Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 23, 2020 | Jun. 30, 2019 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Entity Registrant Name | SEQUENTIAL BRANDS GROUP, INC. | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 65,905,900 | ||
Entity Central Index Key | 0001648428 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Public Float | $ 16,718,928 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Current Assets: | ||
Cash | $ 6,264,000 | $ 14,106,000 |
Restricted cash | 2,043,000 | 2,032,000 |
Accounts receivable, net | 39,452,000 | 49,600,000 |
Prepaid expenses and other current assets | 4,228,000 | 3,981,000 |
Current assets from discontinued operations | 6,839,000 | 23,845,000 |
Total current assets | 58,826,000 | 93,564,000 |
Property and equipment, net | 5,349,000 | 8,391,000 |
Intangible assets, net | 599,967,000 | 634,827,000 |
Goodwill | 0 | 0 |
Right-of-use assets - operating leases | 50,320,000 | |
Other assets | 8,782,000 | 11,222,000 |
Long-term assets from discontinued operations | 330,664,000 | |
Total assets | 723,244,000 | 1,078,668,000 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 15,721,000 | 11,600,000 |
Current portion of long-term debt | 12,750,000 | 28,300,000 |
Current portion of deferred revenue | 6,977,000 | 8,172,000 |
Current portion of lease liabilities - operating leases | 3,035,000 | |
Current liabilities from discontinued operations | 1,959,000 | 15,450,000 |
Total current liabilities | 40,442,000 | 63,522,000 |
Long-term debt, net of current portion | 433,250,000 | 582,487,000 |
Long-term deferred revenue, net of current portion | 4,604,000 | 8,224,000 |
Deferred income taxes | 14,351,000 | 67,002,000 |
Lease liabilities - operating leases, net of current portion | 54,168,000 | |
Other long-term liabilities | 3,389,000 | 9,160,000 |
Long-term liabilities from discontinued operations | 3,629,000 | |
Total liabilities | 550,204,000 | 734,024,000 |
Commitments and contingencies | ||
Equity: | ||
Preferred stock Series A, $0.01 par value; 10,000,000 shares authorized; none issued and outstanding at December 31, 2019 and December 31, 2018 | ||
Common stock, $0.01 par value; 150,000,000 shares authorized; 66,877,494 and 65,990,179 shares issued at December 31, 2019 and December 31, 2018, respectively, and 65,780,738 and 64,327,582 shares outstanding at December 31, 2019 and December 31, 2018, respectively | 672,000 | 657,000 |
Additional paid-in capital | 514,496,000 | 513,764,000 |
Accumulated other comprehensive loss | (4,096,000) | (1,554,000) |
Accumulated deficit | (394,126,000) | (234,723,000) |
Treasury stock, at cost; 1,096,756 and 1,662,597 shares at December 31, 2019 and December 31, 2018, respectively | (3,230,000) | (4,226,000) |
Total Sequential Brands Group, Inc. and Subsidiaries stockholders' equity | 113,716,000 | 273,918,000 |
Noncontrolling interests | 59,324,000 | 70,726,000 |
Total equity | 173,040,000 | 344,644,000 |
Total liabilities and equity | $ 723,244,000 | $ 1,078,668,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Statement Of Financial Position [Abstract] | ||
Preferred stock Series A, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock Series A, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock Series A, shares issued | 0 | 0 |
Preferred stock Series A, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 66,877,494 | 65,990,179 |
Common stock, shares outstanding | 65,780,738 | 64,327,582 |
Treasury stock, shares | 1,096,756 | 1,662,597 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | |||
Net revenue | $ 101,576 | $ 127,290 | $ 124,780 |
Operating expenses | 61,671 | 60,223 | 53,752 |
Impairment charges | 33,109 | 17,899 | 340,628 |
Loss on sale of assets | 7,117 | ||
Income (loss) from operations | 6,796 | 42,051 | (269,600) |
Other expense | (2,107) | (693) | (1,984) |
Interest expense, net | 53,760 | 55,264 | 59,000 |
Loss from continuing operations before income taxes | (49,071) | (13,906) | (330,584) |
Benefit from income taxes | (8,695) | (1,944) | (44,423) |
Loss from continuing operations | (40,376) | (11,962) | (286,161) |
Net loss (income) attributable to noncontrolling interests from continuing operations | 6,036 | (5,506) | (4,172) |
Loss from continuing operations attributable to Sequential Brands Group, Inc. and Subsidiaries | (34,340) | (17,468) | (290,333) |
(Loss) income from discontinued operations, net of income taxes | (125,063) | 6,984 | 104,615 |
Net loss attributable to Sequential Brands Group, Inc. and Subsidiaries | $ (159,403) | $ (10,484) | $ (185,718) |
(Loss) earnings per share attributable to Sequential Brands Group, Inc. and Subsidiaries: | |||
Continuing Operations, Loss per share - basic and diluted | $ (0.53) | $ (0.27) | $ (4.62) |
Discontinued Operations: | |||
(Loss) earnings per share - basic | (1.93) | 0.11 | 1.66 |
Discontinued Operations: | |||
(Loss) earnings per share - diluted | (1.93) | 0.11 | 1.66 |
Weighted-average common shares outstanding: | |||
Earnings Per Share, Basic and Diluted | $ (2.46) | $ (0.16) | $ (2.95) |
Basic (in shares) | 64,760,823 | 63,700,081 | 62,861,743 |
Diluted (in shares) | 64,760,823 | 64,992,059 | 63,093,437 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss from continuing operations | $ (40,376) | $ (11,962) | $ (286,161) |
Other comprehensive (loss) income: | |||
Unrealized (loss) gain on interest rate caps | (80) | 224 | |
Unrealized loss on interest rate swaps | (5,628) | (1,554) | |
Other comprehensive (loss) income | (5,628) | (1,634) | 224 |
Comprehensive income | (46,004) | (13,596) | (285,937) |
Comprehensive loss (income) from continuing operations attributable to noncontrolling interests | 6,036 | (5,506) | (4,172) |
Comprehensive loss from continuing operations attributable to Sequential Brands Group, Inc. and Subsidiaries | (39,968) | (19,102) | (290,109) |
(Loss) income from discontinued operations, net of income taxes | (125,063) | 6,984 | 104,615 |
Comprehensive loss attributable to Sequential Brands Group, Inc. and Subsidiaries | $ (165,031) | $ (12,118) | $ (185,494) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Total Sequential Brands Group, Inc. and Subsidiaries Stockholders' EquityInterest Rate Cap [Member] | Total Sequential Brands Group, Inc. and Subsidiaries Stockholders' EquityInterest Rate Swap [Member] | Total Sequential Brands Group, Inc. and Subsidiaries Stockholders' Equity | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Other Comprehensive Loss [Member]Interest Rate Cap [Member] | Accumulated Other Comprehensive Loss [Member]Interest Rate Swap [Member] | Accumulated Other Comprehensive Loss [Member] | Accumulated Deficit [Member] | Treasury Stock [Member] | Noncontrolling Interest [Member] | Interest Rate Cap [Member] | Interest Rate Swap [Member] | Total |
Balance at Dec. 31, 2016 | $ 462,755 | $ 624 | $ 502,564 | $ (144) | $ (39,651) | $ (638) | $ 74,813 | $ 537,568 | ||||||
Balance (in shares) at Dec. 31, 2016 | 62,602,041 | (97,686) | ||||||||||||
Stock-based compensation | 5,911 | $ 11 | 5,900 | 5,911 | ||||||||||
Stock-based compensation (in shares) | 1,050,680 | |||||||||||||
Unrealized gain (loss) on interest rate, net of tax | $ 224 | $ 224 | $ 224 | |||||||||||
Stock registration costs | (20) | (20) | (20) | |||||||||||
Repurchase of common stock | (1,161) | $ (1,161) | (1,161) | |||||||||||
Repurchase of common stock (in shares) | (327,308) | |||||||||||||
Noncontrolling interest distribution | (7,438) | (7,438) | ||||||||||||
Net income (loss) attributable to noncontrolling interest | 4,172 | 4,172 | ||||||||||||
Net income (loss) attributable to common stockholders | (185,718) | (185,718) | (185,718) | |||||||||||
Balance at Dec. 31, 2017 | 281,991 | $ 635 | 508,444 | 80 | (225,369) | $ (1,799) | 71,547 | 353,538 | ||||||
Balance (in shares) at Dec. 31, 2017 | 63,652,721 | (424,994) | ||||||||||||
Stock-based compensation | 3,842 | $ 14 | 3,828 | 3,842 | ||||||||||
Stock-based compensation (in shares) | 1,493,972 | |||||||||||||
Shares issued under stock incentive plan | 1,500 | $ 8 | 1,492 | 1,500 | ||||||||||
Shares issued under stock incentive plan (in shares) | 843,486 | |||||||||||||
Unrealized gain on equity securities during the year | 1,554 | |||||||||||||
Unrealized gain (loss) on interest rate, net of tax | $ (80) | $ (1,554) | $ (80) | $ (1,554) | $ (80) | $ (1,554) | ||||||||
Repurchase of common stock | (2,427) | $ (2,427) | (2,427) | |||||||||||
Repurchase of common stock (in shares) | (1,237,603) | |||||||||||||
Noncontrolling interest distribution | (6,682) | (6,682) | ||||||||||||
Net income (loss) attributable to noncontrolling interest | 5,506 | 5,506 | ||||||||||||
Net income (loss) attributable to common stockholders | (10,484) | (10,484) | (10,484) | |||||||||||
Balance at Dec. 31, 2018 | 273,918 | $ 657 | 513,764 | (1,554) | (234,723) | $ (4,226) | 70,726 | 344,644 | ||||||
Balance (in shares) at Dec. 31, 2018 | 65,990,179 | (1,662,597) | ||||||||||||
Cumulative effect of revenue recognition accounting change | 1,130 | 1,130 | 355 | 1,485 | ||||||||||
Stock-based compensation | 2,015 | $ 15 | 2,000 | 2,015 | ||||||||||
Stock-based compensation (in shares) | 887,315 | |||||||||||||
Shares issued from treasury stock | (1,268) | $ 1,268 | ||||||||||||
Shares issued from treasury stock (in shares) | 864,576 | |||||||||||||
Unrealized gain (loss) on interest rate, net of tax | $ (2,542) | $ (2,542) | $ (2,542) | |||||||||||
Repurchase of common stock | (272) | $ (272) | (272) | |||||||||||
Repurchase of common stock (in shares) | (298,735) | |||||||||||||
Noncontrolling interest distribution | (5,366) | (5,366) | ||||||||||||
Net income (loss) attributable to noncontrolling interest | (6,036) | (6,036) | ||||||||||||
Net income (loss) attributable to common stockholders | (159,403) | (159,403) | (159,403) | |||||||||||
Balance at Dec. 31, 2019 | $ 113,716 | $ 672 | $ 514,496 | $ (4,096) | $ (394,126) | $ (3,230) | $ 59,324 | $ 173,040 | ||||||
Balance (in shares) at Dec. 31, 2019 | 66,877,494 | (1,096,756) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities | |||
(Loss) income from continuing operations, net of tax | $ (40,376) | $ (11,962) | $ (286,161) |
(Loss) income from discontinued operations, net of tax | (125,063) | 6,984 | 104,615 |
Adjustments to reconcile loss from continuing operations to net cash provided by operating activities: | |||
Provision for bad debts | 4,123 | 1,546 | 484 |
Depreciation and amortization | 4,923 | 2,738 | 2,236 |
Stock-based compensation | 1,871 | 2,911 | 5,911 |
Loss on debt extinguishment | 148 | ||
Amortization of deferred financing costs | 6,381 | 4,481 | 3,862 |
Impairment charges | 33,109 | 17,899 | 340,628 |
Loss on equity securities | 123 | ||
Loss (income) from equity method investment | 78 | (61) | (22) |
Loss on interest rate swaps | 1,029 | ||
Loss on disposal of property and equipment | 70 | 131 | |
Realized loss on equity securities | 1,916 | ||
Amortization of operating leases | 6,261 | ||
Loss on sale of assets | 7,117 | ||
Deferred income taxes | (52,651) | (1,260) | (132,669) |
Changes in operating assets and liabilities: | |||
Accounts receivable | 6,025 | 1,884 | (12,800) |
Prepaid expenses and other assets | 1,534 | (5,041) | (3,541) |
Accounts payable and accrued expenses | 3,092 | 2,135 | (1,256) |
Deferred revenue | (4,815) | (6,967) | (2,676) |
Other liabilities | (7,691) | 7,836 | 983 |
Cash (used in) provided by operating activities from continuing operations | (36,914) | 23,535 | (83,105) |
Cash provided by operating activities from discontinued operations | 40,321 | 9,365 | 111,315 |
Cash provided by operating activities | 3,407 | 32,900 | 28,210 |
Cash flows from investing activities | |||
Investments in intangible assets, including registration and renewal costs | (136) | (239) | (298) |
Purchases of property and equipment | (64) | (4,209) | (3,019) |
Proceeds from sale of trademarks | 4,356 | 500 | |
Proceeds from sale of equity securities | 458 | 5,757 | |
Proceeds from sale of discontinued operations | 165,928 | ||
Cash provided by (used in) investing activities from continuing operations | 166,186 | (92) | 2,940 |
Cash used in investing activities from discontinued operations | (44) | (80) | (77) |
Cash provided by (used in) investing activities | 166,142 | (172) | 2,863 |
Cash flows from financing activities | |||
Proceeds from long-term debt | 9,000 | 107,607 | 10,000 |
Stock registration costs | (20) | ||
Payment of long-term debt | (175,661) | (117,456) | (28,300) |
Guaranteed payments in connection with acquisitions | (475) | (1,375) | |
Deferred financing costs | (4,507) | (14,590) | |
Repurchases of common stock | (272) | (2,427) | (1,161) |
Noncontrolling interest distributions | (5,366) | (6,682) | (7,438) |
Cash used in financing activities from continuing operations | (176,806) | (34,023) | (28,294) |
Cash used in financing activities from discontinued operations | (574) | (3,000) | (3,000) |
Cash used in financing activities | (177,380) | (37,023) | (31,294) |
Net decrease in cash and restricted cash | (7,831) | (4,295) | (221) |
Balance — Beginning of year | 16,138 | 20,433 | 20,654 |
Balance — End of year | 8,307 | 16,138 | 20,433 |
Reconciliation to amounts on consolidated balance sheets | |||
Total cash and restricted cash | 8,307 | 16,138 | 20,433 |
Supplemental disclosures of cash flow information | |||
Cash paid for: Interest | 52,747 | 58,681 | 55,755 |
Cash paid for: Taxes | 1,102 | 90 | 163 |
Non-cash investing and financing activities | |||
Accrued purchases of property and equipment at year end | 18 | 152 | |
Unrealized gain on equity securities during the year | 1,554 | ||
Unrealized (loss) gain on interest rate cap, net during the year | $ (80) | $ 224 | |
Unrealized loss on interest rate swaps, net during the year | $ (2,542) |
ORGANIZATION AND NATURE OF OPER
ORGANIZATION AND NATURE OF OPERATIONS | 12 Months Ended |
Dec. 31, 2019 | |
Organization and Nature of Operations [Abstract] | |
ORGANIZATION AND NATURE OF OPERATIONS | NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS Overview Sequential Brands Group, Inc. (the “Company”) owns a portfolio of consumer brands in the active and lifestyle categories. The Company aims to maximize the strategic value of its brands by promoting, marketing and licensing its global brands through various distribution channels, including to retailers, wholesalers and distributors in the United States and in certain international territories. The Company’s core strategy is to enhance and monetize the global reach of its existing brands, and to pursue additional strategic acquisitions to grow the scope of and diversify its portfolio of brands. The Company licenses brands to both wholesale and direct-to-retail licensees. In a wholesale license, a wholesale supplier is granted rights (typically on an exclusive basis) to a single or small group of related product categories for a particular brand for sale to multiple accounts within an approved channel of distribution and territory. In a direct-to-retail license, a single retailer is granted the right (typically on an exclusive basis) to sell branded products in a broad range of product categories through its brick and mortar stores and e-commerce sites. As of December 31, 2019, the Company had approximately one hundred licensees, with wholesale licensees comprising a significant majority. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2019 | |
Summary of Significant Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reclassification of Prior Year Presentation On June 10, 2019, the Company completed the sale of Martha Stewart Living Omnimedia, Inc. (“MSLO”), a Delaware corporation and a wholly-owned subsidiary of the Company, for $166 million in cash consideration, plus additional amounts in respect of pre-closing accounts receivable that are received after the closing, subject to certain adjustments, pursuant to an equity purchase agreement (the “Purchase Agreement”) with Marquee Brands LLC (the “Buyer”) entered into on April 16, 2019. In addition, the Purchase Agreement provides for an earnout of up to $40,000,000 payable to the Company if certain performance targets are achieved during the three calendar years ending December 31, 2020, December 31, 2021 and December 31, 2022. MSLO and its subsidiaries were engaged in the business of promoting, marketing and licensing the Martha Stewart and the Emeril Lagasse brands through various distribution channels. Due to the sale of MSLO during the second quarter of 2019 (see Note 4), in accordance with Accounting Standards Codification (“ASC”) 205, Discontinued Operations , we have classified the results of MSLO as discontinued operations in our consolidated statements of operations and cash flows for all periods presented. Additionally, the related assets and liabilities directly associated with MSLO are classified as held for disposition from discontinued operations in our consolidated balance sheets for all periods presented. All amounts included in the notes to the consolidated financial statements relate to continuing operations unless otherwise noted. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries. All significant inter-company accounts and transactions have been eliminated in the consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, actual results could differ significantly from estimates. Discontinued Operations The Company accounted for the sale of MSLO in accordance with ASC 360, Accounting for Impairment or Disposal of Long-Lived Assets (“ASC 360”) and Accounting Standard Update (“ASU”) No. 2014-08, Reporting of Discontinued Operations and Disclosures of Disposals of Components of an Entity (“ASU 2014-08”). The Company followed the held-for-sale criteria as defined in ASC 360. ASC 360 requires that a component of an entity that has been disposed of or is classified as held for sale and has operations and cash flows that can be clearly distinguished from the rest of the entity be reported as assets held for sale and discontinued operations. In the period a component of an entity has been disposed of or classified as held for sale, the results of operations for the periods presented are reclassified into separate line items in the statements of operations. Assets and liabilities are also reclassified into separate line items on the related balance sheets for the periods presented. The statements of cash flows for the periods presented are also reclassified to reflect the results of discontinued operations as separate line items. ASU 2014-08 requires that only a disposal of a component of an entity, or a group of components of an entity, that represents a strategic shift that has, or will have, a major effect on the reporting entity’s operations and financial results be reported in the financial statements as discontinued operations. ASU 2014-08 also provides guidance on the financial statement presentations and disclosures of discontinued operations. Revenue Recognition The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”), which became effective for the Company as of January 1, 2018 (see Note 5 for impact of adoption and other related disclosures). ASC 606 requires a five-step approach to determine the appropriate method of revenue recognition for each contractual arrangement: Step 1: Identify the Contract(s) with a Customer Step 2: Identify the Performance Obligation(s) in the Contract Step 3: Determine the Transaction Price Step 4: Allocate the Transaction Price to the Performance Obligation(s) in the Contract Step 5: Recognize Revenue when (or as) the Entity Satisfies a Performance Obligation The Company has entered into various license agreements for its owned trademarks. Under ASC 606, the Company’s agreements are generally considered symbolic licenses, which contain the characteristics of a right-to-access license since the customer is simultaneously receiving the intellectual property (“IP”) and benefiting from it throughout the license period. The Company assesses each license agreement at inception and determines the performance obligation(s) and appropriate revenue recognition method. As part of this process, the Company applies judgments based on historical trends when estimating future revenues and the period over which to recognize revenue. The Company generally recognizes revenue for license agreements under the following methods: 1. Licenses with guaranteed minimum royalties (“GMRs”) : Generally, guaranteed minimum royalty payments (fixed revenue) comprising the transaction price are recognized on a straight-line basis over the term of the contract, as defined in each license agreement. 2. Licenses with both GMRs (fixed revenue) and earned royalties (variable revenue) : Earned royalties in excess of fixed revenue are only recognized when the Company is reasonably certain that the guaranteed minimum payments for the period, as defined in each license agreement, will be exceeded. Additionally, the Company has categorized certain contracts as variable when there is a history and future expectation of exceeding GMRs. The Company recognizes income for these contracts during the period corresponding to the licensee’s sales. 3. Licenses that are sales-based only or earned royalties : Earned royalties (variable revenue) are recognized as income during the period corresponding to the licensee’s sales. Payments received as consideration for the grant of a license or advanced royalty payments are recorded as deferred revenue at the time payment is received and recognized into revenue under the methods described above. Contract assets represent unbilled receivables and are presented within accounts receivable, net on the consolidated balance sheets. Contract liabilities represent unearned revenues and are presented within the current portion of deferred revenue on the consolidated balance sheets. The Company disaggregates its revenue into two categories: licensing agreements and other, which is comprised of revenue from sources such as sales commissions and vendor placement commissions. Commission revenues and vendor placement commission revenues are recorded in the period the commission is earned. Restricted Cash Restricted cash at December 31, 2019 consists of cash deposited with a financial institution required as collateral for the Company’s cash-collateralized letter of credit facilities. Accounts Receivable Accounts receivable are recorded net of allowances for doubtful accounts, based on the Company’s ongoing discussions with its licensees and other customers and its evaluation of their creditworthiness, payment history and account aging. Accounts receivable balances deemed to be uncollectible are charged to the allowance for doubtful accounts after all means of collection have been exhausted and the potential for recovery is considered remote. The allowance for doubtful accounts was $5.8 million and $1.8 million at December 31, 2019 and 2018, respectively. On June 10, 2019, the Company completed the sale of MSLO. As a result, accounts receivable, net, decreased $16.6 million which was recorded within current assets from discontinued operations as of December 31, 2018. The Company’s accounts receivable, net amounted to $39.5 million and $49.6 million as of December 31, 2019 and 2018, respectively. Two licensees accounted for approximately 51% (33% and 18%) of the Company’s total consolidated accounts receivable, net balance as of December 31, 2019 and two licensees accounted for approximately 41% (25% and 16%) of the Company’s total consolidated accounts receivable, net balance as of December 31, 2018. The Company does not believe the accounts receivable balances from these licensees represents a significant collection risk based on past collection experience. Investments The Company accounts for equity securities under ASC 321, Investments – Equity Securities (“ASC 321”). Such securities are reported at fair value in the consolidated balance sheets and, at the time of purchase, are reported in the consolidated statements of cash flows as an investing activity. Gains and losses on equity securities are recognized through net loss. The Company recognized a loss on its equity securities for $0.1 million and $0.9 million recorded in other expense on the consolidated statements of operations for the years ended December 31, 2019 and 2018, respectively. Prior to adoption of ASC 321 in 2018, the Company accounted for its equity securities under ASC 320, Investments – Debt and Equity Securities . During the second quarter of 2017, the Company sold equity securities for $5.8 million. The book cost basis of the equity securities was approximately $7.7 million, which was determined using the specific identification method. The sale resulted in a net realized loss of $1.9 million, which is recorded in other expense in the consolidated statement of operations for the year ended December 31, 2017. The Company did not hold these equity securities as of December 31, 2017. Equity Method Investment For investments in entities over which the Company exercises significant influence but which do not meet the requirements for consolidation, the Company uses the equity method of accounting. On July 1, 2016, the Company acquired a 49.9% noncontrolling interest in Gaiam Pty. Ltd. in connection with its acquisition of Gaiam Brand Holdco, LLC. The value of the Company’s equity method investment was $0.6 million and $0.7 million as of December 31, 2019 and 2018, respectively, and is included in other assets in the consolidated balance sheets. The Company’s share of earnings from its equity method investee, which was not material for the years ended December 31, 2019, 2018 and 2017, is included in other expense in the consolidated statements of operations. The Company evaluates its equity method investment for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investment may not be recoverable. The difference between the carrying value of the equity method investment and its estimated fair value is recognized as an impairment charge when the loss in value is deemed other-than-temporary. Goodwill and Intangible Assets Goodwill represents the excess of purchase price over the fair value of net assets acquired in business combinations accounted for under the purchase method of accounting. The Company does not have any goodwill reported on its consolidated balance sheets at December 31, 2019 or 2018. On an annual basis and as needed, the Company tests goodwill and indefinite lived trademarks for impairment through the use of discounted cash flow models. Assumptions used in our discounted cash flow models are as follows: (i) discount rates; (ii) projected annual revenue growth rates; and (iii) projected long-term growth rates. Our estimates also factor in economic conditions and expectations of management, which may change in the future based on period-specific facts and circumstances. Other intangibles with determinable lives, including certain trademarks, customer agreements, patents and a favorable lease, are evaluated for the possibility of impairment when certain indicators are present, and are otherwise amortized on a straight-line basis over the estimated useful lives of the assets (currently ranging from 2 to 15 years). On June 10, 2019, the Company completed the sale of MSLO. As a result, indefinite-lived intangible assets decreased by $330.1 million which was recorded within assets from discontinued operations as of December 31, 2018. During the first quarter of 2019, the Company recorded non-cash impairment charges of $161. 2 million for indefinite-lived intangible assets related to the Martha Stewart and Emeril Lagasse trademarks. The impairments arose as a result of the sale process for the Martha Stewart and Emeril Lagasse brands (as discussed in Note 4) due to the difference in the fair value as indicated by the sales price as compared to the carrying values of the intangible assets included in the transaction. The sale of the Martha Stewart and Emeril Lagasse brands was approved by the Board of Directors on April 15, 2019, to allow the Company to achieve one of its top priorities in significantly reducing its debt. Going forward the Company’s strategy is to focus on higher margin brands that are well suited for growing health, wellness and beauty categories. These charges are included in discontinued operations in the consolidated statements of operations. During the year ended December 31, 2019, the Company recorded non-cash impairment charges of $33.1 million consisting of $28.5 million related to the Jessica Simpson trademark and $4.6 million related to the Joe’s trademark. During the year ended December 31, 2018, the Company recorded non-cash impairment charges of $17.9 million for indefinite-lived intangible assets related to the trademarks of two of the Company’s non-core brands: Ellen Tracy and Caribbean Joe . The impairments arose due to reduced growth expectations and the impact of licensee transitions for these brands. Fair value for each trademark was determined based on the income approach using estimates of future discounted cash flows. Due to the identification of impairment indicators during the quarter ended September 30, 2017, the Company performed impairment testing of its goodwill and indefinite-lived assets at September 30, 2017, which replaced its October 1 st annual test. As a result of its testing, the Company recorded a non-cash impairment charge of $36.5 million relating to its indefinite-lived intangible assets during the quarter ended September 30, 2017. Due to the identification of impairment indicators during the quarter ended December 31, 2017, the Company performed impairment testing of its goodwill and indefinite-lived assets at December 31, 2017. As a result of its testing, the Company recorded a non-cash goodwill impairment charge of $304.1 million during the quarter ended December 31, 2017. See Notes 3, 7 and 8 for further details. Property and Equipment Property and equipment are stated at cost, less accumulated depreciation and amortization. Maintenance and repairs are charged to expense as incurred. Upon retirement or other disposition of property and equipment, applicable cost and accumulated depreciation and amortization are removed from the accounts and any gains or losses are included in results of operations. Depreciation and amortization of property and equipment is computed using the straight-line method based on estimated useful lives of the assets as follows: Furniture and fixtures 5 years Computer hardware/equipment 5 to 7 years Leasehold improvements Term of the lease or the estimated life of the related improvements, whichever is shorter. Computer software 5 years Automobiles and trucks 5 years Websites 3 years Deferred Financing Costs Deferred financing costs represent lender fees, legal and other third-party costs incurred in connection with issuing debt securities or obtaining debt or other credit arrangements. Deferred financing costs are recorded as a deduction of the carrying value of debt and are amortized as interest expense, using the effective interest method, over the term of the related debt. Debt discounts are amortized to interest expense over the term of the related debt. Treasury Stock Treasury stock is recorded at cost as a reduction of equity in the consolidated balance sheets. Preferred Stock Preferred stock subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value. The Company classifies conditionally redeemable preferred stock (if any), which includes preferred stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control, as temporary equity. At all other times, the Company classifies preferred stock as a component of equity. The Company’s preferred stock does not feature any redemption rights within the holders’ control or conditional redemption features not solely within its control as of December 31, 2019 and 2018. Accordingly, all issuances of preferred stock are presented as a component of equity. The Company did not have any preferred stock outstanding as of December 31, 2019 and 2018. Common Stock Purchase Warrants and Derivative Financial Instruments The Company classifies as equity any contracts that (i) require physical settlement or net-share settlement or (ii) give the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies as assets or liabilities any contracts that (i) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the Company’s control) or (ii) gives the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). The Company assesses classification of its common stock purchase warrants and other freestanding derivatives, if any, at each reporting date to determine whether a change in classification between assets and liabilities is required. The Company determined that its outstanding common stock purchase warrants satisfied the criteria for classification as equity instruments at December 31, 2019 and 2018. Advertising Advertising costs related to media ads are charged to expense as of the first date the advertisements take place. Advertising costs related to campaign ads, such as production and talent, are expensed over the term of the related advertising campaign. Advertising expenses included in operating expenses from continuing operations approximated $12.0 million, $11.1 million and $5.3 million for the years ended December 31, 2019, 2018 and 2017, respectively. As of December 31, 2019 and 2018, the Company had no capitalized advertising costs recorded on the consolidated balance sheets. Stock-Based Compensation Compensation cost for restricted stock is measured using the quoted market price of the Company’s common stock at the date the common stock is granted. For restricted stock and restricted stock units, for which restrictions lapse with the passage of time (“time-based restricted