Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 13, 2015 | |
Document And Entity Information | ||
Entity Registrant Name | WESTERN CAPITAL RESOURCES, INC. | |
Entity Central Index Key | 1,363,958 | |
Document Type | 10-Q | |
Trading Symbol | WCRS | |
Document Period End Date | Sep. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity a Well-known Seasoned Issuer | No | |
Entity a Voluntary Filer | No | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 9,497,689 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,015 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
CURRENT ASSETS | ||
Cash | $ 3,548,728 | $ 4,273,350 |
Loans receivable (less allowance for losses of $1,301,000 and $1,219,000, respectively) | 5,097,418 | 5,331,266 |
Accounts receivable (less allowance for losses of $266,000 and $59,405, respectively) | 2,155,177 | 1,135,127 |
Inventory | 7,583,661 | 2,340,824 |
Prepaid expenses and other | 2,756,249 | 1,435,918 |
Deferred income taxes | 600,000 | 644,000 |
TOTAL CURRENT ASSETS | 21,741,233 | 15,160,485 |
PROPERTY AND EQUIPMENT, net | 8,518,038 | 1,197,710 |
GOODWILL | 13,788,612 | 12,956,868 |
INTANGIBLE ASSETS, net | 8,126,180 | 7,248,793 |
OTHER | 439,402 | 198,408 |
TOTAL ASSETS | 52,613,465 | 36,762,264 |
CURRENT LIABILITIES | ||
Accounts payable and accrued liabilities | 9,381,954 | 6,025,920 |
Income taxes payable | 923,827 | 755,615 |
Current portion notes payable | 4,900,008 | 3,500,000 |
Current portion capital lease obligations | 27,128 | 42,240 |
Deferred revenue and other | 960,604 | 638,068 |
TOTAL CURRENT LIABILITIES | 16,193,521 | 10,961,843 |
LONG-TERM LIABILITIES | ||
Notes payable, net of current portion | 3,571,454 | 1,625,000 |
Capital lease obligations, net of current portion | 48,922 | 31,481 |
Deferred income taxes | 4,268,000 | 3,939,000 |
Other | 93,262 | 114,514 |
TOTAL LONG-TERM LIABILITIES | 7,981,638 | 5,709,995 |
TOTAL LIABILITIES | $ 24,175,159 | $ 16,671,838 |
COMMITMENTS AND CONTINGENCIES (Note 15) | ||
WESTERN SHAREHOLDERS' EQUITY | ||
Common stock, no par value, 12,500,000 shares authorized, 9,497,689 and 5,997,588 issued and outstanding. | ||
Additional paid-in capital | $ 28,903,681 | $ 22,703,745 |
Accumulated deficit | (486,233) | (2,621,692) |
TOTAL WESTERN SHAREHOLDERS' EQUITY | 28,417,448 | 20,082,053 |
NONCONTROLLING INTERESTS | 20,858 | 8,373 |
TOTAL EQUITY | 28,438,306 | 20,090,426 |
TOTAL LIABILITIES AND EQUITY | $ 52,613,465 | $ 36,762,264 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Loans receivable, allowance (in dollars) | $ 1,301,000 | $ 1,219,000 |
Accounts receivable, allowance (in dollars) | $ 266,000 | $ 59,405 |
Common Stock,no par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized | 12,500,000 | 12,500,000 |
Common stock, shares issued | 9,497,689 | 5,997,588 |
Common stock, shares outstanding | 9,497,689 | 5,997,588 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
REVENUES | ||||
Sales and associated fees | $ 13,403,791 | $ 5,710,322 | $ 27,039,059 | $ 15,680,700 |
Financing fees and interest | 2,865,842 | $ 2,919,822 | 8,007,438 | $ 8,229,216 |
Royalty and franchise fees, net | 2,803,405 | 7,883,214 | ||
Other revenue | 2,878,430 | $ 928,600 | 6,259,541 | $ 2,901,385 |
TOTAL REVENUES | 21,951,468 | 9,558,744 | 49,189,252 | 26,811,301 |
COST OF REVENUES | ||||
Cost of sales | 7,324,815 | 2,982,059 | 15,329,353 | 8,841,356 |
Provisions for loans receivable losses | 572,959 | $ 514,763 | 1,351,427 | $ 1,268,330 |
Other | 200,303 | 730,143 | ||
Total Cost of Revenues | 8,098,077 | $ 3,496,822 | 17,410,923 | $ 10,109,686 |
GROSS PROFIT | 13,853,391 | 6,061,922 | 31,778,329 | 16,701,615 |
OPERATING EXPENSES | ||||
Salaries, wages and benefits | 6,236,073 | 2,706,386 | 14,733,576 | 7,702,265 |
Occupancy | 2,016,406 | 1,122,669 | 4,729,718 | 3,409,951 |
Selling, marketing and development | 1,142,751 | 91,164 | 1,513,578 | 260,831 |
Depreciation | 234,122 | 87,150 | 444,814 | 258,644 |
Amortization | 141,783 | 28,373 | 359,133 | 82,962 |
Other | 2,280,809 | 1,053,371 | 5,754,519 | 2,972,548 |
TOTAL OPERATING EXPENSES | 12,051,944 | 5,089,113 | 27,535,338 | 14,687,201 |
OPERATING INCOME | 1,801,447 | $ 972,809 | 4,242,991 | $ 2,014,414 |
OTHER INCOME (EXPENSES): | ||||
Interest income | 995 | 3,065 | ||
Interest expense | (198,048) | $ (60,493) | (401,299) | $ (191,823) |
TOTAL OTHER INCOME (EXPENSES) | (197,053) | (60,493) | (398,234) | (191,823) |
INCOME BEFORE INCOME TAXES | 1,604,394 | 912,316 | 3,844,757 | 1,822,591 |
INCOME TAX EXPENSE | 724,293 | 347,000 | 1,696,813 | 686,000 |
NET INCOME | 880,101 | $ 565,316 | 2,147,944 | $ 1,136,591 |
Less net income attributable to noncontrolling interests | (6,498) | (12,485) | ||
NET INCOME ATTRIBUTABLE TO WESTERN SHAREHOLDERS | $ 873,603 | $ 565,316 | $ 2,135,459 | $ 1,136,591 |
EARNINGS PER SHARE ATTRIBUTABLE TO WESTERN COMMON SHAREHOLDERS | ||||
Basic and diluted (in dollars per share) | $ 0.09 | $ 0.19 | $ 0.30 | $ 0.38 |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | ||||
Basic and diluted (in shares) | 9,497,689 | 3,010,765 | 7,177,176 | 3,010,922 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
OPERATING ACTIVITIES | ||
Net Income | $ 2,147,944 | $ 1,136,591 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 444,814 | 258,644 |
Amortization | 359,133 | $ 82,962 |
Stock based compensation | 76,538 | |
Deferred income taxes | 390,000 | $ 275,000 |
Changes in operating assets and liabilities: | ||
Loans receivable | 233,848 | $ 344,103 |
Accounts receivable | (492,684) | |
Inventory | (1,645,395) | $ (445,191) |
Prepaid expenses and other assets | (612,532) | 345,883 |
Accounts payable and accrued liabilities | (468,720) | $ 327,633 |
Deferred revenue and other current liabilities | (137,896) | |
Accrued liabilities and other | (21,252) | $ (26,401) |
Net cash provided by operating activities | 273,798 | 2,299,224 |
INVESTING ACTIVITIES | ||
Purchase of property and equipment | $ (507,075) | (211,106) |
Purchase of intangible assets | $ (250,000) | |
Acquisition of stores | $ (2,608,500) | |
Cash acquired through acquisition | 2,470,930 | |
Net cash used by investing activities | (644,645) | $ (461,106) |
FINANCING ACTIVITIES | ||
Payments on notes payable - short-term | (120,000) | |
Payments on notes payable - long-term, net | $ (191,668) | $ (750,000) |
Common stock redemption | $ (388) | |
Payments on capital leases | $ (42,107) | |
Net cash used by financing activities | (353,775) | $ (750,388) |
NET (DECREASE) INCREASE IN CASH | (724,622) | 1,087,730 |
CASH | ||
Beginning of period | 4,273,350 | 1,983,835 |
End of period | 3,548,728 | 3,071,565 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Income taxes paid | 1,759,171 | 164,838 |
Interest paid | 392,751 | $ 200,124 |
Noncash investing and financing activities: | ||
Net assets acquired in JPPA/RAI/JPRE acquisition (see Note 13) | 6,123,398 | |
Deposit applied to purchase of intangibles | $ 50,000 |
Basis of Presentation, Nature o
Basis of Presentation, Nature of Business and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation, Nature of Business and Summary of Significant Accounting Policies | 1. Basis of Presentation, Nature of Business and Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared according to the instructions to Form 10-Q and Section 210.8-03(b) of Regulation S-X of the Securities and Exchange Commission (SEC) and, therefore, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) have been omitted. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three- and nine-month periods ended September 30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. For further information, refer to the Consolidated Financial Statements and footnotes thereto included in our Form 10-K for the year ended December 31, 2014. The condensed consolidated balance sheet at December 31, 2014, has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by GAAP. Nature of Business References in these financial statement notes to the Company or we refer to Western Capital Resources, Inc. and its subsidiaries. References to specific companies within our enterprise, such as PQH, WFL, EPI, AGI,, JPPA, RAI or JPRE are references only to those companies. Western Capital Resources, Inc. (WCR) is a holding company owning operating subsidiaries, with the percentages owned by WCR of each subsidiary shown parenthetically, as summarized below. Franchise o AlphaGraphics, Inc. (AGI) (99.2%) franchisor of 252 domestic and 26 international AlphaGraphics Business Centers, as of September 30, 2015, specializing in the planning, production and management of visual communications for businesses and individuals throughout the world. Cellular Retail o PQH Wireless, Inc. and subsidiaries (PQH) (100%) owns and operates 102 cellular retail stores, as of September 30, 2015, as an exclusive dealer of the Cricket brand in 15 statesArizona, Colorado, Idaho, Illinois, Indiana, Iowa, Kansas, Missouri, Nebraska, Ohio, Oklahoma, Oregon, Texas, Washington and Wisconsin. Direct to Consumer o J & P Park Acquisitions, Inc. (JPPA) (100%) a multi-channel retailer of live plants, seeds, holiday gifts and garden accessories selling its products under Park Seed, Jackson & Perkins, and Wayside Gardens brand names as well as a wholesaler under the Park Wholesale brand. JPPA sells over the internet and through direct mail catalogs. o Restorers Acquisition, Inc. (RAI) (100%) operates primarily as a retail seller of home improvement and restoration products. The company sells over the internet through the domain name www.Vandykes.com and through direct mail catalogs. o J & P Real Estate, LLC (JPRE) (100%) owns real estate utilized as JPPAs distribution and warehouse facility and the corporate offices of JPPA and RAI. Consumer Finance o Wyoming Financial Lenders, Inc. (WFL) (100%) owns and operates 50 payday stores, as of September 30, 2015, in nine states (Colorado, Iowa, Kansas, Nebraska, North Dakota, South Dakota, Utah, Wisconsin and Wyoming) providing sub-prime short-term uncollateralized non-recourse cash advance or payday loans typically ranging from $100 to $500 with a maturity of generally two to four weeks, installment loans typically ranging from $300 to $800 with a maturity of six months, check cashing and other money services to individuals. o Express Pawn, Inc. (EPI) (100%) owns and operates three retail pawn stores, as of September 30, 2015, in Nebraska and Iowa, providing collateralized non-recourse pawn loans and retail sales of merchandise obtained from forfeited pawn loans or purchased from customers. Basis of Consolidation The consolidated financial statements include the accounts of WCR, its wholly owned subsidiaries and other entities in which the Company owns a controlling financial interest. For financial interests in which the Company owns a controlling financial interest, the Company applies the guidance of ASC 810 applicable to reporting the equity and net income or loss attributable to noncontrolling interests. All significant intercompany balances and transactions of the Company have been eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that may affect certain reported amounts and disclosures in the consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates. Significant management estimates relate to the notes and loans receivable allowance, carrying value and impairment of long-lived goodwill and intangible assets, inventory valuation and obsolescence, estimated useful lives of property and equipment, gift certificate liabilities and deferred taxes and tax uncertainties. Receivables and Loss Allowance Direct to Consumer Receivables are recorded when billed or accrued and represent claims against third parties that will be settled in cash. The carrying value of receivables, net of the allowance for doubtful accounts, represents their estimated net realizable value. The allowance for doubtful accounts is estimated based on historical collection trends, type of customer, the age of outstanding receivables and existing economic conditions. If events or changes in circumstances indicate that specific receivable balances may be impaired, further consideration is given to the collectability of those balances and the allowance is adjusted accordingly. Past due receivable balances are written-off when internal collection efforts have been unsuccessful in collecting the amount due. Inventory Direct to Consumer Inventory is valued at the lower of cost or market using the weighted-average method of determining cost. Property and Equipment Direct to Consumer Property and equipment are recorded at cost less accumulated depreciation. Depreciation is provided on the straight-line method over the estimated useful lives of the related assets as follows: Computer equipment and software 3 10 years Warehouse improvements and equipment 3 15 years Building 39 years The cost of maintenance and repairs is charged to operations as incurred while renewals and betterments are capitalized. The Company capitalizes certain internal costs, including payroll costs, incurred in connection with the development of software for internal use. These costs are capitalized beginning when