Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 11, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 000-52170 | |
Entity Registrant Name | INNERWORKINGS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-5997364 | |
Entity Address, Address Line One | 203 North LaSalle Street | |
Entity Address, Address Line Two | Suite 1800 | |
Entity Address, City or Town | Chicago | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60601 | |
City Area Code | (312) | |
Local Phone Number | 642-3700 | |
Title of 12(b) Security | Common Stock, $0.0001 par value | |
Trading Symbol | INWK | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 52,132,517 | |
Entity Central Index Key | 0001350381 | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Revenue | $ 286,525 | $ 270,850 | $ 837,816 | $ 827,356 |
Cost of goods sold | 218,356 | 206,808 | 639,385 | 632,376 |
Gross profit | 68,169 | 64,042 | 198,431 | 194,980 |
Operating expenses: | ||||
Selling, general and administrative expenses | 59,938 | 56,142 | 174,404 | 176,312 |
Depreciation and amortization | 3,090 | 3,265 | 8,939 | 10,438 |
Goodwill impairment | 0 | 27,887 | 0 | 27,887 |
Intangible and other asset impairments | 0 | 16,818 | 0 | 16,818 |
Restructuring charges | 3,055 | 3,142 | 10,687 | 3,142 |
Income (loss) from operations | 2,086 | (43,212) | 4,401 | (39,617) |
Other income (expense): | ||||
Interest income | 37 | 19 | 239 | 135 |
Interest expense | (4,376) | (1,769) | (9,608) | (4,854) |
Other expense | (1,736) | (301) | (2,196) | (1,734) |
Total other expense | (6,075) | (2,051) | (11,565) | (6,453) |
Loss before income taxes | (3,989) | (45,263) | (7,164) | (46,070) |
Income tax expense (benefit) | (1,815) | (326) | (1,359) | 851 |
Net loss | $ (2,174) | $ (44,937) | $ (5,805) | $ (46,921) |
Basic and diluted net loss per share (in dollars per share) | $ (0.04) | $ (0.87) | $ (0.11) | $ (0.90) |
Comprehensive loss | $ (3,910) | $ (46,646) | $ (6,541) | $ (50,872) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 38,488 | $ 26,770 |
Accounts receivable, net of allowance for doubtful accounts of $4,247 and $4,880, respectively | 190,992 | 193,253 |
Unbilled revenue | 65,584 | 46,474 |
Inventories | 64,136 | 56,001 |
Prepaid expenses | 13,973 | 16,982 |
Other receivables | 39,317 | 23,727 |
Other current assets | 13,271 | 10,379 |
Total current assets | 425,761 | 373,586 |
Property and equipment, net | 36,714 | 82,933 |
Intangibles and other assets: | ||
Goodwill | 152,191 | 152,158 |
Intangible assets, net | 8,230 | 9,828 |
Right of use assets, net | 51,726 | |
Deferred income taxes | 1,112 | 1,195 |
Other non-current assets | 4,333 | 2,976 |
Total intangibles and other assets | 217,592 | 166,157 |
Total assets | 680,067 | 622,676 |
Current liabilities: | ||
Accounts payable | 169,173 | 158,449 |
Accrued expenses | 44,096 | 35,474 |
Deferred revenue | 18,526 | 17,614 |
Other current liabilities | 32,325 | 26,231 |
Total current liabilities | 274,955 | 380,504 |
Lease liabilities | 47,094 | |
Deferred income taxes | 8,257 | 8,178 |
Other non-current liabilities | 2,486 | 50,903 |
Total liabilities | 499,612 | 439,585 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock, par value $0.0001 per share, 200,000 shares authorized, 64,802, and 64,495 shares issued, and 52,114 and 51,807 shares outstanding, respectively | 6 | 6 |
Additional paid-in capital | 243,706 | 239,960 |
Treasury stock at cost, 12,688 and 12,688 shares, respectively | (81,471) | (81,471) |
Accumulated other comprehensive loss | (25,045) | (24,309) |
Retained earnings | 43,259 | 48,905 |
Total stockholders' equity | 180,455 | 183,091 |
Total liabilities and stockholders' equity | 680,067 | 622,676 |
Term loan facility | ||
Current liabilities: | ||
Less: Current portion of ABL Credit Facility for UK Borrowings | 6,250 | |
Line of credit, non-current | 89,991 | |
ABL Credit Agreement | Revolving credit facility | ||
Current liabilities: | ||
Less: Current portion of ABL Credit Facility for UK Borrowings | 4,585 | 142,736 |
Line of credit, non-current | 76,829 | 0 |
Term Loan Credit Agreement | Term loan facility | ||
Current liabilities: | ||
Less: Current portion of ABL Credit Facility for UK Borrowings | 6,250 | 0 |
Line of credit, non-current | $ 89,991 | $ 0 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 4,247 | $ 4,880 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 64,802,000 | 64,495,000 |
Common stock, shares outstanding (in shares) | 52,114,000 | 51,807,000 |
Treasury stock at cost (in shares) | 12,688,000 | 12,688,000 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Treasury Stock | Additional Paid-in-Capital | Accumulated Other Comprehensive Loss | Retained Earnings |
Beginning balance (in shares) at Dec. 31, 2017 | 64,075,000 | 10,020,000 | ||||
Beginning balance at Dec. 31, 2017 | $ 284,545 | $ 6 | $ (55,873) | $ 235,199 | $ (19,229) | $ 124,442 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (46,921) | (46,921) | ||||
Total other comprehensive income - foreign currency translation adjustments | (3,951) | (3,951) | ||||
Comprehensive loss | (50,872) | |||||
Issuance of common stock upon exercise of stock awards, net of withheld shares (in shares) | 359,000 | |||||
Issuance of common stock upon exercise of stock awards, net of withheld shares | $ (438) | (438) | ||||
Acquisition of treasury shares (in shares) | 2,667,732 | 2,668,000 | ||||
Acquisition of treasury shares | $ (25,598) | $ (25,598) | ||||
Stock-based compensation expense | 3,624 | 3,624 | ||||
Ending balance (in shares) at Sep. 30, 2018 | 64,434,000 | 12,688,000 | ||||
Ending balance at Sep. 30, 2018 | 211,896 | $ 6 | $ (81,471) | 238,385 | (23,180) | 78,156 |
Beginning balance (in shares) at Jun. 30, 2018 | 64,372,000 | 12,688,000 | ||||
Beginning balance at Jun. 30, 2018 | 257,791 | $ 6 | $ (81,471) | 237,634 | (21,472) | 123,094 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (44,937) | (44,937) | ||||
Total other comprehensive income - foreign currency translation adjustments | (1,708) | (1,708) | ||||
Comprehensive loss | (46,646) | |||||
Issuance of common stock upon exercise of stock awards, net of withheld shares (in shares) | 62,000 | |||||
Issuance of common stock upon exercise of stock awards, net of withheld shares | (50) | (50) | ||||
Stock-based compensation expense | 801 | 801 | ||||
Ending balance (in shares) at Sep. 30, 2018 | 64,434,000 | 12,688,000 | ||||
Ending balance at Sep. 30, 2018 | 211,896 | $ 6 | $ (81,471) | 238,385 | (23,180) | 78,156 |
Beginning balance (in shares) at Dec. 31, 2018 | 64,495,000 | 12,688,000 | ||||
Beginning balance at Dec. 31, 2018 | 183,091 | $ 6 | $ (81,471) | 239,960 | (24,309) | 48,905 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (5,805) | (5,805) | ||||
Total other comprehensive income - foreign currency translation adjustments | (736) | (736) | ||||
Comprehensive loss | (6,541) | |||||
Issuance of common stock upon exercise of stock awards, net of withheld shares (in shares) | 307,000 | |||||
Issuance of common stock upon exercise of stock awards, net of withheld shares | (179) | (179) | ||||
Stock-based compensation expense | 3,925 | 3,925 | ||||
Ending balance (in shares) at Sep. 30, 2019 | 64,802,000 | 12,688,000 | ||||
Ending balance at Sep. 30, 2019 | 180,455 | $ 6 | $ (81,471) | 243,706 | (25,045) | 43,259 |
Beginning balance (in shares) at Jun. 30, 2019 | 64,629,000 | 12,688,000 | ||||
Beginning balance at Jun. 30, 2019 | 182,669 | $ 6 | $ (81,471) | 242,010 | (23,309) | 45,433 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (2,174) | |||||
Total other comprehensive income - foreign currency translation adjustments | (1,736) | (1,736) | ||||
Comprehensive loss | (3,910) | |||||
Issuance of common stock upon exercise of stock awards, net of withheld shares (in shares) | 173,000 | |||||
Issuance of common stock upon exercise of stock awards, net of withheld shares | (88) | (88) | ||||
Stock-based compensation expense | 1,784 | 1,784 | ||||
Ending balance (in shares) at Sep. 30, 2019 | 64,802,000 | 12,688,000 | ||||
Ending balance at Sep. 30, 2019 | $ 180,455 | $ 6 | $ (81,471) | $ 243,706 | $ (25,045) | $ 43,259 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Cash flows from operating activities | |||||
Net loss | $ (2,174) | $ (44,937) | $ (5,805) | $ (46,921) | |
Adjustments to reconcile net loss to net cash from operating activities: | |||||
Depreciation and amortization | 3,090 | 3,265 | 8,939 | 10,438 | |
Stock-based compensation expense | 4,219 | 3,624 | |||
Bad debt provision | 1,447 | 888 | |||
Implementation cost amortization | 250 | 344 | |||
Goodwill impairment | 0 | 27,887 | 0 | 27,887 | |
Intangible and long-lived asset impairment | 0 | 16,818 | 0 | 16,818 | |
Change in fair value of warrant | 950 | 0 | |||
Change in fair value of embedded derivative | (97) | 0 | |||
Unrealized foreign exchange loss | 986 | 0 | |||
Other operating activities | 705 | (189) | |||
Change in assets: | |||||
Accounts receivable and unbilled revenue | (21,245) | 5,810 | |||
Inventories | (8,767) | (16,469) | |||
Prepaid expenses and other assets | (29,141) | (7,903) | |||
Change in liabilities: | |||||
Accounts payable | 12,403 | 20,350 | |||
Accrued expenses and other liabilities | 25,378 | (4,572) | |||
Net cash (used in) provided by operating activities | (9,778) | 10,105 | |||
Cash flows from investing activities | |||||
Purchases of property and equipment | (10,012) | (7,835) | |||
Payments for acquisition, net of cash acquired | (390) | 0 | |||
Net cash used in investing activities | (10,402) | (7,835) | |||
Cash flows from financing activities | |||||
Short-term secured repayments | (833) | ||||
Short-term secured borrowings | 55 | ||||
Repurchases of common stock | 0 | (25,689) | |||
Proceeds from exercise of stock options | 63 | 416 | |||
Payment of debt issuance costs | (5,488) | (545) | |||
Other financing activities | (242) | (746) | |||
Net cash provided by (used in) financing activities | 31,139 | (3,279) | |||
Effect of exchange rate changes on cash and cash equivalents | 759 | (1,958) | |||
Increase (decrease) in cash and cash equivalents | 11,718 | (2,967) | |||
Cash and cash equivalents, beginning of period | 26,770 | 30,562 | $ 30,562 | ||
Cash and cash equivalents, end of period | $ 38,488 | $ 27,595 | 38,488 | 27,595 | $ 26,770 |
Revolving credit facility | Credit Agreement | |||||
Cash flows from financing activities | |||||
Repayments on credit facility | (142,583) | ||||
Proceeds from credit facility | 23,230 | ||||
Revolving credit facility | ABL Credit Agreement | |||||
Adjustments to reconcile net loss to net cash from operating activities: | |||||
Change in fair value of embedded derivative | 58 | ||||
Cash flows from financing activities | |||||
Proceeds from credit facility | 81,472 | 0 | |||
Term loan facility | Term Loan Credit Agreement | |||||
Adjustments to reconcile net loss to net cash from operating activities: | |||||
Change in fair value of embedded derivative | 39 | ||||
Cash flows from financing activities | |||||
Repayments on credit facility | (1,250) | 0 | |||
Proceeds from credit facility | $ 100,000 | $ 0 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Basis of Presentation of Interim Financial Statements The accompanying unaudited condensed consolidated financial statements of InnerWorkings, Inc. and subsidiaries (the “Company”) included herein have been prepared to conform to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and generally accepted accounting principles in the United States (“GAAP”) for interim financial information. Footnote disclosures that would substantially duplicate the disclosures included in the December 31, 2018 audited financial statements have been omitted from these interim unaudited financial statements pursuant to such rules and regulations. In the opinion of management, all adjustments considered necessary for a fair presentation of the accompanying unaudited financial statements have been included, and all adjustments are of a normal and recurring nature. The operating results for the three and nine month periods ended September 30, 2019 are not necessarily indicative of the results to be expected for the full year ending December 31, 2019 . These condensed consolidated interim financial statements and notes should be read in conjunction with the Company’s Consolidated Financial Statements and Notes thereto as of and for the year ended December 31, 2018 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 19, 2019 . Argentinian Highly Inflationary Accounting In the second quarter of 2018 , the Argentinian economy was classified as highly inflationary under GAAP due to multiple years of increasing inflation, the devaluation of the Argentine peso ("ARS") and increasing borrowing rates. Effective July 1, 2018 , the Company's Argentinian subsidiary is being accounted for under highly inflationary accounting rules, which principally means all transactions are recorded in U.S. dollars. The Company uses the official ARS exchange rate to translate the results of its Argentinian operations into U.S. dollars. As of September 30, 2019 , the Company had a balance of net monetary assets denominated in ARS of approximately 58.3 million ARS, and the exchange rate was approximately 57.5 ARS per U.S. dollar. During the three and nine months ended September 30, 2019 , the Company recorded a nominal amount and $0.1 million , respectively, of favorable currency impacts within other expense. For the three and nine months ended September 30, 2019 , the Company's Argentinian operations generated revenue of $0.5 million and $2.2 million and gross margin of $0.1 million and $0.2 million , respectively. During the three and nine months ended September 30, 2018 , the Company recorded $0.1 million of unfavorable currency impacts within other expense. For the three and nine months ended September 30, 2018 , the Company's Argentinian operations generated revenue of $0.6 million and $3.3 million and gross margin of $0.1 million and $0.4 million , respectively. Fair Value Measurements ASC 820, Fair Value Measurement , includes a fair value hierarchy that is intended to increase consistency and comparability in fair value measurements and related disclosures. The fair value hierarchy is based on observable or unobservable inputs to valuation techniques that are used to measure fair value. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing based upon its own market assumptions. The fair value hierarchy consists of the following three levels: • Level 1: Inputs are quoted prices in active markets for identical assets or liabilities. • Level 2: Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted prices that are observable and market-corroborated inputs, which are derived principally from or corroborated by observable market data. • Level 3: Inputs that are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable. The fair value of revolving credit facilities and long-term debt facilities are determined using current market yields. Fair value accounting requires bifurcation of embedded derivative instruments such as interest rate reset features in debt instruments, and measurement of their fair value for accounting purposes. In determining the appropriate fair value for embedded derivatives, the Company uses a 'with and without' valuation model. Additionally, fair value accounting requires liability-classified awards, such as warrant liabilities, to be measured at fair value for accounting purposes. The fair value of freestanding derivative instruments, such as warrant liabilities, are valued using the Black-Scholes-Merton option pricing model. Once determined, derivative liabilities and warrant liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded within other expense as an adjustment to fair value of derivatives. Deferred Financing Fees and Debt Discounts Deferred financing fees represent third-party debt issuance costs associated with the related debt facility. Deferred financing fees and related derivative and warrant features associated with the Company’s long-term debt agreement are treated as a discount on the long-term debt and amortized using the effective interest rate method. Derivative features associated with the Company’s revolving credit agreement are treated as a discount on the revolving credit facility and amortized using the straight-line method. Deferred financing fees related to the Company's revolving credit facility are capitalized and reflected as deferred financing costs within other non-current assets and are amortized over the term of the revolving credit facility. Debt discounts on the Company’s revolving credit facility and long-term debt are reflected as a direct deduction from the carrying amount of the long-term portion of the related debt liability. Recent Accounting Pronouncements Recently Adopted Accounting Standards In February 2016 , the FASB issued ASU No. 2016-02, Leases (Topic 842). This pronouncement requires lessees to recognize a liability for lease obligations, which represents the discounted obligation to make future lease payments, and a corresponding right-of-use asset on the balance sheet. The Company adopted ASU 2016-02, along with related clarifications and improvements, as of January 1, 2019 , using the modified retrospective approach, which allows the Company to apply ASC 840, Leases , in the comparative periods presented in the year of adoption. The cumulative effect of adoption was recorded as an adjustment to the opening balance of retained earnings in the period of adoption. The Company elected to use the package of practical expedients, which permitted the Company to not reassess: (i) whether a contract is or contains a lease, (ii) lease classification, and (iii) initial direct costs resulting from the lease. The Company has not elected the hindsight practical expedient, which permits the use of hindsight when determining lease term and impairment of operating lease assets. The Company elected to apply the short-term lease exception, which allows the Company to keep leases with terms of 12 months or less off the balance sheet. The Company also elected to combine lease and non-lease components as a single component for the Company's entire population of lease assets. Adoption of the new standard resulted in the recording of net lease assets and lease liabilities of approximately $39.4 million and $41.5 million , respectively, as of January 1, 2019 . The $2.1 million difference in the lease liabilities and net lease assets represents the net ASC 840 lease liabilities at the effective date that were netted against the initial right-of-use-asset, which included: straight-line rent, prepaid rent, and lease incentives. The $0.2 million transition adjustment to retained earnings was comprised of $1.0 million of build-to-suit financing lease assets that were derecognized and recorded as operating leases in transition and $0.5 million of initial impairment to right-of-use-assets, which were partially offset by the related deferred tax effect of $0.3 million . Adoption of ASU 2016-02 did not materially impact the Company's consolidated net earnings or cash flows and did not have a notable impact on the Company's liquidity or debt-covenant compliance under the Company's current agreements. In the first quarter of 2019, the FASB issued ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income , which amends ASC 220, Income Statement - Reporting Comprehensive Income . This ASU allows a reclassification from accumulated OCI to retained earnings for stranded tax effects resulting from tax reform. This update is effective for fiscal years beginning after December 15, 2018, including interim periods therein, and early adoption is permitted. An election was not made to reclassify the income tax effects of the Tax Cuts and Jobs Act (“Tax Reform Act”) from accumulated other comprehensive income to retained earnings. The adoption of this ASU did not have a material impact on the Company's consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which requires entities to measure the impairment of certain financial instruments, including trade receivables, based on expected losses rather than incurred losses. The guidance introduces a new credit reserving methodology known as the Current Expected Credit Loss (CECL) methodology, which will alter the estimation process, inputs, and assumptions used in estimating credit losses. The effective date is for fiscal years beginning after December 15, 2019, with early adoption permitted for financial statement periods beginning after December 15, 2018. The CECL methodology requires measurement of expected credit losses for the estimated life of the financial instrument, not only based on historical experience and current conditions, but also by including reasonable and supportable forecasts incorporating forward-looking information. At the date of adoption, the change in reserves will be recorded in retained earnings as a cumulative-effect adjustment. The Company is continuing its implementation efforts and has substantially completed scoping activities. The Company is in process of developing CECL models for each pool of financial assets based on risk characteristics of each pool. Model creation, model validation, and parallel runs will continue through the remainder of 2019. In addition, the Company continues to develop the business processes, policies, and controls that satisfy the requirements of the new guidance. The actual impact at adoption will depend on the outstanding balances, characteristics of the Company’s receivable portfolios, macroeconomic conditions, and forecasted information at the date of adoption; however, the Company does not expect ASU 2016-13 to have a significant impact to the consolidated financial statements and related disclosures. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Nature of Goods and Services The Company primarily generates revenue from the procurement of marketing materials for customers. Service revenue, including creative, design, installation, warehousing and other services, has not been material to the Company’s overall revenue to date. Products and services may be sold separately or in bundled packages. For bundled packages, the Company accounts for individual products and services separately if they are distinct - that is, if a product or service is separately identifiable from other items in the bundled package and if a customer can benefit from it on its own or with other resources that are readily available to the customer. The Company includes any fixed charges per its contracts as part of the total transaction price. The transaction price is allocated between separate products and services in a bundle based on their standalone selling prices. The standalone selling prices are generally determined based on the prices at which the Company separately sells the products and services. Contracts may include variable consideration (for example, customer incentives such as rebates), and to the extent that variable consideration is not constrained, the Company includes the expected amount within the total transaction price and updates its assumptions over the duration of the contract. The constraint will generally not result in a reduction in the estimated transaction price. The Company’s performance obligations related to the procurement of marketing materials are typically satisfied upon shipment or delivery of its products to customers. Payment is typically due from the customer at this time or shortly thereafter. Unbilled revenue represents shipments or deliveries that have been made to customers for which the related account receivable has not yet been invoiced. The Company does not have material future performance obligations that extend beyond one year. Some service revenue may be recognized over time, but the difference between recognizing that revenue over time versus at a point in time when the service is completed and accepted by the customer is not material to the Company’s overall revenue to date. Costs to Fulfill Customer Contracts and Contract Liabilities The Company capitalizes certain setup costs related to new customers as fulfillment costs. Capitalized contract costs are amortized over the expected period of benefit using the straight-line method which is generally three years. For the three and nine months ended September 30, 2019 , the amount of amortization was $0.04 million and $0.25 million , respectively, and there was no impairment loss in relation to the capitalized costs in either period presented. Contract liabilities are referred to as deferred revenue in the condensed consolidated financial statements. We record deferred revenue when cash payments are received in advance of satisfying our performance obligations, and we recognize revenue as these obligations are satisfied. The following is a summary of the Company's costs to fulfill and contract liabilities as of September 30, 2019 and December 31, 2018 (in thousands): September 30, 2019 December 31, 2018 Costs to fulfill $ 1,272 $ 1,152 Contract liabilities 18,526 17,614 Cash received 7,622 11,387 Revenue recognized $ 6,710 $ 11,850 Costs to Obtain a Customer Contract The Company incurs certain incremental costs to obtain a contract that the Company expects to recover. The Company applies a practical expedient and recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. No incremental costs to obtain a contract incurred by the Company during the nine months ended September 30, 2019 and 2018 were required to be capitalized. These costs would primarily relate to commissions paid to our account executives and are included in selling, general and administrative expenses. Transaction Price Allocated to Remaining Performance Obligations ASC 606 requires that the Company disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied as of September 30, 2019 . The Company does not have material future performance obligations that extend beyond one year. Accordingly, the Company has applied the optional exemption for contracts that have an original expected duration of one year or less. The nature of the remaining performance obligations as well as the nature of the variability and how it will be resolved is described above. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | Leases The Company leases office space, warehouses, automobiles, and equipment. The Company determines whether a contract is or contains a lease at the inception of the contract. A contract will be deemed to be or contain a lease if the contract conveys the right to control and direct the use of identified office space, warehouse or equipment for a period of time in exchange for consideration. The Company generally must also have the right to obtain substantially all the economic benefits from the use of the office space, warehouse and equipment. The leases are recorded as right-of-use ("ROU") assets and lease liabilities for leases with terms greater than 12 months. The Company’s leases generally have terms of 1 - 10 years , with certain leases including renewal options to extend the leases for additional periods at the Company’s discretion. Generally, the lease term is the minimum of the noncancelable period of the lease, as the Company is not reasonably certain to exercise renewal options. Operating lease expense is recognized on a straight-line basis over the lease term, while variable lease payments are expensed as incurred. Tenant allowances used to fund leasehold improvements are recognized when earned and reduce the right-of-use asset related to the lease. These are amortized through the right-of-use asset as reductions of expense over the lease term. Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease assets represent the right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present value of lease payments not yet paid, the Company estimates incremental secured borrowing rates corresponding to the maturities of the leases. The Company estimates this rate based on prevailing financial market conditions as rates are not implicitly stated in most leases. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Leased assets are presented net of accumulated amortization. Variable lease payment amounts that cannot be determined at the commencement of the lease, such as increases in lease payments based on changes in index rates or usage, are not included in the ROU assets or liabilities; instead, these are expensed as incurred and recorded as variable lease expense. Supplemental balance sheet information related to leases was as follows (in thousands): September 30, 2019 Operating leases Right of use assets: Right of use assets $ 51,425 Finance leases Right of use assets: Right of use assets, cost $ 579 Less: Accumulated amortization (278 ) Right of use assets, net $ 301 Total right of use assets, net $ 51,726 Lease liabilities Current Operating $ 8,485 Finance 114 Non-current Operating $ 46,865 Finance 229 Total lease liabilities $ 55,693 The components of lease cost were as follows (in thousands): September 30, 2019 Operating lease cost $ 7,649 Variable lease cost 866 Short-term lease cost 1,530 Finance lease cost: Amortization of right of use assets 57 Interest on lease liabilities 16 Total finance lease cost $ 73 Less: Sublease income (132 ) Total lease cost $ 9,986 Average lease terms and discount rates were as follows: September 30, 2019 Weighted-average remaining lease term (years) Operating leases 6.96 Finance leases 2.92 Weighted-average discount rate Operating leases 6.59 % Finance leases 7.77 % Supplemental cash flow information related to leases was as follows (in thousands): September 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 82 Operating cash flows from operating leases 5,828 Total $ 5,910 The aggregate future lease payments for operating and finance leases as of September 30, 2019 are as follows (in thousands): Operating Finance Remaining 2019 $ 2,638 $ 33 2020 11,089 133 2021 11,873 134 2022 10,292 71 2023 7,804 10 Thereafter 27,210 — Total lease payments $ 70,906 $ 381 Less: Interest (15,556 ) (38 ) Present value of lease liabilities $ 55,350 $ 343 The aggregate future lease payments for operating and capital leases as of December 31, 2018 were as follows (in thousands): Operating 2019 $ 6,383 2020 5,017 2021 4,422 2022 3,245 2023 2,068 Thereafter 1,966 Total lease payments $ 23,101 |
Leases | Leases The Company leases office space, warehouses, automobiles, and equipment. The Company determines whether a contract is or contains a lease at the inception of the contract. A contract will be deemed to be or contain a lease if the contract conveys the right to control and direct the use of identified office space, warehouse or equipment for a period of time in exchange for consideration. The Company generally must also have the right to obtain substantially all the economic benefits from the use of the office space, warehouse and equipment. The leases are recorded as right-of-use ("ROU") assets and lease liabilities for leases with terms greater than 12 months. The Company’s leases generally have terms of 1 - 10 years , with certain leases including renewal options to extend the leases for additional periods at the Company’s discretion. Generally, the lease term is the minimum of the noncancelable period of the lease, as the Company is not reasonably certain to exercise renewal options. Operating lease expense is recognized on a straight-line basis over the lease term, while variable lease payments are expensed as incurred. Tenant allowances used to fund leasehold improvements are recognized when earned and reduce the right-of-use asset related to the lease. These are amortized through the right-of-use asset as reductions of expense over the lease term. Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease assets represent the right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present value of lease payments not yet paid, the Company estimates incremental secured borrowing rates corresponding to the maturities of the leases. The Company estimates this rate based on prevailing financial market conditions as rates are not implicitly stated in most leases. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Leased assets are presented net of accumulated amortization. Variable lease payment amounts that cannot be determined at the commencement of the lease, such as increases in lease payments based on changes in index rates or usage, are not included in the ROU assets or liabilities; instead, these are expensed as incurred and recorded as variable lease expense. Supplemental balance sheet information related to leases was as follows (in thousands): September 30, 2019 Operating leases Right of use assets: Right of use assets $ 51,425 Finance leases Right of use assets: Right of use assets, cost $ 579 Less: Accumulated amortization (278 ) Right of use assets, net $ 301 Total right of use assets, net $ 51,726 Lease liabilities Current Operating $ 8,485 Finance 114 Non-current Operating $ 46,865 Finance 229 Total lease liabilities $ 55,693 The components of lease cost were as follows (in thousands): September 30, 2019 Operating lease cost $ 7,649 Variable lease cost 866 Short-term lease cost 1,530 Finance lease cost: Amortization of right of use assets 57 Interest on lease liabilities 16 Total finance lease cost $ 73 Less: Sublease income (132 ) Total lease cost $ 9,986 Average lease terms and discount rates were as follows: September 30, 2019 Weighted-average remaining lease term (years) Operating leases 6.96 Finance leases 2.92 Weighted-average discount rate Operating leases 6.59 % Finance leases 7.77 % Supplemental cash flow information related to leases was as follows (in thousands): September 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 82 Operating cash flows from operating leases 5,828 Total $ 5,910 The aggregate future lease payments for operating and finance leases as of September 30, 2019 are as follows (in thousands): Operating Finance Remaining 2019 $ 2,638 $ 33 2020 11,089 133 2021 11,873 134 2022 10,292 71 2023 7,804 10 Thereafter 27,210 — Total lease payments $ 70,906 $ 381 Less: Interest (15,556 ) (38 ) Present value of lease liabilities $ 55,350 $ 343 The aggregate future lease payments for operating and capital leases as of December 31, 2018 were as follows (in thousands): Operating 2019 $ 6,383 2020 5,017 2021 4,422 2022 3,245 2023 2,068 Thereafter 1,966 Total lease payments $ 23,101 |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The following is a summary of the goodwill balance for each reportable segment as of September 30, 2019 (in thousands): North America EMEA LATAM Total Goodwill as of December 31, 2018 $ 152,158 $ — $ — $ 152,158 Foreign exchange impact 33 — — 33 Goodwill as of September 30, 2019 $ 152,191 $ — $ — $ 152,191 Goodwill represents the excess of purchase price and related costs over the value assigned to the net tangible and identifiable intangible assets of businesses acquired. In accordance with ASC 350, Intangibles – Goodwill and Other , goodwill is not amortized, but instead is tested for impairment annually, or more frequently if circumstances indicate a possible impairment may exist. Absent any interim indicators of impairment, the Company tests for goodwill impairment as of the first day of the fourth fiscal quarter of each year. The fair value estimates used in the goodwill impairment analysis require significant judgment. The fair value estimates were based on assumptions management believes to be reasonable, but that are inherently uncertain, including estimates of future revenue and operating margins and assumptions about the overall economic climate and the competitive environment for the business. The fair value determination of the North America reporting unit primarily relies on management judgments around timing of generating revenue from recent new customer wins as well as timing of benefits expected to be received from the significant restructuring actions currently underway (see Note 6 , Restructuring Activities ). If assumptions surrounding either of these factors change, then a future impairment charge may occur. The goodwill impairment charge recorded to the North America reporting unit, as outlined below, represents a partial impairment of the North America segment goodwill, which resulted in “at risk” goodwill under ASC 350, Intangibles – Goodwill and Oth e r . The Company's policy is to include enhanced disclosures should the fair value of the North America segment exceed the carrying value by less than 30 percent at the date of the most recent step one test and the Company fails to meet projections used by management in determining the fair value of the reporting unit or market indicators exist which could lead management to believe the reporting unit may be impaired. The Company considered indicators for impairment and did not identify any that would have triggered additional impairment testing and analysis as of September 30, 2019 . 2018 Goodwill Impairment Charges During the quarter ended September 30, 2018 , the Company changed its segments and re-evaluated its reporting units. This change required an interim impairment assessment of goodwill. The Company determined an enterprise value for its North America, EMEA and LATAM reporting units that considered both discounted cash flow and guideline public company methods. The Company further compared the enterprise value of each reporting unit to its respective carrying value. The enterprise value for North America exceeded its carrying value, which indicated that there was no impairment, whereas enterprise values for the EMEA and LATAM reporting units were less than their respective carrying values, and as a result the Company recognized $20.8 million and $7.1 million goodwill impairment charges, respectively. As of December 31, 2018 , the Company performed an interim impairment assessment due to a triggering event caused by a sustained decrease in the Company's stock price. The Company determined an enterprise value for its North America reporting unit that considered both the discounted cash flow and guideline public company methods. The Company further compared the enterprise value of the reporting unit to its carrying value. The enterprise value for the North America reporting unit was less than its carrying value and resulted in a $18.4 million non-cash goodwill impairment charge. No tax benefit was recognized on such charge, and this charge had no impact on the Company's cash flows or compliance with debt covenants. Prior to this 2018 activity, the Company previously recorded gross and accumulated impairment losses of $75.4 million |
Other Intangibles and Long-Live