stock”), compensation cost is recognized on a straight-line basis over the period between the issue date and the date that restrictions lapse. Time-based restricted stock is included in total shares of common stock outstanding upon the lapse of applicable restrictions. For restricted stock, for which restrictions are based on performance measures (“performance stock units” or “PSUs”), restrictions lapse when those performance measures have been deemed achieved. Compensation cost for PSUs is recognized on a straight-line basis during the period from the date on which the likelihood of the PSUs being earned is deemed probable and (x) the end of the fiscal year during which such PSUs are expected to vest or (y) the date on which awards of such PSUs may be approved by the compensation committee of the Company’s board of directors (the “Compensation Committee”) on a discretionary basis, as applicable. PSUs are included in total shares of common stock outstanding upon the lapse of applicable restrictions. PSUs are included in total diluted shares of common stock outstanding when the performance measures have been deemed achieved but the PSUs have not yet been issued. Fair value for stock options and warrants is calculated using the Black-Scholes valuation model and is expensed on a straight-line basis over the requisite service period of the grant. Compensation cost is reduced for forfeitures as they occur in accordance with ASU 2016‑09, Simplifying the Accounting for Share-Based Payments (“ASU 2016‑09”) . The Company adopted ASU No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”) as of January 1, 2019 on a modified retrospective basis. In accordance with ASU 2018-07, the Company recognizes compensation cost for grants to non-employees on a straight-line basis over the period of the grant. Prior periods have not been restated and were accounted for under the previous method where at each reporting period prior to the lapse of restrictions on warrants, time-based restricted stock and PSUs granted to non-employees, the Company remeasured the aggregate compensation cost of such grants using the Company’s fair value at the end of such reporting period and revised the straight-line recognition of compensation cost in line with such remeasured amount. Leases The Company has operating leases for certain properties for its offices and showrooms and for copiers. The Company adopted ASU No. 2016-02, Leases (“ASU 2016-02” or “ASC 842”) as of January 1, 2019 using the modified retrospective method as of the period of adoption. The Company elected the package of practical expedients upon transition where the Company did not reassess the lease classification and initial direct costs for leases that existed prior to adoption. Additionally, the Company did not reassess contracts entered into prior to adoption to determine whether the arrangement was or contained a lease. In accordance with ASU 2016-02, for leases over twelve months the Company records a right-of-use asset and a lease liability representing the present value of future lease payments. Rent expense is recognized on a straight-line basis over the term of the lease. The Company will test its right-of-use (“ROU”) assets for impairment in accordance with ASC 360. See Note 11 for further information. Income Taxes Current income taxes are based on the respective periods’ taxable income for federal, foreign and state income tax reporting purposes. Deferred tax liabilities and assets are determined based on the difference between the financial statement and income tax bases of assets and liabilities, using statutory tax rates in effect for the year in which the differences are expected to reverse. In accordance with ASU No. 2015‑17, Balance Sheet Classification of Deferred Taxes , all deferred income taxes are reported and classified as non-current. A valuation allowance is required if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company applies the FASB guidance on accounting for uncertainty in income taxes. The guidance clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with other authoritative GAAP and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The guidance also addresses derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. During the years ended December 31, 2019 and 2018, the Company did not have any reserves or interest and penalties to record through current income tax expense in accordance with ASC 740, Income Taxes (“ASC 740”). Interest and penalties related to uncertain tax positions, if any, are recorded in income tax expense. Tax years that remain open for assessment for federal and state tax purposes include the years ended December 31, 2016 through December 31, 2019. Earnings Per Share Basic loss per share (“EPS”) attributable to Sequential Brands Group, Inc. and Subsidiaries is computed by dividing net loss attributable to Sequential Brands Group, Inc. and Subsidiaries by the weighted-average number of common shares outstanding during the reporting period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to all potentially dilutive common shares outstanding during the reporting period, including stock options, PSUs and warrants, using the treasury stock method, and convertible debt, using the if-converted method. Diluted EPS excludes all potentially dilutive shares of common stock if their effect is anti-dilutive. In periods when there is a net loss, diluted loss per share is equal to basic loss per share, since the effect of including any common stock equivalents would be anti-dilutive. Basic weighted-average common shares outstanding is equivalent to diluted weighted-average common shares outstanding for the years ended December 31, 2019, 2018 and 2017 for the calculation of basic loss per share attributable to Sequential Brands Group, Inc. and Subsidiaries. The computation of diluted EPS attributable to Sequential Brands Group, Inc. and Subsidiaries for the years ended December 31, 2019, 2018 and 2017 excludes the common stock equivalents of the following potentially dilutive securities because their inclusion would be anti-dilutive: Year Ended December 31, 2019 2018 2017 Unvested restricted stock 475,387 1,233,703 166,607 Performance based restricted stock — 58,275 65,087 Total 475,387 1,291,978 231,694 The weighted-average common shares outstanding used to calculate diluted EPS from discontinued operations for the years ended December 31, 2019, 2018 and 2017 are 64,760,823, 64,992,059 and 63,093,437, respectively. Concentration of Credit Risk Financial instruments which potentially expose the Company to credit risk consist primarily of cash, restricted cash, accounts receivable and equity securities. Cash is held to meet working capital needs and future acquisitions. Restricted cash is pledged as collateral for a comparable amount of irrevocable standby letters of credit for certain of the Company’s leased properties. Substantially all of the Company’s cash, restricted cash and equity securities are deposited with high quality financial institutions. At times, however, such cash, restricted cash and equity securities may be in deposit accounts that exceed the Federal Deposit Insurance Corporation insurance limit. The Company has not experienced any losses in such accounts as of December 31, 2019. Concentration of credit risk with respect to accounts receivable is minimal due to the collection history and the nature of the Company’s revenue arrangements. The Company performs periodic credit evaluations of its customers’ financial condition. The allowance for doubtful accounts is based upon the expected collectability of all accounts receivable. Customer Concentrations The Company recorded net revenues from continuing operations of $101.6 million, $127.3 million and $124.8 million during the years ended December 31, 2019, 2018 and 2017, respectively. During the year ended December 31, 2019, three licensees represented at least 10% of net revenue, accounting for 19%, 16% and 14% of the Company’s net revenue from continuing operations. During the year ended December 31, 2018, three licensees represented at least 10% of net revenue, each accounting for 18%, 12% and 11% of the Company’s net revenue from continuing operations. During the year ended December 31, 2017, three licensees represented at least 10% of net revenue, accounting for 15%, 14% and 14% of the Company’s net revenue from continuing operations. Loss Contingencies The Company recognizes contingent losses that are both probable and estimable. In this context, probable means circumstances under which events are likely to occur. The Company records legal costs pertaining to contingencies as incurred. Noncontrolling Interests Noncontrolling interest recorded for the year ended December 31, 2019 represents an income allocation to Elan Polo International, Inc., a member of DVS Footwear International, LLC (“DVS LLC”) and loss allocations to With You, Inc., a member of With You LLC (the partnership between the Company and Jessica Simpson) and JALP, LLC (“JALP”), a member of FUL IP Holdings, LLC (“FUL IP”). Noncontrolling interest recorded for the years ended December 31, 2018 and 2017 represents income allocations to DVS LLC, With You, Inc. and loss allocations to JALP. The following table sets forth the noncontrolling interest for the years ended December 31, 2019, 2018 and 2017: Year Ended December 31, 2019 2018 2017 (in thousands) With You LLC $ (6,230) $ 5,607 $ 5,816 DVS LLC 659 614 581 FUL IP (465) (715) (2,225) Net (loss) income attributable to noncontrolling interests $ (6,036) $ 5,506 $ 4,172 The following table sets forth the noncontrolling interest as of December 31, 2019 and 2018: DVS LLC FUL IP With You LLC Total (in thousands) Balance at January 1, 2018 $ 2,668 $ 2,186 $ 66,693 $ 71,547 Net income (loss) attributable to noncontrolling interests 614 (715) 5,607 5,506 Impact of adoption of ASC 606 - - 355 355 Distributions (581) (975) (5,126) (6,682) Balance at December 31, 2018 2,701 496 67,529 70,726 Net income (loss) attributable to noncontrolling interests 659 (465) (6,230) (6,036) Distributions (614) - (4,752) (5,366) Balance at December 31, 2019 $ 2,746 $ 31 $ 56,547 $ 59,324 During the year ended December 31, 2019, the Company wrote-off a receivable related to the previous sale of the FUL trademark. During the year ended December 31, 2018, the Company recorded a loss on sale of assets of $2.0 million related to the sale of the FUL trademark. Reportable Segment An operating segment, in part, is a component of an enterprise whose operating results are regularly reviewed by the chief operating decision maker (the “CODM”) to make decisions about resources to be allocated to the segment and assess its performance. Operating segments may be aggregated only to a limited extent. The Company’s CODM, the Chief Executive Officer, reviews financial information presented on a consolidated basis, accompanied by disaggregated information about revenues for purposes of making operating decisions and assessing financial performance. Accordingly, the Company has determined that it has a single operating and reportable segment. In addition, the Company has no foreign operations or any assets in foreign locations. The majority of the Company’s operations consist of a single revenue stream, which is the licensing of its trademark portfolio, with additional revenues derived from certain commissions. Recently Issued Accounting Standards ASU No. 2019-12, “Simplifying the Accounting for Income Taxes (Topic 740)” In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes (Topic 740) (“ASU 2019-12”), which simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740 related to intraperiod tax allocations, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities related to outside basis differences. The standard also simplifies GAAP for other areas of ASC 740 by clarifying and amending existing guidance related to accounting for franchise taxes and accounting for transactions that result in a step-up in the tax basis of goodwill. ASU 2019-12 is effective for annual and interim periods beginning after December 15, 2020, and early adoption is permitted. The Company does not expect the adoption of ASU 2019-12 to have a material impact on the Company’s consolidated financial statements. AS |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value of Financial Instruments [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | NOTE 3 – FAIR VALUE OF FINANCIAL INSTRUMENTS ASC 820‑10, Fair Value Measurements and Disclosures (“ASC 820‑10”), defines fair value, establishes a framework for measuring fair value in GAAP and provides for expanded disclosure about fair value measurements. ASC 820‑10 applies to all other accounting pronouncements that require or permit fair value measurements. The Company determines or calculates the fair value of financial instruments using quoted market prices in active markets when such information is available or using appropriate present value or other valuation techniques, such as discounted cash flow analyses, incorporating available market discount rate information for similar types of instruments while estimating for non-performance and liquidity risk. These techniques are significantly affected by the assumptions used, including the discount rate, credit spreads and estimates of future cash flows. Assets and liabilities typically recorded at fair value on a non-recurring basis to which ASC 820‑10 applies include: · non-financial assets and liabilities initially measured at fair value in an acquisition or business combination, and · long-lived assets measured at fair value due to an impairment assessment under ASC 360‑10‑15, Impairment or Disposal of Long-Lived Assets . This topic defines fair value 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 and establishes a three-level hierarchy, which encourages an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820‑10 requires that assets and liabilities recorded at fair value be classified and disclosed in one of the following three categories: · Level 1 - inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. · Level 2 - inputs utilize other-than-quoted prices that are observable, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs such as interest rates and yield curves that are observable at commonly quoted intervals. · Level 3 - inputs are unobservable and are typically based on the Company’s own assumptions, including situations where there is little, if any, market activity. Both observable and unobservable inputs may be used to determine the fair value of positions that are classified within the Level 3 classification. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the Company classifies such financial assets or liabilities based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. On June 10, 2019, the Company completed the sale of MSLO. As a result, indefinite-lived intangible assets decreased by $330.1 million which was recorded within assets from discontinued operations as of December 31, 2018. During the first quarter of 2019, the Company had recorded non-cash impairment charges of $161.2 million for these indefinite-lived intangible assets related to the Martha Stewart and Emeril Lagasse trademarks. The impairments arose during the sale process for the Martha Stewart and Emeril Lagasse brands (as discussed in Notes 4 and 7) due to the difference in the fair value as indicated by the sales price as compared to the carrying values of the intangible assets included in the transaction. The sale of the Martha Stewart and Emeril Lagasse brands was approved by the Board of Directors during the second quarter of 2019, to allow the Company to achieve one of its top priorities in significantly reducing its debt. Going forward the Company’s strategy is to focus on higher margin brands that are well suited for growing health, wellness and beauty categories. During the year ended December 31, 2019, the Company recorded non-cash impairment charges of $33.1 million consisting of $28.5 million related to the Jessica Simpson trademark and $4.6 million related to the Joe’s trademark. The impairments arose due to reduced growth expectations and the impact of licensee transitions for these brands. Fair value for each trademark was determined based on the income approach using estimates of future discounted cash flows, a Level 3 measurement within the fair value hierarchy. The following table shows the change in indefinite-lived intangible assets for the year ended December 31, 2019 (in thousands): Balance at January 1, 2019 $ 624,985 Additions 82 Impairment charges (33,109) Balance at December 31, 2019 $ 591,958 During the year ended December 31, 2018, the Company recorded non-cash impairment charges of $17.9 million for indefinite-lived intangible assets related to the trademarks of two of the Company’s brands: Ellen Tracy and Caribbean Joe. The impairments arose due to reduced growth expectations and the impact of licensee transitions for these brands. Fair value for each trademark was determined based on the income approach using estimates of future discounted cash flows, a Level 3 measurement within the fair value hierarchy. The Company determined that certain trademarks which had been impaired during the year ended December 31, 2018 should no longer be classified as indefinite-lived intangible assets. The Company recorded $0.3 million in amortization during the year ended December 31, 2018 related to these trademarks. The following table shows the change in indefinite-lived intangible assets for the year ended December 31, 2018 (in thousands): Balance at January 1, 2018 $ 660,789 Additions 216 Impairment charges (17,899) Reclassified to finite-lived intangible assets (6,951) Sale of trademarks (11,170) Ending balance at December 31, 2018 $ 624,985 During the year ended December 31, 2017, the Company recorded non-cash impairment charges of $36.5 million for indefinite-lived intangible assets related to the trademarks of five of the Company’s brands: Caribbean Joe , Revo , Franklin Mint , Nevados , and FUL . Fair value for each trademark was determined based on the income approach using estimates of future discounted cash flows, a Level 3 measure within the fair value hierarchy. The impairments arose due to reduced contractual minimums or reduced sales forecasts in key distribution channels for these brands. When an intangible asset’s useful life is no longer considered to be indefinite, it must be amortized over the remaining period that it is expected to contribute to cash flows. The Company determined that certain trademarks which had been impaired during the year ended December 31, 2017 should no longer be classified as indefinite-lived intangible assets. The Company recorded less than $0.1 million in amortization during the year ended December 31, 2017 related to these trademarks. During the year ended December 31, 2017, the Company recorded a non-cash goodwill impairment charge of $304.1 million. The quantitative evaluation of goodwill impairment included an assessment of fair value under the income approach using estimates of future discounted cash flows, a Level 3 measure within the fair value hierarchy. See Note 8 for further details. As of December 31, 2019 and 2018, there were no assets or liabilities that are required to be measured at fair value on a recurring basis, except for the Company’s equity securities (see Note 2) and interest rate swaps (see Note 9). There was no change to fair value level hierarchy classification for the years ended December 31, 2019 and 2018. The following table sets forth the carrying value and the fair value of the Company’s financial assets and liabilities required to be disclosed at December 31, 2019 and 2018: Carrying Value Fair Value Financial Instrument Level 12/31/2019 12/31/2018 12/31/2019 12/31/2018 (in thousands) Equity securities 1 $ 47 $ 627 $ 47 $ 627 Interest rate swaps - liability 2 $ 6,514 $ 2,019 $ 6,514 $ 2,019 Term loans 2 $ 453,831 $ 519,850 $ 451,483 $ 515,742 Revolving loan 2 $ 14,358 $ 115,000 $ 14,323 $ 114,827 The carrying amounts of the Company’s cash, restricted cash, accounts receivable and accounts payable approximate fair value due to their short-term maturities. On December 10, 2018, the Company entered into interest rate swap agreements related to its term loans (the “2018 Swap Agreements”) with certain financial institutions. The Company recorded its interest rates swaps in accrued expense and other long-term liabilities on the consolidated balance sheets at fair value using Level 2 inputs. The 2018 Swap Agreements have a $300 million notional value and $150 million matures on December 31, 2021 and $150 million matures on January 4, 2022. The Company’s risk management objective and strategy with respect to the 2018 Swap Agreements is to reduce its exposure to variability in cash flows on a portion of the Company’s floating-rate debt. The 2018 Swap Agreements protect the Company from increases in changes in its cash flows attributable to changes in a contractually specified interest rate on an amount of borrowing equal to the then outstanding swap notional. The Company will periodically assess the effectiveness of the hedge (both prospective and retrospective) by performing a single regression analysis that was prepared at the inception of the hedging relationship. To the extent the hedging relationship is highly effective, the gain or loss on the swap will be recorded in accumulated other comprehensive loss and reclassified into interest expense in the same period during which the hedged transactions affect earnings. During the year ended December 31, 2019, the Company determined that a portion of one of the hedges was no longer effective due to the repayment of certain debt with the proceeds from the sale of MSLO (see Note 9). As a result, in accordance with ASC 815-30-40-6A, the Company de-designated it as a cash flow hedge and reclassified a loss of $0.4 million from other comprehensive loss to other expense in the consolidated statement of operations. Changes in the fair value of the de-designated interest rate swap after the de-designation date are being recognized through continuing operations. The Company recorded a loss of $0.6 million in other expense from continuing operations in the consolidated statements of operations for the year ended December 31, 2019. The components of the 2018 Swap Agreements as of December 31, 2019 are as follows: Notional Value Derivative Asset Derivative Liability (in thousands) LIBOR based loans $ 300,000 $ — $ 6,514 For purposes of this fair value disclosure, the Company based its fair value estimate for the Term Loans and Revolving Loan (each, as defined in Note 9) on its internal valuation whereby the Company applied the discounted cash flow method to its expected cash flow payments due under the loan agreements based on interest rates as of December 31, 2019 and 2018 for debt with similar risk characteristics and maturities. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 12 Months Ended |
Dec. 31, 2019 | |
Discontinued Operations [Abstract] | |
DISCONTINUED OPERATIONS | NOTE 4 – DISCONTINUED OPERATIONS On June 10, 2019, the Company completed the sale of MSLO, a Delaware corporation and a wholly-owned subsidiary of the Company, for $166 million in cash consideration, plus additional amounts in respect of pre-closing accounts receivable that are received after the closing, subject to certain adjustments, pursuant to the Purchase Agreement with the Buyer entered into on April 16, 2019. In addition, the Purchase Agreement provides for an earnout of up to $40,000,000 payable to the Company if certain performance targets are achieved during the three calendar years ending December 31, 2020, December 31, 2021 and December 31, 2022. MSLO and its subsidiaries were engaged in the business of promoting, marketing and licensing the Martha Stewart and the Emeril Lagasse brands through various distribution channels. The Company recorded a pre-tax loss of $4.3 million on the sale of MSLO during the year ended December 31, 2019 which is recorded in discontinued operations in the consolidated statements of operations. During the first quarter of 2019, the Company recorded non-cash impairment charges of $161.2 million for indefinite-lived intangible assets related to the Martha Stewart and Emeril Lagasse trademarks. The impairments arose during the sale process for the Martha Stewart and Emeril Lagasse brands due to the difference in the fair value as indicated by the sales price as compared to the carrying values of the intangible assets included in the transaction. The sale of the Martha Stewart and Emeril Lagasse brands was approved by the Board of Directors on April 15, 2019, to allow the Company to achieve one of its top priorities in significantly reducing its debt. Going forward the Company’s strategy is to focus on higher margin brands that are well suited for growing health, wellness and beauty categories. These charges are included in discontinued operations in the consolidated statements of operations. The Company recorded a net loss from discontinued operations of $125.0 million for the year ended December 31, 2019. The financial results of MSLO through December 31, 2019 are presented as (loss) income from discontinued operations, net of income taxes in the consolidated statements of operations. The following table presents the discontinued operations in the consolidated statements of operations: Year Ended December 31, 2019 2018 2017 Net revenue $ 18,771 $ 42,665 $ 42,684 Operating expenses 16,481 27,544 25,691 Impairment charges 161,224 - - Loss on sale of MSLO 4,273 - - (Loss) income from operations (163,207) 15,121 16,993 Other expense (income) 485 - (401) Interest expense 3,570 6,888 891 (Loss) income from discontinued operations before income taxes (167,262) 8,233 16,503 (Benefit from) provision for income taxes (42,199) 1,249 (88,112) (Loss) income from discontinued operations $ (125,063) $ 6,984 $ 104,615 The Company used cash proceeds from the MSLO sale to make mandatory prepayments of $109.6 million on the Revolving Credit Facility and voluntary prepayments of $44.4 million on its Tranche A-1 Term Loans (see Note 9) . In accordance with ASC 205-20-45-6, Presentation of Financial Statements – Discontinued Operations , the Company has allocated interest expense of $3.6 million and $6.9 million for the years ended December 31, 2019 and 2018, respectively, related to the portion of debt that was required to be paid as part of the transaction and accretion on certain MSLO legacy and guaranteed payments. No interest expense, except for the accretion on certain MSLO legacy and guaranteed payments of $0.9 million, was allocated for the year ended December 31, 2017. During the year ended December 31, 2019, the Company recorded $6.0 million in transaction costs directly related to the sale of MSLO which are recorded in discontinued operations in the consolidated statements of operations. The following table presents the assets and liabilities from discontinued operations as of December 31, 2019 and December 31, 2018: December 31, 2019 2018 Carrying amount of assets included as part of discontinued operations: Current Assets: Accounts receivable, net $ - $ 16,602 Prepaid expenses and other current assets 6,839 7,243 Total current assets from discontinued operations 6,839 23,845 Property and equipment, net - 580 Intangible assets, net - 330,084 Total assets from discontinued operations $ 6,839 $ 354,509 Carrying amount of liabilities included as part of discontinued operations: Current Liabilities: Accounts payable and accrued expenses $ 1,959 $ 11,927 Current portion of deferred revenue - 3,523 Total current liabilities from discontinued operations 1,959 15,450 Deferred income taxes - - Other long-term liabilities - 3,629 Total liabilities from discontinued operations $ 1,959 $ 19,079 The prepaid expenses and other current assets at December 31, 2019 consists of a $6.8 million receivable due to the Company from the Buyer in accordance with the terms of the Purchase Agreement. The following table presents the cash flow from discontinued operations for the years ended December 31, 2019, 2018 and 2017: Year Ended December 31, 2019 2018 2017 (in thousands) Cash provided by discontinued operating activities $ 40,321 $ 9,365 $ 111,315 Cash used in discontinued investing activities $ (44) $ (80) (77) Cash used in discontinued financing activities $ (574) $ (3,000) (3,000) |
REVENUE
REVENUE | 12 Months Ended |
Dec. 31, 2019 | |
Revenue [Abstract] | |
REVENUE | NOTE 5 – REVENUE The Company has entered into various license agreements that provide revenues in exchange for use of the Company’s IP. Licensing agreements are the Company’s primary source of revenue. The Company also derives revenue from other sources such as commissions and vendor placement commissions. Adoption On January 1, 2018, the Company adopted ASC 606 on a modified retrospective basis for all open contracts as of January 1, 2018. The core principle of ASC 606 is the recognition of revenue when a company transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled to in exchange for those goods or services. The new guidance defines a five-step approach to achieve this core principle and, in doing so, requires greater use of judgment and estimates and requires expanded disclosures related to the amounts of revenue recognized and judgements made. Under the modified retrospective basis, results for reporting periods beginning after January 1, 2018 are presented under ASC 606. In connection with the adoption of ASC 606 on January 1, 2018, the Company recorded a net increase of $1.1 million to the opening balance of retained earnings (a reduction of the accumulated deficit). Disaggregated Revenue The following table presents revenue disaggregated by source for the years ended December 31, 2019, 2018 and 2017: Year Ended December 31, 2019 2018 2017 (in thousands) Licensing agreements $ 101,161 $ 120,350 $ 123,948 Other 415 6,940 832 Total $ 101,576 $ 127,290 $ 124,780 Contract Balances Contract assets represent unbilled receivables and are presented within accounts receivable, net on the consolidated balance sheets. Contract liabilities represent unearned revenues and are presented within the current portion of deferred revenue on the consolidated balance sheets. The below table summarizes the Company’s contract assets and contract liabilities: December 31, December 31, 2019 2018 (in thousands) Contract assets $ 1,803 $ 2,484 Contract liabilities 3,040 4,923 On June 10, 2019, the Company completed the sale of MSLO, as a result contract assets decreased $0.7 million and contract liabilities decreased $0.1 million, and are recorded in current assets and liabilities from discontinued operations as of December 31, 2018. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. The Company has reviewed its various revenue streams for its existing contracts under the five-step approach. The Company has entered into various license agreements that provide revenues based on guaranteed minimum royalty payments with additional royalty revenues based on a percentage of defined sales. Guaranteed minimum royalty payments (fixed revenue) are recognized on a straight-line basis over the term of the contract, as defined in each license agreement. Earned royalties and earned royalties in excess of the fixed revenue (variable revenue) are recognized as income during the period corresponding to the licensee’s sales. Earned royalties in excess of fixed revenue are only recognized when the Company is reasonably certain that the guaranteed minimums payments for the period, as defined in each license agreement, will be exceeded. Licensing for trademarks is the Company’s largest revenue source. Under ASC 606, the Company’s agreements are generally considered symbolic licenses which contain the characteristics of a right-to-access license since the customer is simultaneously receiving the IP and benefiting from it throughout the license period. As such, the Company primarily records revenue from licenses on a straight-line basis over the license period as the performance obligation is satisfied over time. The Company applies its judgment based on historical trends when estimating future revenues and the period over which to recognize revenue when evaluating its licensing contracts. Deferred revenue will be recognized as the Company fulfills its performance obligations over periods of approximately one to five years. The below table summarizes amounts related to future performance obligations from continuing operations under fixed contractual arrangements as of December 31, 2019 and the periods in which they are expected to be earned and recognized as revenue: 2020 2021 2022 2023 2024 Thereafter (in thousands) Future Performance Obligations $ 43,535 $ 27,127 $ 6,778 $ 4,280 $ 36 $ - The Company does not disclose the amount attributable to unsatisfied or partially satisfied performance obligations for variable revenue contracts in accordance with the optional exemption allowed for under ASC 606. The Company has categorized certain contracts as variable when there is a history and future expectation of exceeding guaranteed minimum royalties. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 6 – PROPERTY AND EQUIPMENT Property and equipment is summarized as follows: December 31, 2019 2018 (in thousands) Furniture and fixtures $ 5,114 $ 5,114 Computer hardware/equipment 277 524 Leasehold improvements 6,162 6,154 Computer software 570 715 Websites 169 304 Property and equipment 12,292 12,811 Less accumulated depreciation and amortization (6,943) (4,420) Property and equipment, net $ 5,349 $ 8,391 In June 2019, the Company completed the sale of MSLO. As a result, property and equipment, net decreased by $0.6 million which was recorded within assets from discontinued operations as of December 31, 2018. There were no impairments of property and equipment recorded in the consolidated statements of operations for the years ended December 31, 2019, 2018 and 2017. The Company reviews the estimated lives of its fixed assets on an ongoing basis. The review indicated that the lives of certain leasehold improvements were shorter than the estimated useful lives used for depreciation purposes. As a result, effective December 1, 2019, the Company changed its estimates of the useful lives of the leasehold improvements to better reflect the estimated periods during which the assets will remain in service. The remaining useful life is four months for these assets. The effect of the change was an increase of $1.5 million to depreciation and amortization expense from continuing operations for the year ended December 31, 2019. Depreciation and amortization expense from continuing operations amounted to $3.0 million, $1.7 million and $1.5 million for the years ended December 31, 2019, 2018 and 2017, respectively. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2019 | |
