Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 22, 2019 | Jun. 30, 2018 | |
Document and Entity Information | |||
Entity Registrant Name | CPI Card Group Inc. | ||
Entity Central Index Key | 1,641,614 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 11,160,537 | ||
Entity Public Float | $ 8.1 | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | true | ||
Entity Shell Company | false | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 20,291 | $ 23,205 |
Accounts receivable, net of allowances of $211 and $48, respectively | 43,794 | 32,531 |
Inventories | 9,827 | 13,799 |
Prepaid expenses and other current assets | 4,997 | 3,681 |
Income taxes receivable | 5,564 | 8,208 |
Assets of discontinued operation | 20,651 | |
Total current assets | 84,473 | 102,075 |
Plant, equipment and leasehold improvements, net | 39,110 | 44,436 |
Intangible assets, net | 35,437 | 40,093 |
Goodwill | 47,150 | 47,150 |
Other assets | 1,034 | 251 |
Total assets | 207,204 | 234,005 |
Current liabilities: | ||
Accounts payable | 16,511 | 13,239 |
Accrued expenses | 23,853 | 12,789 |
Deferred revenue and customer deposits | 912 | 3,342 |
Liabilities of discontinued operation | 5,669 | |
Total current liabilities | 41,276 | 35,039 |
Long-term debt | 305,818 | 303,869 |
Deferred income taxes | 5,749 | 12,168 |
Other long-term liabilities | 3,937 | 2,503 |
Total liabilities | 356,780 | 353,579 |
Commitments and contingencies (Note 13) | ||
Stockholders' deficit: | ||
Common Stock; $0.001 par value—100,000,000 shares authorized; 11,160,377 shares issued and outstanding and 11,134,714 shares issued and outstanding at December 31, 2018 and 2017, respectively | 11 | 11 |
Capital deficiency | (112,223) | (113,081) |
Accumulated loss | (36,004) | (1,366) |
Accumulated other comprehensive loss | (1,360) | (5,138) |
Total stockholders' deficit | (149,576) | (119,574) |
Total liabilities and stockholders' deficit | $ 207,204 | $ 234,005 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Consolidated Balance Sheets | ||
Allowance on accounts receivable | $ 211 | $ 48 |
Common shares, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common shares, authorized shares (in shares) | 100,000,000 | 100,000,000 |
Common shares, issued shares (in shares) | 11,160,377 | 11,134,714 |
Common shares, outstanding shares (in shares) | 11,160,377 | 11,134,714 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Net sales: | ||
Total net sales | $ 255,814 | $ 223,744 |
Cost of sales: | ||
Depreciation and amortization | 12,417 | 10,697 |
Total cost of sales | 177,224 | 155,539 |
Gross profit | 78,590 | 68,205 |
Operating expenses: | ||
Selling, general and administrative (exclusive of depreciation and amortization shown below) | 68,014 | 62,206 |
Impairments | 19,074 | |
Depreciation and amortization | 5,988 | 6,225 |
Total operating expenses | 74,002 | 87,505 |
Income (loss) from operations | 4,588 | (19,300) |
Other expense, net: | ||
Interest, net | (23,431) | (20,850) |
Foreign currency (loss) gain | (311) | 517 |
Other income, net | 16 | 12 |
Total other expense, net | (23,726) | (20,321) |
Loss before income taxes | (19,138) | (39,621) |
Income tax benefit | 4,339 | 16,536 |
Net loss from continuing operations | (14,799) | (23,085) |
Net (loss) income from discontinued operation, net of taxes | (22,663) | 1,075 |
Net loss | $ (37,462) | $ (22,010) |
Basic and diluted (loss) earnings per share: | ||
Continuing operations (in dollars per share) | $ (1.33) | $ (2.08) |
Discontinued operation (in dollars per share) | (2.03) | 0.10 |
Net (loss) earnings per share (in dollars per share) | $ (3.36) | $ (1.98) |
Basic and dilutive weighted-average shares outstanding (in shares) | 11,149,554 | 11,117,454 |
Dividends declared per common share | $ 0.45 | |
Comprehensive loss | ||
Net loss | $ (37,462) | $ (22,010) |
Reclassification adjustment from discontinued operations | 3,983 | |
Currency translation adjustment | (205) | 1,277 |
Total comprehensive loss | (33,684) | (20,733) |
Products | ||
Net sales: | ||
Total net sales | 125,069 | 104,459 |
Cost of sales: | ||
Products (exclusive of depreciation and amortization shown below) | 82,110 | 70,527 |
Services | ||
Net sales: | ||
Total net sales | 130,745 | 119,285 |
Cost of sales: | ||
Services (exclusive of depreciation and amortization shown below) | $ 82,697 | $ 74,315 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) $ in Thousands | ASU 2014-09Accumulated earnings (loss) | ASU 2014-09 | ASU 2016-09Capital deficiency | ASU 2016-09Accumulated earnings (loss) | Common Stock | Capital deficiency | Accumulated earnings (loss) | Accumulated other comprehensive loss | Total | ||
Beginning balance at Dec. 31, 2016 | $ 11 | [1] | $ (114,837) | $ 25,968 | $ (6,415) | $ (95,273) | |||||
Beginning balance (in shares) at Dec. 31, 2016 | [1] | 11,071,813 | |||||||||
Adoption of ASU | $ (38) | $ 38 | |||||||||
Common stock dividends | (5,021) | (5,021) | |||||||||
Shares issued under stock-based compensation plans | (341) | (341) | |||||||||
Shares issued under stock-based compensation plans (in shares) | [1] | 62,901 | |||||||||
Stock-based compensation | 1,794 | 1,794 | |||||||||
Components of comprehensive (loss) income: | |||||||||||
Net loss | (22,010) | (22,010) | |||||||||
Currency translation adjustment | 1,277 | 1,277 | |||||||||
Ending balance at Dec. 31, 2017 | $ 11 | [1] | (113,081) | (1,366) | (5,138) | $ (119,574) | |||||
Ending balance (in shares) at Dec. 31, 2017 | 11,134,714 | [1] | 11,134,714 | ||||||||
Adoption of ASU | $ 2,824 | $ 2,824 | |||||||||
Shares issued under stock-based compensation plans (in shares) | [1] | 25,663 | |||||||||
Stock-based compensation | 858 | $ 858 | |||||||||
Components of comprehensive (loss) income: | |||||||||||
Net loss | (37,462) | (37,462) | |||||||||
Other comprehensive loss from discontinued operations | 3,983 | 3,983 | |||||||||
Currency translation adjustment | (205) | (205) | |||||||||
Ending balance at Dec. 31, 2018 | $ 11 | [1] | $ (112,223) | $ (36,004) | $ (1,360) | $ (149,576) | |||||
Ending balance (in shares) at Dec. 31, 2018 | 11,160,377 | [1] | 11,160,377 | ||||||||
[1] | Common share and par value amounts have been adjusted to give retroactive effect to the 1-for-5 reverse stock split effected on December 20, 2017. |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Deficit (Parenthetical) | Dec. 20, 2017 |
Consolidated Statements of Stockholders' Deficit | |
Reverse stock split | 0.20 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Operating activities | ||
Net loss | $ (37,462) | $ (22,010) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Loss (income) from discontinued operations | 22,663 | (1,075) |
Impairments | 19,074 | |
Depreciation and amortization expense | 18,405 | 16,922 |
Stock-based compensation expense | 961 | 1,989 |
Amortization of debt issuance costs and debt discount | 1,949 | 1,947 |
Deferred income tax | (6,897) | (9,167) |
Other, net | 302 | (165) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (5,523) | (6,396) |
Inventories | (1,998) | 2,826 |
Prepaid expenses and other assets | (2,108) | 619 |
Income taxes | 2,644 | (8,581) |
Accounts payable | 2,411 | 5,655 |
Accrued expenses | 10,436 | (456) |
Deferred revenue and customer deposits | 632 | 599 |
Other liabilities | 655 | 1,671 |
Cash provided by operating activities - continuing operations | 7,070 | 3,452 |
Cash used in operating activities -discontinued operations | (3,550) | (1,025) |
Investing activities | ||
Acquisitions of plant, equipment and leasehold improvements | (5,634) | (7,263) |
Cash used in investing activities - continuing operations | (5,634) | (7,263) |
Cash used in investing activities - discontinued operations | (220) | (1,527) |
Financing activities | ||
Dividends paid on common stock | (7,540) | |
Payments on capital leases | (519) | |
Taxes withheld and paid on stock-based compensation awards | (341) | |
Cash used in financing activities | (519) | (7,881) |
Effect of exchange rates on cash | (61) | 494 |
Net decrease in cash and cash equivalents: | (2,914) | (13,750) |
Cash and cash equivalents, beginning of period | 23,205 | 36,955 |
Cash and cash equivalents, end of period | 20,291 | 23,205 |
Supplemental disclosures of cash flow information | ||
Cash paid (refunded) during the period for: Interest | 20,703 | 18,466 |
Cash paid (refunded) during the period for: Income tax (refunds) payments, net | (657) | 30 |
Capital lease obligations incurred for certain machinery and equipment | 1,812 | |
Accounts payable for acquisition of plant, equipment and leasehold improvements | $ 1,339 | $ 400 |
Business
Business | 12 Months Ended |
Dec. 31, 2018 | |
Business | |
Business | 1. Business CPI Card Group Inc., (which, together with its subsidiary companies, is referred to herein as “CPI” or the “Company”) is engaged in the design, production, data personalization, packaging and fulfillment of Financial Payment Cards, which the Company defines as credit cards, debit cards and prepaid debit cards issued on the networks of the Payment Card Brands (Visa, MasterCard, American Express, Discover and Interac (in Canada)) in the United States and Canada. The Company also offers an instant card issuance system and services, which provides card issuing bank customers the ability to issue a personalized debit or credit card within the bank branch to individual cardholders. As a producer and provider of services for Financial Payment Cards, each of the Company’s secure facilities must be certified by one or more of the Payment Card Brands and is therefore subject to specific requirements and conditions. Noncompliance with these requirements would prohibit the individual facilities of the Company from producing Financial Payment Cards for these entities’ payment card issuers. In 2018, the Company consolidated three personalization operations in the United States into two facilities to better enable the Company to optimize operations and achieve market-leading quality and service with a market-competitive business model. In conjunction with this decision, the Company accelerated the depreciation of certain related assets, which totaled $2,398 for the year ended December 31, 2018. The Company recorded severance charges of $552, and recorded lease termination charges of $476 during the year ended December 31, 2018. The charges were recorded in the U.S. Debit and Credit segment and were included in “Cost of sales” and “Selling, general and administrative” expenses on the Consolidated Statement of Operations. On August 3, 2018, the Company completed the sale of its three facilities in the United Kingdom that produce retail cards, such as gift and loyalty cards, for customers in the United Kingdom and continental Europe, and provide personalization, packaging and fulfillment services. The facilities sold included Colchester, Liverpool and Derby locations. The transaction was structured as a sale of all of the outstanding shares of CPI Card Group – UK Limited, for total consideration of approximately $4,500. During the third quarter 2018, the Company received net cash proceeds of $315 after the repayment of liabilities associated with the United Kingdom facilities, excluding tax benefits related to the structure of the sale. During the first quarter of 2018, the Company reorganized its United States business operations and realigned its United States reporting segments to correspond with the manner with which the Company’s chief operating decision maker evaluates operating performance and makes decisions as to the allocation of resources. As a result of this realignment, the Company’s CPI on Demand business operations moved from the U.S. Prepaid Debit segment into the U.S. Debit and Credit reporting segment, consistent with the other related personalization operations. Segment information for previous periods has been restated to conform with this realignment and the current period presentation. The restatement of the segment information was not material. The Company’s business consists of the following reportable segments: U.S. Debit and Credit, U.S. Prepaid Debit and Other. U.S. Debit and Credit Segment The U.S. Debit and Credit segment primarily produces Financial Payment Cards and provides integrated card services to card-issuing banks in the United States. Products manufactured by this segment primarily include EMV and non-EMV credit cards, debit cards and Prepaid Debit Cards issued on the networks of the Payment Card Brands, and Private Label Credit Cards that are not issued on the networks of the Payment Cards Brands (including general purpose reloadable, gift, payroll and employee benefit, government disbursement, incentive, and transit cards). The Company’s sales of instant card issuance systems are recorded in this segment. CPI On-Demand services, where the Company is able to produce all images, personalized payment cards and related collateral on a one-by-one, on demand basis for its customers, enabling individualized offerings and reducing waste. This segment also provides a variety of integrated card services, including card personalization and fulfillment services and instant issuance services. The U.S. Debit and Credit segment operations are each certified by multiple global Payment Card Brands and, where required by our customers, certified to be in compliance with the standards of the PCI Security Standards Council. U.S. Prepaid Debit Segment The U.S. Prepaid Debit segment primarily provides integrated card services to Prepaid Debit Card providers in the United States, including tamper-evident security packaging and fulfillment. This segment also produces Financial Payment Cards issued on the networks of the Payment Card Brands that are included in the tamper-evident security packages. The U.S. Prepaid Debit segment operation is certified by multiple global Payment Card Brands, and is certified to be in compliance with the standards of the PCI Security Standards Council. Other The Other category includes corporate headquarters and a less significant operating segment that derives revenue from the production of Financial Payment Cards and retail gift cards, and card personalization and fulfillment services in Canada. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying Consolidated Financial Statements include the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents and they are stated at cost, which approximates fair value. Trade Accounts Receivable and Concentration of Credit Risk Accounts receivable are stated at the amount management expects to collect from outstanding balances. The Company performs ongoing credit evaluations of its customers and generally requires no collateral to secure accounts receivable. December 31, 2018 December 31, 2017 Trade accounts receivable $ 36,428 $ 32,579 Unbilled accounts receivable 7,577 — 44,005 32,579 Less allowance for doubtful accounts (211) (48) $ 43,794 $ 32,531 The Company maintains an allowance for potentially uncollectible accounts receivable based upon its assessment of the collectability of accounts receivable. Accounts are written off against the allowance when it is determined collection will not occur. The allowance for bad debt and credit activity for the years ended December 31, 2018 and 2017 is summarized as follows: Balance as of December 31, 2016 $ 124 Bad debt expense 4 Write-off of uncollectible accounts (82) Currency translation adjustments 2 Balance as of December 31, 2017 $ 48 Bad debt expense 169 Write-off of uncollectible accounts (6) Balance as of December 31, 2018 $ 211 For the year ended December 31, 2018 one customer represented 19% of the Company’s consolidated net sales. For the year ended December 31, 2017 one customer represented 15% of the Company’s consolidated net sales. Inventories Inventories consist of raw materials, and finished goods and are measured at the lower of cost or net realizable value (determined on the first-in, first-out, specific identification or weighted-average method basis). Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Plant, Equipment and Leasehold Improvements Plant, equipment and leasehold improvements are recorded at cost. Accumulated depreciation is computed using the straight-line method over the lesser of the estimated useful life of the related assets (generally 3 to 10 years for machinery and equipment, furniture, computer equipment, and leasehold improvements) or, when applicable, the lease term. Maintenance and repairs that do not extend the useful life of the respective assets are charged to expense as incurred. Long-lived assets with finite lives are reviewed for impairment whenever events indicate that the carrying amount of the asset or the carrying amounts of the asset group containing the asset may not be recoverable. In such reviews, estimated undiscounted future cash flows associated with these assets or asset groups are compared with their carrying value to determine if a write-down to fair value is required. Goodwill and Intangible Assets Goodwill is not amortized, but instead is tested for impairment at least annually on October 1 or more frequently when an event occurs or circumstances change that indicates the carrying value may not be recoverable. For impairment evaluations, the Company first makes a qualitative assessment with respect to both goodwill and other indefinite-lived intangibles. During 2017, the Company early adopted ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”) in conjunction with its annual impairment testing effective October 1, 2017. In accordance with ASU 2017-04, an entity should perform its goodwill impairment test by comparing the fair value of the reporting unit with its carrying amount, and recognize an impairment charge for the amount by which the carrying amount of the reporting unit exceeds its fair value. The Company generally bases its measurement of the fair value of a reporting unit on a blended analysis of the present value of future discounted cash flows and the market valuation approach. The discounted cash flows model indicates the fair value of the reporting unit based on the present value of the cash flows that the Company expects the reporting unit to generate in the future. The Company's significant estimates in the discounted cash flows model include: its weighted average cost of capital; discrete and long-term rate of growth and profitability of the reporting unit's business; and working capital effects. The market valuation approach indicates the fair value of the business based on a comparison of the reporting unit to comparable publicly traded companies in similar lines of business. Significant estimates in the market valuation approach model include identifying similar companies with comparable business factors such as size, growth, profitability, risk and return on investment, and assessing comparable revenue and operating income multiples in estimating the fair value of the reporting unit. Acquired finite-lived intangible assets are amortized on a straight-line basis over the estimated useful lives of the assets, and are reviewed for impairment whenever events indicate that the carrying amount of the asset may not be recoverable. In such reviews, estimated undiscounted future cash flows associated with these assets are compared with their carrying value to determine if a write-down to fair value is required. Income Taxes The Company accounts for income taxes using an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. The Company has deferred tax assets and liabilities and maintains valuation allowances where it is more likely than not that all or a portion of deferred tax assets will not be realized. To the extent the Company determines that it will not realize the benefit of some or all of its deferred tax assets, then these deferred tax assets will be adjusted through the Company’s income tax expense in the period in which this determination is made. The Company recognizes the tax benefits from uncertain tax positions only when it is more likely than not, based on the technical merits of the position, that the tax position will be sustained upon examination, including the resolution of any related appeals or litigation. The tax benefits recognized in the consolidated financial statements from such a position are measured as the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense. Stock-Based Compensation The Company accounts for stock-based compensation pursuant to ASC 718, Share-Based Payments. All stock-based compensation to employees is required to be measured at fair value and expensed, net of forfeitures, over the requisite service period. The Company recognizes compensation expense on awards on a straight-line basis over the vesting period for each tranche of an award. Refer to Note 15 “Stock Based Compensation” for additional discussion regarding details of the Company's stock-based compensation plans. Accrued Expenses Accrued liabilities include accrued payroll expense of $2,371, and $2,526, as of December 31, 2018, and 2017, respectively. Accrued liabilities as of December 31, 2018, also includes accrued employee performance bonus of $7,137. Use of Estimates The accompanying Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). These accounting principles require management to make assumptions and estimates relating to the reporting of assets and liabilities in its preparation of the Consolidated Financial Statements. Significant items subject to such estimates and assumptions include the carrying amount of property and equipment, goodwill and intangible assets, valuation allowances for inventories and deferred taxes, debt, uncertain tax positions and stock-based compensation expense. Actual results could differ from those estimates. Foreign Currency Translation Financial statements of foreign subsidiaries that use local currencies as their functional currency are translated into U.S. dollars using the exchange rate at each balance sheet date for assets and liabilities and the weighted-average exchange rate for each reporting period for net sales, expenses, gains and losses. Translation adjustments are recorded as a component of Accumulated Other Comprehensive Loss in the accompanying consolidated financial statements. Foreign currency transaction gains and losses resulting from the process of re-measurement are recorded in “Foreign currency gain (loss)” in the accompanying Consolidated Statements of Operations and Comprehensive (Loss) Income. For the years ended December 31, 2018 and 2017 there were $(311) and $517 of such foreign currency (losses) gains, respectively. Recently Accounting Pronouncements Recently Adopted Accounting Pronouncements As of January 1, 2018, the Company adopted Accounting Standards Codification ASC 606, Revenue from Contracts with Customers , (“ASC 606”), which requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASC 606 also requires an entity to disclose sufficient quantitative and qualitative information to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted ASC 606 of January 1, 2018 to all its contracts using the modified retrospective method and recognized the cumulative effect of adoption as an adjustment to the opening balance of “Accumulated loss” on the Consolidated Balance Sheet. Under the new guidance, the Company recognizes certain performance obligations over time as the goods are produced, since those products provide value to only a specified customer, have no alternative use and the Company has the right to payment for work completed on such items. This accelerates the timing of revenue recognition for these arrangements, as revenue is recognized as goods are produced rather than upon shipment or delivery of goods. In addition, as a result of adopting the new guidance, the Company has recorded decreases to deferred revenue, and work in process and finished goods inventories, and an increase to accounts receivable. These changes are reflected in the adoption adjustments table below. The comparative financial information has not been restated and continues to be reported under the accounting standards in effect for those periods. See Note 3 “Net sales” for revenue recognition timing and methodology under ASC 606. The cumulative effects of the adjustments made to the Company’s January 1, 2018 Consolidated Balance Sheet upon adoption of ASC 606 were as follows: December 31, Adoption January 1, 2017 Adjustments 2018 Assets: Accounts receivable, net $ 32,531 $ 5,991 $ 38,522 Inventories 13,799 (5,929) 7,870 Assets of discontinued operation 20,651 (357) 20,294 Liabilities: Deferred revenue and customer deposits 3,342 (3,063) 279 Liabilities of discontinued operation 5,669 (535) 5,134 Deferred income taxes 12,168 479 12,647 Stockholders' deficit: Accumulated (loss) earnings (1,366) 2,824 1,458 In accordance with ASC 606, the impact on the Company’s Consolidated Balance Sheet and Statement of Operations and Comprehensive Loss was as follows: Balances As Reported Without December 31, Adoption of Balance Sheet 2018 Adjustments ASC 606 Assets: Accounts receivable, net $ 43,794 $ (7,508) $ 36,286 Inventories 9,827 7,350 17,177 Liabilities: Deferred revenue and customer deposits 912 1,893 2,805 Deferred income taxes 5,749 (567) 5,182 Stockholders' deficit: Accumulated loss (36,004) (1,484) (37,488) Year ended December 31, 2018 Balances As Reported Without Statement of Operations and December 31, Adoption of Comprehensive Loss 2018 Adjustments ASC 606 Net sales: Products $ 125,069 $ (1,803) $ 123,266 Services 130,745 387 131,132 Cost of sales: Products (exclusive of depreciation and amortization) 82,110 (1,738) 80,372 Services (exclusive of depreciation and amortization) 82,697 510 83,207 Gross profit 78,590 (188) 78,402 Income tax benefit (expense) 4,339 39 4,378 Net loss from continuing operations (14,799) (149) (14,948) Net loss from discontinued operation, net of tax (22,663) 157 (22,506) During 2017, the Company early adopted ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”) in conjunction with its annual impairment testing effective October 1, 2017. In accordance with ASU 2017-04, an entity should perform its goodwill impairment test by comparing the fair value of the reporting unit with its carrying amount, and recognize an impairment charge for the amount by which the carrying amount of the reporting unit exceeds its fair value. Recently Issued Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (the “FASB”) issued ASC Topic 842, Leases (“ASC 842”), which provides guidance for accounting for leases. The new guidance requires companies to recognize the assets and liabilities for the rights and obligations created by leased assets. ASC 842 is effective for annual and interim periods beginning after December 15, 2018 (the Company’s fiscal year 2019) with early adoption permitted. The new guidance requires the recognition and measurement of leases at the beginning of the earliest comparative period presented in the financial statements. The guidance required a modified retrospective approach, with an option to apply the transition provisions of the new guidance at the adoption date without adjusting the comparative periods presented. In July 2018, t he FASB issued additional accounting standard updates clarifying certain provisions, as well as providing for a second transition method allowing entities to initially apply the standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings. The Company will adopt the new guidance on the effective date of January 1, 2019 and use the adoption date as the date of initial application as allowed under ASC 842. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. The new standard provides a number of optional practical expedients in transition. The Company expects to elect the ‘package of practical expedients’, which permits the Company not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. The Company does not expect to elect the use-of-hindsight transition practical expedient. The Company’s adoption process of ASC 842 is ongoing, including evaluating and quantifying the impact on the financial statements, identifying the population of leases, calculating its incremental borrowing rate and collecting and validating lease data. While the Company continues to assess all of the effects of adoption, the Company currently believes the most significant effects relate to the recognition of new right-of-use assets and lease liabilities on the balance sheet for real estate operating leases, and providing significant new disclosures about the Company’s leasing activities. The new standard also provides practical expedients for the Company’s ongoing accounting. The Company expects to elect the short-term lease recognition exemption for all leases that qualify, meaning the Company will not recognize right-of-use assets or lease liabilities for existing and new lease agreements that qualify. The Company also expects to elect the practical expedient to not separate lease and non-lease components for all of its leases. |
Net Sales
Net Sales | 12 Months Ended |
Dec. 31, 2018 | |
Net Sales. | |
Net Sales | 3. Net Sales The Company disaggregates its net sales by major source as follows: For the year ended December 31, 2018 Products Services Total U.S. Debit and Credit $ 122,119 $ 56,478 $ 178,597 U.S. Prepaid Debit — 69,199 69,199 Other 4,398 5,493 9,891 Intersegment eliminations (1,448) (425) (1,873) Total $ 125,069 $ 130,745 $ 255,814 For periods after January 1, 2018, the Company accounts for its net sales as follows: Products Net Sales “ Products” net sales are recognized when obligations under the terms of a contract with a customer are satisfied. In most instances, this occurs over time as cards are manufactured for specific customers and have no alternative use and the Company has an enforceable right to payment for work performed. For work performed but not completed and unbilled, the Company estimates revenue by taking actual costs incurred and applying historical margins for similar types of contracts. Items included in “Products” revenue are manufactured Financial Payment Cards, including in contact-EMV, Dual-Interface EMV®, contactless and magnetic stripe cards, private label credit cards and retail gift cards. Card Once® printers and consumables are also included in “Products” revenue, and their associated revenues are recognized at the time of shipping. The Company includes gross shipping and handling revenue and cost in net sales and cost of sales respectively. Services Net Sales Net sales are recognized for “Services” as the services are performed. Items included in “Services” net sales include the personalization and fulfillment of Financial Payment Cards, providing tamper-evident secure packaging and fulfillment services to Prepaid Debit Card program managers and software as a service personalization of instant issuance debit cards. For work performed but not completed and unbilled, the Company estimates revenue by taking actual costs incurred and applying historical margins for similar types of contracts. Customer Contracts The Company often enters into Master Services Agreements (“MSAs”) with its customers. Generally, enforceable rights and obligations for goods and services occur only when a customer places a purchase order or statement of work to obtain goods or services under an MSA. The contract term as defined by ASC 606 is the length of time it takes to deliver the goods or services promised under the purchase order or statement of work. As such, the Company's contracts are generally short term in nature. |
Discontinued Operation
Discontinued Operation | 12 Months Ended |
Dec. 31, 2018 | |
Discontinued Operation | |
Discontinued Operation | 4. Discontinued Operation On August 3, 2018, the Company completed the sale of its United Kingdom facilities that comprised the U.K. Limited reporting segment. The Company did not retain significant continuing involvement with the discontinued operation subsequent to the disposal. In connection with the sale, the Company performed a goodwill impairment test and recorded a charge of $6,366 in the second quarter of 2018. The impairment was a result of continued market softness in the U.K. Limited segment, resulting in lower sales and margins and an expected sales price below the carrying value of the segment. The Company also recorded an impairment charge of $1,249 to customer relationship intangible assets related to the U.K. Limited segment in the second quarter of 2018. The Company recorded a $7,248 loss on sale of U.K Limited for the year ended December 31, 2018. In connection with the substantial liquidation of the foreign entity, the Company released the related cumulative translation adjustment from accumulated other comprehensive loss into loss from discontinued operations. This adjustment was $3,983 and is included in other expense (income), net in the schedule below. As of December 31, 2017, the carrying amounts of the major classes of assets and liabilities of the discontinued operation were as follows: December 31, 2017 Assets: Accounts receivable $ 5,006 Inventories 2,438 Other assets 506 Plant, equipment and leasehold improvements 4,864 Intangible assets 1,379 Goodwill 6,458 Total assets of discontinued operation 20,651 Liabilities: Accounts payable 3,307 Other current liabilities 1,866 Other long-term liabilities 496 Total liabilities of discontinued operation $ 5,669 The major line items constituting the (loss) income of the discontinued operation for the year ended December 31, 2018 and 2017 were as follows: For the year ended December 31, 2018 2017 Total net sales $ 10,741 $ 31,119 Total cost of sales 10,222 24,331 Selling, general and administrative 4,336 5,591 Impairments 7,615 — Other expense (income), net 4,006 (43) Pretax (loss) income from discontinued operation (15,438) 1,240 Pretax loss on sale of discontinued operation (7,248) — Total pretax (loss) income on discontinued operation (22,686) 1,240 Income tax benefit (expense) 23 (165) Net income (loss) from discontinued operation $ (22,663) $ 1,075 |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2018 | |
Inventories | |
Inventories | 5. Inventories Inventories are summarized below: December 31, 2018 2017 Raw materials $ 8,235 $ 7,411 Work-in-process — 5,107 Finished goods 2,991 2,974 Inventory reserve (1,399) (1,693) $ 9,827 $ 13,799 |
Plant, Equipment and Leasehold
Plant, Equipment and Leasehold Improvements | 12 Months Ended |
Dec. 31, 2018 | |
Plant, Equipment and Leasehold Improvements | |
Plant, Equipment and Leasehold Improvements | 6. Plant, Equipment and Leasehold Improvements Plant, equipment and leasehold improvements consist of the following: December 31, 2018 2017 Machinery and equipment $ 62,067 $ 58,595 Machinery and equipment under capital leases 1,812 — Furniture, fixtures and computer equipment 7,730 6,288 Leasehold improvements 19,651 19,601 Construction in progress 1,596 1,512 92,856 85,996 Less accumulated depreciation and amortization (53,746) (41,560) $ 39,110 $ 44,436 Amounts recorded for the depreciation of plant, equipment and leasehold improvements were $13,749 and $12,235 for the years ended December 31, 2018 and 2017, respectively. There were no impairments of the Company’s plant, equipment, and leasehold improvement assets for the continuing operations of the Company for the years ended December 31, 2018 and 2017. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Other Intangible Assets | |