Other Intangibles and Long-Lived Assets | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Other Intangibles and Long-Lived Assets | Other Intangibles and Long-Lived Assets The following is a summary of the Company’s intangible assets as of September 30, 2019 and December 31, 2018 (in thousands): September 30, 2019 December 31, 2018 Weighted Average Life Customer lists $ 73,101 $ 73,792 14.4 Non-competition agreements 942 950 4.1 Trade names 2,510 2,510 13.3 Patents 57 57 9.0 Intangible assets 76,610 77,309 Less: accumulated amortization (68,380 ) (67,481 ) Intangible assets, net $ 8,230 $ 9,828 In accordance with ASC 350, Intangibles - Goodwill and Other , the Company amortizes its intangible assets with finite lives over their respective estimated useful lives and reviews for impairment whenever impairment indicators exist. Impairment indicators could include significant under-performance relative to the historical or projected future operating results, significant changes in the manner of use of assets, significant negative industry or economic trends or significant changes in the Company’s market capitalization relative to net book value. Any changes in key assumptions used by the Company, including those set forth above, could result in an impairment charge and such a charge could have a material adverse effect on the Company’s condensed consolidated statements of comprehensive loss. The Company’s intangible assets consist of customer lists, non-competition agreements, trade names, and patents. The Company’s customer lists, which have an estimated weighted-average useful life of approximately fourteen years , are being amortized using the economic life method. The Company’s non-competition agreements, trade names and patents are being amortized on a straight-line basis over their estimated weighted-average useful lives of approximately four years , thirteen years , and nine years , respectively. Amortization expense related to these intangible assets was $0.6 million and $0.9 million for the three months ended September 30, 2019 and 2018 , respectively, and $1.6 million and $3.2 million for the nine months ended September 30, 2019 and 2018 , respectively. The Company's customer lists had accumulated amortization and impairment of $65.3 million and $64.5 million as of September 30, 2019 and December 31, 2018 , respectively. The Company's non-competition agreements and patents were fully amortized or impaired as of September 30, 2019 and December 31, 2018 . As of September 30, 2019 , estimated amortization expense for the remainder of 2019 and each of the next five years and thereafter is as follows (in thousands): Remainder of 2019 $ 533 2020 2,021 2021 1,783 2022 1,407 2023 962 2024 745 Thereafter 779 $ 8,230 2018 Intangible and Long-Lived Asset Impairment In the third quarter of 2018 , the Company changed its reporting units as part of a segment change, which required an interim impairment assessment. The Company's intangible and long-lived assets associated with the reporting units assessed were also reviewed for impairment. It was determined that the fair value of intangible assets in EMEA and LATAM was less than the recorded book value of certain customer lists. Additionally, it was determined that the fair value of capitalized costs related to a legacy ERP system in EMEA was less than the recorded book value of such assets. As a result, the Company recognized a $13.8 million non-cash, intangible asset impairment charge related to certain customer lists, which is included in the accumulated amortization balance and impairment above. Of the total charge, $0.6 million related to the LATAM reportable segment, and $13.2 million related to the EMEA reportable segment. During the third quarter of 2018 , the Company also recognized a $3.0 million |
Restructuring Activities
Restructuring Activities | 9 Months Ended |
Sep. 30, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Activities | Restructuring Activities 2018 Restructuring Plan On August 10, 2018 , the Company approved a plan to reduce the Company's cost structure while driving value for its clients and stockholders. The plan was adopted as a result of the Company's determination that its selling, general and administrative costs were disproportionately high in relation to its revenue and gross profit. From adoption through completion of the plan, the Company expects to incur pre-tax cash restructuring charges of $20.0 million to $25.0 million and pre-tax non-cash restructuring charges of $0.4 million . Cash charges are expected to include $12.0 million to $15.0 million for employee severance and related benefits and $8.0 million to $10.0 million for consulting fees and lease and contract terminations. Where required by law, the Company will consult with each of the affected country’s local Works Councils prior to implementing the plan. The plan was expected to be completed by the end of 2019 . On February 21, 2019 , the Board of Directors approved a two-year extension to the restructuring plan through the end of 2021 . The following table summarizes the accrued restructuring activities for this plan for the nine months ended September 30, 2019 (in thousands): Employee Severance and Related Benefits Lease and Contract Termination Costs Other Total Balance at December 31, 2018 $ 357 $ 286 $ 706 $ 1,349 Charges 4,434 851 5,402 10,687 Cash payments (3,217 ) (888 ) (4,968 ) (9,073 ) Non-cash settlements/adjustments 55 (167 ) — (112 ) Balance as of September 30, 2019 $ 1,629 $ 82 $ 1,140 $ 2,851 The Company recorded the following restructuring costs by segment (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 North America $ 2,549 $ 1,666 $ 3,957 $ 1,666 EMEA 112 1,186 1,517 1,186 LATAM 102 290 176 290 Other 292 — 5,037 — Total $ 3,055 $ 3,142 $ 10,687 $ 3,142 From adoption through September 30, 2019 , the Company recognized $16.7 million in total restructuring charges pursuant to the 2018 Restructuring Plan. 2015 Restructuring Plan On December 14, 2015 , the Company approved a global realignment plan that allowed the Company to more efficiently meet client needs across its international platform. Through improved integration of global resources, the plan created back office and other efficiencies and allowed for the elimination of approximately 100 positions. In connection with these actions, the Company incurred total pre-tax cash restructuring charges of $6.7 million , the majority of which were recognized during 2016. These cash charges included approximately $5.6 million for employee severance and related benefits and $1.1 million for lease and contract terminations and other associated costs. The charges were all incurred by the end of 2016 with the final payouts of the charges expected to occur in 2019 . The following table summarizes the accrued restructuring activities for this plan for the nine months ended September 30, 2019 (in thousands), all of which relate to EMEA: Employee Severance and Related Benefits Lease and Contract Termination Costs Other Total Balance as of December 31, 2018 $ 486 $ — $ — $ 486 Cash payments (364 ) — — (364 ) Balance as of September 30, 2019 $ 122 $ — $ — $ 122 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes On December 22, 2017 , the Tax Reform Act was enacted into law. The Tax Reform Act significantly revises the U.S. corporate income tax laws by, amongst other things, reducing the corporate income tax rate from 35.0% to 21.0% . In addition to the tax rate reduction, the legislation establishes new provisions that affect our 2019 results, including but not limited to: the creation of a new minimum tax called the base erosion anti-abuse tax ("BEAT"); a new provision that taxes U.S. allocated expenses (e.g., interest and general administrative expenses) and currently taxes certain income greater than 10% return on assets from foreign operations called Global Intangible Low-Tax Income (“GILTI”); a new limitation on deductible interest expense; and limitations on the deductibility of certain employee compensation and benefits. The Company's tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items. The Company’s reported effective income tax rate was 45.5% and 0.7% for the three months ended September 30, 2019 and 2018 , respectively. The Company’s reported effective income tax rate was 19.0% and (1.8)% for nine months ended September 30, 2019 and 2018 , respectively. The Company’s effective income tax rate differs from the U.S. federal statutory rate each year due to certain operations that are subject to tax incentives, state and local taxes, valuation allowances, impacts of the Tax Reform Act, and foreign tax rates that are different than the U.S. federal statutory tax rate. In addition, the effective tax rate can be impacted each period by discrete factors and events such as a write-off of a deferred tax asset for stock‑based compensation due to the expiration of unexercised stock options and prior year provision to return adjustments. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will expire unutilized. At the end of each reporting period, the Company reviews the realizability of its deferred tax assets. There were no material valuation adjustments for the three months ended September 30, 2019 and 2018 . Additionally, the Company continues to incur losses in jurisdictions which have valuation allowances against tax loss carryforwards, so a tax benefit has not been recognized in the financial statements for these losses. |
Loss Per Share
Loss Per Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Loss Per Share | Loss Per Share Basic loss per common share is calculated by dividing net loss by the weighted average number of common shares outstanding for the period. Warrants issued in connection with the Company's long-term debt were issued at a nominal exercise price and are considered outstanding at the date of issuance. Diluted loss per share is calculated by dividing net loss by the weighted average shares outstanding assuming dilution. Dilutive common shares outstanding is computed using the Treasury Stock Method and reflects the additional shares that would be outstanding if dilutive stock options were exercised and restricted stock and restricted stock units were settled for common shares during the period. In addition, dilutive shares include any shares issuable related to performance share units ("PSUs") for which the performance conditions have been met as of the end of the period. There were no dilutive effects for securities during the three and nine months ended September 30, 2019 and 2018 as a result of a net loss incurred in each period. The warrants related to the long-term debt are classified and recorded as a liability at fair value with subsequent changes in fair value recognized in earnings. Refer to Note 13 , Long-Term Debt , for additional information. For diluted EPS, fair value adjustments related to the warrants are adjusted out of earnings; however, as a result of the net loss incurred during the period, the adjustment is considered antidilutive and the loss for the period is not adjusted for the three and nine months ended September 30, 2019 . The computations of basic and diluted loss per share for the three and nine months ended September 30, 2019 and 2018 are as follows (in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Net loss $ (2,174 ) $ (44,937 ) $ (5,805 ) $ (46,921 ) Shares used in computing per share amounts: Weighted average shares outstanding 51,985 51,688 51,900 52,384 Issuance of warrants 1,335 — 1,335 — Weighted average shares outstanding - basic and diluted 53,320 51,688 53,235 52,384 Basic and diluted net loss per share $ (0.04 ) $ (0.87 ) $ (0.11 ) $ (0.90 ) |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Company provides print procurement services to Arthur J. Gallagher & Co. J. Patrick Gallagher, Jr., a member of the Company’s Board of Directors, is the Chairman, President, and Chief Executive Officer of Arthur J. Gallagher & Co. and has a direct ownership interest in Arthur J. Gallagher & Co. The total amount billed for such print procurement services during the three months ended September 30, 2019 and 2018 was $0.3 million and $0.4 million , respectively, and $1.2 million and $1.1 million during the nine months ended September 30, 2019 and 2018 , respectively. Additionally, Arthur J. Gallagher & Company provides insurance brokerage and risk management services to the Company. As consideration for these services, Arthur J. Gallagher & Company billed the Company $0.2 million for the three and nine months ended September 30, 2019 . The amounts receivable from Arthur J. Gallagher & Co. were $0.3 million and $0.3 million as of September 30, 2019 and December 31, 2018 , respectively. In the fourth quarter of 2017, the Company began providing marketing execution services to Enova International, Inc. ("Enova"). David Fisher, a member of the Company's Board of Directors, is the Chairman and Chief Executive Officer of Enova and has a direct ownership interest in Enova. The total amount billed for such services during the three months ended September 30, 2019 and 2018 was $4.8 million and $2.9 million , respectively, and $10.8 million and $6.9 million during the nine months ended September 30, 2019 and 2018 , respectively. The amounts receivable from Enova were $4.6 million and $2.0 million as of September 30, 2019 and December 31, 2018 |
Fair Value Measurement
Fair Value Measurement | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Fair Value Measurement The Company estimates the fair value of the ABL Credit Facility and Term Loan Credit Facility, as defined in Note 12 , Revolving Credit Facilities , and Note 13 , Long-Term Debt , respectively, using current market yields. These current market yields are considered Level 2 inputs. The fair value of the Company’s warrant liabilities recorded in the Company’s financial statements is determined using the Black-Scholes-Merton option pricing model and the quoted price of the Company’s common stock in an active market, volatility and expected life, is a Level 3 measurement. Volatility is based on the actual market activity of the Company’s stock. The expected life is based on the remaining contractual term of the warrants, and the risk-free interest rate is based on the implied yield available on U.S. Treasury Securities with a maturity equivalent to the warrants’ expected life. The table below sets forth the assumptions used within the Black-Scholes-Merton option pricing model to value the Company’s warrant liabilities: Stock price $ 4.43 Exercise price $ 0.01 Time until expiration (years) 4.79 Expected volatility 53.0 % Risk-free interest rate 1.55 % Expected dividend yield — % The fair value of the Company’s embedded derivative liabilities recorded in the Company’s financial statements is determined using a probability-weighted discounted cash flow approach utilizing inputs outlined in Note 12 , Revolving Credit Facilities and Note 13 , Long-Term Debt . The table below sets forth the total fair value of the revolving credit facility and related derivative and term loan and related derivative and warrant as of September 30, 2019 (in thousands): September 30, 2019 Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Fair Value ABL Credit Facility $ 123,029 $ — $ 123,029 ABL Credit Facility - derivative — 541 541 Term Loan Credit Facility 91,590 — 91,590 Warrant — 5,254 5,254 Term Loan Credit Facility - derivative — 442 442 Less: Unamortized discount and deferred financing costs (5,258 ) (5,159 ) (10,417 ) Total $ 209,361 $ 1,078 $ 210,439 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Contingencies In October 2013, the Company removed the former owner of Productions Graphics from his role as President of Productions Graphics, the Company’s French subsidiary. He had been in that role since the Company’s 2011 acquisition of Productions Graphics, a European business then principally owned by him. In December 2013, the former owner of Productions Graphics initiated a wrongful termination claim in the Commercial Court of Paris seeking approximately €0.7 million (approximately $1.0 million ) in fees and damages. In anticipation of this claim, in November 2013, he also obtained a judicial asset attachment order in the amount of €0.7 million (approximately $1.0 million ) as payment security; the attachment order was confirmed in January 2014, and the Company filed an appeal of the order. In March 2015, the appellate court ruled in the Company’s favor in the attachment proceedings, releasing all attachments. The Company disputes the allegations of the former owner of Productions Graphics and intends to vigorously defend these matters. In February 2014, based on a review the Company initiated into certain transactions associated with the former owner of Productions Graphics, the Company concluded that he had engaged in fraud by inflating the results of the Productions Graphics business in order to induce the Company to pay him €7.1 million in contingent consideration pursuant to the acquisition agreement. In light of those findings, in February 2014, the Company filed a criminal complaint in France seeking to redress the harm caused by his conduct and this proceeding is currently pending. In addition, in September 2015, the Company initiated a civil claim in the Paris Commercial Court against the former owner of Productions Graphics, seeking civil damages to redress these same harms. In addition to these pending matters, there may be other potential disputes between the Company and the former owner of Productions Graphics relating to the acquisition agreement. The Company had paid €5.8 million (approximately $8.0 million ) in fixed consideration and €7.1 million (approximately $9.4 million ) in contingent consideration to the former owner of Productions Graphics; the remaining maximum contingent consideration under the acquisition agreemen t was €34.5 million (approximately $37.6 million at the time) and the Company has determined that none of this amount was earned and payable. In January 2014, a former finance employee of Productions Graphics initiated wrongful termination and overtime claims in the Labor Court of Boulogne-Billancourt, and he currently seeks damages of approximately €0.6 million (approximately $0.7 million ). The Company disputes these allegations and intends to vigorously defend these matters. In addition, the Company’s criminal complaint in France, described above, seeks to redress harm caused by this former employee in light of his participation in the fraudulent transactions described above. The labor claim has been stayed in deference to the Company’s related criminal complaint. |
Revolving Credit Facilities
