' |
Goodwill | 39,335 | 17,800 | 21,498 | 2,786 | ' | ' | 17,837 | ' | ' | ' | ' |
Intangible assets | ' | 19,800 | ' | ' | 1,680 | 480 | ' | 12,140 | 260 | 4,930 | 2,370 |
Other intangibles | ' | ' | ' | 738 | ' | ' | 116 | ' | ' | ' | ' |
Other assets | ' | ' | ' | 38 | ' | ' | 2,900 | ' | ' | ' | ' |
Assets acquired | ' | ' | ' | 6,500 | ' | ' | 57,446 | ' | ' | ' | ' |
Accounts payable | ' | ' | ' | 440 | ' | ' | 8,919 | ' | ' | ' | ' |
Accrued liabilities | ' | ' | ' | 208 | ' | ' | 1,375 | ' | ' | ' | ' |
Other current liabilities | ' | ' | ' | 80 | ' | ' | 1,421 | ' | ' | ' | ' |
Other liabilities | ' | ' | ' | ' | ' | ' | 1,032 | ' | ' | ' | ' |
Deferred income tax liability | ' | ' | ' | ' | ' | ' | 5,554 | ' | ' | ' | ' |
Liabilities assumed | ' | ' | ' | 728 | ' | ' | 18,301 | ' | ' | ' | ' |
Preliminary purchase price | ' | ' | ' | $5,772 | ' | ' | $39,145 | ' | ' | ' | ' |
Business_Acquisition_Proforma_
Business Acquisition Proforma Information (Detail) (USD $) | 9 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 |
Business Acquisition, Pro Forma Information [Line Items] | ' | ' |
Revenues | $63,024 | $80,609 |
Operating loss | -7,336 | -14,539 |
Net loss | ($3,614) | ($24,398) |
Components_of_Inventories_Deta
Components of Inventories (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Inventory [Line Items] | ' | ' |
Raw materials | $3,985 | $4,450 |
Finished goods | 11,232 | 2,227 |
Inventory, Gross, Total | 15,217 | 6,677 |
Less: reserves | -1,555 | -1,708 |
Net inventories | 13,662 | 4,969 |
Inventory, Current | ' | ' |
Inventory [Line Items] | ' | ' |
Net inventories | $13,662 | $4,969 |
Intangible_Assets_Subject_to_A
Intangible Assets Subject to Amortization (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | $41,294 | ' |
Accumulated Amortization | -7,126 | -3,732 |
Net Carrying Amount | 34,168 | 17,869 |
Customer Contracts | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | 1,877 | ' |
Accumulated Amortization | -1,655 | ' |
Net Carrying Amount | 222 | ' |
Customer Relationships | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | 22,760 | ' |
Accumulated Amortization | -2,349 | ' |
Net Carrying Amount | 20,412 | ' |
Favorable Leases | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | 334 | ' |
Accumulated Amortization | -45 | ' |
Net Carrying Amount | 289 | ' |
Non-compete agreements | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | 740 | ' |
Accumulated Amortization | -110 | ' |
Net Carrying Amount | 630 | ' |
Patents | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | 268 | ' |
Accumulated Amortization | -147 | ' |
Net Carrying Amount | 121 | ' |
Product Certification | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | 61 | ' |
Accumulated Amortization | -55 | ' |
Net Carrying Amount | 6 | ' |
Technology | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | 1,953 | ' |
Accumulated Amortization | -146 | ' |
Net Carrying Amount | 1,806 | ' |
Backlog | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | 2,370 | ' |
Accumulated Amortization | -1,534 | ' |
Net Carrying Amount | 836 | ' |
Trademarks / Trade Names | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | 10,931 | ' |
Accumulated Amortization | -1,085 | ' |
Net Carrying Amount | $9,846 | ' |
Estimated_Annual_Amortization_
Estimated Annual Amortization Expense (Detail) (USD $) | Sep. 30, 2014 |
In Thousands, unless otherwise specified | |
Estimated Amortization Expense [Line Items] | ' |
2014 | $1,306 |
2015 | 3,088 |
2016 | 2,780 |
2017 | 2,743 |
2018 | 2,600 |
Customer Contracts | ' |
Estimated Amortization Expense [Line Items] | ' |
2014 | 14 |
2015 | 56 |
2016 | 56 |
2017 | 56 |
2018 | 42 |
Customer Relationships | ' |
Estimated Amortization Expense [Line Items] | ' |
2014 | 385 |
2015 | 1,622 |
2016 | 1,622 |
2017 | 1,622 |
2018 | 1,622 |
Favorable Leases | ' |
Estimated Amortization Expense [Line Items] | ' |
2014 | 17 |
2015 | 74 |
2016 | 48 |
2017 | 22 |
2018 | 22 |