the Company has entered the application development stage. The capitalization of these costs ceases when the software is substantially complete and ready for its intended use. Costs incurred for enhancements that are expected to result in additional features or functionality are capitalized and expensed over the estimated useful life of the enhancements. Deferred Revenue Direct to Consumer Sales billed or cash received in advance of actual delivery are deferred and recorded as income in the period in which the related deliveries are made. Merchandise Credits and Gift Card Liabilities Direct to Consumer The Company maintains a liability for unredeemed gift cards, gift certificates and merchandise credits until the earlier of redemption, escheatment or a maximum of two years. The Company has concluded that the likelihood of these liabilities being redeemed beyond two years from the date of issuance is remote. Advertising Direct to Consumer The Company expenses advertising costs as they are incurred, except for direct-response advertising, which is capitalized and amortized over its expected period of future benefits, not to exceed six months. Direct-response advertising consists primarily of catalog book production, printing, and postage costs. Shipping and Handling Costs Direct to Consumer The Company includes shipping and handling fees billed to customers in net sales. Shipping and handling costs are expensed as incurred and included in cost of sales. Stock-based Compensation The Company accounts for its employee stock-based compensation plans using the fair value method. The fair value method requires the Company to estimate the grant-date fair value of its stock-based awards and amortize this fair value to compensation expense over the requisite service period or vesting term. The Company uses the Black-Scholes option-pricing model to estimate the fair value of the Companys stock option awards. The determination of the fair value of stock-based payment awards on the date of grant using an option-pricing model is affected by the Companys stock price as well as assumptions regarding a number of complex and subjective variables. These variables include the expected stock price volatility over the term of the awards, actual and projected employee stock option exercise behaviors, the risk-free interest rate and expected dividends. Due to the inherent limitations of option-valuation models, future events that are unpredictable and the estimation process utilized in determining the valuation of the stock-based awards, the ultimate value realized by award holders may vary significantly from the amounts expensed in the Companys financial statements. Stock-based compensation expense is recognized net of estimated forfeitures such that expense is recognized only for those stock-based awards that are expected to vest. A forfeiture rate is estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from initial estimate. Net Income Per Common Share Basic net income per common share is computed by dividing the income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share gives effect to all dilutive potential common shares outstanding during the period, including stock options, using the treasury stock method. Options to purchase 65,000 shares granted under the 2015 Stock Incentive Plan effective February 6, 2015 (see Note 18) were outstanding at September 30, 2015. These options have a strike price in excess of the market price as of September 30, 2015, were antidilutive and therefore not included in the computation of diluted earnings per share. Thus, there were no dilutive common shares as of September 30, 2015 and 2014. Segment Reporting The Company has grouped its operations into five segments Franchise, Cellular Retail, Direct to Consumer, Consumer Finance, and Corporate. The Franchise segment specializes in the planning, production and management of visual communications for businesses and individuals. The Cellular Retail segment is an authorized Cricket premier dealer selling cellular phones and accessories, providing ancillary services and accepting service payments from customers. The Direct to Consumer segment consists primarily of online and mail order catalog retailers sales of product offerings including seeds, live goods, holiday gifts, garden accessories and home improvement and restoration products. The Consumer Finance segment provides financial and ancillary services and also sells used merchandise at retail pawn stores. The Corporate segment consists of Company activities related to acquisitions and subsequent management of acquired businesses. Reclassifications Certain Statement of Income reclassifications have been made in the presentation of our prior financial statements and accompanying notes, including pro forma presentation, to conform to the presentation as of and for the three and nine months ended September 30, 2015. Recent Accounting Pronouncements No new accounting pronouncement issued or effective during the fiscal quarter has had or is expected to have a material impact on our condensed consolidated financial statements. |
Risks Inherent in the Operating
Risks Inherent in the Operating Environment | 9 Months Ended |
Sep. 30, 2015 | |
Risks and Uncertainties [Abstract] | |
Risks Inherent in the Operating Environment | 2. Risks Inherent in the Operating Environment Regulatory Consumer Finance The Companys Consumer Finance segment activities are highly regulated under numerous local, state and federal laws and regulations, which are subject to change. New laws or regulations could be enacted or issued, interpretations of existing laws or regulations may change, and enforcement action by regulatory agencies may intensify. Over the past several years, consumer advocacy groups and certain media reports have advocated governmental and regulatory action to prohibit or severely restrict sub-prime lending activities of the kind conducted by WFL and EPI. The federal Consumer Financial Protection Bureau has indicated that it will use its authority to further regulate the payday lending industry. Any adverse change in present local, state or federal laws or regulations that govern or otherwise affect lending could result in the Consumer Finance segments curtailment or cessation of operations in certain or all jurisdictions or locations. Furthermore, any actual or perceived failure to comply with applicable local, state or federal laws or regulations could result in fines, litigation, closure of one or more store locations, or negative publicity. Any such outcome would have a corresponding impact on the Companys results of operations and financial condition, primarily through a decrease in revenues, non-cash charges from the write-down of the carrying value of goodwill and intangible assets resulting from the cessation or curtailment of operations, and increased legal expenditures or fines, and could also negatively affect the Companys general business prospects if the Company is unable to effectively replace such revenues in a timely and efficient manner or if negative publicity effects its ability to obtain additional financing as needed. In addition, the passage of federal or state laws and regulations or changes in interpretations of them could, at any point, essentially prohibit WFL or EPI from conducting its lending business in its current form. Any such legal or regulatory change would certainly have a material and adverse effect on the Company, its operating results and its financial condition and prospects. Franchise In August 2015, the National Labor Relations Board (NLRB) changed its long-standing joint-employer standard in a widely discussed decision, Browning Ferris Industries of California, Inc. In that decision, the NLRB asserted that two or more entities are joint employers of a single workforce if they share or co-determine, even indirectly, those matters governing the essential terms and conditions of employment. In terms of franchise business models, the NLRB has to date refused to dismiss various labor and wage-violation complaints alleging that McDonalds is a joint employer together with its franchisees. In the past, courts determining whether a franchisor and franchisee are joint employers of a single workforce have generally examined whether the franchisor exercises direct (as opposed to indirect) and significant control over the franchisees' employment-related decisions-i.e., the hiring, firing or discipline of franchisee employees, payment of their wages, or setting of their work schedules. It is presently uncertain what the ultimate outcome will be of attempts by plaintiffs and regulatory authorities to impose employment-related liabilities upon franchisors under the theory that they are joint employers of their franchisees' employees. Nevertheless, the extension of the Browning Ferris principles to franchise business models, and their application to our AlphaGraphics business, could have material and adverse consequences to the operating results, financial condition and prospects of that business and our Company. Vendor Concentration Direct to Consumer RAI has an agreement with a third-party fulfillment provider that is in effect through January 31, 2016. The fulfillment provider receives and stores inventory, performs periodic cycle counts, picks, packs and ships customer orders. Additional services such as, order taking, processing of customer payments, personalization, customer services, and order processing are also performed by the fulfillment provider. RAI is currently in negotiations to extend the agreement. JPPA has an agreement with a third party wholesale grower that is in effect until 2019. The grower has agreed to perform research for JPPA and maintain JPPA's research crop in exchange for a reduction in royalties to be paid to JPPA for growing JPPA's patented roses. There is an option to renew the agreement for consecutive two year terms and the agreement calls for a 24 month notice prior to termination. |
Loans Receivable
Loans Receivable | 9 Months Ended |
Sep. 30, 2015 | |
Receivables [Abstract] | |
Loans Receivable | 3. Loans Receivable At September 30, 2015 and December 31, 2014, the Companys outstanding loans receivable aging was as follows: September 30, 2015 Payday Installment Pawn & Title Total Current $ 4,234,640 $ 263,313 $ 326,968 $ 4,824,921 1-30 369,269 43,826 413,095 31-60 278,035 21,511 299,546 61-90 250,381 13,988 264,369 91-120 249,758 5,757 255,515 121-150 168,596 1,815 170,411 151-180 170,475 86 170,561 5,721,154 350,296 326,968 6,398,418 Less Allowance (1,204,000 ) (97,000 ) (1,301,000 ) $ 4,517,154 $ 253,296 $ 326,968 $ 5,097,418 December 31, 2014 Payday Installment Pawn & Title Total Current $ 4,387,393 $ 321,634 $ 372,805 $ 5,081,832 1-30 305,382 47,321 352,703 31-60 223,465 24,791 248,256 61-90 236,072 11,799 247,871 91-120 206,705 5,438 212,143 121-150 200,101 1,984 202,085 151-180 204,804 572 205,376 5,763,922 413,539 372,805 6,550,266 Less Allowance (1,147,000 ) (72,000 ) (1,219,000 ) $ 4,616,922 $ 341,539 $ 372,805 $ 5,331,266 |
Loans Receivable Allowance
Loans Receivable Allowance | 9 Months Ended |
Sep. 30, 2015 | |
Provision for Loan and Lease Losses [Abstract] | |
Loans Receivable Allowance | 4. Loans Receivable Allowance As a result of the Companys collection efforts, it historically writes off approximately 43% of returned payday items. Based on days past the check return date, write-offs of payday returned items historically have tracked at the following approximate percentages: 1 to 30 days 43%; 31 to 60 days 65%; 61 to 90 days 83%; 91 to 120 days 88%; 121 to 150 days 91%; and 151 to 180 days 93%. A rollforward of the Companys loans receivable allowance is as follows: Nine Months Ended September 30, 2015 Year Ended December 31, 2014 Loans receivable allowance, beginning of period $ 1,219,000 $ 1,215,000 Provision for loan losses charged to expense 1,351,427 1,817,822 Charge-offs, net (1,269,427 ) (1,813,822 ) Loans receivable allowance, end of period $ 1,301,000 $ 1,219,000 |
Accounts Receivable
Accounts Receivable | 9 Months Ended |
Sep. 30, 2015 | |
Accounts Receivable | |