Revolving Credit Facilities | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Revolving Credit Facilities | Revolving Credit Facilities Credit Agreement The Company entered into a Credit Agreement, dated as of August 2, 2010 , subsequently amended most recently as of March 15, 2019 , among the Company, the lenders party thereto and Bank of America, N.A., as Administrative Agent (the “Credit Agreement”). The Company refinanced its debt on July 16, 2019 . At July 15, 2019, immediately preceding the refinancing, the Credit Agreement included a revolving commitment amount of $175.0 million and $160.0 million in the aggregate through September 25, 2019 and September 25, 2020 , respectively (the “Credit Facility”). The Credit Agreement also provided the Company the right to increase the aggregate commitment amount by an additional $50.0 million . Outstanding borrowings under the Credit Facility were guaranteed by the Company’s material domestic subsidiaries, as defined in the Credit Agreement. The Company’s obligations under the Credit Agreement and such domestic subsidiaries’ guaranty obligations were secured by substantially all of their respective assets. The ranges of applicable rates charged for interest on outstanding loans and letters of credit were 50 - 225 basis point spread for loans based on the base rate and 150 - 325 basis point spread for letter of credit fees and loans based on the Eurodollar rate. The most recent amendment (i) modified the definition of the term “Consolidated EBITDA” as used in the covenant calculations, (ii) increased the maximum leverage ratio to which the Company is subject for the trailing twelve month periods ended December 31, 2018 and March 31, 2019 and (iii) decreased the minimum interest coverage ratio to which the Company is subject for the trailing twelve month periods ended December 31, 2018 and March 31, 2019. All ratios for fiscal periods thereafter remained unchanged. The terms of the Credit Agreement included various covenants, including covenants that require the Company to maintain a maximum leverage ratio and a minimum interest coverage ratio. The most recent amendment to the Credit Agreement modified the maximum leverage ratio from 3.50 to 1.00 to 4.50 to 1.00 for the trailing twelve months ended December 31, 2018, and from 3.00 to 1.00 to 4.75 to 1.00 for the trailing twelve months ended March 31, 2019. The maximum leverage ratio is 3.00 to 1.00 for the trailing twelve months ended June 30, 2019 and each period thereafter. The most recent amendment to the Credit Agreement also modified the minimum interest coverage ratio from 5.00 to 1.00 to 4.00 to 1.00 for the trailing twelve months ended December 31, 2018 and from 5.00 to 1.00 to 3.50 to 1.00 for the trailing twelve months ended March 31, 2019. The minimum interest coverage ratio is 5.00 to 1.00 for the trailing twelve months ended June 30, 2019 and each period thereafter. The Company was in violation of the debt covenants under the Credit Agreement as of June 30, 2019; however, the Company successfully completed refinancing of its debt on July 16, 2019, which is further discussed below. ABL Credit Agreement On July 16, 2019 , the Company and certain of its direct and indirect subsidiaries entered into a loan and security agreement (the “ABL Credit Agreement”) with Bank of America, N.A., as administrative agent, lender, issuing bank and collateral agent, and JPMorgan Chase Bank, N.A. and PNC Bank, National Association, as lenders (the “ABL Credit Facility”). The Company used the initial proceeds from the ABL Credit Facility (in combination with the initial proceeds from the Term Loan Credit Facility discussed in Note 13 , Long-Term Debt ) to repay in full its existing Credit Facility, along with fees and transaction expenses incurred in connection with the closing of the ABL Credit Facility and for working capital purposes. Some, but not all, lenders from the previous the Credit Agreement continued as lenders in the ABL Credit Agreement. Unamortized deferred financing fees associated with non-continuing lenders of $0.1 million were written off as a result of the refinancing. The ABL Credit Facility consists of a $105.0 million asset-based revolving line of credit, of which up to (i) $15.0 million may be used for UK Revolver Loans (as defined in the ABL Credit Agreement), (ii) $10.5 million may be used for Swingline Loans (as defined in the ABL Credit Agreement), and (iii) $10.0 million may be used for letters of credit. The ABL Credit Agreement provides that the revolving line of credit may be increased by up to an additional $20.0 million following satisfaction of certain conditions. The ABL Credit Facility matures on July 16, 2024 . Advances under the ABL Credit Facility bear interest at either: (a) LIBOR (as defined in the ABL Credit Agreement), plus an applicable margin ranging from 2.00% to 2.50% for US LIBOR Loans and UK LIBOR Loans (each as defined in the ABL Credit Agreement); (b) the US Base Rate (as defined in the ABL Credit Agreement), plus an applicable margin ranging from 1.00% to 1.50% for US Base Rate Loans (as defined in the ABL Credit Agreement); or (c) the UK Base Rate (as defined in the ABL Credit Agreement), plus an applicable margin ranging from 2.00% to 2.50% for UK Base Rate Loans (as defined in the ABL Credit Agreement). The Company’s obligations under the ABL Credit Agreement are guaranteed by certain of its subsidiaries pursuant to a guaranty included in the ABL Credit Agreement. As security for the Company’s and its subsidiaries’ obligations under the ABL Credit Agreement, each of the Company and the subsidiaries party thereto have granted: (i) a first priority lien on the Company’s and such subsidiaries’ accounts receivable, chattel paper (to the extent evidencing accounts receivable), inventory, deposit accounts, general intangibles related to the foregoing and proceeds related thereto; and (ii) a second-priority lien on substantially all its other tangible and intangible personal property, including the capital stock of certain of the Company’s direct and indirect subsidiaries. The priority of the liens is described in an intercreditor agreement between Bank of America, N.A. as ABL Agent and TCW Asset Management Company LLC as Term Agent (the “Intercreditor Agreement”). The ABL Credit Agreement contains a minimum fixed charge coverage ratio financial covenant that must be maintained when excess availability falls below a specified amount. In addition, the ABL Credit Agreement contains negative covenants limiting, among other things, additional indebtedness, transactions with affiliates, additional liens, sales of assets, dividends, investments and advances, prepayments of debt, mergers and acquisitions, and other matters customarily restricted in such agreements. The ABL Credit Agreement also contains customary events of default, including payment defaults, breaches of representations and warranties, covenant defaults, events of bankruptcy and insolvency, failure of any guaranty or security document supporting the ABL Credit Agreement to be in full force and effect, and a change of control of the Company’s business. The usage and total commitment of these Loans shall not exceed the respective borrowing base set forth in the ABL Credit Agreement. Within the ABL Credit Agreement, there is a cash dominion requirement for the United States ("US") and United Kingdom ("UK"). In the United States, Bank of America, N.A. (the agent) shall only exercise cash dominion and apply all customer collections of the US borrowers to US obligations when a Trigger Period exists, as defined in the ABL Credit Agreement. In the United Kingdom, all customer collections of the UK borrowers will be applied on a daily basis to any outstanding UK obligations and any credit balance will be transferred back to an account of the UK borrowers. The customer collections of the UK borrowers are only applied against the UK obligations. As a result of the cash dominion, the amount outstanding under the ABL Credit Agreement for UK borrowers has been classified as a current obligation. The amount outstanding under the ABL Credit Agreement for US borrowers has been classified as a long-term obligation, as no Trigger Period has yet occurred nor is considered probable. The amounts outstanding under the ABL Credit Agreement as of September 30, 2019 for the UK borrowers and the US borrowers are $4.6 million and $76.9 million , respectively. At the time of the Company’s debt refinancing, there was $0.3 million of unamortized debt issuance fees associated with lenders under both the prior Credit Agreement and the ABL Credit Agreement. Additionally, the Company incurred $1.7 million of deferred financing fees related to the financing transaction described above. The aforementioned deferred financing fees are presented as an asset and amortized on a straight-line basis over the term of the ABL Credit Agreement. Amortization of deferred financing fees is recorded in interest expense and was approximately $0.1 million . The Company has determined that the interest rate reset features embedded in the ABL Credit Agreement constitute an embedded derivative (collectively, the “ABL Embedded Derivative”) which has been bifurcated from the ABL Credit Facility and recorded as a derivative liability at fair value, with a corresponding discount recorded to the associated debt. The Company recorded immaterial interest expense for the amortization of the ABL Embedded Derivative discount through September 30, 2019 . The following schedule shows the change in fair value of the ABL Embedded Derivative at September 30, 2019 (in thousands): December 31, 2018 $ — Issuance of associated debt (July 16, 2019) 599 Change in fair value (58 ) September 30, 2019 $ 541 The change in fair value is recorded within other expense on the Company’s Condensed Consolidated Statements of Comprehensive Loss. Refer to Note 10 , Fair Value Measurement , for further discussion. The Company’s ABL Credit Facility at September 30, 2019 is summarized as follows (in thousands): ABL Credit Facility outstanding $ 81,472 Less: Current portion of ABL Credit Facility for UK Borrowings (4,585 ) Long-term portion of ABL Credit Facility 76,887 Less: ABL Embedded Derivative Discount (1) (599 ) ABL Embedded Derivative Liability (2) 541 Total Revolving credit facility - non-current $ 76,829 (1) Original value of embedded derivative at July 16, 2019, less amortization. (2) Value of embedded derivative as of September 30, 2019. At September 30, 2019 , the Company had $1.3 million of letters of credit outstanding which have not been drawn upon. On February 22, 2016 , the Company entered into a Revolving Credit Facility (the “Facility”) with Bank of America N.A. to support ongoing working capital needs of the Company's operations in China. The Facility includes a revolving commitment amount of $5.0 million whereby maturity dates vary based on each individual drawdown. On July 16, 2019, the Company modified the Facility to decrease the total revolving commitment amount from $5.0 million to $1.0 million . All other terms of the Facility remained unchanged. Outstanding borrowings under the Facility are guaranteed by the Company’s assets. Borrowings and repayments are made in renminbi, the official Chinese currency. The applicable interest rate is 110% of the People’s Bank of China’s base rate. The terms of the Facility include limitations on use of funds for working capital purposes as well as customary representations and warranties made by the Company. At September 30, 2019 , the Company had $0.5 million of unused availability under the Facility. Long-Term Debt On July 16, 2019 , the Company and certain of its direct and indirect subsidiaries entered into a loan and security agreement (the “Term Loan Credit Agreement”) with TCW Asset Management Company LLC, as administrative agent and collateral agent, and the financial institutions party thereto as lenders (the “Term Loan Credit Facility”). The Term Loan Credit Facility consists of a $100.0 million term loan facility. The Term Loan Credit Facility matures on July 16, 2024 . Principal on the Term Loan Credit Facility is due in quarterly installments, commencing on September 30, 2019, in an amount equal to $1.3 million per quarter during the first year of the Term Loan Credit Facility and $2.5 million each quarter thereafter. The loans under the Term Loan Credit Facility bear interest at either: (a) the LIBOR Rate (as defined in the Term Loan Credit Agreement), plus an applicable margin ranging from 6.25% to 10.75% ; or (b) the Prime Rate (as defined in the Term Loan Credit Agreement), plus an applicable margin ranging from 5.25% to 9.75% . The Company’s obligations under the Term Loan Credit Agreement are guaranteed by certain of its subsidiaries pursuant to a guaranty included in the Term Loan Credit Agreement. As security for the Company’s and its subsidiaries’ obligations under the Term Loan Credit Agreement, each of the Company and the subsidiaries party thereto have granted: (i) a first priority lien on substantially all its tangible and intangible personal property (other than the assets described in the following clause (ii)), including the capital stock of certain of the Company’s direct and indirect subsidiaries, and (ii) a second priority lien on its accounts receivable, chattel paper (to the extent evidencing accounts receivable), inventory, deposit accounts, general intangibles related to the foregoing and proceeds related thereto. The priority of the liens is described in the Intercreditor Agreement. The Term Loan Credit Agreement contains a minimum fixed charge coverage ratio financial covenant, a maximum total leverage ratio financial covenant, a minimum liquidity financial covenant and a maximum capital expenditures covenant, each of which must be maintained for the periods described in the Term Loan Credit Agreement. In addition, the Term Loan Credit Agreement contains negative covenants limiting, among other things, additional indebtedness, transactions with affiliates, additional liens, sales of assets, dividends, investments and advances, prepayments of debt, mergers and acquisitions, and other matters customarily restricted in such agreements. The Term Loan Credit Agreement also contains customary events of default, including payment defaults, breaches of representations and warranties, covenant defaults, events of bankruptcy and insolvency, failure of any guaranty or security document supporting the Term Loan Credit Agreement to be in full force and effect, and a change of control of the Company’s business. The principal outstanding as of September 30, 2019 is $98.8 million . The Company has determined the interest rate reset features embedded in the Term Loan Credit Agreement constitute an embedded derivative (collectively, the “Term Loan Embedded Derivative”) which has been bifurcated from Term Loan Credit Facility and recorded as a derivative liability at fair value, with a corresponding discount recorded to the associated debt. The Company recorded immaterial interest expense for the amortization of the Term Loan Embedded Derivative discount through September 30, 2019. The following schedule shows the change in fair value of the Term Loan Embedded Derivative at September 30, 2019 (in thousands): December 31, 2018 $ — Issuance of associated debt (July 16, 2019) 481 Change in fair value (39 ) September 30, 2019 $ 442 The change in fair value is recorded within other expense on the Company’s Condensed Consolidated Statements of Comprehensive Loss. Refer to Note 10 , Fair Value Measurement , for further discussion. In connection with the closing of the Term Loan Credit Agreement, the Company issued a Warrant (as defined below) to Macquarie US Trading LLC, an affiliate of TCW Asset Management Company LLC, to purchase fully paid and non-assessable shares of common stock of the Company. The Warrant is initially exercisable for an aggregate of 1,335,337 shares of the Company’s common stock with a per share exercise price of $0.01 (the “Initial Warrant”). The Initial Warrant is exercisable on or after (A) the date which is 10 days after the earlier of (x) the date that the Company delivers its financial statements for the fiscal quarter ending March 31, 2020 to the administrative agent and (y) May 15, 2020 (the “First Quarter Reporting Period End Date”) through (B) July 16, 2024 . In addition, if either (x) the Total Leverage Ratio (as defined in the Term Loan Credit Agreement) as of March 31, 2020 for the four (4) consecutive fiscal quarter period then ended is greater than 4.25 to 1.00 or (y) the Company fails to deliver financial statements to the administrative agent as required by the Term Loan Credit Agreement for the fiscal quarter ending March 31, 2020, then from the First Quarter Reporting Period End Date through July 16, 2024, the Warrant shall also be exercisable for an additional 2.49% of the Company’s common stock calculated on a fully-diluted basis (the “Additional Warrant” or “Contingent Warrant” and together with the Initial Warrant, the “Warrant”). The Warrant may be exercised on a cashless basis, and the number of shares for which the Warrant are exercisable and the associated exercise price are subject to certain proportional adjustments as set forth in the Warrant. In addition, the holder of the Warrant is entitled to certain piggyback registration rights. In the event that the Total Leverage Ratio is less than 4.00 to 1.00 at any time between April 1, 2020 and March 31, 2021 (the “Buyback Period”) based on financial statements delivered to agent pursuant to the terms of the Term Loan Credit Agreement, and calculated on a pro forma basis factoring in the repurchase described in the Warrant, then on any day during the Buyback Period, the Company shall be permitted, upon 5 business days prior written notice given to Holder, to repurchase either (x) any portion of the Warrant not yet exercised and/or (y) any shares of common stock received from the Company pursuant to prior exercise of the Warrant, in each case at the Applicable Buyback Price (as defined in the Warrant) by paying cash to the Holder (“Buyback Option”). The Initial Warrant was recorded as a liability at fair value and will be treated as a discount on the associated debt. The following schedule shows the change in fair value of the Initial Warrant at September 30, 2019 (in thousands): December 31, 2018 $ — Issuance of initial warrant (July 16, 2019) 4,304 Change in fair value 950 September 30, 2019 $ 5,254 The change in fair value is recorded within other expense on the Company’s Condensed Consolidated Statements of Comprehensive Loss. The fair value associated with the Contingent Warrant is considered de minimis at September 30, 2019 . The Term Loan is presented net of the related original issue discount (“OID”), which was $8.5 million on the issuance date of July 16, 2019. Accretion of OID is included in interest expense. The Company incurred $3.7 million of deferred financing fees related to the Term Loan Credit Agreement that has been recorded as a debt discount. The combined debt discount from the Initial Warrant liability, the Term Loan Embedded Derivative liability, and the debt issuance fees is being amortized into interest expense over the term of the Term Loan Credit Facility using the effective interest method. The Company recorded interest expense for the amortization of the Initial Warrant liability and Term Loan Embedded Derivative liability debt discounts of $0.2 million for the three and nine months ended September 30, 2019 and recorded an additional $0.2 million of interest expense for the amortization of the debt issuance fees for the three and nine months ended September 30, 2019 . The Company’s Term Loan Credit Facility at September 30, 2019 is summarized as follows (in thousands): Term Loan Credit Facility outstanding $ 98,750 Less: Current portion of Term Loan Credit Facility (6,250 ) Long-term portion of Term Loan Credit Facility 92,500 Less: Original Issue Discount (1) (8,205 ) Term Loan Embedded Derivative Liability (2) 442 Initial Warrant Liability (2) 5,254 Total Term Loan - Non-current $ 89,991 (1) Original value of OID attributable to debt issuance costs, warrant liability and embedded derivatives at July 16, 2019, less amortization. (2) Value of warrant liability and embedded derivatives as of September 30, 2019. Remediation of Going Concern The Company’s independent registered public accounting firm’s report on the Company’s December 31, 2018 consolidated financial statements contains an emphasis of a matter regarding substantial doubt about the Company’s ability to continue as a going concern. Following the successful refinancing of its debt described above and in Note 12, Revolving Credit Facilities |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Revolving Credit Facilities Credit Agreement The Company entered into a Credit Agreement, dated as of August 2, 2010 , subsequently amended most recently as of March 15, 2019 , among the Company, the lenders party thereto and Bank of America, N.A., as Administrative Agent (the “Credit Agreement”). The Company refinanced its debt on July 16, 2019 . At July 15, 2019, immediately preceding the refinancing, the Credit Agreement included a revolving commitment amount of $175.0 million and $160.0 million in the aggregate through September 25, 2019 and September 25, 2020 , respectively (the “Credit Facility”). The Credit Agreement also provided the Company the right to increase the aggregate commitment amount by an additional $50.0 million . Outstanding borrowings under the Credit Facility were guaranteed by the Company’s material domestic subsidiaries, as defined in the Credit Agreement. The Company’s obligations under the Credit Agreement and such domestic subsidiaries’ guaranty obligations were secured by substantially all of their respective assets. The ranges of applicable rates charged