Non-compete agreements | ' |
Estimated Amortization Expense [Line Items] | ' |
2014 | 34 |
2015 | 152 |
2016 | 152 |
2017 | 141 |
2018 | 80 |
Patents | ' |
Estimated Amortization Expense [Line Items] | ' |
2014 | 6 |
2015 | 23 |
2016 | 23 |
2017 | 23 |
2018 | 23 |
Product Certification | ' |
Estimated Amortization Expense [Line Items] | ' |
2014 | 2 |
2015 | 4 |
Technology | ' |
Estimated Amortization Expense [Line Items] | ' |
2014 | 103 |
2015 | 190 |
2016 | 190 |
2017 | 190 |
2018 | 122 |
Backlog | ' |
Estimated Amortization Expense [Line Items] | ' |
2014 | 558 |
2015 | 278 |
Trademarks / Trade Names | ' |
Estimated Amortization Expense [Line Items] | ' |
2014 | 187 |
2015 | 689 |
2016 | 689 |
2017 | 689 |
2018 | $689 |
Goodwill_Additional_Informatio
Goodwill - Additional Information (Detail) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Business Acquisition [Line Items] | ' |
Change in goodwill | $430,000 |
Changes_in_Carrying_Amount_of_
Changes in Carrying Amount of Goodwill (Detail) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Apr. 17, 2014 |
Goodwill [Line Items] | ' | ' |
Goodwill, Beginning Balance | $21,498 | $17,800 |
Business acquisition | 17,837 | ' |
Goodwill, Ending Balance | 39,335 | 17,800 |
Goodwill, Gross | 41,731 | ' |
Accumulated impairment losses | -2,396 | ' |
Goodwill | 39,335 | 17,800 |
Lighting Fixtures and Lamps | ' | ' |
Goodwill [Line Items] | ' | ' |
Goodwill, Beginning Balance | 21,498 | ' |
Business acquisition | 17,837 | ' |
Transfer of Relume's Media business | -1,463 | ' |
Goodwill, Ending Balance | 37,872 | ' |
Goodwill, Gross | 39,861 | ' |
Accumulated impairment losses | -1,989 | ' |
Goodwill | 37,872 | ' |
Lighting Signage and Media | ' | ' |
Goodwill [Line Items] | ' | ' |
Transfer of Relume's Media business | 1,463 | ' |
Goodwill, Ending Balance | 1,463 | ' |
Goodwill, Gross | 1,870 | ' |
Accumulated impairment losses | -407 | ' |
Goodwill | $1,463 | ' |
Preferred_Stock_Additional_Inf
Preferred Stock - Additional Information (Detail) (USD $) | 0 Months Ended | 9 Months Ended | 12 Months Ended |
Jun. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | |
Preferred Stock [Line Items] | ' | ' | ' |
Preferred stock authorized to issue | ' | 5,000,000 | ' |
Accrual of dividends on convertible preferred stock | ' | $1,449,000 | ' |
Series C Convertible Preferred Stock | ' | ' | ' |
Preferred Stock [Line Items] | ' | ' | ' |
Preferred stock authorized to issue | ' | 25,000 | 25,000 |
Preferred stock, cumulative dividends rate | ' | 10.00% | ' |
Preferred stock, stated value for cumulative dividends | ' | $1,000 | ' |
Preferred stock, dividends accrued | ' | 758,000 | 1,014,000 |
Series E Convertible Preferred Stock | ' | ' | ' |
Preferred Stock [Line Items] | ' | ' | ' |
Preferred stock, cumulative dividends rate | ' | 5.00% | ' |
Accrual of dividends on convertible preferred stock | ' | 190,000 | 218,000 |
Series F Convertible Preferred Stock | ' | ' | ' |
Preferred Stock [Line Items] | ' | ' | ' |
Preferred stock, cumulative dividends rate | ' | 7.00% | ' |
Accrual of dividends on convertible preferred stock | ' | 175,000 | 129,000 |
Exchange agreement, shares received | 5,000 | ' | ' |
Series G Redeemable Convertible Preferred Stock | ' | ' | ' |
Preferred Stock [Line Items] | ' | ' | ' |
Preferred stock, cumulative dividends rate | ' | 9.00% | ' |
Accrual of dividends on convertible preferred stock | ' | 326,000 | 0 |
Convertible redeemable preferred stock, shares authorized | ' | 18,000 | ' |
Convertible redeemable preferred stock, par value | ' | $0.00 | ' |
Convertible stock, Conversion of preferred stock | 5,404 | ' | ' |
Conversion price | ' | $2.30 | ' |
Temporary equity liquidation preference per share | ' | $1,000 | ' |
Redemption price added to liquidation Preference per share | ' | 900,000 | ' |
Market value of preferred stock exchanged | ' | 18,400,000 | ' |
Charge recorded in additional paid capital for difference between fair value and stated value | ' | 400,000 | ' |