Accounts Receivable | 5. Accounts Receivable A breakdown of accounts receivables by segment as of September 30, 2015 and December 31, 2014 are as follows: September 30, 2015 Franchise Cellular Retail Direct to Consumer Total Accounts receivable $ 1,423,267 $ 103,738 $ 894,172 $ 2,421,177 Less allowance (150,000 ) (116,000 ) (266,000 ) Net account receivable $ 1,273,267 $ 103,738 $ 778,172 $ 2,155,177 December 31, 2014 Franchise Cellular Retail Direct to Consumer Total Accounts receivable $ 1,164,532 $ $ $ 1,164,532 Less allowance (59,405 ) (59,405 ) Net account receivable $ 1,135,127 $ $ $ 1,135,127 |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 6. Property and Equipment A rollforward of the Companys property and equipment is as follows: December 31, 2014 Merger Transaction Additions Deletions September 30, 2015 Furniture and equipment $ 2,853,603 $ 492,435 $ 1,042,617 $ (730,468 ) $ 3,658,187 Leasehold improvements 787,188 22,766 (9,117 ) 800,837 Software 504,967 1,197,839 81,243 (108,081 ) 1,675,968 Building 85,906 5,034,348 28,449 5,148,703 Land 9,500 1,200,000 1,209,500 Other 96,311 96,311 4,337,475 7,924,622 1,175,075 (847,666 ) 12,589,506 Accumulated depreciation (3,139,765 ) (1,334,555 ) (444,814 ) 847,666 (4,071,468 ) $ 1,197,710 $ 6,590,067 $ 730,261 $ $ 8,518,038 |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 7. Intangible Assets A rollforward of the Companys intangible assets consisted of the follows: December 31, 2014 Merger Transaction Additions Deletions September 30, 2015 Customer relationships $ 4,924,912 $ $ 1,115,000 $ $ 6,039,912 Acquired franchise agreements 5,227,112 5,227,112 Other 227,000 227,000 Amortizable Intangible assets 10,152,024 227,000 1,115,000 11,494,024 Less accumulated amortization (5,685,523 ) (105,480 ) (359,133 ) (6,150,136 ) Net Amortizable Intangible Assets 4,466,501 121,520 755,867 5,343,888 Non-amortizable trademarks 2,782,292 2,782,292 Intangible Assets, net $ 7,248,793 $ 121,520 $ 755,867 $ $ 8,126,180 As of September 30, 2015, estimated future amortization expense for the amortizable intangible assets is as follows: 2015 (remainder) $ 139,720 2016 550,796 2017 537,740 2018 525,991 2019 515,416 2020 499,165 Thereafter 2,575,060 $ 5,343,888 |
Other Non-Current Assets
Other Non-Current Assets | 9 Months Ended |
Sep. 30, 2015 | |
Other Assets, Noncurrent Disclosure [Abstract] | |
Other Non-Current Assets | 8. Other Non-Current Assets Other Non-Current Assets include $145,800 for a note receivable. Our agreement with the borrower includes an approximate 50% forgiveness of principal if, among other terms and conditions, required payments under the agreement are received. The agreement provides for monthly payments of principal over a five-year term ending March 2020. |
Deferred Revenue and Other Liab
Deferred Revenue and Other Liabilities | 9 Months Ended |
Sep. 30, 2015 | |
Deferred Revenue Disclosure [Abstract] | |
Deferred Revenue and Other Liabilities | 9. Deferred Revenue and Other Liabilities Deferred revenue and other liabilities consist of the following: September 30, 2015 December 31, 2014 Deferred financing fees $ 269,526 $ 284,231 Deferred franchise fees 49,579 281,837 Merchandise credits and gift card liability 447,499 Other 194,000 72,000 Total $ 960,604 $ 638,068 |
Notes Payable - Long Term
Notes Payable - Long Term | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Notes Payable - Long Term | 10. Notes Payable Long Term September 30, 2015 December 31, 2014 Note payable (with a credit limit of $3,000,000) to River City Equity, Inc., a related party, with interest payable monthly at 12% per annum, due June 30, 2016 and upon certain events can be collateralized by substantially all assets of WCR, excluding any equity interest in AGI $ 3,000,000 $ 2,000,000 Subsidiary note payable to a financial institution with quarterly principal payments of $375,000 plus interest at prime rate plus 2.5% per annum (5.75% as of September 30, 2015), secured by AGIs assets, due June 2017 2,000,000 3,125,000 Subsidiary note payable to a financial institution with monthly principal payments of $33,334 plus annual paydowns equal to JPREs net cash flow from operations due within 120 days of the calendar year end plus interest at LIBOR plus 3.5% per annum (3.75% as of September 30, 2015), secured by JPRE assets, due June 2019 3,471,462 Total 8,471,462 5,125,000 Less current maturities (4,900,008 ) (3,500,000 ) $ 3,571,454 $ 1,625,000 As part of their lending agreement, AGI may draw on a $1,000,000 line of credit (LOC). The LOC bears interest at the greater of (a) the prime rate plus 2.50% per annum or (b) the LIBOR rate plus 5.50% per annum. The LOC matures in August 2017. There was no activity on this LOC during the period ended September 30, 2015 and there was no balance outstanding as of September 30, 2015. As part of their lending agreement, JPPA may draw on a $4,250,000 LOC. The LOC bears interest at the LIBOR rate plus 2.75% per annum (3.00% as of September 30, 2015). The LOC matures on July, 2016. There was no activity on this LOC during the period ended September 30, 2015 and there was no balance outstanding as of September 30, 2015. RAI is party to a $2,000,000 revolving LOC from a financial institution. This revolving LOC is collateralized by substantially all the assets of the RAI and matures in November 2015. Interest is payable monthly at LIBOR plus 3.50% per annum (3.75% as of September 30, 2015). There was no outstanding balance at September 30, 2015. The Companys notes payable with financial institutions includes certain financial covenants. Management has determined that the Company borrowers were in compliance with these financial covenants as of September 30, 2015. |
Other Operating Expense
Other Operating Expense | 9 Months Ended |
Sep. 30, 2015 | |
Other Expense [Abstract] | |
Other Operating Expense | 11. Other Operating Expense A breakout of other operating expense is as follows: Three Months Ended September 30 Nine Months Ended September 30, 2015 2014 2015 2014 Bank fees $ 310,419 $ 114,391 $ 595,164 $ 334,069 Collection costs 99,587 102,653 319,890 324,635 Conferences 460,602 671,287 Insurance 110,788 79,339 286,783 177,003 Management and advisory fees 125,754 126,163 400,057 364,148 Professional and consulting fees 483,575 106,113 1,401,683 422,515 Supplies 167,480 150,058 496,116 474,571 Other 522,604 374,654 1,583,539 875,607 $ 2,280,809 $ 1,053,371 $ 5,754,519 $ 2,972,548 |
Income Tax Provision
Income Tax Provision | 9 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Tax Provision | 12. Income Tax Provision Income tax expense, as a percentage of Income Before Income Taxes, was 45% and 38% for the three months ended September 30, 2015 and 2014, respectively, and 44% and 38% for the nine months ended September 30, 2015 and 2014, respectively. Nondeductible portion of meal and entertainment expense and nondeductible transaction costs contributed to the higher effective tax rates. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2015 | |
Business Combination, Description [Abstract] | |
Acquisition | 13. Acquisitions Cellular Retail Effective June 1, 2015, PQH consummated the acquisition of all outstanding membership interests in four separate limited liability companies. The entities acquired, when combined, do not meet the 20% significant subsidiaries thresholds under Rule 210.1-02 as modified by Rule 210.3-05(b) of SEC Reg. S-X. Under the equity method of accounting, the assets acquired and liabilities assumed were recorded at their estimated fair values as of the purchase date as follows: June 1, 2015 Cash $ 389,000 Inventory 427,000 Other receivables 405,000 Property and equipment 612,000 Goodwill 578,000 Intangible assets 903,000 Other assets 69,000 Accounts payable and accrued liabilities (826,000 ) $ 2,557,000 JPPA, RAI and JPRE Transaction Effective July 1, 2015, the Company acquired the businesses of JPPA, RAI and JPRE by completing a merger and contribution transaction. In consideration for the acquisition of these businesses, the Company issued to the former owners an aggregate of 3.5 million shares of the Companys common stock representing approximately 37% of the total issued and outstanding common stock after consummation of the acquisition. The e ntities are affiliated entities under common control and in accordance with Accounting Standards Codification Topic 805, Business Combinations, and the Company, as the acquirer, recognized the assets and liabilities of the target entities at their historical values as of the date of merger as follows July 1, 2015 Cash $ 2,082,000 Accounts Receivables, net 527,000 Inventory 3,170,000 Deferred income tax asset 186,000 Prepaid expense and other current assets 525,000 Property and equipment, net 6,590,000 Goodwill 31,000 Intangible assets, net 122,000 Accounts payable and accrued liabilities (2,231,000 ) Short-term notes payable (120,000 ) Income taxes payable (547,000 ) Deferred revenue and other (460,000 ) Notes payable and capital leases (3,583,000 ) Deferred income tax liability (169,000 ) $ 6,123,000 The results of the operations for the acquired businesses, as well as the acquisition of AGI (see Note 13 to the Companys December 31, 2014 Notes to Consolidated Financial Statements) on October 1, 2014 have been included in the consolidated financial statements since the respective dates of acquisition. The following table presents the unaudited pro forma results of operations for the three and nine months ended September 30, 2015 and 2014, as if these acquisitions had been consummated at the beginning of 2014. The pro forma net income below excludes the expenses of the transactions and includes a reduction in management and advisory fees that resulted from the AGI transaction. The pro forma results of operations are prepared for comparative purposes only and do not necessarily reflect the results that would have occurred had the acquisitions been consummated at the beginning of the 2014, or the results that may occur in the future. For the Three Months Ended September 30, 2015 Franchise Cellular Direct to Consumer Corporate Total Pro forma revenue $ 3,675 $ 9,537 $ 5,442 $ 3,297 $ - $ 21,951 Pro forma net income (loss) $ 829 $ 443 $ (569 ) $ 390 $ (167 ) $ 926 Pro forma net income attributable to noncontrolling interests $ 6 $ - $ - $ - $ - $ 6 Pro forma net income (loss) available to Western shareholders $ 823 $ 443 $ (569 ) $ 390 $ (167 ) $ 920 Pro forma earnings (loss) per share available to Western common shareholders basic and diluted $ 0.087 $ 0.047 $ (0.060 ) $ 0.041 $ (0.018 ) $ 0.097 For the Three Months Ended September 30, 2014 Franchise Cellular Direct to Consumer Corporate Total Pro forma revenue $ 3,665 $ 9,078 $ 5,734 $ 3,366 $ - $ 21,843 Pro forma net income (loss) $ 648 $ 393 $ (606 ) $ 364 $ - $ 799 Pro forma net income attributable to noncontrolling interests $ 5 $ - $ - $ - $ - $ 5 Pro forma net income (loss) available to Western shareholders $ 643 $ 393 $ (606 ) $ 364 $ - $ 794 Pro forma earnings (loss) per share available to Western common shareholders basic and diluted $ 0.068 $ 0.041 $ (0.064 ) $ 0.039 $ - $ 0.084 For the Nine Months Ended September 30, 2015 Franchise Cellular Direct to Consumer Corporate Total Pro forma revenue $ 9,641 $ 29,632 $ 30,296 $ 9,451 $ - $ 79,020 Pro forma net income (loss) $ 1,585 $ 967 $ 1,365 $ 932 $ (408 ) $ 4,441 Pro forma net income attributable to noncontrolling interests $ 13 $ - $ - $ - $ - $ 13 Pro forma net income (loss) available to Western shareholders $ 1,572 $ 967 $ 1,365 $ 932 $ (408 ) $ 4,428 Pro forma earnings (loss) per share available to Western common shareholders basic and diluted $ 0.165 $ 0.102 $ 0.144 $ 0.098 $ (0.043 ) $ 0.466 For the Nine Months Ended September 30, 2014 Franchise Cellular Direct to Consumer Corporate Total Pro forma revenue $ 9,568 $ 25,215 $ 30,587 $ 9,506 $ - $ 74,876 Pro forma net income (loss) $ 1,165 $ 526 $ 480 $ 1,076 $ - $ 3,247 Pro forma net income attributable to noncontrolling interests $ 5 $ - $ - $ - $ - $ 5 Pro forma net income (loss) available to Western shareholders $ 1,160 $ 526 $ 480 $ 1,076 $ - $ 3,242 Pro forma earnings (loss) per share available to Western common shareholders basic and diluted $ 0.122 $ 0.055 $ 0.051 $ 0.113 $ - $ 0.341 |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Segment Information | 14. Segment Information Segment information related to the three and nine months ended September 30, 2015 and 2014, is presented below: For the Three Months Ended September 30, 2015 (in thousands) Franchise Cellular Retail Direct to Consumer Consumer Finance Corporate Total Revenues from external customers $ 3,675 $ 9,537 5,442 $ 3,297 $ $ 21,951 Depreciation and amortization $ 109 $ 136 102 $ 29 $ $ 376 Interest expense $ 57 $ 91 50 $ $ $ 198 Income tax expense (benefit) $ 534 $ 221 (177 ) $ 221 $ (75 ) $ 724 Net income (loss) $ 829 $ 443 (569 ) $ 390 $ (213 ) $ 880 Expenditures for segmented assets $ $ 186 $ 29 $ $ 215 For the Three Months Ended September 30, 2014 (in thousands) Franchise Cellular Retail Direct to Consumer Consumer Finance Corporate Total Revenues from external customers $ $ 6,193 $ $ 3,366 $ $ 9,559 Depreciation and amortization $ $ 85 $ $ 31 $ $ 116 Interest expense $ $ 42 $ $ 18 $ $ 60 Income tax expense (benefit) $ $ 164 $ $ 183 $ $ 347 Net income (loss) $ $ 266 $ $ 299 $ $ 565 Expenditures for segmented assets $ $ 34 $ $ 9 $ $ 43 For the Nine Months Ended September 30, 2015 (in thousands) Franchise Cellular Retail Direct to Consumer Consumer Finance Corporate Total Revenues from external customers $ 9,641 $ 24,655 $ 5,442 $ 9,451 $ $ 49,189 Depreciation and amortization $ 325 $ 292 $ 102 $ 85 $ $ 804 Interest expense $ 156 $ 195 $ 50 $ $ $ 401 Income tax expense (benefit) $ 1,015 $ 503 $ (177 ) $ 553 $ (197 ) $ 1,697 Net income (loss) $ 1,585 $ 910 $ (569 ) $ 932 $ (710 ) $ 2,148 Total segment assets $ 9,379 $ 12,823 $ 13,568 $ 16,299 $ 544 $ 52,613 Expenditures for segmented assets $ 91 $ 3,656 $ 186 $ 45 $ 14 $ 3,992 For the Nine Months Ended September 30, 2014 (in thousands) Franchise Cellular Retail Direct to Consumer Consumer Finance Corporate Total Revenues from external customers $ $ 17,305 $ $ 9,506 $ $ 26,811 Depreciation and amortization $ $ 256 $ $ 86 $ $ 342 Interest expense $ $ 130 $ $ 62 $ $ 192 Income tax expense (benefit) $ $ 119 $ $ 567 $ $ 686 Net income (loss) $ $ 199 $ $ 938 $ $ 1,137 Total segment assets $ $ 8,625 $ $ 16,749 $ $ 25,374 Expenditures for segmented assets $ $ 401 $ $ 60 $ $ 461 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2015 | |