Intangible Assets [Abstract] | |
Intangible Assets | NOTE 7 – INTANGIBLE ASSETS Intangible assets are summarized as follows: Gross Useful Lives Carrying Accumulated Net Carrying December 31, 2019 (Years) Amount Amortization Amount (in thousands) Finite-lived intangible assets: Trademarks 5 - 15 $ 12,491 $ (4,515) $ 7,976 Customer agreements 4 2,200 (2,198) 2 Patents 10 95 (64) 31 $ 14,786 $ (6,777) 8,009 Indefinite-lived intangible assets: Trademarks 591,958 Intangible assets, net $ 599,967 Gross Useful Lives Carrying Accumulated Net Carrying December 31, 2018 (Years) Amount Amortization Amount (in thousands) Finite-lived intangible assets: Trademarks 5 - 15 $ 12,438 $ (2,689) $ 9,749 Customer agreements 4 2,200 (2,147) 53 Patents 10 361 (321) 40 $ 14,999 $ (5,157) 9,842 Indefinite-lived intangible assets: Trademarks 624,985 Intangible assets, net $ 634,827 Future annual estimated amortization expense is summarized as follows: Years Ended December 31, (in thousands) 2020 $ 1,839 2021 1,837 2022 1,814 2023 1,388 2024 326 Thereafter 805 $ 8,009 Amortization expense from continuing operations amounted to $1.9 million, $1.0 million and $0.8 million for the years ended December 31, 2019, 2018 and 2017, respectively. Finite-lived intangible assets represent certain trademarks, customer agreements and patents related to the Company’s brands. Finite-lived intangible assets are amortized on a straight-line basis over the estimated useful lives of the assets. The carrying value of finite-lived intangible assets and other long-lived assets is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Indefinite-lived intangible assets are not amortized, but instead are subject to impairment evaluation. As of December 31, 2019, the trademarks of Jessica Simpson , Avia , AND1 , Joe’s , GAIAM , Caribbean Joe , and Ellen Tracy have been determined to have an indefinite useful life, and accordingly, consistent with ASC Topic 350, no amortization has been recorded in the Company’s consolidated statements of operations. Instead, each of these intangible assets are tested for impairment annually and as needed on an individual basis as separate single units of accounting, with any related impairment charge recorded to the statement of operations at the time of determining such impairment. The annual evaluation of the Company’s indefinite-lived trademarks is performed as of October 1, the beginning of the Company’s fourth fiscal quarter. When conducting its impairment assessment of indefinite-lived intangible assets, the Company initially performs a qualitative evaluation of whether it is more likely than not that the asset is impaired. If it is determined by a qualitative evaluation that it is more likely than not that the asset is impaired, the Company then tests the asset for recoverability. The Company tests its indefinite-lived intangible assets for recovery in accordance with ASC‑820‑10‑55‑3D. When the income approach is used, fair value measurement reflects current market expectations about those future amounts. The income approach is based on the present value of future earnings expected to be generated by a business or asset. Income projections for a future period are discounted at a rate commensurate with the degree of risk associated with future proceeds. A residual or terminal value is also added to the present value of the income to quantify the value of the business beyond the projection period. As such, recoverability of assets to be held and used is measured by a comparison of the carrying amount of the asset to its expected future discounted net cash flows. If the carrying amount of such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the recoverability of the assets. Assumptions used in our estimates are as follows: (i) discount rates; (ii) projected annual revenue growth rates; and (iii) projected long-term growth rates. Our estimates also factor in economic conditions and expectations of management which may change in the future based on period-specific facts and circumstances. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. In June 2019, the Company completed the sale of MSLO. As a result, indefinite-lived intangible assets decreased by $330.1 million which was recorded within assets classified as held for disposition from discontinued operations as of December 31, 2018. During the first quarter of 2019, the Company recorded non-cash impairment charges of $161.2 million for indefinite-lived intangible assets related to the Martha Stewart and Emeril Lagasse trademarks reflected in discontinued operations on the consolidated statements of operations. The impairments arose during the sale process for the Martha Stewart and Emeril Lagasse brands (as discussed in Note 4) due to the difference in the fair value as indicated by the sales price as compared to the carrying values of the intangible assets included in the transaction. The sale of the Martha Stewart and Emeril Lagasse brands was approved by the Board of Directors during the second quarter of 2019, to allow the Company to achieve one of its top priorities in significantly reducing its debt. Going forward the Company’s strategy is to focus on higher margin brands that are well suited for growing health, wellness and beauty categories. During the year ended December 31, 2019, the Company recorded non-cash impairment charges of $33.1 million consisting of $28.5 million related to the Jessica Simpson trademark and $4.6 million related to the Joe’s trademark. During the year ended December 31, 2018, the Company recorded non-cash impairment charges of $17.9 million for indefinite-lived intangible assets related to the trademarks of two of the Company’s non-core brands: Ellen Tracy and Caribbean Joe . The impairments arose due to reduced growth expectations and the impact of licensee transitions for these brands. Fair value for each trademark was determined based on the income approach using estimates of future discounted cash flows. These charges are included in impairment charges in the consolidated statements of operations. Due to the identification of impairment indicators during the quarter ended September 30, 2017, the Company performed impairment testing of its goodwill and indefinite-lived assets at September 30, 2017, which replaced its October 1 st annual test. As a result of its testing, during the quarter ended September 30, 2017, the Company recorded a non-cash impairment charge of $36.5 million relating to its indefinite-lived intangible assets related to the trademarks of Caribbean Joe , Revo , Franklin Mint , Nevados, and FUL . The impairments arose due to reduced contractual minimums or reduced sales forecasts in key distribution channels for these brands. In addition, in connection with its goodwill impairment testing performed at December 31, 2017, the Company performed impairment testing of its indefinite-lived assets at December 31, 2017, noting no additional impairment of its indefinite-lived intangible assets. See Note 8 – Goodwill for further details. When an intangible asset’s useful life is no longer considered to be indefinite, it must be amortized over the remaining period that it is expected to contribute to cash flows. The Company determined that certain trademarks which had been impaired during the year ended December 31, 2017 should no longer be classified as indefinite-lived intangible assets. The Company recorded less than $0.1 million in amortization during the year ended December 31, 2017 related to these trademarks. During the year ended December 31, 2018, the Company sold both the Revo and FUL trademarks and incurred a loss on the sale of the assets of $7.1 million. |
GOODWILL
GOODWILL | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill [Abstract] | |
Goodwill | NOTE 8 – GOODWILL Goodwill was tested for impairment at the reporting unit level (the Company has determined that it has a single reporting unit) on an annual basis (October 1 st ) and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. As discussed below, during 2017, due to impairment indicators noted in between annual tests, the Company performed impairment testing at September 30, 2017, which replaced its October 1st annual test. In evaluating goodwill for impairment, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of its reporting unit is less than its carrying amount. Qualitative factors considered include, for example, macroeconomic and industry conditions, overall financial performance and other relevant entity-specific events. If the Company bypasses the qualitative assessment, or concludes that it is more likely than not that the fair value of its reporting unit is less than its carrying value, it then performs a quantitative impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment to be recognized, if any. If the carrying value of the reporting unit’s goodwill exceeds the implied fair value of the goodwill, an impairment loss is recognized in the amount of that excess, not to exceed the carrying amount of goodwill. Due to impairment indicators noted during the third quarter of 2017, specifically the impairment of certain tradenames due to reduced contractual minimums or reduced sales forecasts in key distribution channels, the Company , with the assistance of a third party valuation specialist, performed a quantitative assessment at September 30, 2017, which replaced its October 1 st annual test. Fair value for the quantitative assessment was determined under an income approach using estimates of discounted future cash flows. The income approach relies on assumptions such as the Company’s projected future earnings and appropriate discount rates. Significant assumptions used in the income approach were as follows: (i) discount rates; (ii) projected annual revenue growth rates; and (iii) projected long-term growth rates. The Company’s estimates also factor in economic conditions and expectations of management which may change in the future based on period-specific facts and circumstances. The Company corroborated the results of the income approach by reconciling to within a reasonable range of the Company’s market capitalization , (calculated as total common shares outstanding multiplied by the common equity price per share, as adjusted for a control premium factor). The control premium was estimated based upon control premiums observed in comparable market transactions. Reconciling items identified included the benefit of the Company’s fully reserved tax assets for which the market may not have been giving full value and depressed market multiples experienced by the entities within our brand licensing peer group. Based on the results of the quantitative assessment, the Company determined that goodwill was not impaired as of September 30, 2017. Due to additional impairment indicators noted during the fourth quarter of 2017, specifically a sharp and continued decline in its stock price and the related decline in its market capitalization, the Company determined that there was a fourth quarter impairment indicator and a quantitative impairment test was required to be performed at December 31, 2017. During the fourth quarter of 2017, the Company’s stock price and market capitalization declined approximately 41%, consistent with the decline in market capitalization of similar companies in the Company’s sector . The Company evaluated the fair value of its reporting unit under the income approach (in the same manner as noted above in its assessment at September 30, 2017), adjusting its assumptions to reflect additional market risk in the discount rate (from 10.25% to 11.25%), as well as adjusted future effective tax rates, noting that the fair value of its reporting unit indicated by the income approach at December 31, 2017 was no longer in excess of its carrying value. At December 31, 2017, after comparing the results of the income approach to the market capitalization approach, the Company noted it could no longer corroborate the results of the income approach by reconciling to within a reasonable range of the Company’s market capitalization, including an assumed control premium. As discussed above, the two primary differences between the market approach and income approach were determined to be the Company’s fully reserved tax assets, for which the market may not have been giving full value and depressed market multiples experienced by all entities within the brand licensing peer group. The reconciliation was significantly impacted by the decreased market capitalization, as well as the enactment in December 2017 of the Tax Cuts and Jobs Act, which reduced the aforementioned reconciling item for fully reserved tax assets. As such, the Company determined that the value indicated by the market capitalization approach, calculated using the December 31, 2017 closing stock price of $1.78 and an estimated control premium factor of 20%, was the most appropriate measure of the fair value of the Company as of December 31, 2017. Based on this analysis, the fair value of the Company’s single reporting unit was below its carrying value by an amount greater than the carrying value of goodwill, and the Company recorded an impairment charge of $304.1 million in the fourth quarter of 2017 to fully write off its goodwill. |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2019 | |
Long-Term Debt [Abstract] | |
Long-Term Debt | NOTE 9 – LONG-TERM DEBT The components of long-term debt are as follows: December 31, 2019 2018 (in thousands) Secured Term Loans $ 453,831 $ 519,850 Revolving Credit Facility 14,358 115,000 Unamortized deferred financing costs (22,189) (24,063) Total long-term debt, net of unamortized deferred financing costs 446,000 610,787 Less: current portion of long-term debt 12,750 28,300 Long-term debt $ 433,250 $ 582,487 Debt Facilities On December 30, 2019, the Company amended its Third Amended and Restated Credit Agreement (the “Amended BoA Credit Agreement”) with Bank of America, N.A., as administrative agent and collateral agent and the lenders party thereto (the “BoA Facility Loan Parties”) . The loans under the Amended BoA Credit Agreement will be subject to quarterly amortization payments of $2.5 million through September 30, 2020, $3.25 million through September 30, 2021 and $4 million for each fiscal quarter thereafter. The Amended BoA Credit Agreement modifies the calculation of Consolidated EBITDA (as defined in the agreement) by permitting additional addbacks and specifying the EBITDA amounts for the quarters ended September 30, 2018, December 31, 2018, March 31, 2019 and June 30, 2019. The Amended BoA Credit Agreement allows for the netting of up to $5 million in cash of the Company and its subsidiaries for purposes of calculating the leverage ratio covenant. The Company reduced the available commitments under the revolving facility to $80 million. During the year ended December 31, 2019, the Company incurred $1.3 million in lender fees associated with the amendment which was recorded in deferred financing costs in accordance with ASC 470, Debt and included in long-term debt, net of current portion in the consolidated balance sheet. These fees are being amortized using the effective interest rate method over the remainder of the term of the Amended BoA Credit Agreement. On August 12, 2019, the Company amended its Third Amended and Restated First Lien Credit Agreement (the “Amended FS/KKR Credit Agreement”) with Wilmington Trust, National Association, as administrative agent and collateral agent (the “FS/KKR Agent”) and the lenders party thereto (the “FS/KKR Facility Loan Parties”). Pursuant to the Amended FS/KKR Credit Agreement, no mandatory amortization payments are required until September 30, 2020. Thereafter, the loans under the Amended FS/KKR Credit Agreement will be subject to quarterly amortization payments of $1.0 million. Pursuant to the Amended FS/KKR Credit Agreement, no payment with proceeds of any consolidated excess cash flow will be required to be made prior to the fiscal year ending December 31, 2020. The Amended FS/KKR Credit Agreement modified the calculation of Consolidated EBITDA (as defined in the agreement) by permitting additional addbacks and specifying the EBITDA amounts for the quarters ended September 30, 2018, December 31, 2018, March 31, 2019 and June 30, 2019. The Amended FS/KKR Credit Agreement allows for the netting of up to $5 million in cash of the Company and its subsidiaries for purposes of calculating the leverage ratio covenant. The Company also agreed under the Amended FS/KKR Credit Agreement not to borrow more than $30 million under the Bank of America Revolving Credit Facility. During the year ended December 31, 2019, the Company incurred $3.3 million in lender fees associated with the amendment which was recorded in deferred financing costs in accordance with ASC 470, Debt and included in long-term debt, net of current portion in the consolidated balance sheet. These fees are being amortized using the effective interest rate method over the remainder of the term of the Amended FS/KKR Credit Agreement. On June 10, 2019, the Company completed the sale of MSLO. The Company used cash proceeds from the MSLO sale to make mandatory prepayments of $109.6 million of the Revolving Credit Facility and voluntary prepayments of $44.4 million on its Tranche A-1 Term Loans . The Company expensed $0.8 million of deferred financing costs during the year ended December 31, 2019, included in Interest expense, net in the consolidated statement of operations. On August 7, 2018, the Company and certain of its subsidiaries entered into the Amended BoA Credit Agreement with the BoA Facility Loan Parties and (ii) the Amended FS/KKR Credit Agreement with the FS/KKR Agent and the FS/KKR Facility Loan Parties. The Company used a portion of the proceeds of the $335.0 million loans made to the Company under the Amended BoA Credit Agreement to prepay loans under the FS/KKR Credit Agreement. During 2018, the Company incurred $14.6 million in lender and certain third-party fees associated with debt refinancing, which was recorded as deferred financing costs in accordance with ASC 470 – Debt and included in Long-term debt, net of current portion in the consolidated balance sheet at December 31, 2018. These fees are being amortized using the effective interest rate method over the terms of the Amended BoA Credit Agreement and Amended FS/KKR Credit Agreement. The Company expensed $0.1 million of deferred financing costs, included in Interest Expense, net in the consolidated statement of operations, as a result of a partial extinguishment of the BoA Credit Agreement in accordance with ASC 470 – Debt in connection with the Company’s entry into the Amended BoA Credit Agreement. The Amended BoA Credit Agreement provides for several five-year senior secured credit facilities, consisting of (i) Tranche A Term Loans in an aggregate principal amount of $150.0 million (the “Amended Tranche A Loans”), (ii) Tranche A-1 Term Loans in an aggregate principal amount of $70.0 million (the “Amended Tranche A-1 Loans” and, together with the Tranche A Loans, the “Amended BoA Term Loans”) and (iii) revolving credit commitments in the aggregate principal amount of $130.0 million (the “Amended Revolving Credit Commitments” and, the loans under the Revolving Credit Commitments, the “Amended Revolving Loans”). On the Closing Date, the total amount outstanding under the New Amended BoA Credit Agreement was $335.0 million, including (i) $150.0 million of Amended Tranche A Loans, (ii) $70.0 million of Amended Tranche A-1 Loans and (iii) $115.0 million of Amended Revolving Loans. The loans under the Amended BoA Credit Agreement bear interest, at the Company’s option, at a rate equal to (i) with respect to the Amended Revolving Loans and the Amended Tranche A Loans (a) the LIBOR rate plus 3.50% per annum or (b) the base rate plus 2.50% per annum and (ii) with respect to the Amended Tranche A-1 Loans (a) the LIBOR rate plus 7.00% per annum or (b) the base rate plus 6.00% per annum. The loans under the New Amended BoA Credit Agreement provide for interest rate reductions if certain leverage ratios are achieved, with minimum interest rates equal to (i) with respect to the Amended Revolving Loans and the Amended Tranche A Loans (a) the LIBOR rate plus 3.00% per annum or (b) the base rate plus 2.00% per annum and (ii) with respect to the Amended Tranche A-1 Loans (a) the LIBOR rate plus 6.00% per annum or (b) the base rate plus 5.00% per annum. The undrawn portions of the Revolving Credit Commitments are subject to a commitment fee of 0.375% per annum. The Company may make voluntary prepayments of the loans outstanding under the Amended BoA Credit Agreement, subject to the payment of customary “breakage” costs with respect to LIBOR-based borrowings and, in certain cases, to the prepayment premium set forth in the Amended BoA Credit Agreement. Additionally, the Company is mandated to make prepayments (without payment of a premium or penalty) under the Amended BoA Credit Agreement amounting to: (i) the loans outstanding under the Amended BoA Credit Agreement plus, (a) where intellectual property is disposed, 50.0% of the disposed intellectual property’s orderly liquidation value, and (b) where any other assets constituting collateral are disposed or upon the receipt of certain insurance proceeds, 100% of the net proceeds thereof, subject to certain reinvestment rights; and (ii) the Amended Tranche A-1 Loans to the extent that the outstanding principal amount thereof exceeds 15.0% of the orderly liquidation value of the registered trademarks owned by the BoA Facility Loan Parties. The loans under the Amended BoA Credit Agreement are subject to quarterly amortization payments of $2.5 million through September 30, 2020, $3.25 million through September 30, 2021 and $4 million for each fiscal quarter thereafter. The Amended BoA Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants applicable to the BoA Facility Loan Parties and their subsidiaries. Moreover, the Amended BoA Credit Agreement contains financial covenants that require the BoA Facility Loan Parties and their subsidiaries to (i) maintain a positive net income (as defined in the Amended BoA Credit Agreement) (ii) satisfy a maximum loan to value ratio initially set at 50.0% (applicable to the Amended Revolving Loans and Amended Tranche A Loans) decreasing over the term of the Amended BoA Credit Agreement until reaching a final maximum loan to value ratio of 42.5% and (iii) satisfy a maximum consolidated first lien leverage ratio, initially set at 3.875:1.00, decreasing over the term of the Amended BoA Credit Agreement until reaching a final maximum ratio of 2.875:1.00 for the fiscal quarter ending September 30, 2022 and thereafter. The Amended BoA Credit Agreement contains certain customary events of default, including a change of control. If an event of default occurs and is not cured within any applicable grace period or not waived, the Bank of America Agent, at the request of the lenders under the Amended BoA Credit Agreement, must take various actions, including, without limitation, the acceleration of all amounts due under the Amended BoA Credit Agreement. The Company may request an increase in (i) the Revolving Credit Facility and Tranche A Loans as would not cause the consolidated first lien leverage ratio, determined on a pro forma basis after giving effect to any such increase, to exceed 2.80:1.00 and (ii) the Tranche A-1 Loans, as would not cause the consolidated first lien leverage ratio, determined on a pro forma basis after giving effect to any such increase, to exceed (a) with respect to any increase, the proceeds of which will be used solely to finance an acquisition, 3.00:1.00 and (b) with respect to any other increase, 2.90:1.00, subject to the satisfaction of certain conditions in the Amended BoA Credit Agreement. At December 31, 2019, the Company is in compliance with the covenants included in the Amended BoA Credit Agreement. The Amended FS/KKR Credit Agreement provides for a five and a half-year $314.0 million senior secured term loan facility. The Company may request one or more additional term loan facilities or the increase of term loan commitments under the Amended FS/KKR Credit Agreement as would not have caused the consolidated total leverage ratio, determined on a pro forma basis after giving effect to any such addition and increase, to exceed 6.00:1.00, subject to the satisfaction of certain conditions in the Amended FS/KKR Credit Agreement. The loans under the Amended FS/KKR Credit Agreement bear interest, at the Company’s option, at a rate equal to either (i) the LIBOR rate plus 8.75% per annum or (ii) the base rate plus 7.75% per annum. The Company may make voluntary prepayments of the loans outstanding under the Amended FS/KKR Credit Agreement, subject to the payment of customary “breakage” costs with respect to LIBOR-based borrowings and, in certain cases, to the prepayment premium set forth in the Amended FS/KKR Credit Agreement. The Company is mandated to make prepayments (without payment of a premium or penalty) of loans outstanding under the Amended FS/KKR Credit Agreement amounting to: (i) where intellectual property was disposed, 50.0% of the disposed intellectual property’s orderly liquidation value, (ii) where any other asset constituting collateral is disposed or upon the receipt of certain insurance proceeds, 100% of the net proceeds thereof, subject to certain reinvestment rights, and (iii) any consolidated excess cash flow, in an amount equal to (a) in the event the consolidated total leverage ratio was at least 4.00:1.00, 75% thereof, (b) in the event the consolidated total leverage ratio was less than 4.00:1.00 but at least 3.00:1.00, 50% thereof and (c) in the event the consolidated total leverage ratio was less than 3.00:1.00, 0% thereof. N o mandatory amortization payments are required until September 30, 2020. Thereafter, the loans under the Amended FS/KKR Credit Agreement will be subject to quarterly amortization payments of $1.0 million. The Amended FS/KKR Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants applicable to the FS/KKR Facility Loan Parties and their subsidiaries. Moreover, the Amended FS/KKR Credit Agreement contains financial covenants that require the FS/KKR Facility Loan Parties and their subsidiaries to satisfy (i) a maximum consolidated total leverage ratio, initially set at 7.25:1.00, decreasing over the term of the Amended FS/KKR Credit Agreement until reaching a final maximum ratio of 6.25:1.00 for the fiscal quarter ending September 30, 2022 and thereafter and (ii) a maximum consolidated first lien leverage ratio, initially set at 3.875:1.00, decreasing over the term of the Amended FS/KKR Credit Agreement until reaching a final maximum ratio of 2.875:1.00 for the fiscal quarter ending September 30, 2022 and thereafter. At December 31, 2019, the Company is in compliance with the covenants included in the Amended FS/KKR Credit Agreement. The Amended FS/KKR Credit Agreement contains certain customary events of default, including a change of control. If an event of default occurs and is not cured within any applicable grace period or is not waived, the FS/KKR Agent, at the request of the lenders under the Amended FS/KKR Credit Agreement, is required to take various actions, including, without limitation, the acceleration of amounts due thereunder. The Company may request one or more additional term loan facilities or the increase of term loan commitments under the Amended FS/KKR Credit Agreement as would not have caused the consolidated total leverage ratio, determined on a pro forma basis after giving effect to any such addition and increase, to exceed 6.00:1.00, subject to the satisfaction of certain conditions in the Amended FS/KKR Credit Agreement. Interest Expense from Continuing Operations Interest expense, net during the year ended December 31, 2019 includes interest incurred under our loan agreements of $48.2 million, non-cash interest related to the amortization of deferred financing costs of $ 5.6 million, t he expensing of $0.8 million of deferred financing costs as a result of a partial extinguishment on the Revolving and Term loans in accordance with ASC 470 – Debt and non-cash interest income of $ 0.8 million related to the accretion of the present value of certain payment arrangements . Interest expense, net during the year ended December 31, 2018 includes interest incurred under our loan agreements of $50.9 million, non-cash interest related to the amortization of deferred financing costs of $ 4.5 million, t he expensing of $0.1 million of deferred financing costs as a result of a partial extinguishment of the BoA Credit Agreement in accordance with ASC 470 – Debt in connection with the Company’s entry into the Amended BoA Credit Agreement and non-cash interest income of $ 0.3 million related to the accretion of the present value of certain payment arrangements . Interest expense, net during the year ended December 31, 2017 includes interest incurred under our loan agreements of $55.1 million and non-cash interest related to the amortization of deferred financing costs of $3.9 million . Interest Rate Swaps On December 10, 2018, the Company entered into the 2018 Swap Agreements with certain financial institutions. The Company recorded its interest rate swaps in accrued expenses and other long-term liabilities on the consolidated balance sheets at fair value using Level 2 inputs. The 2018 Swap Agreements have a $300 million notional value, and $150 million matures on December 31, 2021 and $150 million matures on January 4, 2022. The Company’s risk management objective and strategy with respect to the 2018 Swap Agreements is to reduce its exposure to variability in cash flows on a portion of the Company’s floating-rate debt. The 2018 Swap Agreements protect the Company from changes in its cash flows attributable to changes in a contractually specified interest rate on an amount of borrowing equal to the then outstanding swap notional. The Company will periodically assess the effectiveness of the hedge (both prospective and retrospective) by performing a single regression analysis that was prepared at the inception of the hedging relationship. To the extent the hedging relationship is highly effective, the gain or loss on the swap will be recorded in accumulated other comprehensive loss and reclassified into interest expense in the same period during which the hedged transactions affect earnings. During the year ended December 31, 2019, the Company determined that a portion of one of the hedges was no longer effective due to the repayment of certain debt with the proceeds from the sale of MSLO (see Note 4). As a result, in accordance with ASC 815-30-40-6A, the Company de-designated it as a cash flow hedge and reclassified a loss of $0.4 million from other comprehensive loss to other expense in the consolidated statement of operations. Changes in the fair value of the de-designated interest rate swap after the de-designation date are being recognized through continuing operations. The Company recorded a loss of $0.6 million in other expense from continuing operations in the consolidated statements of operation for the year ended December 31, 2019. Debt Maturities As of December 31, 2019, the Company’s debt maturities for the next five years and thereafter on a calendar year basis are as follows: Total 2020 2021 2022 2023 2024 Thereafter (in thousands) Term Loans $ 453,831 $ 12,750 $ 17,750 $ 20,000 $ 111,631 $ 291,700 $ - Revolving Loan 14,358 - - - 14,358 - - Total $ 468,189 $ 12,750 $ 17,750 $ 20,000 $ 125,989 $ 291,700 $ - |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2019 | |
Accounts Payable and Accrued Expenses [Abstract] | |