for interest on outstanding loans and letters of credit were 50 - 225 basis point spread for loans based on the base rate and 150 - 325 basis point spread for letter of credit fees and loans based on the Eurodollar rate. The most recent amendment (i) modified the definition of the term “Consolidated EBITDA” as used in the covenant calculations, (ii) increased the maximum leverage ratio to which the Company is subject for the trailing twelve month periods ended December 31, 2018 and March 31, 2019 and (iii) decreased the minimum interest coverage ratio to which the Company is subject for the trailing twelve month periods ended December 31, 2018 and March 31, 2019. All ratios for fiscal periods thereafter remained unchanged. The terms of the Credit Agreement included various covenants, including covenants that require the Company to maintain a maximum leverage ratio and a minimum interest coverage ratio. The most recent amendment to the Credit Agreement modified the maximum leverage ratio from 3.50 to 1.00 to 4.50 to 1.00 for the trailing twelve months ended December 31, 2018, and from 3.00 to 1.00 to 4.75 to 1.00 for the trailing twelve months ended March 31, 2019. The maximum leverage ratio is 3.00 to 1.00 for the trailing twelve months ended June 30, 2019 and each period thereafter. The most recent amendment to the Credit Agreement also modified the minimum interest coverage ratio from 5.00 to 1.00 to 4.00 to 1.00 for the trailing twelve months ended December 31, 2018 and from 5.00 to 1.00 to 3.50 to 1.00 for the trailing twelve months ended March 31, 2019. The minimum interest coverage ratio is 5.00 to 1.00 for the trailing twelve months ended June 30, 2019 and each period thereafter. The Company was in violation of the debt covenants under the Credit Agreement as of June 30, 2019; however, the Company successfully completed refinancing of its debt on July 16, 2019, which is further discussed below. ABL Credit Agreement On July 16, 2019 , the Company and certain of its direct and indirect subsidiaries entered into a loan and security agreement (the “ABL Credit Agreement”) with Bank of America, N.A., as administrative agent, lender, issuing bank and collateral agent, and JPMorgan Chase Bank, N.A. and PNC Bank, National Association, as lenders (the “ABL Credit Facility”). The Company used the initial proceeds from the ABL Credit Facility (in combination with the initial proceeds from the Term Loan Credit Facility discussed in Note 13 , Long-Term Debt ) to repay in full its existing Credit Facility, along with fees and transaction expenses incurred in connection with the closing of the ABL Credit Facility and for working capital purposes. Some, but not all, lenders from the previous the Credit Agreement continued as lenders in the ABL Credit Agreement. Unamortized deferred financing fees associated with non-continuing lenders of $0.1 million were written off as a result of the refinancing. The ABL Credit Facility consists of a $105.0 million asset-based revolving line of credit, of which up to (i) $15.0 million may be used for UK Revolver Loans (as defined in the ABL Credit Agreement), (ii) $10.5 million may be used for Swingline Loans (as defined in the ABL Credit Agreement), and (iii) $10.0 million may be used for letters of credit. The ABL Credit Agreement provides that the revolving line of credit may be increased by up to an additional $20.0 million following satisfaction of certain conditions. The ABL Credit Facility matures on July 16, 2024 . Advances under the ABL Credit Facility bear interest at either: (a) LIBOR (as defined in the ABL Credit Agreement), plus an applicable margin ranging from 2.00% to 2.50% for US LIBOR Loans and UK LIBOR Loans (each as defined in the ABL Credit Agreement); (b) the US Base Rate (as defined in the ABL Credit Agreement), plus an applicable margin ranging from 1.00% to 1.50% for US Base Rate Loans (as defined in the ABL Credit Agreement); or (c) the UK Base Rate (as defined in the ABL Credit Agreement), plus an applicable margin ranging from 2.00% to 2.50% for UK Base Rate Loans (as defined in the ABL Credit Agreement). The Company’s obligations under the ABL Credit Agreement are guaranteed by certain of its subsidiaries pursuant to a guaranty included in the ABL Credit Agreement. As security for the Company’s and its subsidiaries’ obligations under the ABL Credit Agreement, each of the Company and the subsidiaries party thereto have granted: (i) a first priority lien on the Company’s and such subsidiaries’ accounts receivable, chattel paper (to the extent evidencing accounts receivable), inventory, deposit accounts, general intangibles related to the foregoing and proceeds related thereto; and (ii) a second-priority lien on substantially all its other tangible and intangible personal property, including the capital stock of certain of the Company’s direct and indirect subsidiaries. The priority of the liens is described in an intercreditor agreement between Bank of America, N.A. as ABL Agent and TCW Asset Management Company LLC as Term Agent (the “Intercreditor Agreement”). The ABL Credit Agreement contains a minimum fixed charge coverage ratio financial covenant that must be maintained when excess availability falls below a specified amount. In addition, the ABL Credit Agreement contains negative covenants limiting, among other things, additional indebtedness, transactions with affiliates, additional liens, sales of assets, dividends, investments and advances, prepayments of debt, mergers and acquisitions, and other matters customarily restricted in such agreements. The ABL Credit Agreement also contains customary events of default, including payment defaults, breaches of representations and warranties, covenant defaults, events of bankruptcy and insolvency, failure of any guaranty or security document supporting the ABL Credit Agreement to be in full force and effect, and a change of control of the Company’s business. The usage and total commitment of these Loans shall not exceed the respective borrowing base set forth in the ABL Credit Agreement. Within the ABL Credit Agreement, there is a cash dominion requirement for the United States ("US") and United Kingdom ("UK"). In the United States, Bank of America, N.A. (the agent) shall only exercise cash dominion and apply all customer collections of the US borrowers to US obligations when a Trigger Period exists, as defined in the ABL Credit Agreement. In the United Kingdom, all customer collections of the UK borrowers will be applied on a daily basis to any outstanding UK obligations and any credit balance will be transferred back to an account of the UK borrowers. The customer collections of the UK borrowers are only applied against the UK obligations. As a result of the cash dominion, the amount outstanding under the ABL Credit Agreement for UK borrowers has been classified as a current obligation. The amount outstanding under the ABL Credit Agreement for US borrowers has been classified as a long-term obligation, as no Trigger Period has yet occurred nor is considered probable. The amounts outstanding under the ABL Credit Agreement as of September 30, 2019 for the UK borrowers and the US borrowers are $4.6 million and $76.9 million , respectively. At the time of the Company’s debt refinancing, there was $0.3 million of unamortized debt issuance fees associated with lenders under both the prior Credit Agreement and the ABL Credit Agreement. Additionally, the Company incurred $1.7 million of deferred financing fees related to the financing transaction described above. The aforementioned deferred financing fees are presented as an asset and amortized on a straight-line basis over the term of the ABL Credit Agreement. Amortization of deferred financing fees is recorded in interest expense and was approximately $0.1 million . The Company has determined that the interest rate reset features embedded in the ABL Credit Agreement constitute an embedded derivative (collectively, the “ABL Embedded Derivative”) which has been bifurcated from the ABL Credit Facility and recorded as a derivative liability at fair value, with a corresponding discount recorded to the associated debt. The Company recorded immaterial interest expense for the amortization of the ABL Embedded Derivative discount through September 30, 2019 . The following schedule shows the change in fair value of the ABL Embedded Derivative at September 30, 2019 (in thousands): December 31, 2018 $ — Issuance of associated debt (July 16, 2019) 599 Change in fair value (58 ) September 30, 2019 $ 541 The change in fair value is recorded within other expense on the Company’s Condensed Consolidated Statements of Comprehensive Loss. Refer to Note 10 , Fair Value Measurement , for further discussion. The Company’s ABL Credit Facility at September 30, 2019 is summarized as follows (in thousands): ABL Credit Facility outstanding $ 81,472 Less: Current portion of ABL Credit Facility for UK Borrowings (4,585 ) Long-term portion of ABL Credit Facility 76,887 Less: ABL Embedded Derivative Discount (1) (599 ) ABL Embedded Derivative Liability (2) 541 Total Revolving credit facility - non-current $ 76,829 (1) Original value of embedded derivative at July 16, 2019, less amortization. (2) Value of embedded derivative as of September 30, 2019. At September 30, 2019 , the Company had $1.3 million of letters of credit outstanding which have not been drawn upon. On February 22, 2016 , the Company entered into a Revolving Credit Facility (the “Facility”) with Bank of America N.A. to support ongoing working capital needs of the Company's operations in China. The Facility includes a revolving commitment amount of $5.0 million whereby maturity dates vary based on each individual drawdown. On July 16, 2019, the Company modified the Facility to decrease the total revolving commitment amount from $5.0 million to $1.0 million . All other terms of the Facility remained unchanged. Outstanding borrowings under the Facility are guaranteed by the Company’s assets. Borrowings and repayments are made in renminbi, the official Chinese currency. The applicable interest rate is 110% of the People’s Bank of China’s base rate. The terms of the Facility include limitations on use of funds for working capital purposes as well as customary representations and warranties made by the Company. At September 30, 2019 , the Company had $0.5 million of unused availability under the Facility. Long-Term Debt On July 16, 2019 , the Company and certain of its direct and indirect subsidiaries entered into a loan and security agreement (the “Term Loan Credit Agreement”) with TCW Asset Management Company LLC, as administrative agent and collateral agent, and the financial institutions party thereto as lenders (the “Term Loan Credit Facility”). The Term Loan Credit Facility consists of a $100.0 million term loan facility. The Term Loan Credit Facility matures on July 16, 2024 . Principal on the Term Loan Credit Facility is due in quarterly installments, commencing on September 30, 2019, in an amount equal to $1.3 million per quarter during the first year of the Term Loan Credit Facility and $2.5 million each quarter thereafter. The loans under the Term Loan Credit Facility bear interest at either: (a) the LIBOR Rate (as defined in the Term Loan Credit Agreement), plus an applicable margin ranging from 6.25% to 10.75% ; or (b) the Prime Rate (as defined in the Term Loan Credit Agreement), plus an applicable margin ranging from 5.25% to 9.75% . The Company’s obligations under the Term Loan Credit Agreement are guaranteed by certain of its subsidiaries pursuant to a guaranty included in the Term Loan Credit Agreement. As security for the Company’s and its subsidiaries’ obligations under the Term Loan Credit Agreement, each of the Company and the subsidiaries party thereto have granted: (i) a first priority lien on substantially all its tangible and intangible personal property (other than the assets described in the following clause (ii)), including the capital stock of certain of the Company’s direct and indirect subsidiaries, and (ii) a second priority lien on its accounts receivable, chattel paper (to the extent evidencing accounts receivable), inventory, deposit accounts, general intangibles related to the foregoing and proceeds related thereto. The priority of the liens is described in the Intercreditor Agreement. The Term Loan Credit Agreement contains a minimum fixed charge coverage ratio financial covenant, a maximum total leverage ratio financial covenant, a minimum liquidity financial covenant and a maximum capital expenditures covenant, each of which must be maintained for the periods described in the Term Loan Credit Agreement. In addition, the Term Loan Credit Agreement contains negative covenants limiting, among other things, additional indebtedness, transactions with affiliates, additional liens, sales of assets, dividends, investments and advances, prepayments of debt, mergers and acquisitions, and other matters customarily restricted in such agreements. The Term Loan Credit Agreement also contains customary events of default, including payment defaults, breaches of representations and warranties, covenant defaults, events of bankruptcy and insolvency, failure of any guaranty or security document supporting the Term Loan Credit Agreement to be in full force and effect, and a change of control of the Company’s business. The principal outstanding as of September 30, 2019 is $98.8 million . The Company has determined the interest rate reset features embedded in the Term Loan Credit Agreement constitute an embedded derivative (collectively, the “Term Loan Embedded Derivative”) which has been bifurcated from Term Loan Credit Facility and recorded as a derivative liability at fair value, with a corresponding discount recorded to the associated debt. The Company recorded immaterial interest expense for the amortization of the Term Loan Embedded Derivative discount through September 30, 2019. The following schedule shows the change in fair value of the Term Loan Embedded Derivative at September 30, 2019 (in thousands): December 31, 2018 $ — Issuance of associated debt (July 16, 2019) 481 Change in fair value (39 ) September 30, 2019 $ 442 The change in fair value is recorded within other expense on the Company’s Condensed Consolidated Statements of Comprehensive Loss. Refer to Note 10 , Fair Value Measurement , for further discussion. In connection with the closing of the Term Loan Credit Agreement, the Company issued a Warrant (as defined below) to Macquarie US Trading LLC, an affiliate of TCW Asset Management Company LLC, to purchase fully paid and non-assessable shares of common stock of the Company. The Warrant is initially exercisable for an aggregate of 1,335,337 shares of the Company’s common stock with a per share exercise price of $0.01 (the “Initial Warrant”). The Initial Warrant is exercisable on or after (A) the date which is 10 days after the earlier of (x) the date that the Company delivers its financial statements for the fiscal quarter ending March 31, 2020 to the administrative agent and (y) May 15, 2020 (the “First Quarter Reporting Period End Date”) through (B) July 16, 2024 . In addition, if either (x) the Total Leverage Ratio (as defined in the Term Loan Credit Agreement) as of March 31, 2020 for the four (4) consecutive fiscal quarter period then ended is greater than 4.25 to 1.00 or (y) the Company fails to deliver financial statements to the administrative agent as required by the Term Loan Credit Agreement for the fiscal quarter ending March 31, 2020, then from the First Quarter Reporting Period End Date through July 16, 2024, the Warrant shall also be exercisable for an additional 2.49% of the Company’s common stock calculated on a fully-diluted basis (the “Additional Warrant” or “Contingent Warrant” and together with the Initial Warrant, the “Warrant”). The Warrant may be exercised on a cashless basis, and the number of shares for which the Warrant are exercisable and the associated exercise price are subject to certain proportional adjustments as set forth in the Warrant. In addition, the holder of the Warrant is entitled to certain piggyback registration rights. In the event that the Total Leverage Ratio is less than 4.00 to 1.00 at any time between April 1, 2020 and March 31, 2021 (the “Buyback Period”) based on financial statements delivered to agent pursuant to the terms of the Term Loan Credit Agreement, and calculated on a pro forma basis factoring in the repurchase described in the Warrant, then on any day during the Buyback Period, the Company shall be permitted, upon 5 business days prior written notice given to Holder, to repurchase either (x) any portion of the Warrant not yet exercised and/or (y) any shares of common stock received from the Company pursuant to prior exercise of the Warrant, in each case at the Applicable Buyback Price (as defined in the Warrant) by paying cash to the Holder (“Buyback Option”). The Initial Warrant was recorded as a liability at fair value and will be treated as a discount on the associated debt. The following schedule shows the change in fair value of the Initial Warrant at September 30, 2019 (in thousands): December 31, 2018 $ — Issuance of initial warrant (July 16, 2019) 4,304 Change in fair value 950 September 30, 2019 $ 5,254 The change in fair value is recorded within other expense on the Company’s Condensed Consolidated Statements of Comprehensive Loss. The fair value associated with the Contingent Warrant is considered de minimis at September 30, 2019 . The Term Loan is presented net of the related original issue discount (“OID”), which was $8.5 million on the issuance date of July 16, 2019. Accretion of OID is included in interest expense. The Company incurred $3.7 million of deferred financing fees related to the Term Loan Credit Agreement that has been recorded as a debt discount. The combined debt discount from the Initial Warrant liability, the Term Loan Embedded Derivative liability, and the debt issuance fees is being amortized into interest expense over the term of the Term Loan Credit Facility using the effective interest method. The Company recorded interest expense for the amortization of the Initial Warrant liability and Term Loan Embedded Derivative liability debt discounts of $0.2 million for the three and nine months ended September 30, 2019 and recorded an additional $0.2 million of interest expense for the amortization of the debt issuance fees for the three and nine months ended September 30, 2019 . The Company’s Term Loan Credit Facility at September 30, 2019 is summarized as follows (in thousands): Term Loan Credit Facility outstanding $ 98,750 Less: Current portion of Term Loan Credit Facility (6,250 ) Long-term portion of Term Loan Credit Facility 92,500 Less: Original Issue Discount (1) (8,205 ) Term Loan Embedded Derivative Liability (2) 442 Initial Warrant Liability (2) 5,254 Total Term Loan - Non-current $ 89,991 (1) Original value of OID attributable to debt issuance costs, warrant liability and embedded derivatives at July 16, 2019, less amortization. (2) Value of warrant liability and embedded derivatives as of September 30, 2019. Remediation of Going Concern The Company’s independent registered public accounting firm’s report on the Company’s December 31, 2018 consolidated financial statements contains an emphasis of a matter regarding substantial doubt about the Company’s ability to continue as a going concern. Following the successful refinancing of its debt described above and in Note 12, Revolving Credit Facilities |
Share Repurchase Program