Leases [Abstract] | |
Leases | 15. Leases The Company leases retail and office facilities under operating leases with terms ranging from month to month to six years, with rights to extend for additional periods. Future minimum base lease payments (in thousands) are approximately as follows: Year Ending December 31, Operating Leases 2015 (remainder) $ 938 2016 2,920 2017 2,110 2018 998 2019 554 2020 90 Thereafter Total minimum base lease payments $ 7,610 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 16. Commitments and Contingencies Employment Agreements On April 11, 2013, the Company entered into an Amended and Restated Employment Agreement with its Chief Executive Officer, Mr. John Quandahl. This agreement has a term of three years and contains, among other terms and conditions, provisions for an annual performance-based cash bonus pool for management. Effective February 9, 2015, the Company entered into a three-year employment agreement with its Chief Investment Officer (CIO). Pursuant to that agreement, the CIO is eligible for a discretionary annual performance-based bonus up to $200,000. To date no performance-based bonus has been accrued. The Company has also entered into several employment agreements with certain members of subsidiary management. The terms of each agreement are different, but may ordinarily include stipulated base salary and bonus potential. Pursuant to the numerous employment agreements, bonuses of approximately $353,000 and $655,000 were accrued for the three and nine months ended September 30, 2015, respectively. Vendor Service Agreement In September 2015, AGI entered into a service agreement with a vendor for approximately $680,000. The vendor will provide services over a three year period. |
Management and Advisory Agreeme
Management and Advisory Agreement | 9 Months Ended |
Sep. 30, 2015 | |
Management And Advisory Agreement | |
Management and Advisory Agreement | 17. Management and Advisory Agreement The Company is party to an Amended and Restated Management and Advisory Agreement with Blackstreet Capital Management, LLC, (Blackstreet) under which Blackstreet provides certain financial, managerial, strategic and operating advice and assistance to the Company (see Note 17 to the Companys December 31, 2014 Notes to Consolidated Financial Statements). The amended and restated agreement requires the Company to pay Blackstreet a fee in an amount equal to $400,000 upon the closing of an acquisition in consideration for Blackstreets referral to the Company of such acquisition opportunity, and Blackstreets assistance in the performance of due diligence services relating thereto. Any fees which may have been payable per these terms related to the JPPA, RAI and JPRE acquisition (see Note 12) were waived by Blackstreet. Effective July 1, 2015 the agreement with Blackstreet was amended. The annual fees under the amended and restated contract will be the greater of (i) $612,100 (subject to annual increases of five percent) or (ii) five percent of Western Capitals EBITDA as defined under the agreement. All other terms and provisions remain unmodified. |
Equity
Equity | 9 Months Ended |
Sep. 30, 2015 | |
Stockholders' Equity Note [Abstract] | |
Equity | 18. Equity Common Stock Issued As further explained in Note 13, on July 1, 2015, WCR issued an aggregate of 3.5 million shares of common stock for the acquisition of JPPA, RAI and JPRE. This represented approximately 37% of the total issued and outstanding common stock of the Company after the issuance. WCR 2015 Stock Incentive Plan The Board of Directors of WCR adopted WCRs new 2015 Stock Incentive Plan effective February 6, 2015. The plan replaces the Companys earlier adopted 2008 Stock Incentive Plan, which the board terminated effective February 6, 2015. There were no incentives issued or outstanding under the terminated plan. WCRs Board of Directors, or a committee of the board, will administer the 2015 Stock Incentive Plan and have complete authority to award incentives, interpret the plan and make any other determination it believes necessary and advisable for the proper administration of the plan. A total of 100,000 shares of WCR common stock were reserved in connection with the adoption of the 2015 Stock Incentive Plan. The new plan permits the granting of incentives in any one or a combination of the following forms: stock options, including options intended to qualify under Section 422 of the Internal Revenue Code of 1986, as amended, as qualified or incentive stock options; stock appreciation rights (often referred to as SARs) payable in cash or shares of common stock; restricted stock and restricted stock units; performance awards of cash, stock or property; and stock awards. The following table summarizes nonvested stock option awards outstanding at September 30, 2015 and the changes for the nine months then ended: Number of Weighted- Weighted- Average Remaining Contractual Term ( in years Aggregate Outstanding and nonvested at December 31, 2014 $ $ Granted 65,000 6.00 9.37 Vested Forfeited Outstanding and nonvested at September 30, 2015 65,000 $ 6.00 9.37 $ Exercisable at September 30, 2015 The option vests in three annual and near-equal installments on each of February 8, 2016, 2017 and 2018, and has a contract life of ten years. There were no vested options at September 30, 2015, and thus no intrinsic value in outstanding vested options at September 30, 2015. As of September 30, 2015, total unrecognized stock-based compensation expense related to nonvested stock options was approximately $119,000, which is expected to be recognized over a weighted-average period of approximately 1.4 years. JPPA Stock Incentive Plan The following table summarizes nonvested stock option awards outstanding at September 30, 2015 and the changes for the three months then ended: Number of Shares Weighted- Average Exercise Price Per Share Weighted- Average Remaining Contractual Term ( in years Aggregate Intrinsic Value Outstanding and nonvested at June 30, 2015 35.1 $ 3403.37 $ Granted 9.4 Vested Forfeited Outstanding and nonvested at September 30, 2015 35.1 $ 3403.37 9.4 $ Exercisable at September 30, 2015 Subject to the provisions of the J&P Park Acquisitions, Inc. 2010 Stock Option Plan, the options vest 10% annually beginning on the one year anniversary of the grant until 50% of the options have vested. The remaining options vest upon a sale of the company (as defined in the agreement). The options have a contract life of ten years. There were no vested options at September 30, 2015, and thus no intrinsic value in outstanding vested options at September 30, 2015. As of September 30, 2015, total unrecognized stock-based compensation expense related to nonvested stock options was approximately $108,000. At September 30, 2015 JPPA had 4,645 shares issued and outstanding. RAI Stock Incentive Plan The following table summarizes nonvested stock option awards outstanding at September 30, 2015 and the changes for the three months then ended: Number of Shares Weighted- Average Exercise Price Per Share Weighted- Average Remaining Contractual Term ( in years Aggregate Intrinsic Value Outstanding and nonvested at June 30, 2015 $ $ Granted 73.76 3,765.90 9.16 Vested Forfeited Outstanding and nonvested at September 30, 2015 73.76 $ 3,765.90 9.16 $ Exercisable at September 30, 2015 2.96 6,471.00 6.45 Subject to the provisions of the Restorers Acquisition, Inc. 2011 Stock Option Plan, the options vest 10% annually beginning on the one year anniversary of the grant until 50% of the options have vested. The remaining options vest upon a sale of the company (as defined in the agreement). The options have a contract life of 10 years. There were no vested options at September 30, 2015 and thus no intrinsic value in outstanding vested options at September 30, 2015. As of September 30, 2015, total unrecognized stock-based compensation expense related to nonvested stock options was approximately $230,000. At September 30, 2015 RAI had 573 shares issued and outstanding. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | 19. Subsequent Events On October 1, 2015, the Consumer Finance segment disposed of all four of its locations in an underperforming Utah market for $167,500 in cash, resulting in a loss of approximately $450,000. On November 10, 2015 PQH executed an Asset Purchase Agreement to acquire 10 Cricket Retail Locations for approximately $450,000. The purchase is expected to close on December 1, 2015. The Company evaluated all other events or transactions that occurred after September 30, 2015 up through November 16, 2015, the date on which these financial statements were issued. During this period, the Company did not have any other material subsequent events that impacted its financial statements. |
Basis of Presentation, Nature25
Basis of Presentation, Nature of Business and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared according to the instructions to Form 10-Q and Section 210.8-03(b) of Regulation S-X of the Securities and Exchange Commission (SEC) and, therefore, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) have been omitted. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three- and nine-month periods ended September 30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. For further information, refer to the Consolidated Financial Statements and footnotes thereto included in our Form 10-K for the year ended December 31, 2014. The condensed consolidated balance sheet at December 31, 2014, has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by GAAP. |
Nature of Business | Nature of Business References in these financial statement notes to the Company or we refer to Western Capital Resources, Inc. and its subsidiaries. References to specific companies within our enterprise, such as PQH, WFL, EPI, AGI,, JPPA, RAI or JPRE are references only to those companies. Western Capital Resources, Inc. (WCR) is a holding company owning operating subsidiaries, with the percentages owned by WCR of each subsidiary shown parenthetically, as summarized below. Franchise ○ AlphaGraphics, Inc. (AGI) (99.2%) franchisor of 252 domestic and 26 international AlphaGraphics Business Centers, as of September 30, 2015, specializing in the planning, production and management of visual communications for businesses and individuals throughout the world. Cellular Retail ○ PQH Wireless, Inc. and subsidiaries (PQH) (100%) owns and operates 102 cellular retail stores, as of September 30, 2015, as an exclusive dealer of the Cricket brand in 15 statesArizona, Colorado, Idaho, Illinois, Indiana, Iowa, Kansas, Missouri, Nebraska, Ohio, Oklahoma, Oregon, Texas, Washington and Wisconsin. Direct to Consumer ○ J & P Park Acquisitions, Inc. (JPPA) (100%) a multi-channel retailer of live plants, seeds, holiday gifts and garden accessories selling its products under Park Seed, Jackson & Perkins, and Wayside Gardens brand names as well as a wholesaler under the Park Wholesale brand. JPPA sells over the internet and through direct mail catalogs. ○ Restorers Acquisition, Inc. (RAI) (100%) operates primarily as a retail seller of home improvement and restoration products. The company sells over the internet through the domain name www.Vandykes.com and through direct mail catalogs. ○ J & P Real Estate, LLC (JPRE) (100%) owns real estate utilized as JPPAs distribution and warehouse facility and the corporate offices of JPPA and RAI. Consumer Finance ○ Wyoming Financial Lenders, Inc. (WFL) (100%) owns and operates 50 payday stores, as of September 30, 2015, in nine states (Colorado, Iowa, Kansas, Nebraska, North Dakota, South Dakota, Utah, Wisconsin and Wyoming) providing sub-prime short-term uncollateralized non-recourse cash advance or payday loans typically ranging from $100 to $500 with a maturity of generally two to four weeks, installment loans typically ranging from $300 to $800 with a maturity of six months, check cashing and other money services to individuals. ○ Express Pawn, Inc. (EPI) (100%) owns and operates three retail pawn stores, as of September 30, 2015, in Nebraska and Iowa, providing collateralized non-recourse pawn loans and retail sales of merchandise obtained from forfeited pawn loans or purchased from customers. |