Series G Redeemable Convertible Preferred Stock | Dated April 17, 2014 | ' | ' | ' |
Preferred Stock [Line Items] | ' | ' | ' |
Debt exchanged with stock, shares | 10,956,000 | ' | ' |
Debt exchanged with stock, amount | 10,956 | ' | ' |
Series G Redeemable Convertible Preferred Stock | Dated February 25, 2014 | ' | ' | ' |
Preferred Stock [Line Items] | ' | ' | ' |
Debt exchanged with stock, shares | 1,640 | ' | ' |
Debt exchanged with stock, amount | 1,640,085 | ' | ' |
StockBased_Compensation_Additi
Stock-Based Compensation - Additional Information (Detail) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||
Apr. 22, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 18, 2003 | Sep. 30, 2014 | Dec. 31, 2010 | 12-May-14 | Sep. 30, 2014 | Sep. 30, 2014 | Apr. 21, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Apr. 21, 2014 | |
Employees | Employees | Employees | Employees | Two Thousand Three Plan | Two Thousand Three Plan | Two Thousand Three Plan | Amended Two Thousand Three Plan | 2013 Stock Incentive Plan | 2013 Stock Incentive Plan | Employee Restricted Stock Plan | Restricted Stock | Restricted Stock | Restricted Stock | Restricted Stock | |||||||
Maximum | |||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock reserved for future issuance | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 450,000 | ' | 1,160,000 | ' | 3,000,000 | ' | ' | ' | ' | 300,000 |
Shares of common stock vested and exercisable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 399,020 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares of common stock unvested | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 52,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of option price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock option period | '10 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '10 years | ' | ' | '10 years | ' | ' | ' | ' | ' |
Common stock vesting period | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | ' | ' | ' | '3 years | ' | '3 years | ' | ' | ' |
Additional common stock reserved for future issuance | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | ' | ' | ' | ' | ' | ' |
Number of options granted | 52,500 | 0 | ' | 52,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of options exercised | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Intrinsic value of outstanding exercisable options | ' | $0 | ' | $0 | ' | $98,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | ' | ' | ' |
Common stock reserved for future issuance | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 848,000 | 1,257,500 | ' |
Restricted shares forfeited under stock incentive plan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50,000 | 26,000 | ' |
Weighted average grant date fair value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1.94 | ' |
Shares available for issuance under stock incentive plan | ' | 636,453 | ' | 636,453 | ' | 680,953 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 970,500 | ' | ' |
Unrecognized compensation expense for restricted stock | ' | 2,250,000 | ' | 2,250,000 | ' | 1,019,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock-based compensation | ' | $227,000 | $53,000 | $588,000 | $754,000 | ' | $263,000 | $53,000 | $613,000 | $754,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Summary_of_Stock_Option_Activi
Summary of Stock Option Activity (Detail) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended |
Apr. 22, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Shares Available for Future Grant, Beginning Balance | ' | ' | 680,953 |
Shares Available for Future Grant, Options granted at market | ' | ' | -52,500 |
Shares Available for Future Grant, Options exercised | ' | ' | 0 |
Shares Available for Future Grant, Options forfeited or expired | ' | ' | 8,000 |
Shares Available for Future Grant, Ending Balance | ' | 636,453 | 636,453 |