Accounts Payable and Accrued Expenses | NOTE 10 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES In June 2019, the Company completed the sale of MSLO. As a result, accounts payable and accrued expenses decreased by $11.9 million which was recorded within current liabilities from discontinued operations as of December 31, 2018. Accounts payable and accrued expenses from continuing operations consist of the following: December 31, 2019 2018 (in thousands) Accounts payable $ 2,942 $ 2,775 Accrued expenses Interest 1,025 2,401 Compensation 2,395 2,741 Marketing and commissions 1,402 920 Professional services fees 2,181 112 Interest rate swap liability - current 3,124 528 Licensee settlement payable - current 940 1,883 Other accrued expenses 1,712 240 Total accounts payable and accrued expenses $ 15,721 $ 11,600 |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | NOTE 11 – LEASES The Company has operating leases for certain properties for its offices and showrooms and for copiers. The Company adopted ASU 2016-02 as of January 1, 2019 using the modified retrospective method as of the period of adoption. The Company elected the package of practical expedients upon transition where the Company did not reassess the lease classification and initial direct costs for leases that existed prior to adoption. Additionally, the Company did not reassess contracts entered into prior to adoption to determine whether the arrangement was or contained a lease. At January 1, 2019, the Company did not have any leases that had not yet commenced. The Company also elected the practical expedient to not recognize ROU assets or lease liabilities for leases with a term of twelve months or less. The Company determines if an arrangement contains a lease and the lease term at contract inception based on the terms of each arrangement. The Company’s operating leases contain options to extend and early termination options. The Company will evaluate the terms on a lease-by-lease basis and include options to extend or early termination options when it is reasonably certain that the Company will exercise the option. For arrangements that are identified as leases and are over twelve months the Company records a ROU asset and a lease liability representing the present value of future lease payments. Under ASC 842, the present value of future lease payments must be discounted by using the interest rate implicit in the lease, or if not readily determinable, its incremental borrowing rate. The Company used an average cost of debt of 6.76% as the discount rate for the leases as it is representative of the interest rate that would be charged to borrow an amount equal to the lease payments on a fully collateralized basis. The Company evaluates its ROU assets for impairment in accordance with ASC 360. No impairment of ROU assets existed as of December 31, 2019. The operating lease assets and liabilities recorded on the consolidated balance sheet as of December 31, 2019 are summarized as follows: December 31, Classification on Balance Sheet 2019 Assets (in thousands) Non-current Right-of-use assets - operating leases $ 50,320 Liabilities Current Current portion of lease liabilities - operating leases $ 3,035 Non-current Lease liabilities - operating leases, net of current portion 54,168 Total operating lease liabilities $ 57,203 Weighted average remaining lease term (in years) 13.3 Rent expense is recognized on a straight-line basis over the term of the lease. Rent expense for operating leases was $6.3 million, $6.0 million and $5.7 million for the years ended December 31, 2019, 2018 and 2017, respectively. Sublease income was $1.0 million, $0.7 million and $0.2 million for the years ended December 31, 2019, 2018 and 2017, respectively. All of the aforementioned amounts are included in continuing operations. As of December 31, 2019, the maturities of the Company’s lease liabilities were as follows: Operating Leases (in thousands) 2020 $ 6,807 2021 6,718 2022 6,721 2023 6,707 2024 6,856 Thereafter 53,809 Total minimum lease payments 87,618 Less: imputed interest 30,415 Lease liabilities $ 57,203 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | NOTE 12 – COMMITMENTS AND CONTINGENCIES Legal Matters The Company is in a dispute with a former licensee concerning certain payments allegedly owed to the licensee which the Company disputes. The Company intends to vigorously defend against these claims and pursue a counterclaim. Litigation costs in this matter may be significant. The Company was served with a lawsuit in March 2020 alleging trademark infringement on the Company’s Swisstech brand. The Company intends to vigorously defend against these claims and potentially pursue a counterclaim. Litigation costs in this matter may be significant. We have been cooperating with an investigation by the Securities and Exchange Commission (the “SEC”) into the Company’s controls and practices surrounding impairment analyses of goodwill and intangible assets in 2016 and 2017. In the late third quarter and the fourth quarter of 2019, the SEC began interviewing witnesses in connection with this matter. We believe we complied with generally accepted accounting principles during such periods in all financial matters including goodwill and intangible assets but can provide no assurance that the SEC will agree. We cannot predict the duration or outcome of this matter. Costs related to this matter may be significant. In addition, from time to time, the Company is involved in legal matters arising in the ordinary course of business. While the Company believes that such matters are currently not material, there can be no assurance that matters arising in the ordinary course of business for which the Company is, or could be, involved in litigation, will not have a material adverse effect on its business, financial condition, results of operations or cash flows. Contingent liabilities arising from potential litigation are assessed by management based on the individual analysis of these proceedings and on the opinion of the Company’s lawyers and legal consultants. During the year ended December 31, 2019, the Company accrued approximately $2.0 million related to litigation contingencies and claims. During the year ended December 31, 2018, the Company accrued $3.2 million related to a legacy litigation settlement claim. These charges are included in discontinued operations in the consolidated statements of operations. Assignment Right The Company had entered into a license agreement for its Avia trademark which includes a clause that if the licensee pays to the Company cumulative total royalties of $100.0 million, the licensee has the right to require the Company to assign full title and ownership of the trademark to the licensee. The first term of the agreement ends on December 31, 2022, but automatically renews in three-year increments unless terminated by the licensee. Based on current projections, the option to exercise this right would come into effect in approximately six years. Until such time, the Company continues to pursue and sign license agreements outside the U.S. and within certain channels of distribution within the U.S. and collect royalties therefrom. |
PREFERRED STOCK
PREFERRED STOCK | 12 Months Ended |
Dec. 31, 2019 | |
Preferred Stock [Abstract] | |
Preferred Stock | NOTE 13 – PREFERRED STOCK As of December 31, 2019 and 2018, the Company had 10,000,000 shares of preferred stock authorized with a par value of $0.01 per share, none of which were designated or issued and outstanding. The board of directors of the Company (the “BOD”) is authorized, with the limitations and restrictions set forth in the Company’s certificate of incorporation, to designate from time to time the terms of the preferred stock. |
STOCK INCENTIVE PLAN, OPTIONS A
STOCK INCENTIVE PLAN, OPTIONS AND WARRANTS | 12 Months Ended |
Dec. 31, 2019 | |
Stock Incentive Plan, Options and Warrants [Abstract] | |
Stock Incentive Plan, Options and Warrants | NOTE 14 – STOCK INCENTIVE PLAN, OPTIONS AND WARRANTS Stock Options 2005 Stock Incentive Plan On January 5, 2006, the Company adopted the 2005 Stock Incentive Plan, which authorized the granting of a variety of stock-based incentive awards. The 2005 Stock Incentive Plan was administered by the Company’s BOD, or a committee appointed by the BOD, which determined the recipients and terms of the awards granted. The 2005 Stock Incentive Plan provided for the issuance of both incentive stock options (“ISOs”) and non-qualified stock options (“NQOs”). ISOs could only be granted to employees and NQOs could be granted to directors, officers, employees, consultants, independent contractors and advisors. The 2005 Stock Incentive Plan provided for a total of 366,667 shares of common stock to be reserved for issuance under the 2005 Stock Incentive Plan. 2013 Stock Incentive Plan On July 24, 2013, the BOD approved and adopted the 2013 Stock Incentive Plan. The 2013 Stock Incentive Plan replaced the 2005 Stock Incentive Plan. No new grants will be granted under the 2005 Stock Incentive Plan as of July 24, 2013. Grants that were made under the 2005 Stock Incentive Plan prior to the BOD’s approval and adoption of the 2013 Stock Incentive Plan will continue to be administered in effect in accordance with their terms. The 2013 Stock Incentive Plan became effective on July 24, 2013 and, subject to the right of the BOD to amend or terminate the 2013 Stock Incentive Plan in accordance with terms and conditions thereof, will remain in effect until all shares of the Company’s common stock reserved for issuance thereunder have been delivered and any restrictions on such shares have lapsed. Notwithstanding the foregoing, no shares of the Company’s common stock may be granted under the 2013 Stock Incentive Plan on or after July 24, 2023. On December 4, 2015, the Company filed a registration statement, whereby the 2013 Stock Incentive Plan authorizes the issuance of not more than 2,500,000 shares of the Company’s common stock. The 2013 Stock Incentive Plan is administered by the Compensation Committee. Under the 2013 Stock Incentive Plan, the Compensation Committee is authorized to grant awards to employees, consultants and any other persons to whom the 2013 Stock Incentive Plan is applicable and to determine the number and types of such awards and the terms, conditions, vesting and other limitations applicable to each such award. The Compensation Committee has the power to interpret the 2013 Stock Incentive Plan and to adopt such rules and regulations as it considers necessary or appropriate for purposes of administering the 2013 Stock Incentive Plan. On May 26, 2016, the Company’s stockholders approved an amendment to the 2013 Stock Incentive Plan to increase the number of authorized shares of common stock for issuance by 3,500,000 shares. The following types of awards or any combination of awards may be granted under the 2013 Stock Incentive Plan: (i) NQOs, (ii) stock appreciation rights, (iii) restricted stock, (iv) restricted stock units, (v) performance-based awards, (vi) other stock-based awards, (vii) dividend equivalents and (viii) cash-based awards. The aggregate number of shares of the Company’s common stock that are reserved for awards to be granted under the 2013 Stock Incentive Plan is 6,000,000 shares, subject to adjustments for stock splits, recapitalizations and other specified events. Stock-based Compensation Expense The fair value of options is estimated on the date of grant using the Black-Scholes option pricing model. The valuation determined by the Black-Scholes pricing model is affected by the Company’s stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. The risk free rate is based on the U.S. Treasury rate for the expected life at the time of grant, volatility is based on the average long-term implied volatilities of peer companies and the expected life is based on the estimated average of the life of options using the simplified method as prescribed by ASC 718, Compensation – Stock Compensation . The Company utilizes the simplified method to determine the expected life of the options due to insufficient exercise activity during recent years as a basis from which to estimate future exercise patterns. The expected dividend assumption is based on the Company’s history and expectation of dividend payouts. In accordance with the provisions of ASU 2016‑09, the Company reduces compensation cost for actual forfeitures as they occur. The following table summarizes the Company’s outstanding options: Weighted-Average Remaining Number of Weighted-Average Contractual Life Options Exercise Price (in Years) (in thousands, except share and per share data) Outstanding - January 1, 2017 129,501 $ 9.65 2.3 Granted — — Exercised — — Forfeited or canceled (45,500) $ (11.49) Outstanding - January 1, 2018 84,001 $ 8.65 2.1 Granted — — Exercised — — Forfeited or canceled (34,500) $ (6.41) Outstanding - January 1, 2019 49,501 $ 10.22 2.3 Granted — — Exercised — — Forfeited or canceled (20,000) (12.98) Outstanding at December 31, 2019 29,501 $ 8.35 2.4 Exercisable - December 31, 2019 29,501 $ 8.35 2.4 A summary of the changes in the Company’s unvested stock options is as follows: Weighted-Average Grant Date Number of Options Fair Value Unvested - January 1, 2017 5,000 $ 1.96 Granted — — Vested (5,000) (1.96) Forfeited or canceled — — Unvested - December 31, 2017 — $ — There was no compensation expense related to stock options for the years ended December 31, 2019 and 2018. Total compensation expense related to stock options for the year ended December 31, 2017 was less than $0.1 million. At December 31, 2019, there is no unrecognized compensation expense related to stock options. Warrants The following table summarizes the Company’s outstanding warrants: Weighted-Average Remaining Number of Weighted-Average Contractual Life Aggregate Warrants Exercise Price (in Years) Intrinsic Value (in thousands, except share and per share data) Outstanding - January 1, 2017 801,760 $ 7.87 3.1 $ 51 Granted — — Exercised — — Forfeited or canceled (31,600) $ (5.75) Outstanding - January 1, 2018 770,160 $ 7.87 2.2 $ — Granted — — Exercised — — Forfeited or canceled (570,160) $ (6.07) Outstanding - January 1, 2019 200,000 $ 13.32 6.4 $ — Granted — — Exercised — — Forfeited or canceled — — Outstanding at December 31, 2019 200,000 $ 13.32 5.4 $ — Exercisable - December 31, 2019 200,000 $ 13.32 5.4 $ — A summary of the changes in the Company’s unvested warrants is as follows: Weighted-Average Grant Date Number of Warrants Fair Value Unvested - January 1, 2017 50,000 $ 6.32 Granted — — Vested (50,000) 6.32 Forfeited or canceled — — Unvested - December 31, 2017 — $ — There was no compensation expense related to warrants for the years ended December 31, 2019 and 2018. Total compensation expense related to warrants for the year ended December 31, 2017 was less than $0.1 million. At December 31, 2019 there is no unrecognized compensation expense related to warrants. Restricted Stock A summary of the time-based restricted stock activity for the years ended December 31, 2019, 2018 and 2017 is as follows: Weighted-Average Weighted-Average Remaining Grant Date Fair Contractual Life Number of Shares Value (in Years) Unvested - January 1, 2017 258,787 $ 8.45 2.1 Granted 111,112 3.60 Vested (174,363) (6.73) Unvested - January 1, 2018 195,536 $ 7.23 1.8 Granted 235,296 1.70 Vested (137,843) (5.25) Unvested - January 1, 2019 292,989 $ 3.72 0.9 Granted 464,576 0.86 Vested (235,296) (1.70) Unvested - December 31, 2019 522,269 $ 0.85 0.5 During the year ended December 31, 2019, the Company granted 464,576 shares of time-based restricted stock to members of the Company’s BOD. These shares had a grant date fair value of $0.4 million and vest over a period of one year. The Company recorded $0.3 million during the year ended December 31, 2019 as compensation expense in operating expenses from continuing operations pertaining to these grants. During the year ended December 31, 2018, the Company granted 235,296 shares of time-based restricted stock to members of the Company’s BOD. These shares had a grant date fair value of $0.4 million and vest over a period of one year. The Company recorded $0.1 million and $0.3 million during the years ended December 31, 2019 and 2018, respectively, as compensation expense in operating expenses from continuing operations pertaining to these grants. During the year ended December 31, 2017, the Company granted 111,112 shares of time-based restricted stock to members of the Company’s BOD. These shares had a grant date fair value of $0.4 million and vest over a period of one year. The Company recorded $0.1 million and $0.3 million during the years ended December 31, 2018 and 2017, respectively, as compensation expense in operating expenses from continuing operations pertaining to these grants. Total compensation expense recorded in operating expenses from continued operations related to time-based restricted stock grants for the years ended December 31, 2019, 2018 and 2017 was $0.4 million, $0.5 million, and $0.6 million, respectively. Total unrecognized compensation expense related to time-based restricted stock grants at December 31, 2019 amounted to $0.2 million and is expected to be recognized over a weighted average period of 0.5 years. Restricted Stock Units A summary of the time-based restricted stock unit activity for the years ended December 31, 2019, 2018 and 2017 is as follows: Weighted-Average Weighted-Average Remaining Grant Date Fair Contractual Life Number of Shares Value (in Years) Unvested - January 1, 2017 326,667 $ 8.52 2.5 Granted 688,836 3.18 Vested (219,103) (8.29) Forfeited or canceled (60,000) (4.89) Unvested - January 1, 2018 736,400 $ 3.89 2.2 Granted 2,678,743 1.77 Vested (1,732,523) (2.18) Forfeited or canceled (66,667) (3.20) Unvested - January 1, 2019 1,615,953 $ 2.24 2.2 Granted — — Vested (997,644) (2.44) Forfeited or canceled (190,000) (1.00) Unvested - December 31, 2019 428,309 $ 1.42 1.3 The Company did not grant time-based restricted stock units during the year ended December 31, 2019. During the year ended December 31, 2018, the Company granted 1,835,257 time-based restricted stock units to certain employees and consultants for future services. These shares of time-based restricted stock units had a grant date fair value of $3.2 million and vest immediately to over a period of five years. The Company recorded $0.5 million and $0.8 million during the years ended December 31, 2019 and 2018, respectively, as compensation expense in operating expenses from continuing operations pertaining to these grants. During the year ended December 31, 2018, the Company issued 843,486 time-based restricted stock units to an employee for a 2017 performance-based bonus pursuant to their employment agreement. The bonus was paid in restricted stock in the first quarter of 2018, based on the average closing stock price for the 30 days preceding March 1, 2018. Compensation expense recorded in operating expenses from continuing operations of $1.5 million was fully recognized in 2017 related to this grant. During the year ended December 31, 2017, the Company granted 688,836 time-based restricted stock units to certain employees and consultants for future services. These shares of time-based restricted stock units had a grant date fair value of $2.2 million and vest over a period of six months to three years. Included in this were 33,334 shares of time-based restricted stock units for the Company’s former Chief Executive Officer which were accelerated during the year ended December 31, 2019. The Company recorded $0.2 million, $0.4 million and $0.2 million during the years ended December 31, 2019, 2018 and 2017, respectively, as compensation expense in operating expenses from continuing operations pertaining to these grants. During the year ended December 31, 2017, the Company accelerated the vesting of 83,334 shares of time-based restricted stock units for the Company’s former Chief Executive Officer in connection with the CEO transition and an employee pursuant to their termination agreement. Total compensation expense related to these shares of $0.8 million was recorded in operating expenses from continued operations in the consolidated statement of operations for the year ended December 31, 2017. During the year ended December 31, 2016, the Company granted 260,000 shares of time-based restricted stock units to employees for future services. These shares of time-based restricted stock had a grant date fair value of $1.8 million and vest over a period of three years. Included in this were 58,334 shares of time-based restricted stock units for the Company’s former President which were accelerated during the year ended December 31, 2019. The Company recorded $0.3 million, $0.5 million and $0.7 million during the years ended December 31, 2019, 2018 and 2017, respectively, as compensation expense pertaining to this grant. Total compensation expense recorded as operating expenses from continuing operations related to time-based restricted stock units grants for the years ended December 31, 2019, 2018 and 2017 was $1.2 million, $1.6 million and $1.7 million, respectively. Total accrued compensation expense related to performance-based restricted stock units for the year ended December 31, 2017 was $1.5 million. Total unrecognized compensation expense related to time-based restricted stock units grants at December 31, 2019 amounted to $0.4 million and is expected to be recognized over a weighted average period of 1.3 years. Performance Stock Units A summary of the PSUs activity for the years ended December 31, 2019, 2018 and 2017 is as follows: Weighted-Average Weighted-Average Remaining Grant Date Fair Contractual Life Number of Shares Value (in Years) Unvested - January 1, 2017 2,803,367 $ 8.18 2.4 Granted 716,600 3.17 Vested (701,233) (10.97) Forfeited or canceled (773,100) (7.22) Unvested - January 1, 2018 2,045,634 $ 5.83 2.0 Granted 785,000 1.98 Vested (350,408) (4.71) Forfeited or canceled (260,408) (7.32) Unvested - January 1, 2019 2,219,818 $ 4.47 0.8 Granted — — Vested (289,671) (4.68) Forfeited or canceled (1,800,218) (4.43) Unvested - December 31, 2019 129,929 $ 4.51 — On March 27, 2019, the Compensation Committee voted to approve, on a discretionary basis, vesting of 231,396 PSUs to employees and consultants previously granted during the years ended December 31, 2016, 2017 and 2018 subject to achievement of certain of the Company’s performance metrics within each fiscal year. The fair value and expense recorded for such PSUs was based on the closing price of the Company’s common stock on the date the modification of the performance metric was communicated to employees and consultants. Total compensation expense related to these PSUs of $0.2 million was recorded as operating expenses from continuing operations in the consolidated statement of operations for the year ended December 31, 2019. During the year ended December 31, 2018, the Company granted 135,000 PSUs to employees pursuant to their employment agreements. These PSUs had a grant date fair value of $0.3 million, vest over a period of one to two years and require achievement of certain performance metrics within each fiscal year for such PSUs to be earned. The Company issued 83,250 PSUs to an employee related to this grant. The fair value and expense recorded for such PSUs was based on the closing price of the Company’s common stock on the date the performance metric was communicated to the employee. The Company recorded $0.2 million in compensation expense during the year ended December 31, 2018 as operating expenses from continued operations in the consolidated statement of operations. On February 20, 2018, the Compensation Committee voted to approve, on a discretionary basis, vesting of 208,883 PSUs to employees and consultants previously granted during the years ended December 31, 2016 and 2017 subject to achievement of certain of the Company’s performance metrics within each fiscal year. The fair value and expense recorded for such PSUs was based on the closing price of the Company’s common stock on the date the modification of the performance metric was communicated to employees and consultants. Total compensation expense related to these PSUs of $0.5 million was recorded as operating expenses in the consolidated statement of operations for the year ended December 31, 2018. On July 25, 2017, the Compensation Committee voted to approve, on a discretionary basis, an award of 41,600 PSUs to employees and consultants. The fair value and expense recorded for such PSUs was based on the closing price of the Company’s common stock on the date the modification of the performance metric was communicated to employees and consultants. The Company recorded expense related to this award for the year ended December 31, 2018 as part of the discretionary vesting approved by the Compensation Committee on February 20, 2018. No additional expense was recorded during the year ended December 31, 2018 as the likelihood of these PSUs being earned was not probable. The Company did not record any compensation expense during the year ended December 31, 2017 as the likelihood of these PSUs being earned was not probable. During the year ended December 31, 2017, the Company granted 175,000 PSUs to the Company’s former Chief Executive Officer pursuant to an employment agreement, dated April 3, 2017. These PSUs had a grant date fair value of $0.7 million and vest over a period of three years and require achievement of certain of the Company’s performance metrics within each fiscal year for such PSUs to be earned. The Company recorded $0.2 million in compensation expense during the year ended December 31, 2018 as the performance metrics were achieved pursuant to fiscal year end results. The Company recorded $0.1 million in compensation expense during the year ended December 31, 2018 as the likelihood of these PSUs being earned was considered probable for the current fiscal year. No compensation expense was recorded for the year ended December 31, 2019 related to this grant. During the year ended December 31, 2017, the Company accelerated the vesting of 200,000 PSUs for the Company’s former Chief Executive Officer in connection with the CEO transition. Total compensation expense related to these PSUs of $2.9 million was recorded as operating expenses in the consolidated statement of operations for the year ended December 31, 2017. On February 28, 2017, the Compensation Committee voted to approve, on a discretionary basis, an award of 164,978 PSUs to employees and consultants. Included in the above award were 60,000 PSUs and 36,000 PSUs for the Company’s former Chief Executive Officer and Chief Financial Officer, respectively. The fair value and expense recorded for such PSUs was based on the closing price of the Company’s common stock on the date the modification of the performance metric was communicated to employees and consultants. Total compensation expense related to these PSUs of $0.6 million was recorded as operating expenses from continuing operations in the consolidated statement of operations for the year ended December 31, 2017. Total compensation expense related to the PSUs for the years ended December 31, 2019, 2018 and 2017 was $0.2 million, $0.9 million and $3.5 million, respectively. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes [Abstract] | |
Income Taxes | NOTE 15 – INCOME TAXES The benefit from income taxes from continuing operations consists of the following: For the Year Ended December 31, 2019 2018 2017 (in thousands) Federal: Current provision $ - $ - $ - Deferred provision (7,751) (2,670) (52,878) (7,751) (2,670) (52,878) Foreign: Current provision 57 84 134 Deferred provision - - - 57 84 134 State: Current provision - 30 178 Deferred provision (1,001) 612 8,143 (1,001) 642 8,321 Benefit from income taxes $ (8,695) $ (1,944) $ (44,423) The difference between the benefit from income taxes and the expected income tax provision determined by applying the statutory federal and state income tax rates to pre-tax income are as follows: For the Year Ended December 31, 2019 2018 2017 Federal statutory rate 21.0 % 21.0 % 35.0 % State taxes, net of federal tax benefit 1.6 2.0 — Goodwill impairment — — (32.2) Noncontrolling interest (2.6) 8.3 0.5 Valuation allowance — (7.3) 5.3 Nondeductible compensation (1.6) (5.7) (0.1) Foreign taxes (0.1) (0.5) — Other (0.6) (3.1) (0.7) Tax Cuts and Jobs Act — — 5.6 Change in state tax rates — (0.8) — 17.7 % 13.9 % 13.4 % The Tax Cuts and Jobs Act On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (“Tax Act”) that instituted fundamental changes to the taxation of multinational corporations. The Tax Act includes changes to the taxation of foreign earnings by implementing a dividend exemption system, expansion of the current anti-deferral rules, a minimum tax on low-taxed foreign earnings and new measures to deter base erosion. The Tax Act also includes a permanent reduction in the corporate tax rate to 21%, repeal of the corporate alternative minimum tax, expensing of capital investment, and limitation of the deduction for interest expense. Furthermore, as part of the transition to the new tax system, a one-time transition tax is imposed on a U.S. shareholder’s historical undistributed earnings of foreign affiliates. Although the Tax Act was generally effective as of January 1, 2018, GAAP required recognition of the tax effects of new legislation during the reporting period that included the enactment date, which was December 22, 2017. The components of the Company’s consolidated deferred income tax balances as of December 31, 2019 and 2018 are as follows: December 31, 2019 2018 (in thousands) Deferred income tax assets Net operating loss carryforwards $ 32,565 $ 51,042 Capital loss carryforwards 2,997 4,417 Intangible assets - finite life 3,137 3,261 Stock-based compensation 286 439 Property and equipment - 3,649 Deferred rent - 799 Credits carryforward 1,148 1,281 Deferred revenue 1,939 2,755 Deferred interest expense 9,984 8,644 Deferred compensation - 1,053 Operating lease liability 13,215 - Other 4,791 3,585 70,062 80,925 Deferred income tax liability - long-term Intangible assets - indefinite-lived (57,343) (130,818) Right-of-use asset - operating leases (11,625) - Property and equipment (193) - (69,161) (130,818) Less: Valuation allowance (15,252) (17,109) Net deferred income tax liability - long-term $ (14,351) $ (67,002) In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on consideration of these items and tax provisions under the Tax Act, primarily the new limitation on interest expense deductions, management determined that enough certainty existed to warrant the release of the valuation allowance recorded against substantially all the Company’s deferred tax assets as of December 31, 2017. As of December 31, 2019 and 2018, a valuation allowance of $15.3 million and $17.1 million, respectively, has been recognized for deferred income taxes that may not be realized by the Company in future periods. The valuation allowance at December 31, 2019 and 2018 primarily relates to state net operating losses and capital loss carryforwards. The Company has federal NOLs available to carryforward to future periods of $107.8 million as of December 31, 2019 which begin expiring in 2029. The Company has state NOLs available to carryforward to future periods of $179.0 million as of December 31, 2019 which begin expiring in 2020. The Company has foreign tax credits available to carryforward to future periods of $0.5 million as of December 31, 2019 which begin expiring in 2020. The Company has experienced several changes of ownership under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), which places various limitations on the NOLs. The limitations on NOLs are based upon a formula provided under Section 382 of the Code that is based on the fair market value of the Company and prevailing interest rates at the time of the ownership change. An “ownership change” is generally a 50% increase in ownership over a three-year period by stockholders who directly or indirectly own at least five percent of a company’s stock. The limitations on the use of the NOLs under Section 382 could affect the Company’s ability to offset future taxable income. The Company currently files U.S. federal tax returns and various state tax returns. Tax years that remain open for assessment for federal and state purposes include years ended December 31, 2016 through December 31, 2019. The Company recognizes interest and penalties related to unrecognized tax benefits in the tax provision. The Company has no unrecognized tax benefits at December 31, 2019 and 2018. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 16 – RELATED PARTY TRANSACTIONS Consulting Services Agreement with Tengram Capital Partners, L.P. (f/k/a Tengram Capital Management L.P.) Pursuant to an agreement with Tengram Capital Partners, L.P., formerly known as Tengram Capital Management, L.P. (“TCP”), an affiliate of Tengram Capital Partners Gen2 Fund, L.P., which is one of the Company’s largest stockholders, the Company had engaged TCP, effective as of January 1, 2013, to provide services to the Company pertaining to (i) mergers and acquisitions, (ii) debt and equity financing and (iii) such other related areas as the Company may reasonably request from time to time (the “TCP Agreement”). TCP was entitled to receive annual compensation of $1.0 million, including fees and reimbursement of out-of-pocket expenses in connection with performing its services under the TCP Agreement. The TCP Agreement remained in effect for a period continuing through the earlier of five years or the date on which TCP and its affiliates cease to own in excess of 5% of the outstanding shares of common stock in the Company. On August 15, 2014, the Company consummated transactions pursuant to an agreement and plan of merger, dated as of June 24, 2014 (the “Galaxy Merger Agreement”) with SBG Universe Brands LLC, a Delaware limited liability company and the Company’s direct wholly-owned subsidiary (“LLC Sub”), Universe Galaxy Merger Sub, Inc., a Delaware corporation and direct wholly-owned subsidiary of LLC Sub, Galaxy Brand Holdings, Inc. and Carlyle Galaxy Holdings, L.P. (such transactions, collectively, the “Galaxy Acquisition”). In connection with the Galaxy Merger Agreement, the Company and TCP entered into an amendment to the TCP Agreement (the “Amended TCP Agreement”), pursuant to which, among other things, TCP was entitled to receive annual fees of $0.9 million beginning with fiscal year 2014. The Amended TCP Agreement terminated as of December 31, 2019. The Company paid TCP $0.9 million, $0.7 million, and $0.9 million for services under the Amended TCP Agreement during the years ended December 31, 2019, 2018 and 2017, respectively. The Company reimbursed TCP $0.1 million for the year ended December 31, 2019 and less than $0.1 million for each of the years ended December 31, 2018 and 2017 for out-of-pocket expenses in connection with their services. These amounts are included in operating expenses from continuing operations in the Company’s consolidated financial statements. At December 31, 2019, there was $0.2 million due to TCP for services and less than $0.1 million due for reimbursement of expenses. At December 31, 2018, there was $0.2 million due to TCP for services and less than $0.1 million due for reimbursement of expenses. The Company paid $1.8 million in transaction fees to TCP related to the sale of MSLO during the year ended December 31, 2019 recorded in discontinued operations in the Company’s consolidated financial statements. Additionally, in July 2013, the Company entered into a consulting arrangement with an employee of TCP (the “TCP Employee”), pursuant to which the TCP Employee provides legal and other consulting services at the request of the Company from time to time. The TCP Employee was also issued 125,000 shares of restricted stock, vesting over a four-year period and 180,000 PSUs, vesting over three years in increments of 20% for 2014, 20% for 2015 and 60% for 2016. During the year ended December 31, 2016, the TCP employee was granted 200,000 PSUs, vesting over three years in increments of 33.3% for 2017, 33.3% for 2018 and 33.4% for 2019. During the year ended December 31, 2018, the TCP employee was granted 150,000 shares of time-based restricted stock units, vesting over a three year period and 300,000 shares of time-based restricted stock units, vesting over a three year period with 25% vesting immediately. The Company paid the TCP Employee $0.3 million, $0.3 million and $0.4 million for services under the consulting arrangement during the years ended December 31, 2018, 2017 and 2016, respectively. These amounts are included in operating expenses from continuing operations in the Company’s consolidated financial statements. The Company and the TCP Employee terminated the consulting arrangement during the third quarter of 2019. The Company accelerated the vesting of the unvested shares of the TCP Employee’s time-based restricted stock units. At December 31, 2019, no amounts were due to the TCP Employee. At December 31, 2018, less than $0.1 million was due to the TCP Employee. Transactions with Tommie Copper, Inc. The Company entered into an agreement with Tommie Copper, Inc. (“TCI”), an affiliate of TCP, under which the Company received a vendor placement fee for facilitating certain distribution arrangements. The Company recorded $3.1 million of revenue from continuing operations for the year ended December 31, 2018. At December 31, 2018, the Company had a current receivable of $1.1 million from TCI in accounts receivable and a long-term receivable of $1.9 million from TCI in other assets in the consolidated balance sheet. During the year ended December 31, 2019, the Company reserved $2.9 million related to the outstanding receivable balance recorded in operating expenses from continuing operations in the consolidated statement of operations as TCI could not adhere to its original payment terms and new extended payment terms have been negotiated. At December 31, 2019, the Company had a net current receivable of $0.1 million due from TCI. Transactions with E.S. Originals, Inc. A division president of the Company maintains a passive ownership interest in one of the Company’s licensees, E.S. Originals, Inc. (“ESO”). The Company receives royalties from ESO under license agreements for certain of the Company’s brands in the footwear category. The Company recorded $4.9 million, $8.4 million and $18.1 million of revenue for the years ended December 31, 2019, 2018 and 2017, respectively, for royalties, commissions and advertising revenue earned from ESO license agreements. At December 31, 2019 and 2018, the Company had $2.8 million and $6.2 million, respectively, recorded as accounts receivable and $0.2 million and $1.9 million, respectively, as a long-term receivable in other assets from ESO in the consolidated balance sheets. In addition, the Company entered into a license-back agreement with ESO under which the Company reacquired the rights to certain international territories in order to re-license these rights to an unrelated party. The Company recorded approximately $1.3 million and $0.3 million in license-back expense for the years ended December 31, 2019 and 2018, respectively. Transactions with Centric Brands Inc. (f/k/a Differential Brands Group, Inc.) During the fourth quarter of 2018, Centric Brands, Inc. (“Centric”) acquired a significant portion of Global Brands Group Holding Limited’s (“GBG”) North American licensing business. The Company entered into an agreement with Centric, an affiliate of TCP, under which the Company received a rights transfer fee of $4.0 million related to the Joe’s license. During the fourth quarter of 2019, the Company and Centric entered into a license agreement under the Jessica Simpson brand. The Company recorded $6.6 million and approximately $1.2 million for royalty revenue earned from continuing operations from Centric for the years ended December 31, 2019 and 2018, respectively. At December 31, 2019 and 2018, the Company had $1.0 million and $0.8 million, respectively, recorded as accounts receivable from Centric in the consolidated balance sheets. Acquisition of FUL On November 17, 2014, the Company made a strategic investment in FUL IP. FUL IP is a collaborative investment between the Company and JALP. FUL IP was formed for the purpose of licensing the FUL trademark to third parties in connection with the manufacturing, distribution, marketing and sale of FUL branded bags, backpacks, duffels, luggage and apparel accessories. JALP contributed the FUL trademark with a fair value of $8.9 million. In exchange for a 50.5% economic interest in FUL IP the Company paid JALP $4.5 million. JALP’s minority member interest in FUL IP has been reflected as noncontrolling interest on the Company’s consolidated balance sheets. One of the Company’s directors, Mr. Al Gossett, has a partial ownership interest in JALP. There was $0.5 million, $0.7 million and $2.2 million of noncontrolling interest loss recorded during the years ended December 31, 2019, 2018 and 2017, respectively. The Company sold the FUL trademark during the year ended December 31, 2018. The noncontrolling interest loss for the year ended December 31, 2019 was due to the write off of a $0.9 million receivable related to the previous sale of the FUL trademark. Investment in Equity Securities In September 2015, the Company purchased equity securities of Iconix Brand Group, Inc., an unaffiliated third-party publicly traded company, from Tengram Capital Partners, L.P., which is an affiliate of Tengram Capital Partners Gen2 Fund, L.P., one of the Company’s largest stockholders, for an aggregate purchase price of $12.0 million (plus related transaction expenses), which was the purchase price paid by Tengram Capital Partners, L.P. upon the acquisition of such equity securities in open market transactions. The Company did not pay a fee or any compensation to Tengram Capital Partners, L.P. in connection with the Company’s investment in the equity securities. The Company sold its equity securities during the year ended December 31, 2017. Registration Rights Agreement On June 22, 2015, Martha Stewart, the Martha Stewart Family Limited Partnership, Alexis Stewart, the Martha Stewart 1999 Family Trust, the Martha Stewart 2000 Family Trust and the Martha and Alexis Stewart Charitable Foundation (collectively, the “Stewart Stockholders”) entered into an agreement (the “Registration Rights Agreement”) with the Company, which grants the Stewart Stockholders certain “demand” registration rights for up to two offerings of greater than $15 million each, certain “S-3” registration rights for up to three offerings of greater than $5 million each and “piggyback” registration rights with respect to the shares of the Company’s common stock held by the Stewart Stockholders (whether issued pursuant Mergers or acquired thereafter) and their transferees. All reasonable expenses incident to such registrations generally are required to be borne by the Company. The Registration Rights Agreement became effective on December 4, 2015. |
PROFIT SHARING PLAN
PROFIT SHARING PLAN | 12 Months Ended |
Dec. 31, 2019 | |
Profit Sharing Plan [Abstract] | |
Profit Sharing Plan | NOTE 17 – PROFIT SHARING PLAN The Company has established a 401(k) profit-sharing plan for the benefit of eligible employees. The Company may make contributions to the plan as determined by the BOD. The Company accrued a matching contribution, net of forfeitures, of $0.3 million, $0.1 million and $0.5 million for the years ended December 31, 2019, 2018, and 2017, respectively. |
QUARTERLY DATA (UNAUDITED)
QUARTERLY DATA (UNAUDITED) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Data (Unaudited) [Abstract] | |
Quarterly Data | NOTE 18 – QUARTERLY DATA (UNAUDITED) Unaudited quarterly consolidated financial information from continuing operations for 2019 and 2018 is summarized as follows: First Second Third Fourth Quarter Quarter Quarter Quarter Full Year (in thousands, except per share data) 2019 Net revenue $ 25,524 $ 26,415 $ 25,392 $ 24,245 $ 101,576 Income (loss) from continuing operations 9,978 12,508 (19,964) 4,274 6,796 Loss from continuing operations before income taxes (3,473) (2,214) (33,855) (9,529) (49,071) Loss from continuing operations (3,232) (1,835) (27,820) (7,489) (40,376) Net (income) loss from continuing operations attributable to noncontrolling interests (1,539) (1,455) 9,449 (419) 6,036 Loss from continuing operations attributable to Sequential Brands Group, Inc. and Subsidiaries (4,771) (3,290) (18,371) (7,908) (34,340) Loss from discontinued operations, net of income taxes (120,574) (1,309) (309) (2,871) (125,063) Net loss attributable to Sequential Brands Group, Inc. and Subsidiaries $ (125,345) $ (4,599) $ (18,680) $ (10,779) $ (159,403) Basic and diluted loss per share: Continued operations $ (0.07) $ (0.05) $ (0.28) $ (0.12) Discontinued operations (1.88) (0.02) (0.00) (0.04) Attributable to Sequential Brands Group, Inc. and Subsidiaries (1.95) (0.07) (0.29) (0.16) First Second Third Fourth Quarter Quarter Quarter Quarter Full Year (in thousands, except per share data) 2018 Net revenue $ 29,463 $ 33,126 $ 29,455 $ 35,246 $ 127,290 Income (loss) from continuing operations 11,183 17,723 (3,858) 17,003 42,051 (Loss) income from continuing operations before income taxes (2,478) 3,742 (17,689) 2,519 (13,906) (Loss) income from continuing operations (1,555) 3,301 (8,881) (4,827) (11,962) Net income from continuing operations attributable to noncontrolling interests (1,960) (1,102) (1,581) (863) (5,506) (Loss) income from continuing operations attributable to Sequential Brands Group, Inc. and Subsidiaries (3,515) 2,199 (10,462) (5,690) (17,468) Income from discontinued operations, net of income taxes 1,253 1,388 847 3,496 6,984 Net (loss) income attributable to Sequential Brands Group, Inc. and Subsidiaries $ (2,262) $ 3,587 $ (9,615) $ (2,194) $ (10,484) Basic (loss) earnings per share: Continued operations $ (0.06) $ 0.03 $ (0.16) $ (0.09) Discontinued operations 0.02 0.03 0.01 0.05 Attributable to Sequential Brands Group, Inc. and Subsidiaries (0.04) 0.06 (0.15) (0.03) Diluted (loss) earnings per share: Continued operations $ (0.06) $ 0.02 $ (0.16) $ (0.09) Discontinued operations 0.02 0.02 0.01 0.05 Attributable to Sequential Brands Group, Inc. and Subsidiaries (0.04) 0.06 (0.15) (0.03) |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events | |
Subsequent Events | NOTE 19 – SUBSEQUENT EVENTS In March 2020, the World Health Organization declared the outbreak of a novel coronavirus disease (“COVID-19”) as a pandemic, which continues to spread throughout the U.S. COVID-19 is having an unprecedented impact on the U.S. economy as federal, state and local governments react to this public health crisis. Due to the COVID-19 outbreak, there is significant uncertainty surrounding the potential impact on the Company’s results of operations and cash flows. Continued impacts of the pandemic could materially adversely affect our near-term and long-term revenues, earnings, liquidity and cash flows as our licensees may request temporary relief, delay or not make scheduled payments. The Company is proactively taking steps to increase available cash on hand including utilizing funds available under its Revolving Credit Facility. Subsequent to December 31, 2019, and through March 31, 2020, the Company made net borrowings of $7.1 million on its Revolving Credit Facility. As of March 31, 2020, the Company had a total of $22.7 million drawn down under its Revolving Credit Facility. On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (“CARES”) Act was enacted and signed into law. Certain provisions of the CARES Act impact the 2019 income tax provision computations of the Company and will be reflected in the first quarter of 2020, or the period of enactment. The CARES Act contains modifications on the limitation of business interest for tax years beginning in 2019 and 2020. The modifications to Section 163(j) increase the allowable business interest deduction from 30% of adjusted taxable income to 50% of adjusted taxable income. This modification would significantly increase the allowable interest expense deduction of the Company and result in significantly less taxable income for the year-ended 2019, resulting in less utilization of net operating losses in that year. The change in the interest expense limitation pursuant to the CARES Act will not have an impact to the first quarter of 2020, other than an increase in the net operating loss deferred tax asset. As a result of the CARES Act, it is anticipated that the Company will fully utilize all interest expense that was deferred beginning in 2018 with no additional disallowed interest expense in 2020. On March 30, 2020, the Company entered into the Fourth Amendment to its Third Amended and Restated Credit Agreement (the “New FS/KKR Credit Agreement”) with the FS/KKR Agent and the FS/KKR Facility Loan Parties . Pursuant to the New FS/KKR Credit Agreement, no mandatory amortization payments are required until September 30, 2020. Thereafter, the loans under the New FS/KKR Credit Agreement will be subject to quarterly amortization payments of approximately $2.1 million. The New FS/KKR Credit Agreement modifies the calculation of Consolidated EBITDA (as defined in the agreement) by permitting additional addbacks. The New FS/KKR Credit Agreement allows for the netting of up to $5 million in cash of the Company and its subsidiaries for purposes of calculating the leverage ratio covenants, except for the quarter ended March 31, 2020 which allows for netting of up to $10 million in cash. If the Consolidated Total Leverage Ratio is not equal to or less than 5:50:1:00 (on a pro forma basis) on July 31, 2020, Sequential shall amend its organization documents to add one new independent director acceptable to the lenders under the New FS/KKR Credit Agreement to sit on its Board of Directors. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2019 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts | Schedule II – Valuation and Qualifying Accounts Sequential Brands Group, Inc. (in thousands) Additions Balance at Charged to Beginning of Costs and Balance at End Description Period Expenses Deductions of Period Reserves and allowance deducted from asset accounts: Accounts receivable (a): Year Ended December 31, 2019 $ 1,819 $ 4,123 $ (105) $ 5,837 Year Ended December 31, 2018 $ 372 $ 1,547 $ (100) $ 1,819 Year Ended December 31, 2017 $ 221 $ 482 $ (331) $ 372 Valuation allowance on deferred tax assets (b): Year Ended December 31, 2019 $ 17,109 $ - $ (1,857) $ 15,252 Year Ended December 31, 2018 $ 17,404 $ - $ (295) $ 17,109 Year Ended December 31, 2017 $ 110,829 $ - $ (93,425) $ 17,404 (a) These amounts include reserves for doubtful accounts. (b) Changes are recognized in the provision for (benefit from) income taxes. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Summary of Significant Accounting Policies [Abstract] | |
Reclassification of Prior Year Presentation | Reclassification of Prior Year Presentation On June 10, 2019, the Company completed the sale of Martha Stewart Living Omnimedia, Inc. (“MSLO”), a Delaware corporation and a wholly-owned subsidiary of the Company, for $166 million in cash consideration, plus additional amounts in respect of pre-closing accounts receivable that are received after the closing, subject to certain adjustments, pursuant to an equity purchase agreement (the “Purchase Agreement”) with Marquee Brands LLC (the “Buyer”) entered into on April 16, 2019. In addition, the Purchase Agreement provides for an earnout of up to $40,000,000 payable to the Company if certain performance targets are achieved during the three calendar years ending December 31, 2020, December 31, 2021 and December 31, 2022. MSLO and its subsidiaries were engaged in the business of promoting, marketing and licensing the Martha Stewart and the Emeril Lagasse brands through various distribution channels. Due to the sale of MSLO during the second quarter of 2019 (see Note 4), in accordance with Accounting Standards Codification (“ASC”) 205, Discontinued Operations , we have classified the results of MSLO as discontinued operations in our consolidated statements of operations and cash flows for all periods presented. Additionally, the related assets and liabilities directly associated with MSLO are classified as held for disposition from discontinued operations in our consolidated balance sheets for all periods presented. All amounts included in the notes to the consolidated financial statements relate to continuing operations unless otherwise noted. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries. All significant inter-company accounts and transactions have been eliminated in the consolidation. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, actual results could differ significantly from estimates. |
Discontinued Operations | Discontinued Operations The Company accounted for the sale of MSLO in accordance with ASC 360, Accounting for Impairment or Disposal of Long-Lived Assets (“ASC 360”) and Accounting Standard Update (“ASU”) No. 2014-08, Reporting of Discontinued Operations and Disclosures of Disposals of Components of an Entity (“ASU 2014-08”). The Company followed the held-for-sale criteria as defined in ASC 360. ASC 360 requires that a component of an entity that has been disposed of or is classified as held for sale and has operations and cash flows that can be clearly distinguished from the rest of the entity be reported as assets held for sale and discontinued operations. In the period a component of an entity has been disposed of or classified as held for sale, the results of operations for the periods presented are reclassified into separate line items in the statements of operations. Assets and liabilities are also reclassified into separate line items on the related balance sheets for the periods presented. The statements of cash flows for the periods presented are also reclassified to reflect the results of discontinued operations as separate line items. ASU 2014-08 requires that only a disposal of a component of an entity, or a group of components of an entity, that represents a strategic shift that has, or will have, a major effect on the reporting entity’s operations and financial results be reported in the financial statements as discontinued operations. ASU 2014-08 also provides guidance on the financial statement presentations and disclosures of discontinued operations. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”), which became effective for the Company as of January 1, 2018 (see Note 5 for impact of adoption and other related disclosures). ASC 606 requires a five-step approach to determine the appropriate method of revenue recognition for each contractual arrangement: Step 1: Identify the Contract(s) with a Customer Step 2: Identify the Performance Obligation(s) in the Contract Step 3: Determine the Transaction Price Step 4: Allocate the Transaction Price to the Performance Obligation(s) in the Contract Step 5: Recognize Revenue when (or as) the Entity Satisfies a Performance Obligation The Company has entered into various license agreements for its owned trademarks. Under ASC 606, the Company’s agreements are generally considered symbolic licenses, which contain the characteristics of a right-to-access license since the customer is simultaneously receiving the intellectual property (“IP”) and benefiting from it throughout the license period. The Company assesses each license agreement at inception and determines the performance obligation(s) and appropriate revenue recognition method. As part of this process, the Company applies judgments based on historical trends when estimating future revenues and the period over which to recognize revenue. The Company generally recognizes revenue for license agreements under the following methods: 1. Licenses with guaranteed minimum royalties (“GMRs”) : Generally, guaranteed minimum royalty payments (fixed revenue) comprising the transaction price are recognized on a straight-line basis over the term of the contract, as defined in each license agreement. 2. Licenses with both GMRs (fixed revenue) and earned royalties (variable revenue) : Earned royalties in excess of fixed revenue are only recognized when the Company is reasonably certain that the guaranteed minimum payments for the period, as defined in each license agreement, will be exceeded. Additionally, the Company has categorized certain contracts as variable when there is a history and future expectation of exceeding GMRs. The Company recognizes income for these contracts during the period corresponding to the licensee’s sales. 3. Licenses that are sales-based only or earned royalties : Earned royalties (variable revenue) are recognized as income during the period corresponding to the licensee’s sales. Payments received as consideration for the grant of a license or advanced royalty payments are recorded as deferred revenue at the time payment is received and recognized into revenue under the methods described above. Contract assets represent unbilled receivables and are presented within accounts receivable, net on the consolidated balance sheets. Contract liabilities represent unearned revenues and are presented within the current portion of deferred revenue on the consolidated balance sheets. The Company disaggregates its revenue into two categories: licensing agreements and other, which is comprised of revenue from sources such as sales commissions and vendor placement commissions. Commission revenues and vendor placement commission revenues are recorded in the period the commission is earned. |
Restricted Cash | Restricted Cash Restricted cash at December 31, 2019 consists of cash deposited with a financial institution required as collateral for the Company’s cash-collateralized letter of credit facilities. |
Accounts Receivable | Accounts Receivable Accounts receivable are recorded net of allowances for doubtful accounts, based on the Company’s ongoing discussions with its licensees and other customers and its evaluation of their creditworthiness, payment history and account aging. Accounts receivable balances deemed to be uncollectible are charged to the allowance for doubtful accounts after all means of collection have been exhausted and the potential for recovery is considered remote. The allowance for doubtful accounts was $5.8 million and $1.8 million at December 31, 2019 and 2018, respectively. On June 10, 2019, the Company completed the sale of MSLO. As a result, accounts receivable, net, decreased $16.6 million which was recorded within current assets from discontinued operations as of December 31, 2018. The Company’s accounts receivable, net amounted to $39.5 million and $49.6 million as of December 31, 2019 and 2018, respectively. Two licensees accounted for approximately 51% (33% and 18%) of the Company’s total consolidated accounts receivable, net balance as of December 31, 2019 and two licensees accounted for approximately 41% (25% and 16%) of the Company’s total consolidated accounts receivable, net balance as of December 31, 2018. The Company does not believe the accounts receivable balances from these licensees represents a significant collection risk based on past collection experience. |
Investments | Investments The Company accounts for equity securities under ASC 321, Investments – Equity Securities (“ASC 321”). Such securities are reported at fair value in the consolidated balance sheets and, at the time of purchase, are reported in the consolidated statements of cash flows as an investing activity. Gains and losses on equity securities are recognized through net loss. The Company recognized a loss on its equity securities for $0.1 million and $0.9 million recorded in other expense on the consolidated statements of operations for the years ended December 31, 2019 and 2018, respectively. Prior to adoption of ASC 321 in 2018, the Company accounted for its equity securities under ASC 320, Investments – Debt and Equity Securities . During the second quarter of 2017, the Company sold equity securities for $5.8 million. The book cost basis of the equity securities was approximately $7.7 million, which was determined using the specific identification method. The sale resulted in a net realized loss of $1.9 million, which is recorded in other expense in the consolidated statement of operations for the year ended December 31, 2017. The Company did not hold these equity securities as of December 31, 2017. |
Equity Method Investment | Equity Method Investment For investments in entities over which the Company exercises significant influence but which do not meet the requirements for consolidation, the Company uses the equity method of accounting. On July 1, 2016, the Company acquired a 49.9% noncontrolling interest in Gaiam Pty. Ltd. in connection with its acquisition of Gaiam Brand Holdco, LLC. The value of the Company’s equity method investment was $0.6 million and $0.7 million as of December 31, 2019 and 2018, respectively, and is included in other assets in the consolidated balance sheets. The Company’s share of earnings from its equity method investee, which was not material for the years ended December 31, 2019, 2018 and 2017, is included in other expense in the consolidated statements of operations. The Company evaluates its equity method investment for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investment may not be recoverable. The difference between the carrying value of the equity method investment and its estimated fair value is recognized as an impairment charge when the loss in value is deemed other-than-temporary. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill represents the excess of purchase price over the fair value of net assets acquired in business combinations accounted for under the purchase method of accounting. The Company does not have any goodwill reported on its consolidated balance sheets at December 31, 2019 or 2018. On an annual basis and as needed, the Company tests goodwill and indefinite lived trademarks for impairment through the use of discounted cash flow models. Assumptions used in our discounted cash flow models are as follows: (i) discount rates; (ii) projected annual revenue growth rates; and (iii) projected long-term growth rates. Our estimates also factor in economic conditions and expectations of management, which may change in the future based on period-specific facts and circumstances. Other intangibles with determinable lives, including certain trademarks, customer agreements, patents and a favorable lease, are evaluated for the possibility of impairment when certain indicators are present, and are otherwise amortized on a straight-line basis over the estimated useful lives of the assets (currently ranging from 2 to 15 years). On June 10, 2019, the Company completed the sale of MSLO. As a result, indefinite-lived intangible assets decreased by $330.1 million which was recorded within assets from discontinued operations as of December 31, 2018. During the first quarter of 2019, the Company recorded non-cash impairment charges of $161. 2 million for indefinite-lived intangible assets related to the Martha Stewart and Emeril Lagasse trademarks. The impairments arose as a result of the sale process for the Martha Stewart and Emeril Lagasse brands (as discussed in Note 4) due to the difference in the fair value as indicated by the sales price as compared to the carrying values of the intangible assets included in the transaction. The sale of the Martha Stewart and Emeril Lagasse brands was approved by the Board of Directors on April 15, 2019, to allow the Company to achieve one of its top priorities in significantly reducing its debt. Going forward the Company’s strategy is to focus on higher margin brands that are well suited for growing health, wellness and beauty categories. These charges are included in discontinued operations in the consolidated statements of operations. During the year ended December 31, 2019, the Company recorded non-cash impairment charges of $33.1 million consisting of $28.5 million related to the Jessica Simpson trademark and $4.6 million related to the Joe’s trademark. During the year ended December 31, 2018, the Company recorded non-cash impairment charges of $17.9 million for indefinite-lived intangible assets related to the trademarks of two of the Company’s non-core brands: Ellen Tracy and Caribbean Joe . The impairments arose due to reduced growth expectations and the impact of licensee transitions for these brands. Fair value for each trademark was determined based on the income approach using estimates of future discounted cash flows. Due to the identification of impairment indicators during the quarter ended September 30, 2017, the Company performed impairment testing of its goodwill and indefinite-lived assets at September 30, 2017, which replaced its October 1 st annual test. As a result of its testing, the Company recorded a non-cash impairment charge of $36.5 million relating to its indefinite-lived intangible assets during the quarter ended September 30, 2017. Due to the identification of impairment indicators during the quarter ended December 31, 2017, the Company performed impairment testing of its goodwill and indefinite-lived assets at December 31, 2017. As a result of its testing, the Company recorded a non-cash goodwill impairment charge of $304.1 million during the quarter ended December 31, 2017. See Notes 3, 7 and 8 for further details. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, less accumulated depreciation and amortization. Maintenance and repairs are charged to expense as incurred. Upon retirement or other disposition of property and equipment, applicable cost and accumulated depreciation and amortization are removed from the accounts and any gains or losses are included in results of operations. Depreciation and amortization of property and equipment is computed using the straight-line method based on estimated useful lives of the assets as follows: Furniture and fixtures 5 years Computer hardware/equipment 5 to 7 years Leasehold improvements Term of the lease or the estimated life of the related improvements, whichever is shorter. Computer software 5 years Automobiles and trucks 5 years Websites 3 years |
Deferred Financing Costs | Deferred Financing Costs Deferred financing costs represent lender fees, legal and other third-party costs incurred in connection with issuing debt securities or obtaining debt or other credit arrangements. Deferred financing costs are recorded as a deduction of the carrying value of debt and are amortized as interest expense, using the effective interest method, over the term of the related debt. Debt discounts are amortized to interest expense over the term of the related debt. |
Treasury Stock | Treasury Stock Treasury stock is recorded at cost as a reduction of equity in the consolidated balance sheets. |
Preferred Stock | Preferred Stock Preferred stock subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value. The Company classifies conditionally redeemable preferred stock (if any), which includes preferred stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control, as temporary equity. At all other times, the Company classifies preferred stock as a component of equity. The Company’s preferred stock does not feature any redemption rights within the holders’ control or conditional redemption features not solely within its control as of December 31, 2019 and 2018. Accordingly, all issuances of preferred stock are presented as a component of equity. The Company did not have any preferred stock outstanding as of December 31, 2019 and 2018. |