Share Repurchase Program | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Share Repurchase Program | Share Repurchase Program On February 12, 2015, the Company announced that its Board of Directors approved a share repurchase program authorizing the repurchase of up to an aggregate of $20.0 million of its common stock through open market and privately negotiated transactions over a two-year period. On November 2, 2016, the Board of Directors approved a two-year extension to the share repurchase program through February 28, 2019. On May 4, 2017 , the Board of Directors authorized an increase in its authorized share repurchase program of up to an additional $30.0 million of the Company's common stock through open market and privately negotiated transactions over a two-year period ended May 31, 2019 . As of September 30, 2019 , the program purchase period had lapsed and shares are no longer available for purchase under this plan. During the three and nine months ended September 30, 2019 and three months ended September 30, 2018 , the Company did not repurchase any shares of its common stock under this program. During the nine months ended September 30, 2018 , the Company repurchased 2,667,732 shares of its common stock for $25.6 million in the aggregate at an average cost of $9.60 . Shares repurchased under this program are recorded at acquisition cost, including related expenses. |
Business Segments
Business Segments | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Business Segments | Business Segments Segment information is prepared on the same basis that our Chief Executive Officer, who is our chief operating decision maker ("CODM"), manages the segments, evaluates financial results, and makes key operating decisions. During the third quarter of 2018 , the Company changed its reportable segments. The Company is now organized and managed by the CODM as three operating segments: North America, EMEA and LATAM. The North America segment includes operations in the United States and Canada; the EMEA segment includes operations in the United Kingdom, continental Europe, the Middle East, Africa, and Asia; and the LATAM segment includes operations in Mexico, Central America, and South America. Other consists of intersegment eliminations, shared service activities, and corporate expenses which are not allocated to the operating segments as management does not consider them in evaluating segment performance. The table below presents financial information for the Company’s reportable segments and Other for the three and nine months ended September 30, 2019 and 2018 (in thousands): North America EMEA LATAM Other Total Three Months Ended September 30, 2019 Revenue from third parties $ 201,868 $ 64,352 $ 20,305 $ — $ 286,525 Revenue from other segments 1,952 3,264 14 (5,230 ) — Total revenue $ 203,820 $ 67,616 $ 20,319 $ (5,230 ) $ 286,525 Adjusted EBITDA (1) $ 18,363 $ 3,907 $ 571 $ (11,233 ) $ 11,608 Three Months Ended September 30, 2018 Revenue from third parties $ 181,363 $ 68,890 $ 20,597 $ — $ 270,850 Revenue from other segments 622 2,151 100 (2,873 ) — Total revenue $ 181,985 $ 71,041 $ 20,697 $ (2,873 ) $ 270,850 Adjusted EBITDA (1) $ 14,627 $ 4,619 $ 1,082 $ (8,085 ) $ 12,243 North America EMEA LATAM Other Total Nine Months Ended September 30, 2019 Revenue from third parties $ 590,452 $ 187,014 $ 60,350 $ — $ 837,816 Revenue from other segments 3,165 7,624 18 (10,807 ) — Total revenue $ 593,617 $ 194,638 $ 60,368 $ (10,807 ) $ 837,816 Adjusted EBITDA (1) $ 54,964 $ 10,726 $ 1,447 $ (35,315 ) $ 31,822 Nine Months Ended September 30, 2018 Revenue from third parties $ 565,243 $ 198,229 $ 63,884 $ — $ 827,356 Revenue from other segments 2,993 7,679 178 (10,850 ) — Total revenue $ 568,236 $ 205,908 $ 64,062 $ (10,850 ) $ 827,356 Adjusted EBITDA (1) $ 50,215 $ 6,929 $ 2,913 $ (32,278 ) $ 27,779 (1) Adjusted EBITDA, which represents income from operations with the addition of depreciation and amortization, stock-based compensation expense, restructuring charges, various one-time professional fees, executive search expenses, and other charges itemized in the reconciliation table below, is considered a non-GAAP financial measure under SEC regulations. Income from operations is the most directly comparable financial measure calculated in accordance with GAAP. The Company presents this measure as supplemental information to help investors better understand trends in its business results over time. The Company’s management team uses Adjusted EBITDA to evaluate the performance of the business. Adjusted EBITDA is not equivalent to any measure of performance required to be reported under GAAP, nor should this data be considered an indicator of the Company’s overall financial performance and liquidity. Moreover, the Adjusted EBITDA definition the Company uses may not be comparable to similarly titled measures reported by other companies. The table below reconciles Adjusted EBITDA to loss before income taxes (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Adjusted EBITDA $ 11,608 $ 12,243 $ 31,822 $ 27,779 Depreciation and amortization (3,090 ) (3,265 ) (8,939 ) (10,438 ) Stock-based compensation expense (1,784 ) (801 ) (3,925 ) (3,624 ) Goodwill impairment — (27,887 ) — (27,887 ) Intangible and long-lived asset impairment — (16,818 ) — (16,818 ) Stock appreciation rights market-to-market (248 ) — (294 ) — Restructuring charges (3,055 ) (3,142 ) (10,687 ) (3,142 ) Senior leadership transition and other employee-related costs — (1,153 ) — (1,153 ) Obsolete retail inventory — (950 ) — (950 ) Professional fees related to control remediation (378 ) (1,358 ) (918 ) (1,895 ) Executive search fees — — (80 ) (235 ) Professional fees related to ASC 606 implementation — — — (1,092 ) Sales and use tax audit — — (1,235 ) — Other professional fees (967 ) (81 ) (1,343 ) (162 ) Income (loss) from operations 2,086 (43,212 ) 4,401 (39,617 ) Interest income 37 19 239 135 Interest expense (4,376 ) (1,769 ) (9,608 ) (4,854 ) Other, net (1,736 ) (301 ) (2,196 ) (1,734 ) Loss before income taxes $ (3,989 ) $ (45,263 ) $ (7,164 ) $ (46,070 ) |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation of Interim Financial Statements | Basis of Presentation of Interim Financial Statements The accompanying unaudited condensed consolidated financial statements of InnerWorkings, Inc. and subsidiaries (the “Company”) included herein have been prepared to conform to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and generally accepted accounting principles in the United States (“GAAP”) for interim financial information. Footnote disclosures that would substantially duplicate the disclosures included in the December 31, 2018 audited financial statements have been omitted from these interim unaudited financial statements pursuant to such rules and regulations. In the opinion of management, all adjustments considered necessary for a fair presentation of the accompanying unaudited financial statements have been included, and all adjustments are of a normal and recurring nature. The operating results for the three and nine month periods ended September 30, 2019 are not necessarily indicative of the results to be expected for the full year ending December 31, 2019 . These condensed consolidated interim financial statements and notes should be read in conjunction with the Company’s Consolidated Financial Statements and Notes thereto as of and for the year ended December 31, 2018 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 19, 2019 . |
Argentinian Highly Inflationary Accounting | Argentinian Highly Inflationary Accounting In the second quarter of 2018 , the Argentinian economy was classified as highly inflationary under GAAP due to multiple years of increasing inflation, the devaluation of the Argentine peso ("ARS") and increasing borrowing rates. Effective July 1, 2018 |
Fair Value Measurements | Fair Value Measurements ASC 820, Fair Value Measurement , includes a fair value hierarchy that is intended to increase consistency and comparability in fair value measurements and related disclosures. The fair value hierarchy is based on observable or unobservable inputs to valuation techniques that are used to measure fair value. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing based upon its own market assumptions. The fair value hierarchy consists of the following three levels: • Level 1: Inputs are quoted prices in active markets for identical assets or liabilities. • Level 2: Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted prices that are observable and market-corroborated inputs, which are derived principally from or corroborated by observable market data. • Level 3: Inputs that are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable. The fair value of revolving credit facilities and long-term debt facilities are determined using current market yields. Fair value accounting requires bifurcation of embedded derivative instruments such as interest rate reset features in debt instruments, and measurement of their fair value for accounting purposes. In determining the appropriate fair value for embedded derivatives, the Company uses a 'with and without' valuation model. Additionally, fair value accounting requires liability-classified awards, such as warrant liabilities, to be measured at fair value for accounting purposes. The fair value of freestanding derivative instruments, such as warrant liabilities, are valued using the Black-Scholes-Merton option pricing model. Once determined, derivative liabilities and warrant liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded within other expense as an adjustment to fair value of derivatives. |
Deferred Financing Fees and Debt Discounts | Deferred Financing Fees and Debt Discounts Deferred financing fees represent third-party debt issuance costs associated with the related debt facility. Deferred financing fees and related derivative and warrant features associated with the Company’s long-term debt agreement are treated as a discount on the long-term debt and amortized using the effective interest rate method. Derivative features associated with the Company’s revolving credit agreement are treated as a discount on the revolving credit facility and amortized using the straight-line method. Deferred financing fees related to the Company's revolving credit facility are capitalized and reflected as deferred financing costs within other non-current assets and are amortized over the term of the revolving credit facility. Debt discounts on the Company’s revolving credit facility and long-term debt are reflected as a direct deduction from the carrying amount of the long-term portion of the related debt liability. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Accounting Standards In February 2016 , the FASB issued ASU No. 2016-02, Leases (Topic 842). This pronouncement requires lessees to recognize a liability for lease obligations, which represents the discounted obligation to make future lease payments, and a corresponding right-of-use asset on the balance sheet. The Company adopted ASU 2016-02, along with related clarifications and improvements, as of January 1, 2019 , using the modified retrospective approach, which allows the Company to apply ASC 840, Leases , in the comparative periods presented in the year of adoption. The cumulative effect of adoption was recorded as an adjustment to the opening balance of retained earnings in the period of adoption. The Company elected to use the package of practical expedients, which permitted the Company to not reassess: (i) whether a contract is or contains a lease, (ii) lease classification, and (iii) initial direct costs resulting from the lease. The Company has not elected the hindsight practical expedient, which permits the use of hindsight when determining lease term and impairment of operating lease assets. The Company elected to apply the short-term lease exception, which allows the Company to keep leases with terms of 12 months or less off the balance sheet. The Company also elected to combine lease and non-lease components as a single component for the Company's entire population of lease assets. Adoption of the new standard resulted in the recording of net lease assets and lease liabilities of approximately $39.4 million and $41.5 million , respectively, as of January 1, 2019 . The $2.1 million difference in the lease liabilities and net lease assets represents the net ASC 840 lease liabilities at the effective date that were netted against the initial right-of-use-asset, which included: straight-line rent, prepaid rent, and lease incentives. The $0.2 million transition adjustment to retained earnings was comprised of $1.0 million of build-to-suit financing lease assets that were derecognized and recorded as operating leases in transition and $0.5 million of initial impairment to right-of-use-assets, which were partially offset by the related deferred tax effect of $0.3 million . Adoption of ASU 2016-02 did not materially impact the Company's consolidated net earnings or cash flows and did not have a notable impact on the Company's liquidity or debt-covenant compliance under the Company's current agreements. In the first quarter of 2019, the FASB issued ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income , which amends ASC 220, Income Statement - Reporting Comprehensive Income . This ASU allows a reclassification from accumulated OCI to retained earnings for stranded tax effects resulting from tax reform. This update is effective for fiscal years beginning after December 15, 2018, including interim periods therein, and early adoption is permitted. An election was not made to reclassify the income tax effects of the Tax Cuts and Jobs Act (“Tax Reform Act”) from accumulated other comprehensive income to retained earnings. The adoption of this ASU did not have a material impact on the Company's consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which requires entities to measure the impairment of certain financial instruments, including trade receivables, based on expected losses rather than incurred losses. The guidance introduces a new credit reserving methodology known as the Current Expected Credit Loss (CECL) methodology, which will alter the estimation process, inputs, and assumptions used in estimating credit losses. The effective date is for fiscal years beginning after December 15, 2019, with early adoption permitted for financial statement periods beginning after December 15, 2018. The CECL methodology requires measurement of expected credit losses for the estimated life of the financial instrument, not only based on historical experience and current conditions, but also by including reasonable and supportable forecasts incorporating forward-looking information. At the date of adoption, the change in reserves will be recorded in retained earnings as a cumulative-effect adjustment. The Company is continuing its implementation efforts and has substantially completed scoping activities. The Company is in process of developing CECL models for each pool of financial assets based on risk characteristics of each pool. Model creation, model validation, and parallel runs will continue through the remainder of 2019. In addition, the Company continues to develop the business processes, policies, and controls that satisfy the requirements of the new guidance. The actual impact at adoption will depend on the outstanding balances, characteristics of the Company’s receivable portfolios, macroeconomic conditions, and forecasted information at the date of adoption; however, the Company does not expect ASU 2016-13 to have a significant impact to the consolidated financial statements and related disclosures. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Contract with Customer, Asset and Liability | The following is a summary of the Company's costs to fulfill and contract liabilities as of September 30, 2019 and December 31, 2018 (in thousands): September 30, 2019 December 31, 2018 Costs to fulfill $ 1,272 $ 1,152 Contract liabilities 18,526 17,614 Cash received 7,622 11,387 Revenue recognized $ 6,710 $ 11,850 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Assets and Liabilities, Lessee | Supplemental balance sheet information related to leases was as follows (in thousands): September 30, 2019 Operating leases Right of use assets: Right of use assets $ 51,425 Finance leases Right of use assets: Right of use assets, cost $ 579 Less: Accumulated amortization (278 ) Right of use assets, net $ 301 Total right of use assets, net $ 51,726 Lease liabilities Current Operating $ 8,485 Finance 114 Non-current Operating $ 46,865 Finance 229 Total lease liabilities $ 55,693 |
Lease, Cost | The components of lease cost were as follows (in thousands): September 30, 2019 Operating lease cost $ 7,649 Variable lease cost 866 Short-term lease cost 1,530 Finance lease cost: Amortization of right of use assets 57 Interest on lease liabilities 16 Total finance lease cost $ 73 Less: Sublease income (132 ) Total lease cost $ 9,986 Average lease terms and discount rates were as follows: September 30, 2019 Weighted-average remaining lease term (years) Operating leases 6.96 Finance leases 2.92 Weighted-average discount rate Operating leases 6.59 % Finance leases 7.77 % Supplemental cash flow information related to leases was as follows (in thousands): September 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 82 Operating cash flows from operating leases 5,828 Total $ 5,910 |
Lessee, Operating Lease, Liability, Maturity | The aggregate future lease payments for operating and finance leases as of September 30, 2019 are as follows (in thousands): Operating Finance Remaining 2019 $ 2,638 $ 33 2020 11,089 133 2021 11,873 134 2022 10,292 71 2023 7,804 10 Thereafter 27,210 — Total lease payments $ 70,906 $ 381 Less: Interest (15,556 ) (38 ) Present value of lease liabilities $ 55,350 $ 343 |
Finance Lease, Liability, Maturity | The aggregate future lease payments for operating and finance leases as of September 30, 2019 are as follows (in thousands): Operating Finance Remaining 2019 $ 2,638 $ 33 2020 11,089 133 2021 11,873 134 2022 10,292 71 2023 7,804 10 Thereafter 27,210 — Total lease payments $ 70,906 $ 381 Less: Interest (15,556 ) (38 ) Present value of lease liabilities $ 55,350 $ 343 |
Schedule of Future Minimum Rental Payments for Operating Leases | The aggregate future lease payments for operating and capital leases as of December 31, 2018 were as follows (in thousands): Operating 2019 $ 6,383 2020 5,017 2021 4,422 2022 3,245 2023 2,068 Thereafter 1,966 Total lease payments $ 23,101 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following is a summary of the goodwill balance for each reportable segment as of September 30, 2019 (in thousands): North America EMEA LATAM Total Goodwill as of December 31, 2018 $ 152,158 $ — $ — $ 152,158 Foreign exchange impact 33 — — 33 Goodwill as of September 30, 2019 $ 152,191 $ — $ — $ 152,191 |
Other Intangibles and Long-Li_2
Other Intangibles and Long-Lived Assets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | The following is a summary of the Company’s intangible assets as of September 30, 2019 and December 31, 2018 (in thousands): September 30, 2019 December 31, 2018 Weighted Average Life Customer lists $ 73,101 $ 73,792 14.4 Non-competition agreements 942 950 4.1 Trade names 2,510 2,510 13.3 Patents 57 57 9.0 Intangible assets 76,610 77,309 Less: accumulated amortization (68,380 ) (67,481 ) Intangible assets, net $ 8,230 $ 9,828 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | As of September 30, 2019 , estimated amortization expense for the remainder of 2019 and each of the next five years and thereafter is as follows (in thousands): Remainder of 2019 $ 533 2020 2,021 2021 1,783 2022 1,407 2023 962 2024 745 Thereafter 779 $ 8,230 |
Restructuring Activities (Table
Restructuring Activities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Restructuring and Related Activities [Abstract] | |