Number of Shares Outstanding Under Option, Beginning Balance | ' | ' | 407,020 |
Number of Shares Outstanding Under Option, Options granted at market | 52,500 | 0 | 52,500 |
Number of Shares Outstanding Under Option, Options exercised | ' | 0 | ' |
Number of Shares Outstanding Under Option, Options forfeited or expired | ' | ' | -8,000 |
Number of Shares Outstanding Under Option, Ending Balance | ' | 451,520 | 451,520 |
Weighted Average Exercise Price, Beginning Balance | ' | ' | $4.52 |
Weighted Average Exercise Price , Options granted at market | $3.02 | ' | $2.32 |
Weighted Average Exercise Price, Options exercised | ' | ' | ' |
Weighted Average Exercise Price, Options forfeited or expired | ' | ' | $3.54 |
Weighted Average Exercise Price, Ending Balance | ' | $4.33 | $4.33 |
Related_Party_Transactions_Add
Related Party Transactions - Additional Information (Detail) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | 1 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | |||||||
Aug. 20, 2014 | Apr. 22, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Apr. 21, 2014 | Apr. 21, 2014 | Sep. 30, 2014 | Apr. 30, 2014 | Dec. 31, 2013 | Apr. 09, 2013 | Jun. 30, 2014 | Apr. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | |
Interest Expense | Interest Expense | Restricted Stock | Restricted Stock | Aston Capital Limited Liability Company | Aston Capital Limited Liability Company | Aston Capital Limited Liability Company | Aston Capital Limited Liability Company | RVL One Limited Liability Company | RVL One Limited Liability Company | RVL One Limited Liability Company | RVL One Limited Liability Company | RVL One Limited Liability Company | ||||||||
Issuance of Equity | Agreement | Series G Redeemable Convertible Preferred Stock | ||||||||||||||||||
Restricted Stock | ||||||||||||||||||||
Transactions with Third Party [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument amount | ' | ' | $2,700,000 | ' | $2,700,000 | ' | ' | ' | ' | ' | ' | $3,500,000 | $1,000,000 | ' | ' | ' | $10,800,000 | ' | ' | ' |
Interest rate of debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9.00% | ' | ' | ' | ' | 9.00% | ' | ' | ' |
Debt instrument maturity date | 20-Aug-17 | ' | ' | ' | 1-Apr-16 | ' | ' | ' | ' | ' | ' | 1-Apr-15 | ' | ' | ' | ' | 1-Apr-15 | ' | ' | ' |
Debt instrument converted in to equity | ' | ' | 5,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,600,000 | ' | ' | ' | ' |
Accrued interest | ' | ' | 132,000 | ' | 132,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest Expenses | ' | ' | 192,000 | 24,000 | 651,000 | 24,000 | ' | 76,000 | 132,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of separate investment agreements | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4 | ' | ' |
Proceeds from issuance of convertible preferred stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 26,000,000 | ' | 12,500,000 |
Proceeds from issuance of common stock | ' | ' | ' | ' | ' | 4,948,000 | 5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 192,000 | ' | ' |
Number of common stock shares issued | ' | ' | 83,462,000 | ' | 83,462,000 | ' | 82,095,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 75,000 | ' | ' |
Loans Receivable, Commercial, Trade Financing | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9,900,000 | ' | ' | ' | ' | ' | ' |
Restricted common stock agreed to be issued for services | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 500,000 | ' | ' | ' | ' | ' |
Restricted common stock agreed to be issued for services, vesting period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | ' | ' | ' | ' |
Restricted common stock agreed to be issued for services, vesting date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25-Sep-13 | ' | ' | ' | ' | ' |