Goodwill and Other Intangible Assets | 7. Goodwill and Other Intangible Assets The Company’s goodwill by reportable segment at December 31, 2018 and 2017 is as follows: December 31, 2018 2017 U.S. Debit and Credit $ 47,150 $ 47,150 Goodwill activity is summarized as follows: Balance as of December 31, 2016 $ 66,088 Currency translation 136 Impairments (19,074) Balance as of December 31, 2017 $ 47,150 Currency translation — Impairments — Balance as of December 31, 2018 $ 47,150 In connection with the sale of the Company’s U.K. Limited segment, the Company performed a goodwill impairment test and recorded a charge of $6,366 in discontinued operations during the year ended December 31, 2018. The impairment was a result of continued market softness in the U.K. operations, resulting in lower sales and margins and an expected sale price below the carrying value of the segment. The Company completed its goodwill impairment testing as of October 1, 2018, and no other impairments were recognized as a result of this analysis. The Company completed its goodwill impairment testing as of October 1, 2017, and recorded impairment charges of $19,074, of which $17,181 related to U.S. Debit and Credit resulting from continued market softness in demand for EMV cards, including price erosion and loss of market share in the United States. The other impairment for $1,893 related to Other which resulted from declines in net sales and operating losses incurred in our Canadian business. The Company determined the fair value of the reporting units primarily based on an income approach, using the present value of future discounted cash flows of the reporting unit. This approach includes significant estimates of the reporting unit’s weighted average cost of capital, financial forecasts developed by management, and long-term rate of growth and profitability. The market approach was also considered, with fair value determined by applying pricing multiplies derived from publicly-traded companies that are comparable to the reporting unit. CPI’s amortizable intangible assets consist of customer relationships, technology and software, trademarks and non-compete agreements. Total intangible assets are being amortized over a weighted-average useful life of 15.7 years. Intangible amortization expense totaled $4,656 and $4,687 for the years ended December 31, 2018 and 2017, respectively. During the years ended December 31, 2018 and 2017, there were no material impairments of the Company’s amortizable intangible assets from continuing operations. The Company recorded an impairment charge of $1,249 to customer relationship intangible assets related to the U.K. Limited segment in the second quarter of 2018, which is reported in discontinued operations. Intangible assets consist of the following: December 31, 2018 December 31, 2017 Average Accumulated Net Book Accumulated Net Book Life (Years) Cost Amortization Value Cost Amortization Value Customer relationships 12 to 20 $ 55,454 (25,587) $ 29,867 $ 55,454 $ (22,311) $ 33,143 Technology and software 7 to 10 7,101 (4,024) 3,077 7,101 (3,095) 4,006 Trademarks 7.5 to 10 3,330 (877) 2,453 3,330 (487) 2,843 Noncompete agreements 5 to 8 491 (451) 40 491 (390) 101 Intangible assets subject to amortization $ 66,376 $ (30,939) $ 35,437 $ 66,376 $ (26,283) $ 40,093 The estimated future aggregate amortization expense for the identified amortizable intangibles noted above as of December 31, 2018 is as follows: 2019 $ 4,635 2020 4,595 2021 4,352 2022 3,867 2023 3,867 Thereafter 14,121 $ 35,437 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | 8. Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). In determining fair value, the Company utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels: · Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. · Level 2—Inputs, other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. · Level 3—Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. The Company’s financial assets and liabilities that are not required to be remeasured at fair value in the Consolidated Balance Sheets are as follows: Carrying Fair Value Measurement at Value as of Fair Value as of December 31, 2018 December 31, December 31, (Using Fair Value Hierarchy) 2018 2018 Level 1 Level 2 Level 3 Liabilities: First Lien Term Loan $ 312,500 $ 203,125 $ — $ 203,125 $ — Carrying Fair Value Measurement at Value as of Fair Value as of December 31, 2017 December 31, December 31, (Using Fair Value Hierarchy) 2017 2017 Level 1 Level 2 Level 3 Liabilities: First Lien Term Loan $ 312,500 $ 228,125 $ — $ 228,125 $ — The aggregate fair value of the Company’s First Lien Term Loan, as defined in Note 9, “Long-Term Debt and Credit Facility,” was based on bank quotes. The carrying amounts for cash and cash equivalents approximate fair value due to their short maturities. Nonrecurring fair value measurements include the Company’s goodwill and intangible asset impairments recognized during the year ended December 31, 2018 and 2017, as determined based on unobservable Level 3 inputs. Refer to Note 7, “Goodwill and Other Intangible Assets”, and Note 4, “Discontinued Operations”. |
Long-Term Debt and Credit Facil
Long-Term Debt and Credit Facility | 12 Months Ended |
Dec. 31, 2018 | |
Long-Term Debt and Credit Facility | |
Long-Term Debt and Credit Facility | 9. Long-Term Debt and Credit Facility Long-term debt consists of the following: Interest December 31, December 31, Rate 2018 2017 First Lien Term Loan (a) $ 312,500 $ 312,500 Unamortized discount (2,448) (3,122) Unamortized deferred financing costs (4,234) (5,509) Total long-term debt 305,818 303,869 Less current maturities - - Long-term debt, net of current maturities $ 305,818 $ 303,869 (a) Interest rate on December 31, 2018 First Lien Credit Facility On August 17, 2015, the Company entered into the First Lien Credit Facility with a syndicate of lenders providing for the $435,000 First Lien Term Loan and the $40,000 Revolving Credit Facility. The First Lien Term Loan and the Revolving Credit Facility have maturity dates of August 17, 2022 and August 17, 2020, respectively. The First Lien Credit Facility is secured by a first-priority security interest in substantially all of the Company's assets constituting equipment, inventory, receivables, cash and other tangible and intangible property. Interest rates under the First Lien Credit Facility are based, at the Company's election, on a Eurodollar rate, subject to an interest rate floor of 1.0%, plus a margin of 4.50% or a base rate plus a margin of 3.50%. The First Lien Credit Facility contains customary nonfinancial covenants, including among other things, restrictions on indebtedness, issuance of liens, investments, dividends, redemptions and other distributions to equity holders, asset sales, certain mergers or consolidations, sales, transfers, leases or dispositions of substantially all of the Company's assets and affiliate transactions. The First Lien Credit Facility also contains a requirement that, as of the last day of any fiscal quarter, if the amount the Company has drawn under the Revolving Credit Facility is greater than 50% of the aggregate principal amount of all commitments of the lenders thereunder, the Company maintain a first lien net leverage not in excess of 7.0 times Adjusted EBITDA, as defined in the agreement. As of December 31, 2018, the Company was in compliance with all covenants under the First Lien Credit Facility. The First Lien Credit Facility also requires prepayment in advance of the maturity date upon the occurrence of certain customary events, including based on an annual excess cash flow calculation, pursuant to the terms of the agreement, with any required payments to be made after the issuance of the Company’s annual financial statements. The Company does not have a required excess cash flow payment related to 2018 . In accordance with the terms of the First Lien Credit Facility, the Company repaid $112,500 of the First Lien Term Loan on October 15, 2015 in conjunction with the completion of its initial public offering, and an additional $10,000 during the fourth quarter of 2015. As of December 31, 2018, the Company did not have any outstanding amounts under the Revolving Credit Facility, and has $19,950 available for borrowing. Additional amounts may be available for borrowing under the term of the Revolving Credit Facility, up to the full $40,000, to the extent the Company’s net leverage ratio does not exceed 7.0 times Adjusted EBITDA, as defined in the agreement. The Company has one outstanding letter of credit for $50 relating to the security deposit on a real property lease agreement. The Company pays a fee on outstanding letters of credit at the applicable margin, which was 4.5% as of December 31, 2018, in addition to a fronting fee of 0.125% per annum. In addition, the Company is required to pay an unused commitment fee ranging from 0.375% per annum to 0.50% per annum of the average unused portion of the revolving commitments. The unused commitment fee is determined on the basis of a grid that results in a lower unused commitment fee as the Company’s total net leverage ratio declines. The Company has accrued interest of $5,058 and $4,296 recorded within “Accrued expenses” on the Consolidated Balance Sheets as of December 31, 2018, and 2017, respectively. Deferred Financing Costs Certain costs incurred with borrowings or the establishment or modification of credit facilities are reflected as a reduction to the long-term debt balance. These costs are amortized as an adjustment to interest expense over the life of the borrowing using the effective-interest rate method. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes | |
Income Taxes | 10. Income Taxes Income tax benefit from continuing operations and effective income tax rates consist of the following: December 31, 2018 2017 Current taxes: Domestic $ 2,558 $ (7,369) Foreign — — 2,558 (7,369) Deferred taxes: Domestic (6,897) (9,167) Foreign — — (6,897) (9,167) Income tax benefit $ (4,339) $ (16,536) Loss before income taxes Domestic $ (18,383) $ (36,985) Foreign (755) (2,636) Total $ (19,138) $ (39,621) Effective income tax rate 22.7 % 41.7 % The effective income tax rate differs from the U.S. federal statutory income tax rate as follows: December 31, 2018 2017 Tax at federal statutory rate 21.0 % 35.0 % State income taxes 4.0 0.5 Foreign taxes (0.1) (0.1) Tax benefit for U.K. sale 17.5 — Valuation allowance (13.5) (1.5) Unrecognized tax benefits (4.8) (3.2) Tax credits 2.5 10.8 Deferred tax impact of enacted tax rate and law changes (0.7) 18.4 Goodwill impairments — (17.4) Other (3.2) (0.8) Effective income tax rate 22.7 % 41.7 % The components of the deferred tax assets and liabilities are as follows: December 31, 2018 2017 Deferred tax assets: Accrued expense $ 2,553 $ 744 Unrealized foreign exchange loss — 647 Net operating loss carryforward 5,589 2,156 Deferred financing costs 553 707 Stock compensation 861 679 Tax credit carryforward 1,118 420 Interest limitation 4,412 — Other 927 753 Total gross deferred tax assets 16,013 6,106 Valuation allowance (6,823) (4,617) Net deferred tax assets 9,190 1,489 Deferred tax liabilities: Plant, equipment and leasehold improvements (3,851) (2,819) Intangible assets (9,311) (9,912) Prepaid expenses and other (1,777) (926) Total gross deferred tax liabilities (14,939) (13,657) Net deferred tax liabilities $ (5,749) $ (12,168) The net change in the valuation allowance during the year ended December 31, 2018 was an increase of $2,206 and related to the limitation on the deductibility of interest expense, changes in net operating losses of foreign locations, the interest limitation related to section 163(j) of tax reform legislation that is not expected to be realized, and state research and development credits carried forward. The Company has potential tax benefits associated with $10,791 of gross foreign operating loss carryforwards, which expire at various dates from 2024 through 2038. Due to the uncertainty of being able to recognize these loss carryforwards, the Company has provided a valuation allowance of 100% of the tax benefit. Additionally, the Company has potential tax benefits associated with $9,156 of gross domestic operating loss carryforwards, which do not expire. The Company also has various state and local operating loss carryforwards which will expire at various dates from 2033 to 2038. The Company does expect to be able to utilize these losses prior to expiration. The Company has potential tax benefits associated with state research and development tax credit carryforwards as of December 31, 2018 of $ 778 , which will expire at various dates between 2029 and 2033. Due to the uncertainty of being able to recognize these credit carryforwards, the Company has provided a valuation allowance of 100% of the tax benefit. Additionally, the Company has potential tax benefits associated with federal research and development tax credit carryforwards as of December 31, 2018 of $3 40 , which will expire in 2038. Due to the uncertainty of the research and development credit the Company has provided a 100% valuation allowance. At December 31, 2018, no provision has been made for U.S. federal and state taxes on cumulative foreign earnings as there are no current or cumulative earnings of foreign operations. The Company recorded a current tax benefit in 2018 related to the sale of the U.K. Limited segment of $3,332. 2017 Tax Reform On December 22, 2017, the U.S. government enacted comprehensive tax reform legislation that includes significant changes to taxation of business entities. These changes include, among others, (i) a permanent reduction to the corporate income tax rate, (ii) a partial limitation on the deductibility of business interest expense, (iii) elimination of deduction for income attributable to domestic production activities and (iv) a partial shift of the U.S. taxation of multinational corporations from a tax on worldwide income to a territorial system (along with a transitional rule that taxes certain historic foreign accumulated earnings and certain rules that aim to prevent erosion of U.S. income tax base). In conjunction with tax reform and the reduction of the U.S. federal tax rate from 35.0% to 21.0%, the Company accrued a $7,057 tax benefit during the year ended December 31, 2017 related to the net change in deferred tax liabilities. Unrecognized Tax Benefits Unrecognized tax benefits represent the aggregate tax effect of differences between the tax return positions and the amounts otherwise recognized in the Company’s consolidated financial statements, and are reflected in “Other long term liabilities” and “Deferred income taxes” in the Company’s consolidated balance sheets. The Company accounts for uncertain tax positions by recognizing the financial statement effects of a tax provision only when based upon the technical merits, it is “more-likely-than-not” that the tax position will be sustained upon examination. Balance as of December 31, 2017 $ 1,212 Increase related to current year tax position 506 Increase related to prior year tax position 871 Decrease related to settlements with tax authorities, net of federal benefit (545) Lapse of statute of limitations — Balance as of December 31, 2018 $ 2,044 The Company recognizes interest and penalties with respect to unrecognized tax benefits as a component of income tax expense. The amount of accrued interest and penalties related to unrecognized tax benefits as of and for the year ended December 31, 2018 was $221 and not material for the year ended December 31, 2017. The Company is generally subject to potential federal and state examinations for the tax years on and after December 31, 2015 for federal purposes and December 31, 2013 for state purposes. The Company’s locations in the United Kingdom and Canada are subject to examinations for tax years on and after December 31, 2018 and December 31, 2014, respectively. The Company’s U.K. Limited segment which was sold on August 3, 2018, is subject to examinations for tax years on and after December 31, 2017. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders’ Equity | |
Stockholders’ Equity | 11. Stockholders’ Equity Common Stock Common Stock has a par value of $0.001 per share. Holders of common stock are entitled to receive dividends and distributions subject to the participation rights of holders of all classes of stock at the time outstanding, as such holders have prior rights as to dividends pursuant to the rights of any series of Preferred Stock. Upon any liquidation, dissolution, or winding up of the Company, after required payments are made to holders of any series of Preferred Stock, any remaining assets of the Company will be distributed ratably to the holders of Common Stock. Holders of Common Stock are entitled to one vote per share. During the year ended December 31, 2017, the Company paid dividends of $7,540, representing $0.675 per share. During August 2017, the Company discontinued its quarterly dividend of $0.225 per share. |
(Loss) Earnings per Share
(Loss) Earnings per Share | 12 Months Ended |
Dec. 31, 2018 | |
(Loss) Earnings per Share | |
(Loss) Earnings per Share | 12. (Loss) Earnings per Share Basic or diluted (loss) earnings per share is computed by dividing net earnings or loss by the weighted-average number of ordinary shares outstanding during the period. The following table sets forth the computation of basic and diluted (loss) earnings per share, giving retroactive effect for the one-for-five reverse stock split effective December 20, 2017, attributable to continuing and discontinued operations: December 31, 2018 2017 Numerator: Net loss from continuing operations $ (14,799) $ (23,085) Net (loss) income from a discontinued operation, net of taxes (22,663) 1,075 Net loss $ (37,462) $ (22,010) Denominator: Basic and dilutive EPS—weighted average common shares outstanding 11,149,554 11,117,454 Basic and Diluted EPS: (Loss) per share from continuing operations $ (1.33) $ (2.08) (Loss) income per share from discontinued operations, net of taxes (2.03) 0.10 (Loss) per share $ (3.36) $ (1.98) The potentially dilutive effect of 985,876 and 993,587, stock options and restricted stock units as of December 31, 2018 and 2017, respectively, has been excluded from the computation of diluted earnings per share as their inclusion would be anti-dilutive. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies. | |