Basis of Consolidation | Basis of Consolidation The consolidated financial statements include the accounts of WCR, its wholly owned subsidiaries and other entities in which the Company owns a controlling financial interest. For financial interests in which the Company owns a controlling financial interest, the Company applies the guidance of ASC 810 applicable to reporting the equity and net income or loss attributable to noncontrolling interests. All significant intercompany balances and transactions of the Company have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that may affect certain reported amounts and disclosures in the consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates. Significant management estimates relate to the notes and loans receivable allowance, carrying value and impairment of long-lived goodwill and intangible assets, inventory valuation and obsolescence, estimated useful lives of property and equipment, gift certificate liabilities and deferred taxes and tax uncertainties. |
Receivables and Loss Allowance | Receivables and Loss Allowance Direct to Consumer Receivables are recorded when billed or accrued and represent claims against third parties that will be settled in cash. The carrying value of receivables, net of the allowance for doubtful accounts, represents their estimated net realizable value. The allowance for doubtful accounts is estimated based on historical collection trends, type of customer, the age of outstanding receivables and existing economic conditions. If events or changes in circumstances indicate that specific receivable balances may be impaired, further consideration is given to the collectability of those balances and the allowance is adjusted accordingly. Past due receivable balances are written-off when internal collection efforts have been unsuccessful in collecting the amount due. |
Inventory | Inventory Direct to Consumer Inventory is valued at the lower of cost or market using the weighted-average method of determining cost. |
Property and Equipment | Property and Equipment Direct to Consumer Property and equipment are recorded at cost less accumulated depreciation. Depreciation is provided on the straight-line method over the estimated useful lives of the related assets as follows: Computer equipment and software 3 10 years Warehouse improvements and equipment 3 15 years Building 39 years The cost of maintenance and repairs is charged to operations as incurred while renewals and betterments are capitalized. The Company capitalizes certain internal costs, including payroll costs, incurred in connection with the development of software for internal use. These costs are capitalized beginning when the Company has entered the application development stage. The capitalization of these costs ceases when the software is substantially complete and ready for its intended use. Costs incurred for enhancements that are expected to result in additional features or functionality are capitalized and expensed over the estimated useful life of the enhancements. |
Deferred Revenue | Deferred Revenue Direct to Consumer Sales billed or cash received in advance of actual delivery are deferred and recorded as income in the period in which the related deliveries are made. |
Merchandise Credits and Gift Card Liabilities | Merchandise Credits and Gift Card Liabilities Direct to Consumer The Company maintains a liability for unredeemed gift cards, gift certificates and merchandise credits until the earlier of redemption, escheatment or a maximum of two years. The Company has concluded that the likelihood of these liabilities being redeemed beyond two years from the date of issuance is remote. |
Advertising | Advertising Direct to Consumer The Company expenses advertising costs as they are incurred, except for direct-response advertising, which is capitalized and amortized over its expected period of future benefits, not to exceed six months. Direct-response advertising consists primarily of catalog book production, printing, and postage costs. |
Shipping and Handling Costs | Shipping and Handling Costs Direct to Consumer The Company includes shipping and handling fees billed to customers in net sales. Shipping and handling costs are expensed as incurred and included in cost of sales. |
Stock-based Compensation | Stock-based Compensation The Company accounts for its employee stock-based compensation plans using the fair value method. The fair value method requires the Company to estimate the grant-date fair value of its stock-based awards and amortize this fair value to compensation expense over the requisite service period or vesting term. The Company uses the Black-Scholes option-pricing model to estimate the fair value of the Companys stock option awards. The determination of the fair value of stock-based payment awards on the date of grant using an option-pricing model is affected by the Companys stock price as well as assumptions regarding a number of complex and subjective variables. These variables include the expected stock price volatility over the term of the awards, actual and projected employee stock option exercise behaviors, the risk-free interest rate and expected dividends. Due to the inherent limitations of option-valuation models, future events that are unpredictable and the estimation process utilized in determining the valuation of the stock-based awards, the ultimate value realized by award holders may vary significantly from the amounts expensed in the Companys financial statements. Stock-based compensation expense is recognized net of estimated forfeitures such that expense is recognized only for those stock-based awards that are expected to vest. A forfeiture rate is estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from initial estimate. |
Net Income Per Common Share | Net Income Per Common Share Basic net income per common share is computed by dividing the income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share gives effect to all dilutive potential common shares outstanding during the period, including stock options, using the treasury stock method. Options to purchase 65,000 shares granted under the 2015 Stock Incentive Plan effective February 6, 2015 (see Note 18) were outstanding at September 30, 2015. These options have a strike price in excess of the market price as of September 30, 2015, were antidilutive and therefore not included in the computation of diluted earnings per share. Thus, there were no dilutive common shares as of September 30, 2015 and 2014. |
Segment Reporting | Segment Reporting The Company has grouped its operations into five segments Franchise, Cellular Retail, Direct to Consumer, Consumer Finance, and Corporate. The Franchise segment specializes in the planning, production and management of visual communications for businesses and individuals. The Cellular Retail segment is an authorized Cricket premier dealer selling cellular phones and accessories, providing ancillary services and accepting service payments from customers. The Direct to Consumer segment consists primarily of online and mail order catalog retailers sales of product offerings including seeds, live goods, holiday gifts, garden accessories and home improvement and restoration products. The Consumer Finance segment provides financial and ancillary services and also sells used merchandise at retail pawn stores. The Corporate segment consists of Company activities related to acquisitions and subsequent management of acquired businesses. |
Reclassifications | Reclassifications Certain Statement of Income reclassifications have been made in the presentation of our prior financial statements and accompanying notes, including pro forma presentation, to conform to the presentation as of and for the three and nine months ended September 30, 2015. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements No new accounting pronouncement issued or effective during the fiscal quarter has had or is expected to have a material impact on our condensed consolidated financial statements. |
Loans Receivable (Table)
Loans Receivable (Table) | 9 Months Ended |
Sep. 30, 2015 | |
Loans Receivable Table | |
Schedule of outstanding loans receivable aging | At September 30, 2015 and December 31, 2014, the Companys outstanding loans receivable aging was as follows: September 30, 2015 Payday Installment Pawn & Title Total Current $ 4,234,640 $ 263,313 $ 326,968 $ 4,824,921 1-30 369,269 43,826 413,095 31-60 278,035 21,511 299,546 61-90 250,381 13,988 264,369 91-120 249,758 5,757 255,515 121-150 168,596 1,815 170,411 151-180 170,475 86 170,561 5,721,154 350,296 326,968 6,398,418 Less Allowance (1,204,000 ) (97,000 ) (1,301,000 ) $ 4,517,154 $ 253,296 $ 326,968 $ 5,097,418 December 31, 2014 Payday Installment Pawn & Title Total Current $ 4,387,393 $ 321,634 $ 372,805 $ 5,081,832 1-30 305,382 47,321 352,703 31-60 223,465 24,791 248,256 61-90 236,072 11,799 247,871 91-120 206,705 5,438 212,143 121-150 200,101 1,984 202,085 151-180 204,804 572 205,376 5,763,922 413,539 372,805 6,550,266 Less Allowance (1,147,000 ) (72,000 ) (1,219,000 ) $ 4,616,922 $ 341,539 $ 372,805 $ 5,331,266 |
Loans Receivable Allowance (Tab
Loans Receivable Allowance (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Provision for Loan and Lease Losses [Abstract] | |
Schedule of loans receivable allowance | A rollforward of the Companys loans receivable allowance is as follows: Nine Months Ended September 30, 2015 Year Ended December 31, 2014 Loans receivable allowance, beginning of period $ 1,219,000 $ 1,215,000 Provision for loan losses charged to expense 1,351,427 1,817,822 Charge-offs, net (1,269,427 ) (1,813,822 ) Loans receivable allowance, end of period $ 1,301,000 $ 1,219,000 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Receivables [Abstract] | |
Schedule of accounts receivables | A breakdown of accounts receivables by segment as of September 30, 2015 and December 31, 2014 are as follows: September 30, 2015 Franchise Cellular Retail Direct to Consumer Total Accounts receivable $ 1,423,267 $ 103,738 $ 894,172 $ 2,421,177 Less allowance (150,000 ) (116,000 ) (266,000 ) Net account receivable $ 1,273,267 $ 103,738 $ 778,172 $ 2,155,177 December 31, 2014 Franchise Cellular Retail Direct to Consumer Total Accounts receivable $ 1,164,532 $ $ $ 1,164,532 Less allowance (59,405 ) (59,405 ) Net account receivable $ 1,135,127 $ $ $ 1,135,127 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | 6. Property and Equipment A rollforward of the Companys property and equipment is as follows: December 31, 2014 Merger Transaction Additions Deletions September 30, 2015 Furniture and equipment $ 2,853,603 $ 492,435 $ 1,042,617 $ (730,468 ) $ 3,658,187 Leasehold improvements 787,188 22,766 (9,117 ) 800,837 Software 504,967 1,197,839 81,243 (108,081 ) 1,675,968 Building 85,906 5,034,348 28,449 5,148,703 Land 9,500 1,200,000 1,209,500 Other 96,311 96,311 4,337,475 7,924,622 1,175,075 (847,666 ) 12,589,506 Accumulated depreciation (3,139,765 ) (1,334,555 ) (444,814 ) 847,666 (4,071,468 ) $ 1,197,710 $ 6,590,067 $ 730,261 $ $ 8,518,038 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | A rollforward of the Companys intangible assets consisted of the follows: December 31, 2014 Merger Transaction Additions Deletions September 30, 2015 Customer relationships $ 4,924,912 $ $ 1,115,000 $ $ 6,039,912 Acquired franchise agreements 5,227,112 5,227,112 Other 227,000 227,000 Amortizable Intangible assets 10,152,024 227,000 1,115,000 11,494,024 Less accumulated amortization (5,685,523 ) (105,480 ) (359,133 ) (6,150,136 ) Net Amortizable Intangible Assets 4,466,501 121,520 755,867 5,343,888 Non-amortizable trademarks 2,782,292 2,782,292 Intangible Assets, net $ 7,248,793 $ 121,520 $ 755,867 $ $ 8,126,180 |
Schedule of estimated future amortization expense | As of September 30, 2015, estimated future amortization expense for the amortizable intangible assets is as follows: 2015 (remainder) $ 139,720 2016 550,796 2017 537,740 2018 525,991 2019 515,416 2020 499,165 Thereafter 2,575,060 $ 5,343,888 |
Deferred Revenue and Other Li31
Deferred Revenue and Other Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Deferred Revenue Disclosure [Abstract] | |
Schedule of deferred revenue and other liabilities | Deferred revenue and other liabilities consist of the following: September 30, 2015 December 31, 2014 Deferred financing fees $ 269,526 $ 284,231 Deferred franchise fees 49,579 281,837 Merchandise credits and gift card liability 447,499 Other 194,000 72,000 Total $ 960,604 $ 638,068 |
Notes Payable - Long Term (Tabl
Notes Payable - Long Term (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt instruments | September 30, 2015 December 31, 2014 Note payable (with a credit limit of $3,000,000) to River City Equity, Inc., a related party, with interest payable monthly at 12% per annum, due June 30, 2016 and upon certain events can be collateralized by substantially all assets of WCR, excluding any equity interest in AGI $ 3,000,000 $ 2,000,000 Subsidiary note payable to a financial institution with quarterly principal payments of $375,000 plus interest at prime rate plus 2.5% per annum (5.75% as of September 30, 2015), secured by AGIs assets, due June 2017 2,000,000 3,125,000 Subsidiary note payable to a financial institution with monthly principal payments of $33,334 plus annual paydowns equal to JPREs net cash flow from operations due within 120 days of the calendar year end plus interest at LIBOR plus 3.5% per annum (3.75% as of September 30, 2015), secured by JPRE assets, due June 2019 3,471,462 Total 8,471,462 5,125,000 Less current maturities (4,900,008 ) (3,500,000 ) $ 3,571,454 $ 1,625,000 |