Common Stock Purchase Warrants and Derivative Financial Instruments | Common Stock Purchase Warrants and Derivative Financial Instruments The Company classifies as equity any contracts that (i) require physical settlement or net-share settlement or (ii) give the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies as assets or liabilities any contracts that (i) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the Company’s control) or (ii) gives the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). The Company assesses classification of its common stock purchase warrants and other freestanding derivatives, if any, at each reporting date to determine whether a change in classification between assets and liabilities is required. The Company determined that its outstanding common stock purchase warrants satisfied the criteria for classification as equity instruments at December 31, 2019 and 2018. |
Advertising | Advertising Advertising costs related to media ads are charged to expense as of the first date the advertisements take place. Advertising costs related to campaign ads, such as production and talent, are expensed over the term of the related advertising campaign. Advertising expenses included in operating expenses from continuing operations approximated $12.0 million, $11.1 million and $5.3 million for the years ended December 31, 2019, 2018 and 2017, respectively. As of December 31, 2019 and 2018, the Company had no capitalized advertising costs recorded on the consolidated balance sheets. |
Stock-Based Compensation | Stock-Based Compensation Compensation cost for restricted stock is measured using the quoted market price of the Company’s common stock at the date the common stock is granted. For restricted stock and restricted stock units, for which restrictions lapse with the passage of time (“time-based restricted stock”), compensation cost is recognized on a straight-line basis over the period between the issue date and the date that restrictions lapse. Time-based restricted stock is included in total shares of common stock outstanding upon the lapse of applicable restrictions. For restricted stock, for which restrictions are based on performance measures (“performance stock units” or “PSUs”), restrictions lapse when those performance measures have been deemed achieved. Compensation cost for PSUs is recognized on a straight-line basis during the period from the date on which the likelihood of the PSUs being earned is deemed probable and (x) the end of the fiscal year during which such PSUs are expected to vest or (y) the date on which awards of such PSUs may be approved by the compensation committee of the Company’s board of directors (the “Compensation Committee”) on a discretionary basis, as applicable. PSUs are included in total shares of common stock outstanding upon the lapse of applicable restrictions. PSUs are included in total diluted shares of common stock outstanding when the performance measures have been deemed achieved but the PSUs have not yet been issued. Fair value for stock options and warrants is calculated using the Black-Scholes valuation model and is expensed on a straight-line basis over the requisite service period of the grant. Compensation cost is reduced for forfeitures as they occur in accordance with ASU 2016‑09, Simplifying the Accounting for Share-Based Payments (“ASU 2016‑09”) . The Company adopted ASU No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”) as of January 1, 2019 on a modified retrospective basis. In accordance with ASU 2018-07, the Company recognizes compensation cost for grants to non-employees on a straight-line basis over the period of the grant. Prior periods have not been restated and were accounted for under the previous method where at each reporting period prior to the lapse of restrictions on warrants, time-based restricted stock and PSUs granted to non-employees, the Company remeasured the aggregate compensation cost of such grants using the Company’s fair value at the end of such reporting period and revised the straight-line recognition of compensation cost in line with such remeasured amount. |
Leases | Leases The Company has operating leases for certain properties for its offices and showrooms and for copiers. The Company adopted ASU No. 2016-02, Leases (“ASU 2016-02” or “ASC 842”) as of January 1, 2019 using the modified retrospective method as of the period of adoption. The Company elected the package of practical expedients upon transition where the Company did not reassess the lease classification and initial direct costs for leases that existed prior to adoption. Additionally, the Company did not reassess contracts entered into prior to adoption to determine whether the arrangement was or contained a lease. In accordance with ASU 2016-02, for leases over twelve months the Company records a right-of-use asset and a lease liability representing the present value of future lease payments. Rent expense is recognized on a straight-line basis over the term of the lease. The Company will test its right-of-use (“ROU”) assets for impairment in accordance with ASC 360. See Note 11 for further information. |
Income Taxes | Income Taxes Current income taxes are based on the respective periods’ taxable income for federal, foreign and state income tax reporting purposes. Deferred tax liabilities and assets are determined based on the difference between the financial statement and income tax bases of assets and liabilities, using statutory tax rates in effect for the year in which the differences are expected to reverse. In accordance with ASU No. 2015‑17, Balance Sheet Classification of Deferred Taxes , all deferred income taxes are reported and classified as non-current. A valuation allowance is required if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company applies the FASB guidance on accounting for uncertainty in income taxes. The guidance clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with other authoritative GAAP and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The guidance also addresses derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. During the years ended December 31, 2019 and 2018, the Company did not have any reserves or interest and penalties to record through current income tax expense in accordance with ASC 740, Income Taxes (“ASC 740”). Interest and penalties related to uncertain tax positions, if any, are recorded in income tax expense. Tax years that remain open for assessment for federal and state tax purposes include the years ended December 31, 2016 through December 31, 2019. |
Earnings Per Share | Earnings Per Share Basic loss per share (“EPS”) attributable to Sequential Brands Group, Inc. and Subsidiaries is computed by dividing net loss attributable to Sequential Brands Group, Inc. and Subsidiaries by the weighted-average number of common shares outstanding during the reporting period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to all potentially dilutive common shares outstanding during the reporting period, including stock options, PSUs and warrants, using the treasury stock method, and convertible debt, using the if-converted method. Diluted EPS excludes all potentially dilutive shares of common stock if their effect is anti-dilutive. In periods when there is a net loss, diluted loss per share is equal to basic loss per share, since the effect of including any common stock equivalents would be anti-dilutive. Basic weighted-average common shares outstanding is equivalent to diluted weighted-average common shares outstanding for the years ended December 31, 2019, 2018 and 2017 for the calculation of basic loss per share attributable to Sequential Brands Group, Inc. and Subsidiaries. The computation of diluted EPS attributable to Sequential Brands Group, Inc. and Subsidiaries for the years ended December 31, 2019, 2018 and 2017 excludes the common stock equivalents of the following potentially dilutive securities because their inclusion would be anti-dilutive: Year Ended December 31, 2019 2018 2017 Unvested restricted stock 475,387 1,233,703 166,607 Performance based restricted stock — 58,275 65,087 Total 475,387 1,291,978 231,694 The weighted-average common shares outstanding used to calculate diluted EPS from discontinued operations for the years ended December 31, 2019, 2018 and 2017 are 64,760,823, 64,992,059 and 63,093,437, respectively. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments which potentially expose the Company to credit risk consist primarily of cash, restricted cash, accounts receivable and equity securities. Cash is held to meet working capital needs and future acquisitions. Restricted cash is pledged as collateral for a comparable amount of irrevocable standby letters of credit for certain of the Company’s leased properties. Substantially all of the Company’s cash, restricted cash and equity securities are deposited with high quality financial institutions. At times, however, such cash, restricted cash and equity securities may be in deposit accounts that exceed the Federal Deposit Insurance Corporation insurance limit. The Company has not experienced any losses in such accounts as of December 31, 2019. Concentration of credit risk with respect to accounts receivable is minimal due to the collection history and the nature of the Company’s revenue arrangements. The Company performs periodic credit evaluations of its customers’ financial condition. The allowance for doubtful accounts is based upon the expected collectability of all accounts receivable. |
Customer Concentrations | Customer Concentrations The Company recorded net revenues from continuing operations of $101.6 million, $127.3 million and $124.8 million during the years ended December 31, 2019, 2018 and 2017, respectively. During the year ended December 31, 2019, three licensees represented at least 10% of net revenue, accounting for 19%, 16% and 14% of the Company’s net revenue from continuing operations. During the year ended December 31, 2018, three licensees represented at least 10% of net revenue, each accounting for 18%, 12% and 11% of the Company’s net revenue from continuing operations. During the year ended December 31, 2017, three licensees represented at least 10% of net revenue, accounting for 15%, 14% and 14% of the Company’s net revenue from continuing operations. |
Loss Contingencies | Loss Contingencies The Company recognizes contingent losses that are both probable and estimable. In this context, probable means circumstances under which events are likely to occur. The Company records legal costs pertaining to contingencies as incurred. |
Noncontrolling Interests | Noncontrolling Interests Noncontrolling interest recorded for the year ended December 31, 2019 represents an income allocation to Elan Polo International, Inc., a member of DVS Footwear International, LLC (“DVS LLC”) and loss allocations to With You, Inc., a member of With You LLC (the partnership between the Company and Jessica Simpson) and JALP, LLC (“JALP”), a member of FUL IP Holdings, LLC (“FUL IP”). Noncontrolling interest recorded for the years ended December 31, 2018 and 2017 represents income allocations to DVS LLC, With You, Inc. and loss allocations to JALP. The following table sets forth the noncontrolling interest for the years ended December 31, 2019, 2018 and 2017: Year Ended December 31, 2019 2018 2017 (in thousands) With You LLC $ (6,230) $ 5,607 $ 5,816 DVS LLC 659 614 581 FUL IP (465) (715) (2,225) Net (loss) income attributable to noncontrolling interests $ (6,036) $ 5,506 $ 4,172 The following table sets forth the noncontrolling interest as of December 31, 2019 and 2018: DVS LLC FUL IP With You LLC Total (in thousands) Balance at January 1, 2018 $ 2,668 $ 2,186 $ 66,693 $ 71,547 Net income (loss) attributable to noncontrolling interests 614 (715) 5,607 5,506 Impact of adoption of ASC 606 - - 355 355 Distributions (581) (975) (5,126) (6,682) Balance at December 31, 2018 2,701 496 67,529 70,726 Net income (loss) attributable to noncontrolling interests 659 (465) (6,230) (6,036) Distributions (614) - (4,752) (5,366) Balance at December 31, 2019 $ 2,746 $ 31 $ 56,547 $ 59,324 During the year ended December 31, 2019, the Company wrote-off a receivable related to the previous sale of the FUL trademark. During the year ended December 31, 2018, the Company recorded a loss on sale of assets of $2.0 million related to the sale of the FUL trademark. |
Reportable Segment | Reportable Segment An operating segment, in part, is a component of an enterprise whose operating results are regularly reviewed by the chief operating decision maker (the “CODM”) to make decisions about resources to be allocated to the segment and assess its performance. Operating segments may be aggregated only to a limited extent. The Company’s CODM, the Chief Executive Officer, reviews financial information presented on a consolidated basis, accompanied by disaggregated information about revenues for purposes of making operating decisions and assessing financial performance. Accordingly, the Company has determined that it has a single operating and reportable segment. In addition, the Company has no foreign operations or any assets in foreign locations. The majority of the Company’s operations consist of a single revenue stream, which is the licensing of its trademark portfolio, with additional revenues derived from certain commissions. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards ASU No. 2019-12, “Simplifying the Accounting for Income Taxes (Topic 740)” In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes (Topic 740) (“ASU 2019-12”), which simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740 related to intraperiod tax allocations, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities related to outside basis differences. The standard also simplifies GAAP for other areas of ASC 740 by clarifying and amending existing guidance related to accounting for franchise taxes and accounting for transactions that result in a step-up in the tax basis of goodwill. ASU 2019-12 is effective for annual and interim periods beginning after December 15, 2020, and early adoption is permitted. The Company does not expect the adoption of ASU 2019-12 to have a material impact on the Company’s consolidated financial statements. ASU No. 2018-18, “Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606” In November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606 (“ASU 2018-18”). ASU 2018-18 amends ASC 808, Collaborative Arrangements (“ ASC 808”) and ASC 606, Revenue from Contracts with Customers (“ASC 606”) to clarify that certain transactions between participants in a collaborative arrangement should be accounted for under ASC 606 when the counterparty is a customer. ASU 2018-18 is effective for annual and interim periods beginning after December 15, 2019, and early adoption is permitted. The Company does not expect the adoption of ASU 2018-18 to have a material impact on the Company’s consolidated financial statements. ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement” In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). ASU 2018-13 eliminates, amends, and adds certain disclosure requirements for fair value measurements. ASU 2018-13 is effective for annual and interim periods beginning after December 15, 2019, and early adoption is permitted for the entire standard or for the provisions that eliminate or amend disclosure requirements. The Company does not expect the adoption of ASU 2018-13 to have a material impact on the Company’s consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Summary of Significant Accounting Policies [Abstract] | |
Estimated Useful Lives of Property and Equipment | Furniture and fixtures 5 years Computer hardware/equipment 5 to 7 years Leasehold improvements Term of the lease or the estimated life of the related improvements, whichever is shorter. Computer software 5 years Automobiles and trucks 5 years Websites 3 years |
Earnings Per Share, Basic and Diluted | Year Ended December 31, 2019 2018 2017 Unvested restricted stock 475,387 1,233,703 166,607 Performance based restricted stock — 58,275 65,087 Total 475,387 1,291,978 231,694 |
Schedule of Noncontrolling Interest | Year Ended December 31, 2019 2018 2017 (in thousands) With You LLC $ (6,230) $ 5,607 $ 5,816 DVS LLC 659 614 581 FUL IP (465) (715) (2,225) Net (loss) income attributable to noncontrolling interests $ (6,036) $ 5,506 $ 4,172 |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net | DVS LLC FUL IP With You LLC Total (in thousands) Balance at January 1, 2018 $ 2,668 $ 2,186 $ 66,693 $ 71,547 Net income (loss) attributable to noncontrolling interests 614 (715) 5,607 5,506 Impact of adoption of ASC 606 - - 355 355 Distributions (581) (975) (5,126) (6,682) Balance at December 31, 2018 2,701 496 67,529 70,726 Net income (loss) attributable to noncontrolling interests 659 (465) (6,230) (6,036) Distributions (614) - (4,752) (5,366) Balance at December 31, 2019 $ 2,746 $ 31 $ 56,547 $ 59,324 |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value of Financial Instruments [Abstract] | |
Schedule of Indefinite-lived Assets | Balance at January 1, 2019 $ 624,985 Additions 82 Impairment charges (33,109) Balance at December 31, 2019 $ 591,958 Balance at January 1, 2018 $ 660,789 Additions 216 Impairment charges (17,899) Reclassified to finite-lived intangible assets (6,951) Sale of trademarks (11,170) Ending balance at December 31, 2018 $ 624,985 |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table sets forth the carrying value and the fair value of the Company’s financial assets and liabilities required to be disclosed at December 31, 2019 and 2018: Carrying Value Fair Value Financial Instrument Level 12/31/2019 12/31/2018 12/31/2019 12/31/2018 (in thousands) Equity securities 1 $ 47 $ 627 $ 47 $ 627 Interest rate swaps - liability 2 $ 6,514 $ 2,019 $ 6,514 $ 2,019 Term loans 2 $ 453,831 $ 519,850 $ 451,483 $ 515,742 Revolving loan 2 $ 14,358 $ 115,000 $ 14,323 $ 114,827 |
Schedule of Notional Amounts of Outstanding Derivative Positions | The components of the 2018 Swap Agreements as of December 31, 2019 are as follows: Notional Value Derivative Asset Derivative Liability (in thousands) LIBOR based loans $ 300,000 $ — $ 6,514 |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Discontinued Operations [Abstract] | |
Schedule of discontinued operations unaudited condensed consolidated statements of operations | Year Ended December 31, 2019 2018 2017 Net revenue $ 18,771 $ 42,665 $ 42,684 Operating expenses 16,481 27,544 25,691 Impairment charges 161,224 - - Loss on sale of MSLO 4,273 - - (Loss) income from operations (163,207) 15,121 16,993 Other expense (income) 485 - (401) Interest expense 3,570 6,888 891 (Loss) income from discontinued operations before income taxes (167,262) 8,233 16,503 (Benefit from) provision for income taxes (42,199) 1,249 (88,112) (Loss) income from discontinued operations $ (125,063) $ 6,984 $ 104,615 |
Schedule of discontinued operations balance sheet | December 31, 2019 2018 Carrying amount of assets included as part of discontinued operations: Current Assets: Accounts receivable, net $ - $ 16,602 Prepaid expenses and other current assets 6,839 7,243 Total current assets from discontinued operations 6,839 23,845 Property and equipment, net - 580 Intangible assets, net - 330,084 Total assets from discontinued operations $ 6,839 $ 354,509 Carrying amount of liabilities included as part of discontinued operations: Current Liabilities: Accounts payable and accrued expenses $ 1,959 $ 11,927 Current portion of deferred revenue - 3,523 Total current liabilities from discontinued operations 1,959 15,450 Deferred income taxes - - Other long-term liabilities - 3,629 Total liabilities from discontinued operations $ 1,959 $ 19,079 |
Schedule of discontinued operations cash flow | Year Ended December 31, 2019 2018 2017 (in thousands) Cash provided by discontinued operating activities $ 40,321 $ 9,365 $ 111,315 Cash used in discontinued investing activities $ (44) $ (80) (77) Cash used in discontinued financing activities $ (574) $ (3,000) (3,000) |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue [Abstract] | |
Disaggregated Revenue | The following table presents revenue disaggregated by source for the years ended December 31, 2019, 2018 and 2017: Year Ended December 31, 2019 2018 2017 (in thousands) Licensing agreements $ 101,161 $ 120,350 $ 123,948 Other 415 6,940 832 Total $ 101,576 $ 127,290 $ 124,780 |
Contract Balances | The below table summarizes the Company’s contract assets and contract liabilities: December 31, December 31, 2019 2018 (in thousands) Contract assets $ 1,803 $ 2,484 Contract liabilities 3,040 4,923 |
Future Performance Obligations | The below table summarizes amounts related to future performance obligations from continuing operations under fixed contractual arrangements as of December 31, 2019 and the periods in which they are expected to be earned and recognized as revenue: 2020 2021 2022 2023 2024 Thereafter (in thousands) Future Performance Obligations $ 43,535 $ 27,127 $ 6,778 $ 4,280 $ 36 $ - |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment is summarized as follows: December 31, 2019 2018 (in thousands) Furniture and fixtures $ 5,114 $ 5,114 Computer hardware/equipment 277 524 Leasehold improvements 6,162 6,154 Computer software 570 715 Websites 169 304 Property and equipment 12,292 12,811 Less accumulated depreciation and amortization (6,943) (4,420) Property and equipment, net $ 5,349 $ 8,391 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Intangible Assets [Abstract] | |
Summary of Intangible Assets | Intangible assets are summarized as follows: Gross Useful Lives Carrying Accumulated Net Carrying December 31, 2019 (Years) Amount Amortization Amount (in thousands) Finite-lived intangible assets: Trademarks 5 - 15 $ 12,491 $ (4,515) $ 7,976 Customer agreements 4 2,200 (2,198) 2 Patents 10 95 (64) 31 $ 14,786 $ (6,777) 8,009 Indefinite-lived intangible assets: Trademarks 591,958 Intangible assets, net $ 599,967 Gross Useful Lives Carrying Accumulated Net Carrying December 31, 2018 (Years) Amount Amortization Amount (in thousands) Finite-lived intangible assets: Trademarks 5 - 15 $ 12,438 $ (2,689) $ 9,749 Customer agreements 4 2,200 (2,147) 53 Patents 10 361 (321) 40 $ 14,999 $ (5,157) 9,842 Indefinite-lived intangible assets: Trademarks 624,985 Intangible assets, net $ 634,827 |
Summary of Future Annual Estimated Amortization Expense | Future annual estimated amortization expense is summarized as follows: Years Ended December 31, (in thousands) 2020 $ 1,839 2021 1,837 2022 1,814 2023 1,388 2024 326 Thereafter 805 $ 8,009 |
Schedule of Indefinite-lived Assets | Balance at January 1, 2019 $ 624,985 Additions 82 Impairment charges (33,109) Balance at December 31, 2019 $ 591,958 Balance at January 1, 2018 $ 660,789 Additions 216 Impairment charges (17,899) Reclassified to finite-lived intangible assets (6,951) Sale of trademarks (11,170) Ending balance at December 31, 2018 $ 624,985 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Long-Term Debt [Abstract] | |
Schedule of Long Term Debt | December 31, 2019 2018 (in thousands) Secured Term Loans $ 453,831 $ 519,850 Revolving Credit Facility 14,358 115,000 Unamortized deferred financing costs (22,189) (24,063) Total long-term debt, net of unamortized deferred financing costs 446,000 610,787 Less: current portion of long-term debt 12,750 28,300 Long-term debt $ 433,250 $ 582,487 |
Schedule of Maturities of Long-term Debt | As of December 31, 2019, the Company’s debt maturities for the next five years and thereafter on a calendar year basis are as follows: Total 2020 2021 2022 2023 2024 Thereafter (in thousands) Term Loans $ 453,831 $ 12,750 $ 17,750 $ 20,000 $ 111,631 $ 291,700 $ - Revolving Loan 14,358 - - - 14,358 - - Total $ 468,189 $ 12,750 $ 17,750 $ 20,000 $ 125,989 $ 291,700 $ - |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounts Payable and Accrued Expenses [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | December 31, 2019 2018 (in thousands) Accounts payable $ 2,942 $ 2,775 Accrued expenses Interest 1,025 2,401 Compensation 2,395 2,741 Marketing and commissions 1,402 920 Professional services fees 2,181 112 Interest rate swap liability - current 3,124 528 Licensee settlement payable - current 940 1,883 Other accrued expenses 1,712 240 Total accounts payable and accrued expenses $ 15,721 $ 11,600 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Summary of operating lease assets and liabilities recorded on the balance sheet | December 31, Classification on Balance Sheet 2019 Assets (in thousands) Non-current Right-of-use assets - operating leases $ 50,320 Liabilities Current Current portion of lease liabilities - operating leases $ 3,035 Non-current Lease liabilities - operating leases, net of current portion 54,168 Total operating lease liabilities $ 57,203 Weighted average remaining lease term (in years) 13.3 |
Summary of maturities of the Company’s lease liabilities | Operating Leases (in thousands) 2020 $ 6,807 2021 6,718 2022 6,721 2023 6,707 2024 6,856 Thereafter 53,809 Total minimum lease payments 87,618 Less: imputed interest 30,415 Lease liabilities $ 57,203 |
STOCK INCENTIVE PLAN, OPTIONS_2
STOCK INCENTIVE PLAN, OPTIONS AND WARRANTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Stock Incentive Plan, Options and Warrants [Abstract] | |
Summary of Stock Option Activity | The following table summarizes the Company’s outstanding options: Weighted-Average Remaining Number of Weighted-Average Contractual Life Options Exercise Price (in Years) (in thousands, except share and per share data) Outstanding - January 1, 2017 129,501 $ 9.65 2.3 Granted — — Exercised — — Forfeited or canceled (45,500) $ (11.49) Outstanding - January 1, 2018 84,001 $ 8.65 2.1 Granted — — Exercised — — Forfeited or canceled (34,500) $ (6.41) Outstanding - January 1, 2019 49,501 $ 10.22 2.3 Granted — — Exercised — — Forfeited or canceled (20,000) (12.98) Outstanding at December 31, 2019 29,501 $ 8.35 2.4 Exercisable - December 31, 2019 29,501 $ 8.35 2.4 |
Schedule of Nonvested Stock Options | A summary of the changes in the Company’s unvested stock options is as follows: Weighted-Average Grant Date Number of Options Fair Value Unvested - January 1, 2017 5,000 $ 1.96 Granted — — Vested (5,000) (1.96) Forfeited or canceled — — Unvested - December 31, 2017 — $ — |
Schedule of Warrants Activity and Nonvested Warrants | The following table summarizes the Company’s outstanding warrants: Weighted-Average Remaining Number of Weighted-Average Contractual Life Aggregate Warrants Exercise Price (in Years) Intrinsic Value (in thousands, except share and per share data) Outstanding - January 1, 2017 801,760 $ 7.87 3.1 $ 51 Granted — — Exercised — — Forfeited or canceled (31,600) $ (5.75) Outstanding - January 1, 2018 770,160 $ 7.87 2.2 $ — Granted — — Exercised — — Forfeited or canceled (570,160) $ (6.07) Outstanding - January 1, 2019 200,000 $ 13.32 6.4 $ — Granted — — Exercised — — Forfeited or canceled — — Outstanding at December 31, 2019 200,000 $ 13.32 5.4 $ — Exercisable - December 31, 2019 200,000 $ 13.32 5.4 $ — A summary of the changes in the Company’s unvested warrants is as follows: Weighted-Average Grant Date Number of Warrants Fair Value Unvested - January 1, 2017 50,000 $ 6.32 Granted — — Vested (50,000) 6.32 Forfeited or canceled — — Unvested - December 31, 2017 — $ — |
Schedule of Restricted Stock Activity | A summary of the time-based restricted stock activity for the years ended December 31, 2019, 2018 and 2017 is as follows: Weighted-Average Weighted-Average Remaining Grant Date Fair Contractual Life Number of Shares Value (in Years) Unvested - January 1, 2017 258,787 $ 8.45 2.1 Granted 111,112 3.60 Vested (174,363) (6.73) Unvested - January 1, 2018 195,536 $ 7.23 1.8 Granted 235,296 1.70 Vested (137,843) (5.25) Unvested - January 1, 2019 292,989 $ 3.72 0.9 Granted 464,576 0.86 Vested (235,296) (1.70) Unvested - December 31, 2019 522,269 $ 0.85 0.5 |
Schedule of Restricted Stock Units Activity | A summary of the time-based restricted stock unit activity for the years ended December 31, 2019, 2018 and 2017 is as follows: Weighted-Average Weighted-Average Remaining Grant Date Fair Contractual Life Number of Shares Value (in Years) Unvested - January 1, 2017 326,667 $ 8.52 2.5 Granted 688,836 3.18 Vested (219,103) (8.29) Forfeited or canceled (60,000) (4.89) Unvested - January 1, 2018 736,400 $ 3.89 2.2 Granted 2,678,743 1.77 Vested (1,732,523) (2.18) Forfeited or canceled (66,667) (3.20) Unvested - January 1, 2019 1,615,953 $ 2.24 2.2 Granted — — Vested (997,644) (2.44) Forfeited or canceled (190,000) (1.00) Unvested - December 31, 2019 428,309 $ 1.42 1.3 |
Schedule of Performance Stock Units Activity | A summary of the PSUs activity for the years ended December 31, 2019, 2018 and 2017 is as follows: Weighted-Average Weighted-Average Remaining Grant Date Fair Contractual Life Number of Shares Value (in Years) Unvested - January 1, 2017 2,803,367 $ 8.18 2.4 Granted 716,600 3.17 Vested (701,233) (10.97) Forfeited or canceled (773,100) (7.22) Unvested - January 1, 2018 2,045,634 $ 5.83 2.0 Granted 785,000 1.98 Vested (350,408) (4.71) Forfeited or canceled (260,408) (7.32) Unvested - January 1, 2019 2,219,818 $ 4.47 0.8 Granted — — Vested (289,671) (4.68) Forfeited or canceled (1,800,218) (4.43) Unvested - December 31, 2019 129,929 $ 4.51 — |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The benefit from income taxes from continuing operations consists of the following: For the Year Ended December 31, 2019 2018 2017 (in thousands) Federal: Current provision $ - $ - $ - Deferred provision (7,751) (2,670) (52,878) (7,751) (2,670) (52,878) Foreign: Current provision 57 84 134 Deferred provision - - - 57 84 134 State: Current provision - 30 178 Deferred provision (1,001) 612 8,143 (1,001) 642 8,321 Benefit from income taxes $ (8,695) $ (1,944) $ (44,423) |
Schedule of Effective Income Tax Rate Reconciliation | The difference between the benefit from income taxes and the expected income tax provision determined by applying the statutory federal and state income tax rates to pre-tax income are as follows: For the Year Ended December 31, 2019 2018 2017 Federal statutory rate 21.0 % 21.0 % 35.0 % State taxes, net of federal tax benefit 1.6 2.0 — Goodwill impairment — — (32.2) Noncontrolling interest (2.6) 8.3 0.5 Valuation allowance — (7.3) 5.3 Nondeductible compensation (1.6) (5.7) (0.1) Foreign taxes (0.1) (0.5) — Other (0.6) (3.1) (0.7) Tax Cuts and Jobs Act — — 5.6 Change in state tax rates — (0.8) — 17.7 % 13.9 % 13.4 % |
Schedule of Deferred Tax Assets and Liabilities | The components of the Company’s consolidated deferred income tax balances as of December 31, 2019 and 2018 are as follows: December 31, 2019 2018 (in thousands) Deferred income tax assets Net operating loss carryforwards $ 32,565 $ 51,042 Capital loss carryforwards 2,997 4,417 Intangible assets - finite life 3,137 3,261 Stock-based compensation 286 439 Property and equipment - 3,649 Deferred rent - 799 Credits carryforward 1,148 1,281 Deferred revenue 1,939 2,755 Deferred interest expense 9,984 8,644 Deferred compensation - 1,053 Operating lease liability 13,215 - Other 4,791 3,585 70,062 80,925 Deferred income tax liability - long-term Intangible assets - indefinite-lived (57,343) (130,818) Right-of-use asset - operating leases (11,625) - Property and equipment (193) - (69,161) (130,818) Less: Valuation allowance (15,252) (17,109) Net deferred income tax liability - long-term $ (14,351) $ (67,002) |
QUARTERLY DATA (UNAUDITED) (Tab
QUARTERLY DATA (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Data (Unaudited) [Abstract] | |
Schedule of Quarterly Financial Information | First Second Third Fourth Quarter Quarter Quarter Quarter Full Year (in thousands, except per share data) 2019 Net revenue $ 25,524 $ 26,415 $ 25,392 $ 24,245 $ 101,576 Income (loss) from continuing operations 9,978 12,508 (19,964) 4,274 6,796 Loss from continuing operations before income taxes (3,473) (2,214) (33,855) (9,529) (49,071) Loss from continuing operations (3,232) (1,835) (27,820) (7,489) (40,376) Net (income) loss from continuing operations attributable to noncontrolling interests (1,539) (1,455) 9,449 (419) 6,036 Loss from continuing operations attributable to Sequential Brands Group, Inc. and Subsidiaries (4,771) (3,290) (18,371) (7,908) (34,340) Loss from discontinued operations, net of income taxes (120,574) (1,309) (309) (2,871) (125,063) Net loss attributable to Sequential Brands Group, Inc. and Subsidiaries $ (125,345) $ (4,599) $ (18,680) $ (10,779) $ (159,403) Basic and diluted loss per share: Continued operations $ (0.07) $ (0.05) $ (0.28) $ (0.12) Discontinued operations (1.88) (0.02) (0.00) (0.04) Attributable to Sequential Brands Group, Inc. and Subsidiaries (1.95) (0.07) (0.29) (0.16) First Second Third Fourth Quarter Quarter Quarter Quarter Full Year (in thousands, except per share data) 2018 Net revenue $ 29,463 $ 33,126 $ 29,455 $ 35,246 $ 127,290 Income (loss) from continuing operations 11,183 17,723 (3,858) 17,003 42,051 (Loss) income from continuing operations before income taxes (2,478) 3,742 (17,689) 2,519 (13,906) (Loss) income from continuing operations (1,555) 3,301 (8,881) (4,827) (11,962) Net income from continuing operations attributable to noncontrolling interests (1,960) (1,102) (1,581) (863) (5,506) (Loss) income from continuing operations attributable to Sequential Brands Group, Inc. and Subsidiaries (3,515) 2,199 (10,462) (5,690) (17,468) Income from discontinued operations, net of income taxes 1,253 1,388 847 3,496 6,984 Net (loss) income attributable to Sequential Brands Group, Inc. and Subsidiaries $ (2,262) $ 3,587 $ (9,615) $ (2,194) $ (10,484) Basic (loss) earnings per share: Continued operations $ (0.06) $ 0.03 $ (0.16) $ (0.09) Discontinued operations 0.02 0.03 0.01 0.05 Attributable to Sequential Brands Group, Inc. and Subsidiaries (0.04) 0.06 (0.15) (0.03) Diluted (loss) earnings per share: Continued operations $ (0.06) $ 0.02 $ (0.16) $ (0.09) Discontinued operations 0.02 0.02 0.01 0.05 Attributable to Sequential Brands Group, Inc. and Subsidiaries (0.04) 0.06 (0.15) (0.03) |