Commitments and Contingencies | 13. Commitments and Contingencies Commitments The Company leased certain machinery and equipment under capital lease obligations, which consisted of the following at December 31, 2018: December 31, 2018 Machinery and equipment $ 1,565 Less current portion of capital lease obligations (521) Total long-term capital lease obligations $ 1,044 The Company has recorded the current portion of capital lease obligations in “Accrued expenses” and the long-term capital lease obligations in “Other long-term liabilities”, within the consolidated balance sheet as of December 31, 2018. The Company leases real property for its facilities under non-cancellable operating lease agreements. Land and facility leases expire at various dates between 2019 and 2024 and contain various provisions for rental adjustments and renewals. The leases typically require the Company to pay property taxes, insurance and normal maintenance costs. During the normal course of business, the Company also enters into non-cancellable agreements to purchase goods and services, including production equipment and information technology systems. The 2019 purchase obligations in the table below relates primarily to purchases of capital expenditures. Future cash payments with respect to leases and purchase obligations as of December 31, 2018 are as follows: Operating Capital Purchase Leases Leases Obligations 2019 $ 2,927 $ 521 $ 3,848 2020 2,771 474 — 2021 2,512 243 — 2022 1,243 256 — 2023 971 71 — Thereafter 652 — — Total $ 11,076 $ 1,565 $ 3,848 The Company incurred rent expense under non-cancellable operating leases during the years ended December 31, 2018 and 2017, totaling $3,767 and $3,528, respectively. Contingencies In accordance with applicable accounting guidance, the Company establishes an accrued liability when loss contingencies are both probable and estimable. In such cases, there may be an exposure to loss in excess of any amounts accrued. As a matter develops, the Company, in conjunction with any outside counsel handling the matter, evaluates on an ongoing basis whether such matter presents a loss contingency that is probable and estimable. Once the loss contingency is deemed to be both probable and estimable, the Company will establish an accrued liability and record a corresponding amount of litigation-related expense. The Company expenses professional fees associated with litigation claims and assessments as incurred. In Re CPI Card Group Inc. Securities Litigation, Case No. 1:16-CV-04531 (S.D.N.Y.) (the “Class Action”) On June 15, 2016, two purported CPI stockholders filed putative class action lawsuits captioned Vance, et al. v. CPI Card Group Inc., et al. and Chipman, et al. v. CPI Card Group Inc. in the United States District Court for the Southern District of New York (the “Court”) against CPI, certain of its former officers and current and former directors, along with the sponsors of and the financial institutions who served as underwriters for CPI’s October 2015 initial public offering (“IPO”). The complaints, purportedly brought on behalf of all purchasers of CPI common stock pursuant to the October 8, 2015 Registration Statement filed in connection with the IPO, asserted claims under §§11 and 15 of the Securities Act of 1933, as amended (the “Securities Act”) and sought, among other things, damages and costs. In particular, the complaints alleged that the Registration Statement contained false or misleading statements or omissions regarding CPI’s customers’ (i) purchases of Europay, MasterCard and VISA chip cards (collectively, “EMV® cards”) during the first half of fiscal year 2015 and resulting EMV® card inventory levels; and (ii) capacity to purchase additional EMV® cards in the fourth quarter of fiscal year 2015, and the remainder of the fiscal year ended December 31, 2015. The complaints alleged that these actions artificially inflated the price of CPI common stock issued pursuant to the IPO. On August 30, 2016, the Court consolidated the Vance and Chipman actions and appointed lead plaintiff and lead counsel pursuant to the Private Securities Litigation Reform Act. On October 17, 2016, lead plaintiff filed a consolidated amended complaint, asserting the same claims for violations of §§11 and 15 of the Securities Act. The amended complaint was based principally on the same theories as the original complaints, but added allegations that the Registration Statement contained inadequate risk disclosures and failed to disclose (i) small and mid-size issuers’ slower-than-anticipated conversion to EMV® technology and (ii) increased pricing pressure and competition CPI faced in the EMV® market. On September 21, 2018, the parties executed a stipulation and agreement of settlement (“Stipulation”) to resolve the claims asserted in the amended complaint. On October 22, 2018, the Court granted lead plaintiff’s motion for authorization to notify the settlement class of the proposed settlement. After distribution of the notice to the class and a final settlement hearing on February 5, 2019, the Court entered orders on February 6, 2019: (i) approving the proposed settlement; and (ii) granting in part lead plaintiff’s motion for attorneys’ fees and expenses. On February 25, 2019, the Court entered an order and final judgment dismissing the case, in its entirety, with prejudice. The Company paid an insignificant amount during the fourth quarter of 2018 in relation to an allocation of the total agreed settlement amount. As of December 31, 2018, the Company did not have any liability recorded for an estimate of additional probable loss relating to this matter. There was no liability recorded as of December 31, 2017. Heckermann v. Montross et al. , Case No. 1:17-CV-01673 (D. Del.) (the “Derivative Suit”) On November 20, 2017, a purported CPI stockholder filed a stockholder derivative complaint in the United States District Court for the District of Delaware (the “Court”) against certain of CPI’s former officers and current and former directors, along with the sponsors of the IPO. CPI is also named as a nominal defendant. The derivative complaint asserts claims under §§10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 and seeks, among other things, injunctive relief, damages and costs. It alleges false or misleading statements and omissions in the Registration Statement filed by CPI in connection with its IPO and subsequent public filings and statements. The derivative complaint also asserts claims for purported breaches of fiduciary duties, unjust enrichment, mismanagement and waste of corporate assets. On March 28, 2018, the Court entered the parties’ stipulated order staying the Derivative Suit pending final determination of the Class Action. Under its terms, the stay of the Derivative Suit will be lifted 30 days after the entry of final judgment in the Class Action which was entered on February 25, 2019. The Company believes these claims are without merit and is defending the Derivative Suit vigorously. Given the current stage of these matters, the range of any potential loss is not probable or estimable and no liability has been recorded as of December 31, 2018 and 2017. In addition to the matters described above, the Company is subject to routine legal proceedings in the ordinary course of business. The Company believes that the ultimate resolution of these matters will not have a material adverse effect on its business, financial condition or results of operations. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2018 | |
Employee Benefit Plan | |
Employee Benefit Plan | 14. Employee Benefit Plan The Company maintains a qualified defined-contribution plan under the provisions of the Internal Revenue Code Section 401(k), which covers substantially all employees in the United States who meet certain eligibility requirements. Under the plan, participants may defer their salary subject to statutory limitations and may direct the contributions among various investment options. The Company matches 100% of the participant’s first 3% of deferrals and 50% matching on each of the 4 th and 5 th percent contributed by the participant. As the Company operates the plan as a safe harbor 401(k) plan, the Company’s match is 100% vested at the time of the match. The aggregate amounts charged to expense in connection with the plan were $1,235 and $1,236 for the years ended December 31, 2018 and 2017, respectively. |
Stock Based Compensation
Stock Based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Stock Based Compensation | |
Stock Based Compensation | 15. Stock Based Compensation CPI Card Group Inc. Omnibus Incentive Plan During October 2015, the Company adopted the CPI Card Group Inc. Omnibus Incentive Plan (the “Omnibus Plan”) pursuant to which cash and equity based incentives may be granted to participating employees, advisors and directors. The Company had reserved 800,000 shares of common stock for issuance under the Omnibus Plan. Effective September 25, 2017, the Omnibus Plan was amended and restated, providing for an increase in the number of shares of common stock authorized for issuance thereunder by 400,000. The increase was made effective in the fourth quarter of 2017 by stockholder approval in accordance with applicable law, after which the Company had reserved 1,200,000 shares of common stock for issuance. As of December 31, 2018, there were 156,917 shares available for grant under the Omnibus Plan. During the year ended December 31, 2018, the Company granted awards of non-qualified stock options for 159,755 shares of common stock. During the year ended December 31, 2017, the Company granted awards of non-qualified stock options for 713,075 shares of common stock. During the third quarter of 2017, the Company granted stock option awards in lieu of the regular cycle of Omnibus Plan awards that the Company would have otherwise made in the first quarter of 2018, and also in conjunction with the appointment of the Company’s President and Chief Executive Officer. All stock option grants have a 10-year term, and will generally vest ratably over a three-year period beginning on the first anniversary of the grant date. The following is a summary of the activity in outstanding stock options under the Omnibus Plan: Weighted- Weighted- Average Average Remaining Exercise Contractual Term Options Price (in Years) Outstanding as of December 31, 2017 937,310 $ Granted 159,755 Forfeited (186,438) Outstanding as of December 31, 2018 910,627 $ Options vested and exercisable as of December 31, 2018 305,275 Options vested and expected to vest as of December 31, 2018 910,627 The following is a summary of the activity in non-vested stock options under the Omnibus Plan: Weighted- Average Grant-Date Number Fair Value Non-vested as of December 31, 2017 876,903 $ Granted 159,755 Forfeited (152,242) Vested (279,064) 4.81 Non-vested as of December 31, 2018 605,352 $ 3.14 Unvested options as of December 31, 2018 vest as follows: 2019 301,267 2020 250,228 2021 53,857 2022 - Total unvested options as of December 31, 2018 605,352 Stock options were granted under the Omnibus Plan at various times during the years ended December 31, 2018 and 2017. The fair value of stock option awards was determined at the date of grant using either a Black-Scholes option-pricing model, or a Monte Carlo simulation, with the following weighted-average assumptions: Year ended December 31, 2018 2017 Expected term in years 6.0 6.0 Volatility 48.0 % 31.9 % Risk-free interest rate 2.7 % 2.0 % Dividend yield (1) - % 0.9 % (1) Represents the weighted-average dividend yield for grants made during the year ended December 31, 2017. The Company discontinued its quarterly dividend program during August 2017. Expected term –For option grants valued using a Black-Scholes option-pricing model, the Company estimated the expected term based on the average of the weighted-average vesting period and the contractual term of the stock option awards by utilizing the “simplified method”, as the Company does not have sufficient available historical data to estimate the expected term of these stock option awards. Certain stock option awards granted in 2016 with an exercise price of $50 per share were valued using a Monte Carlo simulation. The Monte Carlo model simulates many future stock price paths, and assumes the exercise of vested options will occur uniformly once the options are projected to be in-the money. Volatility – The Company considered the volatility of its own common stock in determining the fair value of stock option awards, in addition to a peer group average historical volatility over the expected option term. This is due to the limited amount of trading history of the Company’s common stock. The peer group was based on financial technology companies that completed an initial public offering of common stock within the last 10 years. Risk-free interest rate – The risk-free interest rate was determined by using the United States Treasury rate for the period that coincided with the expected option term. Dividend yield – The estimated dividend yield is based on the Company’s recent historical dividend practice and the market value of its common stock. The weighted average grant-date fair value of options granted is as follows: Year Ended December 31, 2018 2017 Weighted Average Grant-Date Fair Value of Options Granted $ $ The following table summarizes the changes in the number of outstanding restricted stock units for the year ended December 31, 2018 under the Omnibus Plan: Weighted- Average Grant-Date Shares Fair Value Outstanding as of December 31, 2017 49,677 $ 16.20 Granted 75,188 2.66 Vested (25,928) 10.63 Forfeited (30,288) 9.91 Outstanding as of December 31, 2018 68,649 $ 6.25 During the year ended December 31, 2018, the Company granted awards of restricted stock units for 75,188 shares of common stock. During the year ended December 31, 2017, the Company granted awards of restricted stock units for 47,870 shares of common stock. The restricted stock unit awards contain conditions associated with continued employment or service, and generally vest one year from the date of grant. On the vesting dates, shares of common stock will be issued to the award recipients. Unvested restricted stock units as of December 31, 2018 will vest as follows: 2019 57,563 2020 10,843 2021 243 Total unvested restricted stock units as December 31, 2018 68,649 The following table summarizes the changes in the number of outstanding cash performance awards for the year ended December 31, 2018: Shares Outstanding as of December 31, 2017 822,915 Granted — Vested (274,854) Forfeited (123,049) Outstanding as of December 31, 2018 425,012 During the year ended December 31, 2017, the Company granted awards of 932,837 cash performance units with a grant-date fair value of $663. These awards will settle in cash in three annual payments on the first, second and third anniversaries of the date of grant. The cash performance units are based on the performance of the Company’s stock, measured based on the Company’s stock price at each of the first, second, and third anniversaries of the grant date compared to the Company’s stock price on the date of grant. The cash performance units were valued using a Monte Carlo simulation. The Monte Carlo model used the following valuation assumptions based on the 3-year term of the awards: leverage adjusted peer volatility of 48%, risk free rate of 1.5%, and a dividend yield of 4.0%, which was based on the Company’s dividend practice in March 2017 when the awards were granted. The Company recognizes compensation expense on a straight-line basis for each annual performance period. The cash performance units are accounted for as a liability and remeasured to fair value at the end of each reporting period. As of December 31, 2018, the Company recognized a liability of $96 in “Accrued expenses” and $64 in “Other long-term liabilities” in the Consolidated Balance Sheet for unsettled cash performance units. Compensation expense for the Omnibus Plan for the years ended December 31, 2018 and 2017 was $961 and $2,360, respectively. As of December 31, 2018, the total unrecognized compensation expense related to unvested options, restricted stock units, and cash performance unit awards under the Omnibus Plan was $840, which the Company expects to recognize over an estimated weighted average period of 1.2 years. CPI Holdings I, Inc. Amended and Restated 2007 Stock Option Plan In 2007, the Company’s Board of Directors adopted the CPI Holdings I, Inc. Amended and Restated 2007 Stock Option Plan (the “Option Plan”). Under the provisions of the Option Plan, stock options may be granted to employees, directors, and consultants at an exercise price greater than or equal to (and not less than) the fair market value of a share on the date the option is granted. As a result of the Company’s adoption of its Omnibus Plan, as further described above, no further awards will be made under the Option Plan. The outstanding stock options under the Option Plan are non-qualified, have a 10-year life and are fully vested as of December 31, 2018. During the year ended December 31, 2018, there was no activity under the Option Plan. As such, total shares outstanding and exercisable were 6,600 shares with a weighted-average exercise price of $0.002 per share and a weighted-average remaining contract term of 4.4 years at December 31, 2018. Compensation expense and unrecorded compensation expense related to options previously granted under the Option Plan, for years ended December 31, 2018 and 2017 were de minimis. Other Stock-Based Compensation Awards During the year ended December 31, 2017, of the remaining 18,972 of unvested restricted stock awards that were outstanding, 9,486 shares vested, and the remaining 9,486 shares were forfeited. The executive who held the remaining 18,972 unvested restricted shares changed employment status to a consultant during the first quarter of 2017, and accordingly, the Company remeasured the awards on the date of the change in employment status and reduced stock-based compensation expense by $143. Compensation expense related to these awards for the year ended December 31, 2017, was $(371). |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting | |
Segment Reporting | 16. Segment Reporting The Company has identified reportable segments as those consolidated subsidiaries that represent 10% or more of its net sales, EBITDA (as defined below) or total assets, or when the Company believes information about the segment would be useful to the readers of the financial statements. The Company’s chief operating decision maker is its Chief Executive Officer who is charged with management of the Company and is responsible for the evaluation of operating performance and decision making about the allocation of resources to operating segments based on measures, such as net sales and EBITDA. EBITDA is the primary measure used by the Company’s chief operating decision maker to evaluate segment operating performance. As the Company uses the term, EBITDA is defined as income before interest expense, income taxes, depreciation and amortization. The Company’s chief operating decision maker believes EBITDA is a meaningful measure and is superior to available GAAP measures as it represents a transparent view of the Company’s operating performance that is unaffected by fluctuations in property, equipment and leasehold improvement additions. The Company’s chief operating decision maker uses EBITDA to perform periodic reviews and comparison of operating trends and identify strategies to improve the allocation of resources amongst segments. On August 3, 2018, the Company completed the sale of the U.K. Limited segment. See Note 4 “Discontinued Operation” for further information. The Company has restated all historical periods presented within these financial statements and has not included U.K. Limited as a reportable segment. During the first quarter of 2018, the Company reorganized its United States business operations and realigned its United States reporting segments to correspond with the manner with which the Company’s chief operating decision maker evaluates operating performance and makes decisions as to the allocation of resources. As a result of this realignment, the Company’s CPI on Demand business operations have been moved from the U.S. Prepaid Debit segment into the U.S. Debit and Credit reporting segment, consistent with the other related personalization operations. Segment information for previous periods has been restated to conform with this realignment and current period presentation. The restatement of the segment information for the year ended December 31, 2017 was not material. As of December 31, 2018, the Company’s reportable segments were as follows: · U.S. Debit and Credit, · U.S. Prepaid Debit, and · Other. The U.S. Debit and Credit segment primarily produces Financial Payment Cards and provides integrated card services to card-issuing banks in the United States. Products manufactured by this segment primarily include EMV and non-EMV Financial Payment Cards, including contact, contactless, and dual interface cards, and CPI Metals TM , a premium product capability. This segment also sells instant card issuance systems, and Private Label Credit Cards that are not issued on the networks of the Payment Cards Brands (including general purpose reloadable, gift, payroll and employee benefit, government disbursement, incentive, and transit cards). The Company provides CPI On-Demand services, where we produce images, personalized payment cards, and related collateral on a one-by-one, on demand basis for our customers. This segment also provides a variety of integrated card services, including card personalization and fulfillment services and instant issuance services. The U.S. Debit and Credit segment operations are each certified by multiple global Payment Card Brands and, where required by our customers, certified to be in compliance with the standards of the PCI Security Standards Council. The U.S. Prepaid Debit segment primarily provides integrated card services to Prepaid Debit Card providers in the United States, including tamper-evident security packaging. This segment also produces Financial Payment Cards issued on the networks of the Payment Card Brands that are included in the tamper-evident security packages. The U.S. Prepaid Debit segment operation is certified by multiple global Payment Card Brands, and is certified to be in compliance with the standards of the PCI Security Standards Council. The Other category includes the Company’s corporate headquarters and a less significant operating segment that derives its net sales from the production of Financial Payment Cards and retail gift cards in Canada. Performance Measures of Reportable Segments Net sales and EBITDA from continuing operations of the Company’s reportable segments for the years ended December 31, 2018 and 2017 were as follows: Net Sales EBITDA December 31, December 31, 2018 2017 2018 2017 U.S. Debit and Credit $ 178,597 $ 162,216 $ 34,213 $ 11,618 U.S. Prepaid Debit 69,199 57,005 23,782 18,847 Other 9,891 11,049 (35,297) (32,314) Intersegment eliminations (a) (1,873) (6,526) — — Total: $ 255,814 $ 223,744 $ 22,698 $ (1,849) (a) Amounts include the elimination of sales between segments for consolidation. The following table provides a reconciliation of total segment EBITDA from continuing operations to “Net (loss) income from continuing operations” for the years ended December 31, 2018 and 2017: December 31, 2018 2017 Total segment EBITDA from continuing operations $ 22,698 $ (1,849) Interest, net (23,431) (20,850) Income tax benefit 4,339 16,536 Depreciation and amortization (18,405) (16,922) Net loss from continuing operations $ (14,799) $ (23,085) Balance Sheet Data of Reportable Segments Total assets of the Company’s reportable segments as of December 31, 2018 and 2017 were as follows: December 31, 2018 2017 U.S. Debit and Credit $ 169,567 $ 174,717 U.S. Prepaid Debit 25,117 22,810 Other 12,520 15,827 Total assets - reportable segments $ 207,204 $ 213,354 Assets of discontinued operation — 20,651 Total assets: $ 207,204 $ 234,005 Net Sales to Geographic Location, Property, Equipment and Leasehold Improvements and Long-Lived assets by Geographic Segments Subsequent to the sale of the Company’s U.K. Limited segment and reclassification to discontinued operations, the Company’s Net Sales, Property, Equipment and Leasehold Improvements, and Long-Lived assets relating to geographic locations outside of the United States is insignificant. Net Sales by Product and Services Net sales from products and services sold by the Company for the years ended December 31, 2018 and 2017 were as follows: December 31, 2018 2017 Product net sales (a) $ 125,069 $ 104,459 Services net sales (b) 130,745 119,285 Total net sales: $ 255,814 $ 223,744 (a) Product net sales include the design and production of Financial Payment Cards, in contact EMV, dual-interface EMV, contactless and magnetic stripe formats. The Company also generates product revenue from the sale of Card Once ® instant issuance systems, Private Label Credit Cards, and retail gift cards. It is impracticable to split the products described into dollar amounts in the table above. (b) Services net sales include revenue from the personalization and fulfillment of Financial Payment Cards, the provision of tamper-evident security packaging, providing fulfillment services to Prepaid Debit Card program managers, CPI on Demand and software as a service personalization of instant issuance debit cards. The Company also generates services revenue from personalizing retail gift cards (primarily in Canada). It is impracticable to split the services described into dollar amounts in the table above. |
Quarterly Financial Information
Quarterly Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information (Unaudited) | |
Quarterly Financial Information (Unaudited) | 17. Quarterly Financial Information (Unaudited) Summarized quarterly results for the years ended December 31, 2018 and 2017 on a continuing operations basis, were as follows: Year Ended December 31, 2018 by Quarter: Q1 Q2 Q3 Q4 2018 Net sales $ 54,857 61,454 70,987 68,516 255,814 Gross profit 14,428 19,875 23,308 20,979 78,590 Net loss from continuing operations (5,677) (802) (1,085) (7,235) (14,799) Basic and diluted loss per share from continuing operations $ (0.51) (0.07) (0.10) (0.65) (1.33) Year Ended December 31, 2017 by Quarter: Q1 Q2 Q3 Q4 2017 Net sales $ 50,422 54,836 60,997 $ 57,489 $ 223,744 Gross profit 14,648 16,666 19,444 17,447 68,205 Net loss from continuing operations (4,598) (3,273) (798) (14,416) (23,085) Basic and diluted loss per share from continuing operations $ (0.42) $ (0.30) $ (0.07) $ (1.29) $ (2.08) |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The accompanying Consolidated Financial Statements include the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents and they are stated at cost, which approximates fair value. |
Trade Accounts Receivable and Concentration of Credit Risk | Trade Accounts Receivable and Concentration of Credit Risk Accounts receivable are stated at the amount management expects to collect from outstanding balances. The Company performs ongoing credit evaluations of its customers and generally requires no collateral to secure accounts receivable. December 31, 2018 December 31, 2017 Trade accounts receivable $ 36,428 $ 32,579 Unbilled accounts receivable 7,577 — 44,005 32,579 Less allowance for doubtful accounts (211) (48) $ 43,794 $ 32,531 The Company maintains an allowance for potentially uncollectible accounts receivable based upon its assessment of the collectability of accounts receivable. Accounts are written off against the allowance when it is determined collection will not occur. The allowance for bad debt and credit activity for the years ended December 31, 2018 and 2017 is summarized as follows: Balance as of December 31, 2016 $ 124 Bad debt expense 4 Write-off of uncollectible accounts (82) Currency translation adjustments 2 Balance as of December 31, 2017 $ 48 Bad debt expense 169 Write-off of uncollectible accounts (6) Balance as of December 31, 2018 $ 211 For the year ended December 31, 2018 one customer represented 19% of the Company’s consolidated net sales. For the year ended December 31, 2017 one customer represented 15% of the Company’s consolidated net sales. |
Inventories | Inventories Inventories consist of raw materials, and finished goods and are measured at the lower of cost or net realizable value (determined on the first-in, first-out, specific identification or weighted-average method basis). Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. |
Plant, Equipment and Leasehold Improvements | Plant, Equipment and Leasehold Improvements Plant, equipment and leasehold improvements are recorded at cost. Accumulated depreciation is computed using the straight-line method over the lesser of the estimated useful life of the related assets (generally 3 to 10 years for machinery and equipment, furniture, computer equipment, and leasehold improvements) or, when applicable, the lease term. Maintenance and repairs that do not extend the useful life of the respective assets are charged to expense as incurred. Long-lived assets with finite lives are reviewed for impairment whenever events indicate that the carrying amount of the asset or the carrying amounts of the asset group containing the asset may not be recoverable. In such reviews, estimated undiscounted future cash flows associated with these assets or asset groups are compared with their carrying value to determine if a write-down to fair value is required. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill is not amortized, but instead is tested for impairment at least annually on October 1 or more frequently when an event occurs or circumstances change that indicates the carrying value may not be recoverable. For impairment evaluations, the Company first makes a qualitative assessment with respect to both goodwill and other indefinite-lived intangibles. During 2017, the Company early adopted ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”) in conjunction with its annual impairment testing effective October 1, 2017. In accordance with ASU 2017-04, an entity should perform its goodwill impairment test by comparing the fair value of the reporting unit with its carrying amount, and recognize an impairment charge for the amount by which the carrying amount of the reporting unit exceeds its fair value. The Company generally bases its measurement of the fair value of a reporting unit on a blended analysis of the present value of future discounted cash flows and the market valuation approach. The discounted cash flows model indicates the fair value of the reporting unit based on the present value of the cash flows that the Company expects the reporting unit to generate in the future. The Company's significant estimates in the discounted cash flows model include: its weighted average cost of capital; discrete and long-term rate of growth and profitability of the reporting unit's business; and working capital effects. The market valuation approach indicates the fair value of the business based on a comparison of the reporting unit to comparable publicly traded companies in similar lines of business. Significant estimates in the market valuation approach model include identifying similar companies with comparable business factors such as size, growth, profitability, risk and return on investment, and assessing comparable revenue and operating income multiples in estimating the fair value of the reporting unit. Acquired finite-lived intangible assets are amortized on a straight-line basis over the estimated useful lives of the assets, and are reviewed for impairment whenever events indicate that the carrying amount of the asset may not be recoverable. In such reviews, estimated undiscounted future cash flows associated with these assets are compared with their carrying value to determine if a write-down to fair value is required. |
Income Taxes | Income Taxes The Company accounts for income taxes using an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. The Company has deferred tax assets and liabilities and maintains valuation allowances where it is more likely than not that all or a portion of deferred tax assets will not be realized. To the extent the Company determines that it will not realize the benefit of some or all of its deferred tax assets, then these deferred tax assets will be adjusted through the Company’s income tax expense in the period in which this determination is made. The Company recognizes the tax benefits from uncertain tax positions only when it is more likely than not, based on the technical merits of the position, that the tax position will be sustained upon examination, including the resolution of any related appeals or litigation. The tax benefits recognized in the consolidated financial statements from such a position are measured as the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation pursuant to ASC 718, Share-Based Payments. All stock-based compensation to employees is required to be measured at fair value and expensed, net of forfeitures, over the requisite service period. The Company recognizes compensation expense on awards on a straight-line basis over the vesting period for each tranche of an award. Refer to Note 15 “Stock Based Compensation” for additional discussion regarding details of the Company's stock-based compensation plans. |
Accrued Expenses | Accrued Expenses Accrued liabilities include accrued payroll expense of $2,371, and $2,526, as of December 31, 2018, and 2017, respectively. Accrued liabilities as of December 31, 2018, also includes accrued employee performance bonus of $7,137. |
Use of Estimates | Use of Estimates The accompanying Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). These accounting principles require management to make assumptions and estimates relating to the reporting of assets and liabilities in its preparation of the Consolidated Financial Statements. Significant items subject to such estimates and assumptions include the carrying amount of property and equipment, goodwill and intangible assets, valuation allowances for inventories and deferred taxes, debt, uncertain tax positions and stock-based compensation expense. Actual results could differ from those estimates. |
Foreign Currency Translation | Foreign Currency Translation Financial statements of foreign subsidiaries that use local currencies as their functional currency are translated into U.S. dollars using the exchange rate at each balance sheet date for assets and liabilities and the weighted-average exchange rate for each reporting period for net sales, expenses, gains and losses. Translation adjustments are recorded as a component of Accumulated Other Comprehensive Loss in the accompanying consolidated financial statements. Foreign currency transaction gains and losses resulting from the process of re-measurement are recorded in “Foreign currency gain (loss)” in the accompanying Consolidated Statements of Operations and Comprehensive (Loss) Income. For the years ended December 31, 2018 and 2017 there were $(311) and $517 of such foreign currency (losses) gains, respectively. |
Recently Accounting Pronouncements | Recently Accounting Pronouncements Recently Adopted Accounting Pronouncements As of January 1, 2018, the Company adopted Accounting Standards Codification ASC 606, Revenue from Contracts with Customers , (“ASC 606”), which requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASC 606 also requires an entity to disclose sufficient quantitative and qualitative information to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted ASC 606 of January 1, 2018 to all its contracts using the modified retrospective method and recognized the cumulative effect of adoption as an adjustment to the opening balance of “Accumulated loss” on the Consolidated Balance Sheet. Under the new guidance, the Company recognizes certain performance obligations over time as the goods are produced, since those products provide value to only a specified customer, have no alternative use and the Company has the right to payment for work completed on such items. This accelerates the timing of revenue recognition for these arrangements, as revenue is recognized as goods are produced rather than upon shipment or delivery of goods. In addition, as a result of adopting the new guidance, the Company has recorded decreases to deferred revenue, and work in process and finished goods inventories, and an increase to accounts receivable. These changes are reflected in the adoption adjustments table below. The comparative financial information has not been restated and continues to be reported under the accounting standards in effect for those periods. See Note 3 “Net sales” for revenue recognition timing and methodology under ASC 606. The cumulative effects of the adjustments made to the Company’s January 1, 2018 Consolidated Balance Sheet upon adoption of ASC 606 were as follows: December 31, Adoption January 1, 2017 Adjustments 2018 Assets: Accounts receivable, net $ 32,531 $ 5,991 $ 38,522 Inventories 13,799 (5,929) 7,870 Assets of discontinued operation 20,651 (357) 20,294 Liabilities: Deferred revenue and customer deposits 3,342 (3,063) 279 Liabilities of discontinued operation 5,669 (535) 5,134 Deferred income taxes 12,168 479 12,647 Stockholders' deficit: Accumulated (loss) earnings (1,366) 2,824 1,458 In accordance with ASC 606, the impact on the Company’s Consolidated Balance Sheet and Statement of Operations and Comprehensive Loss was as follows: Balances As Reported Without December 31, Adoption of Balance Sheet 2018 Adjustments ASC 606 Assets: Accounts receivable, net $ 43,794 $ (7,508) $ 36,286 Inventories 9,827 7,350 17,177 Liabilities: Deferred revenue and customer deposits 912 1,893 2,805 Deferred income taxes 5,749 (567) 5,182 Stockholders' deficit: Accumulated loss (36,004) (1,484) (37,488) Year ended December 31, 2018 Balances As Reported Without Statement of Operations and December 31, Adoption of Comprehensive Loss 2018 Adjustments ASC 606 Net sales: Products $ 125,069 $ (1,803) $ 123,266 Services 130,745 387 131,132 Cost of sales: Products (exclusive of depreciation and amortization) 82,110 (1,738) 80,372 Services (exclusive of depreciation and amortization) 82,697 510 83,207 Gross profit 78,590 (188) 78,402 Income tax benefit (expense) 4,339 39 4,378 Net loss from continuing operations (14,799) (149) (14,948) Net loss from discontinued operation, net of tax (22,663) 157 (22,506) During 2017, the Company early adopted ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”) in conjunction with its annual impairment testing effective October 1, 2017. In accordance with ASU 2017-04, an entity should perform its goodwill impairment test by comparing the fair value of the reporting unit with its carrying amount, and recognize an impairment charge for the amount by which the carrying amount of the reporting unit exceeds its fair value. Recently Issued Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (the “FASB”) issued ASC Topic 842, Leases (“ASC 842”), which provides guidance for accounting for leases. The new guidance requires companies to recognize the assets and liabilities for the rights and obligations created by leased assets. ASC 842 is effective for annual and interim periods beginning after December 15, 2018 (the Company’s fiscal year 2019) with early adoption permitted. The new guidance requires the recognition and measurement of leases at the beginning of the earliest comparative period presented in the financial statements. The guidance required a modified retrospective approach, with an option to apply the transition provisions of the new guidance at the adoption date without adjusting the comparative periods presented. In July 2018, t he FASB issued additional accounting standard updates clarifying certain provisions, as well as providing for a second transition method allowing entities to initially apply the standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings. The Company will adopt the new guidance on the effective date of January 1, 2019 and use the adoption date as the date of initial application as allowed under ASC 842. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. The new standard provides a number of optional practical expedients in transition. The Company expects to elect the ‘package of practical expedients’, which permits the Company not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. The Company does not expect to elect the use-of-hindsight transition practical expedient. The Company’s adoption process of ASC 842 is ongoing, including evaluating and quantifying the impact on the financial statements, identifying the population of leases, calculating its incremental borrowing rate and collecting and validating lease data. While the Company continues to assess all of the effects of adoption, the Company currently believes the most significant effects relate to the recognition of new right-of-use assets and lease liabilities on the balance sheet for real estate operating leases, and providing significant new disclosures about the Company’s leasing activities. The new standard also provides practical expedients for the Company’s ongoing accounting. The Company expects to elect the short-term lease recognition exemption for all leases that qualify, meaning the Company will not recognize right-of-use assets or lease liabilities for existing and new lease agreements that qualify. The Company also expects to elect the practical expedient to not separate lease and non-lease components for all of its leases. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Adoption of New Accounting Standards | |
Schedule of trade accounts receivable | December 31, 2018 December 31, 2017 Trade accounts receivable $ 36,428 $ 32,579 Unbilled accounts receivable 7,577 — 44,005 32,579 Less allowance for doubtful accounts (211) (48) $ 43,794 $ 32,531 |
Schedule of allowance for bad debt and credit activity | Balance as of December 31, 2016 $ 124 Bad debt expense 4 Write-off of uncollectible accounts (82) Currency translation adjustments 2 Balance as of December 31, 2017 $ 48 Bad debt expense 169 Write-off of uncollectible accounts (6) Balance as of December 31, 2018 $ 211 |
ASU 2014-09 | |
Adoption of New Accounting Standards | |
Schedule of adoption of new accounting standards | December 31, Adoption January 1, 2017 Adjustments 2018 Assets: Accounts receivable, net $ 32,531 $ 5,991 $ 38,522 Inventories 13,799 (5,929) 7,870 Assets of discontinued operation 20,651 (357) 20,294 Liabilities: Deferred revenue and customer deposits 3,342 (3,063) 279 Liabilities of discontinued operation 5,669 (535) 5,134 Deferred income taxes 12,168 479 12,647 Stockholders' deficit: Accumulated (loss) earnings (1,366) 2,824 1,458 In accordance with ASC 606, the impact on the Company’s Consolidated Balance Sheet and Statement of Operations and Comprehensive Loss was as follows: Balances As Reported Without December 31, Adoption of Balance Sheet 2018 Adjustments ASC 606 Assets: Accounts receivable, net $ 43,794 $ (7,508) $ 36,286 Inventories 9,827 7,350 17,177 Liabilities: Deferred revenue and customer deposits 912 1,893 2,805 Deferred income taxes 5,749 (567) 5,182 Stockholders' deficit: Accumulated loss (36,004) (1,484) (37,488) Year ended December 31, 2018 Balances As Reported Without Statement of Operations and December 31, Adoption of Comprehensive Loss 2018 Adjustments ASC 606 Net sales: Products $ 125,069 $ (1,803) $ 123,266 Services 130,745 387 131,132 Cost of sales: Products (exclusive of depreciation and amortization) 82,110 (1,738) 80,372 Services (exclusive of depreciation and amortization) 82,697 510 83,207 Gross profit 78,590 (188) 78,402 Income tax benefit (expense) 4,339 39 4,378 Net loss from continuing operations (14,799) (149) (14,948) Net loss from discontinued operation, net of tax (22,663) 157 (22,506) |
Net Sales (Tables)
Net Sales (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Net Sales. | |
Schedule of disaggregation of net sales by major source | For the year ended December 31, 2018 Products Services Total U.S. Debit and Credit $ 122,119 $ 56,478 $ 178,597 U.S. Prepaid Debit — 69,199 69,199 Other 4,398 5,493 9,891 Intersegment eliminations (1,448) (425) (1,873) Total $ 125,069 $ 130,745 $ 255,814 |
Discontinued Operation (Tables)
Discontinued Operation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Discontinued Operation | |
Schedule of assets, liabilities and operations of discontinued operations | December 31, 2017 Assets: Accounts receivable $ 5,006 Inventories 2,438 Other assets 506 Plant, equipment and leasehold improvements 4,864 Intangible assets 1,379 Goodwill 6,458 Total assets of discontinued operation 20,651 Liabilities: Accounts payable 3,307 Other current liabilities 1,866 Other long-term liabilities 496 Total liabilities of discontinued operation $ 5,669 The major line items constituting the (loss) income of the discontinued operation for the year ended December 31, 2018 and 2017 were as follows: For the year ended December 31, 2018 2017 Total net sales $ 10,741 $ 31,119 Total cost of sales 10,222 24,331 Selling, general and administrative 4,336 5,591 Impairments 7,615 — Other expense (income), net 4,006 (43) Pretax (loss) income from discontinued operation (15,438) 1,240 Pretax loss on sale of discontinued operation (7,248) — Total pretax (loss) income on discontinued operation (22,686) 1,240 Income tax benefit (expense) 23 (165) Net income (loss) from discontinued operation $ (22,663) $ 1,075 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Inventories | |
Schedule of inventories | December 31, 2018 2017 Raw materials $ 8,235 $ 7,411 Work-in-process — 5,107 Finished goods 2,991 2,974 Inventory reserve (1,399) (1,693) $ 9,827 $ 13,799 |
Plant, Equipment and Leasehol_2
Plant, Equipment and Leasehold Improvements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Plant, Equipment and Leasehold Improvements | |
Schedule of plant, equipment and leasehold improvements | December 31, 2018 2017 Machinery and equipment $ 62,067 $ 58,595 Machinery and equipment under capital leases 1,812 — Furniture, fixtures and computer equipment 7,730 6,288 Leasehold improvements 19,651 19,601 Construction in progress 1,596 1,512 92,856 85,996 Less accumulated depreciation and amortization (53,746) (41,560) $ 39,110 $ 44,436 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Other Intangible Assets | |
Schedule of goodwill by reportable segment | December 31, 2018 2017 U.S. Debit and Credit $ 47,150 $ 47,150 Goodwill activity is summarized as follows: Balance as of December 31, 2016 $ 66,088 Currency translation 136 Impairments (19,074) Balance as of December 31, 2017 $ 47,150 Currency translation — Impairments — Balance as of December 31, 2018 $ 47,150 |
Schedule of intangible assets excluding goodwill | December 31, 2018 December 31, 2017 Average Accumulated Net Book Accumulated Net Book Life (Years) Cost Amortization Value Cost Amortization Value Customer relationships 12 to 20 $ 55,454 (25,587) $ 29,867 $ 55,454 $ (22,311) $ 33,143 Technology and software 7 to 10 7,101 (4,024) 3,077 7,101 (3,095) 4,006 Trademarks 7.5 to 10 3,330 (877) 2,453 3,330 (487) 2,843 Noncompete agreements 5 to 8 491 (451) 40 491 (390) 101 Intangible assets subject to amortization $ 66,376 $ (30,939) $ 35,437 $ 66,376 $ (26,283) $ 40,093 |
Schedule of future aggregate amortization expense for identified amortizable intangibles | 2019 $ 4,635 2020 4,595 2021 4,352 2022 3,867 2023 3,867 Thereafter 14,121 $ 35,437 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value of Financial Instruments | |
Schedule of financial assets and liabilities subject to fair value measurements | Carrying Fair Value Measurement at Value as of Fair Value as of December 31, 2018 December 31, December 31, (Using Fair Value Hierarchy) 2018 2018 Level 1 Level 2 Level 3 Liabilities: First Lien Term Loan $ 312,500 $ 203,125 $ — $ 203,125 $ — Carrying Fair Value Measurement at Value as of Fair Value as of December 31, 2017 December 31, December 31, (Using Fair Value Hierarchy) 2017 2017 Level 1 Level 2 Level 3 Liabilities: First Lien Term Loan $ 312,500 $ 228,125 $ — $ 228,125 $ — |
Long-Term Debt and Credit Fac_2
Long-Term Debt and Credit Facility (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Long-Term Debt and Credit Facility | |
Schedule of long-term debt | Interest December 31, December 31, Rate 2018 2017 First Lien Term Loan (a) $ 312,500 $ 312,500 Unamortized discount (2,448) (3,122) Unamortized deferred financing costs (4,234) (5,509) Total long-term debt 305,818 303,869 Less current maturities - - Long-term debt, net of current maturities $ 305,818 $ 303,869 (a) Interest rate on December 31, 2018 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes | |
Schedule of income tax (benefit) expense from continuing operations and effective income tax rates | December 31, 2018 2017 Current taxes: Domestic $ 2,558 $ (7,369) Foreign — — 2,558 (7,369) Deferred taxes: Domestic (6,897) (9,167) Foreign — — (6,897) (9,167) Income tax benefit $ (4,339) $ (16,536) Loss before income taxes Domestic $ (18,383) $ (36,985) Foreign (755) (2,636) Total $ (19,138) $ (39,621) Effective income tax rate 22.7 % 41.7 % |
Schedule of effective income tax rate reconciliation | December 31, 2018 2017 Tax at federal statutory rate 21.0 % 35.0 % State income taxes 4.0 0.5 Foreign taxes (0.1) (0.1) Tax benefit for U.K. sale 17.5 — Valuation allowance (13.5) (1.5) Unrecognized tax benefits (4.8) (3.2) Tax credits 2.5 10.8 Deferred tax impact of enacted tax rate and law changes (0.7) 18.4 Goodwill impairments — (17.4) Other (3.2) (0.8) Effective income tax rate 22.7 % 41.7 % |
Schedule of components of deferred tax assets and liabilities | December 31, 2018 2017 Deferred tax assets: Accrued expense $ 2,553 $ 744 Unrealized foreign exchange loss — 647 Net operating loss carryforward 5,589 2,156 Deferred financing costs 553 707 Stock compensation 861 679 Tax credit carryforward 1,118 420 Interest limitation 4,412 — Other 927 753 Total gross deferred tax assets 16,013 6,106 Valuation allowance (6,823) (4,617) Net deferred tax assets 9,190 1,489 Deferred tax liabilities: Plant, equipment and leasehold improvements (3,851) (2,819) Intangible assets (9,311) (9,912) Prepaid expenses and other (1,777) (926) Total gross deferred tax liabilities (14,939) (13,657) Net deferred tax liabilities $ (5,749) $ (12,168) |
Unrecognized Tax Benefits | Balance as of December 31, 2017 $ 1,212 Increase related to current year tax position 506 Increase related to prior year tax position 871 Decrease related to settlements with tax authorities, net of federal benefit (545) Lapse of statute of limitations — Balance as of December 31, 2018 $ 2,044 |
(Loss) Earnings per Share (Tabl
(Loss) Earnings per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
(Loss) Earnings per Share | |
Computation of basic and diluted (loss) EPS | December 31, 2018 2017 Numerator: Net loss from continuing operations $ (14,799) $ (23,085) Net (loss) income from a discontinued operation, net of taxes (22,663) 1,075 Net loss $ (37,462) $ (22,010) Denominator: Basic and dilutive EPS—weighted average common shares outstanding 11,149,554 11,117,454 Basic and Diluted EPS: (Loss) per share from continuing operations $ (1.33) $ (2.08) (Loss) income per share from discontinued operations, net of taxes (2.03) 0.10 (Loss) per share $ (3.36) $ (1.98) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies. | |
Schedule of equipment under capital leases | December 31, 2018 Machinery and equipment $ 1,565 Less current portion of capital lease obligations (521) Total long-term capital lease obligations $ 1,044 |
Schedule of future cash payments with respect to operating leases and purchase obligations | Operating Capital Purchase Leases Leases Obligations 2019 $ 2,927 $ 521 $ 3,848 2020 2,771 474 — 2021 2,512 243 — 2022 1,243 256 — 2023 971 71 — Thereafter 652 — — Total $ 11,076 $ 1,565 $ 3,848 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of changes in outstanding restricted stock units | Weighted- Average Grant-Date Shares Fair Value Outstanding as of December 31, 2017 49,677 $ 16.20 Granted 75,188 2.66 Vested (25,928) 10.63 Forfeited (30,288) 9.91 Outstanding as of December 31, 2018 68,649 $ 6.25 |
Schedule of vesting for unvested restricted stock units | 2019 57,563 2020 10,843 2021 243 Total unvested restricted stock units as December 31, 2018 68,649 |
Summary of changes in number of outstanding cash performance units | Shares Outstanding as of December 31, 2017 822,915 Granted — Vested (274,854) Forfeited (123,049) Outstanding as of December 31, 2018 425,012 |
Omnibus Plan | |
Summary of outstanding and exercisable stock options | Weighted- Weighted- Average Average Remaining Exercise Contractual Term Options Price (in Years) Outstanding as of December 31, 2017 937,310 $ Granted 159,755 Forfeited (186,438) Outstanding as of December 31, 2018 910,627 $ Options vested and exercisable as of December 31, 2018 305,275 Options vested and expected to vest as of December 31, 2018 910,627 |
Summary of activity in non-vested stock options | Weighted- Average Grant-Date Number Fair Value Non-vested as of December 31, 2017 876,903 $ Granted 159,755 Forfeited (152,242) Vested (279,064) 4.81 Non-vested as of December 31, 2018 605,352 $ 3.14 |
Schedule of vesting for unvested options | 2019 301,267 2020 250,228 2021 53,857 2022 - Total unvested options as of December 31, 2018 605,352 |
Schedule of valuation assumptions | Year ended December 31, 2018 2017 Expected term in years 6.0 6.0 Volatility 48.0 % 31.9 % Risk-free interest rate 2.7 % 2.0 % Dividend yield (1) - % 0.9 % (1) Represents the weighted-average dividend yield for grants made during the year ended December 31, 2017. The Company discontinued its quarterly dividend program during August 2017. |
Weighted average grant date fair value of options granted | Year Ended December 31, 2018 2017 Weighted Average Grant-Date Fair Value of Options Granted $ $ |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting | |
Schedule of revenue and EBITDA of the company's reportable segments | Net Sales EBITDA December 31, December 31, 2018 2017 2018 2017 U.S. Debit and Credit $ 178,597 $ 162,216 $ 34,213 $ 11,618 U.S. Prepaid Debit 69,199 57,005 23,782 18,847 Other 9,891 11,049 (35,297) (32,314) Intersegment eliminations (a) (1,873) (6,526) — — Total: $ 255,814 $ 223,744 $ 22,698 $ (1,849) (a) Amounts include the elimination of sales between segments for consolidation. |
Schedule of reconciliation of total segment EBITDA to income before taxes | December 31, 2018 2017 Total segment EBITDA from continuing operations $ 22,698 $ (1,849) Interest, net (23,431) (20,850) Income tax benefit 4,339 16,536 Depreciation and amortization (18,405) (16,922) Net loss from continuing operations $ (14,799) $ (23,085) |
Schedule of total assets of the company's reportable segments | December 31, 2018 2017 U.S. Debit and Credit $ 169,567 $ 174,717 U.S. Prepaid Debit 25,117 22,810 Other 12,520 15,827 Total assets - reportable segments $ 207,204 $ 213,354 Assets of discontinued operation — 20,651 Total assets: $ 207,204 $ 234,005 |
Schedule of net sales from product and services sold by the company | December 31, 2018 2017 Product net sales (a) $ 125,069 $ 104,459 Services net sales (b) 130,745 119,285 Total net sales: $ 255,814 $ 223,744 (a) Product net sales include the design and production of Financial Payment Cards, in contact EMV, dual-interface EMV, contactless and magnetic stripe formats. The Company also generates product revenue from the sale of Card Once ® instant issuance systems, Private Label Credit Cards, and retail gift cards. It is impracticable to split the products described into dollar amounts in the table above. Services net sales include revenue from the personalization and fulfillment of Financial Payment Cards, the provision of tamper-evident security packaging, providing fulfillment services to Prepaid Debit Card program managers, CPI on Demand and software as a service personalization of instant issuance debit cards. The Company also generates services revenue from personalizing retail gift cards (primarily in Canada). It is impracticable to split the services described into dollar amounts in the table above. |
Quarterly Financial Informati_2
Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information (Unaudited) | |
Schedule of summarized quarterly results | Year Ended December 31, 2018 by Quarter: Q1 Q2 Q3 Q4 2018 Net sales $ 54,857 61,454 70,987 68,516 255,814 Gross profit 14,428 19,875 23,308 20,979 78,590 Net loss from continuing operations (5,677) (802) (1,085) (7,235) (14,799) Basic and diluted loss per share from continuing operations $ (0.51) (0.07) (0.10) (0.65) (1.33) Year Ended December 31, 2017 by Quarter: Q1 Q2 Q3 Q4 2017 Net sales $ 50,422 54,836 60,997 $ 57,489 $ 223,744 Gross profit 14,648 16,666 19,444 17,447 68,205 Net loss from continuing operations (4,598) (3,273) (798) (14,416) (23,085) Basic and diluted loss per share from continuing operations $ (0.42) $ (0.30) $ (0.07) $ (1.29) $ (2.08) |
Business (Details)