Summary of Accrued Restructuring Activities | The following table summarizes the accrued restructuring activities for this plan for the nine months ended September 30, 2019 (in thousands), all of which relate to EMEA: Employee Severance and Related Benefits Lease and Contract Termination Costs Other Total Balance as of December 31, 2018 $ 486 $ — $ — $ 486 Cash payments (364 ) — — (364 ) Balance as of September 30, 2019 $ 122 $ — $ — $ 122 The following table summarizes the accrued restructuring activities for this plan for the nine months ended September 30, 2019 (in thousands): Employee Severance and Related Benefits Lease and Contract Termination Costs Other Total Balance at December 31, 2018 $ 357 $ 286 $ 706 $ 1,349 Charges 4,434 851 5,402 10,687 Cash payments (3,217 ) (888 ) (4,968 ) (9,073 ) Non-cash settlements/adjustments 55 (167 ) — (112 ) Balance as of September 30, 2019 $ 1,629 $ 82 $ 1,140 $ 2,851 The Company recorded the following restructuring costs by segment (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 North America $ 2,549 $ 1,666 $ 3,957 $ 1,666 EMEA 112 1,186 1,517 1,186 LATAM 102 290 176 290 Other 292 — 5,037 — Total $ 3,055 $ 3,142 $ 10,687 $ 3,142 |
Loss Per Share (Tables)
Loss Per Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The computations of basic and diluted loss per share for the three and nine months ended September 30, 2019 and 2018 are as follows (in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Net loss $ (2,174 ) $ (44,937 ) $ (5,805 ) $ (46,921 ) Shares used in computing per share amounts: Weighted average shares outstanding 51,985 51,688 51,900 52,384 Issuance of warrants 1,335 — 1,335 — Weighted average shares outstanding - basic and diluted 53,320 51,688 53,235 52,384 Basic and diluted net loss per share $ (0.04 ) $ (0.87 ) $ (0.11 ) $ (0.90 ) |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Measurements, Valuation Techniques | The table below sets forth the assumptions used within the Black-Scholes-Merton option pricing model to value the Company’s warrant liabilities: Stock price $ 4.43 Exercise price $ 0.01 Time until expiration (years) 4.79 Expected volatility 53.0 % Risk-free interest rate 1.55 % Expected dividend yield — % |
Schedule of Fair Value, Liabilities Measured on Recurring Basis | The table below sets forth the total fair value of the revolving credit facility and related derivative and term loan and related derivative and warrant as of September 30, 2019 (in thousands): September 30, 2019 Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Fair Value ABL Credit Facility $ 123,029 $ — $ 123,029 ABL Credit Facility - derivative — 541 541 Term Loan Credit Facility 91,590 — 91,590 Warrant — 5,254 5,254 Term Loan Credit Facility - derivative — 442 442 Less: Unamortized discount and deferred financing costs (5,258 ) (5,159 ) (10,417 ) Total $ 209,361 $ 1,078 $ 210,439 |
Revolving Credit Facilities (Ta
Revolving Credit Facilities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Derivative Liabilities at Fair Value | The following schedule shows the change in fair value of the ABL Embedded Derivative at September 30, 2019 (in thousands): December 31, 2018 $ — Issuance of associated debt (July 16, 2019) 599 Change in fair value (58 ) September 30, 2019 $ 541 The following schedule shows the change in fair value of the Term Loan Embedded Derivative at September 30, 2019 (in thousands): December 31, 2018 $ — Issuance of associated debt (July 16, 2019) 481 Change in fair value (39 ) September 30, 2019 $ 442 |
Schedule of Debt | The Company’s ABL Credit Facility at September 30, 2019 is summarized as follows (in thousands): ABL Credit Facility outstanding $ 81,472 Less: Current portion of ABL Credit Facility for UK Borrowings (4,585 ) Long-term portion of ABL Credit Facility 76,887 Less: ABL Embedded Derivative Discount (1) (599 ) ABL Embedded Derivative Liability (2) 541 Total Revolving credit facility - non-current $ 76,829 (1) Original value of embedded derivative at July 16, 2019, less amortization. (2) Value of embedded derivative as of September 30, 2019. The Company’s Term Loan Credit Facility at September 30, 2019 is summarized as follows (in thousands): Term Loan Credit Facility outstanding $ 98,750 Less: Current portion of Term Loan Credit Facility (6,250 ) Long-term portion of Term Loan Credit Facility 92,500 Less: Original Issue Discount (1) (8,205 ) Term Loan Embedded Derivative Liability (2) 442 Initial Warrant Liability (2) 5,254 Total Term Loan - Non-current $ 89,991 (1) Original value of OID attributable to debt issuance costs, warrant liability and embedded derivatives at July 16, 2019, less amortization. (2) Value of warrant liability and embedded derivatives as of September 30, 2019. |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Derivative Liabilities at Fair Value | The following schedule shows the change in fair value of the ABL Embedded Derivative at September 30, 2019 (in thousands): December 31, 2018 $ — Issuance of associated debt (July 16, 2019) 599 Change in fair value (58 ) September 30, 2019 $ 541 The following schedule shows the change in fair value of the Term Loan Embedded Derivative at September 30, 2019 (in thousands): December 31, 2018 $ — Issuance of associated debt (July 16, 2019) 481 Change in fair value (39 ) September 30, 2019 $ 442 |
Schedule of Warrant Liabilities at Fair Value | The Initial Warrant was recorded as a liability at fair value and will be treated as a discount on the associated debt. The following schedule shows the change in fair value of the Initial Warrant at September 30, 2019 (in thousands): December 31, 2018 $ — Issuance of initial warrant (July 16, 2019) 4,304 Change in fair value 950 September 30, 2019 $ 5,254 |
Schedule of Debt | The Company’s ABL Credit Facility at September 30, 2019 is summarized as follows (in thousands): ABL Credit Facility outstanding $ 81,472 Less: Current portion of ABL Credit Facility for UK Borrowings (4,585 ) Long-term portion of ABL Credit Facility 76,887 Less: ABL Embedded Derivative Discount (1) (599 ) ABL Embedded Derivative Liability (2) 541 Total Revolving credit facility - non-current $ 76,829 (1) Original value of embedded derivative at July 16, 2019, less amortization. (2) Value of embedded derivative as of September 30, 2019. The Company’s Term Loan Credit Facility at September 30, 2019 is summarized as follows (in thousands): Term Loan Credit Facility outstanding $ 98,750 Less: Current portion of Term Loan Credit Facility (6,250 ) Long-term portion of Term Loan Credit Facility 92,500 Less: Original Issue Discount (1) (8,205 ) Term Loan Embedded Derivative Liability (2) 442 Initial Warrant Liability (2) 5,254 Total Term Loan - Non-current $ 89,991 (1) Original value of OID attributable to debt issuance costs, warrant liability and embedded derivatives at July 16, 2019, less amortization. (2) Value of warrant liability and embedded derivatives as of September 30, 2019. |
Business Segments (Tables)
Business Segments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The table below presents financial information for the Company’s reportable segments and Other for the three and nine months ended September 30, 2019 and 2018 (in thousands): North America EMEA LATAM Other Total Three Months Ended September 30, 2019 Revenue from third parties $ 201,868 $ 64,352 $ 20,305 $ — $ 286,525 Revenue from other segments 1,952 3,264 14 (5,230 ) — Total revenue $ 203,820 $ 67,616 $ 20,319 $ (5,230 ) $ 286,525 Adjusted EBITDA (1) $ 18,363 $ 3,907 $ 571 $ (11,233 ) $ 11,608 Three Months Ended September 30, 2018 Revenue from third parties $ 181,363 $ 68,890 $ 20,597 $ — $ 270,850 Revenue from other segments 622 2,151 100 (2,873 ) — Total revenue $ 181,985 $ 71,041 $ 20,697 $ (2,873 ) $ 270,850 Adjusted EBITDA (1) $ 14,627 $ 4,619 $ 1,082 $ (8,085 ) $ 12,243 North America EMEA LATAM Other Total Nine Months Ended September 30, 2019 Revenue from third parties $ 590,452 $ 187,014 $ 60,350 $ — $ 837,816 Revenue from other segments 3,165 7,624 18 (10,807 ) — Total revenue $ 593,617 $ 194,638 $ 60,368 $ (10,807 ) $ 837,816 Adjusted EBITDA (1) $ 54,964 $ 10,726 $ 1,447 $ (35,315 ) $ 31,822 Nine Months Ended September 30, 2018 Revenue from third parties $ 565,243 $ 198,229 $ 63,884 $ — $ 827,356 Revenue from other segments 2,993 7,679 178 (10,850 ) — Total revenue $ 568,236 $ 205,908 $ 64,062 $ (10,850 ) $ 827,356 Adjusted EBITDA (1) $ 50,215 $ 6,929 $ 2,913 $ (32,278 ) $ 27,779 (1) |
Schedule of EBITDA Reconciliation | The table below reconciles Adjusted EBITDA to loss before income taxes (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Adjusted EBITDA $ 11,608 $ 12,243 $ 31,822 $ 27,779 Depreciation and amortization (3,090 ) (3,265 ) (8,939 ) (10,438 ) Stock-based compensation expense (1,784 ) (801 ) (3,925 ) (3,624 ) Goodwill impairment — (27,887 ) — (27,887 ) Intangible and long-lived asset impairment — (16,818 ) — (16,818 ) Stock appreciation rights market-to-market (248 ) — (294 ) — Restructuring charges (3,055 ) (3,142 ) (10,687 ) (3,142 ) Senior leadership transition and other employee-related costs — (1,153 ) — (1,153 ) Obsolete retail inventory — (950 ) — (950 ) Professional fees related to control remediation (378 ) (1,358 ) (918 ) (1,895 ) Executive search fees — — (80 ) (235 ) Professional fees related to ASC 606 implementation — — — (1,092 ) Sales and use tax audit — — (1,235 ) — Other professional fees (967 ) (81 ) (1,343 ) (162 ) Income (loss) from operations 2,086 (43,212 ) 4,401 (39,617 ) Interest income 37 19 239 135 Interest expense (4,376 ) (1,769 ) (9,608 ) (4,854 ) Other, net (1,736 ) (301 ) (2,196 ) (1,734 ) Loss before income taxes $ (3,989 ) $ (45,263 ) $ (7,164 ) $ (46,070 ) |
Basis of Presentation (Details)
Basis of Presentation (Details) $ in Thousands, $ in Millions | Jan. 01, 2019USD ($) | Sep. 30, 2019USD ($)$ / $ | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)$ / $ | Sep. 30, 2018USD ($) | Sep. 30, 2019ARS ($)$ / $ | Dec. 31, 2018USD ($) |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
ARS to USD Exchange Rate | $ / $ | 57.5 | 57.5 | 57.5 | ||||
Favorable currency impacts within Other income (expense) | $ 0 | $ (100) | $ (100) | $ (100) | |||
Amount recognized in revenues due to inflationary accounting | 500 | 600 | 2,200 | 3,300 | |||
Amount recognized in gross margin due to inflationary accounting | 100 | $ 100 | 200 | $ 400 | |||
Right of use assets, net | 51,726 | 51,726 | |||||
Lease liabilities, net | 55,693 | 55,693 | |||||
Build-to-suit financing lease assets | $ 36,714 | $ 36,714 | $ 82,933 | ||||
Accounting Standards Update 2016-02 | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Right of use assets, net | $ 39,400 | ||||||
Lease liabilities, net | 41,500 | ||||||
Lease, right-of-use assets (liabilities), net | (2,100) | ||||||
Cumulative effect of new accounting principle in period of adoption | 159 | ||||||
Build-to-suit financing lease assets | 1,000 | ||||||
Operating lease, impairment loss | 500 | ||||||
Operating lease, deferred tax effect | 300 | ||||||
Argentina, Pesos | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Net monetary assets | $ 58.3 | ||||||
Retained Earnings | Accounting Standards Update 2016-02 | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Cumulative effect of new accounting principle in period of adoption | $ 159 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |||
Capitalized contract costs amortization | $ 40 | $ 250 | |
Costs to fulfill | 1,272 | 1,272 | $ 1,152 |
Contract liabilities | 18,526 | 18,526 | 17,614 |
Cash received | $ 7,622 | 7,622 | 11,387 |
Revenue recognized | $ 6,710 | $ 11,850 |
Leases - Narrative (Details)
Leases - Narrative (Details) | 9 Months Ended |
Sep. 30, 2019 | |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Lessee, lease, term of contract | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Lessee, lease, term of contract | 10 years |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Operating leases: | |
Right of use assets | $ 51,425 |
Finance leases: | |
Right of use asset, cost | 579 |
Accumulated amortization | (278) |
Right of use asset, net | 301 |
Total right of use assets, net | 51,726 |
Current | |
Operating | 8,485 |
Finance | 114 |
Non-current | |
Operating | 46,865 |
Finance | 229 |
Total lease liabilities | $ 55,693 |
Leases - Components of Lease Co
Leases - Components of Lease Cost (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 7,649 |
Variable lease cost | 866 |
Short-term lease cost | 1,530 |
Finance lease cost: | |
Amortization of right of use assets | 57 |
Interest on lease liabilities | 16 |
Total finance lease cost | 73 |
Sublease income | (132) |
Total lease cost | $ 9,986 |
Leases - Average Lease Terms an
Leases - Average Lease Terms and Discount Rates (Details) | Sep. 30, 2019 |
Weighted-average remaining lease term (years) | |
Operating leases | 6 years 11 months 15 days |
Finance leases | 2 years 11 months 1 day |
Weighted-average discount rate | |
Operating leases | 6.59% |
Finance leases | 7.77% |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows from finance leases | $ 82 |
Operating cash flows from operating leases | 5,828 |
Total | $ 5,910 |
Leases - Aggregate Future Lease
Leases - Aggregate Future Lease Payments (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Operating | ||
Remaining 2019 | $ 2,638 | |
2020 | 11,089 | |
2021 | 11,873 | |
2022 | 10,292 | |
2023 | 7,804 | |
Thereafter | 27,210 | |
Total lease payments | 70,906 | |
Less: Interest | (15,556) | |
Present value of lease liabilities | 55,350 | |
Finance | ||
Remaining 2019 | 33 | |
2020 | 133 | |
2021 | 134 | |
2022 | 71 | |
2023 | 10 | |
Thereafter | 0 | |
Total lease payments | 381 | |
Less: Interest | (38) | |
Present value of lease liabilities | $ 343 | |
Operating | ||
2019 | $ 6,383 | |
2020 | 5,017 | |
2021 | 4,422 | |
2022 | 3,245 | |
2023 | 2,068 | |
Thereafter | 1,966 | |
Total lease payments | $ 23,101 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill [Roll Forward] | ||||||
Goodwill, beginning balance | $ 152,158 | |||||
Foreign exchange impact | 33 | |||||
Goodwill, ending balance | $ 152,191 | 152,191 | $ 152,158 | |||
Goodwill impairment | 0 | $ 27,887 | 0 | $ 27,887 | ||
North America | ||||||
Goodwill [Roll Forward] | ||||||
Goodwill, beginning balance | 152,158 | |||||
Foreign exchange impact | 33 | |||||
Goodwill, ending balance | $ 152,191 | $ 152,191 | 152,158 | |||
Reporting unit, threshold maximum percentage of fair value in excess of carrying amount | 30.00% | 30.00% | ||||
Goodwill impairment | 18,400 | $ 75,400 | ||||
EMEA | ||||||
Goodwill [Roll Forward] | ||||||
Goodwill, beginning balance | $ 0 | |||||
Foreign exchange impact | 0 | |||||
Goodwill, ending balance | $ 0 | 0 | 0 | |||
Goodwill impairment | 20,800 | |||||
LATAM | ||||||
Goodwill [Roll Forward] | ||||||
Goodwill, beginning balance | 0 | |||||
Foreign exchange impact | 0 | |||||
Goodwill, ending balance | $ 0 | $ 0 | $ 0 | |||
Goodwill impairment | $ 7,100 |
Other Intangibles and Long-Li_3
Other Intangibles and Long-Lived Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets | $ 76,610 | $ 77,309 |
Less accumulated amortization | (68,380) | (67,481) |
Intangible assets, net | 8,230 | 9,828 |
Customer lists | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets | 73,101 | 73,792 |
Less accumulated amortization | $ (65,300) | (64,500) |
Weighted Average Life | 14 years 4 months 24 days | |
Non-competition agreements | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets | $ 942 | 950 |
Weighted Average Life | 4 years 1 month 6 days | |
Trade names | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets | $ 2,510 | 2,510 |
Weighted Average Life | 13 years 3 months 18 days | |
Patents | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets | $ 57 | $ 57 |
Weighted Average Life | 9 years |
Other Intangibles and Long-Li_4
Other Intangibles and Long-Lived Assets - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization expense of intangible assets | $ 600 | $ 900 | $ 1,600 | $ 3,200 | |
Accumulated amortization | 68,380 | 68,380 | $ 67,481 | ||
Intangible and other asset impairments | 0 | 16,818 | $ 0 | $ 16,818 | |
LATAM | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Intangible and other asset impairments | 600 | ||||
EMEA | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Intangible and other asset impairments | 13,200 | ||||
Customer Lists | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Weighted Average Life | 14 years 4 months 24 days | ||||
Accumulated amortization | $ 65,300 | $ 65,300 | $ 64,500 | ||
Intangible and other asset impairments | 13,800 | ||||
Noncompete Agreements | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Weighted Average Life | 4 years 1 month 6 days | ||||
Trade Names | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Weighted Average Life | 13 years 3 months 18 days | ||||
Patents | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Weighted Average Life | 9 years | ||||
Legacy ERP system | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Non-cash, long-lived asset impairment charge | $ 3,000 |
Other Intangibles and Long-Li_5
Other Intangibles and Long-Lived Assets - Schedule of Other Intangible Amortization (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2019 | $ 533 | |
2020 | 2,021 | |
2021 | 1,783 | |
2022 | 1,407 | |
2023 | 962 | |
2024 | 745 | |
Thereafter | 779 | |
Intangible assets, net | $ 8,230 | $ 9,828 |
Restructuring Activities - Narr
Restructuring Activities - Narrative (Details) $ in Thousands | Aug. 10, 2018USD ($) | Dec. 14, 2015USD ($)employee | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) |
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | $ 3,055 | $ 3,142 | $ 10,687 | $ 3,142 | ||
Restructuring Plan, 2018 | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | 10,687 | |||||
Non-cash settlements/adjustments | $ 400 | 112 | ||||
Restructuring charges recognized pursuant to 2018 plan | $ 16,700 | 16,700 | ||||
Restructuring Plan, 2015 | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | $ 6,700 | |||||
Expected number of positions eliminated | employee | 100 | |||||
Employee Severance and Related Benefits | Restructuring Plan, 2018 | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | 4,434 | |||||
Non-cash settlements/adjustments | (55) | |||||
Employee Severance and Related Benefits | Restructuring Plan, 2015 | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | $ 5,600 | |||||
Lease and Contract Termination Costs | Restructuring Plan, 2018 | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | 851 | |||||
Non-cash settlements/adjustments | $ 167 | |||||
Lease and Contract Termination Costs | Restructuring Plan, 2015 | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | $ 1,100 | |||||
Minimum | Restructuring Plan, 2018 | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | 20,000 | |||||
Minimum | Employee Severance and Related Benefits | Restructuring Plan, 2018 | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | 12,000 | |||||
Minimum | Lease and Contract Termination Costs | Restructuring Plan, 2018 | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | 8,000 | |||||
Maximum | Restructuring Plan, 2018 | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | 25,000 | |||||
Maximum | Employee Severance and Related Benefits | Restructuring Plan, 2018 | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | 15,000 | |||||
Maximum | Lease and Contract Termination Costs | Restructuring Plan, 2018 | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | $ 10,000 |
Restructuring Activities - Sche
Restructuring Activities - Schedule of Restructuring Related Costs (Details) - USD ($) $ in Thousands | Aug. 10, 2018 | Dec. 14, 2015 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 |
Restructuring Reserve [Roll Forward] | ||||||
Charges | $ 3,055 | $ 3,142 | $ 10,687 | $ 3,142 | ||
