| Schedule of Quarterly Financial Information |
The following quarterly Consolidated Statements of Operations for the years December 31, 2018 and 2017 are unaudited, and have been prepared on a basis consistent with the Company’s audited consolidated annual financial statements, and include, in the opinion of management, all normal recurring adjustments necessary for the fair statement of the financial information contained in those statements. The results of operations of any quarter are not necessarily indicative of the results that may be expected for any future period (in thousands, except per share amounts).
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Quarter Ended |
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Mar. 31, 2017 |
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June 30, 2017 |
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Sept. 30, 2017 |
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Dec. 31, 2017 |
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Mar. 31, 2018 |
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June 30, 2018 |
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Sept. 30, 2018 |
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Dec. 31, 2018 |
Revenue |
$ |
152,592 |
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$ |
155,742 |
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$ |
151,537 |
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$ |
159,598 |
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$ |
156,497 |
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$ |
165,962 |
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$ |
164,027 |
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$ |
160,608 |
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Cost of sales |
110,540 |
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118,090 |
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112,951 |
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120,539 |
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118,496 |
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126,731 |
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128,569 |
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138,597 |
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Gross margin |
42,052 |
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37,652 |
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38,586 |
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39,059 |
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38,001 |
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39,231 |
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35,458 |
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22,011 |
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Operating expenses: |
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Sales and marketing |
11,012 |
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10,029 |
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9,332 |
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10,565 |
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9,654 |
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10,877 |
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8,989 |
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8,104 |
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Product development |
7,649 |
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7,942 |
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11,328 |
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8,689 |
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8,358 |
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9,872 |
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7,477 |
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7,033 |
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General and administrative |
35,321 |
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34,929 |
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39,129 |
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38,842 |
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38,285 |
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29,799 |
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31,620 |
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34,959 |
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Provision for (recovery of) legal settlements |
475 |
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— |
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310 |
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650 |
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516 |
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(141 |
) |
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(509 |
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1,451 |
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Amortization of intangible assets |
11,008 |
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10,860 |
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10,981 |
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11,106 |
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10,747 |
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10,357 |
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9,447 |
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7,889 |
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Goodwill impairment(3)
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78,000 |
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— |
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— |
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89,000 |
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— |
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— |
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— |
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— |
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Total operating expenses |
143,465 |
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63,760 |
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71,080 |
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158,852 |
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67,560 |
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60,764 |
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57,024 |
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59,436 |
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Income (loss) from operations |
(101,413 |
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(26,108 |
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(32,494 |
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(119,793 |
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(29,559 |
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(21,533 |
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(21,566 |
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(37,425 |
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Interest expense, net |
(10,964 |
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(14,807 |
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(18,164 |
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(14,519 |
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(15,597 |
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(19,755 |
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(20,048 |
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(20,818 |
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Loss from extinguishment of debt(4)
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(14,389 |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Income from equity method investments(5)
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1,539 |
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601 |
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1,770 |
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(16,334 |
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1,161 |
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428 |
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2,022 |
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(49,921 |
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Change in fair value of derivatives |
2,920 |
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(445 |
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196 |
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839 |
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564 |
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(655 |
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(196 |
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384 |
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Other income (expense), net |
(488 |
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653 |
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(123 |
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(478 |
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438 |
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(673 |
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(588 |
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(194 |
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Income (loss) before income taxes |
(122,795 |
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(40,106 |
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(48,815 |
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(150,285 |
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(42,993 |
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(42,188 |
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(40,376 |
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(107,974 |
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Income tax expense (benefit) |
2,816 |
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4,024 |
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4,153 |
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(15,880 |
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(4,709 |
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3,722 |
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2,852 |
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1,203 |
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Net income (loss) |
$ |
(125,611 |
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$ |
(44,130 |
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$ |
(52,968 |
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$ |
(134,405 |
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$ |
(38,284 |
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$ |
(45,910 |
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$ |
(43,228 |
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$ |
(109,177 |
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Net income (loss) per share(1):
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Basic |
$ |
(1.47 |
) |
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$ |
(0.52 |
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$ |
(0.59 |
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$ |
(1.51 |
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$ |
(0.42 |
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$ |
(0.50 |
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$ |
(0.47 |
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$ |
(1.19 |
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Diluted |
$ |
(1.47 |
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$ |
(0.52 |
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$ |
(0.59 |
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$ |
(1.51 |
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$ |
(0.42 |
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$ |
(0.50 |
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$ |
(0.47 |
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$ |
(1.19 |
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Weighted average shares outstanding(2):
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Basic |
85,440 |
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85,496 |
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89,194 |
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89,222 |
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90,792 |
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91,057 |
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91,408 |
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91,848 |
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Diluted |
85,440 |
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85,496 |
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89,194 |
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89,222 |
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90,792 |
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91,057 |
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91,408 |
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91,848 |
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(1) |
Quarterly and year-to-date computations of net income (loss) per common share amounts are calculated independently. Therefore, the sum of the per share amounts for the quarters may not agree with the per share amounts for the year. |
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(2) |
On the first anniversary of the EMC Acquisition, on July 27, 2017, the Company issued to the EMC seller approximately 5.1 million additional shares of the Company’s common stock. Pursuant to the EMC purchase agreement, 50% of the newly issued shares were valued at $8.40 per share, and the other 50% was valued at the volume-weighted average price of a share of Company common stock measured two days prior to the first anniversary date.
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(3) |
During the quarter ended March 31, 2017, the Company recorded a goodwill impairment loss of $78.0 million in its Maritime & Land Connectivity reporting unit. Additionally, during the quarter ended December 31, 2017, the Company recorded an impairment loss of $45.0 million and $44.0 million to its Maritime & Land Connectivity and Aviation Connectivity reporting units, respectively. See Note 5. Goodwill.
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(4) |
In January 2017, the Company entered into a new credit agreement consisting of a $500 million senior secured term loan facility and a five-year $85 million senior secured revolving credit facility and concurrently paid-off in full the indebtedness assumed upon the EMC Acquisition of $412.4 million. In connection with this refinancing transaction, the Company incurred a loss on extinguishment of debt of $14.4 million recorded in the statement of operations during the quarter ended March 31, 2017. See Note 9. Financing Arrangements.
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(5) |
During the fourth quarter of 2018 and 2017, the Company completed an assessment of the recoverability of its equity method investments and determined that the carrying value of its interest in WMS exceeded the estimated fair value of its interest and accordingly, recorded an impairment loss of 51.0 million and $16.7 million, respectively. See Note 7. Equity Method Investments.
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