Business (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($)item | Aug. 03, 2018USD ($)facility | |
Minimum number of payment card brands which certify card services | item | 1 | ||
Number of personalization operations consolidated | item | 3 | ||
Number of facilities personalization operations were consolidated into | item | 2 | ||
Accelerated depreciation | $ 2,398 | ||
Severance charge | 552 | ||
Termination charge | $ 476 | ||
U.K. Limited | Sold | |||
Number of facilities sold | facility | 3 | ||
Total consideration for sale | $ 4,500 | ||
Proceeds from sale of asset | $ 315 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Trade Accounts Receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Jan. 02, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Trade Accounts Receivable | ||||
Trade accounts receivable | $ 36,428 | $ 32,579 | ||
Unbilled accounts receivable | 7,577 | |||
Trade and unbilled accounts receivable | 44,005 | 32,579 | ||
Less allowance for doubtful accounts | (211) | (48) | $ (124) | |
Accounts receivable, net | $ 43,794 | $ 38,522 | $ 32,531 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Bad debts and Concentration of Credit Risk (Details) $ in Thousands | Dec. 20, 2017 | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Allowance for bad debt and credit activity | |||
Beginning balance | $ 48 | $ 124 | |
Bad debt expense | 169 | 4 | |
Write-off of uncollectible accounts | (6) | (82) | |
Currency translation adjustment | 2 | ||
Ending balance | $ 211 | $ 48 | |
Reverse stock split | 0.20 | ||
Customer Concentration Risk | Net sales | |||
Allowance for bad debt and credit activity | |||
Concentration risk (as a percent) | 19.00% | 15.00% |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Plant, Equipment and Leasehold Improvements (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Minimum | |
Plant, Equipment and Leasehold Improvements | |
Useful life (in years) | 3 years |
Maximum | |
Plant, Equipment and Leasehold Improvements | |
Useful life (in years) | 10 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Advertising Costs and Foreign Currency Translation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Accrued Expenses | ||
Accrued payroll expenses current | $ 2,371 | $ 2,526 |
Accrued employee performance bonus | 7,137 | |
Foreign Currency Translation | ||
Foreign currency (losses) gains | $ (311) | $ 517 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Recently Issued Accounting Pronouncements (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 02, 2018 | |
Assets | |||||||||||
Accounts receivable, net | $ 43,794 | $ 32,531 | $ 43,794 | $ 32,531 | $ 38,522 | ||||||
Inventories | 9,827 | 13,799 | 9,827 | 13,799 | 7,870 | ||||||
Assets of discontinued operation | 20,651 | 20,651 | 20,294 | ||||||||
Liabilities | |||||||||||
Deferred revenue and customer deposits | 912 | 3,342 | 912 | 3,342 | 279 | ||||||
Liabilities of discontinued operation | 5,669 | 5,669 | 5,134 | ||||||||
Deferred income taxes | 5,749 | 12,168 | 5,749 | 12,168 | 12,647 | ||||||
Stockholders' deficit: | |||||||||||
Accumulated (loss) earnings | (36,004) | (1,366) | (36,004) | (1,366) | 1,458 | ||||||
Net sales: | |||||||||||
Net sales | 68,516 | $ 70,987 | $ 61,454 | $ 54,857 | 57,489 | $ 60,997 | $ 54,836 | $ 50,422 | 255,814 | 223,744 | |
Cost of sales: | |||||||||||
Gross profit | 20,979 | 23,308 | 19,875 | 14,428 | 17,447 | 19,444 | 16,666 | 14,648 | 78,590 | 68,205 | |
Income tax benefit | 4,339 | 16,536 | |||||||||
Net loss from continuing operations | (7,235) | $ (1,085) | $ (802) | $ (5,677) | (14,416) | $ (798) | $ (3,273) | $ (4,598) | (14,799) | (23,085) | |
Net (loss) income from discontinued operation, net of taxes | (22,663) | 1,075 | |||||||||
Balance without adoption of ASU 2014-09 | ASU 2014-09 | |||||||||||
Assets | |||||||||||
Accounts receivable, net | 36,286 | 32,531 | 36,286 | 32,531 | |||||||
Inventories | 17,177 | 13,799 | 17,177 | 13,799 | |||||||
Assets of discontinued operation | 20,651 | 20,651 | |||||||||
Liabilities | |||||||||||
Deferred revenue and customer deposits | 2,805 | 3,342 | 2,805 | 3,342 | |||||||
Liabilities of discontinued operation | 5,669 | 5,669 | |||||||||
Deferred income taxes | 5,182 | 12,168 | 5,182 | 12,168 | |||||||
Stockholders' deficit: | |||||||||||
Accumulated (loss) earnings | (37,488) | $ (1,366) | (37,488) | (1,366) | |||||||
Cost of sales: | |||||||||||
Gross profit | 78,402 | ||||||||||
Income tax benefit | 4,378 | ||||||||||
Net loss from continuing operations | (14,948) | ||||||||||
Net (loss) income from discontinued operation, net of taxes | (22,506) | ||||||||||
Adjustment | ASU 2014-09 | |||||||||||
Assets | |||||||||||
Accounts receivable, net | 7,508 | 7,508 | 5,991 | ||||||||
Inventories | (7,350) | (7,350) | (5,929) | ||||||||
Assets of discontinued operation | (357) | ||||||||||
Liabilities | |||||||||||
Deferred revenue and customer deposits | (1,893) | (1,893) | (3,063) | ||||||||
Liabilities of discontinued operation | (535) | ||||||||||
Deferred income taxes | 567 | 567 | 479 | ||||||||
Stockholders' deficit: | |||||||||||
Accumulated (loss) earnings | $ 1,484 | 1,484 | $ 2,824 | ||||||||
Cost of sales: | |||||||||||
Gross profit | 188 | ||||||||||
Income tax benefit | (39) | ||||||||||
Net loss from continuing operations | 149 | ||||||||||
Net (loss) income from discontinued operation, net of taxes | (157) | ||||||||||
Products | |||||||||||
Net sales: | |||||||||||
Net sales | 125,069 | 104,459 | |||||||||
Cost of sales: | |||||||||||
Products (exclusive of depreciation and amortization shown below) | 82,110 | 70,527 | |||||||||
Products | Balance without adoption of ASU 2014-09 | ASU 2014-09 | |||||||||||
Net sales: | |||||||||||
Net sales | 123,266 | ||||||||||
Cost of sales: | |||||||||||
Products (exclusive of depreciation and amortization shown below) | 80,372 | ||||||||||
Products | Adjustment | ASU 2014-09 | |||||||||||
Net sales: | |||||||||||
Net sales | 1,803 | ||||||||||
Cost of sales: | |||||||||||
Products (exclusive of depreciation and amortization shown below) | 1,738 | ||||||||||
Services | |||||||||||
Net sales: | |||||||||||
Net sales | 130,745 | 119,285 | |||||||||
Cost of sales: | |||||||||||
Services (exclusive of depreciation and amortization shown below) | 82,697 | $ 74,315 | |||||||||
Services | Balance without adoption of ASU 2014-09 | ASU 2014-09 | |||||||||||
Net sales: | |||||||||||
Net sales | 131,132 | ||||||||||
Cost of sales: | |||||||||||
Services (exclusive of depreciation and amortization shown below) | 83,207 | ||||||||||
Services | Adjustment | ASU 2014-09 | |||||||||||
Net sales: | |||||||||||
Net sales | (387) | ||||||||||
Cost of sales: | |||||||||||
Services (exclusive of depreciation and amortization shown below) | $ (510) |
Net Sales (Details)
Net Sales (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Disaggregation of Revenue | |
Net Sales | $ 255,814 |
Operating Segments | U.S. Debit and Credit | |
Disaggregation of Revenue | |
Net Sales | 178,597 |
Operating Segments | U.S. Prepaid Debit | |
Disaggregation of Revenue | |
Net Sales | 69,199 |
Operating Segments | Other | |
Disaggregation of Revenue | |
Net Sales | 9,891 |
Intersegment eliminations | |
Disaggregation of Revenue | |
Net Sales | (1,873) |
Products | |
Disaggregation of Revenue | |
Net Sales | 125,069 |
Products | Operating Segments | U.S. Debit and Credit | |
Disaggregation of Revenue | |
Net Sales | 122,119 |
Products | Operating Segments | Other | |
Disaggregation of Revenue | |
Net Sales | 4,398 |
Products | Intersegment eliminations | |
Disaggregation of Revenue | |
Net Sales | (1,448) |
Services | |
Disaggregation of Revenue | |
Net Sales | 130,745 |
Services | Operating Segments | U.S. Debit and Credit | |
Disaggregation of Revenue | |
Net Sales | 56,478 |
Services | Operating Segments | U.S. Prepaid Debit | |
Disaggregation of Revenue | |
Net Sales | 69,199 |
Services | Operating Segments | Other | |
Disaggregation of Revenue | |
Net Sales | 5,493 |
Services | Intersegment eliminations | |
Disaggregation of Revenue | |
Net Sales | $ (425) |
Discontinued Operation (Details
Discontinued Operation (Details) - USD ($) $ in Thousands | Oct. 01, 2017 | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 02, 2018 |
Discontinued Operation and Disposition | ||||||
Impairment of goodwill | $ 19,074 | $ 6,366 | $ 19,074 | |||
Other comprehensive loss from discontinued operations | 3,983 | |||||
Assets | ||||||
Total assets of discontinued operation | 20,651 | $ 20,294 | ||||
Liabilities | ||||||
Total liabilities of discontinued operation | 5,669 | $ 5,134 | ||||
Major line items constituting the (loss) income of the discontinued operation | ||||||
Net income (loss) from discontinued operation | (22,663) | 1,075 | ||||
U.K. Limited | Sold | ||||||
Discontinued Operation and Disposition | ||||||
Impairment of goodwill | $ 6,366 | |||||
Impairment of intangible assets | $ 1,249 | |||||
Proceeds from sale of asset | $ 315 | |||||
Loss from a discontinued operation, net of taxes | 7,248 | |||||
Other comprehensive loss from discontinued operations | 3,983 | |||||
Assets | ||||||
Accounts receivable | 5,006 | |||||
Inventories | 2,438 | |||||
Other assets | 506 | |||||
Plant, equipment and leasehold improvements | 4,864 | |||||
Intangible assets | 1,379 | |||||
Goodwill | 6,458 | |||||
Total assets of discontinued operation | 20,651 | |||||
Liabilities | ||||||
Accounts payable | 3,307 | |||||
Other current liabilities | 1,866 | |||||
Other long-term liabilities | 496 | |||||
Total liabilities of discontinued operation | 5,669 | |||||
Major line items constituting the (loss) income of the discontinued operation | ||||||
Total net sales | 10,741 | 31,119 | ||||
Total cost of sales | 10,222 | 24,331 | ||||
Selling general and administrative | 4,336 | 5,591 | ||||
Impairment | 7,615 | |||||
Other expense (income), net | 4,006 | (43) | ||||
Pretax (loss) income from discontinued operation | (15,438) | 1,240 | ||||
Pre-tax loss on sale of discontinued operation | (7,248) | |||||
Total pretax (loss) income on discontinued operation | (22,686) | 1,240 | ||||
Income tax benefit (expense) | 23 | (165) | ||||
Net income (loss) from discontinued operation | $ (22,663) | $ 1,075 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Jan. 02, 2018 | Dec. 31, 2017 |
Inventories | |||
Raw materials | $ 8,235 | $ 7,411 | |
Work-in-process | 5,107 | ||
Finished goods | 2,991 | 2,974 | |
Inventory reserve | (1,399) | (1,693) | |
Inventory | $ 9,827 | $ 7,870 | $ 13,799 |
Plant, Equipment and Leasehol_3
Plant, Equipment and Leasehold Improvements (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Plant, Equipment and Leasehold Improvements | ||
Plant, equipment and leasehold improvements, gross | $ 92,856 | $ 85,996 |
Less accumulated depreciation and amortization | (53,746) | (41,560) |
Plant, equipment and leasehold improvements, net | 39,110 | 44,436 |
Depreciation | 13,749 | 12,235 |
Impairments of the Company's plant, equipment, and leasehold improvement assets | 0 | 0 |
Machinery and equipment | ||
Plant, Equipment and Leasehold Improvements | ||
Plant, equipment and leasehold improvements, gross | 62,067 | 58,595 |
Machinery and equipment under capital leases | ||
Plant, Equipment and Leasehold Improvements | ||
Plant, equipment and leasehold improvements, gross | 1,812 | |
Furniture, fixtures and computer equipment | ||
Plant, Equipment and Leasehold Improvements | ||
Plant, equipment and leasehold improvements, gross | 7,730 | 6,288 |
Leasehold improvements | ||
Plant, Equipment and Leasehold Improvements | ||
Plant, equipment and leasehold improvements, gross | 19,651 | 19,601 |
Construction in progress | ||
Plant, Equipment and Leasehold Improvements | ||
Plant, equipment and leasehold improvements, gross | $ 1,596 | $ 1,512 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Goodwill by Reporting Segment (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Goodwill | $ 47,150 | $ 47,150 | $ 66,088 |
Operating Segments | U.S. Debit and Credit | |||
Goodwill | $ 47,150 | $ 47,150 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Goodwill Activity (Details) - USD ($) $ in Thousands | Oct. 01, 2017 | Dec. 31, 2018 | Dec. 31, 2017 |
Goodwill Activity | |||
Beginning balance | $ 47,150 | $ 66,088 | |
Currency translation | 136 | ||
Impairments | $ (19,074) | (6,366) | (19,074) |
Ending balance | $ 47,150 | 47,150 | |
Other | |||
Goodwill Activity | |||
Impairments | (1,893) | (1,893) | |
U.S. Debit and Credit | |||
Goodwill Activity | |||
Impairments | $ (17,181) | $ (17,181) |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Intangible Assets [Line Items] | |||
Average Life (Years) | 15 years 8 months 12 days | ||
Intangible amortization expense | $ 4,656 | $ 4,687 | |
Intangible assets subject to amortization, Cost | 66,376 | 66,376 | |
Intangible assets subject to amortization, Accumulated Amortization | (30,939) | (26,283) | |
Intangible assets subject to amortization, Net Book Value | 35,437 | 40,093 | |
Customer relationships | |||
Intangible Assets [Line Items] | |||
Intangible asset impairment charge | $ 1,249 | ||
Intangible assets subject to amortization, Cost | 55,454 | 55,454 | |
Intangible assets subject to amortization, Accumulated Amortization | (25,587) | (22,311) | |
Intangible assets subject to amortization, Net Book Value | $ 29,867 | 33,143 | |
Customer relationships | Minimum | |||
Intangible Assets [Line Items] | |||
Average Life (Years) | 12 years | ||
Customer relationships | Maximum | |||
Intangible Assets [Line Items] | |||
Average Life (Years) | 20 years | ||
Technology and software | |||
Intangible Assets [Line Items] | |||
Intangible assets subject to amortization, Cost | $ 7,101 | 7,101 | |
Intangible assets subject to amortization, Accumulated Amortization | (4,024) | (3,095) | |
Intangible assets subject to amortization, Net Book Value | $ 3,077 | 4,006 | |
Technology and software | Minimum | |||
Intangible Assets [Line Items] | |||
Average Life (Years) | 7 years | ||
Technology and software | Maximum | |||
Intangible Assets [Line Items] | |||
Average Life (Years) | 10 years | ||
Trademarks | |||
Intangible Assets [Line Items] | |||
Intangible assets subject to amortization, Cost | $ 3,330 | 3,330 | |
Intangible assets subject to amortization, Accumulated Amortization | (877) | (487) | |
Intangible assets subject to amortization, Net Book Value | $ 2,453 | 2,843 | |
Trademarks | Minimum | |||
Intangible Assets [Line Items] | |||
Average Life (Years) | 7 years 6 months | ||
Trademarks | Maximum | |||
Intangible Assets [Line Items] | |||
Average Life (Years) | 10 years | ||
Non-compete agreements | |||
Intangible Assets [Line Items] | |||
Intangible assets subject to amortization, Cost | $ 491 | 491 | |
Intangible assets subject to amortization, Accumulated Amortization | (451) | (390) | |
Intangible assets subject to amortization, Net Book Value | $ 40 | $ 101 | |
Non-compete agreements | Minimum | |||
Intangible Assets [Line Items] | |||
Average Life (Years) | 5 years | ||
Non-compete agreements | Maximum | |||
Intangible Assets [Line Items] | |||
Average Life (Years) | 8 years |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Future Aggregate Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Estimated future aggregate amortization expense | ||
2,019 | $ 4,635 | |
2,020 | 4,595 | |
2,021 | 4,352 | |
2,022 | 3,867 | |
2,023 | 3,867 | |
Thereafter | 14,121 | |
Intangible assets subject to amortization, Net Book Value | $ 35,437 | $ 40,093 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - First Lien Credit Facility - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Liabilities: | ||
Carrying amount | $ 312,500 | $ 312,500 |
Term Loan | ||
Liabilities: | ||
Carrying amount | 312,500 | 312,500 |
Long-term debt | 203,125 | 228,125 |
Level 2 | Term Loan | ||
Liabilities: | ||
Long-term debt | $ 203,125 | $ 228,125 |
Long-Term Debt and Credit Fac_3
Long-Term Debt and Credit Facility - Long-Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Long-term Debt | ||
Unamortized discount | $ (2,448) | $ (3,122) |
Unamortized deferred financing costs | (4,234) | (5,509) |
Total long-term debt | 305,818 | 303,869 |
Long-term debt, net of current maturities | $ 305,818 | 303,869 |
First Lien Credit Facility | ||
Long-term Debt | ||
Interest rate (as a percent) | 7.02% | |
Long-term debt | $ 312,500 | $ 312,500 |
Long-Term Debt and Credit Fac_4
Long-Term Debt and Credit Facility - First Lien Credit Facility (Details) $ in Thousands | Oct. 15, 2015USD ($) | Aug. 17, 2015USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2018USD ($)letter | Dec. 31, 2017USD ($) |
Long-term Debt | |||||
Fee on outstanding letters of credit (as a percent) | 4.50% | 4.50% | |||
Fronting fee for letters of credit (as a percent) | 0.125% | 0.125% | |||
Number of outstanding letters of credit | letter | 1 | ||||
Letters of credit outstanding | $ 50 | ||||
Interest expense related to amortization of deferred financing costs and discount | 1,949 | $ 1,947 | |||
Accrued interest | $ 5,058 | $ 4,296 | |||
First Lien Credit Facility | |||||
Long-term Debt | |||||
Maximum net leverage ratio | 7 | ||||
Eurodollar rate | First Lien Credit Facility | |||||
Long-term Debt | |||||
Applicable margin over reference rate (as a percent) | 4.50% | ||||
Eurodollar rate | First Lien Credit Facility | Minimum | |||||
Long-term Debt | |||||
Interest rate (as a percent) | 1.00% | ||||
Base rate | First Lien Credit Facility | |||||
Long-term Debt | |||||
Applicable margin over reference rate (as a percent) | 3.50% | ||||
Term Loan | First Lien Credit Facility | |||||
Long-term Debt | |||||
Maximum borrowing capacity | $ 435,000 | ||||
Amount repaid | $ 112,500 | $ 10,000 | |||
Revolving Credit Facility | |||||
Long-term Debt | |||||
Amount outstanding | $ 0 | ||||
Available for borrowing | $ 19,950 | ||||
Revolving Credit Facility | Minimum | |||||
Long-term Debt | |||||
Unused commitment fee (as a percent) | 0.50% | 0.50% | |||
Revolving Credit Facility | Maximum | |||||
Long-term Debt | |||||
Unused commitment fee (as a percent) | 0.375% | 0.375% | |||
Revolving Credit Facility | First Lien Credit Facility | |||||
Long-term Debt | |||||
Maximum borrowing capacity | $ 40,000 | ||||
Amount drawn to trigger net leverage requirement (as a percent) | 50.00% |
Income Taxes - Continuing Opera
Income Taxes - Continuing Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Current taxes: | ||
Domestic | $ 2,558 | $ (7,369) |
Current income tax (benefit) expense | 2,558 | (7,369) |
Deferred taxes: | ||
Domestic | (6,897) | (9,167) |