Other Operating Expense (Tables
Other Operating Expense (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Other Expense [Abstract] | |
Schedule of other operating expense | A breakout of other operating expense is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Bank fees $ 310,419 $ 114,391 $ 595,164 $ 334,069 Collection costs 99,587 102,653 319,890 324,635 Conferences 460,602 671,287 Insurance 110,788 79,339 286,783 177,003 Management and advisory fees 125,754 126,163 400,057 364,148 Professional and consulting fees 483,575 106,113 1,401,683 422,515 Supplies 167,480 150,058 496,116 474,571 Other 522,604 374,654 1,583,539 875,607 $ 2,280,809 $ 1,053,371 $ 5,754,519 $ 2,972,548 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Business Combination, Description [Abstract] | |
Schedule of purchase price allocations | Cellular Retail Under the equity method of accounting, the assets acquired and liabilities assumed were recorded at their estimated fair values as of the purchase date as follows: June 1, 2015 Cash $ 389,000 Inventory 427,000 Other receivables 405,000 Property and equipment 612,000 Goodwill 578,000 Intangible assets 903,000 Other assets 69,000 Accounts payable and accrued liabilities (826,000 ) $ 2,557,000 JPPA, RAI and JPRE Transaction The e ntities are affiliated entities under common control and in accordance with Accounting Standards Codification Topic 805, Business Combinations, and the Company, as the acquirer, recognized the assets and liabilities of the target entities at their historical values as of the date of merger as follows July 1, 2015 Cash $ 2,082,000 Accounts Receivables, net 527,000 Inventory 3,170,000 Deferred income tax asset 186,000 Prepaid expense and other current assets 525,000 Property and equipment, net 6,590,000 Goodwill 31,000 Intangible assets, net 122,000 Accounts payable and accrued liabilities (2,231,000 ) Short-term notes payable (120,000 ) Income taxes payable (547,000 ) Deferred revenue and other (460,000 ) Notes payable and capital leases (3,583,000 ) Deferred income tax liability (169,000 ) $ 6,123,000 |
Schedule of business acquisition, pro forma | The following table presents the unaudited pro forma results of operations for the three and nine months ended September 30, 2015 and 2014, as if these acquisitions had been consummated at the beginning of 2014. The pro forma net income below excludes the expenses of the transactions and includes a reduction in management and advisory fees that resulted from the AGI transaction. The pro forma results of operations are prepared for comparative purposes only and do not necessarily reflect the results that would have occurred had the acquisitions been consummated at the beginning of the 2014, or the results that may occur in the future. For the Three Months Ended September 30, 2015 (in thousands except earnings per share) Franchise Cellular Retail Direct to Consumer Consumer Finance Corporate Total Pro forma revenue $ 3,675 $ 9,537 $ 5,442 $ 3,297 $ $ 21,951 Pro forma net income (loss) $ 829 $ 443 $ (569 ) $ 390 $ (167 ) $ 926 Pro forma net income attributable to noncontrolling interests $ 6 $ $ $ $ $ 6 Pro forma net income (loss) available to Western shareholders $ 823 $ 443 $ (569 ) $ 390 $ (167 ) $ 920 Pro forma earnings (loss) per share available to Western common shareholders basic and diluted $ 0.087 $ 0.047 $ (0.060 ) $ 0.041 $ (0.018 ) $ 0.097 For the Three Months Ended September 30, 2014 (in thousands except earnings per share) Franchise Cellular Retail Direct to Consumer Consumer Finance Corporate Total Pro forma revenue $ 3,665 $ 9,078 $ 5,734 $ 3,366 $ $ 21,843 Pro forma net income (loss) $ 648 $ 393 $ (606 ) $ 364 $ $ 799 Pro forma net income attributable to noncontrolling interests $ 5 $ $ $ $ $ 5 Pro forma net income (loss) available to Western shareholders $ 643 $ 393 $ (606 ) $ 364 $ $ 794 Pro forma earnings (loss) per share available to Western common shareholders basic and diluted $ 0.068 $ 0.041 $ (0.064 ) $ 0.039 $ $ 0.084 For the Nine Months Ended September 30, 2015 (in thousands except earnings per share) Franchise Cellular Retail Direct to Consumer Consumer Finance Corporate Total Pro forma revenue $ 9,641 $ 29,632 $ 30,296 $ 9,451 $ $ 79,020 Pro forma net income (loss) $ 1,585 $ 967 $ 1,365 $ 932 $ (408 ) $ 4,441 Pro forma net income attributable to noncontrolling interests $ 13 $ $ $ $ $ 13 Pro forma net income (loss) available to Western shareholders $ 1,572 $ 967 $ 1,365 $ 932 $ (408 ) $ 4,428 Pro forma earnings (loss) per share available to Western common shareholders basic and diluted $ 0.165 $ 0.102 $ 0.144 $ 0.098 $ (0.043 ) $ 0.466 For the Nine Months Ended September 30, 2014 (in thousands except earnings per share) Franchise Cellular Retail Direct to Consumer Consumer Finance Corporate Total Pro forma revenue $ 9,568 $ 25,215 $ 30,587 $ 9,506 $ $ 74,876 Pro forma net income (loss) $ 1,165 $ 526 $ 480 $ 1,076 $ $ 3,247 Pro forma net income attributable to noncontrolling interests $ 5 $ $ $ $ $ 5 Pro forma net income (loss) available to Western shareholders $ 1,160 $ 526 $ 480 $ 1,076 $ $ 3,242 Pro forma earnings (loss) per share available to Western common shareholders basic and diluted $ 0.122 $ 0.055 $ 0.051 $ 0.113 $ $ 0.341 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Schedule of segment information | Segment information related to the three and nine months ended September 30, 2015 and 2014, is presented below: For the Three Months Ended September 30, 2015 (in thousands) Franchise Cellular Retail Direct to Consumer Consumer Finance Corporate Total Revenues from external customers $ 3,675 $ 9,537 5,442 $ 3,297 $ $ 21,951 Depreciation and amortization $ 109 $ 136 102 $ 29 $ $ 376 Interest expense $ 57 $ 91 50 $ $ $ 198 Income tax expense (benefit) $ 534 $ 221 (177 ) $ 221 $ (75 ) $ 724 Net income (loss) $ 829 $ 443 (569 ) $ 390 $ (213 ) $ 880 Expenditures for segmented assets $ $ 186 $ 29 $ $ 215 For the Three Months Ended September 30, 2014 (in thousands) Franchise Cellular Retail Direct to Consumer Consumer Finance Corporate Total Revenues from external customers $ $ 6,193 $ $ 3,366 $ $ 9,559 Depreciation and amortization $ $ 85 $ $ 31 $ $ 116 Interest expense $ $ 42 $ $ 18 $ $ 60 Income tax expense (benefit) $ $ 164 $ $ 183 $ $ 347 Net income (loss) $ $ 266 $ $ 299 $ $ 565 Expenditures for segmented assets $ $ 34 $ $ 9 $ $ 43 For the Nine Months Ended September 30, 2015 (in thousands) Franchise Cellular Retail Direct to Consumer Consumer Finance Corporate Total Revenues from external customers $ 9,641 $ 24,655 $ 5,442 $ 9,451 $ $ 49,189 Depreciation and amortization $ 325 $ 292 $ 102 $ 85 $ $ 804 Interest expense $ 156 $ 195 $ 50 $ $ $ 401 Income tax expense (benefit) $ 1,015 $ 503 $ (177 ) $ 553 $ (197 ) $ 1,697 Net income (loss) $ 1,585 $ 910 $ (569 ) $ 932 $ (710 ) $ 2,148 Total segment assets $ 9,379 $ 12,823 $ 13,568 $ 16,299 $ 544 $ 52,613 Expenditures for segmented assets $ 91 $ 3,656 $ 186 $ 45 $ 14 $ 3,992 For the Nine Months Ended September 30, 2014 (in thousands) Franchise Cellular Retail Direct to Consumer Consumer Finance Corporate Total Revenues from external customers $ $ 17,305 $ $ 9,506 $ $ 26,811 Depreciation and amortization $ $ 256 $ $ 86 $ $ 342 Interest expense $ $ 130 $ $ 62 $ $ 192 Income tax expense (benefit) $ $ 119 $ $ 567 $ $ 686 Net income (loss) $ $ 199 $ $ 938 $ $ 1,137 Total segment assets $ $ 8,625 $ $ 16,749 $ $ 25,374 Expenditures for segmented assets $ $ 401 $ $ 60 $ $ 461 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Leases [Abstract] | |
Schedule of future minimum base lease payments | The Company leases retail and office facilities under operating leases with terms ranging from month to month to six years, with rights to extend for additional periods. Future minimum base lease payments (in thousands) are approximately as follows: Year Ending December 31, Operating Leases 2015 (remainder) $ 938 2016 2,920 2017 2,110 2018 998 2019 554 2020 90 Thereafter Total minimum base lease payments $ 7,610 |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Stockholders' Equity Note [Abstract] | |
Schedule of nonnvested stock option awards outstanding | The following table summarizes nonvested stock option awards outstanding at September 30, 2015 and the changes for the nine months then ended: Number of Weighted- Weighted- Average Remaining Contractual Term ( in years Aggregate Outstanding and nonvested at December 31, 2014 $ $ Granted 65,000 6.00 9.37 Vested Forfeited Outstanding and nonvested at September 30, 2015 65,000 $ 6.00 9.37 $ Exercisable at September 30, 2015 JPPA Stock Incentive Plan The following table summarizes nonvested stock option awards outstanding at September 30, 2015 and the changes for the three months then ended: Number of Shares Weighted- Average Exercise Price Per Share Weighted- Average Remaining Contractual Term ( in years Aggregate Intrinsic Value Outstanding and nonvested at June 30, 2015 35.1 $ 3403.37 $ Granted 9.4 Vested Forfeited Outstanding and nonvested at September 30, 2015 35.1 $ 3403.37 9.4 $ Exercisable at September 30, 2015 RAI Stock Incentive Plan The following table summarizes nonvested stock option awards outstanding at September 30, 2015 and the changes for the three months then ended: Number of Shares Weighted- Average Exercise Price Per Share Weighted- Average Remaining Contractual Term ( in years Aggregate Intrinsic Value Outstanding and nonvested at June 30, 2015 $ $ Granted 73.76 3,765.90 9.16 Vested Forfeited Outstanding and nonvested at September 30, 2015 73.76 $ 3,765.90 9.16 $ Exercisable at September 30, 2015 2.96 6,471.00 6.45 |
Basis of Presentation, Nature38
Basis of Presentation, Nature of Business and Summary of Significant Accounting Policies (Details Narrative) | 9 Months Ended |
Sep. 30, 2015USD ($)Nshares | |
Building [Member] | |
useful lives | P39Y |
Stock Compensation Plan [Member] | |
Number of Shares, granted | shares | 65,000 |
Minimum [Member] | Computer equipment and software [Member] | |
useful lives | P3Y |
Minimum [Member] | Warehouse Improvements and equipment [Member] | |
useful lives | P3Y |
Maximum [Member] | Computer equipment and software [Member] | |
useful lives | P10Y |
Maximum [Member] | Warehouse Improvements and equipment [Member] | |
useful lives | P15Y |
Franchising [Member] | Alpha Graphics, Inc. [Member] | |
Number of domestic business centers | 252 |
Number of international business centers | 26 |
Percentage of equity method investment | 99.20% |
Business acquisition, effective date of acquisition | Oct. 1, 2014 |
Cellular Retail [Member] | PQH Wireless, Inc. [Member] | |
Number of stores | 102 |
Percentage of equity method investment | 100.00% |
Number of states in which entity operates | 15 |
Direct to Consumer [Member] | JPPA [Member] | |
Percentage of equity method investment | 100.00% |
Direct to Consumer [Member] | RAI [Member] | |
Percentage of equity method investment | 100.00% |
Direct to Consumer [Member] | JPRE [Member] | |
Percentage of equity method investment | 100.00% |
Consumer Finance [Member] | Wyoming Financial Lenders, Inc. [Member] | |
Number of stores | 50 |
Percentage of equity method investment | 100.00% |
Number of states in which entity operates | 9 |
Consumer Finance [Member] | Wyoming Financial Lenders, Inc. [Member] | Minimum [Member] | Payday [Member] | |
Non-recourse debt | $ | $ 100 |
Consumer Finance [Member] | Wyoming Financial Lenders, Inc. [Member] | Minimum [Member] | Installment [Member] | |
Non-recourse debt | $ | 300 |
Consumer Finance [Member] | Wyoming Financial Lenders, Inc. [Member] | Maximum [Member] | Payday [Member] | |
Non-recourse debt | $ | 500 |
Consumer Finance [Member] | Wyoming Financial Lenders, Inc. [Member] | Maximum [Member] | Installment [Member] | |
Non-recourse debt | $ | $ 800 |
Consumer Finance [Member] | Express Pawn, Inc. [Member] | |
Number of stores | 3 |
Percentage of equity method investment | 100.00% |
Loans Receivable (Details)
Loans Receivable (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | $ 6,398,418 | $ 6,550,266 |
Less Allowance | (1,301,000) | (1,219,000) |
Notes, Loans and Financing Receivable, Net current | 5,097,418 | 5,331,266 |
1 To 30 Days [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 413,095 | 352,703 |
31 to 60 Days [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 299,546 | 248,256 |
61 To 90 Days [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 264,369 | 247,871 |
91 To 120 Days [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 255,515 | 212,143 |
121 To 150 Days [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 170,411 | 202,085 |
151 To 180 Days [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 170,561 | 205,376 |
Current [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 4,824,921 | 5,081,832 |
Payday [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 5,721,154 | 5,763,922 |
Less Allowance | (1,204,000) | (1,147,000) |
Notes, Loans and Financing Receivable, Net current | 4,517,154 | 4,616,922 |
Payday [Member] | 1 To 30 Days [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 369,269 | 305,382 |