ORGANIZATION AND NATURE OF OP_2
ORGANIZATION AND NATURE OF OPERATIONS (Details) | Dec. 31, 2019entity |
Minimum | |
Number of licensees | 100 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) | Jun. 10, 2019USD ($) | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Dec. 31, 2019USD ($)segmententityshares | Dec. 31, 2018USD ($)entityshares | Dec. 31, 2017USD ($)shares | Jul. 01, 2016 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||||
Allowance for doubtful accounts receivable | $ 5,800,000 | $ 1,800,000 | $ 5,800,000 | $ 1,800,000 | ||||||||||||
Decrease in accounts receivable | (16,600,000) | |||||||||||||||
Accounts receivable, net | 39,452,000 | 49,600,000 | 39,452,000 | 49,600,000 | ||||||||||||
Loss on equity securities | 100,000 | 900,000 | ||||||||||||||
Proceeds from sale of available-for-sale securities | $ 5,800,000 | 458,000 | $ 5,757,000 | |||||||||||||
Book cost basis of available for sale securities | $ 7,700,000 | 7,700,000 | ||||||||||||||
Realized loss on sale of available-for-sale securities | 1,900,000 | |||||||||||||||
Decrease in intangible assets | (330,100,000) | |||||||||||||||
Intangible assets, net | 330,084,000 | 330,084,000 | ||||||||||||||
Non-cash impairment charges | $ 36,500,000 | 33,109,000 | 17,899,000 | 340,628,000 | ||||||||||||
Goodwill, impairment loss | 304,100,000 | $ 304,100,000 | 304,100,000 | |||||||||||||
Advertising expenses | 12,000,000 | 11,100,000 | 5,300,000 | |||||||||||||
Capitalized advertising costs | 0 | 0 | 0 | 0 | ||||||||||||
Net revenue | 24,245,000 | $ 25,392,000 | $ 26,415,000 | $ 25,524,000 | 35,246,000 | $ 29,455,000 | $ 33,126,000 | $ 29,463,000 | $ 101,576,000 | 127,290,000 | $ 124,780,000 | |||||
Number of operating segments | segment | 1 | |||||||||||||||
Number of reportable segments | segment | 1 | |||||||||||||||
Goodwill | 0 | 0 | $ 0 | $ 0 | ||||||||||||
Discontinued Operations [Member] | ||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||||
Diluted weighted-average common shares outstanding | shares | 64,760,823 | 64,992,059 | 63,093,437 | |||||||||||||
Minimum | ||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||||
Useful Lives | 2 years | |||||||||||||||
Maximum | ||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||||
Useful Lives | 15 years | |||||||||||||||
Non-cash impairment charges | $ 100,000 | |||||||||||||||
Trademarks [Member] | ||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||||
Intangible assets, net | 161,200,000 | |||||||||||||||
Non-cash impairment charges | $ 161,200,000 | $ 33,109,000 | $ 17,899,000 | $ 36,500,000 | ||||||||||||
Number of indefinite-lived intangible assets | entity | 2 | 2 | ||||||||||||||
Jessica Simpson Trademark [Member] | ||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||||
Non-cash impairment charges | $ 28,500,000 | |||||||||||||||
Joe’s Trademark [Member] | ||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||||
Non-cash impairment charges | 4,600,000 | |||||||||||||||
Gaiam Pty Limited [Member] | ||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||||
Equity method investment, noncontrolling interest | 49.90% | |||||||||||||||
Equity method investments | $ 600,000 | $ 700,000 | $ 600,000 | $ 700,000 | ||||||||||||
Accounts Receivable [Member] | ||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||||
Concentration risk, percentage | 51.00% | 41.00% | ||||||||||||||
Accounts Receivable [Member] | License One [Member] | ||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||||
Concentration risk, percentage | 33.00% | 25.00% | ||||||||||||||
Accounts Receivable [Member] | License Two [Member] | ||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||||
Concentration risk, percentage | 18.00% | 16.00% | ||||||||||||||
Revenue Benchmark [Member] | License One [Member] | ||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||||
Concentration risk, percentage | 19.00% | 18.00% | 15.00% | |||||||||||||
Revenue Benchmark [Member] | License Two [Member] | ||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||||
Concentration risk, percentage | 16.00% | 12.00% | 14.00% | |||||||||||||
Revenue Benchmark [Member] | License Three [Member] | ||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||||
Concentration risk, percentage | 14.00% | 11.00% | 14.00% | |||||||||||||
FUL [Member] | Trademarks [Member] | ||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||||
Loss on sale of assets | $ 2,000,000 | |||||||||||||||
Sale | MSLO | ||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||||
Cash consideration | $ 166,000,000 | |||||||||||||||
Earnout on performance target achieved during first three year | $ 40,000,000 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Depreciation of Property, Plant and Equipment) (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Furniture and Fixtures | |
Property, Plant and Equipment, Useful Life | 5 years |
Computer Hardware and Equipment [Member] | Minimum | |
Property, Plant and Equipment, Useful Life | 5 years |
Computer Hardware and Equipment [Member] | Maximum | |
Property, Plant and Equipment, Useful Life | 7 years |
Computer Software [Member] | |
Property, Plant and Equipment, Useful Life | 5 years |
Automobiles and Trucks [Member] | |
Property, Plant and Equipment, Useful Life | 5 years |
Websites [Member] | |
Property, Plant and Equipment, Useful Life | 3 years |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Antidilutive Shares Excluded from Computation of Diluted EPS) (Details) - shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 475,387 | 1,291,978 | 231,694 |
Unvested restricted stock | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 475,387 | 1,233,703 | 166,607 |
Performance based restricted stock | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 58,275 | 65,087 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Noncontrolling Interest from Continuing Operations) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Net (loss) income attributable to noncontrolling interests | $ 419 | $ (9,449) | $ 1,455 | $ 1,539 | $ 863 | $ 1,581 | $ 1,102 | $ 1,960 | $ (6,036) | $ 5,506 | $ 4,172 |
With You LLC [Member] | |||||||||||
Net (loss) income attributable to noncontrolling interests | (6,230) | 5,607 | 5,816 | ||||||||
DVS LLC [Member] | |||||||||||
Net (loss) income attributable to noncontrolling interests | 659 | 614 | 581 | ||||||||
FUL [Member] | |||||||||||
Net (loss) income attributable to noncontrolling interests | $ (465) | $ (715) | $ (2,225) |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Noncontrolling Interest) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Balance | $ 70,726 | $ 71,547 | $ 70,726 | $ 71,547 | |||||||
Net income (loss) attributable to noncontrolling interest | $ 419 | $ (9,449) | $ 1,455 | 1,539 | $ 863 | $ 1,581 | $ 1,102 | 1,960 | (6,036) | 5,506 | $ 4,172 |
Impact of adoption of ASC 606 | 1,485 | 1,485 | |||||||||
Noncontrolling interest distribution | (5,366) | (6,682) | (7,438) | ||||||||
Balance | 59,324 | 70,726 | 59,324 | 70,726 | 71,547 | ||||||
2016-02 [Member] | |||||||||||
Impact of adoption of ASC 606 | 355 | 355 | |||||||||
DVS LLC [Member] | |||||||||||
Balance | 2,701 | 2,668 | 2,701 | 2,668 | |||||||
Net income (loss) attributable to noncontrolling interest | 659 | 614 | 581 | ||||||||
Noncontrolling interest distribution | (614) | (581) | |||||||||
Balance | 2,746 | 2,701 | 2,746 | 2,701 | 2,668 | ||||||
FUL [Member] | |||||||||||
Balance | 496 | 2,186 | 496 | 2,186 | |||||||
Net income (loss) attributable to noncontrolling interest | (465) | (715) | (2,225) | ||||||||
Noncontrolling interest distribution | (975) | ||||||||||
Balance | 31 | 496 | 31 | 496 | 2,186 | ||||||
With You LLC [Member] | |||||||||||
Balance | $ 67,529 | $ 66,693 | 67,529 | 66,693 | |||||||
Net income (loss) attributable to noncontrolling interest | (6,230) | 5,607 | 5,816 | ||||||||
Noncontrolling interest distribution | (4,752) | (5,126) | |||||||||
Balance | $ 56,547 | 67,529 | $ 56,547 | 67,529 | $ 66,693 | ||||||
With You LLC [Member] | 2016-02 [Member] | |||||||||||
Impact of adoption of ASC 606 | $ 355 | $ 355 |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS (Narrative) (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2019USD ($)entity | Dec. 31, 2018USD ($)entity | Dec. 31, 2017USD ($) | Dec. 10, 2018USD ($) | |
Increase (Decrease) in Intangible Assets, Current | $ (330,100) | |||||||||||||
Income (Loss) from Discontinued Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest | $ (2,871) | $ (309) | $ (1,309) | $ (120,574) | $ 3,496 | $ 847 | $ 1,388 | $ 1,253 | (125,063) | $ 6,984 | $ 104,615 | |||
Non-cash impairment charges | $ 36,500 | 33,109 | 17,899 | 340,628 | ||||||||||
Goodwill impairment charge | 304,100 | $ 304,100 | 304,100 | |||||||||||
Loss on Cash Flow Hedge Ineffectiveness | 400 | |||||||||||||
Loss from Components Excluded from Assessment of Cash Flow Hedge Effectiveness | 600 | |||||||||||||
Amortization expense | 1,900 | 1,000 | 800 | |||||||||||
Trademarks [Member] | ||||||||||||||
Non-cash impairment charges | $ 161,200 | $ 33,109 | $ 17,899 | 36,500 | ||||||||||
Number of indefinite-lived intangible assets | entity | 2 | 2 | ||||||||||||
Amortization expense | $ 300 | |||||||||||||
Jessica Simpson Trademark [Member] | ||||||||||||||
Non-cash impairment charges | 28,500 | |||||||||||||
Joe’s Trademark [Member] | ||||||||||||||
Non-cash impairment charges | 4,600 | |||||||||||||
Maximum | ||||||||||||||
Non-cash impairment charges | 100 | |||||||||||||
Maximum | Trademarks [Member] | ||||||||||||||
Amortization expense | $ 100 | |||||||||||||
Recurring | ||||||||||||||
Assets or liabilities measured at fair value | 0 | 0 | 0 | $ 0 | ||||||||||
Liabilities measured at fair value | $ 0 | $ 0 | $ 0 | $ 0 | ||||||||||
Interest Rate Swap [Member] | ||||||||||||||
Derivative, notional amount | $ 300,000 | |||||||||||||
December 31, 2021 Interest Rate Swap [Member] | ||||||||||||||
Derivative, notional amount | 150,000 | |||||||||||||
January 4, 2022 Interest Rate Swap [Member] | ||||||||||||||
Derivative, notional amount | $ 150,000 |
FAIR VALUE OF FINANCIAL INSTR_4
FAIR VALUE OF FINANCIAL INSTRUMENTS (Schedule of Indefinite-lived Assets) (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Indefinite-lived Intangible Assets [Line Items] | ||||||
Impairment charges | $ (36,500) | $ (33,109) | $ (17,899) | $ (340,628) | ||
Reclassified to finite-lived intangible assets | $ (330,100) | |||||
Trademarks [Member] | ||||||
Indefinite-lived Intangible Assets [Line Items] | ||||||
Balance at January 1 | $ 624,985 | 624,985 | 660,789 | |||
Additions | 82 | 216 | ||||
Impairment charges | $ (161,200) | (33,109) | (17,899) | (36,500) | ||
Reclassified to finite-lived intangible assets | (6,951) | |||||
Sale of trademarks | (11,170) | |||||
Balance at March 31 | $ 591,958 | $ 624,985 | $ 660,789 |
FAIR VALUE OF FINANCIAL INSTR_5
FAIR VALUE OF FINANCIAL INSTRUMENTS (Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value, Inputs, Level 1 [Member] | Equity Securities [Member] | Carrying Value [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Asset | $ 47 | $ 627 |
Fair Value, Inputs, Level 1 [Member] | Equity Securities [Member] | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Asset | 47 | 627 |
Fair Value, Inputs, Level 2 [Member] | Term Loans Member | Carrying Value [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 453,831 | 519,850 |
Fair Value, Inputs, Level 2 [Member] | Term Loans Member | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 451,483 | 515,742 |
Fair Value, Inputs, Level 2 [Member] | Revolving Loans [Member] | Carrying Value [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 14,358 | 115,000 |
Fair Value, Inputs, Level 2 [Member] | Revolving Loans [Member] | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 14,323 | 114,827 |
Fair Value, Inputs, Level 2 [Member] | Interest Rate Swap [Member] | Carrying Value [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 6,514 | 2,019 |
Fair Value, Inputs, Level 2 [Member] | Interest Rate Swap [Member] | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | $ 6,514 | $ 2,019 |
FAIR VALUE OF FINANCIAL INSTR_6
FAIR VALUE OF FINANCIAL INSTRUMENTS (Schedule of Notional Amounts of Outstanding Derivative Positions) (Details) - Interest Rate Cap [Member] $ in Thousands | Dec. 31, 2019USD ($) |
Derivatives, Fair Value [Line Items] | |
Notional Value | $ 300,000 |
Derivative Liability | $ 6,514 |
DISCONTINUED OPERATIONS (Narrat
DISCONTINUED OPERATIONS (Narrative) (Details) - USD ($) | Jun. 10, 2019 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Discontinued Operations | ||||||||||||
(Loss) income from discontinued operations, net of tax | $ (2,871,000) | $ (309,000) | $ (1,309,000) | $ (120,574,000) | $ 3,496,000 | $ 847,000 | $ 1,388,000 | $ 1,253,000 | $ (125,063,000) | $ 6,984,000 | $ 104,615,000 | |
Interest expense | 0 | |||||||||||
Prepaid expenses and other current assets | $ 6,839,000 | $ 7,243,000 | 6,839,000 | 7,243,000 | ||||||||
Revolving Credit Facility [Member] | ||||||||||||
Discontinued Operations | ||||||||||||
Mandatory prepayment | $ 109,600,000 | |||||||||||
Tranche A -1 Term Loans [Member] | ||||||||||||
Discontinued Operations | ||||||||||||
Voluntary prepayment | 44,400,000 | |||||||||||
MSLO | ||||||||||||
Discontinued Operations | ||||||||||||
Accretion and guaranteed expenses | 900,000 | |||||||||||
Sale | MSLO | ||||||||||||
Discontinued Operations | ||||||||||||
Cash consideration | 166,000,000 | |||||||||||
Earnout on performance target achieved during first three year | $ 40,000,000 | |||||||||||
Pre-tax loss | (4,273,000) | |||||||||||
Non-cash impairment charges | $ 161,200,000 | 161,224,000 | ||||||||||
(Loss) income from discontinued operations, net of tax | (125,063,000) | 6,984,000 | 104,615,000 | |||||||||
Interest expense | 3,570,000 | $ 6,888,000 | $ 891,000 | |||||||||
Transaction costs | $ 6,000,000 |
DISCONTINUED OPERATIONS - State
DISCONTINUED OPERATIONS - Statement of operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Discontinued operations unaudited condensed consolidated statement of operations | |||||||||||
Interest expense | $ 0 | ||||||||||
(Loss) income from discontinued operations | $ (2,871) | $ (309) | $ (1,309) | $ (120,574) | $ 3,496 | $ 847 | $ 1,388 | $ 1,253 | $ (125,063) | $ 6,984 | 104,615 |
Sale | MSLO | |||||||||||
Discontinued operations unaudited condensed consolidated statement of operations | |||||||||||
Net revenue | 18,771 | 42,665 | 42,684 | ||||||||
Operating expenses | 16,481 | 27,544 | 25,691 | ||||||||
Impairment charges | $ 161,200 | 161,224 | |||||||||
Loss on sale of MSLO | 4,273 | ||||||||||
(Loss) income from operations | (163,207) | 15,121 | 16,993 | ||||||||
Other expense (income) | 485 | ||||||||||
Other expense (income) | (401) | ||||||||||
Interest expense | 3,570 | 6,888 | 891 | ||||||||
(Loss) income from discontinued operations before income taxes | (167,262) | 8,233 | 16,503 | ||||||||
(Benefit from) provision for income taxes | (42,199) | 1,249 | (88,112) | ||||||||
(Loss) income from discontinued operations | $ (125,063) | $ 6,984 | $ 104,615 |
DISCONTINUED OPERATIONS - Balan
DISCONTINUED OPERATIONS - Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current Assets: | ||
Accounts receivable, net | $ 16,602 | |
Prepaid expenses and other current assets | $ 6,839 | 7,243 |
Total current assets from discontinued operations | 6,839 | 23,845 |
Property and equipment, net | 580 | |
Intangible assets, net | 330,084 | |
Total assets from discontinued operations | 6,839 | 354,509 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 1,959 | 11,927 |
Current portion of deferred revenue | 3,523 | |
Total current liabilities discontinued operations | 1,959 | 15,450 |
Other long-term liabilities | 3,629 | |
Total liabilities discontinued operations | $ 1,959 | $ 19,079 |
DISCONTINUED OPERATIONS - Cash
DISCONTINUED OPERATIONS - Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Cash provided by discontinued operating activities | $ 40,321 | $ 9,365 | $ 111,315 |
Cash used in discontinued investing activities | (44) | (80) | (77) |
Cash used in discontinued financing activities | (574) | (3,000) | (3,000) |
Sale | MSLO | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Cash provided by discontinued operating activities | 40,321 | 9,365 | 111,315 |
Cash used in discontinued investing activities | (44) | (80) | (77) |
Cash used in discontinued financing activities | $ (574) | $ (3,000) | $ (3,000) |
REVENUE (Narrative) (Details)
REVENUE (Narrative) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 01, 2018 |
Retained Earnings (Accumulated Deficit), Total | $ (394,126) | $ (234,723) | |
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | |||
Retained Earnings (Accumulated Deficit), Total | $ 1,100 |
REVENUE (Disaggregated Revenue)
REVENUE (Disaggregated Revenue) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregated revenue | $ 24,245 | $ 25,392 | $ 26,415 | $ 25,524 | $ 35,246 | $ 29,455 | $ 33,126 | $ 29,463 | $ 101,576 | $ 127,290 | $ 124,780 |
Licensing agreements [Member] | |||||||||||
Disaggregated revenue | 101,161 | 120,350 | 123,948 | ||||||||
Other Contract [Member] | |||||||||||
Disaggregated revenue | $ 415 | $ 6,940 | $ 832 |
REVENUE (Contract Balances) (De
REVENUE (Contract Balances) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue [Abstract] | ||
Contract assets | $ 1,803 | $ 2,484 |
Contract liabilities | 3,040 | 4,923 |
Decrease in contract assets | $ 700 | |
Decrease in contract liabilities | $ 100 |
REVENUE (Future Performance Obl
REVENUE (Future Performance Obligations) (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Future Performance Obligations | $ 43,535 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Future Performance Obligations | 27,127 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Future Performance Obligations | 6,778 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Future Performance Obligations | 4,280 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Future Performance Obligations | $ 36 |
REVENUE (Future Performance O_2
REVENUE (Future Performance Obligations Alternate) (Details) | Dec. 31, 2019 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 0 months |
PROPERTY AND EQUIPMENT (Narrati
PROPERTY AND EQUIPMENT (Narrative) (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | |||
Decrease in property, plant and equipment, net | $ (600) | ||
Impairment of property and equipment | 0 | $ 0 | $ 0 |
Depreciation expense | 1,500 | ||
Depreciation and amortization expense | $ 3,000 | $ 1,700 | $ 1,500 |
Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated uselife | 4 months |
PROPERTY AND EQUIPMENT (Summary
PROPERTY AND EQUIPMENT (Summary of Property and Equipment) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 12,292 | $ 12,811 |
Less accumulated depreciation and amortization | (6,943) | (4,420) |
Property and equipment, net | 5,349 | 8,391 |
Furniture and Fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 5,114 | 5,114 |
Computer Hardware and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 277 | 524 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 6,162 | 6,154 |
Computer Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 570 | 715 |
Websites [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 169 | $ 304 |
INTANGIBLE ASSETS (Narrative) (
INTANGIBLE ASSETS (Narrative) (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2019USD ($)entity | Dec. 31, 2018USD ($)entity | Dec. 31, 2017USD ($) | |
Amortization expense | $ 1,900 | $ 1,000 | $ 800 | |||
Loss on debt extinguishment | 7,117 | |||||
Impairment charges | 33,109 | 17,899 | 340,628 | |||
Indefinite-lived intangible assets, period increase (decrease) | $ (330,100) | |||||
Non-cash impairment charges | $ 36,500 | 33,109 | 17,899 | 340,628 | ||
Maximum | ||||||
Non-cash impairment charges | 100 | |||||
Trademarks [Member] | ||||||
Amortization expense | 300 | |||||
Indefinite-lived intangible assets, period increase (decrease) | (6,951) | |||||
Non-cash impairment charges | $ 161,200 | $ 33,109 | $ 17,899 | 36,500 | ||
Number of indefinite-lived intangible assets | entity | 2 | 2 | ||||
Trademarks [Member] | Maximum | ||||||
Amortization expense | $ 100 | |||||
Revo and FUL Trademarks [Member] | ||||||
Loss on debt extinguishment | $ 7,100 | |||||
Jessica Simpson Trademark [Member] | ||||||
Impairment charges | $ 28,500 | |||||
Non-cash impairment charges | 28,500 | |||||
Joe’s Trademark [Member] | ||||||
Impairment charges | 4,600 | |||||
Non-cash impairment charges | $ 4,600 |
INTANGIBLE ASSETS (Summary of I
INTANGIBLE ASSETS (Summary of Intangible Assets) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Schedule Of Finite Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 14,786 | $ 14,999 | |
Accumulated Amortization | (6,777) | (5,157) | |
Finite-lived intangible assets, net | 8,009 | 9,842 | |
Net Carrying Amount, Intangible Assets | $ 599,967 | 634,827 | |
Minimum | |||
Schedule Of Finite Lived Intangible Assets [Line Items] | |||
Useful Lives | 2 years | ||
Maximum | |||
Schedule Of Finite Lived Intangible Assets [Line Items] | |||
Useful Lives | 15 years | ||
Trademarks [Member] | |||
Schedule Of Finite Lived Intangible Assets [Line Items] | |||
Indefinite lived intangible assets | $ 591,958 | $ 624,985 | $ 660,789 |
Trademarks [Member] | |||
Schedule Of Finite Lived Intangible Assets [Line Items] | |||
Useful Lives | 4 years | ||
Gross Carrying Amount | 12,491 | $ 12,438 | |
Accumulated Amortization | (4,515) | (2,689) | |
Finite-lived intangible assets, net | $ 7,976 | $ 9,749 | |
Trademarks [Member] | Minimum | |||
Schedule Of Finite Lived Intangible Assets [Line Items] | |||
Useful Lives | 5 years | 5 years | |
Trademarks [Member] | Maximum | |||
Schedule Of Finite Lived Intangible Assets [Line Items] | |||
Useful Lives | 15 years | 15 years | |
Customer Contracts [Member] | |||
Schedule Of Finite Lived Intangible Assets [Line Items] | |||
Useful Lives | 4 years | ||
Gross Carrying Amount | $ 2,200 | $ 2,200 | |
Accumulated Amortization | (2,198) | (2,147) | |
Finite-lived intangible assets, net | $ 2 | $ 53 | |
Patents [Member] | |||
Schedule Of Finite Lived Intangible Assets [Line Items] | |||
Useful Lives | 10 years | 10 years | |
Gross Carrying Amount | $ 95 | $ 361 | |
Accumulated Amortization | (64) | (321) | |
Finite-lived intangible assets, net | $ 31 | $ 40 |
INTANGIBLE ASSETS (Future Annua
INTANGIBLE ASSETS (Future Annual Estimated Amortization Expense) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Intangible Assets [Abstract] | ||
2020 | $ 1,839 | |
2021 | 1,837 | |
2022 | 1,814 | |
2023 | 1,388 | |
2024 | 326 | |
Thereafter | 805 | |
Intangible assets amortization, total | 8,009 | $ 9,842 |
Intangible Assets, Net (Excluding Goodwill), Total | $ 599,967 | $ 634,827 |
INTANGIBLE ASSETS (Changes in I
INTANGIBLE ASSETS (Changes in Indefinite-Lived Intangible Assets) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Intangible Assets [Abstract] | ||||
Impairment charges | $ (36,500) | $ (33,109) | $ (17,899) | $ (340,628) |
Amortization | $ 1,900 | $ 1,000 | $ 800 |
GOODWILL (Narrative) (Details)
GOODWILL (Narrative) (Details) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($)$ / shares | Dec. 31, 2017USD ($)$ / shares | |
Increase (decrease) in stock price and market capitalization | (41.00%) | ||
Closing stock price | $ / shares | $ 1.78 | $ 1.78 | |
Goodwill, impairment loss | $ 304,100,000 | $ 304,100,000 | $ 304,100,000 |
Measurement Input, Control Premium [Member] | |||
Business Segment Measurement Input | 20 | 20 | |
Minimum | Measurement Input, Discount Rate [Member] | |||
Business Segment Measurement Input | 10.25 | 10.25 | |
Maximum | Measurement Input, Discount Rate [Member] | |||
Business Segment Measurement Input | 11.25 | 11.25 |
GOODWILL (Summary of Goodwill)
GOODWILL (Summary of Goodwill) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2017 | |
Goodwill [Abstract] | |||
Goodwill, impairment loss | $ (304,100,000) | $ (304,100,000) | $ (304,100,000) |
Ending Balance | $ 0 |
LONG-TERM DEBT (Narrative) (Det
LONG-TERM DEBT (Narrative) (Details) - USD ($) | Aug. 12, 2019 | Jun. 10, 2019 | Dec. 10, 2018 | Aug. 07, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Proceeds from issuance of long-term debt | $ 9,000,000 | $ 107,607,000 | $ 10,000,000 | ||||
Long-term debt | 446,000,000 | 610,787,000 | |||||
Debt Issuance Costs, Noncurrent | 14,600,000 | ||||||
Deferred financing costs | 100,000 | ||||||
Interest expense | 48,200,000 | 50,900,000 | 55,100,000 | ||||
Amortization of financing costs | 5,600,000 | 4,500,000 | $ 3,900,000 | ||||
Derivative loss | 600,000 | ||||||
Other comprehensive income (loss) reclassification due to de-designation | 400,000 | ||||||
Interest Rate Cap [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Derivative, notional amount | 300,000,000 | ||||||
Interest Rate Swap [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Derivative, notional amount | $ 300,000,000 | ||||||
Interest Rate Swap Due December 31, 2021 [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Derivative, notional amount | $ 150,000,000 | ||||||
Derivative, maturity date | Dec. 31, 2021 | ||||||
Interest Rate Swap Due January 4, 2022 [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Derivative, notional amount | $ 150,000,000 | ||||||
Derivative, maturity date | Jan. 4, 2022 | ||||||
Revolving Credit Facility [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Line of credit facility, current borrowing capacity | 80,000,000 | ||||||
Repayments of debt | $ 109,600,000 | ||||||
Tranche A -1 Term Loans [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Deferred financing costs | $ 800,000 | ||||||
Repayments of debt | $ 44,400,000 | ||||||
BoA Credit Agreement [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Debt instrument period of credit agreement | 5 years | ||||||
Proceeds from issuance of long-term debt | $ 335,000,000 | ||||||
Debt instrument covenant payment percentage of intellectual property disposed liquidation value | 50.00% | ||||||
Debt instrument covenant payment percentage of net proceeds related to other assets constituting collateral | 100.00% | ||||||
Debt instrument orderly liquidation value of registered trademarks percentage benchmark | 15.00% | ||||||
Amortization of financing costs | 100,000 | ||||||
Other Noncash Income | $ 300,000 | ||||||
Tranche A [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Maximum loan to value ratio | 50.00% | ||||||
Tranche A [Member] | Revolving Credit Facility [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Consolidated first lien leverage ratio | 2.80% | ||||||
Tranche A -1 Term Loans [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Consolidated first lien leverage ratio | 3.00% | ||||||
Revolving Loans [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Long-term debt | $ 115,000,000 | ||||||
Amended KKR Credit Agreement [Member] | Scenario Plan One [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Percent of consolidated excess cash flow for mandatory prepayment | 75.00% | ||||||
Amended KKR Credit Agreement [Member] | Scenario Plan Two [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Percent of consolidated excess cash flow for mandatory prepayment | 50.00% | ||||||
Amended KKR Credit Agreement [Member] | Scenario Plan Three [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Percent of consolidated excess cash flow for mandatory prepayment | 0.00% | ||||||
FS/KKR Credit Agreement [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Debt instrument, face amount | $ 314,000,000 | ||||||
Debt instrument, covenant description | (i) a maximum consolidated total leverage ratio, initially set at 7.25:1.00, decreasing over the term of the Amended FS/KKR Credit Agreement until reaching a final maximum ratio of 6.25:1.00 for the fiscal quarter ending September 30, 2022 and thereafter and (ii) a maximum consolidated first lien leverage ratio, initially set at 3.875:1.00, decreasing over the term of the Amended FS/KKR Credit Agreement until reaching a final maximum ratio of 2.875:1.00 for the fiscal quarter ending September 30, 2022 and thereafter | ||||||
Debt instrument consolidated total leverage ratio | 6.00% | ||||||
FS/KKR Credit Agreement [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 8.75% | ||||||
FS/KKR Credit Agreement [Member] | Base Rate [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 7.75% | ||||||
New Amended FS/KKR Credit Agreement [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Netting of cash for calculating leverage ratio covenant | $ 5,000,000 | ||||||
Deferred financing costs | $ 3,300,000 | ||||||
Percent of disposed intellectual property for mandatory prepayment | 50.00% | ||||||
Percent of assets disposed of other than intellectual property for mandatory prepayment | 100.00% | ||||||
Debt instrument, covenant compliance | the Company is in compliance with the covenants included in the Amended FS/KKR Credit Agreement | ||||||
Debt instrument covenant amount regarding minimal borrowings | 30,000,000 | ||||||
New Amended FS/KKR Credit Agreement [Member] | Scenario Plan One [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Quarterly amortization payments | 0 | ||||||
Consolidated first lien leverage ratio | 3.875% | ||||||
Final consolidated total leverage ratio | 7.25% | ||||||
New Amended FS/KKR Credit Agreement [Member] | Scenario Plan Two [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Quarterly amortization payments | $ 1,000,000 | ||||||
Consolidated first lien leverage ratio | 2.875% | ||||||
Final consolidated total leverage ratio | 6.25% | ||||||
New Amended FS/KKR Credit Agreement [Member] | Scenario Plan Three [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Consolidated total leverage ratio | 6.00% | ||||||
Third Amended BoA Credit Agreement [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Long-term debt | $ 335,000,000 | ||||||
Deferred financing costs | $ 1,300,000 | ||||||
Third Amended BoA Credit Agreement [Member] | Scenario Plan One [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Quarterly amortization payments | 2,500,000 | ||||||
Third Amended BoA Credit Agreement [Member] | Scenario Plan Two [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Quarterly amortization payments | 3,250,000 | ||||||
Third Amended BoA Credit Agreement [Member] | Scenario Plan Three [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Quarterly amortization payments | 4,000,000 | ||||||
Third Amended BoA Credit Agreement [Member] | Revolving Credit Facility [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Netting of cash for calculating leverage ratio covenant | $ 5,000,000 | ||||||
Amended BoA Revolving Credit Commitments [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Debt instrument, face amount | $ 130,000,000 | ||||||
Consolidated first lien leverage ratio | 3.875% | ||||||
Final consolidated first lien leverage ratio | 2.875% | ||||||
Line of Credit Facility, Commitment Fee Percentage | 0.375% | ||||||
Third Amended BoA Tranche A-1 Loans [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Long-term debt | $ 70,000,000 | ||||||
Third Amended BoA Tranche A-1 Loans [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 7.00% | ||||||
Third Amended BoA Tranche A-1 Loans [Member] | Base Rate [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 6.00% | ||||||
Amended BoA Revolving Loans and Amended Tranche A Loans [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 3.50% | ||||||
Amended BoA Revolving Loans and Amended Tranche A Loans [Member] | Base Rate [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 2.50% | ||||||
Third Amended BoA Tranche A Loans [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Debt instrument, face amount | $ 150,000,000 | ||||||
Long-term debt | $ 150,000,000 | ||||||
New Amended BoA Credit Agreement [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Consolidated first lien leverage ratio | 2.90% | ||||||
Revolving Credit Facility and Tranche A Loans [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Amortization of financing costs | $ 800,000 | ||||||
Other Noncash Income | $ 800,000 | ||||||
Maximum | Amended KKR Credit Agreement [Member] | Scenario Plan Two [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Debt instrument consolidated total leverage ratio | 4.00% | ||||||
Maximum | Amended KKR Credit Agreement [Member] | Scenario Plan Three [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Debt instrument consolidated total leverage ratio | 3.00% | ||||||
Maximum | Third Amended BoA Credit Agreement [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Maximum loan to value ratio | 42.50% | ||||||
Maximum | Third Amended BoA Tranche A-1 Loans [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 6.00% | ||||||
Maximum | Third Amended BoA Tranche A-1 Loans [Member] | Base Rate [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 5.00% | ||||||
Maximum | Amended BoA Revolving Loans and Amended Tranche A Loans [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 3.00% | ||||||
Maximum | Amended BoA Revolving Loans and Amended Tranche A Loans [Member] | Base Rate [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 2.00% | ||||||
Minimum | Amended KKR Credit Agreement [Member] | Scenario Plan One [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Debt instrument consolidated total leverage ratio | 4.00% | ||||||
Minimum | Amended KKR Credit Agreement [Member] | Scenario Plan Three [Member] | |||||||
Disclosure Long Term Debt Additional Information [Line Items] | |||||||
