Basis of Presentation and Summary of Significant Accounting Policies (Tables)
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12 Months Ended |
Dec. 31, 2016 |
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| Accounting Policies [Abstract] |
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| Schedule of Accounts Receivable |
(in thousands):
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December 31, |
|
2016 |
|
2015 |
Accounts receivable, gross |
$ |
130,583 |
|
|
$ |
102,089 |
|
Less: Allowance for doubtful accounts |
(10,091 |
) |
|
(8,640 |
) |
Accounts receivable, net |
$ |
120,492 |
|
|
$ |
93,449 |
|
Movements in the balance for bad debt reserve and sales allowance for the years ended December 31, 2016, 2015, and 2014, are as follows (in thousands):
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2016 |
|
2015 |
|
2014 |
Beginning balance |
$ |
8,640 |
|
|
$ |
7,468 |
|
|
$ |
1,929 |
|
Additions charged to statements of operations |
2,624 |
|
|
1,172 |
|
|
5,539 |
|
Less: Bad debt write offs |
(1,173 |
) |
|
— |
|
|
— |
|
Ending balance |
$ |
10,091 |
|
|
$ |
8,640 |
|
|
$ |
7,468 |
|
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| Fair Value Measurements, Recurring and Nonrecurring |
The following tables summarize the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2016, and 2015, respectively (in thousands, except as presented in footnotes to the tables):
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December 31, 2016 |
|
Quotes Prices in Active Markets
(Level 1)
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Significant Other Observable Inputs
(Level 2)
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Significant Other Unobservable Inputs
(Level 3)
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Liabilities: |
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Earn-out liability (1)
|
$ |
1,987 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,987 |
|
Liability warrants (2)
|
433 |
|
|
— |
|
|
— |
|
|
433 |
|
Contingently issuable shares (3)
|
4,545 |
|
|
— |
|
|
— |
|
|
4,545 |
|
Total |
$ |
6,965 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
6,965 |
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|
December 31, 2015 |
|
Quotes Prices in Active Markets
(Level 1)
|
|
Significant Other Observable Inputs
(Level 2)
|
|
Significant Other Unobservable Inputs
(Level 3)
|
Liabilities: |
|
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|
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|
|
|
Earn-out liability (1)
|
$ |
9,652 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
9,652 |
|
Liability warrants (2)
|
24,076 |
|
|
24,076 |
|
|
— |
|
|
— |
|
Total |
$ |
33,728 |
|
|
$ |
24,076 |
|
|
$ |
— |
|
|
$ |
9,652 |
|
|
|
(1) |
Represents aggregate earn-out liabilities for the Company’s acquisitions of WOI, RMG, navAero and masFlight assumed in business combinations for the year ended December 31, 2015. |
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(2) |
Includes 6,173,228 Public SPAC Warrants at December 31, 2016 and 2015.
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(3) |
In connection with the Sound-Recording Settlements, the Company is obligated to issue to UMG up to 0.5 million shares of its common stock when and if he closing price of the Company's common stock exceeds $10.00 per share and 0.4 million shares of common stock when and if the closing price of the Company’s common stock exceeds $12.00 per share. Based on conditions of the award, such contingently issuable shares are classified as liabilities and are remeasured to fair value each reporting period.
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| Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation |
The following tables present the fair value roll-forward reconciliation of Level 1 and 3 assets and liabilities measured at fair value for the years ended December 31, 2016 and 2015, respectively (in thousands):
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Liability Warrants (Level 1) |
|
Liability Warrants (Level 3) |
|
Contingently Issuable Shares
(Level 3)
|
|
Earn-Out Liabilities (Level 3) |
Balance, December 31, 2015 |
$ |
24,076 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
9,652 |
|
Fair value of contingently issuable shares associated with Sound-Recording Settlement |
— |
|
|
— |
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|
6,417 |
|
|
— |
|
Payments of earn-out liability |
— |
|
|
— |
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|
— |
|
|
(4,127 |
) |
Transfer-in |
— |
|
|
6,235 |
|
|
— |
|
|
— |
|
Transfer-out |
(6,235 |
) |
|
— |
|
|
— |
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|
— |
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Change in value |
(17,841 |
) |
|
(5,802 |
) |
|
(1,872 |
) |
|
(3,538 |
) |
Balance, December 31, 2016 |
$ |
— |
|
|
$ |
433 |
|
|
$ |
4,545 |
|
|
$ |
1,987 |
|
|
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Earn-Out Liabilities (Level 3) |
Balance, December 31, 2014 |
$ |
1,710 |
|
Fair value of earn-out liability assumed in 2015 acquisitions |
9,652 |
|
Payments of earn-out liability |
(1,519 |
) |
Non-cash adjustment to 2014 earn-out liability |
(191 |
) |
Balance, December 31, 2015 |
$ |
9,652 |
|
The valuation methodology used to estimate the fair value of the financial instruments in the tables above is summarized as follows:
Earn-Out Liability. The earn-out liabilities are estimated using the income approach. Based on the respective purchase agreements, management estimated the present value of best case, base case, and worst case scenarios. The sum of the discounted weighted average probabilities was used to arrive at the fair value of the earn-out liability. The current and non-current portions of the earn-out liabilities are included in Accounts payable and accrued liabilities and Other non-current liabilities, respectively, on the Consolidated Balance Sheets. The change in value of these earn-out liabilities is included in General and administrative in the Consolidated Statements of Operations.