Deferred income tax (benefit) expense | (6,897) | (9,167) |
Income tax benefit | (4,339) | (16,536) |
Loss before income taxes | ||
Domestic | (18,383) | (36,985) |
Foreign | (755) | (2,636) |
Loss before income taxes | $ 19,138 | $ 39,621 |
Effective income tax rate (as a percent) | 22.70% | 41.70% |
Impact of tax benefit of disposal | $ 3,332 |
Income Taxes - Effective Income
Income Taxes - Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Effective Income Tax Rate Reconciliation | ||
Tax at federal statutory rate (as a percent) | 21.00% | 35.00% |
State income taxes (as a percent) | 4.00% | 0.50% |
Foreign taxes (as a percent) | (0.10%) | (0.10%) |
Deferred tax impact of enacted tax rate and law changes (as a percent) | (0.70%) | 18.40% |
Goodwill impairments (as a percent) | (17.40%) | |
Tax benefit for U.K. sale | 0.175 | |
Valuation allowance (as a percent) | (13.50%) | (1.50%) |
Unrecognized tax benefits (as a percent) | (4.80%) | (3.20%) |
Tax credits (as a percent) | 2.50% | 10.80% |
Other (as a percent) | (3.20%) | (0.80%) |
Effective income tax rate (as a percent) | 22.70% | 41.70% |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Accrued expense | $ 2,553 | $ 744 |
Unrealized foreign exchange loss | 647 | |
Net operating loss carryforward | 5,589 | 2,156 |
Deferred financing costs | 553 | 707 |
Stock compensation | 861 | 679 |
Tax credit carryforward | 1,118 | 420 |
Interest limitation | 4,412 | |
Other | 927 | 753 |
Total gross deferred tax asset | 16,013 | 6,106 |
Valuation allowance | (6,823) | (4,617) |
Net deferred tax assets | 9,190 | 1,489 |
Deferred tax liabilities: | ||
Plant, property and leasehold improvements | (3,851) | (2,819) |
Intangibles | (9,311) | (9,912) |
Prepaid expense | (1,777) | (926) |
Total gross deferred tax liabilities | (14,939) | (13,657) |
Net deferred tax liabilities | $ (5,749) | $ (12,168) |
Income Taxes - Foreign Currency
Income Taxes - Foreign Currency Exchange Rate Fluctuations, Changes in Net Operating Losses and Credit Carryforwards (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Valuation allowance | |
Net increase in valuation allowance | $ 2,206 |
Valuation allowance (as a percent) | 100.00% |
Deferred Tax Liability Not Recognized, Undistributed Earnings of Foreign Subsidiaries [Abstract] | |
Provision for U.S. federal and state taxes on cumulative foreign earnings | $ 0 |
Foreign earnings intended to be reinvested outside of the U.S. | $ 0 |
State | |
Operating Loss Carryforwards [Line Items] | |
Valuation allowance (as a percent) | 100.00% |
Research and development tax credit carryforwards | $ 778 |
Foreign | |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards | $ 10,791 |
Valuation allowance (as a percent) | 100.00% |
Federal | |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards | $ 9,156 |
Research and development tax credit carryforwards | $ 340 |
Income Taxes - 2017 Tax Reform
Income Taxes - 2017 Tax Reform (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes | ||
Tax at federal statutory rate (as a percent) | 21.00% | 35.00% |
Tax expense related to the net change in deferred tax liabilities | $ 7,057 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Unrecognized Tax Benefits | |
Unrecognized Tax Benefits, Beginning Balance | $ 1,212 |
Increase related to current year tax position | 506 |
Increase related to prior year tax position | 871 |
Decrease related to settlements with tax authorities, net of federal benefit | (545) |
Unrecognized Tax Benefits, Ending Balance | 2,044 |
Unrecognized tax benefits, accrued interest and penalties | $ 221 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |
Aug. 31, 2017$ / shares | Dec. 31, 2017USD ($)$ / shares | Dec. 31, 2018Vote / shares$ / shares | |
Dividends, Common Stock [Abstract] | |||
Common shares, par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Dividends paid on common stock | $ | $ 7,540 | ||
Cash dividend paid per common share | $ 0.675 | ||
Amount of discontinued quarterly dividends | $ 0.225 | ||
Common Stock | |||
Class of Stock [Line Items] | |||
Voting rights per share | Vote / shares | 1 |
(Loss) Earnings per Share (Deta
(Loss) Earnings per Share (Details) $ / shares in Units, $ in Thousands | Dec. 20, 2017 | Dec. 31, 2018USD ($)$ / shares | Sep. 30, 2018USD ($)$ / shares | Jun. 30, 2018USD ($)$ / shares | Mar. 31, 2018USD ($)$ / shares | Dec. 31, 2017USD ($)$ / shares | Sep. 30, 2017USD ($)$ / shares | Jun. 30, 2017USD ($)$ / shares | Mar. 31, 2017USD ($)$ / shares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares |
Reverse stock split | 0.20 | ||||||||||
Numerator: | |||||||||||
Net loss from continuing operations | $ | $ (7,235) | $ (1,085) | $ (802) | $ (5,677) | $ (14,416) | $ (798) | $ (3,273) | $ (4,598) | $ (14,799) | $ (23,085) | |
Net (loss) income from a discontinued operation, net of taxes | $ | (22,663) | 1,075 | |||||||||
Net loss attributable to common stockholders | $ | $ (37,462) | $ (22,010) | |||||||||
Denominator: | |||||||||||
Basic and dilutive EPS-weighted average common shares outstanding (in shares) | shares | 11,149,554 | 11,117,454 | |||||||||
Basic and diluted EPS: | |||||||||||
(Loss) per share from continuing operations (in dollars per share) | $ / shares | $ (0.65) | $ (0.10) | $ (0.07) | $ (0.51) | $ (1.29) | $ (0.07) | $ (0.30) | $ (0.42) | $ (1.33) | $ (2.08) | |
(Loss) income per share from discontinued operations, net of taxes (in dollars per share) | $ / shares | (2.03) | 0.10 | |||||||||
(Loss) earnings per share (in dollars per share) | $ / shares | $ (3.36) | $ (1.98) | |||||||||
Stock Options | |||||||||||
Outstanding stock based awards | |||||||||||
Potential dilutive effect of share-based compensation excluded (in shares) | shares | 985,876 | ||||||||||
Restricted stock units | |||||||||||
Outstanding stock based awards | |||||||||||
Potential dilutive effect of share-based compensation excluded (in shares) | shares | 993,587 |
Commitments and Contingencies -
Commitments and Contingencies - Capital Lease (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Commitments and Contingencies. | ||
Machinery and equipment capital lease obligations | $ 1,565 | |
Less current portion of capital lease obligations | (521) | |
Total long-term capital lease obligations | 1,044 | |
Future Cash Payments, Operating Leases: | ||
2,019 | 2,927 | |
2,020 | 2,771 | |
2,021 | 2,512 | |
2,022 | 1,243 | |
2,023 | 971 | |
Thereafter | 652 | |
Total | 11,076 | |
Future Cash Payments, Capital Lease: | ||
2,019 | 521 | |
2,020 | 474 | |
2,021 | 243 | |
2,022 | 256 | |
2,023 | 71 | |
Total | 1,565 | |
Future Cash Payments, Purchase Obligations: | ||
2,019 | 3,848 | |
Total | 3,848 | |
Operating leases, rent expense | $ 3,767 | $ 3,528 |
Commitments and Contingencies_2
Commitments and Contingencies - Contingencies (Details) - Pending Litigation - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Securities Litigation Case | ||
Commitments and Contingencies | ||
Loss contingency accrual | $ 0 | |
Heckermann Montross Suit | ||
Commitments and Contingencies | ||
Loss contingency accrual | $ 0 | $ 0 |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Employee Benefits | ||
Employee benefit plan, Company's portion vested at time of match (as a percent) | 100.00% | |
Employee benefit plan expense | $ 1,235 | $ 1,236 |
Participant's first 3% of deferrals | ||
Employee Benefits | ||
Employee benefit plan, Company match (as a percent) | 100.00% | |
Participant's second 2% of deferrals | ||
Employee Benefits | ||
Employee benefit plan, Company match (as a percent) | 50.00% |
Stock Based Compensation - Omni
Stock Based Compensation - Omnibus Incentive Plan (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 25, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Oct. 31, 2015 |
Omnibus Plan | ||||
Valuation Assumptions: | ||||
Unrecognized compensation expense | $ 840 | |||
Period over which compensation expense expected to recognize | 1 year 2 months 12 days | |||
Omnibus Plan | Stock Options | ||||
Stock based compensation | ||||
Number of shares authorized | 1,200,000 | 800,000 | ||
Number of additional shares authorized | 400,000 | |||
Number of shares available for grant | 156,917 | |||
Stock options granted (in shares) | 159,755 | 713,075 | ||
Stock option life (in years) | 10 years | |||
Number of shares | ||||
Balance at beginning of year (in shares) | 937,310 | |||
Granted (in shares) | 159,755 | 713,075 | ||
Forfeited (in shares) | (186,438) | |||
Balance at end of year (in shares) | 910,627 | 937,310 | ||
Options: Options vested and exercisable | 305,275 | |||
Options: Options vested and expected to vest | 910,627 | |||
Weighted-Average Exercise Price | ||||
Balance at beginning of year (in dollars per share) | $ 17.11 | |||
Granted (in dollars per share) | 2.74 | |||
Forfeited (in dollars per share) | 15.17 | |||
Balance at end of year (in dollars per share) | 14.99 | $ 17.11 | ||
Weighted-Average Exercise Price: Options vested and exercisable | 23.04 | |||
Weighted-Average Exercise Price: Options vested and expected to vest | $ 14.99 | |||
Weighted- Average Remaining Contractual Term (in Years) | ||||
Balance (in years) | 8 years 4 months 17 days | |||
Weighted-Average Remaining Contractual Term (in Years): Options vested and exercisable | 7 years 11 months 5 days | |||
Weighted-Average Remaining Contractual Term (in Years): Options vested and expected to vest | 8 years 4 months 17 days | |||
Number of unvested options scheduled to vest | ||||
Non-Vested Options as of beginning of period | 876,903 | |||
Granted (in shares) | 159,755 | 713,075 | ||
Forfeited (in shares) | (152,242) | |||
Vested (in shares) | (279,064) | |||
Non-Vested Options as of end of period | 605,352 | 876,903 | ||
Weighted-Average Grant Date Fair Value | ||||
Non-Vested, beginning balance | $ 4.08 | |||
Granted: Weighted-Average Grant Date Fair Value | 1.21 | $ 2.43 | ||
Forfeited: Weighted-Average Grant Date Fair Value | 3.45 | |||
Vested: Weighted-Average Grant Date Fair Value | 4.81 | |||
Non-Vested, ending balance | $ 3.14 | $ 4.08 | ||
Valuation Assumptions: | ||||
Expected term in years | 6 years | 6 years | ||
Volatility (as a percent) | 48.00% | 31.90% | ||
Risk-free interest rate | 2.70% | 2.00% | ||
Dividend yield (as a percent) | 0.90% | |||
Price per share for certain stock option awards granted | $ 50 | |||
Omnibus Plan | Stock Options | Maximum | ||||
Valuation Assumptions: | ||||
Volatility rate, peer group determined by tech companies that completed IPO within the state year range (in years) | 10 years | |||
Awards vesting beginning the first anniversary of the grant date | Stock Options | ||||
Stock based compensation | ||||
Vesting period | 3 years | |||
2019 | Omnibus Plan | Stock Options | ||||
Number of unvested options scheduled to vest | ||||
Non-Vested Options as of end of period | 301,267 | |||
2020 | Omnibus Plan | Stock Options | ||||
Number of unvested options scheduled to vest | ||||
Non-Vested Options as of end of period | 250,228 | |||
2021 | Omnibus Plan | Stock Options | ||||
Number of unvested options scheduled to vest | ||||
Non-Vested Options as of end of period | 53,857 |
Stock Based Compensation - Rest
Stock Based Compensation - Restricted Stock Units (Details) - Omnibus Plan - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | |
Weighted Average Grant Date Fair Value | |||
Unrecognized compensation expense | $ 840 | ||
Period over which compensation expense expected to recognize | 1 year 2 months 12 days | ||
Restricted stock units | |||
Number of Restricted Stock Units | |||
Units outstanding at the beginning of the period (in shares) | 49,677 | ||
Granted (in shares) | 75,188 | 47,870 | |
Vested (in shares) | (25,928) | ||
Forfeited (in shares) | (30,288) | ||
Units outstanding at the end of the period (in shares) | 68,649 | 49,677 | |
Weighted Average Grant Date Fair Value | |||
Units outstanding at the beginning of the period (in dollars per shares) | $ 16.20 | ||
Granted (in dollars per share) | 2.66 | ||
Vested (in dollars per share) | 10.63 | ||
Forfeited (in dollars per share) | 9.91 | ||
Units outstanding at the end of the period (in dollars per shares) | $ 6.25 | $ 16.20 | |
Vesting period | 1 year | ||
Compensation expense | $ 961 | $ 2,360 | |
Unvested restricted stock (in units) | 49,677 | 49,677 | 68,649 |
Restricted stock units | 2019 | |||
Number of Restricted Stock Units | |||
Units outstanding at the end of the period (in shares) | 57,563 | ||
Weighted Average Grant Date Fair Value | |||
Unvested restricted stock (in units) | 57,563 | 57,563 | |
Restricted stock units | 2020 | |||
Number of Restricted Stock Units | |||
Units outstanding at the end of the period (in shares) | 10,843 | ||
Weighted Average Grant Date Fair Value | |||
Unvested restricted stock (in units) | 10,843 | 10,843 | |
Restricted stock units | 2021 | |||
Number of Restricted Stock Units | |||
Units outstanding at the end of the period (in shares) | 243 | ||
Weighted Average Grant Date Fair Value | |||
Unvested restricted stock (in units) | 243 | 243 |
Stock Based Compensation - Cash
Stock Based Compensation - Cash Performance Units (Details) - Cash Performance - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Stock based compensation | ||
Grant date fair value | $ 663 | |
Valuation Assumptions: | ||
Expected term in years | 3 years | |
Volatility (as a percent) | 48.00% | |
Risk-free interest rate | 1.50% | |
Dividend yield (as a percent) | 4.00% | |
Number of Cash Performance Units | ||
Units outstanding at the beginning of the period (in shares) | 822,915 | |
Granted (in shares) | 932,837 | |
Vested (in shares) | (274,854) | |
Forfeited (in shares) | (123,049) | |
Units outstanding at the end of the period (in shares) | 425,012 | 822,915 |
Accrued expenses | ||
Stock based compensation | ||
Cash performance liability | $ 96 | |
Other Long Term Liabilities | ||
Stock based compensation | ||
Cash performance liability | $ 64 |
Stock Based Compensation - Opti
Stock Based Compensation - Option Plan (Details) - Stock Options - Option Plan | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Stock based compensation | |
Stock option life (in years) | 10 years |
Number of shares | |
Balance at end of year (in shares) | shares | 6,600 |
Weighted-Average Exercise Price | |
Exercisable at end of year (in dollars per share) | $ / shares | $ 0.002 |
Weighted- Average Remaining Contractual Term (in Years) | |
Balance (in years) | 4 years 4 months 24 days |
Stock Based Compensation - Re_2
Stock Based Compensation - Restricted Shares (Details) - Restricted shares - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2017 | |
Number of Restricted Stock Units | ||
Units outstanding at the beginning of the period (in shares) | ||
Vested (in shares) | 9,486 | |
Forfeited (in shares) | 9,486 | |
Units outstanding at the end of the period (in shares) | 18,972 | |
Weighted Average Grant Date Fair Value | ||
Compensation expense | $ 143 | $ (371) |
Segment Reporting - Revenue and
Segment Reporting - Revenue and EBITDA from Continuing Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting | ||||||||||
Net sales | $ 68,516 | $ 70,987 | $ 61,454 | $ 54,857 | $ 57,489 | $ 60,997 | $ 54,836 | $ 50,422 | $ 255,814 | $ 223,744 |
EBITDA | 22,698 | (1,849) | ||||||||
U.S. Debit and Credit | ||||||||||
Segment Reporting | ||||||||||
EBITDA | 34,213 | 11,618 | ||||||||
U.S. Prepaid Debit | ||||||||||
Segment Reporting | ||||||||||
EBITDA | 23,782 | 18,847 | ||||||||
Other | ||||||||||
Segment Reporting | ||||||||||
EBITDA | (35,297) | (32,314) | ||||||||
Operating Segments | U.S. Debit and Credit | ||||||||||
Segment Reporting | ||||||||||
Net sales | 178,597 | 162,216 | ||||||||
Operating Segments | U.S. Prepaid Debit | ||||||||||
Segment Reporting | ||||||||||
Net sales | 69,199 | 57,005 | ||||||||
Operating Segments | Other | ||||||||||
Segment Reporting | ||||||||||
Net sales | 9,891 | 11,049 | ||||||||
Intersegment eliminations | ||||||||||
Segment Reporting | ||||||||||
Net sales | $ (1,873) | $ (6,526) |
Segment Reporting - Reconciliat
Segment Reporting - Reconciliation of EBITDA from Continuing Operations to "Net (Loss) Income from Continuing Operations" (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of total segment EBITDA to income before taxes | ||||||||||
Total segment EBITDA from continuing operations | $ 22,698 | $ (1,849) | ||||||||
Interest, net | (23,431) | (20,850) | ||||||||
Income tax benefit | 4,339 | 16,536 | ||||||||
Depreciation and amortization | (18,405) | (16,922) | ||||||||
Net loss from continuing operations | $ (7,235) | $ (1,085) | $ (802) | $ (5,677) | $ (14,416) | $ (798) | $ (3,273) | $ (4,598) | $ (14,799) | $ (23,085) |
Segment Reporting - Balance She
Segment Reporting - Balance Sheet Data (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Jan. 02, 2018 | Dec. 31, 2017 |
Segment Reporting | |||
Assets of discontinued operation | $ 20,294 | $ 20,651 | |
Total assets | $ 207,204 | 234,005 | |
Operating Segments | |||
Segment Reporting | |||
Total assets | 207,204 | 213,354 | |
Operating Segments | U.S. Debit and Credit | |||
Segment Reporting | |||
Total assets | 169,567 | 174,717 | |
Operating Segments | U.S. Prepaid Debit | |||
Segment Reporting | |||
Total assets | 25,117 | 22,810 | |
Operating Segments | Other | |||
Segment Reporting | |||
Total assets | $ 12,520 | $ 15,827 |
Segment Reporting - Net Sales b
Segment Reporting - Net Sales by Product and Services (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting | ||||||||||
Total net sales | $ 68,516 | $ 70,987 | $ 61,454 | $ 54,857 | $ 57,489 | $ 60,997 | $ 54,836 | $ 50,422 | $ 255,814 | $ 223,744 |
Products | ||||||||||
Segment Reporting | ||||||||||
Total net sales | 125,069 | 104,459 | ||||||||
Services | ||||||||||
Segment Reporting | ||||||||||
Total net sales | $ 130,745 | $ 119,285 |
Quarterly Financial Informati_3
Quarterly Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information (Unaudited) | ||||||||||
Total net sales | $ 68,516 | $ 70,987 | $ 61,454 | $ 54,857 | $ 57,489 | $ 60,997 | $ 54,836 | $ 50,422 | $ 255,814 | $ 223,744 |
Gross profit | 20,979 | 23,308 | 19,875 | 14,428 | 17,447 | 19,444 | 16,666 | 14,648 | 78,590 | 68,205 |
Net loss from continuing operations | $ (7,235) | $ (1,085) | $ (802) | $ (5,677) | $ (14,416) | $ (798) | $ (3,273) | $ (4,598) | $ (14,799) | $ (23,085) |
Basic and diluted (loss) earnings per share: | ||||||||||
(Loss) earnings per share from continuing operations (in dollars per share) | $ (0.65) | $ (0.10) | $ (0.07) | $ (0.51) | $ (1.29) | $ (0.07) | $ (0.30) | $ (0.42) | $ (1.33) | $ (2.08) |