Payday [Member] | 31 to 60 Days [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 278,035 | 223,465 |
Payday [Member] | 61 To 90 Days [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 250,381 | 236,072 |
Payday [Member] | 91 To 120 Days [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 249,758 | 206,705 |
Payday [Member] | 121 To 150 Days [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 168,596 | 200,101 |
Payday [Member] | 151 To 180 Days [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 170,475 | 204,804 |
Payday [Member] | Current [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 4,234,640 | 4,387,393 |
Installment Loans [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 350,296 | 413,539 |
Less Allowance | (97,000) | (72,000) |
Notes, Loans and Financing Receivable, Net current | 253,296 | 341,539 |
Installment Loans [Member] | 1 To 30 Days [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 43,826 | 47,321 |
Installment Loans [Member] | 31 to 60 Days [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 21,511 | 24,791 |
Installment Loans [Member] | 61 To 90 Days [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 13,988 | 11,799 |
Installment Loans [Member] | 91 To 120 Days [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 5,757 | 5,438 |
Installment Loans [Member] | 121 To 150 Days [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 1,815 | 1,984 |
Installment Loans [Member] | 151 To 180 Days [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 86 | 572 |
Installment Loans [Member] | Current [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | 263,313 | 321,634 |
Pawn Title [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | $ 326,968 | $ 372,805 |
Less Allowance | ||
Notes, Loans and Financing Receivable, Net current | $ 326,968 | $ 372,805 |
Pawn Title [Member] | 1 To 30 Days [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | ||
Pawn Title [Member] | 31 to 60 Days [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | ||
Pawn Title [Member] | 61 To 90 Days [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | ||
Pawn Title [Member] | 91 To 120 Days [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | ||
Pawn Title [Member] | 121 To 150 Days [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | ||
Pawn Title [Member] | 151 To 180 Days [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | ||
Pawn Title [Member] | Current [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes, Loans and Financing Receivable, Gross, Current | $ 326,968 | $ 372,805 |
Loans Receivable Allowance (Det
Loans Receivable Allowance (Details Narrative) | Sep. 30, 2015 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Percentage of historical written off | 43.00% |
1 To 30 Days [Member] | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Percentage of historical written off | 43.00% |
31 to 60 Days [Member] | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Percentage of historical written off | 65.00% |
61 To 90 Days [Member] | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Percentage of historical written off | 83.00% |
91 To 120 Days [Member] | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Percentage of historical written off | 88.00% |
121 To 150 Days [Member] | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Percentage of historical written off | 91.00% |
151 To 180 Days [Member] | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Percentage of historical written off | 93.00% |
Loans Receivable Allowance (D41
Loans Receivable Allowance (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Allowance for Loan and Lease Losses [Roll Forward] | ||
Loans receivable allowance, beginning of period | $ 1,219,000 | $ 1,215,000 |
Provision for loan losses charged to expense | 1,351,427 | 1,817,822 |
Charge-offs, net | (1,269,427) | (1,813,822) |
Loans receivable allowance, end of period | $ 1,301,000 | $ 1,219,000 |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Accounts receivable | $ 2,421,177 | $ 1,164,532 |
Less allowance | (266,000) | (59,405) |
Net account receivable | 2,155,177 | 1,135,127 |
Franchise [Member] | ||
Accounts receivable | 1,423,267 | 1,164,532 |
Less allowance | (150,000) | (59,405) |
Net account receivable | 1,273,267 | $ 1,135,127 |
Cellular Retail [Member] | ||
Accounts receivable | $ 103,738 | |
Less allowance | ||
Net account receivable | $ 103,738 | |
Direct to Consumer [Member] | ||
Accounts receivable | 894,172 | |
Less allowance | (116,000) | |
Net account receivable | $ 778,172 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Property, plant and equipment, gross | $ 12,589,506 | $ 4,337,475 | |
Property, plant and equipment, merger transaction ,gross | 7,924,622 | ||
Property, plant and equipment, additions, gross | 1,175,075 | ||
Property, plant and equipment, deletions, gross | (847,666) | ||
Accumulated depreciation | (4,071,468) | (3,139,765) | |
Accumulated depreciation, merger transaction | (1,334,555) | ||
Accumulated depreciation, additions | 444,814 | $ 258,644 | |
Accumulated depreciation, deletions | 847,666 | ||
Property, plant and equipment, net | 8,518,038 | 1,197,710 | |
Property, plant and equipment, merger transaction ,net | 6,590,067 | ||
Property, plant and equipment, additions ,net | $ 730,261 | ||
Property, plant and equipment, deletions ,net | |||
Furniture And Equipment [Member] | |||
Property, plant and equipment, gross | $ 3,658,187 | 2,853,603 | |
Property, plant and equipment, merger transaction ,gross | 492,435 | ||
Property, plant and equipment, additions, gross | 1,042,617 | ||
Property, plant and equipment, deletions, gross | (730,468) | ||
Leasehold Improvements [Member] | |||
Property, plant and equipment, gross | $ 800,837 | 787,188 | |
Property, plant and equipment, merger transaction ,gross | |||
Property, plant and equipment, additions, gross | $ 22,766 | ||
Property, plant and equipment, deletions, gross | (9,117) | ||
Software [Member] | |||
Property, plant and equipment, gross | 1,675,968 | 504,967 | |
Property, plant and equipment, merger transaction ,gross | 1,197,839 | ||
Property, plant and equipment, additions, gross | 81,243 | ||
Property, plant and equipment, deletions, gross | (108,081) | ||
Building [Member] | |||
Property, plant and equipment, gross | 5,148,703 | 85,906 | |
Property, plant and equipment, merger transaction ,gross | 5,034,348 | ||
Property, plant and equipment, additions, gross | $ 28,449 | ||
Property, plant and equipment, deletions, gross | |||
Land [Member] | |||
Property, plant and equipment, gross | $ 1,209,500 | 9,500 | |
Property, plant and equipment, merger transaction ,gross | $ 1,200,000 | ||
Property, plant and equipment, additions, gross | |||
Property, plant and equipment, deletions, gross | |||
Other [Member] | |||
Property, plant and equipment, gross | $ 96,311 | $ 96,311 | |
Property, plant and equipment, merger transaction ,gross | |||
Property, plant and equipment, additions, gross | |||
Property, plant and equipment, deletions, gross |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Gross amortizable intangible assets | $ 11,494,024 | $ 11,494,024 | $ 10,152,024 | ||
Additions, gross | 1,115,000 | ||||
Additions, amortizable intangible assets | 141,783 | $ 28,373 | 359,133 | $ 82,962 | |
Additions | 755,867 | ||||
Merger Transaction, Gross | 227,000 | 227,000 | |||
Merger Transaction, accumulated amortization | (105,480) | (105,480) | |||
Merger Transaction | 121,520 | 121,520 | |||
Less accumulated amortization | (6,150,136) | (6,150,136) | (5,685,523) | ||
Net Amortizable Intangible Assets | 5,343,888 | 5,343,888 | 4,466,501 | ||
Non-amortizable trademarks | 2,782,292 | 2,782,292 | 2,782,292 | ||
Intangible Assets, net | 8,126,180 | 8,126,180 | 7,248,793 | ||
Customer Relationships [Member] | |||||
Gross amortizable intangible assets | 6,039,912 | 6,039,912 | 4,924,912 | ||
Additions, gross | 1,115,000 | ||||
Acquired Franchise Agreements [Member] | |||||
Gross amortizable intangible assets | 5,227,112 | $ 5,227,112 | $ 5,227,112 | ||
Additions, gross | |||||
Other [Member] | |||||
Gross amortizable intangible assets | 227,000 | $ 227,000 | |||
Additions, gross | |||||
Merger Transaction, Gross | $ 227,000 | $ 227,000 |
Intangible Assets (Details 1)
Intangible Assets (Details 1) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2015 (remainder) | $ 139,720 | |
2,016 | 550,796 | |
2,017 | 537,740 | |
2,018 | 525,991 | |
2,019 | 515,416 | |
2,020 | 499,165 | |
Thereafter | 2,575,060 | |
Finite-Lived Intangible Assets, Net | $ 5,343,888 | $ 4,466,501 |
Other Non-Current Asset (Detail
Other Non-Current Asset (Details Narrative) | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Other Assets, Noncurrent Disclosure [Abstract] | |
Percentage of forgiveness of principal | 50.00% |
Accounts and notes receivable, net | $ 145,800 |
Term of note receivable | 5 years |
Deferred Revenue and Other Li47
Deferred Revenue and Other Liabilities (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Deferred Revenue Disclosure [Abstract] | ||
Deferred financing fees | $ 269,526 | $ 284,231 |
Deferred franchise fees | 49,579 | $ 281,837 |
Merchandise credits and gift card liability | 447,499 | |
Other | 194,000 | $ 72,000 |
Total | $ 960,604 | $ 638,068 |
Notes Payable - Long Term (Deta
Notes Payable - Long Term (Details Narrative) | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Note Payable to River City Equity [Member] | |
Debt Instrument [Line Items] | |
Maturity date | Jun. 30, 2016 |
Stated interest rate | 12.00% |
Maximum borrowing capacity | $ 3,000,000 |
Note Payable to Financial Institution [Member] | |
Debt Instrument [Line Items] | |
Principal periodic payment | $ 375,000 |
Stated interest rate | 5.75% |
Description of maturity date | June 2,017 |
Note Payable to Financial Institution [Member] | Addition to prime rate [Member] | |
Debt Instrument [Line Items] | |
Stated interest rate | 2.50% |
AGI [Member] | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 1,000,000 |
Description of interest rate | (a) the prime rate plus 2.50% per annum or (b) the LIBOR rate plus 5.50% per annum. |
Note Payable to Financial Institution Two [Member] | |
Debt Instrument [Line Items] | |
Principal periodic payment | $ 33,334 |
Stated interest rate | 3.75% |
Description of maturity date | June 2,019 |
Note Payable to Financial Institution Two [Member] | Addition to LIBOR Rate [Member] | |
Debt Instrument [Line Items] | |
Stated interest rate | 3.50% |
JPPA [Member] | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 4,250,000 |
Description of interest rate | LIBOR rate plus 2.75% per annum (3.00% as of September 30, 2015). |
RAI [Member] | |
Debt Instrument [Line Items] | |
Stated interest rate | 3.75% |
Maximum borrowing capacity | $ 2,000,000 |
Description of interest rate | Interest is payable monthly at LIBOR plus 3.50% per annum (3.75% as of September 30, 2015). |
RAI [Member] | Addition to LIBOR Rate [Member] | |
Debt Instrument [Line Items] | |
Stated interest rate | 3.50% |
Notes Payable - Long Term (De49
Notes Payable - Long Term (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 8,471,462 | $ 5,125,000 |
Less current maturities | (4,900,008) | (3,500,000) |
Notes payable, noncurrent | 3,571,454 | 1,625,000 |
Note Payable to River City Equity [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 3,000,000 | 2,000,000 |
Note Payable to Financial Institution [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 2,000,000 | $ 3,125,000 |
Note Payable to Financial Institution Two [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 3,471,462 |
Other Operating Expense (Detail
Other Operating Expense (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Other Income and Expenses [Abstract] | ||||
Bank fees | $ 310,419 | $ 114,391 | $ 595,164 | $ 334,069 |
Collection costs | 99,587 | $ 102,653 | 319,890 | $ 324,635 |
Conferences | 460,602 | 671,287 | ||
Insurance | 110,788 | $ 79,339 | 286,783 | $ 177,003 |
Management and advisory fees | 125,754 | 126,163 | 400,057 | 364,148 |
Professional and consulting fees | 483,575 | 106,113 | 1,401,683 | 422,515 |
Supplies | 167,480 | 150,058 | 496,116 | 474,571 |
Other | 522,604 | 374,654 | 1,583,539 | 875,607 |
Total General & administrative expenses | $ 2,280,809 | $ 1,053,371 | $ 5,754,519 | $ 2,972,548 |
Income Tax Provision (Details N
Income Tax Provision (Details Narrative) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Tax Disclosure [Abstract] | ||||
Percentage of income tax rate | 45.00% | 38.00% | 44.00% | 38.00% |
Acquisitions (Details Narrative
Acquisitions (Details Narrative) - JPPA, RAI and JPRE Transaction [Member] - Common Stock [Member] | Jul. 02, 2015shares |
Number of shares issued for acqusition | 3,500,000 |
Percent of voting rights issued as percent of post acquisition voting rights | 37.00% |
Acquisitions (Details)
Acquisitions (Details) - USD ($) | Sep. 30, 2015 | Jul. 02, 2015 | Jun. 01, 2015 | Dec. 31, 2014 |
Property and equipment, net | $ 6,590,067 | |||
Goodwill | 13,788,612 | $ 12,956,868 | ||
Intangible assets, net | $ 121,520 | |||
JPPA, RAI and JPRE Transaction [Member] | ||||