Contingently Issuable Shares. The liabilities for these contingently issuable shares are included in Accounts payable and accrued liabilities on the December 31, 2016 Consolidated Balance Sheet. The fair values of these contingently issuable shares were determined using a quantitative put option method. The change in the fair value of the contingently issuable shares are included in Change in fair value of derivatives in the December 31, 2016 Consolidated Statement of Operations.
The following table presents information about significant unobservable inputs related to Level 3 financial liabilities as of December 31, 2016.
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Liability Warrants |
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Contingently Issuable Shares |
Assumed liquidation company share price |
N/A |
|
|
$ |
10.00 |
|
|
$ |
12.00 |
|
Common stock price at December 31, 2016 |
$ |
6.46 |
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|
$ |
6.46 |
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|
$ |
6.46 |
|
Exercise price |
$ |
11.50 |
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N/A |
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|
N/A |
|
Estimated term (in years) |
1.09 |
|
|
4.54 |
|
|
6.44 |
|
Expected stock volatility |
34.0 |
% |
|
46.0 |
% |
|
46.0 |
% |
Risk free rate |
0.9 |
% |
|
N/A |
|
|
N/A |
|
Dividend yield |
— |
% |
|
— |
% |
|
— |
% |
Implied discount for lack of marketability (1)
|
— |
% |
|
20.5 |
% |
|
23.5 |
% |
|
|
(1) |
A discount for lack of marketability was applied to the resulting values as the shares, when issued, may not initially be registered with the SEC.
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| Fair Value, by Balance Sheet Grouping |
The following table shows the carrying amounts of the Company’s long-term debt in the consolidated financial statements (in thousands):
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December 31, 2016 |
|
December 31, 2015 |
|
Carrying Amount |
|
Fair Value |
|
Carrying Amount |
|
Fair Value |
Senior secured term loan facility, due July 2021 |
$ |
256,004 |
|
|
$ |
260,020 |
|
|
$ |
— |
|
|
$ |
— |
|
Senior secured revolving credit facility, due July 2020 |
53,891 |
|
|
52,932 |
|
|
— |
|
|
— |
|
Senior secured term loan facility, due July 2022 |
88,082 |
|
|
88,780 |
|
|
— |
|
|
— |
|
2.75% convertible senior notes, due February 2035 (1)
|
69,024 |
|
|
67,444 |
|
|
68,335 |
|
|
78,557 |
|
Other debts |
3,299 |
|
|
3,299 |
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|
2,819 |
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|
2,819 |
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(1) |
The fair value of the convertible senior notes is exclusive of the conversion feature, which was originally valued for reporting purposes at $13.0 million, and is included in Additional paid-in capital in the Consolidated Balance Sheets (see Note 13. Common Stock, Stock-Based Awards and Warrants).
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| Schedule of Effect of Reclassification of Unamortized Debt Issuance Costs |
The table below shows the effect of the reclassifications of unamortized debt issuance costs associated with the convertible senior notes and also capital lease obligation in the Company’s previously reported Consolidated Balance Sheet as of December 31, 2015 (in thousands):
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As Reported |
|
Reclassifications |
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As Reclassified |
|
December 31, 2015 |
|
Capital Lease Obligation |
|
Unamortized Debt Issuance Costs |
|
December 31, 2015 |
Other non-current assets |
$ |
13,702 |
|
|
$ |
— |
|
|
$ |
(1,678 |
) |
|
$ |
12,024 |
|
Long-term debt |
71,493 |
|
|
284 |
|
|
(1,678 |
) |
|
70,099 |
|
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