Restructuring Plan, 2018 | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Beginning balance | 1,349 | |||||
Charges | 10,687 | |||||
Cash payments | (9,073) | |||||
Non-cash settlements/adjustments | $ (400) | (112) | ||||
Ending balance | 2,851 | 2,851 | ||||
Restructuring Plan, 2018 | Employee Severance and Related Benefits | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Beginning balance | 357 | |||||
Charges | 4,434 | |||||
Cash payments | (3,217) | |||||
Non-cash settlements/adjustments | 55 | |||||
Ending balance | 1,629 | 1,629 | ||||
Restructuring Plan, 2018 | Lease and Contract Termination Costs | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Beginning balance | 286 | |||||
Charges | 851 | |||||
Cash payments | (888) | |||||
Non-cash settlements/adjustments | (167) | |||||
Ending balance | 82 | 82 | ||||
Restructuring Plan, 2018 | Other | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Beginning balance | 706 | |||||
Charges | 5,402 | |||||
Cash payments | (4,968) | |||||
Non-cash settlements/adjustments | 0 | |||||
Ending balance | 1,140 | 1,140 | ||||
Restructuring Plan, 2015 | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Beginning balance | 486 | |||||
Charges | $ 6,700 | |||||
Cash payments | (364) | |||||
Ending balance | 122 | 122 | ||||
Restructuring Plan, 2015 | Employee Severance and Related Benefits | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Beginning balance | 486 | |||||
Charges | 5,600 | |||||
Cash payments | (364) | |||||
Ending balance | 122 | 122 | ||||
Restructuring Plan, 2015 | Lease and Contract Termination Costs | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Beginning balance | 0 | |||||
Charges | $ 1,100 | |||||
Cash payments | 0 | |||||
Ending balance | 0 | 0 | ||||
Restructuring Plan, 2015 | Other | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Beginning balance | 0 | |||||
Cash payments | 0 | |||||
Ending balance | $ 0 | $ 0 |
Restructuring Activities - Sc_2
Restructuring Activities - Schedule of Restructuring Costs by Segment (Details) - Restructuring Plan, 2018 - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 3,055 | $ 3,142 | $ 10,687 | $ 3,142 |
Operating Segments | North America | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 2,549 | 1,666 | 3,957 | 1,666 |
Operating Segments | EMEA | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 102 | 290 | 176 | 290 |
Operating Segments | LATAM | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 112 | 1,186 | 1,517 | 1,186 |
Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 292 | $ 0 | $ 5,037 | $ 0 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate percentage | 45.50% | 0.70% | 19.00% | (1.80%) |
Loss Per Share - Schedule of Ba
Loss Per Share - Schedule of Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Net loss | $ (2,174) | $ (44,937) | $ (5,805) | $ (46,921) |
Weighted-average shares outstanding – basic (in shares) | 51,985 | 51,688 | 51,900 | 52,384 |
Issuance of warrants (in shares) | 1,335 | 0 | 1,335 | 0 |
Weighted average shares outstanding – basic and diluted (in shares) | 53,320 | 51,688 | 53,235 | 52,384 |
Basic and diluted net loss per share (in dollars per share) | $ (0.04) | $ (0.87) | $ (0.11) | $ (0.90) |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Arthur J.Gallagher & Co. | |||||
Related Party Transaction [Line Items] | |||||
Print procurement services | $ 0.3 | $ 0.4 | $ 1.2 | $ 1.1 | |
Amount billed to the Company for consideration of services | 0.2 | 0.2 | |||
Net amount receivable from related parties | 0.3 | 0.3 | $ 0.3 | ||
Enova Inc. | |||||
Related Party Transaction [Line Items] | |||||
Print procurement services | 4.8 | $ 2.9 | 10.8 | $ 6.9 | |
Net amount receivable from related parties | $ 4.6 | $ 4.6 | $ 2 |
Fair Value Measurement - Schedu
Fair Value Measurement - Schedule of Fair Value Assumptions (Details) | 9 Months Ended |
Sep. 30, 2019$ / shares | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Stock price (in dollars per share) | $ 4.43 |
Exercise price (in dollars per share) | $ 0.01 |
Time until expiration (years) | 4 years 9 months 14 days |
Expected volatility | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrant liability, measurement input | 0.530 |
Risk-free interest rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrant liability, measurement input | 0.0155 |
Expected dividend yield | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrant liability, measurement input | 0 |
Fair Value Measurement - Sche_2
Fair Value Measurement - Schedule of Fair Value Measurements (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jul. 16, 2019 |
Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrant | $ 5,254 | |
Less: Unamortized discount and deferred financing costs | (10,417) | |
Total | 210,439 | |
Fair Value, Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrant | 0 | |
Less: Unamortized discount and deferred financing costs | (5,258) | |
Total | 209,361 | |
Fair Value, Recurring | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrant | 5,254 | |
Less: Unamortized discount and deferred financing costs | (5,159) | |
Total | 1,078 | |
Term loan facility | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Line of credit, fair value | 91,590 | |
Derivative | 442 | |
Term loan facility | Fair Value, Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Line of credit, fair value | 91,590 | |
Derivative | 0 | |
Term loan facility | Fair Value, Recurring | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Line of credit, fair value | 0 | |
Derivative | 442 | |
ABL Credit Agreement | Revolving credit facility | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Less: Unamortized discount and deferred financing costs | $ (300) | |
ABL Credit Agreement | Revolving credit facility | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Line of credit, fair value | 123,029 | |
Derivative | 541 | |
ABL Credit Agreement | Revolving credit facility | Fair Value, Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Line of credit, fair value | 123,029 | |
Derivative | 0 | |
ABL Credit Agreement | Revolving credit facility | Fair Value, Recurring | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Line of credit, fair value | 0 | |
Derivative | $ 541 |
Commitments and Contingencies (
Commitments and Contingencies (Details) € in Millions, $ in Millions | 1 Months Ended | ||||||||
Jan. 31, 2014USD ($) | Jan. 31, 2014EUR (€) | Dec. 31, 2013USD ($) | Dec. 31, 2013EUR (€) | Nov. 30, 2013USD ($) | Nov. 30, 2013EUR (€) | Sep. 30, 2015USD ($) | Sep. 30, 2015EUR (€) | Feb. 28, 2014EUR (€) | |
Wrongful Termination Lawsuit - Productions Graphics | |||||||||
Other Commitments [Line Items] | |||||||||
Loss contingency, damages sought | $ 1 | € 0.7 | $ 1 | € 0.7 | |||||
Loss contingency, damages value, contingent consideration | $ 9.4 | € 7.1 | € 7.1 | ||||||
Loss contingency, damages value, fixed consideration | 8 | 5.8 | |||||||
Loss contingency, damages maximum, contingent consideration | $ 37.6 | € 34.5 | |||||||
Employment Arbitration Claim | |||||||||
Other Commitments [Line Items] | |||||||||
Loss contingency, damages sought | $ 0.7 | € 0.6 |
Revolving Credit Facilities - N
Revolving Credit Facilities - Narrative (Details) | Jul. 16, 2019USD ($) | Feb. 22, 2016USD ($) | Aug. 10, 2010USD ($) | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2019USD ($) |
Revolving Credit Facility | China | |||||||
Line of Credit Facility [Line Items] | |||||||
Revolving commitment amount | $ 1,000,000 | $ 5,000,000 | |||||
Unused capacity | $ 500,000 | ||||||
Revolving Credit Facility | Base Rate | China | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis spread on variable rate | 110.00% | ||||||
Revolving Credit Facility | Credit Agreement Due 2019 | |||||||
Line of Credit Facility [Line Items] | |||||||
Revolving commitment amount | $ 175,000,000 | ||||||
Revolving Credit Facility | Credit Agreement Due 2020 | |||||||
Line of Credit Facility [Line Items] | |||||||
Revolving commitment amount | 160,000,000 | ||||||
Revolving Credit Facility | Credit Agreement | |||||||
Line of Credit Facility [Line Items] | |||||||
Increased current borrowing capacity | $ 50,000,000 | ||||||
Ratio of indebtedness to net capital | 3 | 3.50 | |||||
Maximum leverage ratio | 3 | 4.75 | 4.50 | ||||
Conversion ratio | 5 | 5 | |||||
Minimum leverage ratio | 5 | 3.50 | 4 | ||||
Revolving Credit Facility | ABL Credit Agreement | |||||||
Line of Credit Facility [Line Items] | |||||||
Revolving commitment amount | 105,000,000 | ||||||
Write off of deferred debt issuance cost | 100,000 | ||||||
Additional increase to borrowing capacity | 20,000,000 | ||||||
ABL Credit Facility outstanding | 81,472,000 | ||||||
Letters of credit outstanding | 1,300,000 | ||||||
Unamortized discount and deferred financing costs | 300,000 | ||||||
Deferred financing costs | 1,700,000 | ||||||
Amortization of deferred financing costs | 100,000 | ||||||
Revolving Credit Facility | ABL Credit Agreement | US | |||||||
Line of Credit Facility [Line Items] | |||||||
ABL Credit Facility outstanding | 76,900,000 | ||||||
Revolving Credit Facility | ABL Credit Agreement | UK | |||||||
Line of Credit Facility [Line Items] | |||||||
Revolving commitment amount | 15,000,000 | ||||||
ABL Credit Facility outstanding | $ 4,600,000 | ||||||
Bridge Loan | ABL Credit Agreement | |||||||
Line of Credit Facility [Line Items] | |||||||
Revolving commitment amount | 10,500,000 | ||||||
Letter of Credit | ABL Credit Agreement | |||||||
Line of Credit Facility [Line Items] | |||||||
Revolving commitment amount | $ 10,000,000 | ||||||
Minimum | Revolving Credit Facility | Credit Agreement | Base Rate | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis spread on variable rate | 0.50% | ||||||
Minimum | Revolving Credit Facility | Credit Agreement | Eurodollar | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis spread on variable rate | 1.50% | ||||||
Minimum | Revolving Credit Facility | ABL Credit Agreement | LIBOR | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis spread on variable rate | 2.00% | ||||||
Minimum | Revolving Credit Facility | ABL Credit Agreement | Base Rate | US | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis spread on variable rate | 1.00% | ||||||
Minimum | Revolving Credit Facility | ABL Credit Agreement | Base Rate | UK | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis spread on variable rate | 2.00% | ||||||
Maximum | Revolving Credit Facility | Credit Agreement | Base Rate | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis spread on variable rate | 2.25% | ||||||
Maximum | Revolving Credit Facility | Credit Agreement | Eurodollar | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis spread on variable rate | 3.25% | ||||||
Maximum | Revolving Credit Facility | ABL Credit Agreement | LIBOR | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis spread on variable rate | 2.50% | ||||||
Maximum | Revolving Credit Facility | ABL Credit Agreement | Base Rate | US | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis spread on variable rate | 1.50% | ||||||
Maximum | Revolving Credit Facility | ABL Credit Agreement | Base Rate | UK | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis spread on variable rate | 2.50% |
Revolving Credit Facilities - C
Revolving Credit Facilities - Change in Fair Value of ABL Embedded Derivative (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Change in fair value | $ 97 | $ 0 |
ABL Credit Agreement | Revolving Credit Facility | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Beginning balance | 0 | |
Issuance of associated debt (July 16, 2019) | 599 | |
Change in fair value | (58) | |
Ending balance | $ 541 |
Revolving Credit Facilities - S
Revolving Credit Facilities - Summary of ABL Credit Facility (Details) - ABL Credit Agreement - Revolving Credit Facility - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Line of Credit Facility [Line Items] | ||
ABL Credit Facility outstanding | $ 81,472 | |
Less: Current portion of ABL Credit Facility for UK Borrowings | (4,585) | $ (142,736) |
Long-term portion of Credit Facility | 76,887 | |
Less: ABL Embedded Derivative Discount | (599) | |
ABL Embedded Derivative Liability | 541 | |
Total Revolving credit facility - non-current | $ 76,829 | $ 0 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) | Oct. 01, 2020USD ($) | Jul. 16, 2019USD ($)day$ / sharesshares | Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) |
Debt Instrument [Line Items] | ||||
Debt instrument, converted debt, interest rate | 2.49% | |||
Initial Warrant | ||||
Debt Instrument [Line Items] | ||||
Number of warrants or rights exercisable (in shares) | shares | 1,335,337 | |||
Class of warrant or right, exercise price (in usd per share) | $ / shares | $ 0.01 | |||
Warrants and rights outstanding, exercise period after triggering event | 10 days | |||
Term Loan Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Warrant, exercise price of common stock | 4.25 | |||
Debt instrument, covenant, leverage ratio, maximum | 4 | |||
Debt instrument, convertible, threshold trading days | day | 5 | |||
Amortization of debt discount | $ 200,000 | |||
Interest expense | 200,000 | |||
Term Loan Facility | ||||
Debt Instrument [Line Items] | ||||
ABL Credit Facility outstanding | 98,750,000 | $ 98,750,000 | ||
Original issue discount | 8,205,000 | 8,205,000 | ||
Term Loan Facility | Term Loan Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Revolving commitment amount | $ 100,000,000 | |||
Debt instrument, periodic payment, principal | 1,300,000 | |||
ABL Credit Facility outstanding | $ 98,800,000 | $ 98,800,000 | ||
Original issue discount | 8,500,000 | |||
Debt issuance costs | $ 3,700,000 | |||
Term Loan Facility | Term Loan Credit Agreement | Minimum | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 6.25% | |||
Term Loan Facility | Term Loan Credit Agreement | Minimum | Prime Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 5.25% | |||
Term Loan Facility | Term Loan Credit Agreement | Maximum | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 10.75% | |||
Term Loan Facility | Term Loan Credit Agreement | Maximum | Prime Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 9.75% | |||
Forecast | Term Loan Facility | Term Loan Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, periodic payment, principal | $ 2,500,000 |
Long-Term Debt - Change in Fair
Long-Term Debt - Change in Fair Value of Term Loan Embedded Derivative (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Change in fair value | $ 97 | $ 0 |
Term Loan Credit Agreement | Term Loan Facility | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Beginning balance | 0 | |
Issuance of associated debt (July 16, 2019) | 481 | |
Change in fair value | (39) | |
Ending balance | $ 442 |
Long-Term Debt - Change in Fa_2
Long-Term Debt - Change in Fair Value of Initial Warrant (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Change in fair value | $ (950) | $ 0 |
Initial Warrant | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 0 | |
Issuance of initial warrant (July 16, 2019) | 4,304 | |
Change in fair value | 950 | |
Ending balance | $ 5,254 |
Long-Term Debt - Summary of Ter
Long-Term Debt - Summary of Term Loan Credit Facility (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Term Loan Facility | ||
Debt Instrument [Line Items] | ||
Term Loan Credit Facility outstanding | $ 98,750 | |
Initial Warrant Liability(2) | (6,250) | |
Long-term portion of Credit Facility | 92,500 | |
Less: Original Issue Discount | (8,205) | |
Term Loan Embedded Derivative Liability | 442 | |
Total Term Loan - Non-current | 89,991 | |
Initial Warrant | ||
Debt Instrument [Line Items] | ||
Initial Warrant Liability | 5,254 | $ 0 |
Initial Warrant | Term Loan Facility | ||
Debt Instrument [Line Items] | ||
Initial Warrant Liability | $ 5,254 |
Share Repurchase Program (Detai
Share Repurchase Program (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2018 | May 04, 2017 | Feb. 12, 2015 | |
Equity [Abstract] | |||
Stock repurchase authorized amount | $ 30,000,000 | $ 20,000,000 | |
Stock repurchased (in shares) | 2,667,732 | ||
Payments for stock repurchased | $ (25,598,000) | ||
Stock repurchased (in dollars per share) | $ 9.60 |
Business Segments - Schedule of
Business Segments - Schedule of Business Segment Financial Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)segment | Sep. 30, 2018USD ($) | |
Segment Reporting [Abstract] | ||||
Number of business segments | segment | 3 | |||
Segment Reporting Information [Line Items] | ||||
Revenue from third parties | $ 286,525 | $ 270,850 | $ 837,816 | $ 827,356 |
Revenue from other segments | 0 | 0 | 0 | 0 |
Total revenue | 286,525 | 270,850 | 837,816 | 827,356 |
Adjusted EBITDA | 11,608 | 12,243 | 31,822 | 27,779 |
Operating Segments | North America | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from third parties | 201,868 | 181,363 | 590,452 | 565,243 |
Revenue from other segments | 1,952 | 622 | 3,165 | 2,993 |
Total revenue | 203,820 | 181,985 | 593,617 | 568,236 |
Adjusted EBITDA | 18,363 | 14,627 | 54,964 | 50,215 |
Operating Segments | EMEA | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from third parties | 64,352 | 68,890 | 187,014 | 198,229 |
Revenue from other segments | 3,264 | 2,151 | 7,624 | 7,679 |
Total revenue | 67,616 | 71,041 | 194,638 | 205,908 |
Adjusted EBITDA | 3,907 | 4,619 | 10,726 | 6,929 |
Operating Segments | LATAM | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from third parties | 20,305 | 20,597 | 60,350 | 63,884 |
Revenue from other segments | 14 | 100 | 18 | 178 |
Total revenue | 20,319 | 20,697 | 60,368 | 64,062 |
Adjusted EBITDA | 571 | 1,082 | 1,447 | 2,913 |
Other | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from third parties | 0 | 0 | 0 | 0 |
Revenue from other segments | (5,230) | (2,873) | (10,807) | (10,850) |
Total revenue | (5,230) | (2,873) | (10,807) | (10,850) |
Adjusted EBITDA | $ (11,233) | $ (8,085) | $ (35,315) | $ (32,278) |
Business Segments - Schedule _2
Business Segments - Schedule of Business Segments Adjusted EBITDA (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Segment Reporting [Abstract] | ||||
Adjusted EBITDA | $ 11,608 | $ 12,243 | $ 31,822 | $ 27,779 |
Depreciation and amortization | (3,090) | (3,265) | (8,939) | (10,438) |
Stock-based compensation expense | (1,784) | (801) | (3,925) | (3,624) |
Goodwill impairment | 0 | (27,887) | 0 | (27,887) |
Intangible and long-lived asset impairment | 0 | (16,818) | 0 | (16,818) |
Stock appreciation rights market-to-market | (248) | 0 | (294) | 0 |
Restructuring charges | (3,055) | (3,142) | (10,687) | (3,142) |
Senior leadership transition and other employee-related costs | 0 | (1,153) | 0 | (1,153) |
Obsolete retail inventory | 0 | (950) | 0 | (950) |
Professional fees related to control remediation | (378) | (1,358) | (918) | (1,895) |
Executive search fees | 0 | 0 | (80) | (235) |
Professional fees related to ASC 606 implementation | 0 | 0 | 0 | (1,092) |
Sales and use tax audit | 0 | 0 | (1,235) | 0 |
Other professional fees | (967) | (81) | (1,343) | (162) |
Income (loss) from operations | 2,086 | (43,212) | 4,401 | (39,617) |
Interest income | 37 | 19 | 239 | 135 |
Interest expense | (4,376) | (1,769) | (9,608) | (4,854) |
Other, net | (1,736) | (301) | (2,196) | (1,734) |
Loss before income taxes | $ (3,989) | $ (45,263) | $ (7,164) | $ (46,070) |
Uncategorized Items - inwkq3201
Label | Element | Value |
Accounting Standards Update 2016-16 [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 153,000 |
Accounting Standards Update 2016-16 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 153,000 |
Accounting Standards Update 2014-09 [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 482,000 |
Accounting Standards Update 2014-09 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 482,000 |