Cash | $ 2,082,000 | |||
Accounts Receivables, net | 527,000 | |||
Inventory | 3,170,000 | |||
Deferred income tax asset | 186,000 | |||
Prepaid expense and other current assets | 525,000 | |||
Property and equipment, net | 6,590,000 | |||
Goodwill | 31,000 | |||
Intangible assets, net | 122,000 | |||
Accounts payable and accrued liabilities | (2,231,000) | |||
Short-term notes payable | (120,000) | |||
Income taxes payable | (547,000) | |||
Deferred revenue and other | (460,000) | |||
Notes payable and capital leases | (3,583,000) | |||
Deferred income tax liability | (169,000) | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net | $ 6,123,000 | |||
Cellular Retail [Member] | ||||
Cash | $ 389,000 | |||
Inventory | 427,000 | |||
Other receivables | 405,000 | |||
Property and equipment, net | 612,000 | |||
Goodwill | 578,000 | |||
Intangible assets, net | 903,000 | |||
Other assets | 69,000 | |||
Accounts payable and accrued liabilities | (826,000) | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net | $ 2,557,000 |
Acquisitions (Details 1)
Acquisitions (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Pro forma revenue | $ 21,951 | $ 21,843 | $ 79,020 | $ 74,876 |
Pro forma net income (loss) | 926 | 799 | 4,441 | 3,247 |
Pro forma net income attributable to noncontrolling interests | 6 | 5 | 13 | 5 |
Pro forma net income (loss) available to Western shareholders | $ 920 | $ 794 | $ 4,428 | $ 3,242 |
Pro forma earnings (loss) per share available to Western common shareholders - basic and diluted | $ 0.097 | $ 0.084 | $ 0.466 | $ 0.341 |
Franchise [Member] | ||||
Pro forma revenue | $ 3,675 | $ 3,665 | $ 9,641 | $ 9,568 |
Pro forma net income (loss) | 829 | 648 | 1,585 | 1,165 |
Pro forma net income attributable to noncontrolling interests | 6 | 5 | 13 | 5 |
Pro forma net income (loss) available to Western shareholders | $ 823 | $ 643 | $ 1,572 | $ 1,160 |
Pro forma earnings (loss) per share available to Western common shareholders - basic and diluted | $ 0.087 | $ 0.068 | $ 0.165 | $ 0.122 |
Cellular Retail [Member] | ||||
Pro forma revenue | $ 9,537 | $ 9,078 | $ 29,632 | $ 25,215 |
Pro forma net income (loss) | $ 443 | $ 393 | $ 967 | $ 526 |
Pro forma net income attributable to noncontrolling interests | ||||
Pro forma net income (loss) available to Western shareholders | $ 443 | $ 393 | $ 967 | $ 526 |
Pro forma earnings (loss) per share available to Western common shareholders - basic and diluted | $ 0.047 | $ 0.041 | $ 0.102 | $ 0.055 |
Direct to Consumer [Member] | ||||
Pro forma revenue | $ 5,442 | $ 5,734 | $ 30,296 | $ 30,587 |
Pro forma net income (loss) | $ (569) | $ (606) | $ 1,365 | $ 480 |
Pro forma net income attributable to noncontrolling interests | ||||
Pro forma net income (loss) available to Western shareholders | $ (569) | $ (606) | $ 1,365 | $ 480 |
Pro forma earnings (loss) per share available to Western common shareholders - basic and diluted | $ (0.060) | $ (0.064) | $ 0.144 | $ 0.051 |
Consumer Finance [Member] | ||||
Pro forma revenue | $ 3,297 | $ 3,366 | $ 9,451 | $ 9,506 |
Pro forma net income (loss) | $ 390 | $ 364 | $ 932 | $ 1,076 |
Pro forma net income attributable to noncontrolling interests | ||||
Pro forma net income (loss) available to Western shareholders | $ 390 | $ 364 | $ 932 | $ 1,076 |
Pro forma earnings (loss) per share available to Western common shareholders - basic and diluted | $ 0.041 | $ 0.039 | $ 0.098 | $ 0.113 |
Corporate [Member] | ||||
Pro forma revenue | ||||
Pro forma net income (loss) | $ (167) | $ (408) | ||
Pro forma net income attributable to noncontrolling interests | ||||
Pro forma net income (loss) available to Western shareholders | $ (167) | $ (408) | ||
Pro forma earnings (loss) per share available to Western common shareholders - basic and diluted | $ (0.018) | $ (0.043) |
Segment Information (Details)
Segment Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Segment Reporting Information [Line Items] | |||||
Revenues from external customers | $ 21,951,468 | $ 9,558,744 | $ 49,189,252 | $ 26,811,301 | |
Depreciation and amortization | 376,000 | 116,000 | 804,000 | 342,000 | |
Interest expense | 198,048 | 60,493 | 401,299 | 191,823 | |
Income tax expense (benefit) | 724,293 | 347,000 | 1,696,813 | 686,000 | |
Net income (loss) | 880,101 | 565,316 | 2,147,944 | 1,136,591 | |
Total segment assets | 52,613,465 | 25,374,000 | 52,613,465 | 25,374,000 | $ 36,762,264 |
Expenditures for segmented assets | 215,000 | $ 43,000 | 3,992,000 | $ 461,000 | |
Franchise [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues from external customers | 3,675,000 | 9,641,000 | |||
Depreciation and amortization | 109,000 | 325,000 | |||
Interest expense | 57,000 | 156,000 | |||
Income tax expense (benefit) | 534,000 | 1,015,000 | |||
Net income (loss) | 829,000 | 1,585,000 | |||
Total segment assets | $ 9,379,000 | 9,379,000 | |||
Expenditures for segmented assets | 91,000 | ||||
Cellular Retail [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues from external customers | $ 9,537,000 | $ 6,193,000 | 24,655,000 | $ 17,305,000 | |
Depreciation and amortization | 136,000 | 85,000 | 292,000 | 256,000 | |
Interest expense | 91,000 | 42,000 | 195,000 | 130,000 | |
Income tax expense (benefit) | 221,000 | 164,000 | 503,000 | 119,000 | |
Net income (loss) | 443,000 | 266,000 | 910,000 | 199,000 | |
Total segment assets | $ 12,823,000 | 8,625,000 | 12,823,000 | 8,625,000 | |
Expenditures for segmented assets | $ 34,000 | 3,656,000 | $ 401,000 | ||
Direct to Consumer [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues from external customers | $ 5,442,000 | 5,442,000 | |||
Depreciation and amortization | 102,000 | 102,000 | |||
Interest expense | 50,000 | 50,000 | |||
Income tax expense (benefit) | (177,000) | (177,000) | |||
Net income (loss) | (569,000) | (569,000) | |||
Total segment assets | 13,568,000 | 13,568,000 | |||
Expenditures for segmented assets | 186,000 | 186,000 | |||
Consumer Finance [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues from external customers | 3,297,000 | $ 3,366,000 | 9,451,000 | $ 9,506,000 | |
Depreciation and amortization | $ 29,000 | 31,000 | $ 85,000 | 86,000 | |
Interest expense | 18,000 | 62,000 | |||
Income tax expense (benefit) | $ 221,000 | 183,000 | $ 553,000 | 567,000 | |
Net income (loss) | 390,000 | 299,000 | 932,000 | 938,000 | |
Total segment assets | 16,299,000 | 16,749,000 | 16,299,000 | 16,749,000 | |
Expenditures for segmented assets | $ 29,000 | $ 9,000 | $ 45,000 | $ 60,000 | |
Corporate [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues from external customers | |||||
Depreciation and amortization | |||||
Interest expense | |||||
Income tax expense (benefit) | $ (75,000) | $ (197,000) | |||
Net income (loss) | (213,000) | (710,000) | |||
Total segment assets | $ 544,000 | 544,000 | |||
Expenditures for segmented assets | $ 14,000 |
Leases (Details)
Leases (Details) | Sep. 30, 2015USD ($) |
Leases [Abstract] | |
2015 (remainder) | $ 938 |
2,016 | 2,920 |
2,017 | 2,110 |
2,018 | 998 |
2,019 | 554 |
2,020 | $ 90 |
Thereafter | |
Total minimum base lease payments | $ 7,610 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Feb. 09, 2015 | Sep. 30, 2015 | Sep. 30, 2015 |
Other Employment Agreement [Member] | |||
Bonus arrangement current | $ 353,000 | $ 655,000 | |
Vendor Service Agreement [Member] | |||
Service agreement with vendor | $ 680,000 | ||
Period of service agreement | 3 years | ||
Chief Financial Officer [Member] | |||
Potential bonus arrangement current | $ 200,000 |
Management and Advisory Agree58
Management and Advisory Agreement (Details Narrative) | 9 Months Ended |
Sep. 30, 2015 | |
Management And Advisory Agreement Details Narrative | |
Other fee payable description | The amended and restated agreement requires the Company to pay Blackstreet a fee in an amount equal to $400,000 upon the closing of an acquisition in consideration for Blackstreets referral to the Company of such acquisition opportunity, and Blackstreets assistance in the performance of due diligence services relating thereto. Any fees which may have been payable per these terms related to the JPPA, RAI and JPRE acquisition (see Note 12) were waived by Blackstreet. |
Management fee payable description | The annual fees under the amended and restated contract will be the greater of (i) $612,100 (subject to annual increases of five percent) or (ii) five percent of Western Capitals EBITDA as defined under the agreement. |
Equity (Details Narrative)
Equity (Details Narrative) - USD ($) | Jul. 02, 2015 | Sep. 30, 2015 | Feb. 06, 2015 | Dec. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock issued | 9,497,689 | 5,997,588 | ||
Stock outstanding | 9,497,689 | 5,997,588 | ||
WCR 2015 Stock Incentive Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares reserved for future issuance (in shares) | 100,000 | |||
Unrecognized stock-based compensation expense | $ 119,000 | |||
Period of unrecognized compensation cost | 1 year 4 months 24 days | |||
Vesting period | 3 years | |||
Expiration period | 10 years | |||
JPPA Stock Incentive Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized stock-based compensation expense | $ 108,000 | |||
Expiration period | 10 years | |||
Options vesting | 10.00% | |||
Remaining options vesting | 50.00% | |||
Stock issued | 4,645 | |||
Stock outstanding | 4,645 | |||
RAI Stock Incentive Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized stock-based compensation expense | $ 230,000 | |||
Expiration period | 10 years | |||
Options vesting | 10.00% | |||
Remaining options vesting | 50.00% | |||
Stock issued | 537 | |||
Stock outstanding | 537 | |||
JPPA, RAI and JPRE Transaction [Member] | Common Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares issued for acqusition (in shares) | 3,500,000 | |||
Percent of voting rights issued as percent of post acquisition voting rights | 37.00% |
Equity (Details)
Equity (Details) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2015USD ($)$ / sharesshares | Sep. 30, 2015USD ($)$ / sharesshares | |
WCR 2015 Stock Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares [Roll Forward] | ||
Outstanding and nonvested at beginning | ||
Granted | 65,000 | |
Vested | ||
Forfeited | ||
Outstanding and nonvested at ending | 65,000 | 65,000 |
Exercisable at September 30, 2015 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ||
Granted | $ / shares | $ 6 | |
Outstanding and nonvested at ending | $ / shares | $ 6 | $ 6 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Roll Forward] | ||
Granted | 9 years 4 months 13 days | |
Outstanding and nonvested at ending | 9 years 4 months 13 days | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Aggregate Intrinsic Value [Roll Forward] | ||
Outstanding and nonvested at beginning | $ | ||
Granted | $ / shares | ||
Vested | $ | ||
Forfeited | $ / shares | ||
Outstanding and nonvested at ending | $ | ||
JPPA Stock Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares [Roll Forward] | ||
Outstanding and nonvested at beginning | 35.1 | |
Granted | ||
Vested | ||
Forfeited | ||
Outstanding and nonvested at ending | 35.1 | 35.1 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ||
Outstanding and nonvested at beginning | $ / shares | $ 3,403.37 | |
Outstanding and nonvested at ending | $ / shares | $ 3,403.37 | $ 3,403.37 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Roll Forward] | ||
Granted | 9 years 4 months 24 days | |
Outstanding and nonvested at ending | 9 years 4 months 24 days | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Aggregate Intrinsic Value [Roll Forward] | ||
Outstanding and nonvested at beginning | $ | ||
Granted | $ / shares | ||
Vested | $ | ||
Forfeited | $ / shares | ||
Outstanding and nonvested at ending | $ | ||
RAI Stock Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares [Roll Forward] | ||
Outstanding and nonvested at beginning | ||
Granted | 73.76 | |
Vested | ||
Forfeited | ||
Outstanding and nonvested at ending | 73.76 | 73.76 |
Exercisable at September 30, 2015 | 2.96 | 2.96 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ||
Granted | $ / shares | $ 3,765.90 | |
Outstanding and nonvested at ending | $ / shares | 3,765.90 | $ 3,765.90 |
Exercisable at September 30, 2015 | $ / shares | $ 6,471 | $ 6,471 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Roll Forward] | ||
Granted | 9 years 7 months 6 days | |
Outstanding and nonvested at ending | 9 years 7 months 6 days | |
Exercisable at September 30, 2015 | 6 years 5 months 12 days | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Aggregate Intrinsic Value [Roll Forward] | ||
Outstanding and nonvested at beginning | $ | ||
Granted | $ / shares | ||
Vested | $ | ||
Forfeited | $ / shares | ||
Outstanding and nonvested at ending | $ |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Events [Member] | Nov. 10, 2015USD ($)N | Oct. 01, 2015USD ($) |
PQH Wireless, Inc. [Member] | ||
Cricket retail locations | N | 10 | |
Cricket retail locations, amount | $ 450,000 | |
Consumer Finance [Member] | Nonperforming Financial Instruments [Member] | ||
Notes receivable, net | $ 167,500 | |
Loss on disposition | $ 450,000 |