Debt instrument consolidated total leverage ratio | 3.00% |
LONG-TERM DEBT (Schedule of Lon
LONG-TERM DEBT (Schedule of Long Term Debt) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Aug. 07, 2018 |
Secured Term Loans | $ 453,831 | $ 519,850 | |
Revolving Credit Facility | 468,189 | ||
Unamortized deferred financing costs | (22,189) | (24,063) | |
Total long-term debt, net of unamortized deferred financing costs | 446,000 | 610,787 | |
Less: current portion of long-term debt | 12,750 | 28,300 | |
Long term debt, noncurrent | 433,250 | 582,487 | |
Revolving Credit Facility [Member] | |||
Revolving Credit Facility | $ 14,358 | $ 115,000 | |
Revolving Loans [Member] | |||
Total long-term debt, net of unamortized deferred financing costs | $ 115,000 |
LONG-TERM DEBT (Long Term Debt
LONG-TERM DEBT (Long Term Debt Maturities) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Long-term Debt, Fiscal Year Maturity [Abstract] | ||
2020 | $ 12,750 | |
2021 | 17,750 | |
2022 | 20,000 | |
2023 | 125,989 | |
2024 | 291,700 | |
Total long-term debt, gross | 468,189 | |
Revolving Credit Facility [Member] | ||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||
2023 | 14,358 | |
Total long-term debt, gross | 14,358 | $ 115,000 |
Term Loans Member | ||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||
2020 | 12,750 | |
2021 | 17,750 | |
2022 | 20,000 | |
2023 | 111,631 | |
2024 | 291,700 | |
Total long-term debt, gross | $ 453,831 |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Schedule of Accounts Payable and Accrued Expenses) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2019 | |
Accounts Payable and Accrued Expenses [Abstract] | ||
Accounts payable | $ 2,775 | $ 2,942 |
Accrued Expenses | ||
Increase (decrease) in accounts payable and accrued liabilities related to MSLO | 11,900 | |
Interest | 2,401 | 1,025 |
Compensation | 2,741 | 2,395 |
Marketing and Commissions | 920 | 1,402 |
Professional services fees | 112 | 2,181 |
Legal settlement payable - current | 528 | 3,124 |
Licensee settlement payable - current | 1,883 | 940 |
Other accrued expenses | 240 | 1,712 |
Total accounts payable and accrued expenses | $ 11,600 | $ 15,721 |
LEASES (Narrative) (Details)
LEASES (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Leases [Abstract] | |||
Discount rate for the leases | 6.76% | ||
Impairment of ROU assets | $ 0 | ||
Rent expense for operating leases | 6,300 | ||
Rent expense for operating leases | $ 6,000 | $ 5,700 | |
Sublease income | $ 1,000 | $ 700 | $ 200 |
Lease, Practical Expedients, Package | true |
LEASES (Summary of operating le
LEASES (Summary of operating lease assets and liabilities recorded on the balance sheet) (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Operating lease assets and liabilities recorded on the balance sheet | |
Right-of-use assets - operating leases | $ 50,320 |
Current portion of lease liabilities - operating leases | 3,035 |
Lease liabilities - operating leases, net of current portion | 54,168 |
Total operating lease liabilities | $ 57,203 |
Weighted average remaining lease term (in years) | 13 years 3 months 18 days |
LEASES (Summary of maturities o
LEASES (Summary of maturities of the Company’s lease liabilities) (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Maturities of the Company’s lease liabilities | |
2020 | $ 6,807 |
2021 | 6,718 |
2022 | 6,721 |
2023 | 6,707 |
2024 | 6,856 |
Thereafter | 53,809 |
Total minimum lease payments | 87,618 |
Less: imputed interest | 30,415 |
Lease liabilities | $ 57,203 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Commitments and Contingencies [Abstract] | ||
Contingency related to settlement claim | $ 2 | $ 3.2 |
Potential contingency income related to assignment rights | $ 100 | |
Option to exercise rights | 6 years |
PREFERRED STOCK (Narrative) (De
PREFERRED STOCK (Narrative) (Details) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock Series A, shares issued | 0 | 0 |
Preferred stock Series A, shares outstanding | 0 | 0 |
Series A Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
STOCK INCENTIVE PLAN, OPTIONS_3
STOCK INCENTIVE PLAN, OPTIONS AND WARRANTS (Narrative) (Details) - USD ($) | Mar. 27, 2019 | Feb. 20, 2018 | Jul. 25, 2017 | May 26, 2016 | Feb. 28, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 04, 2015 | Jan. 05, 2006 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Shares authorized, additional number | 3,500,000 | ||||||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | $ 0 | ||||||||||
2005 Stock Incentive Compensation Plan | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Shares authorized | 366,667 | ||||||||||
2013 Stock Incentive Compensation Plan | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Shares authorized | 6,000,000 | 2,500,000 | |||||||||
Unvested restricted stock | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Restricted stock awards, granted in period | 464,576 | 235,296 | 111,112 | ||||||||
Vested units | 235,296 | 137,843 | 174,363 | ||||||||
Unvested restricted stock | Members of BOD | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Award vesting period | 1 year | 1 year | |||||||||
Allocated share-based compensation expense | $ 300,000 | ||||||||||
Restricted stock awards, granted in period | 464,576 | 235,296 | |||||||||
Fair value of restricted stock grant | $ 400,000 | $ 400,000 | |||||||||
Unvested restricted stock | Members of BOD | Awarded During 2018 [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Allocated share-based compensation expense | 100,000 | 300,000 | |||||||||
Time-based Restricted Stock [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Total compensation expense | $ 400,000 | 500,000 | $ 600,000 | ||||||||
Stock option expense, Recognition period | 6 months | ||||||||||
Unrecognized compensation expense, other than options | $ 200,000 | ||||||||||
Unrecognized compensation expense, period for recognition | 6 months | ||||||||||
Time-based Restricted Stock [Member] | Share-based Payment Arrangement, Employee [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Allocated share-based compensation expense | $ 1,500,000 | ||||||||||
Fair value of restricted stock grant | $ 843,486 | ||||||||||
Time-based Restricted Stock [Member] | Employees and Consultant [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Award vesting period | 5 years | ||||||||||
Restricted stock awards, granted in period | 1,835,257 | 688,836 | |||||||||
Fair value of restricted stock grant | $ 3,200,000 | ||||||||||
Time-based Restricted Stock [Member] | Consultant [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Fair value of restricted stock grant | $ 2,200,000 | ||||||||||
Time-based Restricted Stock [Member] | Awarded During 2017 [Member] | Employees and Consultant [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Allocated share-based compensation expense | $ 200,000 | 400,000 | $ 200,000 | ||||||||
Time-based Restricted Stock [Member] | Awarded During 2018 [Member] | Employees and Consultant [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Allocated share-based compensation expense | $ 500,000 | 800,000 | |||||||||
Time-based Restricted Stock [Member] | Chief Executive Officer [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Restricted stock awards, granted in period | 33,334 | ||||||||||
Time-based Restricted Stock [Member] | Members of BOD | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Award vesting period | 1 year | ||||||||||
Restricted stock awards, granted in period | 58,334 | 111,112 | |||||||||
Fair value of restricted stock grant | $ 400,000 | ||||||||||
Time-based Restricted Stock [Member] | Members of BOD | Awarded During 2017 [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Allocated share-based compensation expense | 100,000 | 300,000 | |||||||||
Warrants | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Allocated share-based compensation expense | $ 0 | $ 0 | |||||||||
Warrants | Maximum | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Allocated share-based compensation expense | $ 100,000 | ||||||||||
Restricted Stock Units (RSUs) [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Accrued share-based compensation expense | $ 1,500,000 | ||||||||||
Restricted stock awards, granted in period | 2,678,743 | 688,836 | |||||||||
Vested units | 997,644 | 1,732,523 | 219,103 | ||||||||
Restricted Stock Units (RSUs) [Member] | Share-based Payment Arrangement, Employee [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Total compensation expense | $ 1,200,000 | $ 1,600,000 | $ 1,700,000 | ||||||||
Stock option expense, Recognition period | 1 year 3 months 18 days | ||||||||||
Unrecognized compensation expense, other than options | $ 400,000 | ||||||||||
Unrecognized compensation expense, period for recognition | 1 year 3 months 18 days | ||||||||||
Restricted Stock Units (RSUs) [Member] | Minimum | Consultant [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Award vesting period | 6 months | ||||||||||
Restricted Stock Units (RSUs) [Member] | Maximum | Consultant [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Award vesting period | 3 years | ||||||||||
Restricted Stock Units (RSUs) [Member] | Former Chief Executive Officer [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Accelerated shares, vesting | 83,334 | ||||||||||
Accelerated shares, compensation expense | $ 800,000 | ||||||||||
Performance based restricted stock | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Allocated share-based compensation expense | $ 200,000 | $ 900,000 | $ 3,500,000 | ||||||||
Total compensation expense | $ 200,000 | ||||||||||
Restricted stock awards, granted in period | 785,000 | 716,600 | |||||||||
Vested units | 289,671 | 350,408 | 701,233 | ||||||||
Performance based restricted stock | Share-based Payment Arrangement, Employee [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Total compensation expense | $ 200,000 | ||||||||||
Restricted stock awards, granted in period | 135,000 | ||||||||||
Stock issued | 83,250 | ||||||||||
Fair value of restricted stock grant | $ 300,000 | ||||||||||
Performance based restricted stock | Employees and Consultant [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Allocated share-based compensation expense | 0 | ||||||||||
Total compensation expense | $ 500,000 | ||||||||||
Restricted stock awards, granted in period | 41,600 | 164,978 | |||||||||
Performance based restricted stock | February 28, 2107 [Member] | Employees and Consultant [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Allocated share-based compensation expense | $ 600,000 | ||||||||||
Performance based restricted stock | Awarded During 2016, 2017 and 2018 [Member] | Employees and Consultant [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Vested units | 231,396 | 208,883 | |||||||||
Performance based restricted stock | Minimum | Share-based Payment Arrangement, Employee [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Award vesting period | 1 year | ||||||||||
Performance based restricted stock | Maximum | Share-based Payment Arrangement, Employee [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Award vesting period | 2 years | ||||||||||
Performance based restricted stock | Chief Executive Officer [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Accelerated shares, compensation expense | $ 2,900,000 | ||||||||||
Restricted stock awards, granted in period | 200,000 | ||||||||||
Performance based restricted stock | Chief Executive Officer [Member] | Year 2017 Two [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Award vesting period | 3 years | ||||||||||
Restricted stock awards, granted in period | 175,000 | ||||||||||
Fair value of restricted stock grant | $ 700,000 | ||||||||||
Performance based restricted stock | Chief Financial Officer [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Restricted stock awards, granted in period | 36,000 | ||||||||||
Performance based restricted stock | Chief Financial Officer [Member] | Year 2017 Two [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Allocated share-based compensation expense | $ 100,000 | ||||||||||
Total compensation expense | $ 0 | 200,000 | |||||||||
Performance based restricted stock | Former Chief Executive Officer [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Restricted stock awards, granted in period | 60,000 | ||||||||||
Employee Stock Option [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Allocated share-based compensation expense | 0 | 0 | |||||||||
Employee Stock Option [Member] | Maximum | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Allocated share-based compensation expense | 100,000 | ||||||||||
Employee Stock Option [Member] | Time-based Restricted Stock [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Award vesting period | 3 years | ||||||||||
Allocated share-based compensation expense | $ 300,000 | $ 500,000 | $ 700,000 | ||||||||
Restricted stock awards, granted in period | 260,000 | ||||||||||
Fair value of restricted stock grant | $ 1,800,000 |
STOCK INCENTIVE PLAN, OPTIONS_4
STOCK INCENTIVE PLAN, OPTIONS AND WARRANTS (Summary of Stock Option Activity and Changes in Unvested Stock Options) (Detail) - Employee Stock Option [Member] - $ / shares | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||||
Outstanding beginning, Number of Options | 49,501 | 84,001 | 129,501 | |
Vested, Number of Options | (5,000) | |||
Forfeited or canceled, Number of Options | (20,000) | (34,500) | (45,500) | |
Outstanding ending, Number of Options | 29,501 | 49,501 | 84,001 | 129,501 |
Exercisable, Number of Options | 29,501 | |||
Outstanding beginning, Weighted Average Exercise Price | $ 10.22 | $ 8.65 | $ 9.65 | |
Vested, options - Weighted-Average Grant Date Fair Value | 1.96 | |||
Forfeited or canceled, Weighted Average Exercise Price | (12.98) | (6.41) | (11.49) | |
Outstanding ending, Weighted Average Exercise Price | 8.35 | $ 10.22 | $ 8.65 | $ 9.65 |
Exercisable, Weighted Average Exercise Price | $ 8.35 | |||
Weighted Average Remaining Contractual Life (in years) | 2 years 4 months 24 days | 2 years 3 months 18 days | 2 years 1 month 6 days | 2 years 3 months 18 days |
Exercisable, Weighted Average Remaining Contractual Life (in years) | 2 years 4 months 24 days | |||
Nonvested | ||||
Outstanding beginning, Number of Options | 5,000 | |||
Vested, Number of Options | (5,000) | |||
Outstanding ending, Number of Options | 5,000 | |||
Outstanding beginning, Weighted Average Exercise Price, Options | $ 1.96 | |||
Vested, options Weighted Average Exercise Price, Options | $ 1.96 | |||
Outstanding ending, Weighted Average Exercise Price, Unvested Options | $ 1.96 |
STOCK INCENTIVE PLAN, OPTIONS_5
STOCK INCENTIVE PLAN, OPTIONS AND WARRANTS (Summary of Warrant Activity) (Detail) - Warrants - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||||
Outstanding beginning, Number of Options | 200,000 | 770,160 | 801,760 | |
Vested, Number of Options | (50,000) | |||
Forfeited or canceled, Number of Options | (570,160) | (31,600) | ||
Outstanding ending, Number of Options | 200,000 | 200,000 | 770,160 | 801,760 |
Exercisable, Number of Options | 200,000 | |||
Outstanding beginning, Weighted Average Exercise Price | $ 13.32 | $ 7.87 | $ 7.87 | |
Vested, options - Weighted-Average Grant Date Fair Value | 6.32 | |||
Forfeited or canceled, Weighted Average Exercise Price | 6.07 | 5.75 | ||
Outstanding ending, Weighted Average Exercise Price | 13.32 | $ 13.32 | $ 7.87 | $ 7.87 |
Exercisable, Weighted Average Exercise Price | $ 13.32 | |||
Weighted Average Remaining Contractual Life (in years) | 5 years 4 months 24 days | 6 years 4 months 24 days | 2 years 2 months 12 days | 3 years 1 month 6 days |
Exercisable, Weighted Average Remaining Contractual Life (in years) | 5 years 4 months 24 days | |||
Outstanding, Aggregate Intrinsic Value | $ 51 | |||
Nonvested | ||||
Outstanding beginning, Number of Options | 50,000 | |||
Vested, Number of Options | (50,000) | |||
Outstanding ending, Number of Options | 50,000 | |||
Outstanding beginning, Weighted Average Exercise Price, Options | $ 6.32 | |||
Vested, options Weighted Average Exercise Price, Options | $ 6.32 | |||
Outstanding ending, Weighted Average Exercise Price, Unvested Options | $ 6.32 |
STOCK INCENTIVE PLAN, OPTIONS_6
STOCK INCENTIVE PLAN, OPTIONS AND WARRANTS (Summary of Restricted Stock Activity and Performance Stock Units) (Detail) - USD ($) $ / shares in Units, $ in Millions | Jul. 25, 2017 | Feb. 28, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Unvested restricted stock | ||||||
Summary Of Restricted Stock Activity [Line Items] | ||||||
Outstanding beginning, Other than options | 292,989 | 195,536 | 258,787 | |||
Restricted stock awards, granted in period | 464,576 | 235,296 | 111,112 | |||
Vested, Other than options | (235,296) | (137,843) | (174,363) | |||
Outstanding ending, Other than options | 522,269 | 292,989 | 195,536 | 258,787 | ||
Outstanding beginning, Weighted Average Exercise Price, Other than options | $ 3.72 | $ 7.23 | $ 8.45 | |||
Granted, Weighted Average Exercise Price, Other than options | 0.86 | 1.70 | 3.60 | |||
Vested, Weighted Average Grant Date Fair Value | (1.70) | (5.25) | (6.73) | |||
Outstanding ending , Weighted Average Exercise Price, Other than options | $ 0.85 | $ 3.72 | $ 7.23 | $ 8.45 | ||
Nonvested, Weighted Average Remaining Vesting Period, Other Than Options, Nonvested | 6 months | 10 months 24 days | 1 year 9 months 18 days | 2 years 1 month 6 days | ||
Performance based restricted stock | ||||||
Summary Of Restricted Stock Activity [Line Items] | ||||||
Outstanding beginning, Other than options | 2,219,818 | 2,045,634 | 2,803,367 | |||
Restricted stock awards, granted in period | 785,000 | 716,600 | ||||
Vested, Other than options | (289,671) | (350,408) | (701,233) | |||
Forfeited or Canceled, Other than options | (1,800,218) | (260,408) | (773,100) | |||
Outstanding ending, Other than options | 129,929 | 2,219,818 | 2,045,634 | 2,803,367 | ||
Outstanding beginning, Weighted Average Exercise Price, Other than options | $ 4.47 | $ 5.83 | $ 8.18 | |||
Granted, Weighted Average Exercise Price, Other than options | 1.98 | 3.17 | ||||
Vested, Weighted Average Grant Date Fair Value | (4.68) | (4.71) | (10.97) | |||
Forfeited or Canceled, Weighted Average Exercise Price, Other than options | (4.43) | (7.32) | (7.22) | |||
Outstanding ending , Weighted Average Exercise Price, Other than options | $ 4.51 | $ 4.47 | $ 5.83 | $ 8.18 | ||
Nonvested, Weighted Average Remaining Vesting Period, Other Than Options, Nonvested | 0 years | 9 months 18 days | 2 years | 2 years 4 months 24 days | ||
Allocated share-based compensation expense | $ 0.2 | $ 0.9 | $ 3.5 | |||
Performance based restricted stock | Employees and Consultant [Member] | ||||||
Summary Of Restricted Stock Activity [Line Items] | ||||||
Restricted stock awards, granted in period | 41,600 | 164,978 | ||||
Allocated share-based compensation expense | $ 0 | |||||
Restricted Stock Units (RSUs) [Member] | ||||||
Summary Of Restricted Stock Activity [Line Items] | ||||||
Outstanding beginning, Other than options | 1,615,953 | 736,400 | 326,667 | |||
Restricted stock awards, granted in period | 2,678,743 | 688,836 | ||||
Vested, Other than options | (997,644) | (1,732,523) | (219,103) | |||
Forfeited or Canceled, Other than options | (190,000) | (66,667) | (60,000) | |||
Outstanding ending, Other than options | 428,309 | 1,615,953 | 736,400 | 326,667 | ||
Outstanding beginning, Weighted Average Exercise Price, Other than options | $ 2.24 | $ 3.89 | $ 8.52 | |||
Granted, Weighted Average Exercise Price, Other than options | 1.77 | 3.18 | ||||
Vested, Weighted Average Grant Date Fair Value | (2.44) | (2.18) | (8.29) | |||
Forfeited or Canceled, Weighted Average Exercise Price, Other than options | (1) | (3.20) | (4.89) | |||
Outstanding ending , Weighted Average Exercise Price, Other than options | $ 1.42 | $ 2.24 | $ 3.89 | $ 8.52 | ||
Nonvested, Weighted Average Remaining Vesting Period, Other Than Options, Nonvested | 1 year 3 months 18 days | 2 years 2 months 12 days | 2 years 2 months 12 days | 2 years 6 months |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Operating Loss Carryforwards [Line Items] | ||
Valuation allowance | $ 15,252 | $ 17,109 |
Deferred tax liability, net | 14,351 | 67,002 |
Accrued interest and penalties associated with release of certain unrecognized tax benefits | 0 | $ 0 |
Federal | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | 107,800 | |
State | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | 179,000 | |
Foreign | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | $ 500 |
INCOME TAXES (Schedule of Compo
INCOME TAXES (Schedule of Components of Income Tax Expense (Benefit)) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes [Abstract] | |||
Federal, Deferred provision | $ (7,751) | $ (2,670) | $ (52,878) |
Federal, Total | (7,751) | (2,670) | (52,878) |
Foreign, Current provision | 57 | 84 | 134 |
Foreign, Total | 57 | 84 | 134 |
State, Current provision | 30 | 178 | |
State, Deferred provision | (1,001) | 612 | 8,143 |
State, Total | (1,001) | 642 | 8,321 |
Provision for (benefit from) income taxes | $ (8,695) | $ (1,944) | $ (44,423) |
INCOME TAXES (Schedule of Effec
INCOME TAXES (Schedule of Effective Income Tax Rate Reconciliation) (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Effective Income Tax Rate Reconciliation, Percentage | |||
Federal statutory rate | 21.00% | 21.00% | 35.00% |
State taxes net of federal tax benefit | 1.60% | 2.00% | |
Goodwill impairment | (32.20%) | ||
Noncontrolling interest | (2.60%) | 8.30% | 0.50% |
Valuation allowance | (7.30%) | 5.30% | |
Nondeductible compensation | (1.60%) | (5.70%) | (0.10%) |
Foreign taxes | (0.10%) | (0.50%) | |
Other | (0.60%) | (3.10%) | (0.70%) |
Tax Act impact | 5.60% | ||
Change in state tax rates | (0.80%) | ||
Effective income tax rate, percent | 17.70% | 13.90% | 13.40% |
INCOME TAXES (Schedule of Defer
INCOME TAXES (Schedule of Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred income tax assets | ||
Net operating loss carryforwards | $ 32,565 | $ 51,042 |
Capital loss carryforwards | 2,997 | 4,417 |
Intangible assets - finite life | 3,137 | 3,261 |
Stock-based compensation | 286 | 439 |
Property, plant & equipment | 3,649 | |
Deferred rent | 799 | |
Credits | 1,148 | 1,281 |
Deferred revenue | 1,939 | 2,755 |
Available-for-sale securities | 9,984 | 8,644 |
Deferred compensation | 1,053 | |
Operating lease liability | 13,215 | |
Other | 4,791 | 3,585 |
Deferred income tax assets | 70,062 | 80,925 |
Deferred income tax liability - long-term | ||
Intangible assets - indefinite-lived | (57,343) | (130,818) |
Right-of-use asset - operating leases | (11,625) | |
Property and equipment | (193) | |
Deferred income tax liability - long-term | (69,161) | (130,818) |
Less: Valuation allowance | (15,252) | (17,109) |
Net deferred income tax liability - long-term | $ (14,351) | $ (67,002) |
RELATED PARTY TRANSACTIONS (Nar
RELATED PARTY TRANSACTIONS (Narrative) (Detail) - USD ($) $ in Thousands | Jun. 22, 2015 | Jan. 01, 2013 | Sep. 30, 2015 | Nov. 17, 2014 | Jul. 31, 2013 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Related Party [Line Items] | |||||||||
Revenue from Contract with Customer, Including Assessed Tax | $ 101,576 | $ 127,290 | $ 124,780 | ||||||
Accounts receivable, net | $ 49,600 | 39,452 | 49,600 | ||||||
Minority Interest | 70,726 | 59,324 | 70,726 | 71,547 | |||||
Distributions | 5,366 | 6,682 | 7,438 | ||||||
Purchase of available-for-sale securities | $ 12,000 | ||||||||
Accounts payable and accrued expenses | 11,600 | 15,721 | 11,600 | ||||||
Other long-term liabilities | 9,160 | 3,389 | 9,160 | ||||||
Demand registration right threshold amount two offerings | $ 15,000 | ||||||||
Security registration form aggregate amount threshold per agreement | $ 5,000 | ||||||||
Loss (income) from equity method investment | $ 78 | $ (61) | $ (22) | ||||||
Unvested restricted stock | |||||||||
Related Party [Line Items] | |||||||||
Restricted stock awards, granted in period | 464,576 | 235,296 | 111,112 | ||||||
Tengram Capital Partners Gen2 Fund LP [Member] | |||||||||
Related Party [Line Items] | |||||||||
Percentage of beneficially owned outstanding common stock | 5.00% | ||||||||
Accounts payable annually, related parties | $ 900 | ||||||||
TCI | |||||||||
Related Party [Line Items] | |||||||||
Revenue | 3,100 | ||||||||
Due to related parties, current | 100 | ||||||||
Due from related parties, current | 1,100 | $ 1,100 | |||||||
Due from related parties, noncurrent | 1,900 | 1,900 | |||||||
Related party receivable reserved amount | 2,900 | ||||||||
FUL [Member] | |||||||||
Related Party [Line Items] | |||||||||
Business combination, recognized identifiable assets acquired and liabilities assumed, intangible assets, other than goodwill | $ 8,900 | ||||||||
Percentage of voting interests acquired | 50.50% | ||||||||
Payments to acquire interest in joint venture | $ 4,500 | ||||||||
Loss (income) from equity method investment | 500 | 700 | $ 2,200 | ||||||
Write off receivables | 900 | ||||||||
ES Originals Inc [Member] | |||||||||
Related Party [Line Items] | |||||||||
Accounts receivable, net | 6,200 | 2,800 | 6,200 | ||||||
Due from related parties, noncurrent | 1,900 | 200 | 1,900 | ||||||
ES Originals Inc [Member] | Royalties And Commissions And Advertising Revenue [Member] | |||||||||
Related Party [Line Items] | |||||||||
Revenue from Contract with Customer, Including Assessed Tax | $ 4,900 | 8,400 | 18,100 | ||||||
TCP Employee [Member] | |||||||||
Related Party [Line Items] | |||||||||
Award vesting period | 3 years | ||||||||
Restricted stock awards, granted in period | 125,000 | 200,000 | |||||||
TCP Employee [Member] | Unvested restricted stock | |||||||||
Related Party [Line Items] | |||||||||
Award vesting period | 4 years | ||||||||
TCP Employee [Member] | Phantom Share Units (PSUs) [Member] | |||||||||
Related Party [Line Items] | |||||||||
Award vesting period | 3 years | ||||||||
Restricted stock awards, granted in period | 180,000 | ||||||||
TCP Employee [Member] | Share-based Compensation Award, Tranche One [Member] | Unvested restricted stock | |||||||||
Related Party [Line Items] | |||||||||
Award vesting period | 3 years | ||||||||
Vesting percentage | 150000.00% | ||||||||
TCP Employee [Member] | Share-based Compensation Award, Tranche Two [Member] | Unvested restricted stock | |||||||||
Related Party [Line Items] | |||||||||
Award vesting period | 3 years | ||||||||
Restricted stock awards, granted in period | 300,000 | ||||||||
Vesting percentage | 25.00% | ||||||||
Centric Brands, Inc. [Member] | |||||||||
Related Party [Line Items] | |||||||||
Current receivable | 800 | $ 1,000 | 800 | ||||||
Transfer fee received for license rights | 4,000 | ||||||||
Centric Brands, Inc. [Member] | Royalty [Member] | |||||||||
Related Party [Line Items] | |||||||||
Revenue from Contract with Customer, Including Assessed Tax | $ 6,600 | 1,200 | |||||||
Registration Rights Agreement [Member] | |||||||||
Related Party [Line Items] | |||||||||
Terms of agreement, description | up to two offerings of greater than $15 million each, certain "S-3" registration rights for up to three offerings of greater than $5 million each | ||||||||
TCP Agreement [Member] | |||||||||
Related Party [Line Items] | |||||||||
Cash Paid For Services | $ 900 | 700 | 900 | ||||||
Amount due for services | 200 | ||||||||
Receivables from services rendered for merger and acquisition | $ 1,000 | ||||||||
Additional expenses related to services provided | 100 | ||||||||
Reimbursement amounts related party | 100 | 100 | |||||||
Payment of transaction fee to related party | 1,800 | ||||||||
TCP Agreement [Member] | Maximum | |||||||||
Related Party [Line Items] | |||||||||
Additional expenses related to services provided | 100 | ||||||||
Reimbursement amounts related party | 100 | ||||||||
TCP Agreement [Member] | Tengram Capital Partners Gen2 Fund LP [Member] | |||||||||
Related Party [Line Items] | |||||||||
Amount due for services | 200 | ||||||||
TCP Agreement [Member] | TCP Employee [Member] | |||||||||
Related Party [Line Items] | |||||||||
Payment For Consulting Services | 300 | $ 400 | |||||||
TCP Agreement [Member] | TCP Employee [Member] | Maximum | |||||||||
Related Party [Line Items] | |||||||||
Amount due for services | $ 100 | 100 | |||||||
License-back Agreement [Member] | ES Originals Inc [Member] | |||||||||
Related Party [Line Items] | |||||||||
License agreement payments during period | $ 1,300 | $ 300 | |||||||
Awarded in 2016 [Member] | TCP Employee [Member] | Share-based Compensation Award, Tranche One [Member] | |||||||||
Related Party [Line Items] | |||||||||
Vesting percentage | 33.30% | ||||||||
Awarded in 2016 [Member] | TCP Employee [Member] | Share-based Compensation Award, Tranche Two [Member] | |||||||||
Related Party [Line Items] | |||||||||
Vesting percentage | 33.30% | ||||||||
Awarded in 2016 [Member] | TCP Employee [Member] | Share-based Compensation Award, Tranche Three [Member] | |||||||||
Related Party [Line Items] | |||||||||
Vesting percentage | 33.40% | ||||||||
Awarded in 2013 [Member] | TCP Employee [Member] | Share-based Compensation Award, Tranche One [Member] | |||||||||
Related Party [Line Items] | |||||||||
Vesting percentage | 20.00% | ||||||||
Awarded in 2013 [Member] | TCP Employee [Member] | Share-based Compensation Award, Tranche Two [Member] | |||||||||
Related Party [Line Items] | |||||||||
Vesting percentage | 20.00% | ||||||||
Awarded in 2013 [Member] | TCP Employee [Member] | Share-based Compensation Award, Tranche Three [Member] | |||||||||
Related Party [Line Items] | |||||||||
Vesting percentage | 60.00% |
PROFIT SHARING PLAN (Narrative)
PROFIT SHARING PLAN (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
401 (k) Profit Sharing Plan (Member) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Employer matching contribution amount | $ 0.3 | $ 0.1 | $ 0.5 |
QUARTERLY DATA (UNAUDITED) (Sch
QUARTERLY DATA (UNAUDITED) (Schedule of Quarterly Financial Information) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Data (Unaudited) [Abstract] | ||||||||||||
Net revenue | $ 24,245 | $ 25,392 | $ 26,415 | $ 25,524 | $ 35,246 | $ 29,455 | $ 33,126 | $ 29,463 | $ 101,576 | $ 127,290 | $ 124,780 | |
Income (loss) from continuing operations | 4,274 | (19,964) | 12,508 | 9,978 | 17,003 | (3,858) | 17,723 | 11,183 | 6,796 | 42,051 | (269,600) | |
Loss from continuing operations before income taxes | (9,529) | (33,855) | (2,214) | (3,473) | 2,519 | (17,689) | 3,742 | (2,478) | (49,071) | (13,906) | (330,584) | |
Loss from continuing operations | (7,489) | (27,820) | (1,835) | (3,232) | (4,827) | (8,881) | 3,301 | (1,555) | (40,376) | (11,962) | (286,161) | |
Net income attributable to noncontrolling interest | (419) | 9,449 | (1,455) | (1,539) | (863) | (1,581) | (1,102) | (1,960) | 6,036 | (5,506) | (4,172) | |
Loss from continuing operations attributable to Sequential Brands Group, Inc. and Subsidiaries | (7,908) | (18,371) | (3,290) | (4,771) | (5,690) | (10,462) | 2,199 | (3,515) | (34,340) | (17,468) | (290,333) | |
(Loss) income from discontinued operations, net of income taxes | (2,871) | (309) | (1,309) | (120,574) | 3,496 | 847 | 1,388 | 1,253 | (125,063) | 6,984 | 104,615 | |
Net (loss) income attributable to Sequential Brands Group, Inc. and Subsidiaries | $ (10,779) | $ (18,680) | $ (4,599) | $ (125,345) | $ (2,194) | $ (9,615) | $ 3,587 | $ (2,262) | $ (159,403) | $ (10,484) | $ (185,718) | |
(Loss) earnings per share - basic: | ||||||||||||
Continuing operations | $ (0.12) | $ (0.28) | $ (0.05) | $ (0.07) | $ (0.09) | $ (0.16) | $ 0.03 | $ (0.06) | ||||
(Loss) earnings per share - basic | (0.05) | (0.01) | (0.03) | (0.02) | $ (1.93) | $ 0.11 | $ 1.66 | |||||
Continuing operations, diluted | (0.09) | (0.16) | 0.02 | (0.06) | ||||||||
(Loss) earnings per share - diluted | 0.05 | 0.01 | 0.02 | 0.02 | (1.93) | 0.11 | 1.66 | |||||
(Loss) earnings per share attributable to Sequential Brands Group, Inc. and Subsidiaries: | ||||||||||||
Basic | (0.03) | (0.15) | 0.06 | (0.04) | ||||||||
Diluted | $ (0.03) | $ (0.15) | $ 0.06 | $ (0.04) | ||||||||
Continuing Operations, Loss per share - basic and diluted | (0.53) | (0.27) | (4.62) | |||||||||
Discontinued operations | (0.04) | 0 | (0.02) | (1.88) | ||||||||
Attributable to Sequential Brands Group, Inc. and Subsidiaries | $ (0.16) | $ (0.29) | $ (0.07) | $ (1.95) | $ (2.46) | $ (0.16) | $ (2.95) | |||||
Non-cash impairment charges of goodwill | $ 304,100 | $ 304,100 | $ 304,100 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Mar. 30, 2020 | Aug. 12, 2019 | Mar. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Long-term debt | $ 446,000 | $ 610,787 | ||||
Subsequent Event | Revolving Credit Facility [Member] | ||||||
Proceeds from Lines of Credit | $ 7,100 | |||||
Long-term debt | $ 22,700 | |||||
New Amended FS/KKR Credit Agreement [Member] | ||||||
Netting of cash for calculating leverage ratio covenant | $ 5,000 | |||||
New Amended FS/KKR Credit Agreement [Member] | Subsequent Event | ||||||
Quarterly amortization payments | $ 2,100 | |||||
Netting of cash for calculating leverage ratio covenant | $ 10,000 | $ 5,000 |
Schedule II - Valuation and Q_2
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
SEC Schedule, 12-09, Allowance, Credit Loss [Member] | |||
Balance at Beginning of Period | $ 1,819 | $ 372 | $ 221 |
Additions Charged to Costs and Expenses | 4,123 | 1,547 | 482 |
Deductions | (105) | (100) | (331) |
Balance at End of Period | 5,837 | 1,819 | 372 |
SEC Schedule, 12-09, Valuation Allowance, Deferred Tax Asset [Member] | |||
Balance at Beginning of Period | 17,109 | 17,404 | 110,829 |
Deductions | (1,857) | (295) | (93,425) |
Balance at End of Period | $ 15,252 | $ 17,109 | $ 17,404 |