Number of shares authorized for grant | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock options vesting period | ' | '3 years | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Monthly payment for underlying lease | ' | ' | ' | ' | 21,355 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Related party transaction costs incurred | ' | ' | $92,637 | $84,591 | $276,692 | $249,262 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $33,000 | ' |
Segment_Reporting_Additional_I
Segment Reporting - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Apr. 17, 2014 | Dec. 31, 2013 |
Segment | Segment | Segment | Segment | |||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' |
Number of reportable segments | 2 | 2 | 2 | 2 | ' | ' |
Goodwill | $39,335 | ' | $39,335 | ' | $17,800 | $21,498 |
Lighting Signage and Media | ' | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' |
Goodwill | $1,463 | ' | $1,463 | ' | ' | ' |
Financial_Information_Relating
Financial Information Relating to Operating Segments (Detail) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Total revenues from external customers | $26,877 | $5,313 | $49,344 | $18,982 | ' |
Segment income (loss) | 371 | -1,543 | -3,593 | -1,968 | ' |
Corporate expenses | -1,116 | -1,513 | -3,799 | -5,297 | ' |
Change in fair value of embedded derivative | ' | ' | ' | -6,990 | ' |
Interest expense | -192 | -24 | -651 | -24 | ' |
Deferred income tax (provision) benefit | -496 | ' | 5,468 | ' | ' |
Other income | 29 | ' | 11 | 746 | ' |
Loss from continuing operations | -1,404 | -3,080 | -2,564 | -13,533 | ' |
Segment depreciation and amortization | 1,742 | 526 | 3,845 | 2,571 | ' |
Corporate depreciation and amortization | 8 | 6 | 13 | 17 | ' |
Total depreciation and amortization | 1,750 | 532 | 3,858 | 2,588 | ' |
Asset | 115,489 | ' | 115,489 | ' | 52,237 |
Reportable Segment | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Asset | 114,750 | ' | 114,750 | ' | 57,513 |
Elimination of intercompany receivables | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Asset | -75 | ' | -75 | ' | -14,231 |
Corporate, Non-Segment | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Asset | 814 | ' | 814 | ' | 8,955 |
Lighting Fixtures and Lamps | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Total revenues from external customers | 25,457 | 4,447 | 45,664 | 16,413 | ' |
Segment income (loss) | 227 | -1,554 | -3,499 | -1,886 | ' |
Segment depreciation and amortization | 1,663 | 470 | 3,608 | 2,400 | ' |
Asset | 109,336 | ' | 109,336 | ' | 50,553 |
Lighting Signage and Media | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Total revenues from external customers | 1,420 | 866 | 3,680 | 2,569 | ' |
Segment income (loss) | 144 | 11 | -94 | -82 | ' |
Segment depreciation and amortization | 79 | 56 | 237 | 171 | ' |
Asset | $5,414 | ' | $5,414 | ' | $6,960 |
Financings_Additional_Informat
Financings - Additional Information (Detail) (USD $) | 0 Months Ended | 9 Months Ended | 1 Months Ended | ||
Aug. 20, 2014 | Sep. 30, 2014 | Aug. 20, 2014 | Oct. 24, 2013 | Dec. 31, 2013 | |
Subsidiary One | Subsidiary One | ||||
Financing Activities and Borrowing Arrangements [Line Items] | ' | ' | ' | ' | ' |
Accounts receivable financing arrangements, maximum available amount for borrowing | ' | ' | ' | $2,000,000 | ' |
Maximum Percentage of borrowing against eligible accounts receivable | ' | ' | ' | 85.00% | ' |
Accounts receivable financing arrangements, interest rate spread on prime rate | ' | 1.75% | ' | ' | ' |
Accounts receivable financing arrangements, maximum interest rate | ' | 5.00% | ' | ' | ' |
Annual fee on the accounts receivable financing arrangements | ' | 1.00% | ' | ' | ' |
Monthly maintenance fee on the accounts receivable financing arrangements | ' | 0.50% | ' | ' | ' |
Borrowings under accounts receivable financing arrangements | ' | ' | ' | ' | 900,000 |
Line of credit facility, maximum borrowing amount | ' | ' | 25,000,000 | ' | ' |
Bank loan payable | ' | $12,893,000 | ' | ' | ' |
Debt instrument agreement period | '3 years | ' | ' | ' | ' |
Debt instrument repayment date | 20-Aug-17 | 1-Apr-16 | ' | ' | ' |